US Airways profit projected to soar

[back2CLT]

One has to wonder how they'd be doing if they had agreed to competitive wages and not imposed more stupid fees than any other airline.

It seems you know the answer. They would either be less profitable or not profitable.

It seems that the market has spoken regarding the fees, and by that, I mean they are generating revenue because people are willing to pay the fees.

As far as employee wages, its tough. I have an anti-union sentiment that believes employees are intentionally hindering their success by making lateral transitions to other carriers a "re-start" option, and that they allow the airlines exploit that inprisionment and push down their wages. Conversely, it would be hard to argue that a 30 year veteran has developed enough additional skill to justify paying them more than a 5 year veteran (pilots excluded), so the free market may not be the solution either, as that would dictate that employees exceeding a certain level of experience should be capped in pay and benefts.

I DO think that performance based quarterly bonuses should be distributed. Pay out x% of profits to employees per quarter, put y% in the bank for rainy days/years and distribute the rest to shareholders. This will keep fixed costs down, and not lead to substantial furloghs when the economy receeds.

 

[AstroLounge]

While "pursuing" anything is always possible, the federal law makes it nearly impossible to achieve. It would be negotiate followed by binding arbitration if necessary - certainly for pilots since USAPA represents no other pilot group and for F/A's in a merger with a non-AFA carrier.

Your sentiment is sound however - in 13 days this merger will be 5 years old and there are still two large groups of employees not integrated. There's plenty of work to be done on that front without worrying about what may or may not happen years down the road.

Jim

regarding the merger and LACK of labor Accords..........I really don't see what the Big deal is about integrating the Flight Crews anyways. Does ANYONE really give a RATS about working East with West and vice versa? Sure NEW Contracts are left in LIMBO but I can't think of ONE Reason why I should be SO DETERMINED to concede anything to achieve such a silly integration. Management has created this dilemma and appears unwilling to get their hands 'dirty' in resolving the situation so WHY NOT let the Status Quo remain? Very RARELY do East/West intermingle to this day and WHY some people want to WASTE so much Energy on this subject is beyond me. (The pilots unwillingness to RESOLVE their differences only hurts the pilots..........I have No Stake in that squabble. I have an opinion but Who cares.) At the end of the Day, as long as everyone DOES THEIR JOB, THAT should be the story of the Day.

 

[UPNAWAY]

It seems you know the answer. They would either be less profitable or not profitable.

It seems that the market has spoken regarding the fees, and by that, I mean they are generating revenue because people are willing to pay the fees.

As far as employee wages, its tough. I have an anti-union sentiment that believes employees are intentionally hindering their success by making lateral transitions to other carriers a "re-start" option.

And Art has an Anti-US sentiment. They have been easily the best operating Airline for the last two years and now may be one of the best financial performing airlines and Art still wants to shut them down!

 

[BoeingBoy]

Very RARELY do East/West intermingle to this day

While that is an understandable perspective for someone in a work group that hasn't been integrated yet and is in a station where HP had no service prior to the merger, I suspect that those who have integrated and are at stations where both airlines had pre-merger service (and thus employees) would disagree.

While I'm certainly NOT saying that you should give concessions just for the sake of integrating your work group, there will be differences in the current two separate contracts that have to be resolved - the "me too" language, for example. Human nature almost insures that the side that has to change will see it as a "concession", whether it is a real concession or not.

Plus there are those on both sides for whom not being integrated is like a concession. Surely there are east commuters who would prefer to commute to PHX and west commuters who would prefer to be based in CLT/PHL/etc. Lack of integration makes bases that the airline has unavailable to them, so their longer/worse/whatever commute is their "concession" for lack of integration.

Jim

 

[BoeingBoy]

It seems you know the answer. They would either be less profitable or not profitable.

It seems that the market has spoken regarding the fees, and by that, I mean they are generating revenue because people are willing to pay the fees.

My guess is that your first statement is correct - the profit will be about equal to what the fees bring in. Which could be a long term problem. Passengers don't like the fees and will avoid them if possible. US has been seeing market share shrink for a while now. How much can an airline shrink and still be profitable with all the fixed costs?

