dalneighbor
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Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 12:12 am



Can WN continue to increase or maintain top pay rates in the industry and be profitable? Will workers from other airlines demand to be compensated just as much as WN employees? Will WN have to ask for pay freezes or concessions from it's employees?

Full Story:
http://www.philly.com/mld/philly/13680251.htm

....A big question is whether that advantage will be enough. In the next few years, Southwest faces higher costs for fuel and labor, its two largest expenses. Meanwhile, competitors Delta, Northwest, United and US Airways have used the Chapter 11 bankruptcy process to lower their costs so they can afford to match Southwest's discount fares.....
Wright Amendment = Federally Engineered AA Price Gouging
 
texan
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 12:46 am

They also receive the highest prodcutivity per worker, which is what makes the higher salaries and benefits possible. When the productivity cost saved no longer balances out the salary and benefit increases, then they will have to look at reducing those two items.

Texan
"I have always imagined that Paradise will be a kind of library."
 
dl757md
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 12:55 am

Quoting Texan (Reply 1):
They also receive the highest prodcutivity per worker

Do you have a source for that info? Just what does prodcutivity mean anyway? Does WN use a cattle prod to cut costs and increase productivity? Thought I'd ask a Texan.  Wink

DL757Md
757 Most beautiful airliner in the sky!
 
2H4
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 1:07 am




Quoting Dl757md (Reply 2):
Do you have a source for that info?

In terms of measurable productivity, I believe WN's aircraft utilization is higher than the competition. In terms of human productivity, it comes down to dedication. WN employees are fiercly devoted to the company, and go the extra mile whenever possible. Pilots throw bags, execs serve drinks, and people work late and put in extra hours to get the job done.

Shortly after 9/11, while most other airline employees were threatening legal action and strikes in the face of impending layoffs, WN employees organized a massive (voluntary) donation program, and ended up (IIRC) donating around a million dollars to the company to help make up for the 9/11 downtime. Most hourly workers, myself included, did not clock in that day, despite working around the clock.

I believe that's the productivity to which Texan was referring.




2H4


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nateDAL
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 1:16 am

The historical record says yes.

WN has been profitable every year since 1973. I don't see any reason why they can't continue to treat thier people well and make money.

I hadn't flown WN for 10 months until Thursday, when I did DAL-HOU. WN has done a great job developing a culture of productivity and service. Employees really seem to go the extra mile to make the planes run on time and keep the passangers happy. That's why they win.
Set Love Free
 
dalneighbor
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 1:23 am

Quoting Dl757md (Reply 2):
Do you have a source for that info?

The link to the article above says WN has 71 employees per aircraft and the industry average is 110. That might suggest that management has better designed operations that require less work to produce aircraft trips.
Wright Amendment = Federally Engineered AA Price Gouging
 
texan
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 1:28 am

Quoting Dl757md (Reply 2):
Do you have a source for that info? Just what does prodcutivity mean anyway? Does WN use a cattle prod to cut costs and increase productivity? Thought I'd ask a Texan.

Cattle prod? Hell no! Herb goes out there with two six-guns strapped to his belt and motivates the employees the real Texan way! Get your facts straight  Smile

Actually, the key lies in cross utilization of employeees. The contracts calls for employees to perform tasks outside the normal scope of their jobs in some cases. This means that pilots can help load bags or clean the airplane if the process is moving slowly, small stuff like that. It helps efficiency which in turn helps the profits, which are then funneled back to the employees through raises, bonuses, or increased benefits.

Texan
"I have always imagined that Paradise will be a kind of library."
 
Jeremy
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 7:42 am

Actually, the Pilots are not supposed to throw bags anymore.
There may still be some who will, but it is not encouraged.
A Pilot was injured once, which put a quick halt to that.

The one thing I will say about the productivity of employees, is that it also creates a lot of on the job injuries. I have worked for 4 airlines, including WN and the OJIs at WN out number the other 3 airlines combined.

I will agree that employees at WN are generally happy, but the farther you get from DAL, the less happy they are.
There were many employees at my station that would curse WN and do things to hurt the company with their apathy.
If that continues to spread, it will be dangerous.
You are now free to be sexually harassed and then terminated for filing a complaint--Southwest Airlines to me.
 
