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CAL And SW The Only Majors To Profit?  
User currently offlineLatechpilot From United States of America, joined Jun 2005, 0 posts, RR: 0
Posted (14 years 2 weeks 10 hours ago) and read 2087 times:

I just read in USA Today where all of the major airlines except for Continental and Southwest were expected to post hefty losses for the quarter. The airlines that are losing cite high fuel prices and a slumping economy, but it doesn't seem to phase CAL and SW. What do these two companies do different than the rest? Of course SW is in a catagory by itself as far as the majors...being a no frills, low cost airline. But CAL doesn't fit in with SW. How does CAL remain so profitable?

43 replies: All unread, showing first 25:
User currently offlineArtsyman From United States of America, joined Feb 2001, 4747 posts, RR: 33
Reply 1, posted (14 years 2 weeks 9 hours ago) and read 1972 times:

Quality Mate.... quality....

Treat the staff well, and they perform well..., United, AA etc all get paid more than Continental, but you don't see us on strike... happy people, do happy jobs...



User currently offlineMitchell Gant From Montserrat, joined Aug 2000, 253 posts, RR: 0
Reply 2, posted (14 years 2 weeks 6 hours ago) and read 1944 times:

One thing CO has going for it at the moment is the booming energy industry, which drives the Houston economy. Companies like Enron are making money hand over fist, and this translates into extra business for Continental. Although jet fuel may be pricey, CO does benefit from the fact that they have a fortress hub in Houston.

User currently offlineDL Widget Head From United States of America, joined Apr 2000, 2100 posts, RR: 5
Reply 3, posted (14 years 2 weeks 6 hours ago) and read 1938 times:

I think that CO and WN have been fortunate so far in that they have not had to grapple with major Labor woes like their competitors. Or maybe they have and have been much more successful in dealing with organized labor. However, I think there are some storms clouds mounting for CO as their pilots are starting to complain that they are far behind in the pay category than their peers at other major airlines.

User currently offlineAgnusBymaster From United States of America, joined Feb 2001, 652 posts, RR: 0
Reply 4, posted (14 years 2 weeks 5 hours ago) and read 1930 times:

Continental has had no major labor headaches, which really are a big drain on the profits and are a source of bad PR. The Houston economy, as mentioned, has helped contribute to the high load factors.

Continental is a very greedy airline, and while they are well run, they aren't actually that customer friendly.

User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 5, posted (14 years 2 weeks 4 hours ago) and read 1916 times:

What exactly do you mean by "greedy" Agnus? If you mean they're making a good profit, then you don't know what a capatalistic society is about. I think you need to explain that one.

As for customer service, I think CO would gladly put their service head-to-head with anyone in the country. Or are all the customer service rewards they've won over the last 5 years just a fluke? Again, I think you need to broaden your explaination a little.

User currently offlineAgnusBymaster From United States of America, joined Feb 2001, 652 posts, RR: 0
Reply 6, posted (14 years 2 weeks 3 hours ago) and read 1910 times:

Greedy as in a $100 ticket change fee!!

User currently offlineAgnusBymaster From United States of America, joined Feb 2001, 652 posts, RR: 0
Reply 7, posted (14 years 2 weeks 3 hours ago) and read 1905 times:

Greedy as in always being the first airline to introduce a fuel surcharge or other fare hike.

User currently offlineCba From United States of America, joined Jul 2000, 4531 posts, RR: 3
Reply 8, posted (14 years 2 weeks 3 hours ago) and read 1902 times:

I must agree, a $100 ticket change fee is ridiculous. I haven't seen anything about a fuel surcharge.

User currently offlinePbb152 From United States of America, joined Feb 2000, 623 posts, RR: 2
Reply 9, posted (14 years 1 week 6 days 23 hours ago) and read 1888 times:

Agnus, the "greed" you speak of and big business go hand in hand no matter what company you are talking about. It is simple economics and responsibility to shareholders. If CO has to charge more for a ticket change or introduce a fuel surcharge fare hike, it is probably because they spend more on their customers than most U.S. airlines. Therefore, if the company execs feel the quarterly or yearly bottom line may suffer due to expenses, something must be done to maintain profits. This is simple business sense which you call "greed". When costs rise in any industry it is passed on to the consumer. Believe me, all of the airlines are charging more or cutting some kind of customer perks due to higher costs. It just may not be as obvious to you. The other airlines will probably still lose money because they don't have the fuel-efficient fleet, customer service record, lack of labor issues, or overall good management and employee relations that CO has. It's all relative if you think about it Agnus. Survival of the fittest!

