Hell, when we did Allegiants ramp I had a Captain come down with bags from the jetway, toss them on the beltloader, then start tossing them from the cart. Pre union for us, but yeah, so things most people have the capability to do with little training.
Thanks Doug: US Outsourcing 7 cities
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Hell, when we did Allegiants ramp I had a Captain come down with bags from the jetway, toss them on the beltloader, then start tossing them from the cart. Pre union for us, but yeah, so things most people have the capability to do with little training.
HPearlyretiree
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Back in the good old days before the union nonsense, pilots would help out rampers at AWA. Life is different, everyone should pitch in and tell the union goons to take the piss.
How did it work for the mechanics when Franke laid most of them off them right before a holiday and HP being threatened to be shutdown by the FAA for MX violations and not being able to grow nor and an airplane to the fleet without FAA approval?
At NWA, most of us Maintenance employees, while waiting to pushback, would be in the jetway assisting with late oversize bags, wheelchairs etc. When all PAX were boarded I would go down and assist the ramp in closing doors, moving equipment etc., to assist in getting an on-time departure. At no time did I ever encounter any resistance. We worked together as fellow employees. No bickering involved.
WorldTraveler
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Luvn
you have it mostly right. WN's strategy has always been to enter the biggest markets and skim off the biggest markets from that city to make a profit.
Despite all the worship of low fare carriers, anyone who understands the industry knows that low fare carriers as a group and WN esp. will never provide the level of nationwide air service that the network carriers do… which is why RJs continue to use large portions of the airspace and slots in the nation’s most congested airports.
.
Your assumption is wrong that network carriers have to choose where to make they want to make the most money based on the increasingly competition from WN. WN’s experience at PHL shows that network carriers have much larger and deeper networks they can use to compete against low fare carriers and they can add capacity in order to maintain the resources necessary to compete against WN.
.
While DL has pulled down connecting capacity in CVG and MEM, they have shifted it to ATL where they are adding system capacity – much of it on lower cost mainline or large RJ flights. DL is in fact able to make it harder for WN (or its FL subsidiary) to establish itself by adding more capacity and by using the depth of the network carrier networks to push a lot more capacity thru those hubs, making WN compete for the local market against a much larger number of seats from the network carriers in each market. DL and US’ revenue management systems decide which markets are most valuable but as long as they continue to add capacity, there is no need to make a choice between the local, WN competitive flow markets, or non-low fare competitive markets.
.
Jim,
Employee productivity in the airline industry is measured by ASMs produced per employee. You might be interested in knowing that using the latest quarterly releases, WN produced about 700,000 ASMs per employee. US mainline employees only was less at about 615K but DL and UA’s mainline employees produced very comparable levels of ASMs as WN.
DL and UA used their higher percentage of widebody aircraft (compared to US) and longhaul (including international) flying to produce comparable levels of productivity.
Excluding international flying from the redeye equation excludes exactly the places where the network carriers have turned in order to increase their productivity; that full 333 flying from PHL to Europe for 16 hours per day round-trip is a major part of why US can successfully be able to defend its PHL hub against WN. US does have some less efficient shorter haul connecting parts of its business than WN but US and other network carriers are able to use most efficient parts of their operation – including transcons and intercontinental flying – to offset some of their inefficiencies in other parts of the network.
Not only does WN pick a narrower market scope to compete in, but they also used a narrower scope of resources than the network carriers in order to serve it.
RJs and contracted operations are part of how network carriers serve the less efficient parts of the operation but they also serve segments such as longhaul, widebody segments which are more efficient than WN.
.
As you are also aware, WN actually does very little (proportionately) nonstop coast to coast flying – in large part because their efficiency advantages do not help them near as much on those routes. Given that transcon flying is a much larger percentage of FL’s ATL operation than it was of US’ PHL operation, it means WN has even less ability to generate efficiencies compared to DL, esp. considering that DL is able to use very efficient aircraft like the domestic 763 and 753.
.
It is certainly true that management at US and any company in general – although US pushes the limit more than other carriers – will outsource as much as they can to reduce costs. But the notion that network carriers cannot compete successfully against low fare carriers including WN is simply not true.
There are plenty of statistics to show that the painful restructurings the network carriers have gone through esp. over the past decade have been successful in helping them compete with low fare carriers.
.
Finally, you do realize that in the most recent quarter, WN’s operating profit margin was less than DL, UA, and US AND its RASM growth also trailed all of the network carriers on their domestic system?
.
