Furlough Estimates
#132
patience
Joined APC: Mar 2011
Posts: 1,068
Multiple fleet types with many different seating configurations probably increases load factors by matching the right size plane on the right route.
All the outsourced and non-union labor coupled with higher load factors is probably why Delta was more profitable. Now in a weaker and thinner market that old ragged out fleet is probably going to bite them.
#133
Gets Weekends Off
Joined APC: Jun 2014
Posts: 589
you do realize that airlines were just fine not too long ago WITHOUT making a Billion dollars ever quarter. I am not saying that we will be just fine but it seems some think we have to return to pre-covid levels in order to "survive" is a little extreme IMHO. AA's game plan is reduce daily/monthly cash burn for now but still being nimble enough to capture market share when it presents itself....bankruptcy is for restructuring problems, we dont have a structuring problem, we have a demand problem and hopefully that returns and a good enough pace for us to ride it out through retirements and LOAs..if cash burn is ZERO by the end of the year, they can certainly ride it out. Comparing the 30% reduction of management and trying to draw a parallel to pilot staffing is shortsighted. The cost, training time, and mandatory retirements make them completely different, again IMHO.
#134
you do realize that airlines were just fine not too long ago WITHOUT making a Billion dollars ever quarter. I am not saying that we will be just fine but it seems some think we have to return to pre-covid levels in order to "survive" is a little extreme IMHO. AA's game plan is reduce daily/monthly cash burn for now but still being nimble enough to capture market share when it presents itself....bankruptcy is for restructuring problems, we dont have a structuring problem, we have a demand problem and hopefully that returns and a good enough pace for us to ride it out through retirements and LOAs..if cash burn is ZERO by the end of the year, they can certainly ride it out. Comparing the 30% reduction of management and trying to draw a parallel to pilot staffing is shortsighted. The cost, training time, and mandatory retirements make them completely different, again IMHO.
Look, I’m not saying there aren’t reasons to be hopeful. There certainly are. I just think that without a vaccine and vaccinations we’re simply not going to tap into anything resembling 2019 numbers. Not to mention the paradigm shift we’re seeing in business travel will be a real beating for legacy airline revenues moving forward. The only people traveling right now are the cost-conscious leisure traveler and even those are only traveling domestically.
“A 15% decline in revenue is enough to send an airline into chapter 11 bankruptcy”.
https://seekingalpha.com/article/435...ll-not-be-last
#135
Gets Weekends Off
Joined APC: Jun 2014
Posts: 589
Looking at the numbers I have my personal doubts that AA (or any legacy) will truly be able to achieve revenue neutrality by year end 2020. As for AA, it is simply not an investable company and will not be an investable company for the better part of the next decade. AAG will be 40-50B in debt by years end (depending on which metrics you use to measure debt). Even a return to profitability every quarter for the next decade won’t allow them to barely even a dent to be made in that staggering figure.
Look, I’m not saying there aren’t reasons to be hopeful. There certainly are. I just think that without a vaccine and vaccinations we’re simply not going to tap into anything resembling 2019 numbers. Not to mention the paradigm shift we’re seeing in business travel will be a real beating for legacy airline revenues moving forward. The only people traveling right now are the cost-conscious leisure traveler and even those are only traveling domestically.
“A 15% decline in revenue is enough to send an airline into chapter 11 bankruptcy”.
https://seekingalpha.com/article/435...ll-not-be-last
Look, I’m not saying there aren’t reasons to be hopeful. There certainly are. I just think that without a vaccine and vaccinations we’re simply not going to tap into anything resembling 2019 numbers. Not to mention the paradigm shift we’re seeing in business travel will be a real beating for legacy airline revenues moving forward. The only people traveling right now are the cost-conscious leisure traveler and even those are only traveling domestically.
“A 15% decline in revenue is enough to send an airline into chapter 11 bankruptcy”.
https://seekingalpha.com/article/435...ll-not-be-last
#136
Gets Weekends Off
Joined APC: Apr 2020
Posts: 264
PHL had the most international transatlantic departures for any AA hub. Its the gateway to Europe, I would say it’s a fortress hub. CLT is bigger domestically, with a few transatlantic and carribean routes.
#137
#138
Gets Weekends Off
Joined APC: Jun 2014
Posts: 589
Naw man, I'll leave that up to you. I am betting you are senior enough at PSA to have plenty of time to run all these dooms day numbers and share them with all of us. I am too busy flying a full months schedule with full flights. Plus, feeling ****ty about the place or industry that i have devoted my life's work too doesn't do me or anybody else any good. Based on that seeking alpha article it sounds like we are all idiots for being pilots since all airlines are doomed. Let me know what your next profession is so I can wish you good luck. Take care.
#139
Banned
Joined APC: May 2017
Posts: 2,012
Whether a 15% revenue decline will bankrupt an airline really isn’t the important question.
the issue is if there is some sustained decline that will. Hard to see how that’s not the case.
Assuming traffic tracks revenue (not sure that’s not optimistic) the airlines are sitting on an 80% decline. At the moment they have a big government lifeline. Hopefully they are using the summer to do the easy things to cut costs. But there are only so many easy things to cut. A year from now traffic still down 50% And all the easy things are done... you are still servicing the debt from vision 2019.
the issue is if there is some sustained decline that will. Hard to see how that’s not the case.
Assuming traffic tracks revenue (not sure that’s not optimistic) the airlines are sitting on an 80% decline. At the moment they have a big government lifeline. Hopefully they are using the summer to do the easy things to cut costs. But there are only so many easy things to cut. A year from now traffic still down 50% And all the easy things are done... you are still servicing the debt from vision 2019.
#140
Naw man, I'll leave that up to you. I am betting you are senior enough at PSA to have plenty of time to run all these dooms day numbers and share them with all of us. I am too busy flying a full months schedule with full flights. Plus, feeling ****ty about the place or industry that i have devoted my life's work too doesn't do me or anybody else any good. Based on that seeking alpha article it sounds like we are all idiots for being pilots since all airlines are doomed. Let me know what your next profession is so I can wish you good luck. Take care.
And why would you feel crappy about all of this? We generally have zero control over any of this. But we can control how we prepare for it. This industry is extremely cyclical and prone to woes very easily due to the nature of high operating costs and thin margins. Just the airlines man. Not much else to it. The only constant is and will always be change.
As for my next profession? I don’t have one. But what I do have is a few other income streams that I’ve worked diligently to build over the years. My goal was to be able to walk away from professional aviation in the next 10 years. I still plan to be able to do that if I wish.
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