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DalDC9Bos
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Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 3:58 pm

From article published yesterday-

http://www.boston.com/travel/travel/202 ... update/amp

What action do you think WN needs to take at this time? The article mentions possibilities such as across the board pay cuts, furloughs, income from ancillary fees. With all the voluntary separations completed, it mentions that they are still 20% overstaffed. I thought they were going to be able to trim the staff down as DL did.
 
727LOVER
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:01 pm

But they're adding, what, 10 new airports?
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
Ishrion
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:05 pm

727LOVER wrote:
But they're adding, what, 10 new airports?


Gotta chase revenue wherever you can and think long-term possibilities with other airlines having weaker positions.
 
CALMSP
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:13 pm

Ishrion wrote:
727LOVER wrote:
But they're adding, what, 10 new airports?


Gotta chase revenue wherever you can and think long-term possibilities with other airlines having weaker positions.


true, but I'd say we all know they are not flying full airplanes from the likes of MDW/HOU and are out of capacity.
 
Sooner787
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:14 pm

Those of us in the airline/travel industry are hanging on by a thread.

I'm convinced without additional stimulus from Uncle Sam, we're gonna
lose a major US carrier in the next 12 months.

Hell, we're already seeing consolidation in the travel industry.
That means a lot of travel jobs that went away last March aren't coming back :(
 
Boof02671
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:22 pm

WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.
 
joeblow10
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:38 pm

As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either
 
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lightsaber
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:40 pm

Ishrion wrote:
727LOVER wrote:
But they're adding, what, 10 new airports?


Gotta chase revenue wherever you can and think long-term possibilities with other airlines having weaker positions.

SouthWest has more aircraft than profitable demand from current locations. With such high fixed costs, they must chase revenue. Too much is closed fir certain prior markets to meet the revenue needs.


To others:
Expand at a loss or more layoffs. Pick your poison.

Lightsaber
Winter is coming.
 
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75driver
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:43 pm

Sooner787 wrote:
Those of us in the airline/travel industry are hanging on by a thread.

I'm convinced without additional stimulus from Uncle Sam, we're gonna
lose a major US carrier in the next 12 months.

Hell, we're already seeing consolidation in the travel industry.
That means a lot of travel jobs that went away last March aren't coming back :(


Of course many jobs are not coming back and the writing has been on the wall for months. If anyone is just realizing it they haven’t been paying attention.

I can’t remember what CEO said it but it was something alone the lines of “human beings have changed their behavior forever”. He was referring to business travel which paid the bills for most sectors of the industry. I think “forever” is a bold claim but as it relates to business the ones who have survived already made their changes permanent. The smart ones did this early and the industry needs to quit chasing fairy dust and accept the long term being very different.

I don’t think we need another government check to kick the can down the road. We need a government stimulus that will retrain people who can pursue jobs where they are needed and not hang on in a resized industry that’s vastly over staffed in all sectors. The travel industry will survive albeit with a smaller footprint. The government needs to help those displaced and plan for the future. If I was junior and this happened I would jump at the opportunity for more education, a degree or retraining into employment areas where long term prospects are better.
 
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TWA302
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 4:59 pm

Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sooner or later the unions are going to have to accept/make concessions or that water is going to sink the ship eventually and then the employees will have an even larger issue.
 
Miamiairport
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 5:09 pm

COVID 19 is going to be around for awhile. I don't care what Trump says it would be years before they could roll the vaccine out to nearly 8 billion people, not to mention the many millions that will refuse to get the vaccine. Add on the impact from the economy and who knows when business travel will return and to what extent. Maybe the CEO is trying to get this thing to a head but these are the options:

1. Never ending billion dollar bailouts to the airlines over the next several years.
2. Tell the healthy to lead their lives as before, protect the old and sick (most of which don't travel anyway) and let herd immunity build. Since a tiny fraction of people under age 65 in good health actually need hospitalization or die from this virus seems common sense to me. But we've long passed common sense.
3. Let airlines all file bankruptcy, try to reorganize in Chapter 11, fire lots more employees, dump leases and assets-which cause even more job losses. And those airlines that are forced into liquidation the hell with them.

