Southwest Vs. Us Airways

[USA320Pilot]

Webcast Question

ARLINGTON (theHub.com) - As part of US Airways Today's continuing series of answers to questions that were unable to be asked at Dave Siegel's recent employee webcast due to time constraints, here is the latest entry:

Q. My counterparts at Southwest make about the same or more than I do. How can our costs be higher? Isn't this just proof of mismanagement?

A. This is not just about labor, nor strictly about wage rates. Southwest is more productive for a variety of reasons. US Airways has a more complex product with higher distribution costs. Southwest doesn't sell through global distribution systems, but directs customers to its own web site, which is far cheaper. Southwest doesn't fly internationally, nor does it have widebody aircraft or multiple fleet types. Our network structure -- the hub and spoke system -- results in lower productivity, although it generates higher revenue. Southwest flies one fleet type. This saves money on inventory and employee training. Southwest skims the cream in a point-to-point system between high-density city pairs. They don't offer any premium services, such as a first class cabin, assigned seating or Club rooms. While they have employees earning top-of-scale wages, they are also hiring people at the bottom of their scale, so their average labor costs are lower. We have work rules that they don't and that makes them more efficient. And benefits for our active employees and retirees are more generous than Southwest's.

Regards,

USA320Pilot

 

[Bud8EE]

I love the part about LUV hiring and offsetting TOS employees. Let's see US Airways tried to shrink to profitability and layoff 33% of its employees of which many are toward bottom of scale with lower longevity. Heck let's cut so deep that if they bring people back they will still be TOS. At the same time US Airways was sending a signal flare to the LCC announcing they should roll forward as it rolls baclward. US airways will then make comments about being astonished about the staggering growth of LCC's over the last 2 years. Surely it didn't have anything to do with wacking 33% of capacity and ripping the door off the hinges let alone opening it to their core markets for the LCC's or anyone else with initiative. I guess you have to have disassociate disorder to absolve yourself of responsibilty be believing things happen in a vaccum when clearly they don't. I guess shrink to grow isn't the brilliant strategy after all. Maybe a longer more thoughtful approach to CH 11 that utilized a plan maintain the scope and size of the airline was the answer. I bet there were at least 44,000 suggestion to that point. I guess Harvard isn't what it used to be. Maybe that school called "rank and file" really is the answer. Hmmmm 😉

 

[johnnyfleet]

I sure would like to know what work rules Dave is talking about, especially in regard to Fleet and Customer Service

 

[robbedagain]

of course it was mismanagement but i see that a certain pilot wont see it that way but hopefully he will. mgmt had a chance in bk to fix a lot of things but it appeared they only fixed things only to ask the employees for further paycuts to help themselves to fatter paychecks while the rest of us still have to wonder what kind of future we have with this airline

 

[unit4clt]

You are correct Bud8EE,

All of Usairways problems were brought on by mismanagement. Look at all of the routes transfered from mainline to rjs. Look at market share being given to competitors. Look at all the baggage delivery cost assosciated with stations NOT being able to put pax bags on the RJS.
These decisions were not made by Labor, although Labor made it easy for the management to make these disasterous decisions, by agreeing with the company on all agreements.
Now the company seeks to dig into the pockets of the employees again. The question is Will the UNIONS again represent the Company Or will they REPRESENT their MEMBERS??????

 

[usfliboi]

ALL OF OUR PROBLEMS??????????? ARE YOU KIDDING ME?

 

[bofie]

I guess Harvard isn't what it used to be.

Harvard never impressed me much. The place is long on theory and short on experience.

 

[Swaayze]

These guys shouldn't even be managing the local McDonald's much less an air carrier. Their ignorance and arrogance continues to amaze me more each day.

 

[Mike W]

So,the problem really isn't as much pay and benefits as it is a bad business model and a failed plan. In other words,if we all worked for free,it wouldn't mean a thing!

 

[WSurf]

Well if mainline hadn't been running the cash registers for all these years while management sat back and let it happen the airline would have probably made it. And if mainline allowed the WO's to operate Jets like 5 years ago, then this probably would have been a different situation! Just think, every contract carrier (about 8) that US Airways uses makes a PROFIT OFF US Airways!!! HELLO, U HAVE 3 REGIONALS that u own and operate. Should have keep all the flying in house. I remember mainline saying that any jets on the property should be flown by mainline pilots... lol, well u made ur own bed... US Airways needs to wake up, and realize they are just a big regional airline with a handful of Carb. and European flights.
Good Luck to all

Ok, time for a Capt. and coke

 

[mweiss]

If they were flown by mainline pilots at mainline rates, they wouldn't be profitable anymore. One of the sad issues with the regionals.

 

[ELP_WN_Psgr]

Everybody makes the same mistakes and errors in judgment....

Southwest skims the cream in a point-to-point system between high-density city pairs.

