The new airline thread

[pilot]

Well, I think the Air Force pilot shortage and attrition problem just got fixed almost overnight. I think it’s going to take a long time for the airlines to recover. I thought the good economy + retirements made this an almost guaranteed good career...more than any other time in history. This virus just caused more damage to the industry than 9/11.

[HuggyU2]

3 hours ago, pilot said:

This virus just caused more damage to the industry than 9/11.

Pretty interesting statement.  

Are basing this on the perceived cash-on-hand the major airlines have?  Something else?

[pilot]

2 hours ago, HuggyU2 said:

Pretty interesting statement.  

Are basing this on the perceived cash-on-hand the major airlines have?  Something else?

Did you see Ed Bastian's email today? I’ve seen several airline CEOs now say the decline in bookings and revenue (and therefore planned capacity cuts) is greater than after 9/11, which is generally what I’m referring to. I think we will see more planes parked and larger revenue losses over the next 6-9 months than the 6-9 months following 9/11. Thank God we at least have a bunch of retirements this time, and the proliferation of RJs and age 65 won’t add to the issues that plagued the lost decade. And hopefully the economy snaps back after this passes...but even if it does, there will be lasting damage to the industry that will take a few years to recover (namely sustained lower demand).  

Anyway, here is most of Ed’s email if you haven’t seen it:

“Demand for travel is declining at an accelerated pace daily, driving an unprecedented revenue impact. Cancellations are rising dramatically with net bookings now negative for travel over the next four weeks. To put that in perspective, we’re currently seeing more cancellations than new bookings over the next month.

The speed of the demand fall-off is unlike anything we’ve seen – and we’ve seen a lot in our business. We are moving quickly to preserve cash and protect our company. And with revenues dropping, we must be focused on taking costs out of our business.

In order to do this, we are taking difficult but determined actions to protect the financial position of the company. These include:
An overall capacity reduction in the next few months of 40 percent – the largest capacity reduction in Delta’s history, including 2001.
Elimination of flying to continental Europe for the next 30 days, which could be extended. We will maintain service to London.
Parking up to 300 aircraft as our reduced capacity requires a substantially smaller fleet.
Deferring new aircraft deliveries to manage our reduced capacity and preserve cash.
Reducing capital expenditures by at least $2 billion for the year, including delaying aircraft mods, IT initiatives and other opportunities to preserve cash.
Immediately offering voluntary short-term, unpaid leaves as well as an immediate hiring freeze.
Substantially reducing the use of consultants and contractors.

We’ll be making more critical decisions on our response in days to come. The situation is fluid and likely to be getting worse.”

Edited March 14, 2020 by pilot

[Gazmo]

Well, I think the Air Force pilot shortage and attrition problem just got fixed almost overnight. I think it’s going to take a long time for the airlines to recover. I thought the good economy + retirements made this an almost guaranteed good career...more than any other time in history. This virus just caused more damage to the industry than 9/11.

Not sure what facts you base your theories on, but most of the airlines pre-9/11 were on the edge of bankruptcy without 9/11. They were flying large, inefficient (empty) airplanes around. Oil prices went up significantly between 99-13 before falling off. We are in different times.

This may turn out to be a speed bump toward the inevitable; another hiring "boom" when this all settles down. Retirements are what they are and not going to change. Some companies are losing 70 pilots per month in retirements. These are all pilots in the 12+ year payscales and theoretically the highest paid pilots in their company. With salaries and associated bennies, a company losing 70 pilots per month can save $20+ million per month in salaries and benefits alone by just freezing hiring. That is 1/4 of a billion dollars in a years time. Furloughs save money in the long run, but they also cost a company money so there has to be a break even point. You furlough off the bottom; the lowest paid pilots. At some point that drives retraining. How much does it cost to bring a furloughed pilot back through indoc and an initial qual program? I have no idea. $100,000 per pilot maybe? You furlough 1,500 pilots only to have to retrain them all when we bounce back. That's at least $100-150 million in training costs. I am no airline financial wizard, but common sense says there is a breakeven point for a furlough and I don't think we are at the point yet where we need to go down that road. This is just me trying to see some light at the end of the tunnel after a few beers.

[pilot]

3 minutes ago, Gazmo said:

Not sure what facts you base your theories on, but most of the airlines pre-9/11 were on the edge of bankruptcy without 9/11. They were flying large, inefficient (empty) airplanes around. Oil prices went up significantly between 99-13 before falling off. We are in different times.