Sorry there's no option 4, 5 or 6. And I get tired of people thinking there is.
 
enplaned
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 5:18 pm

joeblow10 wrote:
Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.


Agreed, especially since a large number of people in the US will refuse to take the vaccine, having been told (1) Covid isn't real and (2) it's a plot to track you (ignore the smartphone in your pocket!) and (3) the govt is out to get them. A lot of Asian countries have shown this thing can be beat without vaccines, but that's a lesson we apparently don't want to learn.

joeblow10 wrote:
Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either


Unless there's a wholesale change in how we approach this thing, its effects are going to be long-running, and one of the industries most affected will be the airline industry. That being the case, the industry needs wholesale restructuring, and for most companies, the appropriate forum for that is Ch 11. US carriers have a history of successfully operating through periods in Ch 11, as a society we should not fear it. Ch 11 will have a devastating effect on employees and vendors to the airline business (including aircraft lessors). But if we're not going to get serious about addressing Covid, that kind of restructuring is inevitable, and we should get on with it.
 
LCDFlight
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 5:23 pm

The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.
 
canyonblue17
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 5:59 pm

LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.


They airline industry has changed dramatically even since 2000. And there may not have been a need for bailouts then - when the industry could trim the fat by losing an airline or two. But today - how many more airlines are there left to trim? At what point does the traveling public wind up getting hurt by a lack of service or much more expensive service because of two few airlines and too little competition?
negative ghostrider the pattern is full
 
joeljack
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:02 pm

Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.
 
Miamiairport
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:03 pm

You can best believe that if there are fewer airlines the coach product will get far worse with airlines shoving as many human bodies as they can into an a/c. Yes International J will likely be a nice experience, for those that can afford it or using OPM. And with fewer more powerful airlines forget about new entrants. I have doubt's that Breeze is going to make it.
 
slcdeltarumd11
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:11 pm

727LOVER wrote:
But they're adding, what, 10 new airports?


It's not some expansion opportunity. They are trying to fly to places people want to go right now. Short term. There's such a lower number of people flying WN has too. Alot of their heavy prime routes like inter California or inter Texas or flights to Vegas there just isn't the demand and they have too many planes sitting around losing money. They have to try to fly where there's some demand or they can stimulate it.

There's no end in sight here for airlines. Everyone is in trouble. WN was not as bad and still is much better off then the US3 legacies. Everyone in travel is taking on water here. WN was able to not do the furloughs the US3 did but they might have too being so overstaffed and a recovery looks further and further out.
 
LCDFlight
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:14 pm

canyonblue17 wrote:
LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.


They airline industry has changed dramatically even since 2000. And there may not have been a need for bailouts then - when the industry could trim the fat by losing an airline or two. But today - how many more airlines are there left to trim? At what point does the traveling public wind up getting hurt by a lack of service or much more expensive service because of two few airlines and too little competition?


You are arguing that the public today wants more flights, but the airlines are unable to serve all the travel demand that people have?

Nope, that's not happening now, but the sooner healthy yields do return, the more healthy the industry will become. We do not need to bail out the equipment and airline investors on this. They got in over their head, again. Like they always do.

The industry will continue even if every major carrier goes bankrupt again. How do I know this? I watched it happen in real life before. And I will watch it again. Either now, or whenever "stuff happens" the next time. And stuff always will happen. Call me heartless for opposing multi-billion bailouts for these investors, and yes, a certain number of workers temporarily. It's ok, I lived through it myself. Got a paycut and everything. Sytem sstill runs today.
 
Silver1SWA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:23 pm

joeljack wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.


They do and it’s written in the already negotiated contract language. Unions would rather stick to existing language. Want to change it? Negotiate.

Concessions won’t solve the headcount issue so there’s no guarantee furloughs won’t happen anyway.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Lootess
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:34 pm

Taking water for the pride of not saying they never did a furlough. Something is going to bend when the demand isn't there.

Headcount is probably their biggest issue over salaries, there isn't enough darts to throw on the dartboard of destinations to generate money.
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:36 pm

LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.

