AMR Files For Bankruptcy
11-30-2011, 08:16 AM
#241
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Joined APC: Jan 2008
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Posts: 731
Originally Posted by ncpilot624
What even more funny about these quotes from newark and olympic is all I heard from the guests on MSNBC and CNBC was how labor was killing AMR. You would think these liberal jewels would point out some more relevant reasons like the wonderful financing cost their upper management signed up for.
You probably didn't watch this one.
11-30-2011, 08:24 AM
#242
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Position: 747
Posts: 731
Originally Posted by Clear Right
After deregulation the "majority" of the flying public made a choice to fly the lowest price carrier. The Internet also contributed to this process....I mean really even when I shop for tickets (an airline pilot) I use Kayak, Expedia, or Travelocity to buy tickets for my family when I can't "endure" Stand-By travel. That is the reality of the business that will never change post deregulation.
I know this will sound very management like, but the reality is that the two largest costs for airlines are fuel and labor. Fuel costs can only be controlled by a hedging program, which is a gamble. Labor is the other part of that equation. The key in my humble opinion is finding that sweet spot in labor costs, where you pay your employees well, but not soo well that you can't remain competitive with the other airlines. Personally I think you should base your pay on a competitive price but offer productivity incentives that boost pay to industry leading for those that want to work more, which is more efficient for the company. I know this goes against the legacy "job protection" model but I think this is where pilots need to spend their energy in negotiations. I.E. I think you need to provide productivity incentives that boost your pay, but also allow efficiency and competitiveness for the company. Fire away with the dissenting opinions...again just an opinion and not targeted at any airline pilot group or company.
I know this will sound very management like, but the reality is that the two largest costs for airlines are fuel and labor. Fuel costs can only be controlled by a hedging program, which is a gamble. Labor is the other part of that equation. The key in my humble opinion is finding that sweet spot in labor costs, where you pay your employees well, but not soo well that you can't remain competitive with the other airlines. Personally I think you should base your pay on a competitive price but offer productivity incentives that boost pay to industry leading for those that want to work more, which is more efficient for the company. I know this goes against the legacy "job protection" model but I think this is where pilots need to spend their energy in negotiations. I.E. I think you need to provide productivity incentives that boost your pay, but also allow efficiency and competitiveness for the company. Fire away with the dissenting opinions...again just an opinion and not targeted at any airline pilot group or company.
11-30-2011, 09:18 AM
#243
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Joined APC: Jun 2005
Posts: 203
Originally Posted by olympic
Hog
11-30-2011, 09:35 AM
#244
No longer cares
Joined APC: Mar 2008
Position: 767er Captain
Posts: 12,109
Originally Posted by B757200ER
What I am seeing is that airlines do NOT have pricing power, like many other industries do. They are incapable of passing along the higher cost of fuel, taxes, doing business or other reasons to consumers because the competition is cut-throat. Airlines should have the ability of raising fares if needed to cover costs, simply put; they don't have that in this economy and in today's industry.
I do not argue that point in principal. I think it is mostly a question of degrees. Actually, you are correct in that they cannot raise the fares enough to cover operations if fixed costs rise to any great degree. But I do not agree with your premise that there are many cheapie airlines out there dumping seats on the market. At least not like in the 90s. With the combination of DAL/NWA and CAL/UAL, the legacy carriers now hold a far bigger piece of the pie, and the smaller players don't have enough seats to make a significant difference. What will be interesting will be to revisit this issue when whatever happens to AMR is flushed out. If that includes more consolidation, then I think airlines will have better pricing power. The problem is that it doesn't happen fast enough for us the line pilots to see any significant improvements. The AMR BK I am afraid, has set us all back yet again.
11-30-2011, 09:54 AM
#245
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11-30-2011, 10:10 AM
#246
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Position: A320/A319/B737 Sys Acft Maint Controller
Posts: 303
Originally Posted by Superpilot92
Continental didn't
as of this MORNING 0600 CST there WAS no more Continental ! Not much Chance of them ever filing Bankruptcy!! the answer is SouthWest.
American was the LASY Legacy to file for CH-11. Only THIS time EVERYBODY gets cuts INCLUDING MANAGEMENT!! They won't be humping the workers while they take Bonuses for themselves!! Now you'll see who REALLY wants to be with the "Eagle" and who ISN'T just another Fast Buck Mananger. I guess we KNOW what Arpey was don't we?!?!
