Waves

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    • Mon Mar 17th 23:50 PM | Rating: 0 0
      Commented on:
      Fixing the Airlines: Reconfigure or Reregulate
      Dr. Cook,

      I applaud and appreciate your articles and in depth research. Being employed in an industry that is sooooo full of annalistic experts that think they know all of the answers, but really don't have a clue, it is refreshing to read someone that DOES HAVE A CLUE.

      At the risk of sounding self important, I continue. As a seasoned pilot, I have an ego to maintain, so please read on. ha I have been flying airplanes (GA, Navy fighters, Airlines) for over 32 years. Man I"m getting old. I am an FAA and military instructor pilot. I have also been maintaining aircraft with an A&P and IA (Inspection Authorization) for over 25 years. I have a Bachelor's degree in Aviation Maintenance and Management. What does this all mean? Nothing at all really, except that I, like many fools, love aviation and have a vested interest in it. Unfortunately, my wife and I have both devoted our lives to it. How smart is that? ha I knew I should have gone to med school. Damn! Orthodontics is where it's at. ha

      I would like to comment on all of the above comments, or even better, I would love to discuss in person with each and every commentator, and each and every point. Many of them have valid points, while many of them unfortunately do not really understand the dynamics of the entire airline industry. They may think they do, but they really don't. PUNDITS hits on a few of the airline's problems, but he or she still seems like an outsider that really is shooting from the "investor" sidelines. I'm glad that various people take interest in the airline industry, but I sometimes wonder why.

      The true bottom line is that the airlines are a unique business that is highly governed and regulated, extremely highly taxed, highly leveraged, requires HUGE capital to operate, and consumer expectation is always perfection (100% safety) with very little cost.

      As far as safety goes, management cannot afford to pay (customers don't want to pay) for top of the line experienced pilots (ie. ex military or high time GA pilots) so who do you think are flying those regional jets? I had a co-pilot once tell me that he would never put his family on a regional jet. I asked why not? He said," I know who's flying those jets, because I used to be one of them. They have no idea of what they are doing." Great warm and fuzzy, huh? The good news is that most of the latest and greatest aircraft technologies, make up for pilot in-experience. Aircraft, navigation systems, redundant mechanical systems, and problem alerting systems, have reduced pilot workload and experience necessary to handle most catastrophic events.

      I would like to continue, but must run.

      Thanks, Dr.Cook.
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    • Mon Mar 17th 10:38 AM | Rating: 0 0
      Commented on:
      Fixing the Airlines: Reconfigure or Reregulate
      P.S. I agree with the Airbus driver! A good domestic route feed to an international operation is the way to go. SW has neither. If I'm not mistaken, United paid $120 mil for Pan Am's South American routes, and the operation paid for itself within one year. Delta's management team (under Ron Allen) didn't want the SA routes because they said there was no money to be made in SA. Instead, they purchased the European route structure, lost huge amounts of money there, and then abandoned most of that route structure. Those decisions didn't seem to phase management; however, many employees took it in the shorts.

      All for now
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    • Mon Mar 17th 10:21 AM | Rating: 0 0
      Commented on:
      Fixing the Airlines: Reconfigure or Reregulate
      All of these statistics and graphs are fine, but had SW not been heavily fuel hedged, they would have lost money just like the rest of the airlines. Many airline analysts mistakenly imply that SW should be the model for all airlines to use. Yes, they are well managed, but when, or if, their fuel hedging program ever lapses, we shall all see the flaws in their type of operation.

      Due largely to their lower fuel costs, throughout the years, SW has been able to charge much less for a ticket than their competitors. The so called "loyal customers" that airline management teams imagine, have obviously migrated to SW to save dollars. This trend of losing "loyal customers" has been taking place for a couple of decades, and cannot be reversed over night. Other airlines such as Jet Blue, and AirTran, have had similar success charging lower fares by paying their employees lower wages, and also having substantially lower aircraft maintenance costs.

      Delta's prior management team (more specifically, CFO Michele Burns, under CEO Leo Mullin) decided to sell most of their fuel hedges, because, "everyone knew that fuel was going down to $28 per barrel." Great foresight, huh? With fuel topping $111 per barrel, is it any wonder why airlines cannot stay in the black?

      Interesting read, keep um coming, Victor.
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    • Mon Mar 10th 12:01 PM | Rating: 0 0
      Commented on:
      Delta/Northwest: Evaluating Company Performance in a Dysfunctional Industry
      Great article! I wish our CEO understood these concepts. As a pilot for Delta Air Lines Airlines for nearly 20 years, and my wife a 20 year DAL FA, we were unfortunate victims of (more) mismanagement during the Pam Am debacle. My 4 year degree in airline management doesn't make me an expert, but it certainly gives me a better understanding of how the industry could be run differently.

      Back in the early 90's, under the control of Ron Allen, Delta purchased parts of a dying carrier for hundreds of millions of dollars more than it was worth. It was a total disaster in every way, especially from the Delta employee's standpoint. Short term, we ended up with about 6000 Pam Am employees, a handful of their trashed airplanes, and some of their route structure. Long term, we ended up with about 6000 employees and their multiple class action law suits, NO airplanes, and we abandoned much of their route structure. What a deal! Pam Am employees were integrated into our senority list, but some felt that they didn't get enough from the deal. So the law suits flew. It literally took my wife and I about 3 years just to get back to our original date of hire senority numbers. Shortly after this wonderful merger (called an acquistion), Delta started furloughing pilots for the first time in it's history (some will say second time). As it turned out, we had Pam Am pilots flying Delta airplanes, while many Delta pilots got furloughed. In more recent times, due mostly to mismanagement, the company was dragged into a bankruptcy. All of the employees ended up with huge compensation cuts and work rule changes, all the while the previous management walked away with wheel barrels full of money (Mullin & Associates). As a result of this, it has been estimated by some that the pilot work force took nearly 56% in compensation hits including the loss of our pensions. Our pensions were something we had previously bargained for in lieu of more pay. Sooooo, many news articles seem to indicate that the Delta pilots are in favor of a merger with NorthWest. I can't imagine where they come up with such nonsense.

      By the way, don't be fooled by the misnomer "de-regulation.&q... The airline industry is one of the most highly regulated and taxed industries in the US. I've been told that it is taxed more heavily than the alcohol, tobacco, & firearm industries combined. Also, the airline industry dosen't make a move without many government entities approval. In reality, "de-regulation&qu... meant the subsidy money stopped (or slowed down to almost nothing), but the regulation continued.

      The last merger disaster, the employees ended up with a t-shirt that said, "Above & Beyond." If we merge with NW and lose our shirts again, I sure hope we get another one of those great t-shirts for a replacement!





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