- There was no pandemic in the 2000s
- There were no gov't-mandated (misguided as they are) "orders" preventing people from traveling in the 2000s
- Airlines are not in danger of going bankrupt due to misguided/failed business plans; they are on the brink *because* of item #1 and #2 above
- Until these "orders" are either lifted (or forcibly rescinded via court order) it is incumbent on the gov't to "bail them out"
Last edited by ArcticSEA on Tue Oct 27, 2020 6:41 pm, edited 2 times in total.
 
Galore
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:38 pm

Miamiairport wrote:
You can best believe that if there are fewer airlines the coach product will get far worse with airlines shoving as many human bodies as they can into an a/c. Yes International J will likely be a nice experience, for those that can afford it or using OPM. And with fewer more powerful airlines forget about new entrants. I have doubt's that Breeze is going to make it.


? Are they going to introduce standing room tickets, because pre-pandemic, the flights were already packed to the gills. I don’t recall a single flight since 2010 that wasn’t completely full. Unless they get approval for standing room tickets, it’s not possible to “get far worse”. Maybe a tiny bit worse (all basic economy cabin) and a whole lot more expensive.
 
Lootess
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:40 pm

ArcticSEA wrote:
LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.

- There was no pandemic in the 2000s
- There were no gov't-mandated (misguided as they are) "orders" preventing people from traveling in the 2000s
- Airlines are not in danger of going bankrupt due to misguided/failed business plans; they are on the brink *because* of item #1 and #2 above
- Until these "orders" are either lifted (or forcibly rescinded via court order) it is incumbent on the gov't to "bail them out"


Considering Southwest operates domestically mainly, states cannot "order" or prevent people from traveling to their state, they can only make it harder like quarantine mandates, testing regimens ala Hawaii.
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:41 pm

Lootess wrote:
ArcticSEA wrote:
LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.

- There was no pandemic in the 2000s
- There were no gov't-mandated (misguided as they are) "orders" preventing people from traveling in the 2000s
- Airlines are not in danger of going bankrupt due to misguided/failed business plans; they are on the brink *because* of item #1 and #2 above
- Until these "orders" are either lifted (or forcibly rescinded via court order) it is incumbent on the gov't to "bail them out"


Considering Southwest operates domestically mainly, states cannot "order" or prevent people from traveling to their state, they can only make it harder like quarantine mandates, testing regimens ala Hawaii.

You know what I meant. You know exactly what I meant.
COVID won't end in a laboratory; it won't end in the voting both. It will end in a court room.
 
kiowa
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:48 pm

Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Delta probably has the lowest % of unionized workers. Have they imposed paycuts or concessions on their non-union labor?
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:49 pm

kiowa wrote:
Have they imposed paycuts or concessions on their non-union labor?

Yes, a 25% paycut (reduced hours) was in place earlier this year; I believe it has since been rescinded.
 
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TWA772LR
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:54 pm

joeljack wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.

I'm considered management and admin at the airline I work at. All M&A employees were required to take 20 days off between May and Sep 30. My particular team is understaffed so we had our hours reduced per week, also because we are schedulers and they couldn't just have us not work. Mathematically we came out on top because the time we lost wasn't actually 20 but really 17 days worth. But we still did our part and got our job done while (hopefully) still preventing layoffs when possible by doing our job well.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
LCDFlight
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:55 pm

ArcticSEA wrote:
LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.

- There was no pandemic in the 2000s
- There were no gov't-mandated (misguided as they are) "orders" preventing people from traveling in the 2000s
- Airlines are not in danger of going bankrupt due to misguided/failed business plans; they are on the brink *because* of item #1 and #2 above
- Until these "orders" are either lifted (or forcibly rescinded via court order) it is incumbent on the gov't to "bail them out"


Most US based major carriers declared Chapter 11 in the decade or so after 9/11. This crisis is worse in some ways. But major carriers have not been declaring Chapter 11. I am not seeing why this capacity vs demand cannot be solved again through that process. Capital markets are healthy right now. This time, it is unacceptable to rationalize capacity and demand? It worked fine before. Most industry career people kept their jobs also.
Last edited by LCDFlight on Tue Oct 27, 2020 6:57 pm, edited 1 time in total.
 
F9Animal
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 6:55 pm

I hate to see this happen, but... I think WN needs to park alot of planes and ride it out. Like a 90 day reduction is probably their best option, and evaluate the situation at 60 days. We know this pandemic isn't going away, and it will likely still be painful in 2021.

