Furlough Estimates

[milleR]

I feel like people confuse finance and economics. Finance is purely a numbers field, economics is a social science that studys and tries to predict human behavior. While the two are not necessarily separate, they can't be compared either. In other words, finance will dictate how the airlines react to a situation, economics is how they will plan for the future.

 

[ZapBrannigan]

How exactly do you think businesses are going to remain in business with no money coming in? I just don’t understand what you think is going to happen here.

I agree. I don't see how any of the majors survive this. If by January things aren't getting back to normal I wouldn't be surprised to see us going down the path of one or two state owned airlines that are government subsidized as essential air service. The rest, allowed to liquidate.


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[NickH]

I agree. I don't see how any of the majors survive this. If by January things aren't getting back to normal I wouldn't be surprised to see us going down the path of one or two state owned airlines that are government subsidized as essential air service. The rest, allowed to liquidate.


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That's a very reasonable prediction. If the virus vanished today, I can't see us getting back to normal by January, or even starting to. The economic damage has been so bad that, even with every business allowed to reopen at full capacity, there just isn't the consumer confidence to start the economy going again. The recession has only just begun. The sooner we can start the recovery the better, but it's going to be a slow and incremental process, and I can't see any airlines surviving in anything like their present form.

 

[amichael]

I agree. I don't see how any of the majors survive this. If by January things aren't getting back to normal I wouldn't be surprised to see us going down the path of one or two state owned airlines that are government subsidized as essential air service. The rest, allowed to liquidate.


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My ultra high level viewpoint is that developing state-owned carriers would require political cooperation and competency that we simply do not have anymore. I think we will see the path of least resistance which is likely just another financial injection.

 

[Skåning]

There is no reprieve, sadly. Rumor is we will be gone by Oct. 1. Just like that, this once great airline will vanish.

How long have you been at XJT?

 

[tcco94]

Guess if I don't have an airline to go back to I should look at the military more seriously

 

[BEEF SUPREME]

Guess if I don't have an airline to go back to I should look at the military more seriously

Won’t be a bad place to hang the next 5-10 years.

Looks like my prediction of 10,000 pilots on the street by October, 1 was an underestimation


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[ZapBrannigan]

My ultra high level viewpoint is that developing state-owned carriers would require political cooperation and competency that we simply do not have anymore. I think we will see the path of least resistance which is likely just another financial injection.

Until March or April, and then what? Yet another? At some point they have to be allowed to survive or fail on their own - very likely with bankruptcies and decimated CBAs.


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[Rocketman99]

In that scenario, it wouldn't be some of the airlines but all of them. There's no way the gubbermint would allow that to happen, no matter how dysfunctional and partisan it is now.

 

[Maximilian_Jenius]

Nothing from the company on that; we just hope we last until Oct. 1.

Where did you hear that?

Source? It certainly looks like via the two memos sent out yesterday (one from the CEO and the other from the MEC chairman) that things looked like they were coming to an end. That would be quite the turnaround in less than 24 hours if you heard they got a 2 year reprieve.

Max,
You made quite the bold statement here and have been asked to Cite your source. This is a very serious issue and it's not appropriate to play yo-yo with people's lives.

What is your source on this?

@GypsyPilot I take serious issue with you saying that I'm callously playing yo-yo with peoples lives. I was actually, very seriously considering going to XJT when I had my hours for their exceptional training and also the AVIATE program. Also and this is very important. Many people here are new to the site and have either never heard of, or have forgotten about a older regular poster on here by the name BM. Who is an XJT captain, great guy.

In recent better days in this industry, while I was in SLC he stayed in touch with me during my training and even offered to walk my app in personally. We used to talk at length about XJT and their training program. He's a friend and both he and his family are going to be greatly affected by this closure. I WOULD NOT JOKE ABOUT THAT!

To continue.

I prefaced, that I wasn't sure if true. But, I was hopeful. Where I read that, social media, FB to be precise. On a very respected active member of this sites wall and also an ex-Jetlink pilot himself. I posted that here to find out if true.

 

[jtrain609]

Guys,


We've had a few bad months and y'all think we're going to be driving around like Fred • Flintstone for the rest of time.

The airlines aren't disappearing. Things will eventually get better. It might take a few years. I understand some of y'all haven't had careers longer than a few years so far, but seriously, stop panicking.

 

[Autothrust Blue]

@GypsyPilot I take serious issue with you saying that I'm callously playing yo-yo with peoples lives. I was actually, very seriously considering going to XJT when I had my hours for their exceptional training and also the AVIATE program. Also and this is very important. Many people here are new to the site and have either never heard of, or have forgotten about a older regular poster on here by the name BM. Who is an XJT captain, great guy.

In recent better days in this industry, while I was in SLC he stayed in touch with me during my training and even offered to walk my app in personally. We used to talk at length about XJT and their training program. He's a friend and both he and his family are going to be greatly affected by this closure. I WOULD NOT JOKE ABOUT THAT!

To continue.

I prefaced, that I wasn't sure if true. But, I was hopeful. Where I read that, social media, FB to be precise. On a very respected active member of this sites wall and also an ex-Jetlink pilot himself. I posted that here to find out if true.

