Angry Workers Attack Executives

[vt]

http://money.cnn.com/2015/10/05/news...n=money_latest

[GRG55]

Re: Angry Workers Attack Executives

http://money.cnn.com/2015/10/05/news...n=money_latest

French airline workers attack execs over job cuts

"...The restructuring plans were revealed after the struggling airline was unable to broker a deal with its pilots. The deadline for negotiations was September 30, and the stand-off forced the company to present its own plan, the spokeswoman said..."

Too many people still think airlines are an exotic business. Running an airline is more like running the lettuce department in a supermarket - highly perishable commodity with a short shelf life.

Only worse.

In the grocery business the produce managers can't hold the company hostage. In an airline the cost of initial and recurrency training, type ratings and other necessary safety requirements mean the pilots can - unlike flight attendants, baggage handlers and ticket agents, it is all but impossible to substitute for them.

[santafe2]

Re: Angry Workers Attack Executives

Too many people still think airlines are an exotic business. Running an airline is more like running the lettuce department in a supermarket - highly perishable commodity with a short shelf life.

Very old joke: How do you make a million dollars in the airline business? Start with two million....

[gwynedd1]

Re: Angry Workers Attack Executives

Very old joke: How do you make a million dollars in the airline business? Start with two million....

I worked for a private company once ,and they said they turned the owner into a millionaire during the 2000 bubble. Before then he was a billionaire.

[gwynedd1]

Re: Angry Workers Attack Executives

Too many people still think airlines are an exotic business. Running an airline is more like running the lettuce department in a supermarket - highly perishable commodity with a short shelf life.

Only worse.

In the grocery business the produce managers can't hold the company hostage. In an airline the cost of initial and recurrency training, type ratings and other necessary safety requirements mean the pilots can - unlike flight attendants, baggage handlers and ticket agents, it is all but impossible to substitute for them.

Too many people think capital is the main source of income. All it ever does is give a short term tactical advantage to take a strategic monopoly position. The airline business is a business literally crossing continents. The competition to some extend can fly in from anywhere. I would not put too much money in any business floating on a boat at sea either. Convert it into land, mineral rights and political influence as fast as you can.

[thriftyandboringinohio]

Re: Angry Workers Attack Executives

Warren Buffet wrote this in his 2007 letter to investors at Berkshire Hathaway (emphasis mine):

Now let’s move to the gruesome. The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it. And I, to my shame, participated in this foolishness when I had Berkshire buy U.S. Air preferred stock in 1989. As the ink was drying on our check, the company went into a tailspin, and before long our preferred dividend was no longer being paid. But we then got very lucky. In one of the recurrent, but always misguided, bursts of optimism for airlines, we were actually able to sell our shares in 1998 for a hefty gain. In the decade following our sale, the company went bankrupt. Twice.

Full letter here http://www.berkshirehathaway.com/2007ar/2007ar.pdf