gizmonc
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WN Purchase Of Airtran

Sat Aug 20, 2011 6:32 pm

Hey all you guys out there who has a legal background. Since WN purchased AT lock stock and barrel so to speak. This is not a merger. SWA formed a LCC GHC and has put AT in that holding company. As I understand is under the process of moving assets over to SWA. So according to the Bond-McCaskill act after the TWA/AA ordeal does this fall under that law. Just courious as to what others might think. Especially if you are in the labor law field.
 
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kgaiflyer
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 6:37 pm

First off, the IATA code for Airtran is FL (AT is Royal Air Morac) . And the code for Southwest is WN.
 
QANTAS747-438
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 6:40 pm

Quoting GizmoNC (Thread starter):
This is not a merger.

Right, it's an aquisition.
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
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kgaiflyer
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 6:43 pm

Quoting GizmoNC (Thread starter):
Just courious as to what others might think. Especially if you are in the labor law field.

It's hard to understand what your point is. The merger -- whatever form it takes -- has passed Justice Department scrutiny.

Are trying to say they made a mistake?
 
727LOVER
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 6:57 pm

TW/AA was an estate sale.
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pliersinsight
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 6:59 pm

Quoting 727LOVER (Reply 4):
TW/AA was an estate sale.

As an attorney, I advise you that you just made one of the more hysterical comments I've ever read on this site.
 
atrude777
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RE: WN Purchase Of Airtran

Sat Aug 20, 2011 7:32 pm

Quoting kgaiflyer (Reply 3):

It's hard to understand what your point is. The merger -- whatever form it takes -- has passed Justice Department scrutiny.

Are trying to say they made a mistake?

Unless I misunderstood, he is asking because this is not a Merger (ala DL/NW, UA/CO, F9/YX, etc) and an acquisition, and because according to him Southwest is creating a LLC, like AA/TWA, does the rule of the Bond-Mcaskill act apply here.

This is the first acquisition between two airlines since TWA/AA, so the rules and laws are being tested for the first time now I think.

No, I do not know the answer, but it does bring up a good point/question.

Alex
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BD338
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 12:23 pm

What does the Bond-McCaskill Act mean in the case of WN/FL? Is there some specific element of the Act that places a restriction or requrement on WN? The OP doesn't explain the question.
 
mcdu
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 2:56 pm

If you read the B/Mc bill you will find the language that applies. It doesn't matter the structure that WN used with GHC as the intermediary. The FL pilots (I believe this is the real direction of your question) are entitled to the protections of B/Mc. There have been several disgruntled WN pilots that are grasping to the hopes that they can somehow take only FL planes without the pilots. By design this is what the bill is entitled to prevent. A shifting of assets to destroy one work group. Much like the BK rules that were in place after Frank Lorenzo did his destruction the B/Mc bill was created to prevent the type of action that AA did with TWA.

As an aside the TWA pilot group just won a lawsuit against ALPA for a DFR complaint in the merger with AA. In my opinion this is the driving factor in why FL MEC rejected the one sided agreement from SWAPA. If the FL MEC agreed to this it could potentially lead to another DFR lawsuit against ALPA. The FL pilots have nothing to lose by going to arbitration. The deal they were handed was terrible for a career.
 
sccutler
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 4:03 pm

Quoting mcdu (Reply 8):
A shifting of assets to destroy one work group. Much like the BK rules that were in place after Frank Lorenzo did his destruction the B/Mc bill was created to prevent the type of action that AA did with TWA.

Frank Lorenzo's "destruction" preserved the very existence of Continental Airlines.
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mcdu
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 4:09 pm

Quoting sccutler (Reply 9):
Frank Lorenzo's "destruction" preserved the very existence of Continental Airlines.

You missed some history. When Lorenzo was gone CAL was in several near death episodes. Remember CALite? CAL was resurrected AFTER Lorenzo. Not because of Lorenzo!
 
bjorn14
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 4:26 pm

Quoting mcdu (Reply 10):
When Lorenzo was gone CAL was in several near death episodes. Remember CALite? CAL was resurrected AFTER Lorenzo. Not because of Lorenzo!

