Wrong again WT. Yes SWA has the higher pay as you first stated, but SWA can very easily write the checks, do to the record profits and future record profits. As I have stated before, SWA is holding out of all contracts to make darn sure they hit and exceed the 15% ROIC to the investors. This, as we can all read in the media, is priority #1 for 2014. We have already been told there is an increase there to be had, but they will wait until after 2014 to dish any of the increases out. One very good example is the numerous articles gloating that GK's pay remained the same for 14 from 13. This stalling we are all seeing is just another way to keep all groups at a pay freeze for now until their goals are reached and breached. The unions seem to be patient at this time, just not sure how long they will be patient for though...
Missing Herb Yet?
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WorldTraveler
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of course they can physically write the checks... but not if they want to continue to meet investor expectations. When DL is now exceeding financial metrics which WN held itself to, WN has to up their financial performance in order to continue to attract investors.
WN is not going to start a wave of wage increases until the revenues come or WN has a pretty good idea where they are coming from.
Add in that WN employees are paid so much more than employees at other airlines (on average) and there is little incentive for WN mgmt. to increase pay unless the financial performance is there to justify it.
WN is not going to start a wave of wage increases until the revenues come or WN has a pretty good idea where they are coming from.
Add in that WN employees are paid so much more than employees at other airlines (on average) and there is little incentive for WN mgmt. to increase pay unless the financial performance is there to justify it.
WorldTraveler
Corn Field
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only in your tiny mind can you not grasp that investors - the exact entities that WN mgmt. is trying to please - do not care one iota about what company they invest in.
They want the best return.
WN is not delivering the highest financial metrics in the industry as they did for years. Other people recognize that, including industry analysts and WN mgmt.
If you can't deal with that reality, then skip over it.
DL's financial performance is very much on the minds of WN execs and what WN execs can and will do with pay increases for its people depends on them getting back to the metrics which WN ITSELF said were its goals - but which it is not meeting but DL is.
I want to see EVERY person get pay raises.... but the financial strength of the company that is writing their check absolutely matters. And financial strength is not something that occurs in a vacuum or independent of other companies.
They want the best return.
WN is not delivering the highest financial metrics in the industry as they did for years. Other people recognize that, including industry analysts and WN mgmt.
If you can't deal with that reality, then skip over it.
DL's financial performance is very much on the minds of WN execs and what WN execs can and will do with pay increases for its people depends on them getting back to the metrics which WN ITSELF said were its goals - but which it is not meeting but DL is.
I want to see EVERY person get pay raises.... but the financial strength of the company that is writing their check absolutely matters. And financial strength is not something that occurs in a vacuum or independent of other companies.
WorldTraveler
Corn Field
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no this is about your inability to deal with the nature of the business as it actually exists.
swamt himself recognizes the financial metrics that are necessary for WN to achieve in order for pay raises to start coming out.
I hope WN employees get what they want.
But WN has competition in the financial markets for financial strength that it hasn't seen in decades.
The airline business is intensely competitive and everyone that actually makes decisions seems to get it; this would be a good time for you to quit pounding your fist on the table in a childish hissy fit and deal with the realities of the way the world actually works.
Instead of demonstrating how threatened you are when someone else shares a different viewpoint, how about you actually educate yourself such that you can meaningfully participate in the discussion - and that doesn't just mean copying and pasting pictures and links.
It means actually demonstrating in your own words that you understand the issues that are being discussed.
And BTW, Herb did a great job of laying the foundation for decades of leadership in the industry.
I don't know what Gary's legacy will be but someone is going to have to reinvent WN or the torch will be passed to others.
personally, I think WN is up to the task and there can be multiple high performing airlines - but Gary right now is tasked with working with reality TODAY - not what happened decades ago under Herb.
swamt himself recognizes the financial metrics that are necessary for WN to achieve in order for pay raises to start coming out.
I hope WN employees get what they want.
But WN has competition in the financial markets for financial strength that it hasn't seen in decades.
The airline business is intensely competitive and everyone that actually makes decisions seems to get it; this would be a good time for you to quit pounding your fist on the table in a childish hissy fit and deal with the realities of the way the world actually works.
Instead of demonstrating how threatened you are when someone else shares a different viewpoint, how about you actually educate yourself such that you can meaningfully participate in the discussion - and that doesn't just mean copying and pasting pictures and links.
It means actually demonstrating in your own words that you understand the issues that are being discussed.
And BTW, Herb did a great job of laying the foundation for decades of leadership in the industry.
I don't know what Gary's legacy will be but someone is going to have to reinvent WN or the torch will be passed to others.
personally, I think WN is up to the task and there can be multiple high performing airlines - but Gary right now is tasked with working with reality TODAY - not what happened decades ago under Herb.
