swaluvfa
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Something Has To Happen Fast!

Mon Mar 21, 2005 3:53 am

It has been over 5 years that this US airline industry has seen any real profits. My question is: when is it EVER going to end? Something HAS to drastically change in this industry that we all love so much in order for it to continue. Lets see the current state of the legacy carriers:

*Delta and their 5 billion 2004 loss

*NWA mechanics saying the airplanes are going to be unsafe

*A319s disappearing from twice chapter 11 USAirways

*UA and the neverending bankruptcy, and neverending losses

*CO and their life or death threat for the employees to make

*AA and the food, pillows, planes, and cash disappearing

I personally think there is going to be NO CHOICE but for mergers, failures, acquisitions, and shutdowns to happen. These airlines think that parking planes, cutting costs, employee pay reductions are going to save them but they are wrong!! It has not saved ANYONE yet.

*A USAirways and Independence shutdown would free up the east coast and Caribbean so that AA could keep their healthy hold on the Caribbean and airlines like Delta, AirTran, and jetBlue could prosper on the east coast.

*A United shutdown would allow Northwest to hopefully gain some additional profit from picking up Asia routes and allow AA, CO to gain some Asia profit as well. Also Continental and Delta could gain UA's Heathrow and small European presence. United's domestic capacity could EASILY be absorbed into the healthier carriers.

*Airlines like ATA, Frontier, America West, Independence, and Midwest need to go.... don't get me wrong, they are all GREAT little airlines indeed, but they are NOT making money and just creating over capacity in the industry.

This is how my little prediction would look in the future:

Legacy Carriers- American, Continental, Northwest, Delta
Others- Southwest, jetBlue, Alaska, AirTran
And of course the regionals flying for AA, CO, NW, DL

Will this create a lack of competition? Maybe. But that is what is needed for these airlines to pull any sort of profit. There will always be the LLCs to offer the low fares.

We all share the same love for the airline industry and I don't wish ANY airline these woes or any airline employee out of a job. I love this industry and think that it is SOO sad what has happened. But something big like this HAS to happen in my opinion.

Any thoughts!?!?!.........
 
NWAFA
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 4:07 am

You hit it right on the head SWA! If there are two carriers, then THAT is competition. You don't need 10 airlines to have competition....a Competition is more than one.

UA needs to crap or get off the pot-quit hiding behind B.K. to "wait and see" -When you don't cut the Umbilical Cord, you start bleeding - hello your there time to cut the cord.

US needs to finally take a good breath in and let the air goes where it will - could be stay alive or finally take its last breath.

Indy Air needs to wake up and finally see they can not make it.

ATA needs to realize that WN is a very smart company and they will NOT save them - they just want the gates and slots at MDW.

AmericaWest - needs to hook up with someone. They have a great thing in PHX and would be a great match for many company's.

NW, CO and DL need to figure out once and for all who is going to merge with who and stop the "i want to be on top, no I want to be on top", and let the 3rd on go and hook up with someone else. The three of them keep doing the pissing contest to see who can go further to decide who will merge with who

American- They are great with the South America stuff, and they are doing a great job concentrating on that.

Southwest is going to be Southwest - they know who and what they are and execute that every day very well.

AirTran - Is trying to figure things out - kinda like we we as humans put one toe in the water to see if its too hot or cold

With a such a pro corporation White house and administration, I think mergers would be allowed so much quicker than before. They need to start happen before we are all dead.
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Lono
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 4:11 am

This has been going for years.... since deregulation.... carriers come and go... don't get too excited about the Legacy carriers going away.... they will be around for a long time... sure one or two may go away... but look how long it takes for one to go away.... UA/CO/US/DL/AA have had issues forever... they are slow to respond... but when they do it is bad for everyone.... It will get interesting when AA starts rethinking it's business plan... they could make a couple of LCC's go away quickly if they wanted...

So nothing is going to happen fast.... just watch and learn...
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avek00
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 4:29 am

Problem is, no one has the $2B or so lying around necessary to merge with or acquire anyone...
Live life to the fullest.
 
BlatantEcho
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 4:53 am

"Problem is, no one has the $2B or so lying around necessary to merge with or acquire anyone..."

and the airlines that do, are smart enough to want nothing to do with merging or acquiring anyone.

But once the airlines get fat again, the cycle will start anew, huge contracts, new fleets they can't pay for, etc.

If you Chap 7. UA, US, AA, & Delta, everyone would be better off after a year or so, as long as they players filling those voids didn't get to big headed. It would be an interesting year, but a fresh start for a large chunk of the industry would be a VERY good thing
They're not handing trophies out today
 
SonOfACaptain
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:02 am

Quoting SWALUVFA (Thread starter):
*A USAirways and Independence shutdown would free up the east coast and Caribbean so that AA could keep their healthy hold on the Caribbean and airlines like Delta, AirTran, and jetBlue could prosper on the east coast.