N1120A
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 8:02 am

Quoting Texan (Reply 6):
Herb goes out there with two six-guns strapped to his belt and motivates the employees the real Texan way!

Nah, he just pulls the cigarette out of his mouth and burns them with it  Silly
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Tornado82
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 8:10 am

Quoting Dl757md (Reply 2):
Do you have a source for that info?



Quoting 2H4 (Reply 3):
In terms of human productivity, it comes down to dedication. WN employees are fiercly devoted to the company, and go the extra mile whenever possible. Pilots throw bags, execs serve drinks, and people work late and put in extra hours to get the job done.

This doesn't answer as a source for that info, and is more stuff that "should" increase productivity... but for example if someone from an unnamed department starts dinkering around in my work thinking they'll "do the easy stuff" so all I have to do is the most technical stuff... it often takes me more time to complete my task than if I did it myself from scratch. I'd imagine an efficient ground worker loading baggage is more efficient when he's doing his routine that he's done 1000 times before, than with a new set of unexperienced hands in the works. But regardless, you didn't answer the questioned asked... because that's not measureable, concrete, nor a source.

Quoting 2H4 (Reply 3):
Most hourly workers, myself included, did not clock in that day, despite working around the clock.

I'd be dipped in fecal matter before I'd work off the clock for an entire day, but that's just me. Just as Southwest supposedly couldn't afford revenue hits from 9/11, I myself couldn't afford to lose $180 that quickly either... and I have alot less money in the bank than a multi-billion dollar corporation like Southwest... and Southwest can raise fares just by choosing to do so... I can't choose to make more money.
 
2H4
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 8:52 am




Quoting Tornado82 (Reply 9):
But regardless, you didn't answer the questioned asked... because that's not measureable, concrete, nor a source.

According to MIT's Global Airline Industry Program, WN's total labor expense per ASM was more than 25% below that of United and American, and 58% less than US Airways. In 2001, Southwest produced 542,050 available seat-miles per employee, as compared to 369,790 at American and 373,400 at United. By this measure, the productivity of Southwest employees is over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers.

Source: http://spacestation.mit.edu/airlines/index2.htm



What's that? Still not good enough for you? Does 2001 data somehow not count? Well, in 2005, WN's headcount per aircraft was 72. American Airlines, on the other hand, had a ratio of 128. It's all in each company's SEC filings.





Quoting Tornado82 (Reply 9):
I'd be dipped in fecal matter before I'd work off the clock for an entire day, but that's just me. Just as Southwest supposedly couldn't afford revenue hits from 9/11, I myself couldn't afford to lose $180 that quickly either...

I'd rather give up $180 from time to time and work for a company that offers job security, and....well...is still in business, rather than hoard my money and become a number on a long list of layoffs.

But that's just me.

 Wink




2H4


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Silver1SWA
Crew
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:02 am

Quoting Jeremy (Reply 7):
There were many employees at my station that would curse WN and do things to hurt the company with their apathy.
If that continues to spread, it will be dangerous.

You wouldn't be refering to OAK would you? From the way they load the aircraft and document their loads on the DR, they seem like a bunch of fools!  irked  From what I hear, the folks in OAK are the most unhappy in the entire system. But then again, just look at the geography...

It is true, especially on the ramp level, that there are a few that don't buy into the whole "Southwest Spirit". There are a few bad apples out there, but generally, we are a happy bunch.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Tornado82
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:27 am

Quoting 2H4 (Reply 10):

What's that? Still not good enough for you? Does 2001 data somehow not count? Well, in 2005, WN's headcount per aircraft was 72. American Airlines, on the other hand, had a ratio of 128. It's all in each company's SEC filings.

That's all I wanted, and the original questioner wanted, a cold, hard, documented fact. Could have posted it the first time, without the attitude.

However, headcount per aircraft is still an arguable number... those "heads" are loading, ground handling, and gate agenting Express aircraft along with the mainliners in many stations... and those Express aircraft aren't "owned," unless they are actually accounted for in those numbers despite not being owned... which would be hard to do considering some of those airlines get new regionals as often as I get new shoes.

