United Verus The Lccs

[Ukridge]

Albatroz - I cannot speak with authority on the remuneration levels for the staff of the European/British carriers other than to note that yes it is quite expensive to live on the eastern side of the Atlantic. This is particulary true in the London metropole where all is subject to price inflation. As an example, office space in Paris is significantly less than London and that is just the start. I do know however, that European air staff have rules that are in some ways more onerous and in some ways less so. I would need to defer this question though to the posters on this board that are actually in the employ of an air carrier and have expert knowledge of such rules and limitations.

As for my employment of JetBlue as an example I certainly seemed to have raised a point that many feel quite passionate about. Europe of course is seeing a profileration of "different cost" (as I feel they would be more accurately labled since they in many ways are performing a different role in the A to B equation thus my previous enqueries concerning the relavance of comparing CASMs) carriers as well. Easyjet, Ryanair, Germanwings, Hapag-lloyd express as well as a host of European charter companies such as LTU, MartinAir etc., make the situation here as open and fluid as in America. However, this being the United forum I needed to frame my enquery in light of United's competition. I will stand by my observation however, that from what I have read in the press, JetBlue other than utilization rates really does not provide a product (other than the ubiquitious cultural icon the television) that is significantly better than any other carrier. How can I maintain this without ever having even flown a LCC? Yes, I know the press lavishes praise on them and that they have a loyal and near cult status camp following, but I still see this as a case of the legacy carriers not yet having leveraged their advantages properly. Time will tell. Cheers

 

[orwell]

The question is what would JetBlue charge if there were no legacy carriers left?

Thank you! You've hit on a point I've often preached about.

No one mentions the fact that the commodity carriers in the US really have enjoyed their own sort of monopoly for some time. What I mean is that they've carved out a niche of cut-rate pricing, thanks to a variety of factors - subsidies, free advertisement and others as mentioned in several posts.

They historically are careful to avoid each other, content to be the unassuming parasites suckling on the near-dead dinosaur carriers, as the press love to portray them. While this does not constitute a true monopoly, it certainly makes for a one-sided equation: on the one hand, the lumbering legacy carriers with fixed costs very difficult to alter and who are ridiculed on a daily basis by the media, and on the other young carriers who are heralded as the saviors for the hip, "travel savvy" consumers who know they have the right to on a whim visit grandma on the opposite coast for a few bucks.

But what would happen when these dinosaurs finally went extinct? Do B6 and WN charge low fares because they have an undeniable urge to lavish the downtrodden consumer with the low fares they deserve as a birthright? Of course not. They charge low fares because that's the only way they could come into existence and the only way they could succeed. I'd enjoy seeing the press coverage change as the impetus to charge low fares vanished.

The other interesting scenario is what will happen when the commodity carriers are finally forced to face REAL competition - both with the legacy carriers when they've successfully transitioned to a lower cost structure and with each other. That will be also fun to watch. Either way, the honeymoon will be over relatively soon. Even weeds eventually run out of space in the garden.

 

[Ukridge]

"But what would happen when these dinosaurs finally went extinct? Do B6 and WN charge low fares because they have an undeniable urge to lavish the downtrodden consumer with the low fares they deserve as a birthright? Of course not. They charge low fares because that's the only way they could come into existence and the only way they could succeed. I'd enjoy seeing the press coverage change as the impetus to charge low fares vanished.

The other interesting scenario is what will happen when the commodity carriers are finally forced to face REAL competition - both with the legacy carriers when they've successfully transitioned to a lower cost structure and with each other. That will be also fun to watch. Either way, the honeymoon will be over relatively soon. Even weeds eventually run out of space in the garden."