You don't need airlines going out of business, what you need is mergers. People are flying. Seats are being sold. The problem is that fares are too low, because of too many competing airlines. I personally think that within the next few years, the industry will go through a major shakedown. I wouldn't be surprised if the legacy carriers number 3 or 4 due to mergers between themsleves. I also think that US will merge with either UA or HP, with UA more likely.

-SOAC
Non Illegitimi Carborundum
 
BlatantEcho
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:11 am

How does merging make an airline suddenly profitable?
Is AA profitable after the TWA merger? Heck no.

You're talking about reducing competition by mergers, when the only want to do it is through Chap 7.

This is America, after all. Competition is the root of our economic system, only the strong (should) survive. Let a few liquidate, and let smarter companies pick up the pieces. That's the way to low fares and a healthy industry.
They're not handing trophies out today
 
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mariner
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:19 am

Just think -

- if there were no such thing as Chapter 11, a lot of this would have happened already.

- if the ATSB had not been set up, a lot of this would have happened already.

cheers

mariner
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atmx2000
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:25 am

No airline in its right mind would want to acquire the huge liabilities of their most unhealthy competitors in a merger or acquisition and put themselves into a bigger hole. It's better if some airlines go bankrupt, so the remaining airlines can pickup profitable bits and pieces without all the crap.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
SonOfACaptain
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:27 am

Quoting BlatantEcho (Reply 6):
How does merging make an airline suddenly profitable?

Just merging with an airline alone won't make the airlines profitable, but it will provide the stepping stones to do so. With less competition, an airline is allowed to raise fares to more profitable levels.

Quoting BlatantEcho (Reply 6):
Is AA profitable after the TWA merger? Heck no.

AA and TWA is not a good example. The merger was in a totally different situation. It also only took a small airline out of business. It didn't really affect the industry.

Quoting BlatantEcho (Reply 6):
You're talking about reducing competition by mergers, when the only want to do it is through Chap 7.

No not really. Merges reduce competion, while at the same time not lowering the amount of seats available. (Which would be a bad thing because people are indeed flying.) Chap. 7 reduces competion, however, it also reduces capacity in the industry.

Quoting BlatantEcho (Reply 6):
This is America, after all. Competition is the root of our economic system, only the strong (should) survive. Let a few liquidate, and let smarter companies pick up the pieces. That's the way to low fares and a healthy industry.

I agree with this, however, why go through such a harsh process when merging will do the same thing.

-SOAC
Non Illegitimi Carborundum
 
744
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:29 am

First of all CHANGE all of the US CARRIER'S stupid CUSTOMER SERVICE which includes ground, reservations, inflight, and ticketing centers. They are so RUDE, out hearted. See how Asian carriers like SQ,CX,BA,KL, etc do incomparision to DL,HP,FL,AA,UA etc especially inflight? What's wrong with all the American carriers?????
 
DeltaWings
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:30 am

Well I dont want any airline to go. Personally I think it's great to have so many airlines. One day, when all this trouble in the industry will be over- and yes one day- then these airlines will be making money again. If it's possible they all should keep on going as long as possible. Let's say most of the airlines merge or go out of business. When the hard times are over, there will be so many airlines gone, although they could be making then if they stayed alive. Delta has been going for 75 years. It would be cruel if they just would have to suddenly leave. Other airlines are even older, so the same counts for them.


~DeltaWings
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atmx2000
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:31 am

Quoting Mariner (Reply 7):
Just think -

- if there were no such thing as Chapter 11, a lot of this would have happened already.

True. Chapter 11 ought not be allowed when the overall state of particular industry is poor.

Quote:

- if the ATSB had not been set up, a lot of this would have happened already.

While that is true, I would argue that the government had significant liability when it failed to create a security system that would have prevented 9/11 from occurring. My view is that as a result it is only fair that the government do something for the airlines. However, they should have restricted it to grants and not include loan guarantees that increase debt load of the airlines and the government simultaneously.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
NWAFA
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:36 am

744

To answer your questions regarding whats wrong with the US carriers - the US carriers DO NOT get government subsidies like the ones you listed do!
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doug_or
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:38 am

Quoting SonOfACaptain (Reply 9):
I agree with this, however, why go through such a harsh process when merging will do the same thing.

Merging won't do the same thing. Most US airline mergers have been more trouble then they were worth.

Quoting SonOfACaptain (Reply 9):
AA and TWA is not a good example. The merger was in a totally different situation. It also only took a small airline out of business. It didn't really affect the industry.

So what are you proposing? a small airline buying a big airline? If we have a bunch of mergers to reduce competition, but maintain the capacities of the merged airilnes, then to raise fares you will STILL need to cut capacity. You can't fill the same number of seats at a higher (more profitable) price.


The problem isn't having too many carriers on a route. The problem is having too many uncompetitive airlines. If someone's making money (like say, Southwest), then there apprently isn't too much competition. If an airline isn't making money, its not because of too much competition, its because it isn't competitive in that market. If there are not markets that airilne is competitive in, then that airline should go out of buisness.
When in doubt, one B pump off
 
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mariner
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 5:43 am

SOAC:

Quoting SonOfACaptain (Reply 9):
why go through such a harsh process when merging will do the same thing.

