Originally Posted by
Excargodog
Barring bankruptcy, the more the Big Three downsize the higher their unit costs. That would be the case even if they were a single fleet type, since by furloughing they will disproportionately retain the more senior (ie, more highly paid) pilots. But they AREN’T single fleet types, meaning every furlough - AND EVERY REHIRE - is going to generate a number of training events, as guys whose last previous type was in a 727 need to be 737 and/or MAX trained since his/her 787 is now parked. And even if all the flying came back in line proportionately by type, that would just mean more retraining.
No, unless the Big Three get some sweetheart deal from the feds or actually go through bankruptcy to extract huge concessions from their unions, I can’t see them bouncing back quicker than the LCC/ULCC model.
I’ll concede I may be wrong - wouldn’t be the first time - but I think the single fleet model (+/- the MAX for SWA) confers a substantial advantage - at least for domestic flying, which I believe will rebound first.
From the business model standpoint of view, LCC/ULCCs are in a much better position than the big 3. But like you mentioned above, that’s not taking possible chap 11s into account (4QTR20, 1QTR21). The bailout money will create problems too, specially for carriers that decide to not take it. The big three will be forced to stay over staffed inducing them to keep more airplanes flying. This in turn will generate indiscriminate overcapacity and will destroy yields for everybody. They won’t have any options but to operate at a loss (at least in the short-mid term) We’ll see the big 3 price-matching us on every single route. Having the lowest CASM it’s a great advantage, but it won’t be enough in the short term.
That’s why it’s my personal opinion that NK will eventually be “forced” to take the bailout money and mock the motions.