The Truth About the Big 6 U.S. Airlines?

[Chris Gains]

You don't come to my little corner of Cyberspace for political discourse, so let's jump right past the discussion of whether it makes sense to invade Iraq and head for the reality: What happens to the Big Six airlines when we do take up arms?
Well, no secret there. The Big Six will whine and demand another bailout.
Since the concept of shared sacrifice—not to mention shame—is beyond the men who run the nation's major carriers, they will stamp their feet, pout, threaten and run to Congress demanding taxpayer-funded relief at the very moment American troops will be fighting and dying half a world a way.
And, please, don't tell me that is a harsh assessment. Need I remind you that Continental CEO Gordon Bethune publicly began the drumbeat for the 2001 bailout just 96 hours after 9/11. A day later, Delta Chief Executive Leo Mullin wailed on national television that the "airline industry cannot be the first casualty of this war." All this while thousands of genuine first casualties were still buried in the rubble at Ground Zero and the Pentagon.
No, fellow travelers, these men will be coming at us again with their bottomless bag of phony statistics, half-truths and paid lobbyists. They will again be demanding our tax dollars to prop up their mismanaged businesses. All this while they pay themselves millions in salary, live in $18,000-a-month condos on the company expense account and do virtually nothing to heal themselves and their broken companies.
Last time, they slunk away with a $5 billion grant after getting a Congressional vote in the middle of the night, all while we were burying our dead and searching for our emotional bearings. But this time we can see them coming from a mile away. We need to be ready for the spin.
This is just some of what you're going to hear in coming days as Big Six bosses come to us hat in hand for another bailout. Be prepared—and let your congressperson know in advance that you don't want more of your tax dollars going to the Big Six.

They'll say: The airline industry is in crisis
Hogwash. The airline "industry" is not in crisis, the Big Six are. The well-managed, well-focused carriers—Southwest, JetBlue, AirTran—are profitable. Their traffic, route networks and revenue are growing, not falling. America West, which has cleaned up its corporate act and simplified its fares, is edging toward profitability despite last year's withering attack of the Big Six. Frontier, which has simplified its fares, is holding its own at its Denver hub despite kamikaze-like attacks by United Airlines.

They'll say: America needs the Big Six
Baloney. This nation survived the demise of its own "chosen instrument," Pan Am. It lost Braniff and survived, lost Eastern and survived, lost TWA and survived. Even the security analysts—who never saw this coming—now realize that the demise of a United Airlines or a US Airways would actually go a long, long way to return the remainder of the Big Six to a modicum of health. America doesn't need all these airlines that pursue unsupportable fare structures, repellant consumer-service policies and hub-and-spoke operations. The faster these incompetently and imperiously run carriers disappear, the faster new and better-run airlines will take their place.

They'll say: Small-town America needs the Big Six
We could argue that forever, but let's stick to the facts: The Big Six have no moral or financial obligation to continue serving smaller communities. In fact, smaller cities are being cut from Big Six route maps with blinding speed. Since 9/11, government statistics show, small communities have lost Big Six flights twice as fast as other cities.

They'll say: Security costs are crippling the Big Six
Shortly after 9/11, the Big Six claimed they were spending $1 billion a year on security. At last count, since the federal government assumed most passenger-security functions, the Big Six has contributed only about $300 million of the $700 million they were supposed to pay.

They'll say: The Big Six are overtaxed
An incredible fabrication that exploded in the Big Six's face in front of a Congressional committee last fall. Airline executives use their spin even in front of a Congressional committee.

They'll say: Fuel costs are killing the Big Six
The airlines are right about this one. Even with aggressive price hedging, the Big Six are doling out millions more every day on fuel costs. But guess what? So are you. So am I. So's Wal-Mart and your local supermarket. Gasoline is now selling for about $2.25 a gallon in California. I don't see Congresspeople rushing to the freeways and handing out tax grants to passing motorists. I paid $1.86 a gallon for home heating oil this week, which is about 80% more than I paid in October. Trust me when I tell you that my local Congresswoman was not waiting on my porch with a tax refund to cover my higher heating bills. Why do the Big Six think they deserve special treatment when it comes to the day-to-day cost of doing business?

