Tight economy and high oil prices - do you think they'll force MORE concessions?
 

Just curious what many of you think will happen during this "downturn" Do you think they'll try and force more wage concessions at the regional and major level? It seems they've gutted things so much since 9/11 they can't seem to go much lower. Will pilots at carriers faced with the possiblilty of Chapter 7 take deeper cuts and lower the bar more to hold onto a dying carrier? The race to the bottom seems to continue. Hopefully a much more optimistic outcome will result with less capacity and a return to profitability for most carriers. I'm not normally a doom and gloom person so I hope we can all stay strong and maintain and improve the pay and work rules wherever we are. Good luck everyone.

you cant take out whats not there. There isnt room at the regionals to take pay cuts.

I don't think any legacy or regional airline will take paycuts at this point. You'll see the Airtrans, fronteirs and air midwests do it. But as superpilot said, there is NO room at regionals. I for one would gladly burn down our corporate offices if they asked for pay cuts.

Legacy guys shouldn't put up with it either. Frankly, I would rather my airline go out of business, than make this industry even MORE shoddy than it already is.

there is about 1300 guys and gals here at pinnacle that agree with you.

The way everybody has slowed down, there has to be a turnaround coming soon. If not and oil comes climbing, by next summer there won't be any traveling, so I think (and hope) that by new years oil should start trickling back down.

Really? Just ask what DAL thinks of Comair.

Just as we remember Lorenzo and his tactics, I hope in the future we remember how Delta took an outstanding company and plucked each feather it had one by one (Comair.)

i'll bring the matches, you bring the can of gas.....


(i cant afford the gas)

I think we wil see several airlines go into Ch 7 in the next 12 months. The surviving airlines will then be able to raise rates to show a profit, even with fuel at a crazy price. Customer service will come back (food, no checked bag fee, etc.) and flying will be much more of an enjoyable experience for the public. Fewer flight will also lead to fewer delays, less crowded airports and happier customers.

Once Israel finishes bombing Iran, the USA, being the suckers we are, will move in to rebuild the Iranian oil fields. Inventory will increase and prices will go back down to around $100 a barrel.

In 2010, when oil is back down to $100 a barrel, the price of fuel will seem cheap given the $8/gallon we paid in the summer of '09. The public will then start flying again and we will repeat the cycle.

Oh- I forgot about the original question: No more concessions. Only Ch. 7's.

Well, we'll see how things pan out here domestically in terms of our economy, that might dictate whether pilots agree to more concessions. The tough times have not begun to set in for many of us, but at the end of the day, having a job is better than having no job I suppose.

My great grand-father, who died just short of 101 years old back in '82 when I was 5 yrs. old, had some interesting stories about life during the Great Depression...he went 6 yrs. w/out work. When work resumed he walked 5 miles to work/5 miles back each day, worked in a factory in Milwaukee, Wisconsin. He bought his first vehicle when he was 65 yrs. old.

Most of us don't realize how good we've had it so far. Most of us have been very fortunate. Personally, I don't want to see concessions. Just don't like 'em...pilots have done enough to rescue this industry while management has resorted to pathetic form letters to the public whining and complaining about the high cost of jet fuel. Rather than being innovative and earning those big bucks they make, they've proven themselves to be completely devoid of any good leadership.

With that said, if the economy gets worse than anticipated, it will be interesting to see how views might change regarding concessions. Time will tell.

Interesting take, I like the $8 bucks/gallon by '09. I think ya low-balled that one, esp. if things continue going down the crapper!

Letter from Management:

Dear Pilot Group,
As we dive into these trying times, we must all tighten our belts. As such, we are forced to cut all pay by $500 per month. However, knowing you will no longer be able to pay your rent, we have graciously erected a used circus tent just outside the perimiter fence, and have coverd the ground with fresh straw............

There are two types of airlines. Ones that have gone through bankruptcy and those that will.

For those that have gone through it, no. For those that haven't, standby.

I'd rather not have a job than make less than I do right now. Maybe the pilots who are making more than me disagree...but I would not put in the hours and personal sacrifice for anything less than the approx. $1500 a month most of us new FOs make. It just ain't happening.

We're professionals, as such, entitled to some dignity in pay. I don't think your doctor would be willing to stick his lubed finger up your nether regions to check your prostate if he was making less than $20,000 a year. I spent just as much time and effort preparing for this job as a Doctor...

And yes, I love flying...and I'm not doing it for the money...but I sure as hell ain't going to do it for free. Let me define free: anything less than I'm making now. Anyone who would needs a dignity check-up. The more we give up, the more we devalue ourselves and our profession. Like my first flight instructor told me: never give free or discounted lessons: it devalues your profession. I'm sticking to that. Offer me less and I walk - its as simple as that. I'll pick tomatoes in Sinaloa before I take a pay cut.