Quoting 2H4 (Reply 10):

I'd rather give up $180 from time to time and work for a company that offers job security, and....well...is still in business, rather than hoard my money and become a number on a long list of layoffs.

But that's just me.

I'd rather keep my money, and my job, hence why I don't work for an airline... but that's just me. If WN fooled you interns into thinking giving up your pittance for a day or two would be responsible for keeping the whole shebang afloat, they've got the exact kind of employees the want. Face it, they got billions in the bank, they could have just stopped expanding if they were in trouble.
 
2H4
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:39 am




Quoting Tornado82 (Reply 12):
If WN fooled you interns into thinking giving up your pittance for a day or two would be responsible for keeping the whole shebang afloat, they've got the exact kind of employees the want.

WN has never even suggested such a thing. Humor me and explain "what kind of employees they want". I'm sure it will be a fun read.  Wink




2H4


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ckfred
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:44 am

I remember reading in the Chicago Tribune an interview with an analyst. It might have been Mike Boyd or Ray Neidl. But, the view was that WN is facing some potential problems.

The contracts all come up for negotiation within the next 2 years, and the pilots start this year. Every union is looking for wage increases proportionate with WN's increases in profits.

WN's CEO has said that while unionized employees will be rewarded, they can't get the raises that they seem intent on getting.

So, either WN faces a serious potential for a strike at some point, or it starts to cave in the way UA caved in with the pilots in 2000. The latter will throw off the cost structure. The former risks alienating WN's employees and its passengers.
 
sccutler
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:45 am

Quoting Tornado82 (Reply 12):
If WN fooled you interns into thinking giving up your pittance for a day or two would be responsible for keeping the whole shebang afloat, they've got the exact kind of employees the want.

But see, you missed the point.

This was not a request from management; it was a spontaneous and voluntary show of solidarity by the rank and file employees. The fact that they did this speaks volumes about the respect they have for their company, reflecting (in turn) the respect the company shows for its people.

===

I'd like to see a citeable source for the allegation above that WN has higher on-job injury rates. That is certainly inconsistent with what I have understood, but I am always ready to be proven wrong.

Warmest regards.
...three miles from BRONS, clear for the ILS one five approach...
 
Dreamflight767
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 9:46 am

This may be an incorrect statement, but WN only pays "top dollar" now that other airlines are experiencing cut backs.
 
We're Nuts
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:00 am

Quoting Tornado82 (Reply 9):
I'd be dipped in fecal matter before I'd work off the clock for an entire day, but that's just me.

And you're exactly the type of employee Southwest doesn't want. If you don't get their philsophy yet, you probably never will.
Dear moderators: No.
 
MD-90
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:06 am

Quoting DALNeighbor (Reply 5):
The link to the article above says WN has 71 employees per aircraft and the industry average is 110.

That's largely because they don't fly long hauls to London or Singapore. That makes a difference. But WN employees are also more productive, as well.
 
Sean-SAN-
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:07 am

FYI WN pays ramp and csr employees the same or less than most airlines. For instance, WN starts rampers out at 8.75 while many airlines start in the $9 range (even ones like Skywest.)

Pilots do make more than most 737 pilot-peers, but that's only post-cutbacks and after their recent contract. Before that, a DL 737 captain was making around $50k++ more.
 
Tornado82
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:14 am

Quoting We're Nuts (Reply 17):

And you're exactly the type of employee Southwest doesn't want. If you don't get their philsophy yet, you probably never will.

I'm heartbroken. There's nothing more I wanted to do than move to Dallas to work for WN corporate  sarcastic ... because I'm surely not 737 qualified nor will I ever be, and I can make a heck of alot more than someone kicking bags around, or passing out peanuts, no offense to anyone. But you know what, my company treats us employees right, we treat it right, and I'll still never be going in there for a day of no pay... and our profit margins are alot higher than WN (like I said, non-airline industry).

Quoting Ckfred (Reply 14):


The contracts all come up for negotiation within the next 2 years, and the pilots start this year. Every union is looking for wage increases proportionate with WN's increases in profits.