Jim

 

[Black Magic]

IMO if people are dumb enough to pay the fee's then thats their own choice. If the money is on the table then the company should go after it. Where consumers really have it wrong is when in their mind they think "we'll I'll stick it to company and I'll just carry on my bag instead." I laugh at this as the fees are just extra gravy. If people really wanted to take a stand with the anti-fee rant, they should not purchase a ticket on any carrier that charges bagfees. Even if a person is not checking a bag you should still book with SW or Jetblue if possible, in a matter of principle. All the carriers would loose so much revenue they would back peddle quickly and get rid of them. But until the consumers wake up they are here to stay.

 

[aafsc]

Well, if US has a lot of cash on hand and AA is in BK, then it will be US buying AA, not a merger of any sorts (regardless of what the combined name is). Do you think that US would then staple its on employees to the bottom of a merged list? I don't see the employment downside.

The stronger US is, the less likely they are to be acquired as their stock price should move upward.

An airline in bankruptcy can successfully fend off an unwanted buyer. Remember DL's successful rejection of US during their bankruptcy? AA and it's employees would do the same IF (very unlikely) AA went chapter 11- Keep AA our AA. AA is making a slow recovery with the improving economy and recent Atlantic joint ventures with BA and IB. The pending joint venture over the Pacific with JAL will only improve AA's position. The only thing that would harm AA's recovery would be a strike. So your dreams of US acquiring AA and stapling AA's employees to the bottom of a combined seniority list is only a dream. Our route system is far far superior to yours. Besides only the TWA F/As and agents were stapled (agents at AA are non-union so seniority is not etched in stone). Some of the TWA pilots were slotted in and guaranteed captain positions in STL while some were placed at the end of the list, it was according to their career expectations, which given TWA's cash position, was nil. The TWA ramp, mechanic and related ,who waived their labor protections as a condition for AA to purchase select TWA assets, (as all TWA labor groups did), got those protections given back to them by the union representing AA's ramp, mechanic and related employees. We went to binding arbitration, the arbitrator ruled and the TWA employees (just like the US East pilots) disagreed with the arbitrator and did everything possible to nullify it by filing numerous grievances and lawsuits; their only position was DOH (sound familiar?) They lost all their lawsuits and grievances and since they were in the minority they could not form a new union to attempt to avoid a binding arbitration. Why am I posting this? Because in the unlikely event of an AA chapter 11 and US taking over AA I would demand (even if McCaskill/Bond didn't exist) a binding arbitration for the simple fact that we gave it to the TWAers when we did not have to. Ramp and mechanic and related at AA could have easily followed the AA F/As and simply stapled them but we didn't. So I would demand the same treatment from the IAM to the TWU that the TWU gave to the IAM. Additionally, unlike the TWAers, we at AA will not waive our seniority protections.

As far as US's performance vs AA's It is quite simple. US is making money because their employees are the lowest paid in the industry, have inferior benefits and work rules, allow for a lot more outsourcing than AA, and gave up their pension and retiree medical. All this after numerous trips to the bankruptcy court. AA on the other hand has never went bankrupt and it's employees are among the highest paid, have better work rules, better benefits, outsource very little work, and we still have our pension and retiree medical benefits. That is why we basically broke even last quarter. If I were a US employee, I would not be celebrating the fact that the company is highly profitable off the backs of its workers.

 

[nycbusdriver]

An airline in bankruptcy can successfully fend off an unwanted buyer.

Not true. The creditors of an airline in bankruptcy can successfully fend off an unwanted buyer. The creditors have all the power. The airline, i.e. management, board, stockholder, have almost none.

Delta showed Parker the door by convincing the creditors that their (Delta management's) plans were a better deal for them and more likely to recoup more of their money than what LCC was offering. That successful argument, and and only that argument, scuttled the deal for LCC. The employees wailing and gnashing of teeth was certainly good entertainment, but nothing more.

 

[ebwgs]

"As far as US's performance vs AA's It is quite simple. US is making money because their employees are the lowest paid in the industry, have inferior benefits and work rules, allow for a lot more outsourcing than AA, and gave up their pension and retiree medical."

All true. You fail to mention the additional advantage in not hedging fuel.