BTW Agnus, just because CO introduces a fuel surcharge fare hike, that doesn't mean other airlines have to follow (which they did not the last two times CO tried). If they don't, the fare hike will never take place. However, as I recall, all majors did follow NW's (not CO's) lead the last time the surcharge was introduced. They must have wanted/needed it in order to maintain profits as well. Are they "greedy"?


User currently offlineArtsyman From United States of America, joined Feb 2001, 4747 posts, RR: 33
Reply 10, posted (14 years 1 week 6 days 19 hours ago) and read 1864 times:

The last time I read all the newspaper articles about the ticket change fee's etc, the papers all slammed the airline industry for it, but did add in at the end, and I quote "In the case of Continental and only Continental, they at least supply a superior service, better on-time percentage, and the youngest fleet in the industry"

I sound like an advert, anyways as mentioned by someone else, Continental are winning every award going more or less year after year, and that doesn't lie


User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 11, posted (14 years 1 week 6 days 17 hours ago) and read 1857 times:

Unfortunately, Angus, you confuse "capitalism" with "greed". Actually, in one sense, they maybe one in the same if you look at it from a certain point of view. Capatilism doesn't discourage businesses/individuals from making as much as they can, unlike Socialism or Communism, which tries to limit everything in the interest of the state. So in that sense, every business and every individual, to some extent, is greedy. But I think in Angus's case, he wants someone to limit the "greed" of airlines, i.e., their ability to make a profit. He is saying that CO or any othe carrier has no right to pass on higher costs to him, and that's where Angus is dead wrong.

As was said earlier, the bottom line in any business is profit, and if that profit margin is shrinking, the business has an obligation to try to keep profits up for the benefit of it's shareholders. In a capatilistic society, even though you, me and Angus may not like it, we will be the ones who pay for that effort to keep up profits.

User currently offlineAgnusBymaster From United States of America, joined Feb 2001, 652 posts, RR: 0
Reply 12, posted (14 years 1 week 6 days 6 hours ago) and read 1827 times:

I'm not "dead wrong" on anything!!!

“Many . . . attach to competition the stigma of selfish greed” (Henry Fawcett)."

I agree!! I love how you're all trying to interpret what I meant.

Continental is greedy and therefore they are competitive with other airlines. But, just because a company is a fierce competitor doesn't mean it's more customer friendly.

Do you think charging $100 for a ticket change or instituting fare changes is customer friendly. NO!

I'm not saying Continental is "BAD" because they are making the most of a capitalist economy. I'm just saying, customers don't necessarily appreciate it. They TOLERATE it, but they don't appreciate it!

That was my whole point all along, and it seems to have gone right over your collective heads.

User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 13, posted (14 years 1 week 6 days 6 hours ago) and read 1817 times:

But Angus, the $100 change fee has NOTHING to do with being "customer friendly." It has to do with what we've been telling you-costs go up, and companies-any company in any industry, has to find ways to recoup profits when costs rise. That's the reality of business in a free-market economy. So yes, you are dead wrong, whether you, me, or anyone likes it or not.

I don't appreciate when the electric company, or the phone company raises my rates, or adds some strange charges on my bills, but it's the same thing, whether I like it or not-they're trying to find way to make up for the cost of business rising.

User currently offlineAgnusBymaster From United States of America, joined Feb 2001, 652 posts, RR: 0
Reply 14, posted (14 years 1 week 6 days 2 hours ago) and read 1804 times:

Honestly, I still don't agree with you.

In a competitive market, the passenger doesn't care what airline "a" and airline "b" can or cannot afford to do, as long as the service on airline "a" is reasonably on par with airline "b"

Invariably, when there are fare hikes, some airlines choose to pass their increased expenses along to the passengers while others don't. They try to under-cut the airlines which raise their fares in hopes of stealing some of their business.

It's just a business technique, and it doesn't make one airline "better" than the other. But, in the eyes of the customer, the airlines which choose to hold the line are being more customer friendly.

In the end, the airlines don't care about satisfying customers, they just want to keep them from jumping ship to others, and find ways of attracting new customers.

User currently offlinePbb152 From United States of America, joined Feb 2000, 623 posts, RR: 2
Reply 15, posted (14 years 1 week 6 days 1 hour ago) and read 1793 times:

Well Agnus, I guess your lack of business sense IS over my head! You only see the "little picture", which is keeping money in your "greedy" pockets! You don't like to lose that money, right? Well, think of yourself as a small business. When your costs rise, do you have to cut back, or minimize the way you spend in order to keep as much money in your "greedy" pockets as possible? I'll bet you do! But, you only relate this to yourself, and that is where you err. Customers like you who only tolerate this when it comes to a business such as CO are obviously concerned because they may have to shell out more cash in the end. However, aren't the folks at CO only trying to maintain the profits that shareholders expect, and allows them to offer the brand of service they do? That is, after all, their responsibility not only to their shareholders, but also their employees, and even though you may not see the "big picture", their customers as well. It allows them to offer their award winning service, purchase more comfortable, fuel-efficient aircraft, and profit-share with their employees. And profit-sharing, among many other employee perks is what keeps a happy and loyal workforce, which is passed on down to the customer in turn. Nothing is for free; you have to give a little to get something in return. And CO gives you plenty in return for the money you spend!