As is what typically happens with unions... and is typically what drags companies' profits the ground a few years later... leading to the cuts... which then makes the company profitable again.... and so the cycle continues.
 
aogdesk
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:16 am

It'll be an interesting study if/when WN feels pressure to the point where they have to ask for concessions...
I bet they'd get them.....employees would see it as investing in the company, and I doubt that you'd see mgmt award themselves $$$$$$ bonuses while asking for concessions. Of course, that would work ONCE if they didn't formulate some ROI plan for employees or if they abused the situation.

I find it amazing that people see WN as the whipping boy......all I see now is posts from WNers defending themselves.
 
hz747300
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:16 am

Quoting Dl757md (Reply 2):
Do you have a source for that info? Just what does prodcutivity mean anyway? Does WN use a cattle prod to cut costs and increase productivity? Thought I'd ask a Texan.

Very interesting question... I am not sure want it means for FAs, but for pilots WN was getting 12 extra hours in flying time per month, for approximately the same salary, according to a friend who was a financial planner for US Airways in Virginia. He pointed to WN's shorter segments generally speaking point-to-pont network which allowed this discrepancy.

He made the claim over a year ago, long before the merger announcement and was let go post merger.

The additional tidbit of information which was interesting was the cost per seat mile. For WN it was just over $0.06/seat mile and for US it was $0.098/seat mile. Thinking about the number of seat miles available and flown, it was very clear to see why WN was doing so well.
Keep on truckin'...
 
bigb
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:32 am

Quoting Aogdesk (Reply 21):
I find it amazing that people see WN as the whipping boy......all I see now is posts from WNers defending themselves.

No offense but I see a lot of typical WN haters trying to talk WN down posting in this thread. If you be around threads awhile, you will know who is on what side.  Wink
ETSN Baber, USN
 
dalneighbor
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 11:21 am

Quoting Sean-SAN- (Reply 19):
Pilots do make more than most 737 pilot-peers, but that's only post-cutbacks and after their recent contract. Before that, a DL 737 captain was making around $50k++ more.

So do the pilots or other workers at other airlines ask for compensation closer to WN? Or do the workers at UA, AA, DL, B6, etc just accept the fact that they will make less as a way to make up for the higher non labor cost as compared to WN?
Wright Amendment = Federally Engineered AA Price Gouging
 
radelow
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 11:27 am

It's the Wal Mart vs. Costco attitude. Wal Mart pays it's employees peanuts and has:
- High turnover
- Higher costs for loss prevention
- Less productive employees
- Employee lawsuits

Costco pays its employees a much more fare wage and offers it's long term employees great benefits and doesn't have any of those things. Southwest is doing it right.
 
OOer
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 12:01 pm

Quoting 2H4 (Reply 10):
What's that? Still not good enough for you? Does 2001 data somehow not count? Well, in 2005, WN's headcount per aircraft was 72. American Airlines, on the other hand, had a ratio of 128. It's all in each company's SEC filings.

You cant compare WN with anyone besides B6 and AirTran maybe. Why? Well how many 777, 767, A300, 757, and 738-800 does WN operate? None. Each one of these aircraft seats up to 2.5 times the amount of people WN puts on their planes. So I am sure its ok for AA to have a higher employee to aircraft ratio as it takes more people to operate a 777 compared to a 737-500!!!!

Quoting Sean-SAN- (Reply 19):
FYI WN pays ramp and csr employees the same or less than most airlines. For instance, WN starts rampers out at 8.75 while many airlines start in the $9 range (even ones like Skywest.)

Hi, what you said is completely irrelevant.
Skywest starts you out between $8.50 and $10.93 per hour depending on the location. You know what the average raise per year is after that for skywest? Approximately 45 cents per year...do you wanna know what WNs is? I believe its between 80-90 cents per year. Skywest tops out anywhere between $14 per hour and $16 per hours, WN tops out their employees at about $24 per hour!!!! So its not the same for most airlines!!!
 
ckfred
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 1:10 pm

OOer:

But it is fair to compare what WN pilots make to what AA 737-800 pilots make. I don't have the exact figures, but I do know that, comparing captains with the same seniority, a WN pilot makes more per hour than an AA pilot.

