Just to clarify, I said, "It wouldn’t completely surprise me if we end up furloughing 60-70%". I don't think that's the likely case. I then laid out what I think might be a realistic number of about 3,000, or roughly 30% of our list. And, in any case, I don't see them starting off furloughing 60-70%.

And btw, we are not overstaffed due to the MAX. That is simply not the fact. Our manning levels began to increase shortly after ratification of the 2016 contract, well before the MAX arrived on property and well before the MAX was grounded. The MAX crisis simply exacerbated the overmanning that was already well under way.

As many here have pointed out this situation is unprecedented and highly dynamic. Even the experts are confounded. They are all over the map with their projections. There are guys like the prominent Oppenheimer analyst who just today stated he thinks the worst is over and that the tech and health care sectors will fuel the recovery. On the flip side, there are other well-known economists and experts like Nouriel Roubini, Scott Minerd, Peter Schiff, and Larry Summers who think that, at best, we are going to see a deep recession, surpassing that of 2008-2009.

Oil is at a historic low reflecting the gigantic demand destruction of the corona crisis. There have been 20 million new unemployment claims in the US over the last several weeks. As the small and medium-sized business that employ a not-insignificant portion of those 20 million begin to permanently shut their doors, how long will it take to crawl back to healthy employment levels?

As states open back up, will there be a "second wave" of infections? I don't know. A lot of epidemiologists think so. Maybe they're wrong. The states beginning to open back up now aren't following the Trump administration's guidelines. Maybe the guidelines are too strict and they were issued more to appease Democrats than for actual practical application. Maybe if there is a second wave, the public will be more scared of the economic fallout than they are of the virus, and they'll demand to let the chips fall where they may - the sort of sentiment expressed by the TX Lt Governor when he said, "There are more important things than living, and that’s saving this country for my children and grandchildren and saving this country for all of us ... I don’t want to die. Nobody wants to die, but man we gotta take some risks and get back in the game and get this country back up and running.” But maybe the public will still be more scared of the virus than they are of the economic carnage. No one knows how this is going to play out.

SWA is the strongest airline financially and arguably the best-positioned to take advantage of the recovery when it happens. No one doubts that a recovery will occur. The question is centered around how long a recovery will take, when it will begin, and what will permanently change as a result of covid? There is no consensus on any of that right now.

If the situation plays out more toward the pessimistic end of economists' projections, though, SWA (and all airlines) may need to scale way back in order to survive. If it plays out more like the optimistic projections, then we probably get by with no furloughs.

I'm not claiming to know which way any of this will go. Some respected experts are saying it might be fairly mild and some experts are saying it might be another Great Depression. Nobody knows how it's going to go. I'm cutting way back on my spending and focusing on my side business to be prepared as possible for a more worst-case scenario but hoping for the best.

 

OK, let's go with 3,000 furloughs.

- What are you basing your furlough numbers on? I'd like to see some math, staffing levels, and the rationale for the numbers. Bear in mind, the loudest complaining about overstaffing has come from the line swine - not the company.

- How long will this downturn last? Consider the changes in the past 2 weeks, let alone past 2 months and going forward.

- By furloughing, are you committing to ceding the market share to our competitors who outsource their work and how do you intend to ensure that Southwest is competitive while keeping people furloughed? Do you cede scope in order to let Southwest be able to keep our market share?

- What is the breakeven savings point in time of any potential furlough and what factors are you basing it on?

- What do you think is our training capacity and once recalls become appropriate, how long do you think it would take to run 3000 pilots through the recall process?

 

SWAPA was saying we were overstaffed by around 700-800 pre-Covid due to the Max. From what I hear, we are rotating about 180 airplanes into and out of the desert (to avoid the expense of pickling them). 180 airplanes at 14 pilots per airplane = 2500 pilots

2500+700 = 3200 pilots

At the legacies a sizable furlough is an expensive proposition. Each furlough generates a tremendous amount of training churn as pilots jockey for position in each displacement bid. At USAir it took 9 months post 9/11 for them to get to my furlough date and I was 1149 from the bottom. That massive expense is why they find it affordable to offer early retirements - it's cheaper.

