After the current earnings release it is clear that SWA is the best positioned airline and it certainly would be premature to ask for concessions. I think the company’s intent was to get unions to consider best the options if demand doesn’t return by October.

SWA is sitting on $15 Billion cash, $10 Billion of which is leveraged. That’s almost 18 months survival without any demand improvement. Not counting the remaining $3B government loan or any other money they can raise with $8B in unencumbered assets and no other debt to speak of. Demand is slowly improving off the bottom. It appears they are positioned to gain off of any overly leveraged airlines in the future. It is hard to imagine the need to furlough even if loads are down 30% in October from last year.

 

It seems like maybe travelers are slowly beginning to return.


Looking at the TSA Total Traveler Throughput data, traveler throughput has increased each week in April. Comparing last week to this week, each day of the week has increased by at least 20%. Yesterday (a Thursday) saw 154,695 travelers, an increase of 38% over Thursday of last week. It was also the biggest day since Mar 29, when 180K travelers were processed by TSA. The week of April 12 appears to have been the low point.


If traveler throughput were to continue to increase by 20% per week, we would exceed last year's peak July throughout (~2.7 million per day) in about 22 weeks. A typical day from last year was about 2.2 million. Of course, it's unlikely that we'll sustain that level of increase for 22 weeks given the economic situation and the trepidation over covid. However, it does give us an idea of what could be possible.


The actual numbers recorded provide evidence that travelers are beginning to return. At the rate they are returning, it might be realistic to think that they could return to a level that significantly limits the carnage within a few months. This is all based on very limited information, so take it fwiw. But it's a small glimmer of hope and good news for now.


Concessions are a permanent solution to a temporary problem.

 

It’s possible we could be ahead of the trend without long international connections.

 

We need places like Disney World and Universal to open. That’s tens, if not hundreds, of thousands just going to MCO. FL beaches and Mexican resorts too. Once we see that coincided with a treatment, we will see numbers dramatically increase.

 

Apparently UAL conducted an employee town hall today. The rumor is (and this is unsubstantiated) that the plan is to furlough a minimum of 25% and maybe over 50% come 1 Oct.

There’s no really useful info yet on the United APC forum. But the rumor jives with the tone of UAL’s earnings call today.

Does anybody have any UAL buds that can verify or offer better info?

Edit: new info from Twitter [MENTION=87016]TheAirchive[/MENTION]:
#United Town Hall 05/01/2020
- Original plan 7 weeks ago was demand down 70% for 2 months, then recover. Didn’t happen. - Demand essentially still down 100% with no sign of uptick. - SWA now planning on a 5 year recovery SWA has 14 Billion cash on hand.
- UAL has only 9.6 billion cash - UAL had 6 billion at start of crisis - SWA much smaller than UAL - UAL would have to have 25 billion to match SWA - UAL must reduce cash burn - AA & DAL cash burn 70M/day - UAL burning 45M/day
- SWA very aggressive & wants more assets as others collapse: wants to be only carrier in DEN & largest in Chicago. - Displacement bid for Pilots tomorrow
- Will mitigate with job share, early outs, etc. Innovative plans. Working with unions. - Gave in to IAM. Now all IAM agents going to 30 hrs/week, not original planned 20.
- Say that they can legally cut hours (under CARE). No hourly $ cuts, just the hours worked. IAM fighting back strong, but that’s what they should do, according to Kirby. - All employee groups will have hours, not dollar, cuts.
- Need a vaccine before everyone returns. - UAL loss was so much bigger than others because of write downs. - Measure of an airline now is Cash Burn. UAL is beating everyone with the lowest cash burn. - UAL cash burn down 50%-60%
- Hoping for demand to recover by 10/1. If not, drastic action for long term survival. - Prepare for worse case - Cost structure must match demand: If demand down 30%, payroll must be down 30%. If demand down 90%, payroll must be down 90%
- Took an ax to every expense except employees. - Nobody knows when demand will return. Still no improvement. - Most optimistic, still down 30% in October. - Better picture in June/July. - Fingers crossed.
- Not hedging fuel. Does not work. - May: UAL 63 int’l flights/week. 9 per day. DAL 50. - “When you’re going through hell, keep going”. Kirby & Winston Churchill
- More hard questions from IAH employees than anywhere else. - If considering/near retirement be aware that schedules, bids,routes,quality of life,& everything will change.Not going to be anything like schedules & airline life was in the past.

 

That thread posted by [MENTION=33005]Arch[/MENTION]ive sounded just awful... but I didn't see the 50% number you mentioned. Their suggestion that if demand is 90% lower they needed to reduce costs by 90% seems unrealistic. I doubt they'll have an airline if it comes to that.


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Seems like a lot of fear-mongering in that UAL info. I’m not saying things aren’t bad but it comes across as trying to scary the crap out of employees.

 

Agree. Or telegraph to the government that if they want United to survive, they'll need more help.

Wonder where they get the notion that SWA is much smaller? Same # of airplanes and more passengers. Maybe they were talking number of employees.


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Probably true (a lot of FUD). It’s in management’s interest to get concessions.

One interesting thing about those notes is they made SWA’s situation sound pretty bullish.

 

Exactly. Stating that SWA wants to be the only carrier in DEN for example....where do they get this $hi7? UAL management loses its credibility when they state stuff like this. I’m calling a lot of that for what it is......FUD.