They'll say: They've done all they can to help themselves
Oh, sure, the Big Six have shed hundreds of thousands of workers in the 18 months since 9/11. They have slashed capacity by up to 15%, too. But they have not fundamentally changed the way they do business. They continue to flood their hubs with unneeded and costly flights. They continue to harass low-fare competitors rather than tend to their own businesses. They continue to squander millions on boondoggles like stadium naming rights. They continue to feather the nests of the bosses with multimillion-dollar employment contracts, lump-sum retirement payouts and appalling expenditures on perks. Worst of all, of course, they continue to destroy their businesses by using a Byzantine fare structure and repulsive customer-service practices that depress both legitimate business-travel demand and discretionary leisure travel.

I won't shed a tear if and when any of the Big Six disappear. Neither should you. More to the point, we shouldn't waste another dime of our national treasury propping them up.

By Joe Brancatelli Travel Reporter For USA Today

It will be interesting to see your coments on this article.........

[Huck]

Thus saith USA Today, the People Magazine of newspapers. USA Today should not speak too much about profitability - it has not turned a profit in its entire history. It is subsidized by its owners.

Didn't say too much about labor costs, though, did he? Probably due to space limitations. I'm sure he loves us too.

Yes, there was an immediate reaction from the airlines after 9/11. But the airlines did a few other things besides beg for loans, like bury their dead and watch their security procedures turn into a chapter from Catch 22.

I try and keep my acidity to a minimum while posting here, but this guy can bite me.

[IceHouse]

I can imagine that another bailout is definitely on the horizon for some of the big six probably after the end of gulf war 2, especially since many of our american friends will be too s**t scared to fly the pond and other international routes as usual leading to even more losses.
So the inefficient US carriers end up getitng more good money thrown at them and our profitable european airlines BA, LH etc get another shafting along with laid off european pilots/groundstaff.
Oh and the flightdeck of these ineffieient US majors get to keep their outrageous saleries with minimal cuts!

[Pax Vobiscum]

For (slightly?) more intelligent comment see The Economist (http://www.economist.com/displaystory.cfm?story_id=1648210)

[Tandemrotor]

At this precise moment in time (things may of course change!) I would have thought that the invasion of Iraq is going so smoothly the'Protectionist Six' will be filling their pants!

At this rate, they will have absolutely NO case whatsoever for sticking their nose in the trough for a second helping of state aid!

Perversely, a quick clean war, is likely to be the worse thing that could happen to them. What makes me think they were already relying on another bailout?

Capacity needs to be removed quickly from this business, Worldwide. It is only right that those who have made the 'tough' choices, in other words, 'the fittest' should survive.

[Onan the Clumsy]

Sorry to be so higgerent, but exactly which six are you including here?

[KADS]

I'd like to see Airtran, Jetblue and Southwest flying americans all over the world transatlantic with good connections. "The big 6" are NEEDED!!! Jeeez!

[ASRAAM]

KADS,

Actually they are not. Many other airlines offer excellent Atlantic connections and are in the the unfortunate position of having to compete without the benefit of huge bailouts, free insurance or chapter 11 protection. They are also bearing the additional costs of security unlike the USA.

Many of these airlines receive MUCH better customer satisfaction ratings too.

I would imagine that the likes of Southwest would love to compete on the Atlantic, unfortunately all the slots are sewn up by the "big 6". If a couple of them were to go under it would release slots for someone who knows how to run an airline.

Whilst I would hate to see the "front line" staff of any airlines losing their jobs a thorough overhaul is required.

It ought to start with the fat cats in the board room, huge salaries are only justified if the company is making money.

Oh yes, a final point. Airlines are struggling mainly because Americans are too frightened to fly. Personally I find it amazing that a nation which has achieved such collective greatness can be made up of so many individual wimps!

