Originally Posted by
Denny Crane
I don't think it will come back in any significant amount to make a difference. Revenue is only going to come back when people feel it is safe to fly which means one of two things. There is a vaccine and/or there is a treatment that has a very high degree of successful treatment. A vaccine is a year away. All the studies I have read about are not going to be complete until late summer/early fall. Hence my pessimism.
I don't agree with those presumptions to the extent you're advocating for. Cases and deaths will beging to fall, then plummet, then most likely have a nominal resurgence "second wave" (not nearly as big as the first) and then receed. A vax is nowhere near a cure all silver bullet anyway, even assuming it can get to market anytime this or next year. Successful coronavirus vaccines are notoriously hard to achieve and most things like this fizzle out on their own long before a vaccine is developed anyway.
Most of the recovery will happen long before the traveling world is vaccinated, even if that's a thing which it may never be.
Now you are putting words in my mouth. Never said I thought we, or others, were/are going to liquidate 100%. Gubmint won't allow that.
No way will the government allow endless bailouts of the big 4 with today's revenue levels either.
The crux of our argument is you feel the additional time we will provide the company with a ALV reduction can/will make a difference. I do not. IMO that additional time will be minimal at best.
We don't have to outrun the coronavirus, we only have to last a day longer than our worst competitor. Right now from what I've seen we're best case middle of the pack and falling. Lots of that can be attributed to the "religious" issue of FA unions though, and as long as that persists there's nothing we can do on our end.
As far as getting slaughtered in the upswing......come on now, do you really think our management is that stupid? Do you think the other majors are not in the same boat as we are and will not cut as much or more than we do? You are fear mongering with you last couple sentences.
Its not fear mongering to state the obvious. I mentioned the other legacy airlines only because we will be "slaughtered" by any of them who can outrun us on the upswing. However maybe they all run over the cliff's edge together in corporate groupthink as they are prone to do at times. Fine, although I bet SWA can ramp up faster than any of us. Them notwithstanding, the "growth" marketshare that will be left hanging for pop up predatory LCC's will be gobbled up quickly if we're not ready for it. JB and AS are already licking their chops thinking we're about to surrender SEA, BOS and much of NYC. I'm sure the existing LCC's as well as AirTran 5.0 will be happy to barf capacity all over ATL and other places while we're sending out recall notices.
Ok, I will define an "appreciable increase" increase in revenue as enough revenue that a $100 million cut on our part increases our liquidity by 2 weeks instead of less than 2 days.
OK so when do you think that will happen? Whatever month it is, every month between now and then we wait will be 2 more weeks we could have had saved up but didn't. You've used the bandaid on a torn open artery analogy before but I disagree with the premise of that analogy. Instead I think its more accurate to say that we're spurting arching ropes of blood from all 4 limbs, so some are saying that proves putting a tourniquet on one or even two of them is useless. I disagree. More blood (revenue) is on the way, and while it may or may not be enough to save the patient, there's a pretty good chance it will be. Let's stop the bleeding on the one or two limbs that we can for now to buy time.
That would be my stratedgy.