Hello Everyone,
Yes, I'm still here and yes, it has been three weeks since my last
newsletter.
What can I say?
Well, for starters, unlike some folks we know, I'm not going to blame Delta
or Southwest. Unlike some other folks, I'm not going to "blame it on the
industry," nor am I going to blame it on aircraft servicing (i.e. lav
dumping) or air traffic control.
No my friends, unlike everyone in the airline industry, I don't blame anyone
or anything for the delay in getting this newsletter out. I've simply been
working -- a lot, more in May, in fact, than ever before. And it's just
been one of those things that I have not been able to sit down for x number
of hours and crank this thing out.
But, alas, here I am and there is so much I've wanted to talk about.
First, of course, there's the America West/US Airways "announcement." I say
announcement because that's all there was/is. There is no "done deal" and
hasn't it been refreshing to look around and realize that nobody is using
that term, "done deal," like they did way back when with the United/US
Airways merger was proposed?
I'll stick by my guns on this one -- I think the merger is a ridiculous
idea. I don't believe it will happen, at least as it was announced. I
think America West Chairman Doug Parker will regret the day he wanted to get
involved in this 'thing.' I say that as if it's some sort of 'entity' from
an old 'Star Trek' episode and even Mr. Spock can't get a tri-quarter
reading on it so Captain Kirk just stands there, sorta like Bruce Lakefield,
trying to figure it out.
I think if you're an America West employee, you feel like the carpet has
been pulled from beneath you - by your own chairman, no less. America West
was one of only three airlines to post a first quarter profit and surely
they will post a healthy second quarter profit when results are announced
later next month. Why oh why then do they want to get involved with 'the
power of US?'
As we all know, the first salvo was fired by the ALPA-represented pilots at
America West who have claimed that they "would view a date-of-hire type of
integration as a completely unworkable solution for the America West
pilots."
Of course, the US Airways ALPA unit responded, claiming they would protect
their pilots in the course of this proposed merger with America West. But
let's face reality here folks, recent history clearly shows us that the ALPA
leadership at US Airways has been more easily taken than a freshmen coed at
her first fraternity party.
Now, you may have seen some news articles that refer to this 'combined'
airline (I'm told its secret service name is 'Amways') as being the nation's
fifth-largest airline. This is deceiving and I'll tell you why. They are
using the projected combined Available Seat Miles of both US Airways and
America West to come up with the "nation's fifth-largest airline."
The problem is that the accepted metric used to measure airline size is
Revenue Passenger Miles and not ASMs. So why are they using ASMs when
touting how big the 'combined' Amways will be? Well, you see, if they use
RPMs, you're looking at US Airways (7th largest) and America West (8th
largest) and the combination would give you the nation's sixth-largest
airline, surpassing Southwest Airlines.
It should be noted that pre-9/11, US Airways was the nation's sixth-largest
airline, however that former lurch-of-a-CEO, Stephen M. Wolf, who always
said "you can't shrink to profitability" did just that -- he shrunk US
Airways after 9/11 to a point where Southwest took over the 6th spot by
default, you might say.
So, using RPMs, 'Amways' would become the nation's 6th-largest airline.
But, the going-forward plans for Amways have the US Airways side shrinking
even more. You see where I'm going here? So the fact is, it would only be
a matter of time before Southwest Airlines (growing entity) would reclaim
their status as the nation's sixth-largest airline, once again surpassing
Amways (shrinking entity). And that my friends is why they aren't using the
standard RPMs in this case. 5th largest airline -- yeah, I'm impressed.
Now, what to make of Bruce Lakefield.
We all know the brief history of Bruce Lakefield at US Airways. He has
stated, on numerous occasions, that he only came here "as a favor to my good
friend, Dr. Bronner." He has also called his $425,000 annual salary a
"pimple" and said he needed the money to support a second home in the D.C.
area.
see:
http://www.post-gazette.com/pg/04321/412404.stm
So why is Mr. Lakefield going to continue to have his foot in the door by
being the 'vice-chairman' of the board of this proposed new entity?
Vice-chairman? I mean, come on now, that's about as important a role as the
assistant commissioner of arena football. And by the way Mr. Lakefield,
saying that the "only option was to merge" is an insult to every employee
who has given multiple wage concessions, work rule changes, and seen their
pensions slashed so that you (i.e. management) could run the airline as a
stand-alone carrier which, by the way, management said was the plan all
along. Wolf said it, Siegel said it and Lakefield, when asked if US Airways
was being shopped around replied, "to who - I don't know of any?" So the
"stand-alone-carrier" thing was just a mis-statement I guess.
You can go back and look at the press release on this deal
http://www.usairways.com/about/press/nw_05_0519.htm and despite all the
"revenue synergies" and "customer-friendly pricing" and "most efficient work
groups in the industry" -- well, it all looks good on paper. But as any
coach will tell you, "you don't play the game on paper." I assure you
folks, it will never happen as published.
They claim that this airline will be profitable at oil prices above
$50/barrel. (I'm laughing, too) I can't wait for the excuse -- because,
especially in the case of US Airways, there is ALWAYS an excuse. (Remember
"They're coming to kill us."?)
But at the end of the day, if you ask me which airline management team I'd
like to see running the 'entity,' I think we all know the answer to that.
Go West, young man!
By the way, Judge Mitchell still hasn't ruled on the bonus $$ for US
Airways. Maybe he thinks the concern over this issue will just 'go away'
with time. Will he finally break tradition and say "no," or will he
continue his rubber stamp ways? Hopefully, we'll find out soon.
THERE'S SO MUCH MORE:
Wow, let's see now, the DOT report is out; former US Airways stooges Dave
Siegel and Neal Cohen are in the news; Spirit Air, who's CEO is former US
Airways marketing guy Ben Baldanza, has a new plane, which they christened
"The Spirit of the Baldanza." So, let's get started with the DOT report.
This DOT report, like all others, is designed to assist consumers with
information on the quality of services, or lack thereof, provided by the 19
reporting airlines. Here's the data for April, 2005:
ON-TIME:
1- Hawaiian Airlines ... 95.6%
2- ATA Airlines ... 89.0
3- Skywest Airlines ... 87.6
4- Southwest Airlines ... 86.7
5- Comair ... 85.5
6- America West Airlines ... 85.2
7- United Airlines ... 84.8
8- Independence Air ... 84.6
9- American Airlines ... 84.4
10- Northwest Airlines ... 83.7
11- Delta Air Lines ... 82.6
12- American Eagle Airlines ... 82.1
13- ExpressJet Airlines ... 81.7
14- Continental Airlines ... 80.4
15- US Airways ... 80.0
16- AirTran Airways ... 78.8
17- Atlantic Southeast Airlines ... 77.3
18- JetBlue Airways ... 77.0
19- Alaska Airlines ... 77.0
(Average: 83.4%)