If we don’t save cash today, there may not be an airline tomorrow.

IMO, there will be no ERP and furloughs will cut deep. The airline will worry about future training costs as demand and revenue return. Until then, preserving cash is the strategy.

I hope I’m wrong and we survive this with minimal impact. As a data point, however, the Air Force is talking about a 30% budget cut in FY21 (govt has to pay for CV bailout). Now apply that across all DOD. Then extrapolate that to the Fed govt. Now consider the govt contractors and suppliers. Federal govt travel will be drastically slashed for years. What percentage of our business is that? Getting a lot more efficient is the only way we survive. With travel not really expected to return until 2022, expect the company to buy time by slashing big (fleets, labor) up front, and progressively figuring out the recovery the plan (think “just in time,” 3-6 month staffing outlook).

Frankly, the next 12 months is a freebie in that it will make little difference if we fly an empty 330 ATL-PHX vice an empty 737, giving the company time to right size and retrain. Which is why I think the company’s long term strategy is no ERPs, maintain compensation, and not marginalize the brand. Turning us into a People’s Express won’t generate revenue and will destroy the brand that provides our competitive advantage. While we may cut deeper than other airlines, I think we’ll also be the fastest to return to pre-CV performance by maintaining what’s left of our premium-paying customer base during the next 3-5 years.

If the $5B private equity investment is true, that bodes well for avoiding BK and maintaining our contract. We do not want to go to BK, which means furloughs, not ERPs.

Again, just my opinion.