Damn fine instructor. We need more like him.

I have absolutely 0 respect for CFI's that teach for free.....

That was one of the biggest pet peeves I had as a CFI was the pay issue. At the large 141 "pilot factory" I worked at most instructors put a cursory .3 pre/post charge on the billing which I thought was rediculous. We were required to be there for the students half an hour before their launch, though most instructor weren't or were finishing up with the prior student and many instructors didn't even walk outside for the students preflight so many instructors did only do about .3 pre/post. I hated it as a student when my instructor breifed me on what we were doing for the flight as I was running the before start check and said see you next time on shut down - when I'd actually TEACH before hand and be available for the hours I was SUPPOSED to teach - students would look at me like I was trying to rip them off when I'd put down .7 pre/post because they were so used to seeing .3 from other instructors. - which was common especially for primary students. So many instructors were always trying to give their students a break (which I understand - I was a poor college student too) but if we want any integrity in our profession we have to advocate our true worth, even as a CFI.

And some who have gone through it before will possibly do it again.:eek:

Smells like a SFB .3 to me. I hated that as well, so stupid. There are so many things wrong with that place.

...the only good place to be right now, sadly, is in the execs. seat...

...it's a crime that management keeps asking for cuts here and there from everyone but themselves...

we have already taken concessions. Our dollar is now worth 40% less than it was 10 years ago. How's that for a pay cut?
Inflation is killing the economy. But at least our multi trillion dollar dept is now worth less because of the devalued dollar.

Darned right...many people wonder why the European carriers aren't laying off en masse as we are here in the US...three reasons:

1) When you calculate in the devaluation of dollars vs. the euro (all oil is sold in US dollars the second it comes out of the ground in Saudi Arabia), fuel has only gone up 25% in the EU vs. 40-50% in the US over the same period.

2) The Euros have a transportation infrastructure and economies that are structured around high fuel prices, since they tax the heck out of energy to limit consumption.

3) Fares over there (with the notable exceptions of Ryanair, Easy, and a few others) are where they should be, and companies like BA and Lufthansa have had success "selling up" and offering excellent customer service and amenities, vs. everyone here whoring themselves out to people who would've been on a Greyhound less than 15 years ago.

Send the Greyhound people back to the bus, and jack up fares (but offer better service and real food on real plates). If we're going to cut capacity so much anyways, we might as well upsell our product lines and get rid of the economy travelers who demand their $50 flight to Lauderdale to take their obnoxious family to Grandma's retirement village.

When I was a child (late 70s and 80s) I remember people still dressing nice to go fly. It was not a cheap experience. You worked hard to get the money to go on a trip. You were proud to be able to afford the luxury of flying somewhere. Now you walk through the airport and it looks like a sleepover party. People in pajamas and flip-flops, ratty clothes - stuff I would be embarrassed to be seen in out in public. Anybody who has $100 can get on a plane. It has become the Greyhound of the 21st Century. Pilots get paid on a bus driver's level and treated with about the same level of respect.

I agree that we need to jack ticket prices up to a higher level...but also increase/return the amenities that used to be there. People will pay more for a better experience...just not as many of them. You cannot...and I repeat cannot compete on price alone in ANY industry. You have to offer something else otherwise someone will always come around and undercut you to get the sales. That is exactly what has been happening in our industry. Shave $10 off the price of a ticket and get 20 more passengers. If people bought cars and houses like they currently bought airline tickets they would all drive Chevy Aveo's and live in used FEMA trailers. Something has to give. I still think the word "cheap" has a negative connotation for a good reason. The industry has been doing quantity of passengers over quality for far too long...and it shows.

Another thing I notice -- how many airlines do you actively see trying to build a recognizable brand that people will commit to? I've only seen a handful of airlines advertise on television with decent commercials - nothing like they used to be. And no, "American Airlines is the official airline of the Oprah Winfrey show" does not cut it. Tell me why your airline is different and why I should pay the few extra dollars to fly it. Build a brand for me, give me a compelling reason to fly with YOU! I flew Continental a few years back and had such a positive experience and felt strongly about the company - I was willing to pay $50 extra for a ticket just to fly Continental! Its the same reason people pay $30 for an Abercrombie t-shirt rather than a $5 Wal-Mart t-shirt. What do you get in a Lexus that you can't have in a Hyundai? What is the difference between a Timex and an Omega? Brand and brand loyalty. The feeling you're getting something extra for your money. Crummy frequent flyer programs aren't enough...give people something COMPELLING! Bigger seats, meals, better service. Until someone is sucessful in this people will continue to fly the "other" airline to save 52 cents.

