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03-15-2013 | 07:46 AM

#1911

TillerEnvy

Gets Weekends Off

Joined: Jun 2009

Posts: 1,097

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Quote:

Originally Posted by TillerEnvy

Below cost? You really that naive? Bedford has already disclosed the projected income from it. Don't let emotions get in the way of intelligent posting.

Why would anybody bid below cost on BRAND NEW NOT SITTING AROUND AIRCRAFT? Think about it.

Bedford might have disclosed income but what is the profit?

Are these cost based on the current contract for pilots and rest of employees?

Of course the projected profit is not for current labor rates. Do you folks have any idea how small of a percentage labor costs are in the grand scheme? You can't even come close comparing this to Pinnacle. That was doomed before the start. But it's easier to flame away than to understand facts, so carry on.

03-15-2013 | 08:23 AM

#1912

Ultralight

Gets Weekends Off

Joined: Nov 2012

Posts: 611

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[QUOTE= Do you folks have any idea how small of a percentage labor costs are in the grand scheme?[/QUOTE]

Labor is the only controlable cost at an airline. Fuel, maintenance, training, landing fees etc are pretty much the same whichever airline it is.

Now if you have 10 captains on $60,000 a year (G7 for example) and 10 captains on $100,000 a year (Skywest for example) thats a difference of $400,000 for only 10 pilots. $4 million for 100 pilots. Once you get into big numbers like the 3,000 pilots (Eagle for example) you are talking huge sums of money.

AA, Delta, United, U.S Airways, don't really care who flies their feed. They just look at the numbers, and so the whip saw, concessions and under bidding begins.

03-15-2013 | 11:52 AM

#1913

rickair7777

Prime Minister/Moderator

Joined: Jan 2006

Posts: 44,895

Likes: 690

From: Engines Turn or People Swim

Quote:

Originally Posted by Ultralight

Labor is the only controlable cost at an airline. Fuel, maintenance, training, landing fees etc are pretty much the same whichever airline it is.

Now if you have 10 captains on $60,000 a year (G7 for example) and 10 captains on $100,000 a year (Skywest for example) thats a difference of $400,000 for only 10 pilots. $4 million for 100 pilots. Once you get into big numbers like the 3,000 pilots (Eagle for example) you are talking huge sums of money.

AA, Delta, United, U.S Airways, don't really care who flies their feed. They just look at the numbers, and so the whip saw, concessions and under bidding begins.

Mx is controllable, since it has a high labor component and you can shop Chinese junkyards for "re-certified" used parts. If you outsource, economy of scale helps the price.

Training costs can benefit from economy-of-scale.

Fuel (if you buy your own) cab benefit from economy of scale as well as an aggressive purchasing dept which makes use financial instruments such as hedges.