Delta Pilots End Era of Luxurious Pay
Nov 13th 2004, 2:53 pm
#76
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"AbsolutelyCertain" <[email protected]> wrote
> Bad mojo. Government + business = no good.
Yep. The Government saved #3, so that a foreign company could come and buy
it. We still have people working, but BTW, where are the profits going,
now?
--
Jim in NC
---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.794 / Virus Database: 538 - Release Date: 11/10/2004
> Bad mojo. Government + business = no good.
Yep. The Government saved #3, so that a foreign company could come and buy
it. We still have people working, but BTW, where are the profits going,
now?
--
Jim in NC
---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.794 / Virus Database: 538 - Release Date: 11/10/2004
Nov 13th 2004, 2:58 pm
#77
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
John Mazor wrote:
> There's also a bias against network carriers. If you're a low-cost carrier,
> most of your service is point to point. Network carriers run a lot of
> traffic through connecting flights at hubs, so some of the fees are applied
> twice to the ticket price, once for each segment.
But the legacy carriers ended up charging less for flights going through hubs
and more for the privilege of flying direct. Artificial pricing that didn't
reflect reality. That is the big difference between legacy and low cost carriers.
And low cost carriers don't generally offer unsustainable rates. Their goals
are to be profitable, not to kill other carriers.
Legacy carriers had been conditioned to expects cycles of very profitable and
cycles of losses. So employees were also conditioned to ask for hefty raises
even during downturns because they knew the airline would recover and make
tons of profits for a few years.
What is happening now is that airlines and employees are finding out that they
aren't dealing with the normal cycle of ups and downs and that some serious
permanent changes are needed.
What is missing now is some real changes in legalcy airlines schedules/operations
> There's also a bias against network carriers. If you're a low-cost carrier,
> most of your service is point to point. Network carriers run a lot of
> traffic through connecting flights at hubs, so some of the fees are applied
> twice to the ticket price, once for each segment.
But the legacy carriers ended up charging less for flights going through hubs
and more for the privilege of flying direct. Artificial pricing that didn't
reflect reality. That is the big difference between legacy and low cost carriers.
And low cost carriers don't generally offer unsustainable rates. Their goals
are to be profitable, not to kill other carriers.
Legacy carriers had been conditioned to expects cycles of very profitable and
cycles of losses. So employees were also conditioned to ask for hefty raises
even during downturns because they knew the airline would recover and make
tons of profits for a few years.
What is happening now is that airlines and employees are finding out that they
aren't dealing with the normal cycle of ups and downs and that some serious
permanent changes are needed.
What is missing now is some real changes in legalcy airlines schedules/operations
Nov 13th 2004, 3:34 pm
#78
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"devil" <[email protected]> wrote in message
news:[email protected]. ..
> On Sat, 13 Nov 2004 15:27:43 +0000, Cyrus Afzali wrote:
> > The loan guarantees were paid back by Chrysler.
> The loans, or the loan guarantees?
Chrysler paid back everything and ahead of schedule as I remember.
news:[email protected]. ..
> On Sat, 13 Nov 2004 15:27:43 +0000, Cyrus Afzali wrote:
> > The loan guarantees were paid back by Chrysler.
> The loans, or the loan guarantees?
Chrysler paid back everything and ahead of schedule as I remember.
Nov 13th 2004, 3:36 pm
#79
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
Chris wrote:
> In that case they failed. Chrysler cars are junk and making the US a better
> place would have meant getting rid of Chrysler.
US and canadian jobs would have been lost. many jobs. And the capacity would
have been filled by japanese and european cars. Remember that at the time,
all US carmakers were making absolutely crappy cars would lousy quality and
everyone was buying japanese. Chrysler may have been the worse of the bunch
with abobinations such as the k-car. But they did improve trememdounsly from
that very low low since then.
> In that case they failed. Chrysler cars are junk and making the US a better
> place would have meant getting rid of Chrysler.