Yep. Good ol' Gordo pretty much straightened them out.
"I want to know the voice of God the rest is just details" --A. Einstein
 
gizmonc
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 5:07 pm

Funny how pilots who actually fly the planes are calling AIRTRAN, AT

from airlinepilotsforum.com


It's completely real.

Disclaimer: I'm a SWA FO, attempting to remove all bias from at least this post.

From what I've heard, it provides for basically total seat protection for all AT Capts anywhere in the system, regardless of their seniority. I think that's it's selling point to ALPA, just my guess.

It looks to me like the most senior AT FO's are taking the biggest hit. Zero upgrades until 2020.

ATL will probably be drawn down to a lot less pilots than it currently is, although it sounds like it will still be at least as big as any other SWA domicile. Same number or more flights, just less pilot lines originating from there.

717 payrates will equal 737. Also a big incentive. If sent to arbitration, 717 payrates are up for negotiation with the company. SWA (not SWAPA) is a tough negotiator.

Hard to guage the std SWAPA pilot response. Our BOD voted unanimously to approve AND recommend passage.

The typical internet-active SWA pilot seems to be more hard core than the line guy. My opinion only: the internet participators will rant against, but the avg line dudes will vote for this deal. I'd be surprised if we don't pass it.

There should be some people who are happy. I think the top half of the AT capts should be extatic. They have a huge raise, seat protection and will get to stay in ATL.

Jr AT Capt, I dunno. Big raise, seat protection, but you're going to get displaced and your seniority is going to sit at the bottom for a while.

If you're a SWA Capt, you get an 8% seniority bump and nothing else really changes.

AT senior FO. They got the worst of the deal. Big raise and you can stay in ATL but upgrade is going to be out of reach for a while.

If you're an AT new hire...well, you might be happy. Big raise and a much bigger pond to swim in. But you will be displaced and jr anywhere you go.

SWA FO....hard to say. I think the more junior you are, the more you might like this deal.

The senior SWA FO's I think will be angry no matter what happens. Unless they were all made Capts and CEO's of their own airlines I think some of those guys would be angry about it.
 
mcdu
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 5:18 pm

Good job FL pilots! The WN group appears to be very disappointed that you guys did not roll over and play dead. Best of luck in arbitration. It would seem that is a good risk to take based on the deal that was presented to you guys.
 
WNCrew
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 5:29 pm

Seems that when you look back at history, it's often the pilots who drag out the acquisitions/integrations because everyone is so passionate about what "fair" is to themselves.... which is understandable, but nonetheless it bogs everything down because nobody is willing to actually "GIVE" anything.

The other labor groups often follow suit to what's happening with the pilots as well, the FA's end up in the mix, the ramp, etc etc etc.

I hope this isn't anything like US or DL or what will happen at UA... but it is what it is and it already looks like the employees' sense of self-value on the WN-side of things is going to create a mess.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
XFSUgimpLB41X
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 5:51 pm

It doesn't matter that it is an "acquisition." If the seniority list integration it goes to arbitration it will be treated as a standard merger.
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mcdu
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:01 pm

Quoting XFSUgimpLB41X (Reply 15):
It doesn't matter that it is an "acquisition." If the seniority list integration it goes to arbitration it will be treated as a standard merger.

Absolutely spot on! It doesn't matter who bought who or how the deal is structured. B/Mc is designed to protect both sides. All mergers are usually an acquisition of some type on paper. DL/Western, USAir and all the other carriers they have "acquired" over the years. Those are still mergers of operations and seniority list. It just seems the arrogance of the WN pilots that they are immune to a "merged" airline is absurd. They are no better than the FL pilots.
 
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par13del
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:03 pm

Quoting WNCrew (Reply 14):
Seems that when you look back at history, it's often the pilots who drag out the acquisitions/integrations because everyone is so passionate about what "fair" is to themselves

I would say its because they have the power to protect their interest.

Quoting WNCrew (Reply 14):
The other labor groups often follow suit to what's happening with the pilots as well, the FA's end up in the mix, the ramp, etc etc etc.

Very little power so they usuallly take what they get.
 
WNCrew
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:11 pm

Quoting mcdu (Reply 16):
It just seems the arrogance of the WN pilots that they are immune to a "merged" airline is absurd. They are no better than the FL pilots.