And remember Agnus, CO is just as susceptible to rising costs as any other airline, or any other company in any other sector. Even my dad complained about the CO ticket change price the other day, but with the cost of fuel, and impending economic downturn, this is the nature of the beast. Something has to give, but I would hardly call CO's tactics "greedy". I'd say it's more on the line of responsible and economical.


User currently offlinePbb152 From United States of America, joined Feb 2000, 623 posts, RR: 2
Reply 16, posted (14 years 1 week 6 days 1 hour ago) and read 1786 times:

Agnus, I didn't get to read your last post before my previous one, so I will say I absolutely agree with you about the point that most customers don't care about why an airline has to raise fares or surcharges. They are just concerned with having to pay more, which they should be. I was just attacking this issue from an CO's economic point-of-view because I didn't think the term "greedy" was appropriate.


User currently offlineJetsetTX From , joined Dec 1969, posts, RR:
Reply 17, posted (14 years 1 week 3 days 17 hours ago) and read 1758 times:


Considering Continental won both JD Power awards last year (long and short haul) and has won another four I believe in the previous five years, I would think that your statement that Continental is not customer friendly is wrong, and our most frequent customers would agree with me.

User currently offlineSEVEN_FIFTY7 From United States of America, joined Sep 2000, 957 posts, RR: 4
Reply 18, posted (14 years 1 week 3 days 16 hours ago) and read 1756 times:

All these CO people are bragging over the "awards" that airline has gotten, with JD Power seemingly being the only award group handing them out to Bethune and buddies.

Hmmmm. I'm wondering who these JD Power panelists are. Methinks they have friends and family that work for a large Houston-based airline. ...But I won't knock CO. I guess after all those years of being the ugly duckling at the bottom, there wasn't anywhere else to go but up.

User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 19, posted (14 years 1 week 3 days 16 hours ago) and read 1751 times:

757, get some facts before making a statement. the JD Power awards are given out after surveys done by FREQUENT FLYERS of all the major airlines. The surveys are done in conjunction with Frequent Flyer Magazine, and are independent of the employees of the airlines.

Obviously, you've never heard of JDPower and Associates-they give out awards in all kinds of fields for customer service excellence. Next time, think before you type.

User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 20, posted (14 years 1 week 3 days 16 hours ago) and read 1748 times:

I don't put much stock in any awards, regardless of how "prestigeous" they are. That being said, you still have to admit that WN and CO are doing SOMETHING right to make money when the others aren't. Repeat customers play a role in there somewhere.

User currently offlineLsjef From , joined Dec 1969, posts, RR:
Reply 21, posted (14 years 1 week 3 days 16 hours ago) and read 1741 times:

Two points:

1) airlines are greedy in their competition to collect airfares and post profits; such is life. BUT, profits are not the only bottom line. A second (and often overlooked "bottomline") is long-term business stability, which in an industry such as passenger aviation relies heavily on customer satisfaction and repeat flying. When my job forces me to change a flight, SWA lets me credit the full unused fare toward a future ticket, while the other airlines apply arbitrary change fees that often exceed the actual fare! So, where is my loyalty as a customer?? Likewise, how many times has each of us changed to a different bank or credit card because we dislike the insensitivity and apparent greed associated with a fee that, in the big picture, was really trivial?

2) I, too, put little stock in awards like JD Powers. All too often these awards are really no more than promotional back-pats distributed by industry groups to assist marketing departments. They lack objectivity, and miss the true bottom line: how were YOU treated by airline A on your last flight, and overall during the last year?

User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 22, posted (14 years 1 week 3 days 15 hours ago) and read 1737 times:

I often don't put stock in such awards, but when a certain company wins such awards over and over in whatever industry, you have to take notice of them.

User currently offlineCOexERJ From , joined Dec 1969, posts, RR:
Reply 23, posted (14 years 1 week 3 days 15 hours ago) and read 1736 times:

Seven_Fifty_Seven wrote:
"All these CO people are bragging over the "awards" that airline has gotten, with JD Power seemingly being the only award group handing them out to Bethune and buddies"

-As Continental EWR would say "Another brilliant quote from the peanut gallery"

Here's a short list of a few of CO's most recent awards.