Expansion during this time is insane. Most airlines need to just Seriously reduce the bleeding by reducing it's schedules big time.
I Am A Different Animal!!
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:01 pm

Parking planes is the opposite of what needs to happen.
In ~April thru the early summer, consumer confidence in flying was essentially non-existent.
To restore that confidence, flying must expand (in volume as well as into new markets).

The problem in the US is the media, who seeks to extract every penny of value out of this pandemic.
This is why we went from "15 days to slow the spread" in March to "CASES! CASES! CASES!" today.
It is in their best interest to freak the public out to the fullest extent possible; "stay at home" orders and the like are big business for media companies and Amazon.
But that is a topic for non-av; although it directly correlates to this discussion.

In China, there is no vaccine. And yet domestic travel there is already to ~90% of pre-pandemic levels, and their economy is slated to grow by 10% this year.
In the west, we're in a feedback loop.
 
IrishLessor
Posts: 61
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:03 pm

joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either


Joeblow10.
I think it is widely accepted that things won't magically go back to normal. From the get go of this this pandemic the airline said it would be 2023/4 before things might resemble 2019
However, the mood music is very positive on a vaccine, it is quite probably that multiple big Pharma will deliver a vaccine this year, huge logistical arrangements are being put in place to distribute it. Once the tap starts flowing people will be more confident to fly, and holiday. At first largely for VFR and leisure, but the challenge is for governments to drive positive messaging and make this happen. We live in hope...
Last edited by IrishLessor on Tue Oct 27, 2020 7:06 pm, edited 1 time in total.
 
MIflyer12
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:03 pm

LCDFlight wrote:
Most US based major carriers declared Chapter 11 in the decade or so after 9/11. This crisis is worse in some ways. But major carriers have not been declaring Chapter 11. I am not seeing why this capacity vs demand cannot be solved again through that process. Capital markets are healthy right now. This time, it is unacceptable to rationalize capacity and demand? It worked fine before. Most industry career people kept their jobs also.


This isn't a debt problem for WN - it's a labor cost problem. They have too many people doing too little work (whether you want to measure it by flights, ASMs or RPMs). WN may find pride in its 'no layoff' history but that is a crippling constraint. WARN Act 20% by craft and give each union work force 45 days to accept a pay cut or see furloughs.
 
Lootess
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Joined: Sun May 13, 2018 6:15 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:05 pm

F9Animal wrote:
I hate to see this happen, but... I think WN needs to park alot of planes and ride it out. Like a 90 day reduction is probably their best option, and evaluate the situation at 60 days. We know this pandemic isn't going away, and it will likely still be painful in 2021.

Expansion during this time is insane. Most airlines need to just Seriously reduce the bleeding by reducing it's schedules big time.


Expansion is necessary to keep a bloated workforce. That's the stance they have taken instead of parking and reducing headcount.

The way things are going, something is going to crack.
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:06 pm

Lootess wrote:
The way things are going, something is going to crack.

Groupthink is bad for you. We passed over 1 million passengers last week.
Recovery is a function of expansion/resumption of service. They are directly related.
 
User avatar
jfklganyc
Posts: 6075
Joined: Mon Jan 05, 2004 2:31 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:07 pm

Ive been posting this for months on here, most recently when WN announced its latest round of new cities.

The industry will go through a round of bankruptcy/merger/acquisition/liquidation just like the mid to late 2000s

There is too much debt being piled onto an industry that operates with weak margins historically. This will hinder the ability to conduct business going forward.


Anyone that doesnt realize this is keeping their head buried.

There isn’t a bailout that is big enough or long enough to reverse this.
 
canyonblue17
Posts: 704
Joined: Wed Oct 08, 2008 12:22 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:07 pm

You are arguing that the public today wants more flights, but the airlines are unable to serve all the travel demand that people have?

Nope, that's not happening now, but the sooner healthy yields do return, the more healthy the industry will become. We do not need to bail out the equipment and airline investors on this. They got in over their head, again. Like they always do.