US and canadian jobs would have been lost. many jobs. And the capacity would
have been filled by japanese and european cars. Remember that at the time,
all US carmakers were making absolutely crappy cars would lousy quality and
everyone was buying japanese. Chrysler may have been the worse of the bunch
with abobinations such as the k-car. But they did improve trememdounsly from
that very low low since then.
Nov 13th 2004, 3:51 pm
#80
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
John Mazor wrote:
> Cut capacity by 10% and you can cut labor, fuel, and fleet costs by 10%.
> Hell, you can let go of gates, and probably other costs, too, like landing
> fes and all those federal fees.
Another problem. Airlines don't want to let go of gates because they know that
they would go to competitors.
Airlines could dramantically cut gate usage with more efficient schedules and
would anso increase the number of revenu geretating hours for each aircraft.
But that will leave gates open for a competitor to use.
And in order to keep those gates, airlines have to make fake schedules that
make use of those gates, otherwise the airport authority might decide that
since the airline isn't making use of the gates, they woudl be re-assigned to
another airline.
> Cut capacity by 10% and you can cut labor, fuel, and fleet costs by 10%.
> Hell, you can let go of gates, and probably other costs, too, like landing
> fes and all those federal fees.
Another problem. Airlines don't want to let go of gates because they know that
they would go to competitors.
Airlines could dramantically cut gate usage with more efficient schedules and
would anso increase the number of revenu geretating hours for each aircraft.
But that will leave gates open for a competitor to use.
And in order to keep those gates, airlines have to make fake schedules that
make use of those gates, otherwise the airport authority might decide that
since the airline isn't making use of the gates, they woudl be re-assigned to
another airline.
Nov 13th 2004, 4:30 pm
#81
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
On Sat, 13 Nov 2004 22:19:30 -0500, nobody <[email protected]> wrote:
[ Snip ]
>When you start a business, if your credit history isn't good enough, you get a
>co-signer whose credit history gives the bank the necessary nudge to approve
>the loan. The co signer doesn't dish out any money. Is this a subsidy ?
>The subsidy occurs if the co-signer has to dish out money because you can't
>fulfill your obligations. Until that happens, no subsidy has occured.
In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.
That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.
Malc.
[ Snip ]
>When you start a business, if your credit history isn't good enough, you get a
>co-signer whose credit history gives the bank the necessary nudge to approve
>the loan. The co signer doesn't dish out any money. Is this a subsidy ?
>The subsidy occurs if the co-signer has to dish out money because you can't
>fulfill your obligations. Until that happens, no subsidy has occured.
In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.
That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.
Malc.
Nov 13th 2004, 4:36 pm
#82
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
On Sat, 13 Nov 2004 11:39:28 +0800, "M.Lopresti"
<[email protected]> wrote:
>Flying DL LAX-DFW-JAX for my interstate trip in three weeks, I had the
>oppotunity to fly either COA or DL. I have no idea about the current
>status of US airlines as Im an Aussie, I hope AAL isn't going to shit too
>as I'm using them to fly the international legs.
If you're flying the international legs from Australia, then the
notion that AAL is flying the legs is not exactly true.
You may have an AA flight number, but the plane will have a big red
kangaroo on the tail.
(All AA flights from SYD, MEL, AKL, and BNE are operated by QF)
Malc.
<[email protected]> wrote:
>Flying DL LAX-DFW-JAX for my interstate trip in three weeks, I had the
>oppotunity to fly either COA or DL. I have no idea about the current
>status of US airlines as Im an Aussie, I hope AAL isn't going to shit too
>as I'm using them to fly the international legs.
If you're flying the international legs from Australia, then the
notion that AAL is flying the legs is not exactly true.
You may have an AA flight number, but the plane will have a big red
kangaroo on the tail.
(All AA flights from SYD, MEL, AKL, and BNE are operated by QF)
Malc.
Nov 13th 2004, 7:36 pm
#83
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
Malcolm Weir wrote:
> In this case, the government backing meant that the risk to the lender
> was reduced (actually, eliminated), so the lender lends at (say) 6%
> instead of 24%.