Perhaps because the system has completely and utterly failed?

It is more than three years since 9/11, and passengers are flying in greater numbers than before that date, so that excuse is out the window.

It is more than three years since the ATSB - the Airline Transportation Stabilization Board - was set up.

Do you believe the airlines are more stable now than three years ago?

And what would a merger achieve? You can't dismiss AA and TWA just because that merger doesn't fit your theory.

cheers

mariner
aeternum nauta
 
Gnomon
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:03 am

I absolutely agree that something must give.

And two weeks ago, I would've agreed with SWALUVFA's prediction that the legacies who fold would be UA and US.

But both US and UA are hanging on under Chapter 11 protection. I think at this point that both have the ability to successfully complete their supervised reorganizations at some point, if creditors and the courts are willing to wait.

What's more, DL's and CO's independent warnings last week give me reason to worry. CO is so highly leveraged that an attempt to reorganize under Chapter 11 might not be practical, as many here have noted. DL warned it already has tied up many of its assets in the out-of-court restructuring it completed last year, lessening the protections afforded by a Chapter 11 petition, and increasing the risk of a liquidation under Chapter 7 should DL become insolvent.

In my "doomsday" scenario, it's possible that, before all is said and done, the U.S. airline industry will have NW, AA, US, and UA -- in some consolidated form -- stamped all over it. Ironically, DL and CO -- previously considered the healthiest airlines -- would be history because of their bold attempts to restructure out of court. I hope I'm wrong, but this is one possibility of how things might play out.
 
dtw9
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:11 am

[First of all CHANGE all of the US CARRIER'S stupid CUSTOMER SERVICE which includes ground, reservations, inflight, and ticketing centers. They are so RUDE, out hearted.What's wrong with all the American carriers?????} I'll tell you whats wrong, cheap ass customers that don't want to pay a fair price to be transported from point A to point B. They want cadillac service on a Yugo fare. So who has to pay for this, The employees of the Airlines,thats who. These people have seen their pay cut, their hours increased, their pensions scrapped,and their jobs hanging on by a shoestring,and all people are worried about is that they don't smile anymore.Gee I wonder why.They have to listen to cheap whinny ass people all day long who do nothing but complain,throwup on them because their drunk on their asses,treat them like crap because their pretzels are stale or because their told they have to check their bag because its to big for the overhead, and you wonder why their Rude. Well the flying public wanted taxicab mentality when it comes to airfares and they got it. Whens the last time you took a cab and were offered a pillow or pretzels,or how about that cocktail with your ptv sir during your drive from the airport to the hotel? I'm not saying its right to be rude, but I think the flying public needs to do alittle soul searching about their own attitudes and actions first, instead of just throwing stones
 
Gnomon
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:22 am

Dtw9 --

I don't think you and NWAFA can fairly blame customers for the airlines' plight. Customers, like anyone else, are economically rational actors who seek the lowest price. If you want to blame anyone, point to the LCCs who gave them alternatives.

Bear in mind that, unless you live on a commune, or on unowned land in Montana where you build your house from trees and shoot your own food with free ammo, you're a customer, too. I'm sure you appreciate the attractiveness of being able to visit Grandma for $200 now instead of the $500 it would've cost before.

Whether or not customers will pay for added value over the LCCs remains to be seen. Delta seems half-heartedly to be pursuing that theory in various corporate statements over the last six months, the faux wood-paneled floors in the lavs, etc. But taking pillows off planes and charging for food are steps in the wrong direction if you want more people to buy your product.

You airline employees could do your parts to create more value in your product. Be nice to me and deliver professional and sophisticated service that exceeds what I'd get at an LCC, and I guarantee you that I'll pay more to fly your airline next time.

But having flown both DL and NW recently, I can't say either experience added any value over what I would've enjoyed with WN or FL. If I can save a few dollars and not miss any value, why wouldn't I? Why wouldn't you?
 
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mariner
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:24 am

Dtw9:

Wow! Dump all the blame on the passengers? Gosh, I thought the passengers were the reason for an airline's existence.

Why not blame management? I mean, they've made some dumb ass decisions - US Airways little fiasco at FLL being not the least of them, but surely not the latest.

Or the UAL management investing in Avolar? Or giving in to the pilots during the Summer of Hell?

Or the UAL pilots, demanding an industry leading contract? Or kicking CEO Goodwin out just because he told a truth that no one wanted to hear?

Or how about Delta's management, believing they could survive with $20 billion dollars worth of debt - and another industry leading pilot contract?

There's blame enough to go around - but no - you want to stick it to the passengers, the bread and butter?

