Furlough Estimates

[ZapBrannigan]

It is admittedly morbid, but for those of us on the bottom half of the seniority list there is value in planning and preparing for a furlough. For most of us that means updating logbooks and resumes, reconnecting with professional networks (I opened Linked In for the first time in a decade yesterday), and going through the family budget with a fine tooth comb to determine what are the must haves, what are the nice-to-haves, and what can be cut. We've also updated our will and trust to make sure that if we should both die, the kiddo is cared for. Once all of that is done, it is essentially a waiting game. I think it is a foregone conclusion that there will be furloughs come October whether your carrier took advantage of grant money or not. So there might be some value in looking analytically at how many pilots might be shed assuming demand begins to recover, but doesnt return to pre-covid levels. I think this is a reasonable assumption since we can't stay in quarantine indefinitely, but a vaccine will probably not be widely available before early 2021.

Before 9/11 the convention wisdom was that if you had 10%-15% of the pilot group behind you, you were safe from furlough. 9/11 actually resulted in a furlough that cut as deep as 30% into the seniority list at my airline. I'm sure by now we all realize that this event is significantly worse than 9/11. So lets take a look at our airlines, figure out what they're parking (permanently) and try to forecast the damage. I'll go first.

Lets take a look at WN. The grounding of the Max turned out to be a mixed blessing. On the one hand, they certainly didn't need that extra lift right now (there should have been 70-80 Max on the property by now). The down side is they were already staffed for most of those airplanes. Prior to Covid19 SWAPA alleged that the company was over-staffed by around 700 pilots, which is about 50 Maxes worth. They are currently in the process of parking 100 more airplanes, although there are rumors it could go as high as 180 over the next few months. Using their numbers of approximately 14 pilots per airplane, those plus the SWAPA overstaffing estimate would yield a furlough of about 2100 to 3200 pilots or, conveniently 20%-32% of the pilot group.

MAX overstaffing: 700 pilots
Aircraft parked 100-180: 1400 - 2520 pilots
Total overstaffed by (based on fleet count): 2100 - 3220 pilots

That is back to a hire date of approximately December of 2013.

This doesn't take into account early retirements (which haven't been offered) or voluntary paid leave (because they are temporary)
579 pilots will retire within 3 years, 1400 pilots will retire within 5 years.

 

[mastermags]

It also seems like some airlines are being more aggressive than others when it comes to parking airplanes. While not all balance sheets are equal, it seems like some airlines by parking fewer planes now are preparing for a more aggressive recovery if this does start turning around post summer. Of course an airline with a single fleet type compared to one with say, eleven, could park the least amount at a time and then adjust it in a quick fashion.

Also, would it be fair to say we should be looking at what percentage of the total list we are rather than how many total guys we have below us. Sitting at 70.2% of the total list and and still quite concerned.

 

[Fearless]

I've been at my present airline for almost twenty years. Between 9/11 and the "Great Recession", this will be my go-round of the airline "boom-bust" cycle. It looks to be a rough couple of years. Our airline is frequently short-staffed, but I wouldn't be surprised to see the bottom 20% on furlough come this fall.

I am worried about the junior FO's and flight attendants. Here's what I keep telling myself:

"(Captain), Keep your f-ing mouth shut! Nobody needs any more doom and gloom right now."

"Support your coworkers. Be a good listener. Don't spread rumors or misinformation."

"Our junior pilots will have an AWESOME career. This is just one heck of a speed bump. Do what you have to to survive for the next year, then come back to the job you love."

"Stay positive. See #1. Keep your f-ing mouth shut!"

Stay safe out there!
Fearless

 

[PositiveVibes]

Just wanted to chime in here,

Comparing this event to 9/11 or 2008 does not work. We don't have an event in the history of aviation to look back and draw a comparison from. How the recovery looks from all of this is also unknown. Some people go straight to doom and gloom, some like to be overly optimistic. I think we are going to find reality somewhere in the middle of that.