Now, the difference is that a WN pilot gets paid for the scheduled flying time, and nothing more. So, if a WN pilot flying MDW-STL winds up sitting on the hold pad for 30 minutes due to a ground stop, then loses 10 minutes in the air due to congestion and reduced speeds, and finally sits for 10 minutes at STL waiting for his gate to open, he just worked an extra 50 minutes for free.

The AA pilot flying ORD-STL, with the exact same situation, got 50 minutes of extra pay.
 
dl757md
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:11 pm

Quoting 2H4 (Reply 3):
Shortly after 9/11, while most other airline employees were threatening legal action and strikes in the face of impending layoffs, WN employees organized a massive (voluntary) donation program, and ended up (IIRC) donating around a million dollars to the company to help make up for the 9/11 downtime. Most hourly workers, myself included, did not clock in that day, despite working around the clock.

I believe that's the productivity to which Texan was referring.

You aren't the only one's who have done these types of things. Talk to me when you buy the company a new 737-700 voluntarily.

Quoting DALNeighbor (Reply 5):
The link to the article above says WN has 71 employees per aircraft and the industry average is 110

Yes, but what percentage of work is contracted out at WN v. other airlines. Those contract employees aren't counted in the employee per aircraft figures.

Quoting 2H4 (Reply 3):
In terms of human productivity, it comes down to dedication.



Quoting OOer (Reply 26):
You cant compare WN with anyone besides B6 and AirTran maybe. Why? Well how many 777, 767, A300, 757, and 738-800 does WN operate? None.

Precisely, nothing against WN employees but I think it's success lies more in the business model than in the dedication of the employees. The company is more efficient from the ground up. Yes, FAs clean cabins, mechanics throw bags, etc. but it's because management has set it up this way and requires them to do it. It's not, for the most part, out of their unselfishness and dedication.

DL757Md
757 Most beautiful airliner in the sky!
 
2H4
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:21 pm




Quoting Dl757md (Reply 28):
Yes, FAs clean cabins, mechanics throw bags, etc. but it's because management has set it up this way and requires them to do it. It's not, for the most part, out of their unselfishness and dedication.

That's a good point...management certainly deserves credit. I think the two factors go hand-in-hand.





Quoting Dl757md (Reply 28):
You aren't the only one's who have done these types of things. Talk to me when you buy the company a new 737-700 voluntarily.

I was referring specifically to the week after 9/11, but that's really cool. I've never heard about that -700 you refer to. Did they put any special markings on it?




2H4


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ntspelich
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:28 pm

Quoting Tornado82 (Reply 20):
and I can make a heck of alot more than someone kicking bags around, or passing out peanuts, no offense to anyone.

Yeah, that's why one of my Coworkers (a ramp supervisor) cleared over $100k last year. Yes, he worked some OT, but still that's not a pretty bad living.
United 717 heavy, you're facing the wrong way. Any chance you can powerback to get off of my deice pad?
 
RachelBDL
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:35 pm

Quoting Dl757md (Reply 28):
Yes, but what percentage of work is contracted out at WN v. other airlines.

I'd say very very little. Coming from a small station, the only contracted people we use are the cleaners on RON aircraft, and local mechanics if we need them. At a much larger station, it's all SWA folks.
I not only drink the KoolAid, I do the Jello shots too!
 
SonOfACaptain
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:46 pm

Quoting 2H4 (Reply 10):
Does 2001 data somehow not count?

Actually, it doesn't. A LOT of things have happened since 2001. For instance...

Quoting 2H4 (Reply 10):
and 58% less than US Airways.

... is not remotely true anymore. US pays more for fuel than employees now.

Of course, this doesn't change anything. WN is still the best.

-SOAC
Non Illegitimi Carborundum
 
wjcandee
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 2:58 pm

Quoting Jeremy (Reply 7):
I will agree that employees at WN are generally happy, but the farther you get from DAL, the less happy they are.
There were many employees at my station that would curse WN and do things to hurt the company with their apathy.

