The shortage is coming and not from bob

FrequentFlierCA

Veteran
Feb 25, 2008
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The unfortunate thing here is that if a union weren't in the way you'd see pay raises a lot faster in a situation like this. The shortage will drive up your value quickly and wages would rise to prevent poaching by other carriers. But with the union locking you in for several years you'll have to wait until the next contract to see any benefit.
 

700UW

Corn Field
Nov 11, 2003
37,637
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NC
Apparently you have never worked in the airline industry, you have no clue about it.

First people laid-off and pay cuts that it happens to is non-union.

So explain how WN is the highest paid in the industry, most profitable over the past 30 years, yet they have the highest percentage of a unionized workforce in the airline industry?
 
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Buck

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Aug 20, 2002
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Apparently you have never worked in the airline industry, you have no clue about it.

First people laid-off and pay cuts that it happens to is non-union.

So explain how WN is the highest paid in the industry, most profitable over the past 30 years, yet they have the highest percentage of a unionized workforce in the airline industry?
All true, but divide the representation between an Industrial Union and a Craft Union and see if there is a difference.
 

737823

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Jun 5, 2010
6,631
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Apparently you have never worked in the airline industry, you have no clue about it.

First people laid-off and pay cuts that it happens to is non-union.

So explain how WN is the highest paid in the industry, most profitable over the past 30 years, yet they have the highest percentage of a unionized workforce in the airline industry?

Well take Econ 101 and you'll learn that the wage you pay someone is very different than the cost they impose. WN can pay the most, while being the most profitable because of work rules and productivity gains. You have to look at the entire contract as a package


Josh
 

Hackman

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Sep 30, 2003
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Well take Econ 101 and you'll learn that the wage you pay someone is very different than the cost they impose. WN can pay the most, while being the most profitable because of work rules and productivity gains. You have to look at the entire contract as a package


Josh
Hey Josh, stick to subjects you know: like sitting in first class and complaining about the lowly non-revs flying with you, how little the ungrAAteful flight attendants kiss your ass, how your second glass of wine didn't come on time as demanded, and finally the indignant reasons why your never flying on AA again.

You don't know anything about the reasons WN is successful....start with the self-help book "Airline Management for Dummies"...the WN edition.
 
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eolesen

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Jul 23, 2003
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I'm the publisher of that, so feel free to ask me any questions....

But the newbie is right about the fact you can't look at the wages without looking at the total package. Take WN's contract and benefits, and you can talk about their wages. You guys seem to want your workrules and benefits with their pay, and that dog ain't gonna hunt.
 
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Hackman

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I'm the publisher of that, so feel free to ask me any questions....

But the newbie is right about the fact you can't look at the wages without looking at the total package. Take WN's contract and benefits, and you can talk about their wages. You guys seem to want your workrules and benefits with their pay, and that dog ain't gonna hunt.
Your the publisher of the AA edition, I didn't see your WN version. The AA copy hasn't done so well... at least for the workers that is.

What work rules and benefits are your referencing that AA/twu has that WN does not? Save the heavy overhaul diatribe, if Centerpork could have outsourced it cheaper they would have done so long ago.

Are you referring to the WN 401k vs our DB plan? The fact is the WN AMT's with 20+ years I know are fairly wealthy and many are millionaires with a excellent company matched 401k. Were as the AA AMT's have been locked into a under performing 401K for years...and the constant threat of losing the DB plan.

How about the WN executives compensation vs. AA executives? WN suits receive much less compared to AA for being PROFITABLE year after year, where as AA's empty suits rake in exorbitant compensation for RECORD LOSSES. Save the size of the airline comparison or the comparable MAJOR CORPORATION crap , it's PAY FOR PERFORMANCE right? Profit vs. loss....the BOTTOM LINE?

Here's Bandit the black lab to fetch that smelly overripe mAAllard that's been cooking in the sun.... looks like he's going for a nice cool swim instead.
 

eolesen

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Jul 23, 2003
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It's one thing to have the ability to send overhauls out when you don't have the base infrastructure, and yet another when you do.

Lots of other differences in the contract; you're bright - go read them for yourself and see which one micro-manages what the company controls and has lots & lots of protective language. Retirement is just one aspect when you look at benefits. Retiree medical is another. Essentially, no ties or obligations to retirees except travel.

I totally agree with you on the exec compensation. That's covered in the book under the chapter titled "How not to poison the well of labor relations beyond repair".