>
> That's the subsidy: the difference in what they had to pay for the
> money, versus what unbacked loan would have cost.
Semantics.
Is a subsidy some amount actually disbursed by a government (or a direct
revenu loss due to a tax breaks), or is it just the signature of a piece of
paper that gives a company a competitive edge ? Or both ?
If a government provides an environment that fosters creation and expansion of
enterprises, is that a subsidy or just a government doing a good job ?
If a governmnmet helps a corporation sign a better deal with the greedy banks
by assuming some of the risks, it is definitely "help". But is it a subsidy ?
No money gets exchanged.
If a government puts in a bankrupcy law that helps companies weather a bad
storm is that a subsidy ?
> In this case, the government backing meant that the risk to the lender
> was reduced (actually, eliminated), so the lender lends at (say) 6%
> instead of 24%.
>
> That's the subsidy: the difference in what they had to pay for the
> money, versus what unbacked loan would have cost.
Semantics.
Is a subsidy some amount actually disbursed by a government (or a direct
revenu loss due to a tax breaks), or is it just the signature of a piece of
paper that gives a company a competitive edge ? Or both ?
If a government provides an environment that fosters creation and expansion of
enterprises, is that a subsidy or just a government doing a good job ?
If a governmnmet helps a corporation sign a better deal with the greedy banks
by assuming some of the risks, it is definitely "help". But is it a subsidy ?
No money gets exchanged.
If a government puts in a bankrupcy law that helps companies weather a bad
storm is that a subsidy ?
Nov 13th 2004, 8:20 pm
#84
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"nobody" <[email protected]> wrote in message
news:[email protected]...
> What is missing now is some real changes in legalcy airlines
> schedules/operations
They need to get to understand that flying today is no longer a luxury for
the few but a commodity for the many. This will dramatically change the
entire way the business is being run and the priorities set.
Nik
news:[email protected]...
> What is missing now is some real changes in legalcy airlines
> schedules/operations
They need to get to understand that flying today is no longer a luxury for
the few but a commodity for the many. This will dramatically change the
entire way the business is being run and the priorities set.
Nik
Nov 13th 2004, 8:24 pm
#85
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
Morgans wrote:
> "AbsolutelyCertain" <[email protected]> wrote
>
>
>>Bad mojo. Government + business = no good.
>
>
> Yep. The Government saved #3, so that a foreign company could come and buy
> it. We still have people working, but BTW, where are the profits going,
> now?
Let me guess... the stockholders?
Americans can buy the stock.....
> "AbsolutelyCertain" <[email protected]> wrote
>
>
>>Bad mojo. Government + business = no good.
>
>
> Yep. The Government saved #3, so that a foreign company could come and buy
> it. We still have people working, but BTW, where are the profits going,
> now?
Let me guess... the stockholders?
Americans can buy the stock.....
Nov 13th 2004, 9:11 pm
#86
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
Nik wrote:
> They need to get to understand that flying today is no longer a luxury for
> the few but a commodity for the many. This will dramatically change the
> entire way the business is being run and the priorities set.
Service levels are just a small portion of the total costs.
While AA was out calculating the pennies saved by not carrying a spare spoon
on its flights, it was staying blind to the mass inefficiencies of its
schedules which requires mucy larger fleet than necessary, more gates at hubs
and thus more ground staff etc etc etc.
In terms of "luxury", even intercity buses in australia show movies for free.
Heck, Jetblue shows TV on board its planes.
The $12 meal is nowhere near the reason legacy airlines wanted to charge $400
more for a flight compared to a low cost carrier. Just an easy excuse for
legacy carriers to blame it on the meal while not fixing the real causes of
its high cost structure.
> They need to get to understand that flying today is no longer a luxury for
> the few but a commodity for the many. This will dramatically change the
> entire way the business is being run and the priorities set.
Service levels are just a small portion of the total costs.
