Maybe we should just have one "state run" airline with thousands of aircraft and call it "Ameriflot". That way it'd be fair for everyone.

 

Interesting you should say this because their have been these small snippets in the news about the Brazillians finding a lot of new oil and gas the didn't know about. The oil industry may have a few years left of this profitability but the scenario quoted above is very possible with a lot of new discoveries.

 

The way things are going and with people pushing for cabotage, we may just see "aeroflot" being the major airline here in the USA.............

 

I for one am still waiting for your (or anyone else who thinks so) answer to how SWA is hurting the consumer.

 

SWA has excellent hedging strategies which they can afford and the others can't due to their tremendous overhead expenses. Therefore they can keep the ticket prices "artificially" low. If they were paying the same for their oil, their would be NO WAY they could fly their planes with oil at what it is. The other airlines are constantly compared to SWA even though the business models are COMPLETELY different. They figure if SWA can make money, everyone else should. They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH. They think the costs are the same for a landing slot in FRA for the B777 as they are for a B737 landing in ABQ. They think we can turn a B777 around in 15 minutes just like SWA does. So when they DO fly on someone else, they are totally mislead about the dynamics and complexity of what we do. SWA is great at what they do, but it is so totally different than what the majors do. Yes, we both carry passengers, but you don't have first class, transfer luggage, fly internationally, fly into EWR, ORD, JFK, YYZ, etc. You don't serve meals, and fly transcon redeyes from LAX to EWR. You fly one type of plane and we don't. Their are lots of similarities, but many MAJOR differences. Unfortunately though, these passengers think SWA is the best thing since sliced bread, but can't fathom that we operate differently. So, they are either extremely satisified with what they experience or totally put off. SWA didn't have any planes stranded outside the USA on 9-11. It cost the airlines with int'l flights BILLIONS in lost revenue. No one ever said anything about that, because the news media was totally absorbed by the fact that SWA made a profit and gave out the so-called "bailout" money as profit sharing. No mention of thousands of pax being stranded in BDA with the airlines paying out $10's of thousands in hotel bills. SWA didn't have that problem. As I said before, SWA is a well managed airline, but they are familiar with their territory, and like anything else, once you're out of your comfort zone, things change rapidly.

 

Thanks for your reply! I am not so sure you answered the question but again
as I said you and I have had our disagreements before. 9-11 is over and every airline had to make adjustments. Am I to believe that you think SWA should not have received the grants provided to all airlines? I believe that NO airline should have received any money because in a free market those that expose themselves to risk must plan properly for the worst. Yes, we added it to our profits and dispensed it in our profit sharing accordingly. The exposure to international events is a real threat to those who provide that service and the risks are evident in your reply. Perhaps that is why little 'ol SWA has not ventured in that direction at present. Rest assured that if that is where the money is SWA will follow and we will have to deal with all the difficulties you mentioned.

Perhaps I should have worded my question differently. How is it the domestic consumer has been hurt?

Now back to the thread subject of fuel hedges. I am of the belief that we gambled (Gary Kelly might beg to differ) and it has been extremely successful.
Sometimes those who take a risk are rewarded and sometimes they lose. Okay, I will say it, "I would rather be lucky than good."

 

"I would rather be lucky than good."

Oscar, I was gonna ask if you had a military background. Then I read your profile...Answered my own question. I had a few buds with Hornet backgrounds on a joint program I worked on.

BTW-Happy Birthday!

 

[QUOTE=ewrbasedpilot;376498] They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH. [QUOTE]

How is that harder requiring more pay? (Yes, not the SAME, just different)

1. From the front, it's one takeoff and one landing.

2. You (and the other 2 pilots) get to take a 'nap' in first class between those events.

3. Service in the cabin is handled by the FAs.

4. Getting Oceanic Clearance is not rocket science.

5. Long lay-over to follow your 16 hour torture.

Compare that to 15+ takeoffs and 15+/- landings with 13+/- hour overnights on a 3 day trip blocking 21 hours. [Obviously not all trips].

Which 3 day trip do you think involves more risk? (I guess that would be a 4 day trip for the 777 ocean crossing).

If you think pay should be based on risk, I would think SW would win.

If you think pay should be based on company profits, SW would win.

If you think pilot pay is being eroded by management, you are right!!

 

[quote=Spanky189;377834][quote=ewrbasedpilot;376498] They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH. Where do you guys come up with this stuff? The - on T/O and landings is correct. This arguement is soooo old. In three years I havent done 5 legs/13 hours...5legs/13 hours...5legs/13hours. Have you been talking to GL or something? Give it a rest already geez. I have had 1 count it 1 LBB overnight and actually had a good time their. Go figure! We dont go to IAH anymore.

 

ALL airlines have the same opportunity to hedge their fuel purchases.

Yes, it takes cash up front to do it. But let's be honest, and give credit where it's due. SWA has done an excellent job with their fuel hedging program.

Delta was big in fuel hedging several years ago but totally screwed the pooch. Michelle Burns was the CFO at the time and she thought "Hey, if we sell our hedged contracts we can realize an $80 million dollar gain."

So DAL sold their contracts and the price of oil shot up. The actual cost of her "brilliance" was an increase in fuel cost by upwards of $500,000,000 in the first year. Now good 'ol Michelle took her bonus, and her bankruptcy proof pension, and is gone. (Believe it or not I think she's on the Board at Cisco Systems)

Fuel hedging is like insurance. You are paying money to insure against cost increases, and be able to accurately forecast your fuel costs.

I have homeowner's insurance which costs roughly $1,500.00 a year. Michelle would have me cancel my policy to save that money. What a genius, until the house burns down.

The point I'm trying to make is; SWA was smart, DAL was stupid. SWA can continue their hedging program as long as they want. Other carriers can get in the act too, if they want.

Because of SWA's strategy their fuel costs are the lowest in the industry, and they can effectively make money selling tickets at prices other carriers can't make money at.

Yes, it benefits the consumer, and be honest, it's smart business!

Is it good for other airlines? No. Is it good for employees at other airlines? No. But does SWA management have any responsibility to those groups? No again.

A year or two ago many of SWA's really low fuel contracts were starting to expire. Many other airline managements were then saying: "Now SWA will have to pay the same as us for fuel and they'll have to compete on a level playing field." Well, the price of fuel increased to much higher levels and SWA was still hedged, albeit at a higher cost per gallon. Once again, though, their business acumen paid off and they enjoyed a significant fuel cost advantage.

SWA doesn't compete in all the market segments that the legacy carriers do. If you want to fly from Ft Myers, FL to Missoula, MT you can't do it on SWA. Nor can you go to London, Paris or Tokyo.

But they have defined their market, and they've stuck to it. They are very, very good at what they do.

I've jump seated on SWA many times. When they pull into a gate there is ALWAYS someone to bring the jetway to the aircraft. At DAL it's pathetic. You often wait several minutes. Why? SWA executes their plan better.