WN has a lot of historical advantages to it… but it is naïve to not recognize the challenges that WN faces in becoming a true coast to coast carrier competing in markets where network carriers have long been established. Network carriers have many advantages that they have at their disposal and which they continue to perfect to allow them to compete against low fare carriers.
.
The notion that network carriers cannot compete not only is false but so also is the notion that the only way for network carriers to compete against WN and other low fare carriers is to outsource their flying and operations.
It is highly possible for network carriers to maintain the size, scope, and efficiencies that WN has in order to keep jobs and revenues at mainline carriers.
.
Failing to believe that network carriers can successfully compete or justifying their inefficiencies – which aren’t there or if they do exist are a lot less than you think – is an invitation for management to continue to justify outsourcing.
.
Network carrier employees need to focus on what they have accomplished and what they can do instead of seeing themselves as unable to compete.
excellent example, Tech... Kev has related that some of his frustration with DL has come from the bureaucracy that has come as DL has taken away some of the "entrepeneuralism" that NW had in its operations.
DL employees are perhaps less likely to help out in each other's work areas than what you and Kev described as happening at NW but DL was and still is a larger airline so if they lost something in process efficiency they have made up for it in efficiency coming from volume. DL and NW had very similar labor productivity and labor CASMs at the time of the merger although they came up w/ those numbers differently. CO, DL, and NW all had much higher labor productivity than AA, UA, or US before the mergers started happening. Now most of the network carriers aside from AA have pretty similar levels of productivity but UA and US cut alot higher percentage of jobs than NW or DL in BK to get to that level of productivity.
.
Your example shows that it is possible thru more than one way to create the needed efficiencies.
you have it mostly right. WN's strategy has always been to enter the biggest markets and skim off the biggest markets from that city to make a profit.
Despite all the worship of low fare carriers, anyone who understands the industry knows that low fare carriers as a group and WN esp. will never provide the level of nationwide air service that the network carriers do… which is why RJs continue to use large portions of the airspace and slots in the nation’s most congested airports.
.
Your assumption is wrong that network carriers have to choose where to make they want to make the most money based on the increasingly competition from WN. WN’s experience at PHL shows that network carriers have much larger and deeper networks they can use to compete against low fare carriers and they can add capacity in order to maintain the resources necessary to compete against WN.
.
While DL has pulled down connecting capacity in CVG and MEM, they have shifted it to ATL where they are adding system capacity – much of it on lower cost mainline or large RJ flights. DL is in fact able to make it harder for WN (or its FL subsidiary) to establish itself by adding more capacity and by using the depth of the network carrier networks to push a lot more capacity thru those hubs, making WN compete for the local market against a much larger number of seats from the network carriers in each market. DL and US’ revenue management systems decide which markets are most valuable but as long as they continue to add capacity, there is no need to make a choice between the local, WN competitive flow markets, or non-low fare competitive markets.
.
Jim,
Employee productivity in the airline industry is measured by ASMs produced per employee. You might be interested in knowing that using the latest quarterly releases, WN produced about 700,000 ASMs per employee. US mainline employees only was less at about 615K but DL and UA’s mainline employees produced very comparable levels of ASMs as WN.
DL and UA used their higher percentage of widebody aircraft (compared to US) and longhaul (including international) flying to produce comparable levels of productivity.
Excluding international flying from the redeye equation excludes exactly the places where the network carriers have turned in order to increase their productivity; that full 333 flying from PHL to Europe for 16 hours per day round-trip is a major part of why US can successfully be able to defend its PHL hub against WN. US does have some less efficient shorter haul connecting parts of its business than WN but US and other network carriers are able to use most efficient parts of their operation – including transcons and intercontinental flying – to offset some of their inefficiencies in other parts of the network.
Not only does WN pick a narrower market scope to compete in, but they also used a narrower scope of resources than the network carriers in order to serve it.
RJs and contracted operations are part of how network carriers serve the less efficient parts of the operation but they also serve segments such as longhaul, widebody segments which are more efficient than WN.
.
As you are also aware, WN actually does very little (proportionately) nonstop coast to coast flying – in large part because their efficiency advantages do not help them near as much on those routes. Given that transcon flying is a much larger percentage of FL’s ATL operation than it was of US’ PHL operation, it means WN has even less ability to generate efficiencies compared to DL, esp. considering that DL is able to use very efficient aircraft like the domestic 763 and 753.
.
It is certainly true that management at US and any company in general – although US pushes the limit more than other carriers – will outsource as much as they can to reduce costs. But the notion that network carriers cannot compete successfully against low fare carriers including WN is simply not true.
There are plenty of statistics to show that the painful restructurings the network carriers have gone through esp. over the past decade have been successful in helping them compete with low fare carriers.