I have to agree with you, AND it's not just the pilots. Over here at WN people are incredibly stuck on this definition.. this word "acquisition"... it's part of what feeds the arrogance, which in turn is based on ignorance. A lot of WN employees seem to think that WN is "saving the day" when it comes to FL... they have no clue that FL was doing just fine, were making money etc. They also fail to see that WN NEEDS certain aspects of FL to survive... we NEED them we're not saving them from anything.

I hear a lot of "Well they should be so lucky..." "They're getting a pay raise etc.." SO? What's it to any front-line employee? We are FRONT-LINE employees... period. It's our business to do our job... not to tell some other employee what they are and aren't entitled to.

WN employees have been so sheltered from any sense of reality for so long, and now they're being thrown into a very REAL Industry-reality and they are completely misguided.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
WNCrew
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:12 pm

Quoting par13del (Reply 17):
I would say its because they have the power to protect their interest.

Yes and we all see how well it turns out......
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Cubsrule
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:20 pm

Quoting WNCrew (Reply 18):
A lot of WN employees seem to think that WN is "saving the day" when it comes to FL... they have no clue that FL was doing just fine, were making money etc.

FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?
I can't decide whether I miss the tulip or the bowling shoe more
 
WNCrew
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:35 pm

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

Well it's not as if they were floundering! I've heard WN employees say they were in bankruptcy!!!! It's ridiculous! They had posted a profit had they not? They're light-years ahead of say AA for example, in terms of current financial success.

Nonetheless, WN wasn't "saving the day", they were acquiring assets that couldn't otherwise be attained through organic growth. WN bought FL because they needed them, that should say a lot about FL and it should remind WN and it's employees that it's not "perfect".
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
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par13del
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:45 pm

Quoting WNCrew (Reply 19):
Yes and we all see how well it turns out......

Well the industry is well aware of the power of pilot groups, so yes we will see how this one turns out. WN has had good relations with their unions, so far there has been no reason for either side to draw their swords, lets hope it stays that way, but the physics at WN is the same as AA, DL, UA, US etc. the pilots as a union are usually the most united and the single group that can bring operations to a halt.

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

Well WN has also had routes they start and pull back, its normal in the industry, as for agreeing to the "buy out", I think WN only had to convince board members not the staff of FL, who knows what their motives were, I'm betting money, shares in WN and no stress in having to make decisions that affect the value of their shares.
 
Cubsrule
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 6:57 pm

Quoting WNCrew (Reply 22):
WN bought FL because they needed them, that should say a lot about FL and it should remind WN and it's employees that it's not "perfect".

I don't think it says a thing about FL beyond that FL had assets (not people) that WN needed/wanted - 717s and ATL.
I can't decide whether I miss the tulip or the bowling shoe more
 
WNCrew
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 7:05 pm

Quoting cubsrule (Reply 24):
I don't think it says a thing about FL beyond that FL had assets (not people) that WN needed/wanted - 717s and ATL.

EXACTLY, which means WN wasn't "saving" FL from some demise... they're not the knight on the white horse, WN needed FL's assets. As for it's people, WN has already stated that not only do we NEED the FL employees to continue running the operation, but with WN's increased efficiencies per employee they'll need to continue hiring well after the integration is complete... so I'm not sure what you mean by "not people".... can you imagine, in theory, the administrative costs associated with RE-interviewing and RE-hiring, fully training (transitional training is cheaper) another 4,000 people???.... all while trying to integrate two companies. That would negate the synergy costs of the integration itself.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Cubsrule
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 7:26 pm

Quoting WNCrew (Reply 25):
As for it's people, WN has already stated that not only do we NEED the FL employees to continue running the operation, but with WN's increased efficiencies per employee they'll need to continue hiring well after the integration is complete...

That makes no sense. If WN is more efficient per employee than FL, WN ought to need fewer people, not more.

To your first point, what you are missing is that in most cases the FL people are needed for the fact that they come with the operation, not for some special skill or ability that they have.
I can't decide whether I miss the tulip or the bowling shoe more
 
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par13del
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 7:42 pm

Quoting cubsrule (Reply 26):

To your first point, what you are missing is that in most cases the FL people are needed for the fact that they come with the operation, not for some special skill or ability that they have.

