Let me try this again....my computer ate half of it the first time. Sorry to bore those who have already read, but it's important to make the accurate version with Airwaysdc9's pull quotes available. Sorry for the error AirwaysDC9, this one should be correct.
Thank you for writing to me, I'm only some policy wonk on the 'Net and as such realize that you don't need to do that. By the way, you're the only person I've read so far who has traced out the "US Airways needs to merge to survive" scenario in such detail, and such well-informed detail.
As a longtime regular customer of US Airways and lifetime Rochester resident (I go to grad school in DC but am still a legal Rochester resident) it's hard to see a local institution in danger, even if it's one that mistreats Rochester residents and businesses. And yes, the employees matter....as I've said in a number of posts, US Airways employees have been consistently professional, competent, and a pleasure to do business with. What happens to y'all does matter
I'd like to respond to some of your arguments below, and explain why even employees are better off letting the market handle the situation, for employees as well as travelers, and not an anti-competitive merger. In short, the oligopoly mainline carriers cannot be trusted with increased market power, as they have demonstrated conclusively that they will screw medium-size (ROC) and small-size (ITH) markets with it, with unjust high-margin fares.
And as you observe, there is a market for flights from ROC to LGA, BOS, PHL, etc. Someone will fly them. As a matter of fact, every time someone HAS flown them, Allegheny/ US Air/ US Airways has bought them out! And give the fluidity of the regional airline system--for instance American's gulp of Business express and Atlantic Coast's new ACJet subsidiary---the regional jets can get around without anti-competitive mergers. ACJet Dornier jets are flying ROC-LGA as we speak.
ADC9: So...now they are faced with this merger. Fantastic! US Airways has an exceptional route system deeply entrenched into the Northeastern United States...if those high costs can be leveraged out throughout a much more vast route structure (UAL), they could be brought back down. After all, it is unlikely that US Airways could embark on long-haul expansion on their own, while still protecting their valuable east coast route structure...and long haul flying is the ONLY thing that can lower costs effectively.
J: How does UA "leverage US costs?" US employees are not going to want to lose your current work rules (you'll know better, but I have the impression that it's work rules more than salaries that drive US's costs so high) and that alone could sink the merger. And if UA keeps US employees' current contracts, the UA employees are not going to be happy about it. And the UA pilots just broke management in their summertime standoff, so it is not clear to me at all that a merger would "leverage" US labor costs.
ADC9: Bud Shuster makes several speaches "plugging" the merger, but carefully warning that without the transaction US Airways may face bankrupsty in the coming years. Mr. Wolf echos those sentiments in Senate hearings. Now...employees are starting to feal a bit of fear... If this thing DOESNT go through, THEN what??? Employees ask management, "Hey! Whats plan B?" And management responds that there IS no plan B...they're singularly focused on getting the merger passed....uh oh
J: Plan B, as throughout American history, is that US employees go work for CO, DL, and WN--whose pay and union involvement is in line with the rest of the industry, they just have firmer work rules. People want to fly, and if the product is there at a reasonable cost, they will. US employees will have new jobs on different-colored airplanes. But I for one trust market forces more than anti-market buyouts that would make a Big Three who could crush WN, AT, JB, etc, and leave us back where ROC, BUF et al were in 1995. Which is not acceptable.
ADC9: US Airways is forced to make some tough decisions. They certainly cant afford to fly the new Airbuses to cities like Rochester....so they delete jet service to upstate New York...Saab 340s and Dash 8's are all that can be found. (after all...even if the pilots agreed to RJ flying for Express now, it would be years before the product could be delivered at the scope required to compete with Continental Express and Comair) >>
J: Continental and Delta, sensing competitive advantage, would fly more RJs into Rochester than they do now. They have the delivery slots at Canadair and Embraer. And if WN and JB keep driving fares down, some of those RJs become 737s. Maybe you might be working on one of them.