Now, in regards to furloughs, we are lucky we have a (currently) strong economy, and mandatory retirements over the next several year. Furloughs really depend of the rate of recovery. That being said there are MANY more variables that go into calculating the need to furlough than us PILOTS can imagine. I'm not saying don't prepare for a furlough. Everyone should be saving right now. It's in our nature, as pilots, to prepare for the worst possible outcome. What I am saying is we should not make up random furlough numbers. Why add to the stress of this event by trying to predict something we are not experts on? Instead of trying to predict furlough numbers, kick back and have a beer, go for a walk, talk with old friends. (non-aviation friends)

I know it's hard to not think about the future of aviation but we just need to relax! I know that's also very hard right now, but furlough numbers are out of our control, and we have no way to calculate it, so why stress about the exact number, percentage or if they even happen.

Let's take this all day-by-day. Save your money, prepare for the worst and hope for the best!

Everything will be ok!

Stay safe!

 

[Richman]

Is this "The Price is Right" rules, where if we bid too high and are one over we lose? If we get the number exactly do we win both Showcases?

 

[Get-home-itis]

The fact is that everybody got a 6 month reprieve......the question is, "What do things look like in 6 months?"

Anyone who tells you they have an answer for that is lying, smoking crack, or one of those people who feel compelled to give you their opinion on everything regardless of their level of knowledge. Traffic could be coming back or it could be 2 paying pax and 7 deadheaders on every flight....or something in between. The only thing you can do if you're in the bottom part of a list is have a serious discussion with your significant other and advise them that all major purchases are off. Don't take on a single cent of new debt. Find a way to continue to pay for food, the mortgage, utilities, and clothes for the kids.....in that order. everything else gets saved for the rainy day fund. Other than that, keep your fingers crossed.

BTW, as someone in the top 30% of the SJI list but who flies with a lot of guys in the bottom 20%, not surprisingly they're asking a lot of questions about furlough possibilities and state of the airline stuff. Before offering any opinions, I've taken to asking them if they really want to hear my answer.....cuz if you don't want to hear the answer, don't ask the question.

 

[CFIscare]

Is this "The Price is Right" rules, where if we bid too high and are one over we lose? If we get the number exactly do we win both Showcases?

I'll go with 1 Bob.

 

[mastermags]

I'll go with 1 Bob.

I like people who bid 1 and get outbid by 2

 

[Kingairer]

I optimistic about not getting furloughed. Unless you’re in the bottom 10% I think you’ll survive without getting furloughed. Some data from China seems to suggest their domestic market has started to rebound. My only concern right now is not getting covid and most importantly not giving it to my family.

 

[SlumTodd_Millionaire]

I’d say 30% is a given. I don’t expect air travel to be back at 2019 levels for a decade.

 

[mikecweb]

I'm 80% at my company and we're pulling aircraft out of the desert and i'm still looking at getting that number for the truck boat driving school.

 

[drunkenbeagle]

I’d say 30% is a given. I don’t expect air travel to be back at 2019 levels for a decade.

Not quite as doom and gloom here. But assume that Government, Banks and then Airlines will get what they want - in that order. The exact terms of how the US Treasury will hand out money aren't known yet, but with the administration in place now - I would assume the terms will not be favorable to labor in the way Congress had intended.

My expectation - passenger airplanes will stay parked as long as possible. Market share is irrelevant right now, so barely solvent airlines will want the best margin they can get. I would expect furloughs to hit 60 to 70%. That will largely be driven by creditors, who want to get as much as they can out of airlines as they restructure their debt before they go bankrupt. I think passenger levels will be back in 4 or 5 years. But not tomorrow.

 

[bike21]

I’d say 30% is a given. I don’t expect air travel to be back at 2019 levels for a decade.

Much too pessimistic for my money. YMMV.

 

[drunkenbeagle]

Much too pessimistic for my money. YMMV.

I hope your money is not in any travel related stock right now. Especially anything related to aviation.

 

[derg]

I have no idea.

Even the people who I know that should technically know don’t even have any idea.