WorldTraveler
Corn Field
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- #38
if you find having to deal with the reality of the way business works as disruptive, then you should consider whether posting about business issues on this forum is really something you should be doing.
There is nothing in my previous post or my participation in this thread that does anything other than discuss the business aspects of where WN is right now.
WN is a great company. I have never said anything contrary to that.
But WN is at an inflection point in the life of the company.
Herb's legacy is just that - a legacy.
Gary has to figure out how to make WN work in the midst of an environment where WN's labor costs cannot be justified based on WN's revenue generation relative to the industry; WN's ability to stimulate new traffic in domestic markets is gone and can easily be duplicated even in the int'l markets which WN wants to enter; and WN is now facing a more costly and complex operation as WN now has to compete in markets where WN cannot be the dominant carrier as they once were.
WN will adapt - but much of what you have held to as being WN will change.
In the meantime, other airlines are delivering the financial results that WN set as its own goals but hasn't delivered in quite some time.
I'm not sure how long you thought WN would have the front row seat to yourself, but the industry - and life - changes.
There is nothing in my previous post or my participation in this thread that does anything other than discuss the business aspects of where WN is right now.
WN is a great company. I have never said anything contrary to that.
But WN is at an inflection point in the life of the company.
Herb's legacy is just that - a legacy.
Gary has to figure out how to make WN work in the midst of an environment where WN's labor costs cannot be justified based on WN's revenue generation relative to the industry; WN's ability to stimulate new traffic in domestic markets is gone and can easily be duplicated even in the int'l markets which WN wants to enter; and WN is now facing a more costly and complex operation as WN now has to compete in markets where WN cannot be the dominant carrier as they once were.
WN will adapt - but much of what you have held to as being WN will change.
In the meantime, other airlines are delivering the financial results that WN set as its own goals but hasn't delivered in quite some time.
I'm not sure how long you thought WN would have the front row seat to yourself, but the industry - and life - changes.
does this plane go to paris
Senior
"Gary has to figure out how to make WN work"
Given the fact that WN made 152 Million with $4.17 Billion in revenues and Delta made $213 Million on $8.92Billion in revenue, it appears that WN is doing a far superior job and Gary has figured out to make WN work.
Given the fact that WN made 152 Million with $4.17 Billion in revenues and Delta made $213 Million on $8.92Billion in revenue, it appears that WN is doing a far superior job and Gary has figured out to make WN work.
WorldTraveler
Corn Field
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WN's performance this quarter absolutely improved but its 14.2% ROIC is still less than the 15% which WN itself set. DL exceeded that mark.
DL's market cap is over $31B, one of the highest among airlines in the world while WN's is just under 17.
It wasn't that long ago that WN's market cap was higher than the rest of the entire legacy segment of the industry combined.
Nobody is doubting what WN has done or the turnaround that is taking place. But this isn't the past when WN alone was the benchmark for financial performance in the industry.
DL's market cap is over $31B, one of the highest among airlines in the world while WN's is just under 17.
It wasn't that long ago that WN's market cap was higher than the rest of the entire legacy segment of the industry combined.
Nobody is doubting what WN has done or the turnaround that is taking place. But this isn't the past when WN alone was the benchmark for financial performance in the industry.
does this plane go to paris
Senior
Market cap does move as you pointed out a few weeks ago. Delta's market cap went from 30Billion down to 27B and is now back to 31B. It could easily go back down again.
The Balance sheets are much better indication. WN actually has a positive balance sheet and not nearly the long debt that DL or others have.
Comparing the financial performances of the 4 largest carriers, AAL obviously came in first in the Q1, WN came in second, DL came in 3rd and UA came in 4th.
The Balance sheets are much better indication. WN actually has a positive balance sheet and not nearly the long debt that DL or others have.
Comparing the financial performances of the 4 largest carriers, AAL obviously came in first in the Q1, WN came in second, DL came in 3rd and UA came in 4th.
WorldTraveler
Corn Field
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the market cap of every other airline moved down as well. Don't forget to include that inconvenient little truth.
AA had a great quarter. But they are in the honeymoon stage of their merger... they have yet to integrate much of anything. Labor is now looking for what it was promised; AA's employees are paid substantially less than DL and WN employees - and that little reality won't be accepted by AA/US employees for long.
And AA's RASM trails DL's because AA is still flying a lot of underperforming capacity. AA has enormous strategic challenges that it has yet to face including DAL, DCA, and LGA divestitures.
DL was the most profitable airline in the world last year and is on track to repeat it again this year.