ADC9: Rochester is now served by Southwest to over 6 cities! Airfares are at an all time low. US Airways pulls out, but the people of Rochester dont even notice...in fact, since US Airways also pulls out of Ithica, Elmira, and Binghamton, the Rochester Airport gets even MORE customers as businessmen begin to struggle slightly to get where they need to go on the east coast. >>
By this time, a new commuter operation, a New Mohawk (from the ashes of the victim of the Allegheny/ US Air pocketbook) would arise. And CO, DL, AA etc would see a big opportunity. US obviously had some people flying from ITH, BGM, etc, and the other majors would want them. These carriers have orders in at the regional manufacturers.
ADC9: In a few more years US Airways has declared bankruptsy. The bankruptsy judge rengotiates employee contracts and that helps some, but dozens of airplanes are returned to their lessors, and several thousand employees are laid off. The loss of jobs in cities such as Pittsburgh and Charlotte begins to have a small effect on the local economies. >>
And the planes, and employees, are flying for other airlines, maybe based in other cities yes, but maybe right there in PIT and CLT, who knows. Americans still want to fly, and someone to fly them. We just demand that these flights be at *reasonable* fares not rapine fares. Please forgive the harsh language, but after shelling out around $230 to $250 for years on a route that shouldn't cost me more than $150 tops--and businessmen on the moment pay $500 to $1000 for--I'm not very happy with US Airways.
ADC9: Ultimately 46000 employees are out of work...6176 pilots looking for work in a market which simply doesnt need them...and should they find a job with another major airline, it will be at the bottom of the seniority list...their 10 or 20 years at US Airways amounting to nothing as they return to a probationary pay scale...THANKFUL to even have a job. >>
J: A market which doesn't need them? United's work problems this summer were ultimately about a shortage of pilots! Almost every issue of Aviation Week I read has some reference to a need for pilots. They are needed at a just wage that compensates them and does not gouge consumers, but they are needed. And all those planes they'd fly need FA's, mechanics, ground crew, etc....
ADC9: How's ol' Rochester doing? Well FINE! After all, Southwest is providing them service to Baltimore, and Nashville, Las Vegas and Pheonix. But DARN is it hard to get to Philly from there...almost impossible to get to LaGuardia...sure, you could take JetBlue to Kennedy...but what a pain. Cant seem to get to Boston...Only place south we can get to is Atlanta...sure wish I could fly into Charlotte.
J: Continental would be flying me to LGA, American Eagle RJ to BOS (where they are building up), and Delta RJ would be flying me to Philadelphia. I'd have to make a connection at Dulles on United RJ to get to Charlotte, but that's fine because US offers one measly nonstop from ROC to CLT today anyway. And you'd be working for one of those carriers, not worried about your job
ADC9: I'm sorry that your airfares in upstate New York are high. The only thing I can assume is that the forces of supply and demand are hard at work. Every flight I fly into Rochester is close to full. But, please dont wish for the demise of my company...and the loss of jobs for myself and my 46,000 coworkers. We need you...and hopefully, you need us.
J: Airwaysdc9, Rochester DOES need you. But you'll still be able to serve us, you'll get a paycheck every two weeks, and I will still have the pleasure of doing business with you, on a different airline. One that doesn't have the cost structure from amalgamated regionals whose high expenses and fares reflected the market conditions of the 1950s to early 1980's.
But Rochester does NOT need a Big Three American, United and Delta whose pocketbooks would be so deep that they could consider crushing even Southwest, let alone AirTran and JetBlue. Big Air has demonstrated so conclusively that they abuse their power when nobody's in town to hold them accountable, that they simply are not to be granted any more power.
Sorry, but that's what happens when people like Steve Wolf and Jim Goodwin think $123 million golden parachutes, and unions think "industry leading" contracts with still-loose work rules, are what airlines should have. The business goes elsewhere...as am I, on Southwest BWI-BUF for my trip home for Thanksgiving. I hope to do business with US again soon, at a reasonable less-than-$200 fare DCA-ROC. But that's up to Wolf, and to y'all who work for him
Need a new airline paint scheme? Better call Saul! (Bass that is)