In all cases, the only item FL has that's unique is the 717, which they can park immediately if they want to.
FL is a company with assets which include staff, if WN does not want the staff that comes along with the operation they can certainely pay them to go away, would increase the purchase price but its doable.
If they won't pay them off then they have to find some way to have them work together with their staff for the better good of a company which they have no interest in, its a purchase not a merger, their company is gone, so their loyalty is up for grabs.
 
kcrwflyer
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 7:43 pm

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

Because you can't do the exact same thing forever and expect it not to come back to bite you. Successful businesses have to change and adapt with time, airlines are no exception.

Your comment would imply that WN wasn't doing just fine before adding PHL, DEN, LGA, etc... and any other cities that were a curve ball from their original business plan.
 
Cubsrule
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 8:37 pm

Quoting par13del (Reply 27):
FL is a company with assets which include staff, if WN does not want the staff that comes along with the operation they can certainely pay them to go away, would increase the purchase price but its doable.

To be clear, I'm not suggesting that WN should get rid of FL staff, though I agree that it's doable. But it's silly to pretend that WN bought FL because of the staff or that WN needs them.

Quoting kcrwflyer (Reply 28):
Successful businesses have to change and adapt with time, airlines are no exception.

I agree. FL needed to merge (that's been true for 5 years, FWIW). WN needed to get in to Atlanta. Seems like a match made in heaven to me.
I can't decide whether I miss the tulip or the bowling shoe more
 
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par13del
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 8:52 pm

Quoting cubsrule (Reply 29):
But it's silly to pretend that WN bought FL because of the staff or that WN needs them.

It will be interesting to see what WN does with them, it has the potential to derail their efforts in ATL for a few years.
ATL was huge for FL, one would assume that a number of staff are entrenched in the area with their families, as it is also a DL mainstay, any bad press from disgruntled FL staff will be magnified by the DL base. WN need O&D from ATL as well as whatever traffic they can generate from their current network, they spent a lot to get access, not sure slow growth is the preferred strategy.
 
YXwatcherMKE
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 9:26 pm

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

FL was doing ok in MKE prior to WN arrival in MKE. F9 was also doing better in MKE after the YX merger and Had WN stayed out of MKE there would not have been such a air-fare price war that there was/is going on in MKE. When you run the kind of sales that were being run all the time by WN (example just done one week sale...$59.00 anywhere in the system from MKE sale) it does not make money for any of the airlines including WN because the other carriers need to match the fare or lose the passengers. Yeah it increases the LF but not the yield so why do it all the time. Yes it has brought in more passengers to MKE which the airport officials like but the bean counts of the airlines must hate.
I miss the 60's & 70's when you felt like a guest on the plane not cattle like today
 
kcrwflyer
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 9:48 pm

Quoting YXwatcherMKE (Reply 31):
FL was doing ok in MKE prior to WN arrival in MKE. F9 was also doing better in MKE after the YX merger and Had WN stayed out of MKE there would not have been such a air-fare price war that there was/is going on in MKE. When you run the kind of sales that were being run all the time by WN (example just done one week sale...$59.00 anywhere in the system from MKE sale) it does not make money for any of the airlines including WN because the other carriers need to match the fare or lose the passengers. Yeah it increases the LF but not the yield so why do it all the time. Yes it has brought in more passengers to MKE which the airport officials like but the bean counts of the airlines must hate.

My two cents... I feel like MKE could be a great focus city for ONE airline but has become a fight over something nobody wants in it's current state.
 
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par13del
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RE: WN Purchase Of Airtran

Sun Aug 21, 2011 11:41 pm

Quoting YXwatcherMKE (Reply 31):
it does not make money for any of the airlines including WN because the other carriers need to match the fare or lose the passengers.

Key reason why the other airlines are in trouble, if your cost base cannot support the fare sale price don't match the fare sale, simple economics, the legacies got into trouble chasing market share.
Now if they assume that the pax will not return after the fare sale their problem is larger than just the price of the ticket.
 
Cubsrule
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 12:54 am

Quoting YXwatcherMKE (Reply 31):
FL was doing ok in MKE prior to WN arrival in MKE

What evidence do you have to support this assertion?
I can't decide whether I miss the tulip or the bowling shoe more
 
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Revelation
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 1:36 am

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

Ok, if FL was such a basket case, why did WN offer a significant premium over market to buy them? All they had to do was just get 51% at market price, hold an special shareholders meeting, elect a new BOD and be totally in charge and do whatever they wanted to do with them.

