JMT21

A few recent headlines:
Stocks end higher amid global stability signs

Jobless claims at lowest level in month

Fed: Most of U.S. seeing modest growth

and my favorite

Worker productivity rises as wages soar

Just a little taste of reality for all you "sky-is-falling", "outsourcing is killing America", "American jobs and wages are circling the drain" folks. Enjoy.

NGINEWHOISWHAT

Hello JMT, I was doing some reading a found an article by a Princeton Economics professor. He reversed his position on globalization and free trade. The sky is falling ... actually, it's more of a gentle let down. I'll post the link.

Tom

http://www.princeton.edu/~ceps/worki...119blinder.pdf,

http://www.aflcio.org/issues/jobseco...born_China.pdf

Airbum

As far as pay a quick look on apc showed Cathy US based side of pay well below the the two major US cargo companies, approxiamtely 25% lower. Being simply labor this fact IS brought up at the table during contract talks. And yes this drives down the US pilots pay.

Led Zep

..........

Led Zep

I'm not trying to flame, but just one outsider's view of what is seen when looking at the passenger airline industry.

First, foreing ownership. Over the past 6 years, this is what has been observed when looking at the pax carriers:

1: 4 major U.S. airlines filing for Chapter 11 bankruptcy protection, one of
them filing for it twice.

2: Most of the carriers reporting record losses.

3: Employees receiving furlough notices in record numbers.

4: Employees forced to endure cutbacks in wages and benefits.

5: Pensions literally being erased.

I am not advocating foreign ownership of any U.S. corportation. I am looking at the way the airlines have been managed over the last half-decade and cannot help but wonder if the management blunders could possibly get any worse. People talk about how bad foreign ownership of U.S. airlines would be for it's employees, but one has to admit that the last 6 years have not exactly been a honeymoon for labor under the current domestic ownership.

Second, the airlines have to come to the realization that price is NOT the only factor when most people shop around for a ticket. Service should also rank very high. When travelling just a few hundered miles, I look for the lowest fare. But when travelling longer distances, especially overseas on personal travel, I am willing to pay a higher fare for better service. And I have no problem spending my money on a foreign carrier if they can provide that service.

The service on domestic carriers, with very, very rare exception is absolutely pathetic. If the pax carriers want to be successful, customer service and satisfaction has to improve.

NGINEWHOISWHAT

My only concern with foreign ownership is this: If a Chinese airline could own an American carrier, they could do it a lot cheaper and almost overnight put thousands out of work. Other countries don't have to refine fuel to our levels. I don't know if this is true of jet a, but it's true of Diesel and they are nearly the same. Less refinement equals cheaper fuel.

The leases remain the same, but the cost of labor dramtically decreases. Instead of making 100-1500 per day, it's much less. So, THAT'S the primary concern my friend. We can not compete with a communist nation with a bazillion people.

If they come in and buy us, they can put whatever crews on whatever routes they want and downsize us. Keep the profitable flying for themselves and then sell us.

The Europeans can do the same thing, but I'm not an economist so I can't say for certain. A lot of costs are higher in Europe, but despite what some people say, the dollar is still king although it has taken a beating. Everyone still wants into the US market.

Led Zep

I understand what you are saying, and I don't disagree with you. As far as labor costs go, I personally think we are pretty much there already. My basis for that opinion lie with the likes of Skybus and the myriad of flying jobs that people are willing to do and accept the low wages in doing so for very long periods of time. I hope that trend changes.

Velocipede

Oh, please. For domestic travel, price is the only consideration. All the yapping is just lip service from everyone who wants the "Pan Am" experience at the Southwest price.

The second half of your statement may be true. When you lock yourself in a tube for 15 hours, you may consider service, but for domestic operations, price is king.

The average passenger is only interested in going from Dallas to Orlando for $49. And everyone else has to suffer because the airlines won't price their tickets high enough to afford amenities anymore. You want something to eat? You'll pay extra for it. Take an extra suitcase? Pony up. Want a paper ticket? $10 please.

That's what you asked for when you supported deregulation and let the LCC monster out of the cage. Now everyone has to work toward the magic $.07 seat mile.

FDXLAG

Good,

I would rather not pay $475 to go DFW to MCO. Even if it included a $3 meal and a $.75 paper ticket.

Under regulation I probably would have a choice of 3 flights instead of 50 +. There are a whole lot more pilots flying those 50 flights than there were flying those 3 flights. A whole lot more people riding too. They may not meet your standards, but they are spending money.

Service does count. When I go to MCO I fly on NW at a little premium because I don't like the SWA cattle call. If it was a big premium I would probably take SW.

Velocipede

A whole lot more flying those flights at RJ or Skybus wages. That's because the only place left for the airlines to cut costs is labor. The price of capital is fixed, the price of oil is fixed. The ONLY way to sell a $49 ticket is to pay pilots B6 wages. Or worse yet, Skybus wages.

Once a B6 or Skybus proves that pilots will sell themselves for those rates, the other carriers have to match. Some use bankruptcy court, others use arbitrators. But the overall wages sink to the lowest common denominator and right now, that's jetBlue. Soon it will be Skybus.

Eventually, with Open Skies, you'll have a bunch of Chinese or Indian airlines flying from BWA to ORL. There will be 50 flights a day, as you put it, with ZERO American pilots on the flight decks.

But the consumer will be happy. The WalMartization of the airline business is about to start in earnest.