Wow.

mariner
aeternum nauta
 
Gnomon
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:25 am

Once again Mariner hits the nail on the head. Thanks.
 
dtw9
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:35 am

Its not management thats dictating the fares, its the flying public. You think these airlines would be in the troubles they're in if people would just pay a fare that would support daily operations plus, you have to remember, they have pension and health care costs they need to pay? How about you tell me where you all work and I call your bosses and tell them to cut your pay,cancel your pensions and have them work you an extra 10 hours a month? anyone game? I didnt think so.
 
Gnomon
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:39 am

Dtw9, if that's how you feel, why don't you just quit and find another job?
 
NWAFA
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:45 am

Gnomon,

When I was a young 21 year old like your self I would have said the same uneducated answer as yours "why don't you just quit".

After spending 25 years in this business, why do I need to just quit? Why do I need to stop doing what I love and do it very well. Why am I, along with all the other hard working, dedicated and committed airline employees the ones that must pay to passengers fly? The cost of living is going up every day, yet airline employees must take a pay cut. We are not even keeping up with the cost of living.

May I suggest after you spend 25 years of your heart in this industry, you take a pay cut. Take away your pension that was promised to you. Take away more health care. Take away more time off. Make you work longer days and hours.

[Edited 2005-03-20 22:55:30]
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StevenUhl777
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:48 am

Quoting Avek00 (Reply 3):
Problem is, no one has the $2B or so lying around necessary to merge with or acquire anyone...

Gee...only $2B, huh? No debt to assume? What a deal/steal! If all it took were $2B like you suggest, several investor groups would have come forth already, and the industry would look VERY different.

I agree also that something "big" needs to happen to get the industry back on track. I used to think that US was going to disappear in short order. But, that was about this time last year, and here they are, still going. They also have a revenue sharing agreement with UA, which seems to help both them and UA. UA..well, I've said everything already on that subject. At least they had some $3-$4B in unemcumbered assets to negotiate DIP financing with, and that just might get them through this time, or perhaps to the next Ch. 11 filing several years from now, time will tell.

AA facing a cash crunch, along with Indy Air, Delta, and Continental. If the other thread about CO is true like I'm sure it is, then maybe we'll see them in Ch. 11? Ch. 7 maybe? Sounds like they have very few assets to negotiate with. DL and CO are on thin ice it seems.

My feeling is that UA and AA will be around, and there will be some sort of consolidation between NW/DL/CO. Indy Air is toast, and UA will benefit from that. Jetblue will continue for a few more years.

I don't know. Just my 2 cents, but I doubt it's even worth that much.

Quoting Gnomon (Reply 20):
Once again Mariner hits the nail on the head

Yeah, he has a tendency to do just that in all of his threads.  Wink
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
dtw9
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:54 am

Gnomon ,because when your five years from the end of your career, you don't walk away. Yes theres been managment mistakes through the years,but the rudeness of people in general towards one another and the people in this industry is just disgraceful. Buying a ticket isn't a license to act like total idiots. I see you're a law student by your profile, how many cases you going to take for 10 bucks?
 
Arniepie
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 6:57 am

All this speculation as what is going or should happen to turn the tides!

It will sort itself out one way or the other, in the market economy (capitalism) where we work in these things fix themselves, as long as the cash suppliers think there is some value in an airline (or any other type of company) they will keep on supporting it, as soon as they think it's better to liquidate they will exactly do that.


Best guesses as whom might survive the storm.
-WN: Needs no explanation
-Jetblue: see WN
-AA: Good network (Centr & Sth America+ Europe) and some good hubs
-UA: (if they reduce in size) They have Chicago, Denver and San Fransisco
-NW: Still going strong in Asia and a good network overall.
-CO: They'll survive because others will disappear.
-US: This is purely speculation but they still have some opportunity's on the east coast, but as I said this is a big maybe.


Who will (probably)go
-Delta: They really have not a lot going for them
-Independence: Just don't see it happening


The real problem ,IMH(umble)O ,is that the Airlines suffer from the same illness that some other company's suffer from;
They seem to believe that there is room for constant growth in the industry, that there is no such things as saturation.
This is a very common problem in management environments, they are convinced of the fact that there is limitless potential and that everything benefits from constant change/evolution.
The airline industry suffers particularly hard from these things as they are coming of age now, meaning that these days the original founders (family's or single persons) are no longer actively involved.
The people steering the ships these days are usually also just (extremely well paid )employees and don't have any deep going relation with the company .
If you have somebody at the helm who has something to loose (or a lot to gain) from the wellbeing of that company it usually turns out that the company itself also benefits from it.

[Edited 2005-03-20 23:02:24]
[edit post]
 
Gnomon
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:01 am

NWAFA, I believe you have misinterpreted my remarks to insinuate that I do not empathize with you. I do. However, no amount of "heart" I could "spend" in a 25-year career would cause me to stay there if indeed it's as grim as the picture Dtw9 painted.

I empathize with and feel for both of you. I hope some smart minds create some relief for the airlines soon. But blaming passengers -- the lifeblood of the industry -- for not wanting to pay enough is not appropriate.