This may turn out to be a speed bump toward the inevitable; another hiring "boom" when this all settles down. Retirements are what they are and not going to change. Some companies are losing 70 pilots per month in retirements. These are all pilots in the 12+ year payscales and theoretically the highest paid pilots in their company. With salaries and associated bennies, a company losing 70 pilots per month can save $20+ million per month in salaries and benefits alone by just freezing hiring. That is 1/4 of a billion dollars in a years time. Furloughs save money in the long run, but they also cost a company money so there has to be a break even point. You furlough off the bottom; the lowest paid pilots. At some point that drives retraining. How much does it cost to bring a furloughed pilot back through indoc and an initial qual program? I have no idea. $100,000 per pilot maybe? You furlough 1,500 pilots only to have to retrain them all when we bounce back. That's at least $100-150 million in training costs. I am no airline financial wizard, but common sense says there is a breakeven point for a furlough and I don't think we are at the point yet where we need to go down that road. This is just me trying to see some light at the end of the tunnel after a few beers.

I hope there are no furloughs or bankruptcies and they use attrition to right size for demand over the next 3-6-9-12 months after this virus/hysteria goes away (hopefully by April/May?). I agree re furloughs being expensive. I also hope they offer early retirements to help shave some off the top. Could be a win win. But with the massive amount of fleet parking the majors are about to be doing, I predict there won’t be any hiring at the majors for a while, which is what my original post is referring to. The AF likely won’t be bleeding pilots for a while and can do a little catching up via production with a lot less attrition. Also, I predict this is a wake up call for guys thinking of bailing altogether and not doing guard/reserve, which may help fill future guard/reserve billets. And I’m sure getting guard/res  volunteers for stuff when no fly lines or lower average line values are doled out will be a lot easier. 

[nunya]

"Offering early retirements" means nothing in modern airlines. With no A plan at most carriers (and those with A plans aren't hurting right now), you walk away with nothing extra if you leave at age 61 or 64+364.

[Seriously]

7 hours ago, Gazmo said:

Some companies are losing 70 pilots per month in retirements. These are all pilots in the 12+ year payscales and theoretically the highest paid pilots in their company. With salaries and associated bennies, a company losing 70 pilots per month can save $20+ million per month in salaries and benefits alone by just freezing hiring. 

The company doesn't save money through retirements. They save money by reducing flying operations. Those 70 pilots' seats will be filled by someone else who has already been with the company for more than 12 years.

[AirGuardianC141747]

7 hours ago, nunya said:

"Offering early retirements" means nothing in modern airlines. With no A plan at most carriers (and those with A plans aren't hurting right now), you walk away with nothing extra if you leave at age 61 or 64+364.

Expanding upon nunya’s point. “Voluntary unpaid leave“ will not be enticing for the majority either, regardless of the airline. Unless your very wealthy, part of the youth group or new hire that has buku $$$ saved or an alternate income source, etc. and wouldn’t mind a break = “Survey says” - you won’t budge unless forced out for the time being. Granted, it would be an exceptional time to land an AGR position within the ANG or Reserve equivalent. While your seniority may slow for a bit due to the lack of hiring under you, the retirements above you will keep you moving. The increase of pay per year (if under 12 or 15 maxed depending on carrier) will be nice to come back to of course and maybe even an upgrade. Also, this may be the opportunity to go beyond the 5 yr USERRA limit and snag a retirement (I would get that authorization in writing by your company) or at least gain a substantial amount of points/$ for your eventual retirement. 
 

Understandably, the Senior airline folks especially those close to retirement would be silly not to max it out to the end = further pad your 401K, grab any matching, continue direct contribution, get yourself closer to max Social Security benefits (67), etc and unfortunately I must say - recover your losses these past several weeks via the stock market.

Delta has indicated the most drastic measures thus far. The others will probably follow suit. Airlines will execute major moves to save their themselves for the most part, lending themselves more in tune for loans or bailout assistance perhaps. It’s obvious (just my thoughts) they are running down their checklist of cuts (not in order): Fleet size reduction, Route reduction, voluntary unpaid leave, reduced pay rates, retirement of older aircraft earlier than planned, stop share buybacks, freeze hiring, cut outside contractor help, deferring aircraft orders, etc. All of this leads to the proverbial “we did everything we could before even considering Furloughs.“

Pray this hysteria is short lived and the initial cutbacks work accordingly. If not, you park too many planes you park pilots. Even the Air Force (AF) had their “banked pilots” in the early 90’s, but those folks just did another paying AF job while they awaited their turn to fly aircraft after pilot training...