The industry will continue even if every major carrier goes bankrupt again. How do I know this? I watched it happen in real life before. And I will watch it again. Either now, or whenever "stuff happens" the next time. And stuff always will happen. Call me heartless for opposing multi-billion bailouts for these investors, and yes, a certain number of workers temporarily. It's ok, I lived through it myself. Got a paycut and everything. Sytem sstill runs today.[/quote]

"They got in over their heads, again" are you kidding me. These are businesses that go where the money goes - and serve the public in the process. They were doing a pretty decent job doing that until - through zero fault of their own this time - Covid slammed demand. To compare this situation to previous situations where airlines were mismanaged into bankruptcy is ludicrous.
negative ghostrider the pattern is full
 
EssentialBusDC
Posts: 128
Joined: Sun Jan 15, 2017 3:06 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:09 pm

joeljack wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.


They do. Paid (At reduced hours) and unpaid time off, early retirements and the biggest lever to cut costs in drastic times -Furloughs.

But why use all the existing cost cutters when you can get even more from Labor?

Right now Cost is not the cause of the losses, it’s a revenue issue.
Last edited by EssentialBusDC on Tue Oct 27, 2020 7:16 pm, edited 1 time in total.
 
CobaltScar
Posts: 763
Joined: Thu Mar 23, 2017 2:30 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:11 pm

I've said this before, but Southwest has Flight Attendants that have not worked a single flight in years. They just go to recurrent once a year and still get 5+weeks of PAID vacation from the company. Thats just the tip of the iceberg.

Also due to the way they bid their schedules, they (the ones that actually fly) can chose vacations weeks and then bid a schedule of flying that overlaps the vacation days and the company will remove the flying and PAY them for it.

List goes on and on. I can only imagine what the Pilots can get away with. So I have no sympathy for their ship taking on water when they are so incredibly wasteful as is.
 
LAXLHR
Posts: 456
Joined: Sat Dec 03, 2016 10:07 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:12 pm

joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either


Read what you wrote, and then think about it. If the above is true, then forget about an airline industry coming back, there will be no people left on earth. We'll all be dead! If the regular flu vaccine does not work (it doesn't) and that was 100 years in the making, then you really think they will have anything worthwhile for decades to come.

I feel bad for the industry, and others, but people need to just wake up worldwide to what is really going on. Weakened immune systems cannot defend.
BA IB ET JM EA GK PA VS AA SN HP CO W7 WN NW DL UA AC US LH LX OS JL QF QR WY MH CX U2 EK 9W UK TP VY VN LO OK OZ UL SQ LA

707 727 L10 732-NG 741 742 743 744 752 753 762 763 772 773 787 DC8 DC9 DC10 M80 M11 100 AB3 310 318 319 320 321 330s 340s 350 380
 
lhrnue
Posts: 376
Joined: Sat Jun 05, 2010 2:47 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:14 pm

Stupid questions ... does Southwest have any income from Cargo? I guess it's impossible with the short turnarounds and no containers.
 
User avatar
ArcticSEA
Posts: 172
Joined: Thu Oct 15, 2020 8:04 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:15 pm

Humanity (science) has never been able to contain or otherwise "zero-out" (hello, New Zealand) *any* respiratory virus. Ever.
You want to talk about a new normal? Don't talk about masks, distancing, and the other BS. COVID is here to stay.
The industry either survives, or it doesn't. I'm betting on survival.
 
Boof02671
Posts: 2273
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:16 pm

joeljack wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.

Doesn’t work that way. When we in the industry took concessions the airlines didn’t give us anything back when times improved. They made us wait till our contracts were amendable and negotiate for years to get improvements. AA took concessions in 2003 and again in 2012 for a five year CBA. Those employees just got a new CBA this year with improvements. They negotiate for over four years to get improvements back do this five years of concessions turned into almost eight years.
Last edited by Boof02671 on Tue Oct 27, 2020 7:21 pm, edited 1 time in total.
 
Boof02671
Posts: 2273
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:18 pm

ArcticSEA wrote:
kiowa wrote:
Have they imposed paycuts or concessions on their non-union labor?

Yes, a 25% paycut (reduced hours) was in place earlier this year; I believe it has since been rescinded.