I don't think the guys at AA read that far.
 
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737823

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Jun 5, 2010
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Hey Josh, stick to subjects you know: like sitting in first class and complaining about the lowly non-revs flying with you, how little the ungrAAteful flight attendants kiss your ass, how your second glass of wine didn't come on time as demanded, and finally the indignant reasons why your never flying on AA again.

You don't know anything about the reasons WN is successful....start with the self-help book "Airline Management for Dummies"...the WN edition.

While I don't pretend to be an expert in airline management I feel I have a good grasp of their overall strategy and how they have cut costs. Again-in the context of any business the wage you pay an employee is entirely different than the cost they impose. Aside from benefits there are administrative costs, hiring costs, etc that don't appear on the payroll. Back to productivity the total cost can be reduced through productivity gains while the worker enjoys a high wage. Mathematically it can be represented as:

Wage $$/Marginal Product of Labor (MPL-productivity)=Cost

Again you have to take a look at the 360 degree view. You can't cherry pick articles and make apples to apples comparisons between TAs. A TA is a package.

Oh, and I had awesome FAs coming back from LAX last week. Don't think there were any non-revs but it was an awesome flight. Hopefully once the FA contract is settled the morale will improve and we'll see new FAs on the property.

Josh
 

Hopeful

Veteran
Dec 21, 2002
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While I don't pretend to be an expert in airline management I feel I have a good grasp of their overall strategy and how they have cut costs. Again-in the context of any business the wage you pay an employee is entirely different than the cost they impose. Aside from benefits there are administrative costs, hiring costs, etc that don't appear on the payroll. Back to productivity the total cost can be reduced through productivity gains while the worker enjoys a high wage. Mathematically it can be represented as:

Wage $$/Marginal Product of Labor (MPL-productivity)=Cost

Again you have to take a look at the 360 degree view. You can't cherry pick articles and make apples to apples comparisons between TAs. A TA is a package.

Oh, and I had awesome FAs coming back from LAX last week. Don't think there were any non-revs but it was an awesome flight. Hopefully once the FA contract is settled the morale will improve and we'll see new FAs on the property.

Josh
Tell you what, Josh.....The company should come right out and say "IF YOU GUYS WANT SWA OR UPS PAY, THEN GIVE US THEIR OPERATING STRUCTURE..."

All we hear form the pro company pundits is that our labor costs are too high...Once and for all, the company should come right out and say what they mean.
 
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787nightmare

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Aug 28, 2010
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Two years and four lines seems an awful lot for a "trial basis". It is enough to cover their older model 737s (300s and 500s).

You're right, 4 lines. Didn't realize they had that much going on down there.
Which is the max allowed per the AMFA contract. According to my source, they put out a good product too.

Not exactly what I wanted to hear... <_<
 

FWAAA

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Jan 5, 2003
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Some of you guys seem to keep forgetting(aafsc), WN does do some heavys(granted no component OH) in DAL(several lines), as well as phase hvy cards in PHX, HOU and DAL on RONs.

Southwest says the following about its maintenance in its annual 10-K:

The Company performs substantially all line maintenance on its aircraft and provides ground support
services at most of the airports it serves. However, the Company has arrangements with certain aircraft
maintenance firms for major component inspections and repairs for its airframes
and engines, which comprise the
majority of the Company’s annual aircraft maintenance costs.

That doesn't sound like WN is doing its heavy airframe overhaul in-house, but maybe WN is not describing its maintenance activities accurately in its 10-K. Not all airframe maintenance is performed in El Salavador, but it doesn't sound like any Heavy C checks (or D checks) are performed in DAL by WN mechanics.
 

eolesen

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Jul 23, 2003
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Tell you what, Josh.....The company should come right out and say "IF YOU GUYS WANT SWA OR UPS PAY, THEN GIVE US THEIR OPERATING STRUCTURE..."

All we hear form the pro company pundits is that our labor costs are too high...Once and for all, the company should come right out and say what they mean.

The pundits aren't the only ones saying it -- it's right there in the company's financial reports....

Go read any transcript of an earnings call in the past 18 months, Hopeful. Here's what the company was saying a year ago:

Arpey said:
Finally, let me just briefly touch on labor negotiations. We’re making progress as demonstrated by the tentative agreements we reached in the second quarter with a number of employee groups represented by the Transport Worker’s Union.