 

Edited March 14, 2020 by AirGuardianC141747

[SocialD]

Ya, early outs won't make much of a dent, as AirGuardian said, why leave early.  I certainly would not expect senior dude to leave early...those dudes have already been through a lot in their careers.  I'm just hoping I'm senior enough to bid one of those 55 hour no fly lines they'll be offering in May or June.  Well...now that the DOD said we can't travel, maybe I'd rather just take 72 hours reserve lines to sit at home.  

[Doc]

Here's a small bit of positive (at this circus anyway);

On 9/11, all new hires in training were sent home immediately.  That hasn't happened.  In fact, as of today, a new hire pilot class & mx class scheduled for next week are still a go.  Furloughs "off the top" continue at 60-80/month.

No clue as to when the postponed end of month class will be rescheduled.  If the 76s are indeed parked soon, some portion of the 75/76 pilot group will most likely displace and utilize already scarce sim resources.

Disclaimer:  Long range planning here is usually just past the next meal period & lunch time isn't far off.

 

 

[HuggyU2]

2 hours ago, Doc said:

 (at this circus anyway);

Which circus are you at?

[HuggyU2]

Sent from a friend at Delta....

 

This is from an email our Delta Air Lines CEO sent out this morning. 40% reduction in capacity in the next few months and parking up to 300 aircraft. Unprecedented pull down in flying by any company. Crazy times.

“The speed of the demand fall-off is unlike anything we’ve seen – and we’ve seen a lot in our business. We are moving quickly to preserve cash and protect our company. And with revenues dropping, we must be focused on taking costs out of our business.

In order to do this, we are taking difficult but determined actions to protect the financial position of the company. These include:

An overall capacity reduction in the next few months of 40 percent – the largest capacity reduction in Delta’s history, including 2001.

Elimination of flying to continental Europe for the next 30 days, which could be extended. We will maintain service to London.

Parking up to 300 aircraft as our reduced capacity requires a substantially smaller fleet.

Deferring new aircraft deliveries to manage our reduced capacity and preserve cash.

Reducing capital expenditures by at least $2 billion for the year, including delaying aircraft mods, IT initiatives and other opportunities to preserve cash.

Immediately offering voluntary short-term, unpaid leaves as well as an immediate hiring freeze.

Substantially reducing the use of consultants and contractors.

We’ll be making more critical decisions on our response in days to come. The situation is fluid and likely to be getting worse.”

[AirGuardianC141747]

4 hours ago, SocialD said:

I'm just hoping I'm senior enough to bid one of those 55 hour no fly lines they'll be offering in May or June. 

Boom! This would be a Willy Wonka Ticket during this situation, especially if all were kept on board with benefits and it truly would be cheaper in the short term 6-9, 12 months (whatever the gonculator says) especially with interest free loan injections vs cutting and then retraining. I am unaware of the furlough criteria protections at specific airlines, but others on their APC forums have mentioned they have a lot of monetary penalties associated with this. My company not so much, it’s flying rubber dog crap out of Hong Kong. Limited dog crap, limited pilots, but thankfully there is a plethora of dog crap for the foreseeable future. I hope everyone is senior enough to attain what they want/need (positive plug).

[SocialD]

30 minutes ago, AirGuardianC141747 said:

I am unaware of the furlough criteria protections at specific airlines, but others on their APC forums have mentioned they have a lot of monetary penalties associated with this. My company not so much, it’s flying rubber dog crap out of Hong Kong. Limited dog crap, limited pilots, but thankfully there is a plethora of dog crap for the foreseeable future. I hope everyone is senior enough to attain what they want/need (positive plug).

 

Ya supposedly we have furlough protections for everyone on the at the signing of our last contract.  However, I'm not sure it's worth the paper it's written on in times like this.  If they need to furlough, they're furlough what they need.  We supposedly get 90 days notice and 1 month pay per year of service up to 6.  That said, I don't think we're really there yet...especially if they think this will dry up in the next 2-4 months.  We've been fairly understaffed in a lot of categories and running guys at high ALVs (80+) even in the winter.  Dropping them down to a more normal ALV 70ish will provide lots of relief in itself.  Throw in some SILs and maybe some guys jumping on orders and that will go a long way. Won't totally solve the issue but doesn't hurt.  The 300 number referenced in Huggy's post likely includes 120 or so regional jets.

Edited March 14, 2020 by SocialD

[AirGuardianC141747]

12 minutes ago, joe1234 said:

Ugh, the last thing I would want to do when I'm 63 is be forced to work myself to the bone during a global pandemic that's deadly to older people because I was too greedy to rebalance my portfolio more conservatively.

Well, you will be in a better position using the recommended strategy by most consultants and just plane common sense based on previous markets. Unfortunately we add yet another debacle which proves this investment strategy in an extreme environment. 

