Originally Posted by Big John

For all of you who have been wondering how much it will cost United to furlough and retrain pilots, I encourage you to contact your reps and/or file a PDR.

And good luck with that. We all know you'll never get an answer. Big John is here to take care of you, though.

PAST FURLOUGH NUMBERS ASSUMING AN 18% REDUCTION

2003: 18% of 12000 pilots = 2160 furlongs

Actual number was 2172

2008: 18% of 8000 pilots = 1440 furloughs

Actual number was 1437

2020: 18% of 13500 pilots = 2430 furloughs

Actual number is N/A

SAVINGS FROM FURLOUGHS

The rule of thumb in 2003 was that for every six first officers that the corporation furloughed, it would save $1,000,000 per year.

Contract 2000 pay rates:

2002 B737 FO year one $50
2002 B737 FO year two $80

Contract 2012 pay rates:

2020 B737 FO year one $91
2020 B737 FO year two $140

Pay rates for these positions, where most of the furloughs will occur, are 75-80% higher than in 2002. The corporation now saves about $1.7M for every six FOs furloughed at present rates.

Projected furloughs = 2430

2430 / 6 = 405

405 X $1.7M = $688.5M annually

TRAINING COSTS

In 2008, the price tag for furloughing 1437 pilots and retraining the remainder of the pilot group was $100,000,000.

I don't know exactly how many pilots had to be retrained, but I heard the price tag was in the neighborhood of $60,000 per pilot.

8000 pilots- 1437 furlongees = 6563 remaining pilots

$100M / $60,000 = 1667

1667 / 6563 = 25% of remaining pilots who have to be retrained

Today's numbers:

13500 pilots - 2430 furloughees = 11070 remaining pilots

25% of 11070 remaining pilots have to be retrained = 2767 pilots

Let's just double training costs versus 2008 and call it $120,000 per pilot at current rates:

2767 pilots X $120,000 = $332M one time cost

$688.5M annual savings = $1,886,300 savings per day

$332,000,000 / $1,886,300 per day = 176 days to break even on furloughing 18% of United pilots.

Even if they have to retrain half of the remaining pilot group, their break even is still under a year at 352 days.