October 09, 2005: "Over the past 10 years airfares have fallen across the board while wages in the industry have continued to rise, in part because of workers' ability to bring an airline to a halt."  That says it all, in a nutshell, as to why Legacy Airlines are fast going down that bone yard road leading to the dinosaur tar pits.  To survive in this highly competitive world, British Airways unions will have to bite the bullet and stop resisting attempts to increase the productivity of all airline employees.  
    The new CEO, Willie Walsh, was surrounded on all sides by powerful unions, when he saved "Aer Lingus, the Irish state-owned airline, by cutting fares, overheads and jobs."  And, he managed to do that while convincing the Aer Lingus workforce to support his decisions.  It now remains to be seen if the unions at BA will be as rational as those at Aer Lingus.  I am not holding my breath, but I would love to have my skepticism proved unjustified.  If they support the proven Walsh strategies, the airline will return to profitability and jobs will be preserved and even expanded in the long run.  It only requires that union bosses quit trying to stir up rank-n-file hate, by constantly demonizing management.  

April, 2005:  Growth has accelerated rapidly over the past five years, at Non-Union Skywest Airlines.  "In 2000, SkyWest operated just 16 CRJs, according to Raymond James & Assoc. At the end of 2004, it was up to 137 CRJs (125 CRJ200s and 12 CRJ700s), including 28 added last year of which 24 were new and four were purchased from Independence Air. It will take a further 20 CRJ700s this year, a move that will require hiring 200 more pilots. Sixty-nine Brasilia turboprops round out the fleet."

The carrier also enjoys "the strongest balance sheet in the Regional airline industry," according to RJ&A. Its long-term debt to capitalization ratio was 61% at Sept. 30, 2004, compared to an industry average of 92% among its peers. Long-term debt totaled $463.2 million at year end and it was sitting on a cash hoard of $550 million. 

September 07, 2005:  Jetblue traffic rose by 29.8 percent in August.  RPMs (revenue passenger miles) rose to 1.98 billion, compared to 1.5 billion in August of 2004. Capacity rose 28.7 percent to 2.21 billion Asks (available seat miles) from 1.71 billion.  Load factor, was up too:  90.1 %, compared to 89.3 %, in August, 2004.  For the first 8 months of this year, JB's traffic has grown by 30.8 %, to 13.52 billion RPMs.  Capacity rose 25.1 percent to 15.39 Asks.  Load factor, to 87.9 % from 84.1 %.  This all provides a stark contrast to what is going on at the Legacy Airlines, which still have so many union millstones hanging about their necks.  

Please note:  Jetblue is a non-union airline.  See The Amazing Jet Blue.

September 02, 2005:  Shares of SWA upgraded, while AMR downgraded.  SWA  said that "traffic rose 13.7 percent to 5.67 billion revenue passenger miles, capacity rose 12.2 percent to 7.45 billion available seat miles, and load factor improved 1 percent to 76.1 percent."  Jet Blue shares gained 34 cents.  Air Tran shares rose 14 cents.  In contrast, NWA shares fell 39 cents, DAL shares fell 3 more cents, UAL shares slid 2 cents.

August 30, 2005:  NWA losing $4 million per day; seeks more concessions from its unions. The idiotic strike by its mechanics union, is now in its second week. Meanwhile, LCCs are still making profits, creating new jobs, expanding their routes, gaining market share at the expense of the Millstone Legacy Carriers, and buying new planes.  Only a militant acolyte unionist cannot understand the "why?" of such a stark contrast.

August 09, 2005: DAL stock plunges after one analyst warns to sell Delta shares.  He fears DAL, the 3rd largest carrier, is close to filing bankruptcy.  "The company's market capitalization - the total value of the company's outstanding shares - fell to $286 million, less than one-third the amount of discount carrier AirTran Airways despite Delta being 15 times larger in terms of annual revenue."  DAL has almost $10 billion since January 2001.
    While high oil prices are now a very strong factor, there is no doubt that at least several of those wasted Billions, would not have been poured down the drain, had the unions immediately cooperated with management, to slash costs as much as possible, as soon as possible.  Persistent foot-dragging, by the unions, has been the biggest factor of all in management's failure to bring costs in line with actual revenues, since the end of 2000.  Unions don't create, protect and preserve jobs; they destroy them. 

August 08, 2005:  The Last Hurrah of NWA unions?  "Northwest's current actions are particularly egregious examples of the anti-union tactics used against our union brothers and sisters by the corporate world. It is only through solidarity that we can preserve the gains that unions have made, and preserve middle class America." So says Ted Ludwig, AMFA Local 33 President, at NWA.
    Seems I heard much the same kind of bilge, from militant unionists at Eastern Airlines, on their way down the bone yard road to the dinosaur tar pits.  Unions don't create, protect and preserve jobs; they destroy them.