We believe these agreements strike the right balance between our folks’ understandable desires for short-term improvement and our company’s need for cost competitiveness which is the only way to provide for long-term job security.


Horton said:
While this is a step in the right direction, we’ve said before that our labor costs are the highest in the industry. That has mostly to do of course with our status as being the only big network carrier not to have filed for bankruptcy. But that’s the past and we’re focused on the future. Let me summarize why we think this gap will be mitigated going forward.

Based on our analysis of airline industry labor contracts, we estimate that we have an annual labor cost gap of nearly $600 million on average versus our network competitors. Since most of the industry’s major contracts are now amendable, we believe the gap will start to close as the industry works through this contract cycle.

There is evidence of the cost gap closing significantly this year with our largest competitor, Delta. And of course as United and Continental work to combine their companies over the next couple of years, they’ve indicated that employees will share in the benefits of their proposed merger. We expect this will drive increased labor costs for the new United.

That said, we’re not waiting for the world to change around us. We’re working hard to achieve fair, responsible and competitive labor agreements, that is the path to the most opportunity in job security for our people. As we do and as the labor costs of other carriers increase we think our current cost gap will continue to narrow.

I know, these are all made up numbers, and it's not backed up by statistics... but the company has almost always said they need costs to be in line with the competition. That was Crandall's mantra.

And yes, I know the company isn't telling you HOW to close the cost gap. I'm sure they have a Vermont Plan somewhere with their way of implementing changes if given free reign, but for now are giving the union the ability to come up with ways that work for the membership.
 

Bob Owens

Veteran
Sep 9, 2002
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Southwest says the following about its maintenance in its annual 10-K:



That doesn't sound like WN is doing its heavy airframe overhaul in-house, but maybe WN is not describing its maintenance activities accurately in its 10-K. Not all airframe maintenance is performed in El Salavador, but it doesn't sound like any Heavy C checks (or D checks) are performed in DAL by WN mechanics.
Well it doesn't sound like they are doing a majority of it in house. We all knew that already, don't know if they do D checks, maybe they sell them before they get that old, but they have 500 airplanes, they don't and never had the facilities to do all their own OH. But the trend there has been to bring more in house.
 

Bob Owens

Veteran
Sep 9, 2002
14,274
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The pundits aren't the only ones saying it -- it's right there in the company's financial reports....

Go read any transcript of an earnings call in the past 18 months, Hopeful. Here's what the company was saying a year ago:

I know, these are all made up numbers, and it's not backed up by statistics... but the company has almost always said they need costs to be in line with the competition. That was Crandall's mantra.

And yes, I know the company isn't telling you HOW to close the cost gap. I'm sure they have a Vermont Plan somewhere with their way of implementing changes if given free reign, but for now are giving the union the ability to come up with ways that work for the membership.
Well the company claims that just $100 million of that labor cost gap is attributable to MX. If AA outsourced their OH they could shed around 6000 jobs. That could shave labor costs by around $510 million, they may end up spending triple that to vendors to overhaul their 600 airplanes but labor costs are all that matter right? So if our labor costs are over competitors who outsource their overhaul by just $100 million and if AA followed their competitors business model by outsourcing they could shave $510 million they are getting a $400 million bargain as far as MX labor costs. They get the Tulsa base for a song, the city provides other incentives as
well.
Horton says that they have this disadvantage because they didn't go BK. Well I doubt that. Retiree medical. Company claimed that eliminating retiree medical would get them $57 million the first year, that was from plundering the accounts of those who have paid into the fund for years, after year one the savings with their 20 hour per month (vs 11 or 12 at competitors) while only being able to accrue 8 days per year ( vs 12 days/yr at competitors) was $5.8 million.
The pension? I think that it's already been established that currently the DB does not present a cost disadvantage, in fact AA admitted that currently the 55% DC would cost more. As far as long term liability Delta owes it's frozen plan around $12 billion while AA owes less than IIRC $7 billion to their plan.
So where are the costs that make our MX labor costs uncompetitive? Sure the business model is different, and even though our wages are lower and benefits inferior, yes, our "labor cost" are higher. The question is,and remains unanswered, does the total cost for doing OH in house surpass what it would cost if they outsourced it? The companies behavior provides the answer, the fact that they have opted to increase insourcing is more telling than anything they say. So the next question is at what point does that change?
 

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