Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
MIflyer12
Topic Author
Posts: 8487
Joined: Mon Feb 18, 2013 11:58 pm

Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 12:39 pm

With the 3Q20 financial statements out for the biggest six U.S. carriers (JetBlue published today), one can look at labor expense (before CARES Act subsidy from PSP) relative to Available Passenger Miles - a measure of labor dollar productivity. From a financial point of view, lower wage cost per million ASMs is better. (If employees want to argue more pay and more jobs are better, sure - until the money runs out.)

Salaries, Wages and Benefits per million ASMs

Alaska, $62,889

Southwest, $63,407

Delta, $69,141

JetBlue, $72,411 (see 8-K notes to add CARES PSP grant under Special Items back to Salaries)

American, $87,916

United, $100,351

United fans will want to add freight revenues, and, indeed, UA's 3Q20 cargo revenues were significantly larger than those of DL or AA. It's quite a task, however, to argue that a $422 million/quarter cargo activity is supporting what had been a $11 Billion/quarter business.

To look at a labor metric including cargo, a comparison of salary expense to passenger + cargo revenue isn't quite as clean. Like UA, B6, AA and DL separate cargo revenues in the income statement. Alaska shows cargo + other (with MileagePlan separate); for Southwest cargo isn't separated - maybe it's not meaningful.

Wage expense per $ of (passenger + cargo) revenue

Alaska, $0.80

Delta, $0.94

American, $0.98

JetBlue, $1.03

United, $1.08

Southwest, $1.15

Southwest suffers here because its yield was so much lower than the others. WN (and AA) really cut fares to chase passenger numbers and revenue. DL maintained the highest yield. UA was 7.4% behind DL but a little better than B6, which was a little better than AS, then AA, with WN far at the bottom, just 73% of DL's number. (If you like low fares, WN was your friend.)
 
hiflyeras
Posts: 2284
Joined: Thu Jul 14, 2011 6:48 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 2:22 pm

Very interesting breakdown! Thanks!
 
User avatar
DL747400
Posts: 968
Joined: Mon Sep 01, 2008 4:04 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 2:37 pm

Doesn't AS also lead the industry in outsourcing their airport jobs, especially below the wing?
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
CALMSP
Posts: 3345
Joined: Wed Aug 13, 2003 3:18 am

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 2:41 pm

DL747400 wrote:
Doesn't AS also lead the industry in outsourcing their airport jobs, especially below the wing?


I'd say that would be F9 and NK probably leading that category. NK only staffs FLL and F9 has no one.
 
DaCubbyBearBar
Posts: 124
Joined: Sat Apr 05, 2008 12:31 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 2:53 pm

Doesn’t WN list their Cargo as Freight in their statements? Looks like it is cleanly separated
I am me and no one else...so my opinions are mine
 
alasizon
Posts: 2628
Joined: Sat Apr 28, 2007 8:57 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 2:58 pm

CALMSP wrote:
DL747400 wrote:
Doesn't AS also lead the industry in outsourcing their airport jobs, especially below the wing?


I'd say that would be F9 and NK probably leading that category. NK only staffs FLL and F9 has no one.


F9, NK, G4, HA and SY are all less than AS and B6 is on its way to being equal to AS. AS has above-wing in almost every airport in the West that sees Mainline service multiple times per day and as far as I know, their #s also include QX employees which is a little different than outsourcing the jobs.
Airport (noun) - A construction site which airplanes tend to frequent
 
toltommy
Posts: 2796
Joined: Tue Dec 09, 2003 9:04 am

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 3:38 pm

alasizon wrote:
AS has above-wing in almost every airport in the West that sees Mainline service multiple times per day and as far as I know, their #s also include QX employees which is a little different than outsourcing the jobs.


If QX employees are included, than these numbers may not be accurate. Are all wholly-owned subsidiaries included in these numbers? Either QX needs removed, or the wholly-owneds at AA (Piedmont/Envoy) and UA (UGE), and McGee at AS needs included.
A300/A310/A319/A320/A321/A332/A333 / 707/712/727/732/733/734/735/738/739/752/753
/762/763/764/772/788/789/DC8/DC9-10/30/40/50/MD81/83/87/88/90/L1011-/250/500/CRJ200/440 /700/900/EMB135/140/145/170/175/190/328Jet/F70/SF3/BE1/J31
 
NW
Posts: 92
Joined: Tue Jun 24, 2008 9:37 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 4:10 pm

DL747400 wrote:
Doesn't AS also lead the industry in outsourcing their airport jobs, especially below the wing?


I believe it depends on how you calculate the metric. Delta is up there relative to size and amount of jobs outsourced.
 
alasizon
Posts: 2628
Joined: Sat Apr 28, 2007 8:57 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Tue Oct 27, 2020 5:09 pm

toltommy wrote:
alasizon wrote:
AS has above-wing in almost every airport in the West that sees Mainline service multiple times per day and as far as I know, their #s also include QX employees which is a little different than outsourcing the jobs.


If QX employees are included, than these numbers may not be accurate. Are all wholly-owned subsidiaries included in these numbers? Either QX needs removed, or the wholly-owneds at AA (Piedmont/Envoy) and UA (UGE), and McGee at AS needs included.