"All this after numerous trips to the bankruptcy court."
This statement is rather hyperbolic as there were 2 trips. The number 2 does not really conjure "numerous" but I get your point.



"AA on the other hand has never went bankrupt and it's employees are among the highest paid, have better work rules, better benefits, outsource very little work, and we still have our pension and retiree medical benefits. That is why we basically broke even last quarter."

And that is why your company could find itself in trouble. Your labor costs are the highest in the industry as were ours at one point and we know where that led US. AA, for all of its size and power, is not immune to some of the same fixes that its competitors employed to get their financial houses in order. The Oneworld alliance is currently in total disarray. There is no doubt that the potential AA-BA ATI benefits could elevate AA from its current doldrums, but with contentious labor issues at AA, BA, bankruptcy at JAL, coupled with the new ANA investment in an LCC out of Kansai which could threaten JAL, and the bankruptcy filing and subsequent collapse at Mexicana could all serve to undermine any synergistic benefits anticipated by the construction and inclusion of anti-trust immunity within the Oneworld Alliance. Stay tuned.
If I were a US employee, I would not be celebrating the fact that the company is highly profitable off the backs of its workers.

 

[SparrowHawk]

And Art has an Anti-US sentiment. They have been easily the best operating Airline for the last two years and now may be one of the best financial performing airlines and Art still wants to shut them down!

Art & I have flown more PAID miles on US Airways than most on this board that aren't pilots. We are CUSTOMERS, which in case you haven't noticed is the reason you have a job. Art, has shifted his business elsewhere not because he hate US Airways, rather because other carriers offer a better value proprosition and unlike me he isn't held captive by the PHL hub.

What you have to realize it that "Best Operating Airline" is accurate we're dealing in tenths of percents differential in many case between worst and first. That being the case as a customer you look elsewhere and you evaluate things like FF Programs, Clubs, On Board Amenities and customer service should things go wrong as they do with any airline.

We've all heard the anti customer comments from Parker and Kirby. So exactly WHY would a business flyer like Art rush to the US Airways counter?

The following is from a different web site: Take it FWIW but it does support what I've been saying.

There is an article coming out soon about US Airways and it will appear in the USA Today. I was alerted and asked to speak to the writer while my wife and I were in Hawaii last week by US Airways as a CP who would have good things to say about the airline. Apparently, through the discovery process, this writer (whose name escapes me now) could find no one...not a single Frequent Flier who had anything good to say about US Airways. US Airways apparently thought I would so they recommended he call me, which he did.

Suffice it to say, that this flyer buried US Airways. Anything you'd like to add?

Looks like I'll be back in the air more regularly and I'm seriously considering the Midwest/Frontier airline for the bulk of my business. What does US offer a frequent flyer? Mostly the answer is NOTHING.

 

[wings396]

Not true. The creditors of an airline in bankruptcy can successfully fend off an unwanted buyer. The creditors have all the power. The airline, i.e. management, board, stockholder, have almost none.

Delta showed Parker the door by convincing the creditors that their (Delta management's) plans were a better deal for them and more likely to recoup more of their money than what LCC was offering. That successful argument, and and only that argument, scuttled the deal for LCC. The employees wailing and gnashing of teeth was certainly good entertainment, but nothing more.

I think that the main reason that DL fought LCC and Parker off was due to their own merger with NW that was already brewing behind the scenes. The CEO at DL was only there for the interm, and Anderson showed up very soon after the attempt by LCC. I'm sorry that I can't recall the DL CEO's name at the time, but I'm sure that he and the BOD had a good insight as to what was on the horizon involving NWA. I recall the speculation about DL & NW merging started to swirl as soon as they both made the trip to BK court on the same day.

 

[Glucose Intolerant]

As far as US's performance vs AA's It is quite simple. US is making money because their employees are the lowest paid in the industry, have inferior benefits and work rules, allow for a lot more outsourcing than AA, and gave up their pension and retiree medical. All this after numerous trips to the bankruptcy court. AA on the other hand has never went bankrupt and it's employees are among the highest paid, have better work rules, better benefits, outsource very little work, and we still have our pension and retiree medical benefits. That is why we basically broke even last quarter. If I were a US employee, I would not be celebrating the fact that the company is highly profitable off the backs of its workers.