[proxus]

It always annoys me to see USA whine about gas prices.

In the first post it was stated that the price for auto gas was 2.25$. That is about 0.60$ per liter.

In my country we pay about 1.3$ per liter, that is almost around 5$ per gallon. I have seen even higher price in the last 2 years.

So you think that's expensive:eek:

What about 5$ per gallon.

Well just a thought

Peace

Proxus

[newarksmells]

With United and US.Air in bankruptcy and American heading their quicky, that leaves Continental, Delta and Northwest. As the CEO of United stated in court last week, with International Bookings down significantly beacuse of the War with Iraq, the future isn't too promising.

In all likelyhood, if the War continues, we're probably looking at the Big '4' at best. Of course, that should make Chris Gains extremely happy because he can then start pushing for the Big '2'. Needless to say, if he had thought out the repercussions of fewer airlines in terms of ticket costs and schedules he might have engaged the brain first :*

Newark

[dudly]

I was reading the diatribe that Chris Gains posted from what was it USA Today, until I got to the part about how we survived with a couple of carriers that have gone chapter 7. He includes TWA in this which is of course not true. After that I assumed the author didn't really have a clue and quit reading.

AirTran, now didn't that use to be ValueJet. I seem to remember that they bought some little commuter named AirTran, changed their name and hoped people would forget who they really were. I guess the public really is clueless on alot of things. Yeah, I really want to ride on those guys to LHR. Right. Jet Blue, now would someone once and for all tell us if Air Bus is really letting them fly their jets for free with no lease payments, I have heard nothing to dispell that rumour as of now. Southwest, what a great company, but they are essentially a short haul cattle car.

[Huck]

Take SWA or Jet Blue or Airtran, increase their workforce times ten, and wait five years - things would get just as bad. You want to know the differences in UAL and Singapore Airlines? They're cultural, not institutional.

[Ignition Override]

ASRAAM and Huck-I don't know the statistics of fear, but I suspect that many of my fellow countrymen are cowards, regarding vacation cancellations or rescheduling. Other than some areas of the Middle East right now or a country or two in South America which are reportedly infested with drug-runners etc, I can't imagine letting the fear of travel become so overpowering.

Over a week ago, we picked up a large number of high school kids in Charlotte. They were off to fly to AMS and on to Vienna, and they seemed really excited-admittedly, before any attacks on Iraq began, but there was plenty of news about the possibilities all over the networks.

Are thousands of adults afraid to go to the many countries which are very stable and away from the Middle East? :eek:

How many of these nervous would-be travelers drive through heavy traffic in US towns or cities, making frequent lane changes, or around street corners in their hometown with a cell phone (handy) stuck to their ears, or even pushing the buttons and NOT looking outside?

That IS dangerous travel, and these jerks are all over our US cities-truly are much more serious threat, statistically, than one terrorist with a gun or grenade.

[stargazer02]

Hey Chris
i don't know where you are getting the info you have perhaps you'd like to expand on it but from my info in DAL Leo Mullins is actually not paid millions...he took a pay cut first and is the lowest paid CEO for any of the major airlines.....it's less than 200k which isn't that much considering that most of the transatlantic/pacific captains in DAL earn more than 200k a year.
He also lives in a modest suburb of Atlanta and not a $18,000.00 per month condo....
Where are you getting your information from???

[46Driver]

I jumpseat on AirTran several times a month (they have an open jumpseat policy) and have nothing but good things to say about them (and no, I don't work for them). Gate people are hospitable, the crews are nice, and the new 717's are sweet.
As for Jet Blue, it was my understanding (maybe wrong) that they are only paying interest on their airplanes with a lump sum due later. Y'all can go to www.flightinfo.com for more details and/or questions.

[ATPMBA]

Proxus:

It always annoys me to see USA whine about gas prices.

You pay about $5 for gallon for gas, I just filled up for $1.70, about 0.85 goes to government taxes.

Why are your gas prices so high in Iceland, or the U.K. or other countries ?