~Air Transport World's airline of the year-1996, 2001
~Fortune's best 100 companies to work for-1999,2000,2001
Best short-haul executive/business class 2000, 2001
Best long-haul executive/business class 2001
Best trans-Atlantic airline 2001
Best airline based in North America 2001
Best frequent flyer program 2000, 2001
~Fortune's most admired- #2 domestic carrier-1999,2000,2001
~Fortune's most admired- #1 US-based global carrier 2000
~Information Week-No. 1 Airline Innovator of Information Technology 2000
~NPD New Media Services- #1 airline website 2000
~Forrester Powerrankings- #1 airline website 2000
~Brand Keys- #1 in customer loyalty 2000
~Aviation Week & Space Technology-#2 "Best Managed" U.S. airline 2000
~Ziff Davis Smart Buisness Magazine- Best Airline 2000
~Condé Nast Traveler magazine-Best Transatlantic Business Class, Best Transpacific Business Class of all U.S. airlines 1998,1999, 2000
~Airline Quality Rating Study: Top International Airline, #2 Domestic Airline 2000
~Smart Money Magazine's top-rated U.S. airline for business travel 2000

...Guess you are wrong, Seven Fifty Seven.
BTW: With CO "buying" all these awards, I wonder how they are financing all those new aircraft or the major building projects in EWR & IAH.


Continental...Cinderella of the skies!

User currently offlineTravatl From United States of America, joined Mar 2001, 2174 posts, RR: 6
Reply 24, posted (14 years 1 week 3 days 14 hours ago) and read 1730 times:

With all this talk about the majors posting losses the first quarter, what about the second-tier (Frontier, AirTran, Midway) and regional (ASA, Mesa, Comair) carriers?

How are they shaping up for the first quarter?


25 Goingboeing : Quick poll - how many posters on this board have taken part in a JD Powers, Aviation Week, Fortune, et al survey? Not to take anything away from CO, b
26 COexERJ : Goingboeing, By your logic, we should ignore crash test data and consumer reports on automobiles since "very few" have taken part in an actual crash t
27 Kindalazy : I tend to agree with one of the earlier posts which pegs employee satifaction as the key to CO (and WN's) profitability. Ultimately, it the airlines e
28 Goingboeing : My post wasn't a slam at CO, COexERJ - but one who lives by the JD Powers award can also die by the JD Powers award. The awards are super de duper for
29 COexERJ : Goingboeing, I know you weren't trying to slam CO, but I just thought it would be appropriate to share with you an employee's perspective. I'm a reali
30 Lsjef : GoingBoeing: You beat me in rebutting comments re: the JDPowers awards. I was busy at work and have just now found the time to do some research. What
31 Kindalazy : Lsjef, Good point regarding business (i'm not paying) vs. leisure (where's my wallet) travelers and their perceptions of what constitutes a quality fl
32 Sccutler : LSJEF- I believe you are mistaken in your assessment of the passenger mix of SWA- There seems to be a general presumption (at least expressed on this
33 WiLdmanVzla : I think the secret of both airlines is to give what they are offering in terms of service... both are good choices if you want to have the kind of ser
34 Ladevale : To be sure, Continental has won quite a number of awards for its customer service and frequent flyer program. But, from my perspective, it is often ha
35 IloveA340 : There aircraft (exept continentals new 772 and 764's) are cattle cars.
36 COexERJ : Ladevale, I'm not about to get into a shouting match with you, it's no secret that you don't like CO... you never have anything good to say about them
37 Lsjef : My best guess on the question of why UAL and AAL don't top these surveys... ...they are such big airlines that they offset the perks of their size wit
38 Lowfareair : The main reason business travelers choose their main airline is not for perks and benefits, it is because of convenience. Sure there might be a very g
39 Goingboeing : LSJEF - most of the travellers who "put up" with the summer from hell did not do so because of the fantastic Hong Kong award on Cathay. Indeed a lot o
40 Lsjef : In the service industry, little things do mean a lot. Same thing with SWA vs. UAL/DAL/AAL. In the past five years, I've made dozens of calls to airlin
41 COexERJ : Goingboeing, Thanks for the kind words, being a Res agent for CO, I too love the fact that as soon as you call, we are there to answer. Its something
42 Goingboeing : COexERJ - You're welcome. I remember the first time we flew CO. We were going from MCI to RSW. The first airline I tried was Delta. Waited for 20 minu
43 Jplenny : I just flew FRA-EWR-MCO and back on CO. I will have to agree with the awards they have EARNED. This is was one of the best trips I have been on in yea
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