Quoting Itsnotfinals (Reply 187):
Their base bay (As everyone's base pay in the US) does not include benefits or tax deferred income, as you probably know.
[quote=Itsnotfinals,reply=157]You forgot 401K, medical and other benefits that are all a benefit (although US workers tend to ignore cash or benefits they can't spend immediately) those benefits are income whether you see that or not. |
Benefits do not pay the mortgage, food bills or car payments. This is basic "cash flow" flawed. Without cash flow business and people do not survive. No-one bases an employment plan on benefits. The argument is ludicrous. You can offer any a.netter a million in benefits, but without salary the employee can't and won't take the job. Additionally if
SX doesn't survive, with us all knowing more than 9 out of 10 start up airlines don't make it to through their fifth year, how much are the benefits worth afterwards? Are these benefits fully protected and untouchable by management? Unlikely....
Where I mostly remain skeptical is the movement of assets around on very short notice. I am now very concerned that they may be transforming into a ACMI leasing operator. They have already burnt a good will in the west, and now
GSO is a new product? How long will this last? What happens when another state offers financial support? Or the
NC funds dry up?
65 aircraft on the way in and they cannot maintain the first cities with a few acft indicates a business model on a thread. So how do they become the one of ten that survives?
CMH doesn't support long term success for 65 birds?
Generally a planner will maintain a list of your top 20, 30 or 60 or so cities, if five of the first ten fail or don't meet expectations then what do you do with the remaining 55 aircraft? At weaker airports, then the probability of sucess is driven lower mathamatically. The business plan should have laid out the sure bets for start-up and if those can't make it then the long term perspective is very weak.
To put this into a perspective: If I were to start a chain of widget stores I would open them where I think sucess is highly gaurenteed, if five of the first ten choices have to be adjusted or dropped within three to six months of opening I then critically absorb huge operational losses (a cost I cannot accept as a start-up business) as well as damage to my brand.......... The
SX brand is not strong at all, that will take a minimum of two years to build. Further more, movement of assets and the draw-down of the west breeds a level of fear in the consumer towards whether the brand will indeed survive. I for one suggest buying
SX tickets from one perspective "If you can afford to lose the cash, then its worth the risk. If you want to be assured of a seat then it would be a lower risk with a more reputable airline."
CMH just lost
B6 which should be very concerning to Elaine and staff at
CMH. If
SX eventually fails
CMH may end up with an extremely damaged (trashed) market with less service than it started with.
DL planning recently mentioned concern was not with the
SX routes, but rather their concern is similar to mine;
SX may damage yield and reduce consumer expectations at
CMH to a level where other airlines will not be able to serve the market with sustainable yeilds. The $10 fare carries a great deal of baggage with impact on other service at
CMH. The first tower just tumbled with
B6 departing.
SX may transform
CMH into a
PIT without a similar business base of
PIT. Oil just hit $92 which puts further pressure on the revenue side of the ledger as the loss per seat will rise on the low end of the scale.
SX may eventually be forced to increase the number of $10 and $20 fares available to get a level of cash flow with seats being perishable, in an attempt to build loyalty.
The problem is the $10 gimmick. It places the brand into a very very very very low value category.
.