when the fleet plan firms up.

so...nobody knows

 

They’re basing it off the fleet plan for summer 2021 rather than block hours. In yesterday’s townhall it was mentioned that there was a small chance the fleet plan could be out this week. Obviously it’s very dynamic with future orders and what can and can not be deferred or parked. After the fleet plan is out, I would think an AE would be out a week or 2 after.

 

Sounds good, but define "fleet plan."

What I mean by that is how can they possibly have a legit, comprehensive fleet plan right now based on anything? Current numbers are meaningless but we'll get much more clarity a couple months from now.

They already committed to 88/90's gone, which isn't the biggest deal since the majority 88's were gone this year anyway and the smaller 90 fleet is likely safely in the "demand reduction" zone for any realistic scenario.

From an article in another thread:

"...bookings for Thanksgiving are up 38 percent from last year, while the other winter holidays are up 40 percent."

If the "fleet plan" is basically the 88/90's gone that wold make sense. But if they commit to irreversable fleet decisions and staffing/displacement decisions that would take several years to undo, they could be simply locking in revenue/marketshare/profit loss for years to come.

 

Just hop on Delta.com and plug in some random city pairs and you can see that demand is ticking back up. I looked at a few round trips from DTW-LAX, DTW-SFO for next week, and quite a few are sold out. Granted that's with the 60% capacity restriction, but it's clear that there is a pent up travel demand. Zoom meetings can only accomplish so much. Anybody I've talked to, stuck working from home, is done with this. They can't wait to get back to work.

 

I agree. While I don't think 2019 numbers will happen this year of course, it seems like a very realistic possibility that the company could panic/groupthink into irreversible spastic reductions just in time to lose out on many billions in revenue, profit and even long term marketshare in some situations. That's why significant excess airframes and staffing has to be carried in one form or another for a while to see how this shakes out.

 

I suspect the unemployment rates are concerning management. I agree there will be a bump this summer with pent-up demand, however, once the stimulus money runs out and states have to pay unemployment compensation to an all-time record number of people, we may see states go bankrupt in Oct/Nov (just before the election).

Obviously a worst case scenario, but I think it’s a legitimate concern to management and that when all of the consequences on this shutdown shakeout, we’ll be in the throws of a significantly constrained economy that will take a few years to crawl out of.

Duhhh, right? It’s encouraging to see positive trends, but the country (and world) is going to have big bills to pay this fall. Management has to balance risk, survival, opportunity, fleet sizing, etc. I predict one of the majors will be too optimistic and end up in BK or worse.

 

Yes, on the town hall yesterday they were hoping for the fleet plan for 2021 by end of this week or early next week. Don’t know how long it would take Bob and his team to come up with the bid.

 

Just curious as to what’s worse than bankruptcy? Having to pay to work and several murder hornets behind the rudder pedals?


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Of course. While most of that number is directly related to the artificial draconian insanity overreaction we implimented, we don't know how many jobs will come back versus stay gone. I suspect many bars and restaurants may never reopen. Also this could accelerate the inevitable Blockbuster-esque demise of brick and mortar movie theaters who were only mostly even around pre virus in the first place because they artifically held desired content hostage. However we could also see a resurgence of American manufacturing assuming the national sell outs on both sides of the fake isle put the country first which is possible but by no means certain. I do think we'll see some degree of it though, even if we only partially capitalize on the opportunity instead of fully.

The 88/90 instant retirement is a huge capacity pull, as is the mandatory removal of 35 large RJ's and seat pulls from many more if a single pilot is furloughed. In addition I'm sure this will swing the needle on not doing expensive MX checks on ancient 320's and ER's on an airframe by airframe basis. Beyond that, any more fleet retirements will have to coincide with replacements otherwise we will become drastically and irreversably smaller for many, many years. The window of cost savings for doing such a move is relatively narrow and limited in its upside anyway. The downside is massive and will cost many, many times more than the savings over an even medium timeframe.

As to our "fleet plan" coming out this week or next week, if its anything other than 88/90 retirememt as far as fleets go, they're just panicking and trying to collapse to profitability which is guaranteed not to work, unless there are potential quick ramp up options they're not sharing with us, which is always possible. There's probably some awesome AC deals out there, and DL has too many fleets. The 88/90 pull will help consolidate that into a more realistic fleet plan while pulling a lot of capacity short term yet while allowing prompt replacement if needed. Much more than that is a huge gamble that's only guaranteed to destroy medium term revenue and sacred profits for only possible and very limited short term savings.

Along those lines, has any airline renegotiated AC leases and gates/fees? Seems like it would be incredibly easy if they all did it in mass. Call their bluff together and see if they'll self collapse and choke on unused assets no one can buy right now in a desperate attempt to extract full pay for.

 

Wow, that was a long dissertation to say I have no idea. They are not sharing with us because they don’t want to signal the competition. We are essentially the public. They may be shifting gears to make this a smaller more exclusive airline with room to spare and 6 feet between every seat. Nobody knows yet, not even the decision makers. Chill, we have until October to see what the demand will be.