When will the employees be priced out of their jobs?

Buck

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At what point will the industry price their own employees out of the profession? Many mechanics are actively searching for alternatives.
 

KCFlyer

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Buck - The pricing model is indeed broken, but the solution is not to raise the prices. The solution is to get more passengers on your planes who might not have had the luxury of planning 21 days in advance, but who cannot justify the legalized rape of their wallet by paying for a "fully flexible" fare. Most airlines have already reduced their supply, but they haven't done anything to attempt to increase the demand from the folks who wished they could have flown, but couldn't afford to pay to subsidize the loss leaders. What the airlines should do is lower the fares and reduce the variety of airfares that are offered.
 

mwa

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No - the problem is pricing. At today's fares the break even load factor is greater than 100%. The infrastructure will collapse and resemble AmTrak if changes are not made.
 

AAmech

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On 3/2/2003 8:16:13 PM mwa wrote:

No - the problem is pricing. At today's fares the break even load factor is greater than 100%. The infrastructure will collapse and resemble AmTrak if changes are not made.
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Actually the Breakeven load factor at AA is around 87%
 

KCFlyer

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[blockquote]
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On 3/2/2003 8:16:13 PM mwa wrote:

No - the problem is pricing. At today's fares the break even load factor is greater than 100%. The infrastructure will collapse and resemble AmTrak if changes are not made.
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Here's my sample round trip fares for DFW-LAX:

Unrestricted coach (fully refundable) - $620 - 21.53 cents per mile
7 day advance purchase - $500 17.36 cents per mile
14 Day Advance Purchase - $400 13.8 cents per mile
21 Day Advance Purchase - $331 11.5 cents per mile

IMHO, you'd greatly increase the number of people who would find it affordable to travel at the last minute. You wouldn't sell the entire coach cabin a loss leader fare and hope to make it up on the backs of a few who have to pay full coach. If you book a fare 23 days in advance, and plans change when there are 8 days remaining, just charge the difference between what they paid and what's the effective rate for those days - drop the stupid "change penalty" - you want customers to return, remember? Piss them off by screwing them with change fees and they'll fly someone else.

Another idea (which will go over with 'elites' about as well as fare reductions go over with airline employees) is eliminating the first class upgrades from any fare class tickets. Charge a decent rate for first class and CHARGE them to fly there. Putting a butt that paid $100 round trip into a first class seat because he has a bunch of miles in his AAdvantage account is doing nothing for your bottom line. Any complementary upgrades ought to come from full Y class at the very least.

Yeah, Northwest most likely would run a fare sale and sell tickets below cost...let them. Yes, you'll most likely lose a few passengers who are willing to fly north to go west. That's cool. NWA would be losing money on them. Better to have the competition lose the money than to fill your coach cabin with a bunch of money losing fares and lose the money yourself. Push the fact that you wouldn't charge fees for changes. Appeal to the value inherent in the system. So far, the airlines only seem to feel that increasing demand applies to the leisure traveller. Do something for the business traveller. The "value" prices were a start, but sadly, they are laden with the same penalties and fees that the 21 day advance tickets are saddled with. Let a last minute business meeting run long and you're happy to nickle and dime the primo customer because he or she didn't buy a "flexible" ticket at 10 times the lowest fare.

IMHO, that would have a far bigger postitive impact than raising fares across the board. The alternative is to raise everything, then face the additional layoffs as supply is decreased yet again to meet the lessened demand.
 
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[blockquote]
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On 3/2/2003 8:00:07 PM KCFlyer wrote:

Buck - The pricing model is indeed broken, but the solution is not to raise the prices. The solution is to get more passengers on your planes who might not have had the luxury of planning 21 days in advance, but who cannot justify the legalized rape of their wallet by paying for a "fully flexible" fare. Most airlines have already reduced their supply, but they haven't done anything to attempt to increase the demand from the folks who wished they could have flown, but couldn't afford to pay to subsidize the loss leaders. What the airlines should do is lower the fares and reduce the variety of airfares that are offered.

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KCF,
Your right. "VALUE PRICEING" !!!!!!!

If it was good enough for Crandall, you and I, then "what the HE**, are we waiting for" ???????????

NH/BB's

"Damn the torpedo's, FULL steam ahead" !!!
 
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Buck

Buck

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This is all good input, however the point I was attempting to make was that when the company reduces the total compensation package of it's employees, they will begin to seek work in other professions.
 

KCFlyer

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[blockquote]
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On 3/2/2003 11:19:09 PM Buck wrote:

This is all good input, however the point I was attempting to make was that when the company reduces the total compensation package of it's employees, they will begin to seek work in other professions.
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And my point is that if managment were to focus on increasing revenues as much as they are focusing on employee concessions, many of those concessions would not be necessary.
 
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On 3/2/2003 11:48:41 AM Buck wrote:

At what point will the industry price their own employees out of the profession? Many mechanics are actively searching for alternatives.
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Buck they are already doing it, we have fully trained AMTs who are leaving the profession because they can get better pay working on cars. When it comes to peoples toys they will pay whatever it takes to keep their toys running, but when it comes to flying they just click on the cheapest fare and go bye bye, no thought is given to the work that is performed on the plane they are travelling on, they don't care if someone who earns minimum wage or 50 bucks an hour worked on it, all they know is I got a cheap fare. Guess if we all go fix cars and let the planes start falling out of the sky, someone will take notice and say Gee whats going on here.
 
B

bagsmasher

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Buck wrote:
"This is all good input, however the point I was attempting to make was that when the company reduces the total compensation package of it's employees, they will begin to seek work in other professions."


It won't happen anytime soon for the TWA AMT's. If you will remember they got about a 40% increase in pay when they came over. Even if they have to take a pay cut when the concessions come, they will still come out with a pretty good raise.
 
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Buck

Buck

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No this is not what is happening. It is about supply and demand. The mechanics at Southwest are compensated in total more than the mechanics at American. It is not about just wages. It is also the business model that American is running. It is broken.
 

Ch. 12

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It won't happen anytime soon for the TWA AMT's. If you will remember they got about a 40% increase in pay when they came over. Even if they have to take a pay cut when the concessions come, they will still come out with a pretty good raise.
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Doesn't the TWA 40% pay raise illustrate the point that AA was already paying their own employees at a substantial rate? If AA was that much higher than TW and still asking for more...is it not the employees who are pricing themselves out of a job?
 

Ch. 12

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I understand that WN mechanics may be paid more but the WN model is to expect and require quite high productivity and many tasks are carried out by few individuals. This separates them from AA and all other long-standing majors in that they get much more out of each employee. I know that mech's at AA work hard but the way that tasks are laid out and carried out is quite different than at WN. Throughout the years too many work rules have also been put into place leading to lower productivity. It's not the mech's fault...it's in their rules. In order for the majors to compete effectively with WN and the other low-cost guys, there needs to be a CULTURE CHANGE within both mgmt and employees. Unfortunately, that's about the most difficult piece to change.
 
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Buck

Buck

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So does this mean a leaner work force?

If it does then it will be up to the unions to consider their fate. The TWU has a history of being more concerned with the number of dues payers than the issues mechanics face in the industry. Legislation for issues that involve mechanics is almost always placed on the back burner. The old scholl of industrial unionism needs to fixed. As long as the industril unioinists blindly follow the party and not the issues, the overall membership numbers will continue to decrease.