Too Lower ALV or Not?
#102
There are many false dilemmas being created to support individual narratives. The choices aren't riding ALV into the dirt vs a 20% give that magically saves the company. We have the luxury of a few months of rational thought to sort this one out.
Let's start with "Full pay till the Last Day" (of the taxpayer funded labor bailouts). We pay taxes and we pay union dues. If ever there was a time to argue the financial value of our dues, now is that time. Like them or not, our union's firm stance on holding ALV, probably put enough money in every pilot's pocket to cover dues for a year or longer. We pay lots of money in taxes, the "free money" is a return of our tax dollars. The bailout is for us, the labor behind the airline. Now is not the time to be gracious and hand back a gift. We should make contingency plans for when that money runs out, but nothing requires execution beforehand.
With regard to reducing ALV for cost savings, that ride is short lived. Within the current pilot group size it affords some immediate cost reduction, a reduction that is not required. It would be an optional form of charity akin to each pilot writing a check to Delta Air Lines, Inc. in an amount equal to 20% of monthly pay. ALV reduction as a furlough prevention measure increases cost to Delta Air Lines, because they incur fixed costs on per pilot basis in addition to the variable hourly costs. Maximizing productivity out of each pilot reduces the fixed costs by requiring fewer pilots. The only argument that can be made for reducing ALV vs furloughs is that the company expects a quick recovery and needs the pilots available quicker than a furlough recall. Under that scenario, the company is willing to pay a premium for availability. What is wrong with keeping current ALV as part of that premium? Another argument is that reducing ALV prevents furloughs and saves training costs by keeping pilots in their current categories. This is a double cost savings for the company, both in training and in pilot pay. We can offer a savings similar to ALV reduction via SILs, furthermore those are voluntary and individual.
Discussing all of these cost savings measures is nothing more than an exercise in mental ms5turbation. It does nothing to actually solve the crisis Delta is facing. We have a revenue crisis, not a cost crisis. If we really wanted to help Delta, we would fund passenger safety measures and an advertising campaign to promote those measures, rather than make a donation via reduced pay. What about funding thermal imaging cameras and promoting facemasks to reduce the spread aboard our flights?
The Theatrical Safety Association (TSA) did wonders restoring public confidence in air travel post 9/11. Attach a thermal camera to the body scanners and dress up a couple people in scrubs to look at the images. Once in a while, pull someone aside and post the occasional article about how they caught a crewmember with a fever attempting to travel.
I've fulfilled my daily requirement for self-serving entertainment via APC. Off to work on Plan B. I'm researching a few classes that will add value in my side business.
Let's start with "Full pay till the Last Day" (of the taxpayer funded labor bailouts). We pay taxes and we pay union dues. If ever there was a time to argue the financial value of our dues, now is that time. Like them or not, our union's firm stance on holding ALV, probably put enough money in every pilot's pocket to cover dues for a year or longer. We pay lots of money in taxes, the "free money" is a return of our tax dollars. The bailout is for us, the labor behind the airline. Now is not the time to be gracious and hand back a gift. We should make contingency plans for when that money runs out, but nothing requires execution beforehand.
With regard to reducing ALV for cost savings, that ride is short lived. Within the current pilot group size it affords some immediate cost reduction, a reduction that is not required. It would be an optional form of charity akin to each pilot writing a check to Delta Air Lines, Inc. in an amount equal to 20% of monthly pay. ALV reduction as a furlough prevention measure increases cost to Delta Air Lines, because they incur fixed costs on per pilot basis in addition to the variable hourly costs. Maximizing productivity out of each pilot reduces the fixed costs by requiring fewer pilots. The only argument that can be made for reducing ALV vs furloughs is that the company expects a quick recovery and needs the pilots available quicker than a furlough recall. Under that scenario, the company is willing to pay a premium for availability. What is wrong with keeping current ALV as part of that premium? Another argument is that reducing ALV prevents furloughs and saves training costs by keeping pilots in their current categories. This is a double cost savings for the company, both in training and in pilot pay. We can offer a savings similar to ALV reduction via SILs, furthermore those are voluntary and individual.
Discussing all of these cost savings measures is nothing more than an exercise in mental ms5turbation. It does nothing to actually solve the crisis Delta is facing. We have a revenue crisis, not a cost crisis. If we really wanted to help Delta, we would fund passenger safety measures and an advertising campaign to promote those measures, rather than make a donation via reduced pay. What about funding thermal imaging cameras and promoting facemasks to reduce the spread aboard our flights?
The Theatrical Safety Association (TSA) did wonders restoring public confidence in air travel post 9/11. Attach a thermal camera to the body scanners and dress up a couple people in scrubs to look at the images. Once in a while, pull someone aside and post the occasional article about how they caught a crewmember with a fever attempting to travel.
I've fulfilled my daily requirement for self-serving entertainment via APC. Off to work on Plan B. I'm researching a few classes that will add value in my side business.