Very true regarding - none of us want to work ourselves to the bone during our final years, let alone now. Studies have shown that those who retire at 60 vs 65 live quite a bit longer in our business (Cargo studies based on some of the extreme schedules).

Retiring early from any walk of life: It is highly recommended to have some kind of hobby to keep your mind busy; otherwise, you decline rapidly. 5 folks I know have passed within 5 years of retiring from the military. Coincidence maybe, but I will admit you lose your mission sense when you leave after many years of service and I myself had to refocus and create another mental game of that drive on attitude using my family, friends and contributor to our great nations economy.

Regardless of the minutia and suck you all go thru, you are part of a small and very special group of warriors which no one (aside from your immediate family who rides the suck with you) will understand not having been a part of it.

Great respect for you all in the military, law enforcement, Fire Fighters, and First Responders who maintain the highest standards to keep our nation from going full tilt. I will always remember it has been an voluntary force for many decades and it is a calling! My apologies for sliding off the tracks there.

[SocialD]

I say keep the post Huggy, you were spot on!  

[JBueno]

Not trying to add to the gloom, but contracts can go out the window in bankruptcy. Just want folks to be prepared.
 

https://www.cbsnews.com/news/bankruptcy-judge-throws-out-amr-pilots-contract/#

[SocialD]

13 hours ago, JBueno said:

Not trying to add to the gloom, but contracts can go out the window in bankruptcy. Just want folks to be prepared.
 

https://www.cbsnews.com/news/bankruptcy-judge-throws-out-amr-pilots-contract/#

 

Don't necessarily disagree with you, but it's going to be A LOT harder sell when your management team was doing 12B in stock buyback and making 6+B leading up to this temporary event.  

 

 

 

[gearhog]

“Too big to fail”

[pilot]

Unbelievable. From UAL:

 

[pilot]

Link to news release:
https://hub.united.com/2020-03-15-a-message-from-oscar-munoz-and-scott-kirby-2645495847.html

[gearhog]

Trump is going to shut it all down this week.

[Gazmo]

Well boys, it was fun while it lasted; just over a year for me. Just enough to get a taste of the "good life". You really can't make this shit up, can you? It's right out of a movie. Words cannot describe how happy I've been since I landed my first airline job. I know a lot of you felt the same. Well, last week before the shit really hit the fan, I had enough intuition to start procuring my full-time job back at the unit because I just knew this wasn't going to go well. Hopefully the odds (and my experience) are in my favor, but it'll be interesting to see what the future holds since I've showed my cards. I've walked around the house all weekend like a zombie thinking "f#ck my life", but I have to push forward. I hope everyone in the same situation the best. I really don't know what else to say.

 

 

[Springer]

On 3/14/2020 at 11:37 AM, AirGuardianC141747 said:

Very true regarding - none of us want to work ourselves to the bone during our final years, let alone now. Studies have shown that those who retire at 60 vs 65 live quite a bit longer in our business (Cargo studies based on some of the extreme schedules).

 

 

I went at 59.  How much time does that buy me?

Edited March 16, 2020 by Springer

[AirGuardianC141747]

3 hours ago, Springer said:

I went at 59.  How much time does that buy me?

I envy you, I hope to leave at 60 myself for personal reasons of health, financial health and the ability to focus on family, hobbies and travel (ground travel) while I can still hike around and not stumble around significantly. I stumble now.

I was wrong not to state there is another study that shows pilots live longer than the general population as well and yet other data indicating we all are the same regardless of occupation.

I can get on board that genes play a big role and pilots of today tend to be much more fitness conscious and have changed their eating/drinking habits these past several decades compared to the aforementioned studies form 1992 (pass earlier) and 1996 (live longer) therefore live longer.

Couple of FedEx guys who jumped with us last year gave me the following info which bodes well in your case “Springer.” I still have this in my notes:

Retire 60 - Live an average of 18 years after retirement = 78

Retire 65 - Live an average of 8 years after retirement = 73

I think you’ll live longer as long as you remain engaged in some form of mindful activity. My father passed at 78 and he was at the pinnacle of specialties as a doctor when he retired and created other challenges to keep his cognitive skills sharp as a tac, but cancer attacks the best of us. 3 times in his case, true fighter!

My CPAP and Colonoscopies barring other anomalies will increase my longevity whatever that might be.

Dang, I envy your 59 departure. Going to be tuff walking away from this gig not necessarily the monetary value, but the pond hopping adventures I get myself into aside from the current fiasco going on.

Edited March 16, 2020 by AirGuardianC141747