Dtw9, I'm required to do pro bono work for which I'm not compensated at all, not even $10.

I wish we could return to the days of the Clippers, where passengers were civil, sophisticated, and courteous, and airline employees were equally so.
 
isitsafenow
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:05 am

NWAFA...Dont make the statement the carriers DO NOT receive government subsidies. As a rule you are correct, however in certain small cites, carriers do receive a crumb(small subsidy) to serve the city. Alpena is one city and Muskegon is another. Its not much but there is government monies, involved.
It may be state, county, city or in some rare case, federal money that is funneled back to the airlines. Its nothing like the bucks received before dereg when small town America got a nice check off to the carriers. In the 60's, Pellston paid North Central to fly in there but the lions share of money came from Washington. Those days are over.
safe
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avek00
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:13 am

"Gee...only $2B, huh? No debt to assume? What a deal/steal! If all it took were $2B like you suggest, several investor groups would have come forth already, and the industry would look VERY different."

You misunderstood - the $2B+ figure refers to the INTEGRATION COSTS involved with putting together two airlines even if the airlines merge via stock swap and all debts are assumed by the new firm. It cost AMR over $1.5B to integrate TWA, even though it bought the basketcase for less than $750M.

Legacy airlines would have merged with each other at rapid pace post-9/11 were it not for the fact that no business investor (or airline manager) with half a brain would piss away billions of dollars over and above the acquisition costs.
Live life to the fullest.
 
A330Jamaica
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:17 am

I will say one thing only. Follow OIL!!! and you will know the fate of the airline industry both in the U.S and abroad. It must contract in the near future.
 
aa757first
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:18 am

jetBlue, Frontier, America West, Southwest and the other LCCs aren't going to fail for a long time. No matter how much bitter legacy employees pray, its just not going to happen. It doesn't take just pay cuts, either, although they are necessary. It is going to take complete work rule changes. Example number one: fire all aircraft cleaners, maybe keeping a few for widebody international flights. Flight attendants at WN can clean the planes, why can't flight attendants at AA or NW do the same?

Andrew
 
Leskova
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RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:19 am

The passengers aren't the problem - they just see what's available and select whatever they like most: for most, that'll be the lowest fare.

But there are those that'll select a flight on their preferred airline, at least as long as that preferred airline somehow distinguishes itself from the rest of the crowd of competitors - unfortunately, airlines seem to all be heading down the road of "where can we cut something else to be even less unique?"...

It's not just the pillow, or just the blanket, certainly not just the question whether you get the whole can of soda, or if you can get a second bag of pretzels if you're starving after arriving on a longhaul flight and going through customs only to catch a short connection onto an onward flight... it's the sum of all these things as well as several more.

It comes down to what I posted on another thread in response to the question why BA manages to make money in an environment where they're confronted with LCCs on several of the routes they fly: they fight the battles in which they have a reasonable chance of winning, not every single battle out there including the ones they simply cannot win.

The big carriers in the US need to seriously re-evaluate what they're trying to be: full-frills carriers with a higher cost base but also higher fares, or no-frills airlines with a low cost base and low fares - but trying to be full-service with no-frills fares? Well - just look at the numbers that the legacies are producing at the moment: that's the result.

Find out what you're trying to be - what markets you need to serve, which you can better serve through alliances with either other mainline carriers or regional carriers, but, for the love of flying, do something that sets you apart from the competition - because that's what'll have people coming back: low fares alone won't do it, because all of your competitors offer those as well, and in the end, all you'll be doing is digging your own graves by virtue of offering yet another lower fare.

And for the flight attendants around here, I don't think anyone here is doubting that you've got a tough job - you certainly do.

But you are not the only people who have a tough job, nor are you the only people who've had to live with reductions in pay and benefits or increases in working hours.

The problem that you've got is simply that if the passengers you've got on board don't like the service you provide - with whatever little means you're given by your company to provide it - then these passengers might very well use a different airline next time.

The result: less income for the airline, less pay and even less job security for you.

I know that it sucks to have to be friendly to customers when you're feeling down - been there, done that (though not on a plane) - but a customer that you lose today will be hard to win back tomorrow.

And the woman or the man travelling with annoying children on one of your flights today might, in fact, just be a business traveller going on vacation with the family - not the person you want to offend, because your airline might not only lose her/his leisure flights, but also the business flights...

Regards,
Frank
Smile - it confuses people!
 
FA4B6
Posts: 1078
Joined: Mon Sep 13, 2004 3:00 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:27 am

Quoting Aa757first (Reply 31):
Example number one: fire all aircraft cleaners, maybe keeping a few for widebody international flights. Flight attendants at WN can clean the planes, why can't flight attendants at AA or NW do the same?

It's called a union. I was doing a flight from JFK-DEN. We were turning to do the DEN-BOS redeye. Its part of a very productive [very senior] trip we have at B6.

