Originally Posted by
shrsailplanes
Kinda is your problem, because if you don’t understand the flip side of the coin you’ll spend all your time bashing your head against the wall screaming, “Why won’t they give us an industry standard contract?!?!? Just raise ticket prices!!!!”
Frontier is designed to run on specific economic numbers to make it a viable investment to the board. Increasing fare prices means a fundamental shift in how Frontier conducts business. I just don’t believe indigo is interested in anything aside from their original investment model.
I hear this philosophy all the time.
But let me ask the question differently . . . let's say you sell widgets. You've got pretty good ones too - so they sell pretty well. There are other widgets sellers - some better some worse but for the most part the market is pretty stable. Then, one of your competitors comes along and changes the widget just enough that they can make them cheaper and better at the same time. And, they train their customer service people to be friendlier than yours. They start making a greater profit margin and taking away business from you. Other widget sellers change/adapt their business to compete better. You continue on, continually striving to lower costs, hiring/training new/cheaper workers (as the older/more expensive ones leave) despite market wages going up 40%. Your union workers are now asking for a raise to "market" rates.
You realize that you're already selling at your lowest price and there are quarters that you don't even cover all your costs and you have investors asking what your next move is.
What would be the smartest thing for you to do?
a). Continue on the same, placate labor as long as possible w/ fake concern for their raise demands and just hope they don't get to strike
b). Decide to compete by investing in your labor (and other areas) such that you still remain lower cost than others but improve your product to where you can increase widget prices to cover
Do you see how absurd your above outlook appears?
Of course, there is always options c) sell the company but that's a whole nother discussion...
Either way, as aptly put so many times, it is NOT OUR PROBLEM. All we need to do as a group is stand strong and continue the demand (and let the system work).