On the AS side, the earnings are reported for the whole group so all of QX and McGee's employees would be included. AAL includes the whole group (Piedmont/PSA/Envoy), UAL I'm not clear on as I can't remember if UGE is actually under "United Airlines Holdings, Inc" but I believe so, then UGE would also be included making comparisons valid.
Airport (noun) - A construction site which airplanes tend to frequent
 
11C
Posts: 172
Joined: Mon Jun 17, 2019 2:25 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 12:02 am

toltommy wrote:
alasizon wrote:
AS has above-wing in almost every airport in the West that sees Mainline service multiple times per day and as far as I know, their #s also include QX employees which is a little different than outsourcing the jobs.


If QX employees are included, than these numbers may not be accurate. Are all wholly-owned subsidiaries included in these numbers? Either QX needs removed, or the wholly-owneds at AA (Piedmont/Envoy) and UA (UGE), and McGee at AS needs included.


Agree, including Horizon skews the whole thing. Not a mainline to mainline comparison.
 
User avatar
usdcaguy
Posts: 1546
Joined: Mon Jan 26, 2004 12:41 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 4:59 pm

Isn't the reason why AA and UA have such high labor costs is that their pilots make so much more than those at other carriers? That would definitely push their average salary up. Not sure about flight attendants.
 
MIflyer12
Topic Author
Posts: 8487
Joined: Mon Feb 18, 2013 11:58 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 5:14 pm

usdcaguy wrote:
Isn't the reason why AA and UA have such high labor costs is that their pilots make so much more than those at other carriers?


Rates for equivalent aircraft are comparable to DL and WN. (See APC for rates.)

For example, 8-yr 738 captains:

WN $262/hour
DL $276/hr
AA $270/hr
UA $275/hr

Maybe avg seniority at AA or UA is a little higher. If they're making more $ flying larger gauge they would be generating more ASMs per pilot hour. It's labor $ productivity, not labor hour productivity, I'm mentioning.
 
MIflyer12
Topic Author
Posts: 8487
Joined: Mon Feb 18, 2013 11:58 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 5:33 pm

toltommy wrote:
alasizon wrote:
AS has above-wing in almost every airport in the West that sees Mainline service multiple times per day and as far as I know, their #s also include QX employees which is a little different than outsourcing the jobs.


If QX employees are included, than these numbers may not be accurate. Are all wholly-owned subsidiaries included in these numbers?


It's wage cost per million ASMs in the first ranking. If a carrier outsources relatively more (labor or contracted flying) that would drive down wage bill per ASM, not drive it up. Same thing with wage expense per unit of revenue.

Alaska is efficient is generating both ASMs and revenue $ per $ of wage expense, in spite of gauge capped at 190 with the A321. I waited for B6's results to complete this for the six largest U.S. carriers by revenue. One could expect that Spirit/Frontier/Allegiant, solely mainline and with lower wage rates, would be very efficient in wage cost per million ASMs. Low fares per mile may impede labor efficiency per revenue $, however. I'm guessing that HA's very short inter-island flights mean a lot of labor cost per million ASMs; it's really an outlier in terms of network.
 
slcdeltarumd11
Posts: 4845
Joined: Fri Jan 09, 2004 7:30 am

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 7:41 pm

I know this is an Alaska fan boy/girl started thread but should we celebrate outsourcing as a good thing?
 
User avatar
NWAESC
Posts: 1612
Joined: Thu Aug 30, 2007 1:02 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Thu Oct 29, 2020 9:23 pm

Interesting data! Thanks for taking the time to put it all together.
"Nothing ever happens here, " I said. "I just wait."
 
ASFlyer
Posts: 1734
Joined: Sat May 28, 2005 1:25 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Fri Oct 30, 2020 12:41 am

slcdeltarumd11 wrote:
I know this is an Alaska fan boy/girl started thread but should we celebrate outsourcing as a good thing?


Does it really even matter? Outsourcing is happening at most airlines. Alaska has actually brought quite a few stations in house above wing since the VX acquisition as VX had their own people in many stations. Most outsourced stations are in one or two flight a day markets.
 
ytib
Posts: 590
Joined: Sun Nov 07, 2004 3:22 am

Re: Alaska Airlines - $ labor productivity leader for US 6

Fri Oct 30, 2020 12:55 am

slcdeltarumd11 wrote:
I know this is an Alaska fan boy/girl started thread but should we celebrate outsourcing as a good thing?


Depends, if you work for Skywest, Mesa, Republic, etc. you may consider a good thing. :wave:
318, 319, 320, 321, 332, 333, 388, 707, 717, 722, 732, 733, 734, 73Q, 735, 73G, 738, 7M8, 739, 752, 753, 742, 74L, 744, 762, 763, 772, 77L, 77W, 789, 142, CN1, CR2, CR7, DC8, DH2, DH8, D8Q, D10, D95, EM2, ER3, ER4, E70, 100, J31, M11, M83, M88, M90, SF3
 
frmrCapCadet
Posts: 4413
Joined: Thu May 29, 2008 8:24 pm

Re: Alaska Airlines - $ labor productivity leader for US 6

Fri Oct 30, 2020 12:54 pm

I sometimes think pilots are highly paid. But an Alaska pilot putting in maximum hours and with spouse and kids at home, the household income is only moderately more than typical Seattle household income. Seattle living costs are not a good thing. It probably is and will put pressure on Alaska.
Buffet: the airline business...has eaten up capital...like..no other (business)

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos