Concession discussions in our future?
05-22-2020, 09:59 AM
#471
Swimmin' in da pool
Joined APC: Jan 2014
Posts: 444
Originally Posted by Thunder1
RJS,
Thanks for the quick reply and for re-reading my post and the apology. A much welcome response on the Internet when someone can apologize and move on -- a rare behavior on semi-anonymous forums these days.
Best wishes to all of us in these crazy times.
Cheers!
Thanks for the quick reply and for re-reading my post and the apology. A much welcome response on the Internet when someone can apologize and move on -- a rare behavior on semi-anonymous forums these days.
Best wishes to all of us in these crazy times.
Cheers!
05-22-2020, 03:08 PM
#472
Gets Weekends Off
Joined APC: Oct 2006
Posts: 2,845
Originally Posted by Mozam
Now your talking, with 2 coffee makers per AC, I will volunteer to be your assistant VP. I have some great ideas like giving out free samples at all the deck parties. Noting says GO , like deck parties and a despise for pilots .
05-22-2020, 03:51 PM
#473
Gets Weekends Off
Joined APC: Feb 2018
Posts: 1,256
Newly updated chart. I included data from Open Table (the restaurant reservation service) to see how it relates to our industry. From Open Table: "This data shows year-over-year seated diners at restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins." The rest of the info is pretty self-explanatory. Data for the number of reopened states from https://www.governing.com/now/Reopen...-Way-Back.html
22 May.jpg
22 May.jpg
05-23-2020, 05:41 AM
#474
Line holder
Joined APC: Nov 2013
Position: On the bus,seat 0A
Posts: 3,228
Originally Posted by Privateer89
For all you VP’s...my big question is at what point could we break even? I realize there are a lot of factors such as reduced capital spending, early outs, and EETO. These will all work in with the lower ticket prices we will undoubtedly see. We are currently burning 20M/Day which is much improved from the 30M-35M from April. My guess would be if we could operate about 80% of our fleet at 70-75% load factor.
This is where SWA’s no furlough legacy and balance sheet will be significant. Every airline will obviously be overstaffed come Q4 barring the failure any large airline. If any company is burning so much cash that bankruptcy is a risk, then a furlough is most likely in the playbook. They have an obligation to act in the best interest of the shareholders. If we can break even or withstand smaller temporary losses, it would be easier to justify being overstaffed in order to maintain the no furlough legacy for the long term benefit of SWA.
This is where SWA’s no furlough legacy and balance sheet will be significant. Every airline will obviously be overstaffed come Q4 barring the failure any large airline. If any company is burning so much cash that bankruptcy is a risk, then a furlough is most likely in the playbook. They have an obligation to act in the best interest of the shareholders. If we can break even or withstand smaller temporary losses, it would be easier to justify being overstaffed in order to maintain the no furlough legacy for the long term benefit of SWA.
Realistically I don’t think revenues are close to $100/pax, and the numbers are only good while the future tax payers pay our current salaries.
05-23-2020, 06:14 AM
#475
Gets Weekends Off
Joined APC: Jul 2013
Position: 175 CA
Posts: 1,544
Originally Posted by symbian simian
WAG: Losing $20M per day, if the average revenue is $100 per pax you need 200,000 pax per day to break even, currently running around 2000 flights per day, so 100 pax per 180 available seats is 55% load factor to break even.
Realistically I don’t think revenues are close to $100/pax, and the numbers are only good while the future tax payers pay our current salaries.
Realistically I don’t think revenues are close to $100/pax, and the numbers are only good while the future tax payers pay our current salaries.