While AA was out calculating the pennies saved by not carrying a spare spoon
on its flights, it was staying blind to the mass inefficiencies of its
schedules which requires mucy larger fleet than necessary, more gates at hubs
and thus more ground staff etc etc etc.
In terms of "luxury", even intercity buses in australia show movies for free.
Heck, Jetblue shows TV on board its planes.
The $12 meal is nowhere near the reason legacy airlines wanted to charge $400
more for a flight compared to a low cost carrier. Just an easy excuse for
legacy carriers to blame it on the meal while not fixing the real causes of
its high cost structure.
Nov 13th 2004, 9:30 pm
#87
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"John Mazor" <[email protected]> drivveled on and
onnews:[email protected]:
> "Mike Rapoport" <[email protected]> wrote in message
> news:[email protected] hlink.net...
>> John, we are never going to agree. I think that airlines and airline
>> passengers should pay for all the costs incurred in providing the
>> service. If more security was needed in malls, tunnels and churches,
>> the people owning and using them would pay for it.
>> Regarding taxes, I am not going to take the time to prove that
>> airlines don't pay them at all. I just demonstrated that in three
>> years where UAL reported 1.288B in income taxes they paid 74MM or
>> about 6%. They probably got that back in later years. The
>> differnces between GAAP and tax accounting is complex and it doesn't
>> make sense to get much further into
> it
>> here. UAL may not have payed any but I am not about to go back year
>> by
> year
>> and do the analysis since it is what I do for a living and I could do
>> the work on something else and get paid for it. You can be certain
>> that the total of income taxes paid is less that the total of
>> subsidies recieved
> for
>> the industry as a whole.
>
> What about the fees? IIRC, that's $11 billion/year.
>
> Are schools paid for exclusively by those who have children? OTOH, do
> you pay a security fee when you visit private or public buildings and
> get checked? A perfect match between taxes/fees and users is neither
> possible nor desirable.
>
> Anyway, we'll agree to disagree.
>
>> I agree that excess capacity is the problem (it is always the
>> problem) but the excess capacity is driven by the high fixed costs.
>
> I don't have the data in front of me, but while the theory of
> incremental costs vs. fixed costs is valid, the bulk of airline costs
> go into labor and fuel and fleet costs (aircraft leases and
> maintenance) to increase capacity. Cut capacity by 10% and you can cut
> labor, fuel, and fleet costs by 10%. Hell, you can let go of gates,
> and probably other costs, too, like landing fes and all those federal
> fees. What's left? Something, to be sure, but not enough to justify
> losing 10 cents on every dollar of ticket price in the quest to gain
> market share and dilute fixed costs.
>
>> It is simply too expensive to take capacity off the market.
>
> See previous.
>
>> Even if a major player
>> disappeared, all the aircraft and other infrastructure would still
>> exist. Somebody would buy it at some price and put it back to work.
>> This new entrant would then have lower costs and put preasure on the
>> other
> carriers.
>
> So the "dog in a manger" approach is a valid business plan? I gotta
> keep losing money on every flight or my competitor is going to get my
> planes and operate them against me?
>
> Back in the early 1980s, when the first new entrants were emerging, I
> heard an arline analyst tell a roomful of executives that "you people
> are crazy." You sell your old DC-9s and 727s to the new entrants for a
> lousy couple of million each and then complain how they're eating your
> lunch. If you had any sense at all, you would have taken every
> surplus airliner out to the desert and cut it up for scrap value.
>
> Airline execs were short-sighted, penny-wise, pound-foolish then, and
> they still are today. Crandall was right then and it's still true
> today.
Yeah, IIRC a few freight airlines did exactly that. In fact, one of my
workmates just flew a couple of perfectly servicable airbusses from Japan
to Tennessee to be broken up. He said the JAL airplanes were in better
shape than the ones he flew for a living!
Bertie
onnews:[email protected]:
> "Mike Rapoport" <[email protected]> wrote in message
> news:[email protected] hlink.net...