You should look into this, it could be:

- Big mutli-national oil companies are ripping you off.

- Lack of refineries in your area or distribution.

- High government taxes on your gas.

I think the government is heavily taxing you on gas. If you don’t like it then become politically active. If you live in a democracy you can make a difference.

I suspect your government needs these taxes for socialist programs, so if taxes rollback on gas they will increase elsewhere unless you reduce spending programs or increase businesses as to gain more tax revenue without raising taxes.

[tsgas]

Most european countries are tiny compared to the size of the U.S. and also have excellent mass transit systems that are subsidized partially by motorists.So it is much easier to choose between using a car or mass transit.In most of the U.S. people that drive long distances have little choice.

[proxus]

The government here collect about 70% of each liter in taxes.

The price is similar throughout the other Scandinavian countries. Even in Norway, which is the only one of the Scandic ones that process oil on a big scale, the price is similar as ours.:(

The reason being, at least here, is probably:

Small market

Long distances for each shipment

Last month they even had to shut down all of GA ( at least the ones that used piston engines ) because the vapour pressure (?) of the gas was to low.

But that was probably because of damaged shipment last year ( yes the 100LL is shipped about once a year )

But this is how it has always been, and probably will be. ( we are only 288K souls )

Regard

Proxus

[AA717driver]

Proxus--I sympathize with you and your fellow aviation-loving-Scandanavians. We have to fight the government to keep our taxes at the already too high rates we have now.

I've run into several Norwegians, Sweedes and Brits who are training or working in the U.S. because it is far too expensive to fly over there.TC

[Shock Stall]

I think the US is the only place you’ll find ‘cheap’ gas. I would suggest the Government doesn’t tax it much, which leads to the Gas Guzzling, environment destroying, mounds of metal we call SUV’s making lame attempts to park or mounting the kurb so the sole occupant of the vehicle can use the cashpoint. :yuk:

I nearly pissed myself laughing when I discovered that the fuel prices on the Kadena Air Force Base in Okinawa (Japan) are the same as on the American Mainland. The military has to take a little piece of the ‘states everywhere they go – right down to the price of fuel!

Filling up in ‘Japan’ (ie. Outside the base) costs about 3 times the price. So the military are filling up their mostly sensible cars (you can’t get those ridiculous monstrosities over there) on American tax payer subsidies, just so they can ‘feel at home'! :rolleyes:

Can’t complain though…..saved me a bundle;)

If you want cheap training, go to New Zealand. Low Dollar = cheap fuel = cheap training. (only if you're spending foreign Dollars though, otherwise the fuel is just as expensive as the rest of the world – except the US obviously)

[46Driver]

If you don't want an SUV, then don't buy one - its called freedom of choice. As for me, when the 5.7L V-8 gives up the ghost in my Yukon, I hope to drop in the new GM 8.1. Happy Trails!
You are right about mass transit, there is very little of it in the states with the exception of the big cities. You have to go by car, therefore, you want to keep the gas prices low.

[411A]

46Driver,
Don't know about the 'new' 8.1 litre...the old one in the Eldorado was great, passed everything but the gas station.
Great ride...but tires only lasted 8000 miles, well the cheap ones anyway.

[Luke SkyToddler]

Bloody hell ... 8.1 litres ... and the boys are so nonchalant about it!

How convenient for your continued motoring pleasure, that your government has shown such single minded resolve in the face of world opinion, and single handedly set about liberating the Iraqi oilfields - er sorry, Iraqi people - from their terrible enslavement :rolleyes:

[Onan the Clumsy]

I suspect your government needs these taxes for socialist programs, so if taxes rollback on gas they will increase elsewhere unless you reduce spending programs or increase businesses as to gain more tax revenue without raising taxes.


...or you could just run a huge defecit and let your national debt increase beyond all reason

[seacue]

Onan the C. said:
---------------------------
...or you could just run a huge defecit and let your national debt increase beyond all reason
---------------------------

You don't think any major country would do that, do you?