But I digress...

Bingo - I've wondered this too. Marketing can be pretty fascinating at times. I know people that have fierce brand loyalty simply because they like their color, logo, slogan or whatever. People will go to great lengths and pay extra for companies they like simply because of good advertising. Who can forget the "Come fly the friendly skies" ad campaigns with Gene Hackman for United? I was pretty young to even remember that but I'd venture to guess they sold a lot of tickets that way. I think a good TV ad campain would bring in a lot more dollars than would be saved by charging for first checked bags, deleting in flight entertainment and premium service etc and all the negative publicity that brings as well. There are many more ways to bring in paying customers than crappy milage programs and a 5 dollar discount over brand X. Execs seem to have missed that mark and think that money is better spent on their annual bonus - heck they have a golden parachute anyway if their other "brilliant ideas" fail.

Probably because product differntiation does not matter anymore.

Consumers are more motivated by price, than anything else.

Passengers lie
 

Bob Crandall claims that all of these things have been tried repeatedly, without success. Passengers say they'll gladly pay more for such items, but then book away for a cheaper seat. Just a few years ago AMR tried again, removing a couple rows of seats to increase legroom and advertising this widely. The result? Load factors hardly budged and revenue plummeted, causing them to replace the seats. :o

I'm going to politely disagree on this just a bit. Yes many people seem to shop around for the cheapest price on things...but usually things that they don't value much. For example maybe you buy the cheapest toothpaste you can find, or a laundry basket, etc. But most people will pay more for something they do value. Look at how many people pay $5 for Starbucks products (which has a strong brand image and loyalty), look at how many people buy Apple products (again, strong brand image and loyalty). Most people don't go out and buy the cheapest LCD television they can find or the cheapest car...because they value these things. The airline industry, by cutting fares so much, has caused the consumer to devalue air travel. To them its just the Wal-Mart of the air. The experience on most every airline is exactly the same as the other - crowded, $3 cookies, not on time, etc. People don't value air travel like they used to anymore. That needs to be reversed. I think reducing availability and increasing fares is a step in the positive direction. It needs to be less commonplace than it already is...but it needs to be compelling. People will spend more for something if they PERCEIVE they are getting more value for their money. Perception is their reality. If they think Starbucks coffee is the greatest thing on earth, no amount of $1 coffee from McDonald's is going to sway them. People aren't going to stop buying Apple products because "dude, they can get a Dell" for $500 less. An airline needs to work hard on the perception of value for the money, branding and loyalty. Just paying lip service to it and not doing it will not change a thing.

American companies tend to look for the overnight innovation - something that will revolutionize their business overnight. If it doesn't work in a few weeks they abandon it. How did Toyota get to be such a dominant force in the automotive industry? They make little changes, thousands of them in a year, small steps...and they continue to pursue and nurture them. Their idea of innovation is that tiny little steps will eventually produce a great thing. They listen to customers, managers and people working on the production line. The result is a product that is dominant and a brand that people will pay more for because of perceived value for the money. So we add something at a US airline and abandon it a month later because it didn't show any immediate return. This is not a good practice at all. Slow and steady wins the race!

I could continue, because this is something I've felt passionate about for a long time and spent a lot of time thinking about and researching. I'm highly interested in business...and it eludes me how companies that provide such a great service could be so inept at turning a decent profit!!!

You've hit the nail on the head with a dark hidden problem in American management. That is exactly what happens when you become a slave to stock price and large fund investors. They want a quick ROI and if the stock doesn't budge, they bail for the next one hit wonder. That is how our market is structured. Unfortunately, it is resulting in the gutting of American industrial might in favor of financial fragility. The airline industry is only the most recent iteration.

I'm gonna go with Pontius pilot - I think people would notice a difference and have some loyalty with a good ad campaign. I've heard enough people complain about X airlines reputation or service that if someone had an effective enough ad campaign with a higher level of service there are enough upper middle class citizens that would pay the premium.

Besides wasnt the AA debaucle with the seats in response to Legacy Oneida Airlines that flew entirely first or business class configured DC-9s somewhere in Texas? (if my memory serves correct) It was a short lived startup that American made sure to defeat quickly. So yeah AMR lost money - but won the war. Legacy Airlines is no more. After that mission was accomplished the seats went back in.

Not really trying to bash Comair here but what did Comair do to DAL pilots when they started furloughing??? I call it... Karma?


Pontius Pilot
Well spoken.


PS just to clarify I dont want ANYONE to get furloughed, already two of my close friends are going to be out of a job (one is a 135 turbo prop operator!!).
Good luck to all

~m