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On 3/1/2003 8:52:55 AM REACC1 wrote:
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On 3/1/2003 12:48:33 AM PineyBob wrote:
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If that's the case then their is something else wrong! I have harbored the suspicion that the "REAL" problems at US are structural in nature and not totally wage based. Nothing I have read during this whole BK proceeding has convinced me that I am wrong in my assesment. I don't know if it IAM, pilots, or what but when SWA can have lower operating costs and pay higher wages there is something radically wrong. QUESTION: do any of the SWA work groups have a defined contribution pension plan? If they don't that's where a huge chunk of your cost differential lives!
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According to WN ramp contract they have a healthy 7% match in their 401k vs 2% for U.
U is still broken. The money is leaking out somewhere, but it is not puddling around labor. By far, I am no expert, but I believe it is structurally flawed. Are rj's supposed to prop it up? Is capital keeping them from fixing it? It has a great heating/cooling system. Why spend the bucks to make it even more efficient, when there are gaping holes in the walls and roof?
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The discrepancy comes from a variety of sources. First, WN has been profitable since their entry into the market. Their profitabiliy has allowed them to maintain a much better credit rating than US, henceforth, they have been able to finance aircaft, airport rent, and other associated equipment at a much lower rate than US or any other major. It simply costs them less money to capitalize their operations. Secondly, they have held to a simple business model that allows them to operate their aircraft more than 11 hours per day, versus US average utilization of less than 9 hours. With the higher utilization, they can spread their costs over a wider operating system.
Thirdly, they operate one aircraft type. This provides training, maintenance, and airport operations efficiencies that US does not have with 5 fleet types. Fourthly, they operate from fringe airports that charge markedly lower landing fees. Fifthly, their union contracts allow airport personnel to handle multiple duties rather than pigeonholeing people into one job per aircraft, and lastly, they fly point to point, eliminating costly hubs and all of the equipment and bureacracy that US has to deal with in PIT, PHL, and CLT. Wake up. They have better system and Dave still doesn't get it.