August 07, 2005: "Struggling Delta Air Lines Inc. and Northwest Airlines Inc. are bankruptcy bound, he said, and he also believes Fort Worth-based AMR Corp. and Continental Airlines Inc. of Houston will eventually have no choice but to seek similar protection because they won't be able to shed debt and restructure contracts outside of Chapter 11. That inability to shed costs will leave them at an unworkable competitive disadvantage to competitors who have reorganized. The legacy carriers are unsustainable in the long run," said Mr. Cordle, whose dour outlook isn't embraced by all industry watchers, some of whom think the industry might be seeing light at the end of the tunnel. Mr. Cordle says that's more like the fading glow from an era's sunset." 

August 06, 2005:  NWA unions pledge to strike, management pledges to continue flying if they do. "The airline is seeking $1.1 billion worth of wage concessions from its workers. It got $300 million from pilots and salaried employees last year, but mechanics and flight attendants have resisted.  The company has proposed $176 million worth of cuts from mechanics, including a 25 percent pay cut. It also wants to lay off roughly 2,000 of AMFA's current 4,500 Northwest workers." 

August 01, 2005:  NWA lost at the rate of $4 million per day, during the first half of 2005.  Unions still preparing to strike.  Apparently, they seek the same kind of "union victory" for Northwest, that was the result of the intransigent unions striking Easter Airlines.  NWA CEO Doug Steenland, "...said that many of company's major competitors have significantly lowered their labor costs, both in and outside of bankruptcy, leaving Northwest with the highest labor costs in the industry."

July 25, 2005:  NWA unions prefer War to Survival.  NWA directors and other management types are getting rid of their own stock, indicating they suspect bankruptcy is inevitable.  FAs have filed a lawsuit to try and prevent the company from training replacement workers, in anticipation of a strike.  "Bankruptcy, which could come quickly in the event of a strike, almost certainly would lead to termination of employee pensions and even unilateral cuts in pay and other benefits. The result would almost surely be a smaller airline with fewer jobs. As of March 31, Northwest had $2.3 billion in cash and marketable securities, down from $3.1 billion a year ago. The company reported a net loss of $862 million last year."  Equity analyst, Ray Neidl says that this country needs only two or three Legacy carriers.  There are now six.  Unions ignore that kind of overcapacity at their own peril.  Down the bone yard road to the tar pits, filled with dinosaur airlines.........  Better to be dead out of a job, than admit union economic policies amount to total Luddite idiocy.

July 24, 2005:  Excerpt. "Several years ago I attended a party where the main topic of conversation was pensions and benefits. No, this was not some gathering of accounting geeks, but rather a social gathering of folks who all worked for United Airlines, a company currently on the brink of bankruptcy. The conversationalists were international flight attendants, and they made a point of letting me know that a) they were the cream of the flight attendant crop, and b) they’d never go back to humdrum workaday routines of domestic travel.

"Silently, I knew that the jobs they described, with seven-day work months paying $80-$90,000 a year with benefits, couldn’t last. They didn’t. Today, of the three ladies at that party, two took early retirement, while the third couldn’t afford to leave United. She now works four-day weeks as a domestic flight attendant and is thankful to have the job. 

"While the convenient excuse for the collapse at United (or any other airline) is to blame 9-11, the reality is that airline worker benefits and salaries were at unsustainable levels long before the terrorist attacks. The problem arises when the innovator fails to respond to the challenges of the upstart. That’s what happened in the airline sector: companies and their unions (especially at United) refused to recognize the competition Southwest and others brought to the market. 

July 23, 2005:  Read this to find out how politicians and unions conspire to hold down the airline consumer, while they pick his pockets.  American Airlines was able to show a slight profit this last quarter, not because it provides its customers with the best possible product at competitive market prices, but because it continues to lobby for the Wright Amendment, which prohibits airline customers from having Free-Market choice, when flying out of Dallas/Ft.Worth. The more the unions get their way, the more the customer must pay.

July 23, 2005:  NWA mechanics ready to strike.  Airline plans to continue operation and GWB will not intervene. "Since 2000, the company has cut some 4,400 mechanics and cleaners, who also are represented by AMFA. Much of this has been done through outsourcing. The union fears that the airline will farm out still more jobs in the months ahead. The management wants $176 million in concessions from AMFA, which has countered with a plan it says will save the airline $143 million. The airline puts the value of the union plan at $87 million, tops. Northwest warns that if it can't get these concessions plus givebacks from other unions for a grand total of $1.1 billion, it faces bankruptcy — an option that could deal its workers an even bigger financial blow."

July 19, 2005:  In their haste to drive Northwest Airlines into bankruptcy, the mechanics union at NWA has voted to strike.  NWA is forecast to lose "$3.29 a share, with a loss range of $3 to $3.80 among the nine analysts surveyed -- wider than last year's range of 90 cents a share."  Apparently, the union workers don't really need or want those jobs.  They would rather see the LLCs continued to expand their market share, while NWA continues down the bone-yard path to the bankruptcy Tar Pits.  Northwest plans to continue flying, if they strike.  They are outsourcing much of their maintenance, and hiring replacements for the strikers.

