Quote:
Originally Posted by trip
Five years is a given for any significant hiring at the big three, beyond that no one knows.
For the Big Three it’s sort of a perfect storm of ugliness. Their big money makers - international and business flying - are hurt the worst and likely to recover the slowest (and for business flying, incompletely). And all the aircraft optimized for those niches must either be parked (driving up overhead costs with non productive assets) or reconfigured (if possible) to support regular domestic flying. At the same time they have had to bribe the personnel flying that equipment to retire or train them (at non trivial cost of both lost productivity and training personnel resources) to fly equipment more suited to regular domestic flying and thereby generating huge costs for the retirees and huge costs for the training churn (which much of the latter will need to be undone if/when international and business flying returns as will the equipment reconfigurations).
The overall slowdown and shrinking of all flying is going to shrink scope which is going to shrink all the regionals with the potential exception of Horizon. In many areas the Big Three have been using their own flying and that if their regional affiliates to essentially block competition by tying up limited gate availability. That won’t be possible in the immediate future, allowing the LCC/ULCC folks to get their foot in the door at even the fortress hubs and once there they will be difficult to dislodge.
And, speaking of competition, there will be competition - competition that does not share either the legacy costs of some of the Big Three or the expenses of multiple fleet types (and some of those antiquated and inefficient). Competition like Breeze using ultra efficient aircraft that can make long skinny routes economical crewed by all newbies with nobody yet up to year three on the payscale. And again, the LCC/ULCCs flying single type equipment with relatively junior crews are getting more efficient aircraft, NEOs and MAXs, that are going to carve into the not only domestic market share but the Hawaii traffic and much of the near international (Caribbean, Central and South America) and maybe even into some of the European flying that was the exclusive niche of the Big Three.
every airline’s CASM is going to be driven up by the reduced flying and furloughs, if only because they’ll be losing junior (payscale relatively cheap) pilots and retaining senior (payscale relatively expensive) pilots, but the Big Three will be affected by this to a considerably greater extent (and for a considerably longer period) than the LCC/ULCCs and it is no longer impossible to believe that any of the Big Three, especially AA with its massive debt load - is too big to fail. And like pattern bargaining in wage negotiations, one of the Big Three going into bankruptcy puts a lot of pressure on the others to try to get relieved of their debts and expensive contracts by taking that route too.
But for the LCC/ULCCs and newbies like Breeze (who figured to lose money the first few years in any event) it won’t be a lost decade. Maybe another year and a half at worst, IMHO.