God Bless all my Brothers and sisters at American. Stay Proud and Stay Strong!! Sooner or Later This too shall Pass!
11-30-2011, 10:17 AM
#247
Da Hudge
Joined APC: Oct 2006
Position: Poodle Whisperer
Posts: 17,473
Originally Posted by strfyr51
88888888888888888888888888888888888888888888888888 88888888888
as of this MORNING 0600 CST there WAS no more Continental ! Not much Chance of them ever filing Bankruptcy!! the answer is SouthWest.
American was the LASY Legacy to file for CH-11. Only THIS time EVERYBODY gets cuts INCLUDING MANAGEMENT!! They won't be humping the workers while they take Bonuses for themselves!! Now you'll see who REALLY wants to be with the "Eagle" and who ISN'T just another Fast Buck Mananger. I guess we KNOW what Arpey was don't we?!?!
God Bless all my Brothers and sisters at American. Stay Proud and Stay Strong!! Sooner or Later This too shall Pass!
as of this MORNING 0600 CST there WAS no more Continental ! Not much Chance of them ever filing Bankruptcy!! the answer is SouthWest.
American was the LASY Legacy to file for CH-11. Only THIS time EVERYBODY gets cuts INCLUDING MANAGEMENT!! They won't be humping the workers while they take Bonuses for themselves!! Now you'll see who REALLY wants to be with the "Eagle" and who ISN'T just another Fast Buck Mananger. I guess we KNOW what Arpey was don't we?!?!
God Bless all my Brothers and sisters at American. Stay Proud and Stay Strong!! Sooner or Later This too shall Pass!
11-30-2011, 10:23 AM
#248
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Joined APC: Jul 2009
Position: Le Bus
Posts: 382
Originally Posted by B757200ER
What I am seeing is that airlines do NOT have pricing power, like many other industries do. They are incapable of passing along the higher cost of fuel, taxes, doing business or other reasons to consumers because the competition is cut-throat. Airlines should have the ability of raising fares if needed to cover costs, simply put; they don't have that in this economy and in today's industry.
I get several emails a month looking for Pilots to fly in China at very good pay rates. Ironic.
11-30-2011, 10:27 AM
#249
veut gagner à la loterie
Joined APC: Apr 2008
Position: Light Chop
Posts: 23,286
Originally Posted by olympic
Where's Tomahawk when you need him? Did he resign?
Originally Posted by B757200ER
I agree, the business model is poor. Fares are still too low, and don't adequately cover costs. Niche carriers like Spirit and Ryanair are ****ing off passengers with these stupid incidental charges, like for carryons, blankets and other stuff. AA and other majors need to raise their fares to cover costs---period, instead of employees taking pay/benefit cuts to subsidize low fares. In what other industry do employees take the hit to ensure low expenses for consumers???
One conclusion I can draw from this inability of AA and others to pass along higher costs to consumers in the form of ticket prices is this: There are still too many airlines, dumping cheap seats on a volatile market.
One conclusion I can draw from this inability of AA and others to pass along higher costs to consumers in the form of ticket prices is this: There are still too many airlines, dumping cheap seats on a volatile market.
The truth about low cost carriers is they probably provide their services at a price that is unsustainable long term in the hopes of wrestling away market share and maybe even destroying a legacy carrier. Then they'll grow, gain significant revenue but once they plateau they'll probably begin to raise prices... and then here comes the next guy.
I think what is going on is the current legacy airlines are combating it. They're not doing the price wars and incroaching on each others territory and for the most part matching prices.
They're purposefully re-regulating themselves in terms of market access and prices.
Look at it this way, it only takes one city pair to make a part 121 airline and grow it. But try and make a freight hauler that competes with FedEx. You won't, you don't have the network. The entry costs are too high. Not so for a regular airline.
11-30-2011, 11:13 AM
#250
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Joined APC: Jul 2007
Posts: 3,672
Originally Posted by B757200ER
What I am seeing is that airlines do NOT have pricing power, like many other industries do. They are incapable of passing along the higher cost of fuel, taxes, doing business or other reasons to consumers because the competition is cut-throat. Airlines should have the ability of raising fares if needed to cover costs, simply put; they don't have that in this economy and in today's industry.
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