Missing Herb Yet?

[Overspeed]

[SIZE=12pt]Southwest CEO: Labor contracts need to reflect current realityhttp://r.smartbrief.com/resp/fHdFCypReEkkaNbsfDlgbQfCBHqf?format=standard[/SIZE]
[SIZE=10.5pt]Gary Kelly, the CEO of Southwest Airlines, says the carrier's business model still works after 43 years. "Not only has the world changed, but our relative position within the industry on costs has changed," Kelly says. "Now we just need to make sure our labor contracts are updated to reflect the current reality."[/SIZE]
 
 
http://online.wsj.com/news/articles/SB10001424052702303949704579459643375588678
 
 

 

[WorldTraveler]

thank you, Overspeed

I'm waiting for all of the union fanboys to jump on this one.... being the most unionized won't drive higher and higher salaries?

and heaven forbid that swamt be faced with the reality of where WN is today.

and, lo and behold, WN's average fares have grown faster than any other airline.

and WN won't grow until it returns to its 15% ROI

"With its growth stalled, Southwest can't hire as many new employees at the bottom of the pay scale. From 2007 through 2012, Southwest's cost to fly a seat one mile rose 42%—more than any other major U.S. airline, according to Massachusetts Institute of Technology data that adjust for flight distance."



"For its nearly 17,000 ground workers and customer-service agents, Southwest wants to tighten rules on sick time and largely hold compensation flat. In prior contracts, workers generally received raises. It also ultimately wants 40% to be part-time, meaning their families would have to pay more for health benefits. "


Mr. Kelleher responded: "What I tell them is…'What we're talking about here is your future. If we don't change, you won't have one.' "

gotta LUV it

 

[Glenn Quagmire]

Let is know when they bargain for and vote themselves a paycut.

 

[WorldTraveler]

if history in the rest of the industry is any guide, Gary will figure out how to and will outsource at a far higher rate.

no growth is not a good sign for any airline employee.

 

[WNMECH]

if history in the rest of the industry is any guide, Gary will figure out how to and will outsource at a far higher rate.

no growth is not a good sign for any airline employee.

It means nothing if you are still making profits, year after year after year after year.......

 

[eolesen]

Don't burst his bubble. WT's been dying for something else he can gloat about DL's superiority.

 

[WorldTraveler]

It means nothing if you are still making profits, year after year after year after year.......

Indeed...but their profits aren't what theyu used to be.

You did read that Gary said thät WN won't grow until it reaches an ROI target that other carriers are now reaching?

 

[swamt]

Wrong once again WT.  SWA is now recording RECORD profits.  Not only a continuation in profit reporting, but record profits.
 
SWA will grow over the next few years rather we reach the 15% or not. But you will also see SWA reach the 15% this current year, and will very well reach beyond the 15%.  But just watch us grow thru the international flights. 
 
Yes,  Just gotta LUV this stuff!!!
 
And yes we all do miss Herb, he is and has been a great leader and owner.  The best over and beyond any other airline owner, hands down, PERIOD, end of story...

 

[WorldTraveler]

did you bother to read the article?

Gary is in charge and he says it is flatline until the 15% ROI return to levels WN once enjoyed.

On a margin basis, WN is far from where it has been in the past.

The WSJ takes another shot at WN today.
Unlike its rivals’ hub-and-spoke networks that generally fan flights out from their biggest cities, Southwest made famous the spoke-to-spoke network, connecting cities directly with shorter, nonstop flights.

But over the past several years, Southwest has cut back in many of the smaller communities that were the trademark of its network, like Albuquerque, N.M., and Birmingham, Ala. Meanwhile, the airline has bolstered service to some of its biggest markets, such as Chicago and Baltimore, and launched flights to some of the nation’s biggest cities.

http://blogs.wsj.com/corporate-intelligence/2014/04/02/as-southwest-goes-mainstream-will-direct-flights-go-extinct/

 

[WorldTraveler]

the graphs here highlight exactly why the legacy airlines are better positioned to grow revenues that domestic only airlines.... WN is desperately trying to get into the int'l arena but they still will not have access to some of the hottest global growth areas that the US legacy carriers can tap into.

http://seekingalpha.com/article/2124293-delta-air-lines-is-taking-off?isDirectRoadblock=false&uprof=45

 

[WNMECH]

Yawn.