You seem to think the only model of acquisition is where one party is strong and the other is weak. IMHO, FL was doing okay but felt it'd be better off long term being acquired by WN, and obviously WN felt the same way, or they wouldn't have bothered to pay a premium for FL.

Quoting cubsrule (Reply 26):
To your first point, what you are missing is that in most cases the FL people are needed for the fact that they come with the operation, not for some special skill or ability that they have.

Really? So you're saying you could buy an airline running 140 narrowbodies, fire everyone, and resume operations by hiring people without any special skills or abilities? Personally, I think you might need to hire more than a few people with special skills and abilities, and only a small minority of those would be pilots.
Inspiration, move me brightly!
 
Cubsrule
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 2:04 am

Quoting Revelation (Reply 35):
Ok, if FL was such a basket case, why did WN offer a significant premium over market to buy them?

They wanted in to ATL.

Quoting Revelation (Reply 35):
IMHO, FL was doing okay but felt it'd be better off long term being acquired by WN

I can buy "doing OK." FL had a significant revenue problem, and you can't keep your costs bottom of the barrel forever. Sooner or later, FL would have had to do something big. I think they knew that, which is why we saw the really foolish effort to buy YX.

Quoting Revelation (Reply 35):
So you're saying you could buy an airline running 140 narrowbodies, fire everyone, and resume operations by hiring people without any special skills or abilities?

For every FL employee, there are probably 5 fired/layed off/unable to break in to the industry who could do the job jsut as well.
I can't decide whether I miss the tulip or the bowling shoe more
 
WNCrew
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 2:20 am

Quoting cubsrule (Reply 36):
For every FL employee, there are probably 5 fired/layed off/unable to break in to the industry who could do the job jsut as well.

...and as hard as it is for many MANY of my coworkers to comprehend, the employees of WN are no different, myself included. I am a flight attendant and while I know I am VERY good at my job, it's not a difficult job. Could JUST anyone do my job as well, absolutely not, but there are, in fact, people who could. The same could be said for any other position at WN.

I have brought out in your posts, the very attitude I was referring to, that WNers are somehow superior (despite our abysmal appearance) and that FLers should count themselves lucky. Contrary to what some may think, there are people who applied at other carriers because that is where they wanted to work... not for WN.

I'm not trying to disparage my company or the wonderful people I DO work with, only to show that there are a lot of people with attitudes that are incredibly misplaced and ignorant.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 2:32 am

Quoting cubsrule (Reply 36):
For every FL employee, there are probably 5 fired/layed off/unable to break in to the industry who could do the job jsut as well.

Ok, then, how much time and money would it take you to screen through the 5x applicants (hopefully enough in each domicile), screen out the ones who did get fired for cause but aren't telling you, or the new entrants who aren't going to be able to deal with the industry, get them trained under a common set of procedures and corporate culture, weed out the ones who can't make the adjustment and start over with replacements, etc? How long and how much money till you have those 140 narrowbodies all flying the same number of flights per day they now do?
Inspiration, move me brightly!
 
wjcandee
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 4:39 am

Quoting WNCrew (Reply 18):
I hear a lot of "Well they should be so lucky..." "They're getting a pay raise etc..

Same arrogant crap many AA-ers threw at the TWA folks, many of whom were stellar and frankly people that I much preferred to fly with. It allowed them to sleep at night after stapling the poor TWA folks to the bottom of their list, only to be screwed in the following downsizing.

Quoting cubsrule (Reply 24):
I don't think it says a thing about FL beyond that FL had assets (not people) that WN needed/wanted - 717s and ATL.
FL's people ARE assets. What is WN going to do -- go out and new-hire that many pilots, flight attendants and customer service people, and train them from scratch? How much would that cost? They are effectively buying a turnkey operation, an operation that runs more efficiently than WN.

Quoting cubsrule (Reply 29):
To be clear, I'm not suggesting that WN should get rid of FL staff, though I agree that it's doable. But it's silly to pretend that WN bought FL because of the staff or that WN needs them.