We had a non rev'ving AA F/A on board who was really nice until she asked us where our layover hotel is in DEN. When we explained its a transcon turn, she balked at us and said "AA would never allow us to do such an awful thing. We do a transcon, then we layover, never a transcon turn." Trying to be nice we explained that we're all lineholders, and that we choose trips like this because theyre productive and you get your hours in quick. She practically had a heart attack at the thought that we do trancon turns and redeyes. "We would NEVER do that at AA"

As to why F/A's won't clean at their airlines, simple, they're not allowed to. And even if they had to, a la WN and B6, there would probably be anarchy.
"Leap! And the net will appear."
 
NWAFA
Posts: 1843
Joined: Wed Dec 31, 2003 10:30 pm

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:34 am

FA4B6,

I would not call JFK-DEN a transcon. A transcon is COAST to COAST.

At NWA we have red eye turns form the hub - MSP-LAX-MSP that leaves MSP at 8pm and gets backinto MSP at 6am..same with DTW which would be around the same flight time as your JFK-DEN-JFK. Im pretty sure AA has ORD-LAX turns. I know UA has them.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
greasespot
Posts: 2955
Joined: Sat Apr 24, 2004 10:48 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:39 am

umm mergers shut downs are one thing. How do you stop other new start-ups from filling the void....seems like there is an endless supply of people willing to start airlines.

The capacity lost in any shut down will most likely be filled by someone else.

Been like that for years...How many companies grew when Eastern shut down or Pan Am.....There may have been a short term drop but Someone stepped into the void someone always will.

GS
Sometimes all you can do is look them in the eye and ask " how much did your mom drink when she was pregnant with you?"
 
dtw9
Posts: 893
Joined: Mon Sep 22, 2003 10:09 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:40 am

One point I'd like to make about LCC's, they haven't been around long enough to worry about paying out pensions to thousands of retired employees,If they last long enough, their day will come too. How do you think they'll handle the situation when it arrives?The same way its playing out with the established carriers of today I'll bet .Pensions are killing companys throughout the world because of greater automation and smaller work forces, something that couldn't be foreseen 30 years ago. Also as far as pay cuts go, its not just the cut in pay, it's the mortgage, the doctor bills, the everyday bills that continue to go up as your pay goes down. Its not so cut and dry as most want to make it out to be. Just because your pays been cut doesn't mean your bills are cut too. You talk about customer service, Well that goes bought ways. Treat me, as you want me, to treat you.
 
NWAFA
Posts: 1843
Joined: Wed Dec 31, 2003 10:30 pm

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 7:47 am

DTW9,

Your right about the pay comes down but not our bills. I agree with part of your statement when you say:

Treat me, as you want me, to treat you.

However, we as Flight Attendants need to show the respect to our passengers ON BOARD first. The public is getting worst. They are rude. Crude and many times just nasty..they are like that after we are nice to them.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
Mikey711MN
Posts: 1229
Joined: Fri Nov 07, 2003 4:19 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:06 am

Quoting Dtw9 (Reply 36):
One point I'd like to make about LCC's, they haven't been around long enough to worry about paying out pensions to thousands of retired employees,If they last long enough, their day will come too. How do you think they'll handle the situation when it arrives?

Just curious: do LCC's even have pensions ala their legacy counterparts?!? I honestly thought that part of holding the line on cost was to, obviously among other things, offer 401(k) plans or otherwise some other retirement plan. Can anyone confirm that?*

-Mike

* On a quick search in the employment sections of various LCC websites, I see a lot of 401(k) talk and certainly no mention of pensions.
I plan on living forever. So far, so good...
 
dtw9
Posts: 893
Joined: Mon Sep 22, 2003 10:09 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:13 am

NWAFA , you are right. We as the flightcrew have to be nice to our customers regardless of how rude they are to us. Boy thats a tough statement to swallow. I wonder if people really realise the number of employees it takes to make their 79 dollar flight happen. The flightcrew, the rampers, the cleaners ,the ticket agents, the mechanics ,the aircraft servicers,and on and on and on. And all for 79 bucks. It cost more than that to get a house cleaned. But then again we're overpaid right?
 
lehpron
Posts: 6846
Joined: Tue Jul 10, 2001 3:42 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:15 am

I have an idea, let capitalism rule and allow legacy airlines to effing die out; that way the remaining human resources from company fallouts should be more than enough to start up many new airlines with fresh new looks on life that can ratake what was lost.
The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
Cactus739
Posts: 2245
Joined: Mon Jan 19, 2004 6:41 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:24 am

Quoting Dtw9 (Reply 36):
One point I'd like to make about LCC's, they haven't been around long enough to worry about paying out pensions

Southwest started flying in 1971. I'm not 100% familiar with their benefits, but I don't believe they have a pension set up... if they do, I'd say 34 years in business is long enough.
You can't fix stupid.... - Ron White
 
dtw9
Posts: 893
Joined: Mon Sep 22, 2003 10:09 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:31 am

Cactus739,Southwest is the exception,and they too are going to start feeling the pain. You can't compare a 30 year old to a 70 year old
 
N867BX
Posts: 295
Joined: Thu Nov 25, 2004 10:19 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:42 am

Quoting Greasespot (Reply 35):
umm mergers shut downs are one thing. How do you stop other new start-ups from filling the void....seems like there is an endless supply of people willing to start airlines.