No it’s not rescinded
 
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spinotter
Posts: 802
Joined: Wed May 27, 2015 1:37 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:29 pm

LCDFlight wrote:
The airline industry is a volatile business. The "confidence" seen in recent years was misguided and wrong. It began to melt into complacency.

Airline bankruptcy is ALWAYS a possibility, at all times due to industry structure and free entry. I have worked for bankrupt airlines in the 2000s and learned all about it. There were not grand bailouts then, nor did the public believe that was necessary.


Interesting discussion. I wonder what it is about the air transport industry that has led to it's being the victim of this boom and bust cycle? The pandemic is a black swan for sure, but ever since deregulation we have seen one merger and bankruptcy after another. Too many airplanes chasing too few customers? Should the industry have remained under CAB regulation? It doesn't seem to me that a "normal" type of business should have to go through these cycles.
 
User avatar
ArcticSEA
Posts: 172
Joined: Thu Oct 15, 2020 8:04 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:36 pm

spinotter wrote:
Should the industry have remained under CAB regulation?

Stopped reading there.
 
Miamiairport
Posts: 741
Joined: Tue Apr 10, 2018 8:14 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:37 pm

WN (and every other airline) can find cuts to make but it's not going to be enough to save them. Flying 50% of previous capacity on garbage fares to get Mr and Mrs John Q to fly isn't going to save any airline. As long as there are "COVID" conditions business travel except for a minimal percentage is going nowhere. The economy will continue to crater, it's already moving up the white collar chain, and unemployed, financially troubled people don't buy airline tickets. So rambling on how WN might have some FAs getting paid to mostly sit on their behind isn't a real answer. I think Kelly mean't the sinking ship is the industry, not just his airline.

We can simply let every airline file Chapter 11, fire people, walk away from obligations and commitments and try to emerge as much smaller entities in this new world. But the end result will only be a few surviving airlines. Think airline travel has become horrible now, just wait.

Or we can realize that the virus is here to stay and since man has been roaming the Earth virus have come and gone. Yes, people will die, mostly the old and infirm. But I'm sorry when was life throughout the history of man ever really fair?

Truthfully if we ever went back to air travel of the 1960s but the capacity thereto personally I'd not shed a tear, assuming we got back that flying experience again (sans cigarette smoking). But I realize that most people don't want to or can't pay $1,500 to fly coach coast to coast. People want some how for there to be this perfect solution and it's just not there.
 
User avatar
ArcticSEA
Posts: 172
Joined: Thu Oct 15, 2020 8:04 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:48 pm

Miamiairport wrote:
Or we can realize that the virus is here to stay and since man has been roaming the Earth virus have come and gone. Yes, people will die, mostly the old and infirm. But I'm sorry when was life throughout the history of man ever really fair?

The adults in the room understand this. Talk about a new reality.
 
737MAX7
Posts: 158
Joined: Mon Nov 13, 2017 7:26 pm

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 7:55 pm

lhrnue wrote:
Stupid questions ... does Southwest have any income from Cargo? I guess it's impossible with the short turnarounds and no containers.

Yes we make money on cargo. Just because you don’t have containers doesn’t mean you can’t ship cargo, it just gets bulk loaded. I see plenty of it 6 days a week.
 
Lootess
Posts: 516
Joined: Sun May 13, 2018 6:15 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 8:02 pm

ArcticSEA wrote:
Lootess wrote:
The way things are going, something is going to crack.

Groupthink is bad for you. We passed over 1 million passengers last week.
Recovery is a function of expansion/resumption of service. They are directly related.


Still not enough for the planes in service and workforce. They'll get through the rest of 2020 okay, with enough water on the ship to still be afloat. But when travel falls like a rock in January like it normally does, that's going to be an interesting issue.
 
rbavfan
Posts: 3630
Joined: Fri Apr 17, 2015 5:53 am

Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 8:15 pm

joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either



Delta is playing it smart cutting back fleet and noting avter thing improve they will remain a smaller carrier than before. There were already too many flights & too much capacity, except for thanksgiving & Christmas holidays. But I still think after a few years thing will stabilize and travel will eventually be back to last years levels. It's just going to be a while. WN should pull through it, American may not. While they have. a newer fleet they are heavily in debt due to that new fleet. Bad timing.

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