 

[SlumTodd_Millionaire]

Much too pessimistic for my money. YMMV.

Business is evolving before our eyes because of this. In my industry, we just did our first ever industry conference by Zoom meeting last week. We had a big name guest speaker, virtual break out sessions, etc. At the end, everyone was commenting on how they got just as much out of it as they did their last in-person conference. Everyone is figuring out in real time that we can do this stuff without traveling anymore. Business travel is going to go off a cliff, and it ain’t coming back. Not at 2019 levels. Leisure carriers like Spirit will fare better, but carriers traditionally appealing to the premium business pax are gonna get the worst of this.

 

[MikeD]

Business is evolving before our eyes because of this. In my industry, we just did our first ever industry conference by Zoom meeting last week. We had a big name guest speaker, virtual break out sessions, etc. At the end, everyone was commenting on how they got just as much out of it as they did their last in-person conference. Everyone is figuring out in real time that we can do this stuff without traveling anymore. Business travel is going to go off a cliff, and it ain’t coming back. Not at 2019 levels. Leisure carriers like Spirit will fare better, but carriers traditionally appealing to the premium business pax are gonna get the worst of this.

interesting. I wonder if businesses had not been essentially forced to go this route or to try this due to everything going on now, if this would’ve been something that would’ve taken much longer to catch on? The idea that these kinds of meetings can be had with the same or better quality as in-person, but with none of the expenses of business travel and lodging. Sure, there’s been advertisements here and there for virtual meeting websites and such for businesses, but perhaps one of the positive fallouts from all of this, in a manner of speaking, are things like this that businesses may not have tested the water on before being forced to.

 

[Finny]

I have no idea.

Even the people who I know that should technically know don’t even have any idea.

This. When the people in the know, don’t know, and are silent, you shouldn’t pay attention to the people trying to play the expert.

 

[Hiboglossi]

Business is evolving before our eyes because of this. In my industry, we just did our first ever industry conference by Zoom meeting last week. We had a big name guest speaker, virtual break out sessions, etc. At the end, everyone was commenting on how they got just as much out of it as they did their last in-person conference. Everyone is figuring out in real time that we can do this stuff without traveling anymore. Business travel is going to go off a cliff, and it ain’t coming back. Not at 2019 levels. Leisure carriers like Spirit will fare better, but carriers traditionally appealing to the premium business pax are gonna get the worst of this.

...And people scoffed at my prediction that teleconferencing would replace most business travel. Honestly I'll be surprised if demand for air travel ever recovers to 2019 levels. The world just got a lot bigger this March with how much less people will be traveling. The pre-Pandemic world is gone forever. Even leisure travel will take a long time to recover with Depression levels of unemployment likely.

I don't know what to expect for furloughs but it's going to get ugly. I'm high on the seniority list but at a small regional and we'll probably meet the same fate as TSA sooner or later. I suspect the furloughs and layoffs are going to be much worse than anyone is expecting right now.

interesting. I wonder if businesses had not been essentially forced to go this route or to try this due to everything going on now, if this would’ve been something that would’ve taken much longer to catch on? The idea that these kinds of meetings can be had with the same or better quality as in-person, but with none of the expenses of business travel and lodging. Sure, there’s been advertisements here and there for virtual meeting websites and such for businesses, but perhaps one of the positive fallouts from all of this, in a manner of speaking, are things like this that businesses may not have tested the water on before being forced to.

I always figured that sooner or late, teleconferencing would supersede most business travel, and that business travel would become somewhat obsolete. Looks like with this pandemic business travel is disappearing all at once. I doubt it will ever come back.

 

[PositiveVibes]

Business travel might take a little while to come back, but it will.

"You will never see eye-to-eye if you never meet face-to-face.” - Warren Buffett, Chairman and CEO, Berkshire Hathaway

“Nothing replaces being in the same room, face-to-face, breathing the same air and reading and feeling each other's micro-expressions.” - Peter Guber, CEO, Mandalay Entertainment