It seems like there is an endless supply of people willing to fund these startups.

Quoting Dtw9 (Reply 36):
One point I'd like to make about LCC's, they haven't been around long enough to worry about paying out pensions to thousands of retired employees,If they last long enough, their day will come too.

As mentioned, LCC's don't have pensions. There has been a hell of a lot of LCC's that have came and went. Only a few LCC's have figured out the riddle of success, most have or will fall by the wayside one way or another.
 
SonOfACaptain
Posts: 1695
Joined: Thu May 27, 2004 5:36 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 8:58 am

Quoting Doug_Or (Reply 14):
Merging won't do the same thing. Most US airline mergers have been more trouble then they were worth.

These mergers would be different. Whereas in the past, airlines mergered to grow or gain market share, these mergers would be made for the well being of the industry. Airlines know there are too many airlines, and the best way to fix this is to merge.

Quoting Doug_Or (Reply 14):
So what are you proposing? a small airline buying a big airline? If we have a bunch of mergers to reduce competition, but maintain the capacities of the merged airilnes, then to raise fares you will STILL need to cut capacity. You can't fill the same number of seats at a higher (more profitable) price.

No, what I was applying is in the response above.

Naturally, when you raise prices, less people are going to fly. However, cutting capacity to fix this would be A LOT less severe than having a whole major airline go down under.

Quoting Doug_Or (Reply 14):
The problem isn't having too many carriers on a route. The problem is having too many uncompetitive airlines.

What?!?!?! If you have too many uncompetitive airlines, than you have too many airlines. Common sense really. Merger would make airlines more competitive, that's the whole idea.

Quoting Doug_Or (Reply 14):
If someone's making money (like say, Southwest), then there apprently isn't too much competition.

I'm not talking about WN, I am talking about the industry as a whole, particulary, the legacy carriers.

Quoting Doug_Or (Reply 14):
If an airline isn't making money, its not because of too much competition, its because it isn't competitive in that market. If there are not markets that airilne is competitive in, then that airline should go out of buisness.

Airlines aren't competitive because there is too much competition. Once again, mergers would fix this.

Quoting Mariner (Reply 15):
Perhaps because the system has completely and utterly failed?

Yes, and mergers would be trying to fix this also. Why does everybody think that just because something is broken, that you have to replace it? Does anybody know that fixing works too.

Quoting Mariner (Reply 15):
It is more than three years since 9/11, and passengers are flying in greater numbers than before that date, so that excuse is out the window.

That's why you don't want airlines to go out of business, because it would drastically reduce seats available. So the logical thing to do, is well, merge.

Quoting Mariner (Reply 15):
You can't dismiss AA and TWA just because that merger doesn't fit your theory.

I can dismiss it, because it is a whole different situation. AA/TWA merger was in response to the UA/US merger talks. They did it so they could keep up with UA. Today's mergers would take place so they can fix the industry.
Non Illegitimi Carborundum
 
F9Animal
Posts: 3642
Joined: Thu Dec 16, 2004 7:13 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 9:06 am

Most of the legacy carriers have alligned themselves to be profitable. US has done a complete 180. Sadly, with all the concessions that they got, the fuel has zeroed out any hopes of seeing profit. Fuel is going to be the shakeout of the industry.

I wont guess on any airlines fate, as I have been proven wrong several times. I also don't want to see anyone fail, for the sake of the employees. In the next 6 to 8 months if the fuel stays at these levels, we will see some major changes. Sadly, it will not be mergers, but failures.

Just my guess of course.
I Am A Different Animal!!
 
dtw9
Posts: 893
Joined: Mon Sep 22, 2003 10:09 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 9:10 am

SonOfACaptain, sadly there won't be any mergers between the legacies strickly because of the pension mess at all of them. There is no way in Hell that a merger would accomplish anything. The only way this is going to straighten out is a shakeout of the industry. Somebody or somebodies are going to have to fail to reduce the overcapacity in the marketplace and bring fares back to a respectable level. Tell me which two or three you could merge with the pension messes and lack of capital that any of them have?

[Edited 2005-03-21 01:14:10]
 
AADC10
Posts: 1506
Joined: Sat Nov 13, 2004 7:40 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 9:25 am

Quoting Cactus739 (Reply 41):
Quoting Dtw9 (Reply 36):
One point I'd like to make about LCC's, they haven't been around long enough to worry about paying out pensions

Southwest started flying in 1971. I'm not 100% familiar with their benefits, but I don't believe they have a pension set up... if they do, I'd say 34 years in business is long enough.

Southwest does not have a defined benefit pension. The have a defined contribution pension, I believe a 401(k) plan.

