That's kinda the problem. Certain people seem to have decided, "I will work for an airline no matter what, and consider nothing else." As long as so many have limited their job opportunities to only the airline industry, instead of saying, "Hmmm; that pay is too low / conditions are too poor; I am worth more than that; maybe I had better consider something else besides the airlines," well, here we are.46Driver said:
Smaller United
- Thread starter Just Plane Crazy
- Start date
Bear,
I think you are correct. For me, the personal threshold of whether it is worth it or not hinges roughly at what I could make as an O-5 pilot in the military (i.e., roughly $100k). Above that, I'll probably stick around, below that and I'm off to find something else. (I just finished my first M.S. and am now starting an MBA). I've got people in my office who just want to fly, regardless of pay, period, and its scary.
Don't forget that pay is relative. $100k may not be much to somebody in San Fran or New York, but for those of us who live in some of the tax free Southern states, its more than comfortable.
Finally, the other point I wanted to bring up is the hiring practices. Almost every career airline now has a minimum amount of turbine PIC time to get hired. What does that mean down the food chain? It means that F.O.'s at regionals will accept lower and lower pay in exchange for growth. All of the RJ F.O. time in the world is useless until you move over to the left seat. There is little incentive at regionals to improve work rules and pay in comparison to growth. Therefore, you have an ever widening cost differential. At least that's how I see it.
I think you are correct. For me, the personal threshold of whether it is worth it or not hinges roughly at what I could make as an O-5 pilot in the military (i.e., roughly $100k). Above that, I'll probably stick around, below that and I'm off to find something else. (I just finished my first M.S. and am now starting an MBA). I've got people in my office who just want to fly, regardless of pay, period, and its scary.
Don't forget that pay is relative. $100k may not be much to somebody in San Fran or New York, but for those of us who live in some of the tax free Southern states, its more than comfortable.
Finally, the other point I wanted to bring up is the hiring practices. Almost every career airline now has a minimum amount of turbine PIC time to get hired. What does that mean down the food chain? It means that F.O.'s at regionals will accept lower and lower pay in exchange for growth. All of the RJ F.O. time in the world is useless until you move over to the left seat. There is little incentive at regionals to improve work rules and pay in comparison to growth. Therefore, you have an ever widening cost differential. At least that's how I see it.
But why should that be scary? Why should you expect the passengers to pay more than what is required to get qualified people to sit in the seats and move the airplane around?46Driver said:
Who said anything about "expecting passengers to pay more?"mweiss said:
The scary part is just how little people are willing to be compensated for the glamor and glory (or the whatever it is) of working for "the airlines."
Bear,
You are exactly right. Too many employees are still in deep denial over the situation. They still think that only minor changes are required and than it's back to business as usual because the economy is on the rise and profits will return. I think our Senior Mgmt hasn't really done all that much to quell that mind-set. Sadly, this only re-emphasizes the true struggle facing our company. That is genuinely eliminating that type of mind-set and truly revolutionizing the company into a consistently profitable entity. It's actually a mind-set that all the legacy carriers are still dealing with for the most part. We have yet to see a true re-shaping of the industry. The dynamics have forever changed. With each point of domestic market share that the LCC's eat up, the chances diminish that the legacy carriers will be able to compete because they have not yet transformed themselves to be able to compete. We all know that in the best of times, this industry survives on razor-thin profit margins. And that was BEFORE 9/11. Now? Forget it. Either you dramatically lower your cost structure to a level that is on par with the ever-growing LCC's or you will slowly whither and die on the vine. Increasing revenue is very difficult when you face a continual onslaught of decreasing fares. There is just too much capacity in the U.S. Domestic market. Too many airlines flying too many seats. That's why you can't get pricing power. So, in my view, when the true shakeout of this industry occurs (and it inevitably will), I want United to ensure it has a seat when the music stops. We now have a golden opportunity to re-shape the company into the competitive forced needed to profitably compete. That, in turn, will put extreme pressure on the other legacy carriers and push them to the brink. While they then deal with their own liquidity crisis in trying to bring costs down and possibly even file for Ch. 11, we will leave them in our wake and be poised to take advantge of their inevitable retrenchment. This is about survival, people. This isn't about staying one step ahead of the repo man for the next decade, ala TWA. This is about ensuring we are going to be around for the long haul. Think about it. Right now, the other legacy carriers are worried. They're worried about United finally re-shaping itself to where it needs to be to make money consistently. They're worried because they know what it will mean for them. They'll end up doing what we've been doing for the better part of the last two years. And the LCC's are worried, also. They know what a United with competitive costs will do to them. You think I'm wrong? Do you still see brazen quotes from Frontier execs turning their nose up at all things TED in the press? Nope. I guess stealing 9 points of their market share in DEN since TED's inception has taken the air out of their financial sails. Jeff Potter, have we got your attention yet?
