Originally Posted by
123AB
When we're visiting the classroom, I feel like BP (or whoever is there that day) is good at giving us the current planning numbers that are internally releasable as of that moment in time. The thing is though, conditions are constantly in flux so those numbers can and do change. Next month, heck, even next week the numbers could be higher or lower.
Let's just assume there is not a recession coming and no reduction in flying demand, and let's just assume that the public adjusts to our new offerings and we at least keep the pace or improve on our numbers. If that's the case, we do have retirements starting to ramp up in 2026 and especially into 2027. Also, a couple hundred pilots go out on medical each year with some of them to never return. And 3-5% will leave for another airline for any number of reasons that are right for them. Now consider that from CJO to the post-IOE pipeline takes 4-6 months and of course there are hundreds to get through the pipeline...so I could see the need for hiring to start ramping up sometime in 2026.
Economic recession and reduced flying demand? Boeing doesn't deliver on the Max 7? Then it's a different story.
To try to even think about staffing between now till the end of the year really is a fools errand. One data point so far. Delta will reduce capacity. UAL reports tommorrow. I would not be surprised if they do the same. No CEO is going to go against that. I expect SWA to do the same. No doubt their is softening in bookings. It's small and strategic. It's not big. Delta will cut capacity 3%-5% in back half of the year. I can't think of scenario where SWA wouldn't cut either. Doesn't make sense. It also doesn't mean they will furlough either. Over 300 guys retire within two years and 500 guys in three years. To furlough means their is a long term view of an economic downturn. It's also expensive. During the GFC, SWA's revenue decreased 6%. Thats a pretty big drop. Nothing so far indicates that. I still believe that a VSP type of scenario would be negotiated before they would pull that lever. I would hope. After the mega mergers, airlines do a much better job in managing cash and cost's. SWA is on an island of it's own because of it's revenue deficiency already compared to it's peers. If or when their is a severe downturn, SWA will be much more vunerable then previous times. They just don't have the margins they had in years past. If yields soften, it's a tough spot for management. Balance sheet is strong and still the best in the industry. Net cash with about $14 Billion in unencumbered assets if neccesary. But SWA's BOD is different now. I'm hoping for a small patch of softness in the economy if at all.