ULCC Model in the U.S.
04-07-2021 | 05:00 PM
#181
Gets Weekends Off
Joined: Feb 2012
Posts: 4,601
Likes: 0
From: CRJ FO
My narrative?
3 bailouts later and I no longer think liquidation is on the table. The next couple years are going to be pretty interesting though that’s for sure.
As for the current situation I think it’s as simple as all the airlines rushing to grab market share while the federal government is picking up a big chunk of the tab. And the pressure on AA is only going to increase. Like I said, interesting couple of years ahead.
3 bailouts later and I no longer think liquidation is on the table. The next couple years are going to be pretty interesting though that’s for sure.
As for the current situation I think it’s as simple as all the airlines rushing to grab market share while the federal government is picking up a big chunk of the tab. And the pressure on AA is only going to increase. Like I said, interesting couple of years ahead.
04-17-2021 | 08:51 AM
#182
Gets Weekends Off
Joined: May 2016
Posts: 343
Likes: 0
My narrative?
3 bailouts later and I no longer think liquidation is on the table. The next couple years are going to be pretty interesting though that’s for sure.
As for the current situation I think it’s as simple as all the airlines rushing to grab market share while the federal government is picking up a big chunk of the tab. And the pressure on AA is only going to increase. Like I said, interesting couple of years ahead.
3 bailouts later and I no longer think liquidation is on the table. The next couple years are going to be pretty interesting though that’s for sure.
As for the current situation I think it’s as simple as all the airlines rushing to grab market share while the federal government is picking up a big chunk of the tab. And the pressure on AA is only going to increase. Like I said, interesting couple of years ahead.
04-17-2021 | 08:59 AM
#183
Perennial Reserve
Joined: Jan 2018
Posts: 14,248
Likes: 257
The main problem isn’t labor rates per se. It’s one of an awful lot of people being at the top of those scales, and the WB aircraft (and their pilots) not being able to be optimally employed until international and business flying rebounds. that and the debt service. $35 billion is a lot of debt to service - especially now when everyone is losing money.
04-17-2021 | 10:43 AM
#184
Prime Minister/Moderator
Joined: Jan 2006
Posts: 45,127
Likes: 796
From: Engines Turn or People Swim
This is why startups seem to be able to get goping and occasionally thrive despite numerous structural barriers to entry. A new pilot group works for a lot less, and that won't change until they get a union, operate for a couple decades, and do a couple contract cycles.
04-17-2021 | 01:06 PM
#185
Perennial Reserve
Joined: Jan 2018
Posts: 14,248
Likes: 257
This is why startups seem to be able to get goping and occasionally thrive despite numerous structural barriers to entry. A new pilot group works for a lot less, and that won't change until they get a union, operate for a couple decades, and do a couple contract cycles.
Last edited by Excargodog; 04-17-2021 at 01:17 PM.
04-17-2021 | 07:17 PM
#186
Gets Weekends Off
Joined: May 2016
Posts: 343
Likes: 0
I think that's the rub. As a guidance counselor told me more than a few years ago you can expect your pay to be related directly to your ability to make your company money. Obviously there are exceptions but I've felt that was good advice all these years later. I'm sure we would all like to make 500K a year but most aren't in a position to do so and if the company's bottom line can't support it eventually it will go out of business. Guess we'll see.
04-17-2021 | 08:24 PM
#188
Perennial Reserve
Joined: Jan 2018
Posts: 14,248
Likes: 257
Depends on your bond rating usually although the payout is generally twice a year rather than monthly. Or at least what your bond rating was when you took out the loan.
https://www.forbes.com/sites/michael...h=2d49b006cffa
https://www.bloomberg.com/news/artic...-strong-demand
But the big risk is that all the money the fed has been pumping into the economy will raise interest rates and when the bonds mature they will need to be refinanced at a far higher rate if the company can’t generate the free cash flow to pay the bonds off outright.
https://www.forbes.com/sites/michael...h=2d49b006cffa
https://www.bloomberg.com/news/artic...-strong-demand
But the big risk is that all the money the fed has been pumping into the economy will raise interest rates and when the bonds mature they will need to be refinanced at a far higher rate if the company can’t generate the free cash flow to pay the bonds off outright.
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