It's not doable. WN does need them. Without them, WN would have to go through an unprecedented expansion in a record-short period of time, with all the management, hiring and training issues that would entail. Where would you get that many planes that quickly? How would you safely and effectively train that many people to do that work? The FAA would be completely up their butt, given what always happens when airlines try to expand quickly: problems. It's also not feasible to think that Airtran would just sell its stuff and shut down, because this company is much more valuable as a GOING CONCERN (i.e. operating business) than it is as a collection of pieces of equipment, which it would have no reason or incentive to sell as such; its present owners would be much happier if it continued to operate than they would be to sell off equipment. That it is much more valuable as a going concern is reflected in the enormous premium that Southwest has to pay over the then-present value of the stock to get the owners to sell, and that market value was a hell of a lot more than just the liquidation value of the equipment.

[Edited 2011-08-21 21:44:14]
 
Cubsrule
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 4:47 pm

Quoting WNCrew (Reply 37):
I have brought out in your posts, the very attitude I was referring to, that WNers are somehow superior (despite our abysmal appearance) and that FLers should count themselves lucky.

But when did I say that? Many - probably most - frontline employees in the industry (all carriers) are equally replaceable.

Quoting wjcandee (Reply 39):
an operation that runs more efficiently than WN.

By what metric?

Quoting wjcandee (Reply 39):
It's not doable. WN does need them.

You are conflating "wise" and "doable." Many things are doable but cost so much money that it would be foolish to attempt them.
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SPREE34
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 5:04 pm

Quoting par13del (Reply 27):
In all cases, the only item FL has that's unique is the 717, which they can park immediately if they want to

And promptly begin losing money on the leases, not to mention reduced revenue from closed cities and traffic lost to other carriers.

The 717 is good equipment. They have 80-+ frames. It's a natural intra Texas machine, and more efficient that the 735s, of which there are only 25.

They'll go into arbitration, piss and moan for a month after the results, then live happily ever after making more money than the guys at the other carriers flying like equipment.
I don't understand everything I don't know about this.
 
DCA-ROCguy
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 5:14 pm

Quoting cubsrule (Reply 20):
FL was "doing just fine?" So why the money-losing MKE buildup? Why the foray into the G4 model? Why even approve the merger?

Regarding the "AllegianTran" operation, IMO it was likely a defensive move. Allegiant has been very successful, in part, by flying to one of AirTran's bread-and-butter markets, Florida. My guess is that all of the "regular' LCC's are quietly watching G4 very closely. If G4 were to get big enough, maybe they could become a threat in larger-than-Elmira markets. AirTran has the biggest exposure, IMO, because they are more dependent upon Florida than are B6 or WN, and they also are willing to fly to smaller markets than WN--and thus could feel heat from G4 sooner.

A couple of years ago, AirTran acccountants seem to have decided that FL might be able to profitably run G4-type subweekly small market to sunspot service. For a while, it appears to have worked; I for one thought it could have been a real threat to G4. But my guess is that once oil went over $100 again during the past year, that flying became borderline or unprofitable for FL. I share the majority opinion here that the "AllegianTran" markets will mostly probably go once FL is merged into WN.

Jim
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wjcandee
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 8:14 pm

Quoting cubsrule (Reply 39):
You are conflating "wise" and "doable." Many things are doable but cost so much money that it would be foolish to attempt them.

It's not doable because the owners wouldn't sell the physical assets alone because they are worth more as part of a going concern. WN, as a public company, couldn't pay the premium necessary to just acquire those assets, because shareholders would depose the management and void the deal. You are saying essentially that "anything is doable as long as you pay enough money". I'm here to tell you that WN wouldn't be allowed by its owners to pay that money. End of story, and of hypothetical.
 
Cubsrule
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RE: WN Purchase Of Airtran

Mon Aug 22, 2011 8:19 pm

Quoting wjcandee (Reply 42):
You are saying essentially that "anything is doable as long as you pay enough money".

Precisely. You are making my point in to something it isn't and never was.
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LoneStarMike
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 1:32 am

 
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par13del
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 2:14 am

The only problem that I have with the process is that 4 parties are not involved in the negotiations, the boards of both companies started this process, now they sit back and let the unions negotiate among themselves some of the "terms" of their employment.
Management should be mandated to participate, matter of fact, how about if the law required the union contracts be abrogated and new one negotiated when mergers take place.
 