05-23-2020, 07:53 AM
#476
Gets Weekends Off
Joined APC: Nov 2013
Position: 737CA
Posts: 118
The fact that SWA is still running capacity at 60%-70% below normal is very alarming. Going into the busiest season of the year. That goes for all airlines. Capacity will be an important gauge going forward. All the other numbers are metrics that can't be analyzed until July earnings release(or lack their of). Real metrics to follow going forward are cash flow and capacity. All other metrics, CASM/yield/average airfare, breakeven load factor, etc are all distorted due to grounding of so many airplanes. Airlines are capping capacity well below the airplanes ability. Basically SWA as well as others are adding capacity to make passengers feel safe. Not because its profitable. Bizarre to say the least. Their is a reason why Buffet bailed on airlines.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
05-23-2020, 08:09 AM
#477
Gets Weekends Off
Joined APC: Apr 2013
Posts: 3,439
Originally Posted by REF 5
The fact that SWA is still running capacity at 60%-70% below normal is very alarming. Going into the busiest season of the year. That goes for all airlines. Capacity will be an important gauge going forward. All the other numbers are metrics that can't be analyzed until July earnings release(or lack their of). Real metrics to follow going forward are cash flow and capacity. All other metrics, CASM/yield/average airfare, breakeven load factor, etc are all distorted due to grounding of so many airplanes. Airlines are capping capacity well below the airplanes ability. Basically SWA as well as others are adding capacity to make passengers feel safe. Not because its profitable. Bizarre to say the least. Their is a reason why Buffet bailed on airlines.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
I agree. There simply is no metric to measure this by.
Today's company comms said that they are trying to stimulate demand and preserve cash flow. They haven't even begun taking steps yet to become profitable again. Hopefully the trend of a parabolic recovery will continue. Otherwise, I think we will be a completely different airline a year from now.
05-23-2020, 08:22 AM
#478
Gets Weekends Off
Joined APC: Apr 2012
Position: 737 CA
Posts: 508
Originally Posted by REF 5
SWA hasn't had a break even load factor like that for at least a decade, maybe more. In the last ten years its breakeven load factor has been in the mid 70's on an annual basis. Its best year as far as operating margin was 20% in 2015 and it's breakeven was 72%.
Since yields are trashed now. Who knows. Its not pretty.
Since yields are trashed now. Who knows. Its not pretty.
05-23-2020, 11:12 AM
#479
Gets Weekends Off
Joined APC: Nov 2013
Position: 737CA
Posts: 118
Here are ten years of financial statements from SWA.
http://www.southwestairlinesinvestor...l%20Report.pdf
Page 45
http://www.southwestairlinesinvestor...ar/ar-2014.pdf
page 46
Break even load factor is CASM/yield in cents. In all those years they have been in the mid 70's. Now, they may given you a more "pure" breakeven load factor number. Taking out things like profit sharing(yes thats considered a cost), hedges and depreciation but the numbers are the numbers. Like you said though, it doesn't matter now. Just a mental exercise. Cash flow is the most important metric now. That will dictate many decisions in the fall.
http://www.southwestairlinesinvestor...l%20Report.pdf
Page 45
http://www.southwestairlinesinvestor...ar/ar-2014.pdf
page 46
Break even load factor is CASM/yield in cents. In all those years they have been in the mid 70's. Now, they may given you a more "pure" breakeven load factor number. Taking out things like profit sharing(yes thats considered a cost), hedges and depreciation but the numbers are the numbers. Like you said though, it doesn't matter now. Just a mental exercise. Cash flow is the most important metric now. That will dictate many decisions in the fall.
05-24-2020, 05:53 AM
#480
Gets Weekends Off
Joined APC: Sep 2015
Posts: 276
Originally Posted by REF 5
The fact that SWA is still running capacity at 60%-70% below normal is very alarming. Going into the busiest season of the year. That goes for all airlines. Capacity will be an important gauge going forward. All the other numbers are metrics that can't be analyzed until July earnings release(or lack their of). Real metrics to follow going forward are cash flow and capacity. All other metrics, CASM/yield/average airfare, breakeven load factor, etc are all distorted due to grounding of so many airplanes. Airlines are capping capacity well below the airplanes ability. Basically SWA as well as others are adding capacity to make passengers feel safe. Not because its profitable. Bizarre to say the least. Their is a reason why Buffet bailed on airlines.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
Even if they ran all their airplanes and capped it at 60-65% capacity for sale, that's still 35-40 below what the should be. Companies can last a long time with positive cash flow. Pan Am, TWA, etc lasted many decades losing money but still had cash(flow) coming in. If we can get to about a million a day going through the TSA by mid July I think that helps build confidence not only for passengers that flying is safe and places are open, executive management teams will have confidence to minimize furloughs. I hope.
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