July 22, 2004:  Delta Pilots finally start to wake up to Reality (just a little bit, anyway.....).   DAL just posted its worst quarterly loss, since 1978 ($1.96 billion in the second quarter, causing Standard and Poor to lower DAL's debt rating for the 3rd time in 2004).  The odds of a bankruptcy are growing rapidly.  DAL-ALPA pilots now offering to take a 23% wage cut, after dragging their heals for many months, while the hemorrhage continued unabated.  DAL  requested  ALPA  to agree to a 30% cut last winter.  Since they are the highest paid in the industry (and probably also the least productive), that would seem to be a very reasonable request to rational minds.

July 22, 2004:  AMR ekes out a profit of $6 million for 2nd quarter.  That amounts to 3 cents per share.  Last year in the same quarter, AMR lost $75 million.  Continental lost $17 million in the 2nd quarter of 2004.  The pilots at AMR finally got real many months ago, barely averting bankruptcy at AMR.  That made all the difference in the world, when compared to the $1.96 BILLION loss at Delta.

July 22, 2004:  Northwest Airlines 2nd quarter loss was $182 million.  That amounts to $2.11 per share.  NWA has been seeking wage and other concessions from its unions for over a year, without success.  They hope to increase their daily load factor, to help offset higher fuel costs.  But, if passengers continue to flock to lower price airlines, NWA will keep trudging down the dinosaur path to the tar pits.  Only a sudden change in union mentality can change that scenario, but history indicates that is a rather remote possibility.

July 11, 2004:  Herbert D. Kelleher, the chairman of Southwest Airlines, describes the govt. airline loan guarantees as little more than life support for uncompetitive airlines.  Until the airlines restructure their business models to reflect what the consumers are demanding (low fares being the core of the model), they will just be throwing good money after bad.  It is obvious this has come down to a battle for the survival of the fittest.  The Union Dinosaurs of Eastern, Braniff and Pan American have already succumbed to the Free-Market tar pits.  Now, the test is to see if the remaining Union Dinosaurs have learned anything, while they witnessed the carnage.  If not, Delta, United, Northwest and US Airways are surely next on the tar pit list.  Free-Markets do not evaporate simply because the Roger Halls and Frederick Dubinskys of the world, assure their gullibles they do not exist.  ALPA's magic wand (in the shape of a baseball bat), like sugar candy in a hurricane, has melted away, leaving only empty rhetoric in its wake. 

July 11, 2004:  Will UAL be forced to dump its pension obligations on the PBGC?  If so, retired UAL Pilots could lose half or much more, than they are currently receiving.  UAL continues to lose money: "$2.8 billion last year on revenue of $13.7 billion. Industry projections have it losing more than $1 billion this year too."  The costs of bankruptcy itself are enormous.  Only the lawyers come out on top of that game.  Had United's unions worked with management when the alarm was first sounded, over two years before UAL was finally forced into bankruptcy, they might have had to take less of a hit, and the pensions would be less in jeopardy now.  But Dubinsky and other union leaders insisted upon digging in their heels, until billions were flushed down the sewer----billions that could have gone towards necessary restructuring outside of the bankruptcy route.  With such union millstones hung about the neck of United and other Legacy Airlines, is it any wonder they are going the way of the dinosaurs?

July 09, 2004:  Delta Pilots still dragging their heals while the airline hurtles towards bankruptcy.  They appear to have learned nothing from the experience at United, US Airways and AMR.  DAL pilots are only offering pay cuts of 13.5 percent and some work rule changes. DAL management insists it must reduce pilot costs by 45%, including pay cuts of 34.5%, plus productivity increases.  DAL-ALPA pilots remain among the highest paid in the industry.

July 02, 2004:  UAL Pension Plans on Shaky Grounds. 
     "Just a few weeks ago, United said in a bankruptcy court filing that it viewed its pension plans 'as untouchable unless there was no other choice.' But that was before the government denied loan guarantees to United. O. V. Delle-Femine, national director of the Aircraft Mechanics Fraternal Association, said he now feared the worst. 'You've got to gut the pension plans,' he said. 'I don't see any other way.'"

July 01, 2004:  UAL Labor Costs still too high to acquire loans to exit Bankruptcy.<>
     "UAL, the second-biggest US airline, must cut costs to attract investors and lenders that will replace the US$2 billion in funding that would have come with the guarantee. The three-member Air Transportation Stabilization Board voted unanimously to oppose the request for a US$1.1 billion guarantee, repeating its stance that UAL is capable of getting loans without taxpayer support.
    United's first-quarter cost to fly one seat one mile was 10.2 US cents while it was 9.5 US cents at American Airlines and 11.7 US cents at US Airways.
    Even after last year's worker concessions, United's costs were 40 per cent higher than the 6.1 cents at JetBlue Airways Corp, a New York-based low-fare carrier. Southwest, the biggest discounter and most profitable US airline, had a unit cost of 7.8 US cents. US Airways wants to get its cost down to between 7 cents and 8 cents, Mr Stephan said."

June 27, 2004:  DAL inches closer to Bankruptcy, as its pilots still refuse Reality.  They are among the very highest paid pilots in the industry, the $2 billion per year ALPA cost at DAL, being 50 % higher than any other airline.

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