SPREE34
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 1:17 pm

Quoting par13del (Reply 45):
now they sit back and let the unions negotiate among themselves some of the "terms" of their employment.

That's how the law says it works.

Quoting par13del (Reply 45):
how about if the law required the union contracts be abrogated and new one negotiated when mergers take place.

By law, they can't be abrogated. Thet are required to follow legal precedent and laws in renegotiating a new CBA. Abrogating would be no CBA to operate under during a time things can get dicey. I don't see that ever getting through the courts or legislation.
I don't understand everything I don't know about this.
 
wwtraveler99
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 2:49 pm

Quoting mcdu (Reply 8):
There have been several disgruntled WN pilots that are grasping to the hopes that they can somehow take only FL planes without the pilots. By design this is what the bill is entitled to prevent. A shifting of assets to destroy one work group. Much like the BK rules that were in place after Frank Lorenzo did his destruction the B/Mc bill was created to prevent the type of action that AA did with TWA.

Ok so WN cannot simply shift assets, from what I am reading of your post. Now what if they were to simply park the aircraft and replace that with a new delivery? Instead of retiring X number of planes, as I am sure they have planned, just do not retire anything. As they park the aircraft the need for employees becomes less and less. Now, unfortunately, those un-needed folks get laid-off.

So does B/M prevent any type of downsizing of any form. Or does it mandate that a carrier has to keep all service, a/c and emploees?


WW
 
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par13del
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 3:26 pm

Quoting SPREE34 (Reply 46):
That's how the law says it works.

I know, just venting / complaining, thanks.

Quoting SPREE34 (Reply 46):
By law, they can't be abrogated. Thet are required to follow legal precedent and laws in renegotiating a new CBA. Abrogating would be no CBA to operate under during a time things can get dicey. I don't see that ever getting through the courts or legislation.

Th situation at US Airways should have spurred something, similar to what resulted from AA / TWA and the UA Chpt.11 process. Presently management does not seem to think that they are loosing anything by following the letter of the law, SWA management quickly withdrew their inducements for a deal which seemed to have been offered to prevent the current situation.
Based on what I read of the offer I was somewhat taken aback by the financial incentives offered especially to their own staff, one would think that with a pilot group that is already one of the highest paid and productive they would welcome an infusion of numbers which could potentially be used to reduce some numbers input to productivity.

Let's hope this does not turn into another US Airways fiasco, and yes if WN has to poney up more money for the problem to go away that still counts in my book as a fiasco, bet it was not thought of or planned in the merger scenario.
 
rumorboy
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RE: WN Purchase Of Airtran

Tue Aug 23, 2011 4:05 pm

Quoting par13del (Reply 48):
So does B/M prevent any type of downsizing of any form. Or does it mandate that a carrier has to keep all service, a/c and employees?



M/B does NOT prevent any type of downsizing. All that M/B law does is provide a "fair and equitable list" when it comes to merging two separate lists. It is up to SWAPA and ALPA and if necessary a abirtrator(s) to decide. The law does NOT force a company to merge the lists, only if they merge the list that it will be what was negotiated, mediated or arbitrated.

Quoting par13del (Reply 45):
The only problem that I have with the process is that 4 parties are not involved in the negotiations, the boards of both companies started this process, now they sit back and let the unions negotiate among themselves some of the "terms" of their employment



That's not actually true. Both the Transition Agreement and Process Agreement have ALL 4 parties involved and have signed off on it. Actually under the M/B law both management teams have a right to participate. It happens to be that SWA and Airtran decided IF both unions can't agree on a negotiated list, then go through mediation and arbitration, both unions are on there own. Although GK said yesterday IF asked by either party they would come back to the table. So its really up ALPA/SWAPA on how they want to proceed. In most cases mediation is making a case for arbitration.

Quoting SPREE34 (Reply 40):
Quoting wjcandee (Reply 39):
an operation that runs more efficiently than WN.

By what metric?



SWA has already stated many times that Airtran does more with less than what SWA does. Especially in the IT side of the house. They have the lowest FTE's of any airline including SWA. That's a metric the a lot of LCC's(especially SWA) use in their presentations to wall street and airline analysts. Better on time performance, best bags for almost a half decade now. As far as profitability, Airtran doesn't even come close.