[newarksmells]

All;

Taxes in the U.S (both Federal and State) amount to about 35% of any gallon of gas/ petrol you pump. Don't make me go to cigarettes ;-(... especially near a gas pump


Newark

[seacue]

Newarksmells tells us:
-------------------------------
Taxes in the U.S (both Federal and State) amount to about 35% of any gallon of gas/ petrol you pump.
-------------------------------

The taxes are a fixed amount per US gallon. The Fed tax is 18.4 cents per gallon. About 15.5 cents of this goes to the highway fund and the rest to mass transit. The state taxes vary from 7.5 cents (Georgia) to 31.1 cents (Wisconsin) - with most of them being in the low 20s.

So the total fuel tax in the USA varies from 25.9 cents/gallon to 49.5 cents per gallon.

I live in Maryland, which has a 23.5 cent tax (total 41.9). At the present price of about $1.83 for self-serve regular near me, the tax is about 23% of the total.

[Ian Fleming]

Re fuel prices in U.S. compared to European countries.
As an ex pat, whenever I return to the UK I am always lambasted by my old countrymen about "Yank Tanks" and their propensity for drinking petrol. Personally I've always found it astonishing that I can drive at 80 mph on English motorways, (often in the slow lane) while being overtaken by long convoys of BMW's, Jaguars and Mercedes, most wearing badges describing engine displacement at 4 liters or larger, and exceeding 90 mph! The obvious truth here is that if you earn enough money in the UK to own a car with a large engine, then many do. The difference is, in the U.S. most people can afford to do so.

Another interesting observation is that the fuel consumption of a car with a small engine car at 80 mph is not that much less than a 4 liter engine at the same speed. The smaller unit has to work much harder, and at less volumetric efficiency. Lastly and perhaps most interesting is the fact that aside from the ridiculous SUV's and the rare Dodge Viper, the largest engines for sale "in cars" in the U.S. are of German or English manufacture!

The UK and most other European counties have always overtaxed their motorists. I remember well in during the Suez crisis, 1 shilling was added to petrol tax, to cover that extra voyage for the crude to go the long way round the Cape. It never came off. The French did something similar because following Suez, no Middle Eastern country would sell them oil, and they had to go to Venezuela to get it. (One reason perhaps for their current political position over Iraq!)

In truth this bleating about the environment is relatively new, and to argue that high fuel prices somehow make Europeans better people is patent rubbish. Low Lead, then No Lead fuels, were pioneered in the US, as was the mass production of closed loop computerised electronic fuel injection, catalytic converters, and high pressure/low hysterisis tires. I'm not saying that American cars are better in any way, it's matter of 'horses for course's'. The mass transit system in the U.S. is call a "Freeway". American cars are for the most part, still too heavy, (although my 4.6 liter Lincoln weighs 3800 lbs, my 4.2 liter Audi A6 is over 4000 lbs) they ride too softly, and most only have automatic transmissions, but they are quiet, comfortable and extremely reliable, (especially when the climate is concidered) and compared to what European's pay for their cars, cheap.

I am sick and tired of ill informed Europeans belly aching about the low relative price of petrol in the U.S. Yes Americans use twice the energy per day of Europeans, but like so many other things, that's because we can. Most Europeans can't afford the choice, and therein perhaps lies my answer!
Ian.

[Shock Stall]

"The obvious truth here is that if you earn enough money in the UK to own a car with a large engine, then many do. The difference is, in the U.S. most people can afford to do so. "




You’ve hit the nail on the head with that comment. Although we hate the exorbitant price of petrol, it keeps all but the few overpaid individuals (a touch of jealousy, perhaps?) from owning ridiculously overpowered and thirsty vehicles. Given infinite resources I’m sure most of us would love to drive to work in having our chests numbed by the rumble of a large displacement V8. But thanks to many governments world-wide these vehicles have been relegated to the ranks of the weekend warrior.