>> John, we are never going to agree. I think that airlines and airline
>> passengers should pay for all the costs incurred in providing the
>> service. If more security was needed in malls, tunnels and churches,
>> the people owning and using them would pay for it.
>> Regarding taxes, I am not going to take the time to prove that
>> airlines don't pay them at all. I just demonstrated that in three
>> years where UAL reported 1.288B in income taxes they paid 74MM or
>> about 6%. They probably got that back in later years. The
>> differnces between GAAP and tax accounting is complex and it doesn't
>> make sense to get much further into
> it
>> here. UAL may not have payed any but I am not about to go back year
>> by
> year
>> and do the analysis since it is what I do for a living and I could do
>> the work on something else and get paid for it. You can be certain
>> that the total of income taxes paid is less that the total of
>> subsidies recieved
> for
>> the industry as a whole.
>
> What about the fees? IIRC, that's $11 billion/year.
>
> Are schools paid for exclusively by those who have children? OTOH, do
> you pay a security fee when you visit private or public buildings and
> get checked? A perfect match between taxes/fees and users is neither
> possible nor desirable.
>
> Anyway, we'll agree to disagree.
>
>> I agree that excess capacity is the problem (it is always the
>> problem) but the excess capacity is driven by the high fixed costs.
>
> I don't have the data in front of me, but while the theory of
> incremental costs vs. fixed costs is valid, the bulk of airline costs
> go into labor and fuel and fleet costs (aircraft leases and
> maintenance) to increase capacity. Cut capacity by 10% and you can cut
> labor, fuel, and fleet costs by 10%. Hell, you can let go of gates,
> and probably other costs, too, like landing fes and all those federal
> fees. What's left? Something, to be sure, but not enough to justify
> losing 10 cents on every dollar of ticket price in the quest to gain
> market share and dilute fixed costs.
>
>> It is simply too expensive to take capacity off the market.
>
> See previous.
>
>> Even if a major player
>> disappeared, all the aircraft and other infrastructure would still
>> exist. Somebody would buy it at some price and put it back to work.
>> This new entrant would then have lower costs and put preasure on the
>> other
> carriers.
>
> So the "dog in a manger" approach is a valid business plan? I gotta
> keep losing money on every flight or my competitor is going to get my
> planes and operate them against me?
>
> Back in the early 1980s, when the first new entrants were emerging, I
> heard an arline analyst tell a roomful of executives that "you people
> are crazy." You sell your old DC-9s and 727s to the new entrants for a
> lousy couple of million each and then complain how they're eating your
> lunch. If you had any sense at all, you would have taken every
> surplus airliner out to the desert and cut it up for scrap value.
>
> Airline execs were short-sighted, penny-wise, pound-foolish then, and
> they still are today. Crandall was right then and it's still true
> today.
Yeah, IIRC a few freight airlines did exactly that. In fact, one of my
workmates just flew a couple of perfectly servicable airbusses from Japan
to Tennessee to be broken up. He said the JAL airplanes were in better
shape than the ones he flew for a living!
Bertie
Nov 13th 2004, 10:24 pm
#88
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"nobody" <[email protected]> wrote in message
news:[email protected]...
> Nik wrote:
>> They need to get to understand that flying today is no longer a luxury
>> for
>> the few but a commodity for the many. This will dramatically change the
>> entire way the business is being run and the priorities set.
> Service levels are just a small portion of the total costs.
> While AA was out calculating the pennies saved by not carrying a spare
> spoon
> on its flights, it was staying blind to the mass inefficiencies of its
> schedules which requires mucy larger fleet than necessary, more gates at
> hubs
> and thus more ground staff etc etc etc.
> In terms of "luxury", even intercity buses in australia show movies for
> free.
> Heck, Jetblue shows TV on board its planes.
> The $12 meal is nowhere near the reason legacy airlines wanted to charge
> $400
> more for a flight compared to a low cost carrier. Just an easy excuse for
> legacy carriers to blame it on the meal while not fixing the real causes
> of
> its high cost structure.