My gosh spoken like someone who actually looked behind the curtain.......what a concept. Unlike the masses here that continue to consume mass quantities of the cactus kool-aid while following the yellow brick road and GREAT OZ to no where.

Parker and Company offered the DAL board significantly more than the proposed DAL/NWA had to offer on paper, yet still was rejected.
Some people and management teams still can differentiate when they are being hoodwinked. Good thing for DAL.

 

[IberiaMAL]

Art & I have flown more PAID miles on US Airways than most on this board that aren't pilots. We are CUSTOMERS, which in case you haven't noticed is the reason you have a job.

To be honest - and not to sound rude - but I really don't care anymore about yours, Bob's, nor Art's expierences on US Airways. I know you guys are better than all the rest of us but US is making a profit and US did not go belly up like you guys have predicted for the past 5 years.

You guys have moved on, what, 4 years ago? bye...

Meanwhile, US Airways is projecting a pretty high and mighty profit. Charlotte is a very strong candidate for the 2012 DNC, one of the fastest growing economies in the USA with an average of 100,000 new jobs a month, new terminals at CLT are underway, new check-in's, etc. etc. at CLT. There is that rumor of US getting up to 710 daily flights at CLT.

There is a whole lot more to this news than 3 disgruntled above-all customers who have moved on from US Airways 4 years ago.

Is the current business model sustainable?
Will US expand internationally/domestically?
etc. etc.

Have fun at Frontier.

 

[SparrowHawk]

You guys have moved on, what, 4 years ago? bye...

Funny if I've moved on then why am I very close to Silver status?

Is the business model sustainable? YES it is! just so long as the employees are willing to work for the lowest wages and benefits in the majors. Heck, Spirit pays their pilots more.

If stiving to be merely "Good Enough" as Doug Parker has been heard saying in town hall meetings is the goal then I'd argue they've achieved their goal.

If employees are willing to work for wages that are "Good Enough" then I can't say very much.

If the company is happy with IT/SHARES and it's "Good Enough" then it supports my contention that customers NEVER factor into the equation.

 

[Art at ISP]

I feel the need to set the record straight here, as apparently many of you do not know my history with US Airways.

I never said I wished they would go out of business, although I did feel that some management moves indicated that at some point they might. I was wrong. What I was NOT wrong about and what Bob was NOT wrong about is US upper management's utter contempt for loyal customers and employees. You who work there know well that you have some of the worst pay rates and work rules in the industry.

If it were not for the ridiculous nickel and diming, and the lowest wages, the company's financial picture would not be as rosy as it appears to be today. US leads the way with fees--and let me say up front that I don't disagree with ALL the fees...just most.

My reason for not flying US any more has nothing to do with the front line employees and operations--in fact I congratulate Rob Isom for turning things around as he has. The main reason I left and will not come back is that in my dealings with upper management as a customer advocate and VERY frequent customer I was lied to, given deliberate false information, and totally misled on a number of issues. When a managing director looks me in the face and says they are going to reach out to dissatisfied customers PERSONALLY and 60 days later not one has been called, it says something about that person and how the corporate culture permits that to happen.

Charging elite customers for choice seats is an insult to those who kept flying US through the good times and bad ...and one will note that NO OTHER airline has matched that policy. Many offer the prime seats for sale, but only after all elites have been accommodated.

The fundamental problem, however, is that if fares had been rational in the first place, none of these fees would have been necessary...something I blame ALL the airlines for. IF you want to have a fare structure based on services offered, then make a simple tiered fare structure, ala AC or FL....right up front you know what you're going to pay..you can choose a prime seat immediately, and you can choose a fare which includes baggage I believe. The current system is disingenuous and is somewhat fraudulent as the true cost of travel is not disclosed up front.

The bottom line is that you should enjoy it while you can. US still offers a substandard product, and has a culture of dishonesty in its dealings with both employees and customers. Once the federal government regulates these fees and the unions are able to get industry par contracts, I think the financial picture will be somewhat different.

I do miss some of my old friends at US Airways and wish you all well, but you won't see a dime of my money until Doug and Scott are gone.

My BEST to you all...