You mean like Amarillo to Albuquerque? New Orleans to Birmingham? San Diego to Las Vegas? Harlingen to Houston (or San Antonio, for that matter)? Nashville to Kansas City? Oklahoma City to Kansas City?

One thing all those routes have in common is when WN started service across there, there was no other service.


Southwest doesn't sell through global distribution systems, but directs customers to its own web site, which is far cheaper.


If it is cheaper, why doesn;t USAIrways do it? Nobody put a gun at their head and made them sign up for Orbitz, Travelocity, et al. back in Q3 '99 on Holly's Planebusiness.Com, everyone was predicting Southwest's demise because they were actively refusing to allow Orbitz to list their flights.

While they have employees earning top-of-scale wages, they are also hiring people at the bottom of their scale, so their average labor costs are lower.

Well duh. When you shrink your airline to where nobody is left but more senior people, what did you expect? You shrunk your airline and handed routes right and left over to Mesa, Chataqua, ShuttleAmerica, Mom's Airlines, Ed's International Airways......you name it. What you really needed to do is softer concessions, some lower pay scales for new hires, then grow yourself to a lower labor average labor cost. I never learned how to cut my lower-paid workers and reduce my average labor cost at Texas A&M, I guess that's a class offered only to harvard MBAs.

 

[FM2436]

Everybody makes the same mistakes and errors in judgment....

Southwest skims the cream in a point-to-point system between high-density city pairs.

You mean like Amarillo to Albuquerque? New Orleans to Birmingham? San Diego to Las Vegas? Harlingen to Houston (or San Antonio, for that matter)? Nashville to Kansas City? Oklahoma City to Kansas City?

One thing all those routes have in common is when WN started service across there, there was no other service.

I don;t thing USA320Pilot was necessarily refering to the market pair you use as an example. I think he was refering to market pair like those between BWI and ALB, BUF, MDW, CLE, FLL, BDL, HOU, IND, JAX, ISP, LAX, MHT, BNA, ORF, MCO, PHX, PVD, RDU, STL, TPA, PBI, and starting in a few days market pair like those between PHL and MDW, MCO, PVD, TPA.

 

[delldude]

funny thing usa320pilot-as i was reading your post...all the words SOUTHWEST suddenly morphed into JETBLUE.

 

[sfb]

I don;t thing USA320Pilot was necessarily refering to the market pair you use as an example. I think he was refering to market pair like those between BWI and ALB, BUF, MDW, CLE, FLL, BDL, HOU, IND, JAX, ISP, LAX, MHT, BNA, ORF, MCO, PHX, PVD, RDU, STL, TPA, PBI, and starting in a few days market pair like those between PHL and MDW, MCO, PVD, TPA.

FM2436-

The funny thing is, most of the city pairs from BWI you listed WEREN'T "high-density" before WN started service. Taking DOT's compilations of daily passenger counts on several routes:

ALB-BWI: Before WN (1Q00), 74 (pax/day); Most recent (2Q03), 621 (pax/day)
BUF-BWI: Before WN (1Q00), 94; Most recent (2Q03), 757
BDL-BWI: Before WN (2Q99), 241; Most recent (2Q03), 933
IND-BWI: Before WN (1Q00), 193; Most recent (2Q03), 476
ISP-BWI: Before WN (4Q98), 26; Most recent (2Q03), 542
MHT-BWI: Before WN (1Q98), 25; Most recent (2Q03), 1531
PVD-BWI: Before WN (2Q95), 159; Most recent (2Q03), 1715
ORF-BWI: Before WN (2Q01), 96; Most recent (2Q03), 216
RDU-BWI: Before WN (1Q99), 121; Most recent (2Q03), 575
PBI-BWI: Before WN (4Q00), 239; Most recent (2Q03), 439
JAX-BWI: Before WN (2Q96), 199; Most recent (2Q03), 602
MCO-BWI: Before WN (3Q95), 426; Most recent (2Q03), 1965
TPA-BWI: Before WN (3Q95), 354; Most recent (2Q03), 1298

I can't get figures for before 4Q93 which would give traffic numbers from BWI to STL, MDW, BNA, STL, CLE, HOU, and LAX before Southwest. But of the markets I listed, the smallest percentage increase was to PBI (84%) ranging up to a ridiculously large increase of 6000% in traffic between MHT and BWI.

I wouldn't exactly call PVD-PHL a high-density pair, either, at a whopping 116 daily passengers. But with the stimulative effect of the AVERAGE one-way fare dropping from $325 to under $50, it wouldn't surprise me to see traffic increase by 1000% or more on that route. Same for MHT-PHL, at 102 daily passengers paying an average one-way fare of $303. Most of the other routes announced by Southwest already have or will have non-stop low-fare competition (TZ to MDW, HP to PHX/LAS, FL to PBI/MCO/TPA/FLL, F9 to LAX).