#105
I've been through the past bankruptcy. My biggest concern besides the whole company tanking (we can't prevent it with pay cuts if it's going to happen), is cheapening our profession. We did irreparable damage to our profession after 2001. "I'll fly for free, I love flying" guys did a lot of damage. ALPA should have come out a lot harder against what happened. Most of those guys ended up as consultants. Management laughed at us until TA2. I'd rather make a stand now and go back to an industry where pilots are respected. Or just do something else altogether. You don't see doctors or lawyers cutting their rates right now.
#106
Super Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,873
For all you guys anxious to lower ALV to help mitigate furloughs, prevent BK, save the day etc - chill out. There may come a time when it will behoove us to come to an agreement with management but that time is not now.
All these fatalistic cash burn predictions are base on current (nil) revenue. Even in a depressed slow comeback revenue will skyrocket compared to April and May. We are at the nadir of this cycle. If revenue even returns to 50% of normal that will buy us additional time.
If the company really needs our help they may want to honor their previous SIL agreement. Until they do that we do two things - jack and squat. For all of you pressing for a quick deal at our weakest financial position what makes you think management will honor any agreement? I mean things may "change." They have a lengthy track record of deception, misleading us, and using every financial trick in the book to get around numerous previous agreements. If they want to draw on the goodwill of the pilot group they first have to establish some goodwill.
Finally if BK is truly on the table (I don't think it is) no agreement is worth anything. It all gets wiped out through the sophistry of the BK code.
Lets just all take a deep breath and see what the next couple of months hold in store for us. For all we know Chuck Norris could be working on something as we speak.
Scoop
All these fatalistic cash burn predictions are base on current (nil) revenue. Even in a depressed slow comeback revenue will skyrocket compared to April and May. We are at the nadir of this cycle. If revenue even returns to 50% of normal that will buy us additional time.
If the company really needs our help they may want to honor their previous SIL agreement. Until they do that we do two things - jack and squat. For all of you pressing for a quick deal at our weakest financial position what makes you think management will honor any agreement? I mean things may "change." They have a lengthy track record of deception, misleading us, and using every financial trick in the book to get around numerous previous agreements. If they want to draw on the goodwill of the pilot group they first have to establish some goodwill.
Finally if BK is truly on the table (I don't think it is) no agreement is worth anything. It all gets wiped out through the sophistry of the BK code.
Lets just all take a deep breath and see what the next couple of months hold in store for us. For all we know Chuck Norris could be working on something as we speak.
Scoop
#108
Gets Weekends Off
Joined APC: Aug 2011
Position: Hoping for any position
Posts: 2,506
#109
For all you guys anxious to lower ALV to help mitigate furloughs, prevent BK, save the day etc - chill out. There may come a time when it will behoove us to come to an agreement with management but that time is not now.
All these fatalistic cash burn predictions are base on current (nil) revenue. Even in a depressed slow comeback revenue will skyrocket compared to April and May. We are at the nadir of this cycle. If revenue even returns to 50% of normal that will buy us additional time.
If the company really needs our help they may want to honor their previous SIL agreement. Until they do that we do two things - jack and squat. For all of you pressing for a quick deal at our weakest financial position what makes you think management will honor any agreement? I mean things may "change." They have a lengthy track record of deception, misleading us, and using every financial trick in the book to get around numerous previous agreements. If they want to draw on the goodwill of the pilot group they first have to establish some goodwill.
Finally if BK is truly on the table (I don't think it is) no agreement is worth anything. It all gets wiped out through the sophistry of the BK code.
Lets just all take a deep breath and see what the next couple of months hold in store for us. For all we know Chuck Norris could be working on something as we speak.
Scoop
All these fatalistic cash burn predictions are base on current (nil) revenue. Even in a depressed slow comeback revenue will skyrocket compared to April and May. We are at the nadir of this cycle. If revenue even returns to 50% of normal that will buy us additional time.
If the company really needs our help they may want to honor their previous SIL agreement. Until they do that we do two things - jack and squat. For all of you pressing for a quick deal at our weakest financial position what makes you think management will honor any agreement? I mean things may "change." They have a lengthy track record of deception, misleading us, and using every financial trick in the book to get around numerous previous agreements. If they want to draw on the goodwill of the pilot group they first have to establish some goodwill.
Finally if BK is truly on the table (I don't think it is) no agreement is worth anything. It all gets wiped out through the sophistry of the BK code.
Lets just all take a deep breath and see what the next couple of months hold in store for us. For all we know Chuck Norris could be working on something as we speak.
Scoop
Demand will come back. It will take 2-3 years to see the same demand we had pre-Corona, and that's just my opinion. I'm not smart. But I do know this industry has been resilient. Every time there's a black swan event, it has come back.
#110
Gets Weekends Off
Joined APC: Nov 2011
Posts: 4,509
this is the most reasonable post I have read on here in awhile. Seriously.
Demand will come back. It will take 2-3 years to see the same demand we had pre-Corona, and that's just my opinion. I'm not smart. But I do know this industry has been resilient. Every time there's a black swan event, it has come back.
Demand will come back. It will take 2-3 years to see the same demand we had pre-Corona, and that's just my opinion. I'm not smart. But I do know this industry has been resilient. Every time there's a black swan event, it has come back.
And all these people freaking out about it being a 2-3 year recovery....when management says that they mean 2-3 years to be back to making 6 billion a year in profits...not just to be profitable.
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