Continental furlough question
02-11-2008, 07:41 AM
#31
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,171
Jsled, I didn't find the breakdown for labor costs. I was hoping for a detailed comparison of each company by the numbers, not anecdotal comments about management. I've already acknowledged that they're evil; we're now discussing whether or not they're inept.
Are you following my comments on labor costs? AMR Corp's labor costs include Eagle costs; UAL's labor costs do not include regional labor costs. So we're not doing an apples to apples comparison by saying that UAL's got a $1Billion advantage. And Arpey's not exactly an unbiased source for this information. I learned long ago that there are liars, damned liars, and statisticians. Arpey used a statistician to make it sound like he was at a disadvantage in terms of labor costs. I'd like to see a side by side comparison by each individual skill; pilots' compensation is similar at both airlines.
As far as stock options, they have to be reported as compensation under FASB 123. So those options DO hit the bottom line. http://www.fasb.org/st/summary/stsum123r.shtml
But excessive options is another example of being evil, not inept.
Look, quite frankly I can't believe that I'm sitting here having to defend UAL management. I think that they're evil, but I don't think that they're as inept as you make them out to be.
The traditional metrics used to measure an airline/management's performance are RASM and CASM. Since you can't compare one separately from the other (JetBlue's CASM is less than UAL's, but so is their RASM - different operations), the best comparison that I know of is RASM minus CASM. And even that's not the best of measures.
Is Frontier's management now inept since they're in the red, but were great during the post-911 timeframe?
Each airline has it's own niche. UAL's, prior to BK, was landing corporate contracts. Fat, juicy corporate contracts. Those contracts resulted in a fairly decent RASM premium for UAL. UAL was overly reliant on those corporate contracts. When the companies renegotiated or dropped those contracts, it was devastating to the bottom line.
After UAL slipped into BK, RASM dropped considerably; we no longer carried a RASM premium - that title went to AMR. UAL's been slowly rebuilding the RASM premium, but it's an uphill road. One of the things that will help UAL rebuild a RASM premium is the new interiors, but that costs money - it's a hit to non-labor CASM. So does that make UAL's management inept?
Should UAL be ordering airframes in the current economic environment? Perhaps, but I see a fairly big recession looming. Buying new planes may not be the most prudent strategy at this point in the business cycle. I was very ticked off over the special dividend by UAL; I feel that it was the wrong time to be lowering cash on hand.
I noticed that UAL paid down more than $2B in debt in 2007; that is one item that does please me. That's one thing that I like seeing from management; a deleveraged balance sheet.
Are you following my comments on labor costs? AMR Corp's labor costs include Eagle costs; UAL's labor costs do not include regional labor costs. So we're not doing an apples to apples comparison by saying that UAL's got a $1Billion advantage. And Arpey's not exactly an unbiased source for this information. I learned long ago that there are liars, damned liars, and statisticians. Arpey used a statistician to make it sound like he was at a disadvantage in terms of labor costs. I'd like to see a side by side comparison by each individual skill; pilots' compensation is similar at both airlines.
As far as stock options, they have to be reported as compensation under FASB 123. So those options DO hit the bottom line. http://www.fasb.org/st/summary/stsum123r.shtml
But excessive options is another example of being evil, not inept.
Look, quite frankly I can't believe that I'm sitting here having to defend UAL management. I think that they're evil, but I don't think that they're as inept as you make them out to be.
The traditional metrics used to measure an airline/management's performance are RASM and CASM. Since you can't compare one separately from the other (JetBlue's CASM is less than UAL's, but so is their RASM - different operations), the best comparison that I know of is RASM minus CASM. And even that's not the best of measures.
Is Frontier's management now inept since they're in the red, but were great during the post-911 timeframe?
Each airline has it's own niche. UAL's, prior to BK, was landing corporate contracts. Fat, juicy corporate contracts. Those contracts resulted in a fairly decent RASM premium for UAL. UAL was overly reliant on those corporate contracts. When the companies renegotiated or dropped those contracts, it was devastating to the bottom line.
After UAL slipped into BK, RASM dropped considerably; we no longer carried a RASM premium - that title went to AMR. UAL's been slowly rebuilding the RASM premium, but it's an uphill road. One of the things that will help UAL rebuild a RASM premium is the new interiors, but that costs money - it's a hit to non-labor CASM. So does that make UAL's management inept?
Should UAL be ordering airframes in the current economic environment? Perhaps, but I see a fairly big recession looming. Buying new planes may not be the most prudent strategy at this point in the business cycle. I was very ticked off over the special dividend by UAL; I feel that it was the wrong time to be lowering cash on hand.
I noticed that UAL paid down more than $2B in debt in 2007; that is one item that does please me. That's one thing that I like seeing from management; a deleveraged balance sheet.
02-11-2008, 08:47 AM
#34
Gets Weekends Off
Joined APC: Apr 2006
Position: 737 CA
Posts: 2,750
Andy,
I show AMR's Mainline Jet operation 2007 casm as 11.38 from their website.
I show UAL's Mainline Jet operation 2007 casm as 11.39 from their website.
I need a 20% raise to equal their nb captain pay (159/hr vs 132/hr)....ok they only have 11% b/c contribution to our 16% so lets say 15%. Then there is the A plan....they still have it, AMR still contributes. And what is their cap? 81 hours to our 89/95? This is just the pilot comparison, pilots only make up a small percentage of total employees. So my question is....If our casm is identical now, what would happen to our casm if UAL gave everyone a 15% raise and contributed to a pension? What would happen if UAL changed the cap to 81 hours like at AMR? Would our casm increase? significantly? YES. This is Arpey's point. AMR is at a big disadvantage yet they can equal our casm after 3 years in bankruptcy? That is pathetic on our (managements) part.
Kimokk....sorry about the thread hijack. Rest assured this is my last post on this thread. good day.
I show AMR's Mainline Jet operation 2007 casm as 11.38 from their website.
I show UAL's Mainline Jet operation 2007 casm as 11.39 from their website.
I need a 20% raise to equal their nb captain pay (159/hr vs 132/hr)....ok they only have 11% b/c contribution to our 16% so lets say 15%. Then there is the A plan....they still have it, AMR still contributes. And what is their cap? 81 hours to our 89/95? This is just the pilot comparison, pilots only make up a small percentage of total employees. So my question is....If our casm is identical now, what would happen to our casm if UAL gave everyone a 15% raise and contributed to a pension? What would happen if UAL changed the cap to 81 hours like at AMR? Would our casm increase? significantly? YES. This is Arpey's point. AMR is at a big disadvantage yet they can equal our casm after 3 years in bankruptcy? That is pathetic on our (managements) part.
Kimokk....sorry about the thread hijack. Rest assured this is my last post on this thread. good day.
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