Until our dependence on oil is quenched, we will continue to see the kind of action being waged in the middle east by successive (and dare I say it…American… regimes). Was it not the oil crisis of the ‘70’s that thrust Datsun (now Nissan) into the lime-light? America (and it’s thirst for oil) started the Japanese car market. It’ll take a similar crisis to kill off these stupid SUV’s.

Unfortunately hitting the average Joe in the pocket is the only way to make them see sense. Sadly (as a by-product) we are now seeing a proliferation of Diesel powered cars, simply because Diesel is cheaper. So instead of dying from Cancer caused from the inhalation of Benzine from unleaded gas, we’ll die from sulphur and particulate matter inhaled from under regulated (and under refined) high sulphur diesel. And what’s more, as diesel has a lower calorific value, we’re seeing even larger displacement engines in a feeble attempt to recreate the horsepower of petrol.

Money rules all. I love a powerful car, I even own one. But I’m realistic enough to realise that nobody needs to drive to work in a car that only gets 8mpg. I save it for the weekends.

As pilots were reminded every day of the need to save fuel. Not only for the cost to the company, but for the cost to the environment in which we all live. To burn fuel “Because we can” is a very short sighted view and worthy of a few extra cents of government tax on your fuel to make you think about it.

[Huck]

It's all marketing, folks. Go read "The Overspent American."

If someone had offered my Grand-dad in his prime a 7 seat 300 horse behemoth to drive to work, he would have told them to shove it.

Not for the gas consumption, but for the cost of purchase!

My brother-in-law just purchased a $38,000 Expidition for himself and his two small children. Yeah, it gets 14 mpg, but look at that price again! That's two Honda Accords and a Hyundai backup!

I got an SUV - a 1994 Explorer 2-door with 180,000 miles. Cost was ~18,000. Gets 20 mpg. 4 seats. I'll replace it with an Escape Hybrid when they come out.

[Onan the Clumsy]

Ian Fleming said...

The obvious truth here is that if you earn enough money in the UK to own a car with a large engine, then many do.

Whilst I'm sure there are plenty of people who do own fancy cars in the UK, my understanding (and, having ben gone for so long, I could be mistaken) is that most of those high end motors you see zipping up the M1 are company cars and that it's a common part of the benefits package of a white collar job.

However the point about unleaded gas is well made. I used to get a sore throat something awful when I went back to visit and walked through the streets of London. Taxis were by far the worse...and busses.

It would have been a lot worse without the mass transit systems too.

[Tripower455]

You’ve hit the nail on the head with that comment. Although we hate the exorbitant price of petrol, it keeps all but the few overpaid individuals (a touch of jealousy, perhaps?) from owning ridiculously overpowered and thirsty vehicles.


I wasn't aware that it was possible to have a "ridiculously overpowered vehicle!" ;)

My airport car weighs 3300 lbs, has 310+ hp (from a normally aspirated 5.7 litre v-8) at the rear wheels, and gets almost 30mpg. Is it overpowered? I think it's just about right........for a daily driver! :)

My weekend cruiser weighs 3700 lbs, has 7.6 litres (462 cid. 455 +.030"), 3 carbs and puts out well over 400 HP. It is overpowered, but not ridiculously so........... ;) :)

[West Coast]

Okay, give it up, whats the weekend ride? Olds or pontiac? I have been looking for a restoration car, it will probably be a 73 TA with the 455.

[46Driver]

I think Buick had a nice ride with a 455 CID Regal GS about that time frame as well.

[kala87]

Getting back to the original subject of this thread, I've travelled as SLF on United a number of times since November 2002, between LHR - IAD and LHR - ORD. All the flights were in economy apart from one business class upgrade.

On each flight, I couldn't fault the service or food. I'm not exaggerating to say that both were virtually on a par with service and food I've received on EK, TG and SIA, and better than BA.

If United are trying this hard to look after their customers, they deserve to win through Chapter 11.

[Tripower455]

Okay, give it up, whats the weekend ride?


'66 GTO Convertible. 4 speed tripower.......