True. That is exactly the mindset of a luxury provider. Prize and efficiency
is only of secondary importance. Service level is the primary concern. And
because of that there will be so many areas where costs are not properly
controlled. That also includes the salary levels of staff.
Nik
news:[email protected]...
> Nik wrote:
>> They need to get to understand that flying today is no longer a luxury
>> for
>> the few but a commodity for the many. This will dramatically change the
>> entire way the business is being run and the priorities set.
> Service levels are just a small portion of the total costs.
> While AA was out calculating the pennies saved by not carrying a spare
> spoon
> on its flights, it was staying blind to the mass inefficiencies of its
> schedules which requires mucy larger fleet than necessary, more gates at
> hubs
> and thus more ground staff etc etc etc.
> In terms of "luxury", even intercity buses in australia show movies for
> free.
> Heck, Jetblue shows TV on board its planes.
> The $12 meal is nowhere near the reason legacy airlines wanted to charge
> $400
> more for a flight compared to a low cost carrier. Just an easy excuse for
> legacy carriers to blame it on the meal while not fixing the real causes
> of
> its high cost structure.
True. That is exactly the mindset of a luxury provider. Prize and efficiency
is only of secondary importance. Service level is the primary concern. And
because of that there will be so many areas where costs are not properly
controlled. That also includes the salary levels of staff.
Nik
Nov 13th 2004, 10:45 pm
#89
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
"Dave Stadt" <[email protected]> wrote in message news:[email protected]. com...
> "devil" <[email protected]> wrote in message
> news:[email protected]. ..
>> On Sat, 13 Nov 2004 15:27:43 +0000, Cyrus Afzali wrote:
>> > The loan guarantees were paid back by Chrysler.
>> The loans, or the loan guarantees?
> Chrysler paid back everything and ahead of schedule as I remember.
That's right. Remember all the hoopla.
Don't anyone forget the M1 tank, please. Me thinks the gov'mt didn't want to loose that production line....
> "devil" <[email protected]> wrote in message
> news:[email protected]. ..
>> On Sat, 13 Nov 2004 15:27:43 +0000, Cyrus Afzali wrote:
>> > The loan guarantees were paid back by Chrysler.
>> The loans, or the loan guarantees?
> Chrysler paid back everything and ahead of schedule as I remember.
That's right. Remember all the hoopla.
Don't anyone forget the M1 tank, please. Me thinks the gov'mt didn't want to loose that production line....
Nov 13th 2004, 11:12 pm
#90
Guest
Posts: n/a
Re: Delta Pilots End Era of Luxurious Pay
QF via Narita then US airlines the rest of the way.
Malcolm Weir wrote:
> On Sat, 13 Nov 2004 11:39:28 +0800, "M.Lopresti"
> <[email protected]> wrote:
> >Flying DL LAX-DFW-JAX for my interstate trip in three weeks, I had the
> >oppotunity to fly either COA or DL. I have no idea about the current
> >status of US airlines as Im an Aussie, I hope AAL isn't going to shit too
> >as I'm using them to fly the international legs.
> If you're flying the international legs from Australia, then the
> notion that AAL is flying the legs is not exactly true.
> You may have an AA flight number, but the plane will have a big red
> kangaroo on the tail.
> (All AA flights from SYD, MEL, AKL, and BNE are operated by QF)
> Malc.
Malcolm Weir wrote:
> On Sat, 13 Nov 2004 11:39:28 +0800, "M.Lopresti"
> <[email protected]> wrote:
> >Flying DL LAX-DFW-JAX for my interstate trip in three weeks, I had the
> >oppotunity to fly either COA or DL. I have no idea about the current
> >status of US airlines as Im an Aussie, I hope AAL isn't going to shit too
> >as I'm using them to fly the international legs.
> If you're flying the international legs from Australia, then the
> notion that AAL is flying the legs is not exactly true.
> You may have an AA flight number, but the plane will have a big red
> kangaroo on the tail.
> (All AA flights from SYD, MEL, AKL, and BNE are operated by QF)
> Malc.