My whole point here is that at some point, the legacy carriers are going to get their costs in line with the LCC's. They have no choice. Either they do that or they won't survive. And the ones that are successful in doing so are going to start putting the wood to the marketplace again. I want United to be one of the survivors for many reasons, not the least of which is to get some extremely satisfying payback for being the industry doormat the last 4 years! But truly re-shaping this company is going to entail some dramatic changes to "the way it's been done the last 25 years". We must continually strive to be as efficient as possible. The only other alternative is that this airline will cease to exist. Anyone who doubts that happening is only fooling themself. It's come down to marketplace Darwinism, a true survival of the fittest. As painful as it may be for many, including myself, let's just do what really needs to be done and move on. We're just wasting precious time.
You are exactly right. Too many employees are still in deep denial over the situation. They still think that only minor changes are required and than it's back to business as usual because the economy is on the rise and profits will return. I think our Senior Mgmt hasn't really done all that much to quell that mind-set. Sadly, this only re-emphasizes the true struggle facing our company. That is genuinely eliminating that type of mind-set and truly revolutionizing the company into a consistently profitable entity. It's actually a mind-set that all the legacy carriers are still dealing with for the most part. We have yet to see a true re-shaping of the industry. The dynamics have forever changed. With each point of domestic market share that the LCC's eat up, the chances diminish that the legacy carriers will be able to compete because they have not yet transformed themselves to be able to compete. We all know that in the best of times, this industry survives on razor-thin profit margins. And that was BEFORE 9/11. Now? Forget it. Either you dramatically lower your cost structure to a level that is on par with the ever-growing LCC's or you will slowly whither and die on the vine. Increasing revenue is very difficult when you face a continual onslaught of decreasing fares. There is just too much capacity in the U.S. Domestic market. Too many airlines flying too many seats. That's why you can't get pricing power. So, in my view, when the true shakeout of this industry occurs (and it inevitably will), I want United to ensure it has a seat when the music stops. We now have a golden opportunity to re-shape the company into the competitive forced needed to profitably compete. That, in turn, will put extreme pressure on the other legacy carriers and push them to the brink. While they then deal with their own liquidity crisis in trying to bring costs down and possibly even file for Ch. 11, we will leave them in our wake and be poised to take advantge of their inevitable retrenchment. This is about survival, people. This isn't about staying one step ahead of the repo man for the next decade, ala TWA. This is about ensuring we are going to be around for the long haul. Think about it. Right now, the other legacy carriers are worried. They're worried about United finally re-shaping itself to where it needs to be to make money consistently. They're worried because they know what it will mean for them. They'll end up doing what we've been doing for the better part of the last two years. And the LCC's are worried, also. They know what a United with competitive costs will do to them. You think I'm wrong? Do you still see brazen quotes from Frontier execs turning their nose up at all things TED in the press? Nope. I guess stealing 9 points of their market share in DEN since TED's inception has taken the air out of their financial sails. Jeff Potter, have we got your attention yet?