At SW we don't have any such cost. Downgrades take a few days. Displacements are a morale problem more than a cost problem. It is cheap and efficient to furlough when you have a single fleet type.

I'm guessing based on statements they've made in the past that they can't accommodate much over about 1000 pilots per year to hire or recall. I forget how long you're out before you need an entire new initial to requalify.


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A lot of those planes we parked were old 700’s ready for retirement. We kept flying them because the Max was grounded. Now they’re taking their nap before being turned into beer cans. When the Max finally does come back, there’s over 100 of them with our name already painted on the side.

If load factors are in the 50-60% range by end of summer I don’t think we furlough anyone. Definitely not 1/3rd of the list.

 

I'm not pretending to be an expert at this game. None of us know the ins and outs of what's going on in the heads of the leadership at the GO. Maybe they are simply focused on simply surviving the pandemic and not thinking much about five years from now. On the other hand, maybe they see covid as NBD, but a great opportunity to attain labor concessions and seize market share. I have no idea.

The science behind the covid virus is not well-established. It has only been around for four months. Science has not had a lot of opportunity yet to fully understand it. It has had zero chance to run any long-term studies on the virus.

The economics and politics behind a world-wide shutdown driven by a global pandemic are also not well-established. This has never happened before in the modern global economy.

I said my guess at 3,000 is what "I think might be a realistic number". I have no certainty about that. "I think", and "might" are key words in that statement. I'm not talking to GK, VDV, or any of the SWAPA leadership. I'm not an airline industry analyst. My guess at 3,000 is based simply on the number I've heard circulated that we were overmanned by about 2,000 pilots going into the covid crisis. That put us at a pilot to aircraft ratio of just over 13. Our traditional pilot to aircraft ratio had been 10.5 until the last several years. We know we can operate just fine at 10.5. Based on that ratio, that would put our need for pilots at about 7,900. If we've currently got 180 aircraft parked (on a rotating basis and currently flying around with single-digit and low two-digit load factors), that works out to be about an additional 2,000 pilots at 10.5 pilots to aircraft (more using today's pilot to aircraft ratio).

So, depending on what happens with opening up the economy, I could see us furloughing anywhere from zero (V-shaped recovery) to 6 or 7,000 (Great Depression level downturn). 3,000 pilots is a WAG that takes into account our current overmanning (2,000) with an additional 1,000 to reflect the reduced number of aircraft as a result of likely continued diminished overall demand. I'm not at all a koolie but I think SWA will try to avoid furloughing the full number they could justify furloughing to the SWA board. Just a feeling. I could very well be wrong.

Maybe the need for pilots will be modulated post-covid if governments require or passengers demand social distancing on aircraft. Just one more wild card that nobody has any idea how it will develop that could effect the decision to furlough or not.

Again, no one knows how this is going to play out, especially not any pilot armchair economists/industry analysts. I could easily be way off. That's a given. I'm a pilot.

 

Me:

 

Stealing this. BAHAHAHAHA!!!


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Whatever.....still not as great a vehicle as the greatest sports car EVER. The Mazda Miata!!!

 

So the pool now rests at about 30%?

F.

Yall better not be picking up that open time while I’m out in my yard looking up.

 

RJ! You are thinking like an airline exec! If I were in the big chair, I would not want to furlough anyone. The idea is to outlast your competitor. If AA, DAL and UAL furlough, we have an opportunity to hold our markets, expand current markets, and fill in the gaps of abandoned markets. SWA has the financial ability to outlast the others, but not forever. Operating an airline on borrowed money is risky (UAL AA) but SWA may do it to pounce on abandoned markets.

This is all dependent on loads coming back. If our planes are still empty after the 4th of July, plan on furloughs this fall.

I would support half pay for everyone (half the flying as well) keep everyone on property, current and ready to ramp back up quickly. That’s good for the company, keeps money in everyone’s pocket, and keeps everyone employed. I don’t see that as a “concession” we just become part time employees. Same pay scale, same work rules, same contract.

“Same pay till the last day” is a nice thought, but not very practical. It would just prolong furloughs and hamstring flexibility for the company to throttle the operation. The more agile the company can be, the quicker we will recover/expand.

If SWA plays their hand just right, I think we will come out ahead.