So you heard it from a sister’s boyfriend’s uncle who has a cousin who is a line check airman who saw Ferris pass out at 31 Flavors last night.

 

[SlumTodd_Millionaire]

I agree. I don't see how any of the majors survive this. If by January things aren't getting back to normal I wouldn't be surprised to see us going down the path of one or two state owned airlines that are government subsidized as essential air service. The rest, allowed to liquidate.


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Damn, you’re even more pessimistic than I am. My view is mass bankruptcies, a mix of 11 and 7, and we‘re left with a much smaller group of smaller airlines that are receiving government assistance for an extended period of time. I don’t see 2019 traffic again until at least 2030, if ever. The world is adapting, and I don’t think business travel is ever what it once was again.

 

[ZapBrannigan]

Damn, you’re even more pessimistic than I am. My view is mass bankruptcies, a mix of 11 and 13, and we‘re left with a much smaller group of smaller airlines that are receiving government assistance for an extended period of time. I don’t see 2019 traffic again until at least 2030, if ever. The world is adapting, and I don’t think business travel is ever what it once was again.

The problem I see - and I'm not telling you anything you don't know - is that to successfully emerge from chapter 11 you need a viable business plan that investors can get support. Most of the airlines don't have a COST problem (or at least didn't in January). They have a revenue problem. I can't imagine that you could cut enough in labor contracts, aircraft leases, real estate, etc to offset such a dramatic drop in revenue. And, as one of my previous employers told me the week before furloughing me, "you can't shrink to profitability". Ironic, but still somewhat true. The value in an airline is in the strength of the network and its ability to generate revenue. If you shrink too much, you don't have the ability to come back from it.

The only solution I see would be chapter 7 for one or more majors, dividing up those customers among the rest until demand starts to return. I just don't see Chapter 11 as the answer this time (though I'm certain that some or all of the airlines will try)


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[Autothrust Blue]

The problem I see - and I'm not telling you anything you don't know - is that to successfully emerge from chapter 11 you need a viable business plan that investors can get support. Most of the airlines don't have a COST problem (or at least didn't in January). They have a revenue problem. I can't imagine that you could cut enough in labor contracts, aircraft leases, real estate, etc to offset such a dramatic drop in revenue. And, as one of my previous employers told me the week before furloughing me, "you can't shrink to profitability". Ironic, but still somewhat true. The value in an airline is in the strength of the network and its ability to generate revenue. If you shrink too much, you don't have the ability to come back from it.

The only solution I see would be chapter 7 for one or more majors, dividing up those customers among the rest until demand starts to return. I just don't see Chapter 11 as the answer this time (though I'm certain that some or all of the airlines will try)


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We can fly it for no bucks an hour and not solve the problem, agreed.

 

[deadstick]

I doubt they can draw down Expressjet in two months, so no worries there.

Sadly, i think you are wrong

Skybus

 

[mwflyer]

Guys,


We've had a few bad months and y'all think we're going to be driving around like Fred • Flintstone for the rest of time.

The airlines aren't disappearing. Things will eventually get better. It might take a few years. I understand some of y'all haven't had careers longer than a few years so far, but seriously, stop panicking.

Exactly. It’s like everyone is trying to one up each other for the most dire prediction. Traffic was rebounding rapidly before the virus resurgence. We’d be well over a million passengers per day if that hadn’t happened. Possibly 1.5 million right now.

2019 was a record breaking year. Passenger loads don’t have to return that high for airlines to make a profit again. What that number is, I don’t know. Is it 1.8, 2 million, again, I dont know, but it isn’t 2.5 million passengers a day.

 

[bimmerphile]

Exactly. It’s like everyone is trying to one up each other for the most dire prediction. Traffic was rebounding rapidly before the virus resurgence. We’d be well over a million passengers per day if that hadn’t happened. Possibly 1.5 million right now.

2019 was a record breaking year. Passenger loads don’t have to return that high for airlines to make a profit again. What that number is, I don’t know. Is it 1.8, 2 million, again, I dont know, but it isn’t 2.5 million passengers a day.

"Right sizing the operation" is the new "shrink to profitability"

 

[tcco94]

Exactly. It’s like everyone is trying to one up each other for the most dire prediction. Traffic was rebounding rapidly before the virus resurgence. We’d be well over a million passengers per day if that hadn’t happened. Possibly 1.5 million right now.

2019 was a record breaking year. Passenger loads don’t have to return that high for airlines to make a profit again. What that number is, I don’t know. Is it 1.8, 2 million, again, I dont know, but it isn’t 2.5 million passengers a day.

Which just goes to prove how this thread and posting your opinion with absolutely nothing to back it is meaningless. Unfortunately, the forums are a dark place right now.

 

[upup89]

Exactly. It’s like everyone is trying to one up each other for the most dire prediction. Traffic was rebounding rapidly before the virus resurgence. We’d be well over a million passengers per day if that hadn’t happened. Possibly 1.5 million right now.

2019 was a record breaking year. Passenger loads don’t have to return that high for airlines to make a profit again. What that number is, I don’t know. Is it 1.8, 2 million, again, I dont know, but it isn’t 2.5 million passengers a day.

I remember in 2008 people saying the airlines were never going to hire an employee ever again. Par for the course this time also.