Orwell - probably as trenchant analysis of the situation as I have read. This is exactly what my colleague and I were trying in our incomplete way to answer. If, (and this is indeed an if) the legacy carriers can successfully restructure themselves, then what happens to all the LCCs as they begin the battle with themselves? There is only so much low-hanging fruit on the tree and in true basic economic tradition and theory, the market will become saturated and the weaklings will be put out the door.
It seems then that we have two distinct issues at hand. The first is the viablity and nimbleness to the legacy carriers to adopt and make the necessary changes. The problems for a carrier such as United are well documented and Chip, with the regularity and precision of a cesium clock reminds the reader of the issues on an hourly basis. Someone on the staff will eagerly search for the advantages that can be leveraged.
The second issue is that of the growing competition among the LCCs themselves. How many 18 Euro flights can the market support from London to Nice? Their markets will soon overlap and this will prove interesting. Once these two distinct issues are resolved, then time will tell how the legacys bring their advantages to bear against the remaining LCCs or if a truce will be declared and a status quo established.
Cheers

 

[Bear96]

As can be seen, jetBlue compensation is well in line...

Hmmm. Well, if the absolute lowest paid (according to the link) in terms of hourly flight pay rates counts as "well in line," I guess so.

 

[Diesel8]

Well, it does appear a few airlines were left off that chart, wonder why. Secondly, as I posted, the rate for CA at jetBlue is at eight years, the rest at twelve. If the payscale keeps going as is, doubtfull, then it would surpass a few of the ones listed at the 10 year mark.

 

[Albatroz]

UKRidge, thanks for your reply. I know a few BA flight attendants and they wanted to know what my pay, work rules were like and it turns out they make about the same I do but they work about 20hrs a month more then me. So, I guess I make more. Also, they don't bid or trade trips and get nothing for vacation pay, plus pay for private insurance way more then I do if they want to go that way and not use their national health system. They also told me that their co-pilots make about the same or less then a senior BA purser or CSD, (What we call a purser). If it is like that with every department, and they charge the same price for tickets, we are in trouble competing. Thanks.

 

[atabuy]

Ukridge,
Your senarios are spot on about the mature airlines having a hard time against upstarts. It will be a bloody battle until more passengers start flying and seat demand increases.
Airlines were gearing up for huge seat demands prior to 911 and then you know the rest.
The legacy's have been around since regulation, and they have put on excess weight ( buildings, extra management layers ) they don't seem to know, how to unload.

When times were good anybody could have managed Ual, but as times soon turned, you saw that management could not run the airline, and had made many bad judgements and wasted many valuable assets.

So the finger pointing started and Ual not only started losing money, but the ability to keep up with startups who had great deals, and Luv, that never fell into the trap of using profits for brick and mortar, or too many people who were not productive.

I was searching for some of the predictions for passenger increases prior to 911, but only came up with one, and another search site.
Ual still has to think out of the box and really come up with a working plan.

Time will tell. Cheers



http://www.orlandoairports.net/goaa/press/19970813.htm

http://search.netscape.com/ns/search?query...age=NSCPResults

 

[rotate]

-Diesel8:

The APA chart you referenced should be regarded with great skepticism. It quotes rates for US AIRWAYS 777s and Jetblue 737s. Neither of these carriers operate these respective aircraft. :huh:

I hope the person responsible for this information never pilots an aircraft I'm seated in.

High pay should be associated with high quality and accuracy.

 

[iflyjetz]

-Diesel8:

The APA chart you referenced should be regarded with great skepticism. It quotes rates for US AIRWAYS 777s and Jetblue 737s. Neither of these carriers operate these respective aircraft. :huh:

I hope the person responsible for this information never pilots an aircraft I'm seated in.

High pay should be associated with high quality and accuracy.

You missed the following notes directly underneath the charts:

2. The DC-10 at Northwest and Hawaiian, and the A330 at US Airways were substituted in lieu of the 777 pay-rate.
3. The A319/A320 at United, US Airways, Northwest, and Jet Blue was substituted in lieu of the 737/800 pay rate. The B-717 at Hawaiian was substituted in lieu of the 737/800 and MD-80 pay rate.

😱 😀

The devil's in the details.... 😳

 

[iflyjetz]

Well, it does appear a few airlines were left off that chart, wonder why. Secondly, as I posted, the rate for CA at jetBlue is at eight years, the rest at twelve. If the payscale keeps going as is, doubtfull, then it would surpass a few of the ones listed at the 10 year mark.

Diesel8, pay charts flatten out after the third or fourth year; how much of a wage increase do you expect to see from year 8 to 12?