This is something that WN management (at least used to) spend a lot of time thinking about: How to "push" the culture into the smaller stations and the stations furthest away from DAL (and the other big hubs). I wonder whether that's an issue that they still pay as much attention to. It was a big deal in some discussions that I had with some senior folks there back when I lived in Dallas (which is a surprisingly long time ago, now).
 
ltbewr
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 3:02 pm

Don't forget too, that often (as noted on this website) they may not always be the lowest fare between 2 points, sometimes some majors may be cheaper. A difference is that their top fare for a given flight will probably be a lot less than the majors top fare. For many business or late booking travelers, that means they won't feel they are getting screwed.
WN also started in the 1970's only in and around Texas, prior the late 1970's deregulation. That means they were not stuck with the legacy work rules, union rules and so on which = lower costs of operations.
They were slow but steady to grow over a lot of years. They have been willing to stick to a solid game plan, with enough adjustments over time to stay competitive. They have excellent leadership and management. They offer a very consistant product. They attract good people to work for them. WN has been better able to adjust and hasn't been as affected by the ups and downs of the business cycles unlike the majors as to operational costs, fares and demand. As others have noted, there are a lot of other factors that somehow makes them consistant profit makers instead of money flushers.
Whatever it is, it works.
 
supa7E7
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 3:11 pm

WN can have fewer employees because of their small network and low number of airports.

WN does its thing, but to compare it to United or something ("more efficient") is ridiculous. WN does a great job at what it does (sort of like a rich garbageman!), and United is an overspending, though glamorous, aristocrat. They are both cool airlines. And both well run.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
DATAMINER
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RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 3:53 pm

AAI has 64 employees per aircraft.

But this exercise is pointless. Yes WN can maintain wages as they are, as long as they are content to make industry standard margins after their hedging runs out. The bottom line is they would have lost money without the hedging gains this year. Not much better than many other airlines.

Just this last report their "adjusted for stage length" non fuel CASM went up 10%. Primarily due to labor costs. Now what other airline posted CASM increases even close to that?

So stay away from the stock. It trades at old school multiples.
 
Av8trxx
Posts: 632
Joined: Sun Nov 11, 2001 7:08 am

RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 6:26 pm

Quoting Silver1SWA (Reply 11):
You wouldn't be refering to OAK would you? From the way they load the aircraft and document their loads on the DR, they seem like a bunch of fools!

Some things never change! Over 10 years and counting. Same old crap. Most at that station couldn't stack Legos and think 30 bags belong at the back of D. They also have one of the higher turnover rates at that station from what I remember too.
 
IceTitan447
Posts: 450
Joined: Mon Jan 09, 2006 11:27 am

RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 8:55 pm

Quoting DALNeighbor (Thread starter):
Can WN Sustain Paying Employees Top Dollar?

What does WN pay their CSR's? Just curious.
 
Tornado82
Posts: 4662
Joined: Thu May 26, 2005 10:19 am

RE: Can WN Sustain Paying Employees Top Dollar?

Tue Jan 24, 2006 10:38 pm

Quoting DATAMINER (Reply 36):
So stay away from the stock. It trades at old school multiples.

I was going to invest about $1000 into WN listening to how everyone brags here on A.net, then started reading some financials more closely, and noticed some trends that alluded to not-so-happy times at WN in the not-so-distant future as well. I thought about hitting and running, but the stock doesn't gain quickly enough for that, so stayed completely out of it.
 
lat41
Posts: 457
Joined: Mon Jun 28, 2004 12:23 pm

RE: Can WN Sustain Paying Employees Top Dollar?

Wed Jan 25, 2006 12:42 am

Pay peanuts, get monkeys! Happy, well compensated workers will do a better more productive job. Seems to be working for WN!
 
dalneighbor
Posts: 589
Joined: Mon Oct 03, 2005 12:04 pm

RE: Can WN Sustain Paying Employees Top Dollar?

Wed Jan 25, 2006 1:07 am

Quoting Icetitan447 (Reply 38):
What does WN pay their CSR's? Just curious.

It's my understanding that they top out over $24/hour.

