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[QUOTE=DoubleHaul;13372714]Consequently, no matter how much pay is cut, it is very difficult to compete with the LCCs on a labor cost per ASM basis, simply because the LCCs were able to tailor their overall compensation packages to suit their business model from the beginning.
That is because the legacy model is less efficient at producing ASM's per employee, not because of compensation rates. Just look at WN (the most efficient low cost carrier model) vs the legacies. Nothing in the legacies employee compensation other that at AA is better than at WN, yet WN has lower employee compensation per ASM than the legacies. Even AA has lower average employee compensation than WN despite not terminating the DB pension plans, retiree health care, etc. The difference is completely how many ASM's are produced with the number of employees, and that comes back to the business model.
I am curious about what you believe the major problem is with the legacy's business model.
I'd hope you were kidding. It is inefficient compared to the low cost carriers, especially WN. Lots of airport facilities, lots of employees, lots of equipment/planes because of the nature of the legacy hub/spoke model.
Jim