Now tell us the margin required to pay for a new contract.

 

You and I have been back and forth about this. The current contract had QoL as the #1 priority. Howd that work out 6-9 years later?

Again, ULCC has MANY variations. Southwest was once one - the laughing stock of the industry. Smaller planes flying regional routes. Cheaper labor. They even had to deal w/ a law that prevented intranational flying (from Texas) for a while. They obviously aren't that anymore. Do you think the owner/CEO wanted to stay like that or now wish they could go back?

It IS possible to have customer service AND charge less. What does it take? Well, cheaper CASM to start (we have that). It takes a slow, steady growth process emphasizing brand loyalty thru a robust rewards and credit card program (we're a little late but are trying this). It also involves an emphasis from the top on taking care of the customer through employees who feel takin care of by the company (we don't have that). This can only come from an INVESTMENT into the employee. Sooner or later, you gotta SPEND money with the hopes of making more.

BUSINESS MODELS are choices and MUST change/adapt/become better to remain profitable. Like Kirby said, the existing ULCC is dead. He's right. The future is death if we stay the way we are. As already mentioned, the new ULCC model needs to change and it MUST incorporate market labor costs. Anything else won't work. Back in the day, SW pilots were willing to work for less to become part of something special that would pay out later. NO ONE is gonna work for less forever and be OK with it.

 

I knew we’d agree on something eventually

 

For all the complaining in here about negotiations it sure seems like none of you actually read the communications from the negotiators.

Literally ALL of your questions about our ask are IN the newsletters.

Jesus, I'm getting too old for this sheeeeit.

 

Respectfully, your don't have a clue. They are literally changing the operation as we speak. Some small changes, like seats and connectivity, some large changes, like the entire revenue/ticketing model. Does F9 need a radical leadership overhaul? Yes, but that isn't the point here. F9 realized the a la carte process was not only generating less revenue but it was driving pax away. Instead of relying on 50% of total revenue coming from ancillary fees paid a percentage of the passengers they have pivoted to raising tickets prices a small amount paid by 100% of the pax. It hasn't fully developed yet, and it will take time. One of the largest new revenue streams will come from CC partnerships. Once the passenger base is trained and understands they can get a free checked bag as long as they buy their ticket with a specific CC (and they avoid the ghetto gate agent battle royal, win/win) we can finally become relevant with a better bank and share in some of the CC revenue. That is just one facet/component of the transformation F9 is currently going through. The route structure will also evolve for the better. Instead of reducing stage length intentionally (when you need ancillary rev to survive, you need to fly more shorter legs and turn the ac more often). Some of our most profitable legs are almost 2000nm but F9 was forced to average stage length across the fleet below 900 when we were slaves to the ancillary model.

its a work in progress, but if anyone shows me past margins and claims "they can't afford 35% raises" I'll punch them in face. Do hourly rates go down when fuel prices rise? Do they go up when fuel prices drop? Pilot pay makes up 5-10% casm depending on the airline. At F9 it is a very low single digit percentage. I don't have to work the math for you, but when you increase a SMALLER number by 35-50% it isn't going to move that CASM needle as much. Every airline gapped up during their last section 6, we missed a complete cycle. Frankly a 35% raise isn't going to cut it for me.

F9 wants a 40% cost advantage. F9 runs a stage-length adjusted CASM ex of around 6.4 and delta runs a casm ex of around 14.4. Assuming pilot wages and benefits make up 10% of casm (they don't) but worst cast thats 65 cents today plus another 33 cents with a 50% raise (not going to get a 50% raise, just keeping the math easy) we impact casm by a dollar. With a 7.4 casm we are still 48% lower than dal casm. Voilia, there is your 40% margin, FUPM.

 

GOLD TIER POST!

 

Yes to this!

 

Show me a ULCC that has legacy pay and I’ll let you try and punch me in the face.

 

Youve really become a real hero on the F9 threads.

You make your way to the unemployment office yet?

Airlineapps.com

 

We really should not be short sighted and look at empty open time today and conclude "well if we don't have plentiful open time today what good is trade/drop/swap?"

Think long term. You don't want to sell these rules for some pot of money, the company would love to do that for a reason. United gave away forcing upgrades on new hires and that's leverage they'll never have again. We absolutely shouldn't give up our QoL rules but instead reinforce them. We need to BUILD on our QoL rules, not trash them. I want legacy rates but I do not see it happening in the 2020s and I think we need to have an honest discussion about that.

I meet a ton of pilots who are here for the work rules, not the rate. In their minds we will never make legacy rates dollar for dollar and they're ok with that. Rates are overrated folks. Rates sell you the QoL gutting. Don't accept abysmal pay - but being within 5-15% with stellar work rules is a win.

Does our current management team think like this? I don't think so, honestly.

I think Frontier will adapt, I just don't trust this management team to be smart about how it does. Scott Kirby is forward thinking. We are totally reactive and never ahead of what is coming and I think that's a clear recipe for mediocre results or worse.