DL is also paying down debt at a pretty fast clip.
Wall Street is happy with what DL is doing. The stock was up 5% yesterday. WN's or anyone else's isn't doing the same relative ot DL today.
AA had a great quarter. But they are in the honeymoon stage of their merger... they have yet to integrate much of anything. Labor is now looking for what it was promised; AA's employees are paid substantially less than DL and WN employees - and that little reality won't be accepted by AA/US employees for long.
And AA's RASM trails DL's because AA is still flying a lot of underperforming capacity. AA has enormous strategic challenges that it has yet to face including DAL, DCA, and LGA divestitures.
DL was the most profitable airline in the world last year and is on track to repeat it again this year.
DL is also paying down debt at a pretty fast clip.
Wall Street is happy with what DL is doing. The stock was up 5% yesterday. WN's or anyone else's isn't doing the same relative ot DL today.
Wrong once again WT. Per your quote, "WN's ability to stimulate new traffic in domestic market is gone" This is a complete lie. You need read and comprehend a lot better. As it is more accurately called, "the southwest affect" and it is still happening in the domestic markets as we speak. Just read an article about it happening in Memphis. Since Delta started to retrieve from there as a hub, SWA has moved in to fill and add new flights. Since SWA has entered and grown at Memphis the fares have gone down and traffic has increased (I believe the numbers were by 10.8%) therefore "the southwest affect" does still in fact happen. Stop your lies WT won't work...
WorldTraveler
Corn Field
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first you conveniently forget that WN bought FL who previously served MEM.
FL offered MORE seats from MEM than WN is offering.
Further, FL had lower fares - DOT data shows it - so the notion that WN is doing something that FL didn't first do is a little much.
And while you might want to think that the WN effect still exists, WN confirmed today that it ONLY has a 5% cost advantage over the legacy carriers. That simply is not enough of a cost advantage for WN to be able to price low enough below AA and DL and PROFITABLY stimulate traffic.
Any airline can reduce fares and stimulate traffic - but they have to have the cost structure in order to do that on a sustained basis. WN will lower fares well below cost in order to stimulate traffic at DAL and then jack them up a few months later when they have moved half of the market away from DFW.
AA and NW were masters at cutting fares when competitors showed up and then raised fares again. It is hardly a phenomenon that WN thought up or perfected.
The only reason WN succeeded before is because they had low enough costs to support those kinds of low fares.
WN doesn't have that cost advantage now.
Which is also why WN didn't bother to even put as many seats into MEM as FL flew
BTW, here is what professional industry analysts say about the industry.
Still, it’s Delta Air Lines that “remains the leader with the U.S. airline industry,” says Imperial Capital’s Bob McAdoo and Scott Buck. They explain why:
Better than expected 1Q14 results and updated guidance validate our view that Delta remains the leader within the U.S. airline industry. In our view, a favorable operating environment should allow Delta to continue to grow free cash flow and further improve its balance sheet suggesting further deployment of capital to shareholders…Strong 1Q14 results, in what has traditionally been the weakest seasonal quarter, demonstrate how the industry and Delta operations have changed in recent years.
FL offered MORE seats from MEM than WN is offering.
Further, FL had lower fares - DOT data shows it - so the notion that WN is doing something that FL didn't first do is a little much.
And while you might want to think that the WN effect still exists, WN confirmed today that it ONLY has a 5% cost advantage over the legacy carriers. That simply is not enough of a cost advantage for WN to be able to price low enough below AA and DL and PROFITABLY stimulate traffic.
Any airline can reduce fares and stimulate traffic - but they have to have the cost structure in order to do that on a sustained basis. WN will lower fares well below cost in order to stimulate traffic at DAL and then jack them up a few months later when they have moved half of the market away from DFW.
AA and NW were masters at cutting fares when competitors showed up and then raised fares again. It is hardly a phenomenon that WN thought up or perfected.
The only reason WN succeeded before is because they had low enough costs to support those kinds of low fares.
WN doesn't have that cost advantage now.
Which is also why WN didn't bother to even put as many seats into MEM as FL flew
BTW, here is what professional industry analysts say about the industry.
Still, it’s Delta Air Lines that “remains the leader with the U.S. airline industry,” says Imperial Capital’s Bob McAdoo and Scott Buck. They explain why:
Better than expected 1Q14 results and updated guidance validate our view that Delta remains the leader within the U.S. airline industry. In our view, a favorable operating environment should allow Delta to continue to grow free cash flow and further improve its balance sheet suggesting further deployment of capital to shareholders…Strong 1Q14 results, in what has traditionally been the weakest seasonal quarter, demonstrate how the industry and Delta operations have changed in recent years.
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