.
Finally, you do realize that in the most recent quarter, WN’s operating profit margin was less than DL, UA, and US AND its RASM growth also trailed all of the network carriers on their domestic system?
.
WN has a lot of historical advantages to it… but it is naïve to not recognize the challenges that WN faces in becoming a true coast to coast carrier competing in markets where network carriers have long been established. Network carriers have many advantages that they have at their disposal and which they continue to perfect to allow them to compete against low fare carriers.
.
The notion that network carriers cannot compete not only is false but so also is the notion that the only way for network carriers to compete against WN and other low fare carriers is to outsource their flying and operations.
It is highly possible for network carriers to maintain the size, scope, and efficiencies that WN has in order to keep jobs and revenues at mainline carriers.
.
Failing to believe that network carriers can successfully compete or justifying their inefficiencies – which aren’t there or if they do exist are a lot less than you think – is an invitation for management to continue to justify outsourcing.
.
Network carrier employees need to focus on what they have accomplished and what they can do instead of seeing themselves as unable to compete.
excellent example, Tech... Kev has related that some of his frustration with DL has come from the bureaucracy that has come as DL has taken away some of the "entrepeneuralism" that NW had in its operations.
DL employees are perhaps less likely to help out in each other's work areas than what you and Kev described as happening at NW but DL was and still is a larger airline so if they lost something in process efficiency they have made up for it in efficiency coming from volume. DL and NW had very similar labor productivity and labor CASMs at the time of the merger although they came up w/ those numbers differently. CO, DL, and NW all had much higher labor productivity than AA, UA, or US before the mergers started happening. Now most of the network carriers aside from AA have pretty similar levels of productivity but UA and US cut alot higher percentage of jobs than NW or DL in BK to get to that level of productivity.
.
Your example shows that it is possible thru more than one way to create the needed efficiencies.
Thought it could be an IAM union brother and sister of Air Wisconsin ground handling or possible co-workers of CWA Piedmont whipsawing mainline pay to express level
Kev3188
Veteran
I think most of what constitutes an HR handbook these days is due to the litigious society we happen to live in.
^YES.^
BoeingBoy
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Which slants the data toward airlines that outsource more. For example, US has been "Expressing" stations since 911 because the scope language of the ground personnel allows stations to be staffed by non-mainline employees (contract or Express) when the number of mainline flights drops below a certain number per day. One of the latest is LAS. So that inflates mainline employee productivity if you only look at ASM's/employee. Ignoring such factors results in the computer geek GIGO - Garbage In, Garbage Out. Certainly, though, if one wants to minimize the efficiency of an airline like WN or B6, putting garbage in to get the desired garbage out comes in handy.
And it's been a historical fact, nothing new. However, WN was build and grew on a model of charging reasonable fares based on their costs. They've never charged $500 for the least expensive fare on a 280 mile segment, as US did after FL exited the BOS-PHL market and WN entered it. So when legacies make nice profits, they tend to have a higher margin than WN. WN has been happy making a lower profit margin year in, year out.
Just a question. If the legacies are nearly as efficient as WN, why do they have to charge billions of dollars more in fees than WN to make any money? Could it be because their express-type operations, multiple fleet types, hub/spoke ops, etc don't allow them to compete with the WN/B6's efficiencies so they use the fees to make up the difference?
Jim
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Awesome idea. Let's decertify the unions. We of course, would be laid off before the ink was dry dumbass.
WorldTraveler
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Jim,
I continue to believe that you and others WAY underestimate the transformation that has taken place in the industry - how much adaptation has taken place at the legacy/network carriers and how much the efficiency gap has closed compared to the low fare carriers.
At the same time, you continue to believe that the low fare carriers like WN have a model that will work in this environment, for which data is showing they really aren't doing that well.
Their margins are falling along with their performance stats like OT... the simple fact is that WN is trying to be more like a network carrier - with a considerable amount of bumps. The network carriers paid a huge price - or in reality, their employees and creditors, as part of the process of transforming from being a utility which served every point on the map to being viable today.
.
Lots of legacy/network airlines have looked at whether it would be worth ditching their models in favor of WN's type of model but have consistently come to the conclusion that the assets they have cannot be underestimated - and must be leveraged for what they are worth.
.
You cannot serve the hundreds of cities that network carriers do with the WN model... nor can you attain the same level of efficiency from RJs as WN gets from 737s. But the network carriers use their longhaul int'l and transcon flights to dramatically boost the less efficient parts of their system, icnluding their connecting and small jet operations.