My whole point here is that at some point, the legacy carriers are going to get their costs in line with the LCC's. They have no choice. Either they do that or they won't survive. And the ones that are successful in doing so are going to start putting the wood to the marketplace again. I want United to be one of the survivors for many reasons, not the least of which is to get some extremely satisfying payback for being the industry doormat the last 4 years! But truly re-shaping this company is going to entail some dramatic changes to "the way it's been done the last 25 years". We must continually strive to be as efficient as possible. The only other alternative is that this airline will cease to exist. Anyone who doubts that happening is only fooling themself. It's come down to marketplace Darwinism, a true survival of the fittest. As painful as it may be for many, including myself, let's just do what really needs to be done and move on. We're just wasting precious time.
Jungle,JungleClone said:
This statement is either clearly out of context or you have a skewed view on reality. F-9 has had an increase in RASMs and LF on Ted routes. DIA has had a large increase in traffic as well. Maybe Ted is creating the South West effect? Jeff Potter is not worried about Ted, but he may be worried about a restructured United using LCC tactics under the UAL brand. The Ted brand is not scary to anyone. It is a laughable experiment to all in the industry especially SWA, Air Tran, AWA, and JB.
So the load factors and yields to ONT got soooo high FRNT decided to abandon the route? Apparently, it's no longer the UAL guys in denial.... Guess we'll all see how the FRNT Q numbers look.... Wanna bet on who has the worse performance on a percentage basis? FRNT is in BIG trouble, and it will only get worse with the HUGE jet order. Potter's greed will be FRNT's undoing, and it's unfortunate that the line employees will have to be the ones who pay the price.
I guess we are disagreeing on the term "expecting" (passengers to pay more). We are probably quibbling over semantics...mweiss said:
If airline employees wise up and decide not to work for less than a certain level of compensation, it would be irrelevant (in the sense of not caring) to them where the money comes from.
If enough people just say, "Hmmm, no thanks; I'm not working for that; I'll go elsewhere," then someone will have to figure out how they will offer more compensation. Sure the customer paying more is one option; but so is maybe reducing costs somewhere else (for example, from multi-million dollar golden parachutes for failed executives). It wouldn't matter to the potential employee. Make the job attractive enough; how is not their concern. They would be "expecting" a certain level of compensation, and if it is not met, they would simply look elsewhere; no sweat off their backs.
And BTW you referenced
Who or what determines what is "required" to get people to move planes around? If airline employees all decided they will not work for less than a certain level of compensation, then isn't that the new level "required" to get them to move planes around, with the according increased costs? So I guess no one is expecting people to pay more than what is "required." The issue is, What is that level? What is "required?"
Of course I fully realize I am living in a dream world and in reality many people are probably willing to work for a lot less even than what is being offered today.
Bear, it's more than semantics. There is a convergence point at which you should be looking.
Sure, in the short run savings could be extracted from other places. But what happens when you get to the point where those other places no longer have opportunity? Competitive commodity industries necessarily move in this direction, where savings must be extracted from as many places as possible, or the business will not be competitive.
Airlines don't have to be commodity businesses, but they sure have acted like they are, for the most part.
So, ultimately, the money has to come from somewhere. Nobody wants to be the one to give it up. But ultimatly, everyone will have to, or they will no longer be employed.
Sure, in the short run savings could be extracted from other places. But what happens when you get to the point where those other places no longer have opportunity? Competitive commodity industries necessarily move in this direction, where savings must be extracted from as many places as possible, or the business will not be competitive.
Airlines don't have to be commodity businesses, but they sure have acted like they are, for the most part.
So, ultimately, the money has to come from somewhere. Nobody wants to be the one to give it up. But ultimatly, everyone will have to, or they will no longer be employed.
mweiss I think we agree on more than disagree.
By "semantics" I meant this:
When you said that to see higher wages, airline employees would have to "expect" that consumers pay more, I took that to mean some sort of conscious cause-and-effect thought process like "I demand higher wages, and I expect you to charge higher fares to pay it."
