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Alaska Air Warning of Lower Profits

Old 05-24-2007, 08:38 AM
  #11  
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Originally Posted by SkyHigh View Post
Well if that is true then it appears that management is sinking thier heels in for a fight. I am selling all my ALK stock today.

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ALK is at a 52 week low. Great plan to sell. Buy "Sky" High, Sell Low. Great plan........
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Old 05-24-2007, 12:27 PM
  #12  
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Originally Posted by dash trash View Post
ALK is at a 52 week low. Great plan to sell. Buy "Sky" High, Sell Low. Great plan........
I guess his mystery career he's so happy with (although he spends much of it here among real pilots) isn't in trading stocks.
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Old 06-12-2007, 10:37 PM
  #13  
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Default Pilots Picket Alaska Air Group Meeting

Note: Well, obviously I did not make the shareholder meeting in ANC today, but here is the Associated Press' rendition of what happened, at least outside of the meeting.

ANCHORAGE, Alaska - Dozens of pilots dressed in their dark blue uniforms and caps formed picket lines Tuesday outside Alaska Air Group's annual shareholder meeting, held this year in Anchorage to mark the company's 75th anniversary.

Two years ago, the pilots were forced to take an average 26 percent pay cut. Now that Alaska Air Group is making money, the pilots contend it is time the company gave back.

"We are two years into a contract that was imposed," said pilot Sean Cassidy, 42, of Tacoma, Wash., vice chairman of the Air Line Pilots Association. "Since then, we haven't had as much as a cost of living increase."

Alaska Air Group wants to reach a contract with the pilots that won't increase costs.

"We want a deal that basically keeps costs where they are today," chairman and Chief Executive Bill Ayer said in a meeting with reporters. He declined to predict when the company might make an offer.

Alaska Air Group's approximately 1,500 pilots took pay cuts ranging from 19 percent to 34 percent after the company successfully persuaded an arbitrator to impose the cuts.

The contract became amendable May 1, and pilots and management began negotiating in January. However, several major contractual issues, including pay and retirement benefits, remain unresolved, according to the union.

Cassidy said the "cost-neutral" contract the company wants means that even if pilots are offered more money, they will have to take concessions elsewhere, most likely in work rules, retirement plans, health benefits or job security.

"We are not in the position of giving up all these things that we have worked so hard for," Cassidy said. "We feel the way we've been treated since 2005 is not right, it's not fair."

Two groups of about 30 pilots each formed picket lines on both sides of a downtown hotel where shareholders were meeting inside. One female pilot carrying a baby held a sign that read, "We love our company but we love our families more." Another sign read: "Alaska Airlines _ Record Profits. Our Pain, Their Gain."

Pilot David Campbell, 39, of Seattle, said the company's stance is disheartening.

"Our company just had its most profitable year ever," he said. "We played an important role in that. Despite those recent profits ... they are not willing to share that success."

For the first time last year, Alaska Air Group's total revenue exceeded $3 billion. Although it posted a net loss of $52.6 million for 2006, the company said it would have made a profit of $137.7 million without charges related to severance programs, fuel hedging, and a write-down of the value of its MD-80 fleet.

Chief Financial Officer Brad Tilden said he expected another good year in 2007.

Ayer said Alaska Air Group, with 14,000 employees, is in the middle of a transformation to make it more efficient and capable of competing both with low-cost carriers and legacy carriers. The problem is that many of the legacy carriers have emerged from bankruptcy with much lower costs after shedding their retirement plans, Ayer said.

Alaska Air Group's pilot costs continue to be on the high end, Ayer said. Pilots make an average $118,000 a year, with 59 percent making more than $100,000, according to company officials.

Pilots, who make up about 15 percent of the work force, account for 60 percent of the company's pension costs.

While the company needs to look at all its costs, Ayer said Alaska Air Group and the pilots would have to agree to any changes concerning pensions and retirement plans.

"We think those obligations stand until we agree mutually to do something different," he said.

Ayer said the transformation the company is undergoing is most apparent in Alaska Airline's transition to an all-Boeing 737 fleet and subsidiary Horizon Air's move toward larger turbo prop planes. The company expects to save $130 million a year in fuel costs with the more efficient fleet. The new planes also will help the company grow its cargo business, he said.