Quoting OOer (Reply 26):
I believe its between 80-90 cents per year. Skywest tops out anywhere between $14 per hour and $16 per hours, WN tops out their employees at about $24 per hour!!!! So its not the same for most airlines!!!
Wright Amendment = Federally Engineered AA Price Gouging
 
Tornado82
Posts: 4662
Joined: Thu May 26, 2005 10:19 am

RE: Can WN Sustain Paying Employees Top Dollar?

Wed Jan 25, 2006 1:13 am

Quoting DALNeighbor (Reply 41):
It's my understanding that they top out over $24/hour.

Assuming 40hr weeks, that's $50k/yr approximately. Not bad.
 
dalneighbor
Posts: 589
Joined: Mon Oct 03, 2005 12:04 pm

RE: Can WN Sustain Paying Employees Top Dollar?

Wed Jan 25, 2006 1:40 am

Quoting Tornado82 (Reply 42):
Assuming 40hr weeks, that's $50k/yr approximately. Not bad.

In addition, the added flexibility of picking up shifts and working overtime shifts probably gives the workers earnings potential in excess of $75-80K.

Where else can you find that kind of earnings potential without requiring a college education?

Here is a link to a good article that discusses productivity and a few other aspects of WN's future plans.

http://www.flightinternational.com/A...n/177/204204/On+the+offensive.html

.....This reflects the company work ethic, one described by Brandeis University business professor Jody Hoffer Gittell as one with few vertical barriers, one based on the power of relationships among employees. Southwest people, motivated as much by culture as by profit sharing, undertake tasks that are not formalised by job descriptions.

So pilots will run down the jetway/airbridge ladder to toss a late-checked bag onto the luggage conveyor while flight attendants will help hustle snacks and drinks from the catering trucks to the aircraft galley. None of these seems an enormous achievement until an observer compares a traditional airline, legacy or low-fare. How many pilots at other airlines would be willing to do a landing apron search for debris while waiting for the flight to approach the gate?

The pilots, Kelly says, “are important leaders at this company”, and late last year, the Southwest Airlines Pilots Association, a union that is independent of the large national ALPA, initiated and agreed to a series of productivity improvements that could save the airline $4 million annually. The pilot deal adds 1.5 hours of flying a month at no added cost by reducing the number of new pilots that need to be recruited. Southwest’s 4,700 pilots fly about 67 “hard” hours a month, and a median wage for a fifth-year first officer (co-pilot) according to AIR, an Atlanta-based pilot career service, is just under $9,300 a month. That is well above the $7,600 industry average for a first officer at that grade, according to AIR. The best thing Southwest can do for its pilots, though, is to grow, Kelly says. “This is a pilots’ airline. They can advance to the left seat, to command, rapidly, and that’s what pilots want – growth.”.....

.....In the second-quarter of 2005, as fuel was in its trajectory, unit costs actually dipped despite the one-fourth increase in fuel costs. Kelly is proud that “over 34 years, we’ve been on a steady improving rate in terms of our employees. We’ve never had furloughs; we’ve never had pay cuts. And our head count per aircraft, as a real gross measure of productivity, is at the lowest level in 25 years. So as long as we find ways to work more efficiently, work smarter, we’ll grow.”

Among these ways are using gate equipment rather than auxiliary power units to cool parked aircraft; tankering and bunkering fuel; and new flight paths including some offshore routeings on north-south coastal flights that will save time; plus the retrofitting of all the airline’s 200-plus Boeing 737-700s with winglets from Aviation Partners/Boeing. New aircraft will be delivered fitted with the winglets. A major campaign for 2006 is increasing punctuality, crucial for an airline that operates over 980,000 trips a year. In the first nine months of 2005, Southwest carried over 66 million customers, while Delta Air Lines, the number two, carried 60.1 million, according to the US Bureau of Transportation Statistics. Southwest is investing in an initiative it calls EFT or Electronic Flight Times, under which information from a ground-to-air datalink will be automated and used globally in both internal, operational and external reporting of flight times and delays. By the end of the year, Southwest internal flight information display and external airport displays will be connected and displayed at airports on new liquid crystal display flat panel monitors. The airline has also invested about $12 million over the past three years to speed the boarding process with an automated boarding-pass system developed with another Texas-based low-cost leader, Dell Computers.....
Wright Amendment = Federally Engineered AA Price Gouging

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