Saturday, August 6, 2011

Why Southwest is not a realistic comparison

I hear this all the time: "Well Southwest can do it....Why not us?"  or  "We should be paid what they get". All well and good. Absolutely. Couldn't agree more.
A wise man once said you get paid what you can negotiate. Not what's "fair". Not what's "right". So given that our logic then devolves into a Beat chest/dig-heels-in/get angry mentality, and we go down a road with no negotiated end. We have stasis. But I digress. Assuming we WERE adept negotiators, why couldn't we get a Southwest contract? Answer, same reason Delta couldn't. Same reason American didn't. We have a different debt structure to Southwest, and as debt service is approximately one third of an airline's overhead,  (labor and fuel making up the majority of the rest) a disparity in this number is a huge factor in overall financial health. (Anybody paying attention this week will note the corporate bond market is heading south along with the DOW and NasDaQ, and so our counterparts in management are being faced with a progressively more difficult economic future.)
Southwest began life as a by-product of the Wright Amendment, preventing any carrier  operating out of Dallas-Love from flying to anywhere except a neighbouring state ( after American got suckered into the costs of building DFW, this was the bone they got thrown). Nobody was interested except Magic Herb and his merry band who seized the opportunity, cornered the market, and effectively began to operate in a micro regulated market. Very cheaply. Pilots didn't get paid much. No benefits. Costs were low. Promises (options) were high, and a belief by the troops in the management resulted in an airline that grew at a rate that kept its bonds cheap, its debt service low. It has always maintained this edge, parlaying its cash balance into lucrative fuel hedges. It has always been run well. It has never had labor strife to derail operations and alienate customers. It has always had a management that believed in profits from operations (not asset shuffling) and a workers that never tried to deliberately screw the company up to make a point.
To expect United to magically undo all of the mistakes of the last 40 years to obtain an equal footing and hence the ability to pay us comparably, is unrealistic.
But that won't stop you demanding it will it? Not if everyone around you feels comfortable with the mantra. Your union does not want you to think independently as it undermines their ability to control. This logic works fine in the military, but when freedom of choice is available, people require a good reason to do things. Any time I have questioned issues such as transparency in negotiations I received the same answer: "It is so because the MEC says it is so". Fine. I don't have to agree with it. I don't have to believe in it. And I don't have to remain quiet while our representatives steer us into the quagmire that is your future (it looks exactly like your past).
Only if we have realistic expectations will we move on from this present situation.

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