On the other hand, I guess I am trying to portray an (admittedly) idealistic and implausible world, where people won't work for pennies at an airline just for the "thrill" of working for an airline or because "working in the airline industry is in my blood," and when confronted with sub-standard wages will just dispassionately say, "No, thanks," and go elsewhere for work. They won't consciously "expect" an employer to do some specific thing to be able to provide higher compensation; they'll just quietly (well, to the extent airline employees can do ANYthing quietly!) move on until the compensation corrects itself to the point where it will attract them.
For example, if you are working at Company A (or are applying for a job there) and realize there is another opportunity at Company B, and you think you should make more at Co. A, do you go to your boss and say, "I EXPECT you to charge customers more so you can pay me more!"? No. Most likely, you simply go to your boss at Co. A and say, "I want a raise." You don't particularly care where the money comes from. If the boss doesn't agree to give you a raise, you simply go work at Co. B.
By "semantics" I meant this:
When you said that to see higher wages, airline employees would have to "expect" that consumers pay more, I took that to mean some sort of conscious cause-and-effect thought process like "I demand higher wages, and I expect you to charge higher fares to pay it."
On the other hand, I guess I am trying to portray an (admittedly) idealistic and implausible world, where people won't work for pennies at an airline just for the "thrill" of working for an airline or because "working in the airline industry is in my blood," and when confronted with sub-standard wages will just dispassionately say, "No, thanks," and go elsewhere for work. They won't consciously "expect" an employer to do some specific thing to be able to provide higher compensation; they'll just quietly (well, to the extent airline employees can do ANYthing quietly!) move on until the compensation corrects itself to the point where it will attract them.
For example, if you are working at Company A (or are applying for a job there) and realize there is another opportunity at Company B, and you think you should make more at Co. A, do you go to your boss and say, "I EXPECT you to charge customers more so you can pay me more!"? No. Most likely, you simply go to your boss at Co. A and say, "I want a raise." You don't particularly care where the money comes from. If the boss doesn't agree to give you a raise, you simply go work at Co. B.
No offense, but that's any easy thing to say when you are at a high paying company and want to maintain the status quo. If you are at the bottom, you are going to scratch and claw to get what you can, the status quo is only hurting you.
As for moving from Company A to Company B, you are trapped at Company A due to seniority rules. 80% of something and at the top of the seniority lists (with its benefits. Besides, if you go to B, you are starting over at the bottom, making even less money and more subject to a furlough.
As for moving from Company A to Company B, you are trapped at Company A due to seniority rules. 80% of something and at the top of the seniority lists (with its benefits. Besides, if you go to B, you are starting over at the bottom, making even less money and more subject to a furlough.
Bus,Busdrvr said:
F-9's Jet Express (RJ700) couldn't compete with UA on the ONT route with Ted's $58/RT fares. Likewise, F-9 couldn't compete with NWA on MSP-LAX with NW's $89/RT fares. I think pulling out of those markets was the prudent thing to do. They are simply keeping their powder dry for profitable opportunites as they arise, rather than throwing money down the drain like their competition is doing.
As you know Frontier is a very conservative company with a strong Balance Sheet. You characterize them as being in "Big Trouble", but I don't see it that way relative to the rest of the industry. Besides, wouldn't F-9's demise mean another furlough for you?
And, once Frontier pulled out, did the fares stay at those unrealistically low prices? UAL and NW need to be careful about fighting those kinds of wars. If you charge $89 to fly from LAX-MSP until you run off your competition, then jack up the fare to $450, consumers remember this.C54Capt said:
There is still some animosity in Dallas over AA vs. Braniff and every other airline that AA has run off. The fact that no one was making money at the competition prices in those days matter not. All people focus on is the fact that the fares are higher now; so, that must be AA's fault.
I suspect you're right. I don't deny the beauty of the ideal world, but we don't live there, so I don't spent a lot of time thinking about it.Bear96 said:
Exactly. One of the results of seniority is a willingness to work for less than otherwise. After all, if you switch to another airline, even one that would pay you more dollars, you start at the bottom in seniority, with all of the baggage that comes along with being at the bottom.46Driver said:
