USAirways posts profit

[UPNAWAY]

Doug has said the exact same thing himself, infact did so yesterday. My guess is the Fool is correct and we get raises and go back to bairley squeaking by in good times and loosing a ton in bad times, even now the profit marging is only 4%. Without a merger industry average wages are a fools pipedream.

 

[700UW]

Legend is:
Airline - RASM - CASM - Yield cents - Profit/Loss Margin %

Atlantic
AA - 16.16 - 15.93 - 13.77 - 1.4%
DL - 14.78 - 12.93 - 14.07 - 14.3%
UA - 15.53 - 13.75- 14.41 - 12.9%
US - 16.07 - 13.39 - 13.26 - 20.0%

Latin
AA - 19.31 - 16.69 - 17.45 - 15.6%
DL - 14.44 - 12.63 - 14.01 - 14.4%
UA - 16.54 - 12.73 - 16.27 - 29.9%
US - 16.55 - 15.11 - 14.05 - 9.5%

Pacific
AA - 15.81 - 16.73 - 13.45 - (5.5%)
DL - 16.20 - 12.68 - 15.97 - 27.7%
HA - 13.19 - 10.22 - 13.47 - 29.1%
UA - 16.90 - 12.91 - 17.07 - 30.9%


As we know Q3 was a good quarter for the industry, with everyone posting strong international numbers.
Only blip was AA across the Pacific.

Source: Form 41.

 

[FWAAA]

Doug has said the exact same thing himself, infact did so yesterday. My guess is the Fool is correct and we get raises and go back to bairley squeaking by in good times and loosing a ton in bad times, even now the profit marging is only 4%. Without a merger industry average wages are a fools pipedream.

Agreed. And even with a merger, industry average wages will likely send the combined airline back to Ch 11 unless the "synergies" are larger than they were in all the previous mergers.

If the combined US-AA shrinks by even a few percent (most other merged airlines shrank by more), it will be very difficult for the combined airline to pay those much higher wages to the US pilots and FAs and increase the nAAtive employees' wages (as Parker has promised) and still turn a reasonable profit.

 

[Jester]

Doug has said the exact same thing himself, infact did so yesterday. My guess is the Fool is correct and we get raises and go back to bairley squeaking by in good times and loosing a ton in bad times, even now the profit marging is only 4%. Without a merger industry average wages are a fools pipedream.

I think we hit upon the obvious... PHL, CLT and PHX are not premium revenue hubs compared to DFW, ORD, ATL and even MIA and SFO as international gateways. I do not think AA "Cornerstone" approach was poor, but rather they had a competitive disadvantage with the wage and benefit cost structure compared to those airlines who took a trip through bankruptcy court while continuing to fly large numbers of fuel inefficient MD-80s. Give AA the US cost structure and the aircraft type, and AA would be very profitable, and Parker knows this and why he is trying to move up into better hubs with an AA merger.

 

[diamondcutter]

Back of the envelope calculations show that US FAs would cost approximately $60 million more per year if they had the AA FA contract and the US pilots might cost as much as $300 million more per year if they had the AA APA contract. Right there is $360 million in higher wage costs. I'm certain that the US employees will be happy to split the $61 million in profit sharing, but what they really deserve are industry-average (or better) wages. And yes, US profits would be substantially smaller if that happened.

Twice last year, Parker offered the US FAs $40 million a year in raises and those would not have brought the FAs up to AA's bankruptcy contract.

As ClueByFour used to post, it doesn't take a genius to report profits when you pay your employees so much less than the competition.

Actually our TA would have payed more than AA . My AA friends wish they our last TA. Better duty rigs, vacation , senior pay, health care cost, ect.

 

[FWAAA]

Actually our TA would have payed more than AA . My AA friends wish they our last TA. Better duty rigs, vacation , senior pay, health care cost, ect.

It may have paid better in some areas than the AA FA bankruptcy agreement, but it would not have raised US costs to the AA cost levels. The $40 million in additional annual cost for the rejected US TA would have to be raised to more like $60 million to hit AA's costs.

 

[diamondcutter]

It may have paid better in some areas than the AA FA bankruptcy agreement, but it would not have raised US costs to the AA cost levels. The $40 million in additional annual cost for the rejected US TA would have to be raised to more like $60 million to hit AA's costs.

We just got a new TA 40,000 buy out plus 1,700 signing bonus . This news just came out From Afa ..this will pass.

 

[AAviator]

just one person's opinion of US' profits. http://beta.fool.com...ogyholnk0000001

Good read.....

If it weren't a valid point of consideration, it wouldn't be ruffling so many feathers here.....

 

[AAviator]

We just got a new TA 40,000 buy out plus 1,700 signing bonus . This news just came out From Afa ..this will pass.

http://www.afausairways.org/index.cfm?zone=/unionactive/view_article.cfm&HomeID=269831

 

[DCaf]

The Motley-Fool article was dumb. Of course costs will go up, is this news? What isn't mentioned is the company's ability to deal with them. My opinion is that Parker will pay labor whatever wages he can while still allowing for profitability.

I'm not wild about posters putting fellow airlines down in a fultile attempt to elevate their own. It's cheap, pathetic, and sad.

 

[nycbusdriver]

My opinion is that Parker will pay labor whatever wages he can while still allowing for profitability.

My vote for Laugh-of-the-Day Award!

 

[AAviator]

My vote for Laugh-of-the-Day Award!

Yup!

Make sure your costs are less than you revenues...

Warton MBA no doubt!

 

[Kev3188]

there was a comment that said something to the tune of profits would be smaller if the employees were paid substantially higher i dont know if that is true

It is.

Back of the envelope calculations show that US FAs would cost approximately $60 million more per year if they had the AA FA contract and the US pilots might cost as much as $300 million more per year if they had the AA APA contract. Right there is $360 million in higher wage costs. I'm certain that the US employees will be happy to split the $61 million in profit sharing, but what they really deserve are industry-average (or better) wages. And yes, US profits would be substantially smaller if that happened.

+1

And the knock on effect to getting the industry average- or better- rates they deserve is that the $$$ is in their pocket/401k/wherever right now.

As ClueByFour used to post, it doesn't take a genius to report profits when you pay your employees so much less than the competition.

I wonder whatever happened to him/her??

 

[DCaf]

My vote for Laugh-of-the-Day Award!

Well thanks. For what it's worth, I was paraphrasing WN management regarding their philosophy on pay.

 

[nycbusdriver]

Well thanks. For what it's worth, I was paraphrasing WN management regarding their philosophy on pay.

And what in the world does WN management have in common with Parker?