Defined contribution is much cheaper for companies because the only fund a matching portion of the pension and nothing for those who cannot afford the make the contribution. Defined benefit is funded entirely by the company.

401(k)s are supposedly better for the nomadic modern worker, because they vest immediately and can be taken from job to job, but it is a huge disadvantage to employees who stay long enough to become vested a defined benefit plan.

What will hurt Southwest is becoming the industry leader. They are highly unionized, even more so than Delta, and the unions are going to demand industry leading wages. Herb Kelleher was able to hold them off at Doug Parker's expense, but they will not be able to do this forever.

The pensions will also become less of an advantage for WN as US, UA and other dump their plans. JetBlue will also be able to press them for a while since it will be years before their pay scales and maintenance costs start taking effect.

Continental is weaker than some of the previous posts imply because their cash is dwindling fast and they lost their gamble on not placing any fuel hedges. USAir, on the other hand, which has been dead airline flying for years, even before United's Chapt. 11, is still not in any immediate danger of liquidation. As several airline executives and analysts have said, airlines are an easy business to enter and a difficult one to exit.

Quoting SWALUVFA (Thread starter):
*A United shutdown would allow Northwest to hopefully gain some additional profit from picking up Asia routes and allow AA, CO to gain some Asia profit as well. Also Continental and Delta could gain UA's Heathrow and small European presence. United's domestic capacity could EASILY be absorbed into the healthier carriers.

United would sell their routes, just as PanAm did to UAL before, to the airline which could come up with the cash and the winner would be American. Nobody wants the slots at NRT and the China route authority and can pay more than AA. They would probably also try to buy the Heathrow slots but that would probably not be allowed.
 
PhilSquares
Posts: 3371
Joined: Sun Mar 28, 2004 6:06 pm

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 9:30 am

From my humble perspective I think the whole U.S. airline industry is bordering on failure for a number of reasons.

1) Massive over expansion. The current problems were rooted in the massive expansion in the late 90's. The first tell tale signs of the current problems were in late 2000 when yields began to fall as the U.S. economy began to stagnate. This expansion was based on the boom years of the late 90's and false financial assumptions on cash flow being able to finance the expansion.
Now we have too much domestic capacity. Yields are depressed because of that, and now DL "simplifies" the fare structure putting more downward pressure on yields. Simply put, the domestic network needs to contract. Be it voluntarily or forced (Ch 7)

2) The LCC impact. SW/B6/FL have had an impact on the domestic market. However, every "airline within an airline" has failed miserably. CO Lite, MetroJet and UAL's Shuttle are good example. Unless UAL has taken "smart" pills, I suspect TED isn't a great addition to the bottom line. U.S. airlines can't run one airline let alone try to run two airlines at the same time.

3) Oil. Had the price of fuel not risen to the current levels, certainly the profitability picture would have been different. Here the airlines are in a lose/lose situation. On one hand, the airlines that have invested in new equipment are saving massive sums on operating costs, but paying for the investment (operating leases) based on optimistic financial assumptions which don't exist. Or you have the case of NW, which elected to keep the DC-9 and minimize the capital investment. Now they are squeezed because of the direct operating costs associated with using the older equipment.

4) Unions/Management. Clearly, the blame can fall on both parties. Certainly the unions have an obligation to negotiate a "fair" contract. When times are good, they should share in the gains. However when the UAL contract and then the DL +1% were consummated, everyone had their rose colored glasses on. No one assumed things would get bad. I guess they failed to realize the cyclical nature of the airline industry! However, management was to blame too for not insisting on a safety valve. An out to ensure financial survivalability in case of a downturn.

Conclusion

1) As much as I hate to say it, there will be fewer Legacy carriers left. My guess is two Legacy carriers will not be here in 2-3 years. Which ones? Depends on how they play their cards. I would venture US will not be here, then we have CO. No assets to leverage, no safety cushion at all. Certainly in much worse shape than DL. DL, has some cushion, however, they are lacking in a functional Asian network. UAL/NW similar situation, however they have a strong international network, however NW does have no S. American presence. Should CO disappear, the benefits of codesharing will also evaporate. AA fairly balanced network, however, they too lack a broad Asian market.

2) Management and Unions need to co-exist and forge a new outlook on contracts. Doing away with the Railway Labor Act isn't the answer. The real answer is to have pragmatic people in positions of responsibility.


Just my opinion.
Fly fast, live slow
 
i15846375
Posts: 7
Joined: Mon Dec 29, 2003 12:27 am

RE: Something Has To Happen Fast!

Mon Mar 21, 2005 12:52 pm

Just a thought, how much money is being saved through upper-management salary cuts? Seems that the employees that are lowest on the totem pole are always the ones to make the sacrifice. I never hear of any CEO's, or presidents taking any major pay-cuts. The employees are the major force behind making a company successful or not, and they are the ones who are kicked around the most, why never upper-management? I think it is time for them to do some major sacrificing too.

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