It would appear that all you see is the negative comparisons between the network carriers and WN but don't want to admit to the positive elements.
.
Who cares whether the network carriers obtain their revenue from fees or the actual ticket price. Consumers don't like it but I have yet to see one study that says that consumers quit flying network carriers because of their fee structure. Your phone and electric bill is littered w/ fees, charges, and adjustments - yet you still use those services.
.
Happy consumers are great - but when it comes to you receiving a paycheck, I don't think you care where the money came from. Same for the stockholders.
.
Recognize that the network airlines have a viable business model - at present more viable than WN's - and they offer services that WN can't.
.
Doesn't mean WN doesn't offer a product that meets the needs of their customers, even if it is a fairly small market group.
.
BTW, I still believe you will see WN increasingly walk away from being what it was in the past as it now becomes the only true nationwide low fare carrier and one that is substantially larger than B6, its next closest competitor - w/ considerably less nationwide coverage.
.
The lights went off in WN executives heads' not that long ago that they were reaching the end of what they could accomplish as a low fare carrier... they decided to move into the role of becoming a nationwide carrier, eclipsing all other low fare carriers, and moving into the realm of network carriers. They will make a few tweaks here and there in the US but their US system is pretty close to being built out.
As they reach maturity in the domestic market and as their growth options move out to the int'l market where network carriers have long had an advantage, you will see WN becoming more like just another network carrier than ever before, even if they try to maintain a few relics from their past to make you think otherwise.
I continue to believe that you and others WAY underestimate the transformation that has taken place in the industry - how much adaptation has taken place at the legacy/network carriers and how much the efficiency gap has closed compared to the low fare carriers.
At the same time, you continue to believe that the low fare carriers like WN have a model that will work in this environment, for which data is showing they really aren't doing that well.
Their margins are falling along with their performance stats like OT... the simple fact is that WN is trying to be more like a network carrier - with a considerable amount of bumps. The network carriers paid a huge price - or in reality, their employees and creditors, as part of the process of transforming from being a utility which served every point on the map to being viable today.
.
Lots of legacy/network airlines have looked at whether it would be worth ditching their models in favor of WN's type of model but have consistently come to the conclusion that the assets they have cannot be underestimated - and must be leveraged for what they are worth.
.
You cannot serve the hundreds of cities that network carriers do with the WN model... nor can you attain the same level of efficiency from RJs as WN gets from 737s. But the network carriers use their longhaul int'l and transcon flights to dramatically boost the less efficient parts of their system, icnluding their connecting and small jet operations.
It would appear that all you see is the negative comparisons between the network carriers and WN but don't want to admit to the positive elements.
.
Who cares whether the network carriers obtain their revenue from fees or the actual ticket price. Consumers don't like it but I have yet to see one study that says that consumers quit flying network carriers because of their fee structure. Your phone and electric bill is littered w/ fees, charges, and adjustments - yet you still use those services.
.
Happy consumers are great - but when it comes to you receiving a paycheck, I don't think you care where the money came from. Same for the stockholders.
.
Recognize that the network airlines have a viable business model - at present more viable than WN's - and they offer services that WN can't.
.
Doesn't mean WN doesn't offer a product that meets the needs of their customers, even if it is a fairly small market group.
.
BTW, I still believe you will see WN increasingly walk away from being what it was in the past as it now becomes the only true nationwide low fare carrier and one that is substantially larger than B6, its next closest competitor - w/ considerably less nationwide coverage.
.
The lights went off in WN executives heads' not that long ago that they were reaching the end of what they could accomplish as a low fare carrier... they decided to move into the role of becoming a nationwide carrier, eclipsing all other low fare carriers, and moving into the realm of network carriers. They will make a few tweaks here and there in the US but their US system is pretty close to being built out.
As they reach maturity in the domestic market and as their growth options move out to the int'l market where network carriers have long had an advantage, you will see WN becoming more like just another network carrier than ever before, even if they try to maintain a few relics from their past to make you think otherwise.
SparrowHawk
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How so? SWA usually buys out it's Sr. folks if costs start to rise.
Nice segue. Here's an interesting article on CASM.
http://seekingalpha.com/article/293337-spirit-airlines-retains-cost-advantage-amr-and-united-continental-trail-peers?source=yahoo
signals
Veteran
Not to give my age but...blame it on the Basanova, or Casanova....divide and conquer. US gives Doug the upper hand. I wouldn't care but the airline industry sets the standard for the rest of US B)
signals
Veteran
Since I'm banned from Seeking Alpha because they make sense, I'm guessing that not all WN folks have to accept the buyout. Thus LUV has to accommodate them.