"We are really focusing on our transformation of the company," Ayer said.

Tilden said the company remains dedicated to providing service to Alaska
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Old 06-13-2007, 11:53 AM
  #14  
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I don't doubt that this could be ALK management's move before the pilot contract negotiations, but I've seen a few similar reports that quote other airline execs saying the similar things. Continental just deferred some orders from 2009 to 2010. The article indicated economic reasons (economy slowing) and a recent increase in nationwide capacity that is making it harder to sustain ticket prices. United and US Air execs are saying the same kind of stuff about income (not that it would take an economic downturn to hurt either of these companies....they seem perfectly capable of screwing themselves over all on their own). Even Southwest is talking about slowing growth. The economy does seem to be slowing a bit from what I can tell. I sure as he!! hope this isn't a trend, though. Capacity needs to stay low or consolidation needs to happen so the companies can remain profitable. Sustained profitability would give pilots a great bargaining position in the upcoming negotiations at the majors. Just my $.02.
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Old 06-13-2007, 12:15 PM
  #15  
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Default Unions

I had a conversation with a guy in line at the post office the other day. He was a retired union Freightliner factory assemblyman. He told me that when he retired in 1997 his hourly cost to the company was $57. Now the company is moving most of the manufacturing down to Mexico due to the reduced costs.

Alaska Airlines has already thrown the mechanics and rampers to the curb. They seem to be setting their heels for another fight. No company is so secure that they can afford costs that are higher than their competitors. Every company is in a race to match costs. Alaska Airlines is no different.

Customers don't care. They only want to get there at the cheapest price. The FAA insures that most are equivalent in terms of safety so what then does a big fancy airline have to offer that a Skybus can't?

Like a pack of ravenous mice the LCC's are gnawing away at the base of the establishment. Undercutting once strong and competitive companies.
In the end everyone will have to sink to the lowest common denominator or risk loosing their jobs. The best a union can do for its workers is an organised retreat.

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Old 06-13-2007, 01:01 PM
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We have to be careful what we read in the media these days. There would be an article about how the economy is going to pot like yesterday and it would be right next to an article on a housing boom. For example, I read an article that the economy is slowing down because of high gas prices and foreign competition and what have you, but a couple clicks on my trusty mouse later, I was reading an article on how this summer is going to be crazy because record numbers of people are flying and the airports are having trouble keeping up and Boeing is predicting that airlines will be buying 28,000 aircraft in the next 20 years and the regional airlines are having such a heck of a time finding enough 200 hour wonders let alone an experienced pilot in either seat, so what are we to believe anyway. How’s that for a run on sentence?

Bill Ayer is no dumb chump. I'm sure ALPA knows this and it strives to negotiate from a position of strength instead of being on the defensive. A return to status quo of 2005 is not acceptable.

Last edited by vagabond; 06-13-2007 at 01:17 PM. Reason: Little moi committed a grammatical error - egads.
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Old 06-15-2007, 06:55 AM
  #17  
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Lets see how low the stock does when we are on STRIKE! Corporate America Controls the Media! Get ready for a fight or get ready for Corporate Control!
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Old 06-15-2007, 07:52 AM
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Although a strike is a potental threat, I don't see that happening easily at Alaska..... with the essential air service provided throughout AK, the current administration and Ted Stevens, one could block any such move. It's just going to be a long grinding process like FEDEX (and they were making huge profits)
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Old 06-15-2007, 06:11 PM
  #19  
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Originally Posted by bagwan View Post
Although a strike is a potental threat, I don't see that happening easily at Alaska..... with the essential air service provided throughout AK, the current administration and Ted Stevens, one could block any such move. It's just going to be a long grinding process like FEDEX (and they were making huge profits)
What like 3 or 4 essential air service airports... Big Deal! Northern will will bring the milk....
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Old 06-15-2007, 06:29 PM
  #20  
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Hate to be the Devil's Advocate, but there's that little annoying thing known as the Railway Labor Act. Self-help is some ways away, in my opinion.
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