WN has never had 15% ROI.
It has been Gary's goal since he became CEO

This is all aimed at unions to try and squeeze more from is but we know we are now making record profits and are at over 13% ROI.

Here is the real picture of WN.

http://southwest.investorroom.com/2014-01-23-Southwest-Airlines-Reports-Record-Fourth-Quarter-And-Full-Year-Profit-41st-Consecutive-Year-Of-Profitability

If you read this article, you will see how people can talk out of both sides of their mouths.

You may believe the chicken little propaganda, but the unions at WN are not that stupid.

 

[WorldTraveler]

he is running the place, nonetheless.

If WN gives up its historically cordial labor relations for the contentious environment that is typical in the airline industry, it will mark a significant change in the ethos of what has allowed WN to win.

I'm not sure why it is a surprise that this day is here.... did you really think that WN would be able to continue to pay its labor groups far more than other airlines, esp. as revenue growth failed to grow as fast as costs?

BTW, I enjoy having you back in the discussion.... you are more level headed than the other one.

 

[WNMECH]

If you worked at WN you would know that they have been singing the same tune during contract negotiations for many years.
The sky has been falling for a decade.
Then after contracts are signed, they sing a different tune.
Read the first article and then the link I posted closely.

Sounds like two different company's.

Yet year after year of record profits.

For years the know it alls have said the only reason we make profits were fuel hedges.
And as soon as those were unwound we would lose money.

Wrong.

They said they only reason we made profits was our outsourcing and that when others outsourced more, we could not compete.

Wrong.

They said that after bankruptcy the legacies would have lower costs than us and we would lose money.

Wrong.

Which of these predictions did you make Nostradamus.

 

[swamt]

I have read all the articles as of recent.  And I will still tell you WT, we will grow rather the 15% ROIC is met or not this year, FACT, Period, GET A CLUE, the articles you speak of are all just propaganda as SWA is in nego's with almost ALL the labor groups right now.  It's all just propaganda to get sympathy from the general public, AND YOU, as you are falling for it, to try and get all the unions on the property to accept and take everything they want.  YOU, as a union nego should see this and realize what the company is doing.  Once again GET A CLUE, DA, oh I'm sorry, Idiot...  Luv you man...

 

[WorldTraveler]

If you worked at WN you would know that they have been singing the same tune during contract negotiations for many years.
The sky has been falling for a decade.
Then after contracts are signed, they sing a different tune.
Read the first article and then the link I posted closely.

Sounds like two different company's.

Yet year after year of record profits.

For years the know it alls have said the only reason we make profits were fuel hedges.
And as soon as those were unwound we would lose money.

Wrong.

They said they only reason we made profits was our outsourcing and that when others outsourced more, we could not compete.

Wrong.

They said that after bankruptcy the legacies would have lower costs than us and we would lose money.

Wrong.

Which of these predictions did you make Nostradamus.

I don't recall ever stating that the legacy carriers' costs would be below WN's. WN's costs cannot continue to grow at the rate they have and WN can't pay its employees so much more than legacy carriers who outsource much higher portions of their operations in line with what other global carriers do.


WN's technique may be doom and gloom in contract negotiations - that is not terribly unique in any company - but the fundamentals of WN's business model are not near as favorable as they once were and the revenue advantages that WN once had are simply not there.

WN is banking on access to key business markets to help them restore a revenue advantage but also gain it only if they are the only carrier in many of those markets. WN is counting on growing into Latin America markets and having a revenue advantage there as well. The reason why legacy carriers are fighting back and winning against WN as both US and DL have done is because they know that WN can't pull the amount of traffic it once did without losing money in the process.

And unlike in the past, the legacy carriers have access to the fastest growing regions of the world which are not in N. America and thus which WN cannot benefit from.

The legacy carriers' costs are well within the range of WN's and they will continue to exert pressure on WN's ability to compete.

And your salaries will not only not grow like they have in the past but WN will have to outsource larger and larger portions of its operation just like the legacy carriers have done.

Welcome to the new reality for WN. Herb had it pretty easy in comparison to Gary.