Looks like United is about to ask for paycuts
 

Let’s get this straight right now. This is virus situation is bad. No amount of paycuts will save anything. Those of us that have been around or been furloughed know that paycuts will never do anything but get you paid less. They won’t save jobs and they won’t save the company. When I was furloughed paycuts were voted for and the furloughs happened anyway. SnapBack language was in place to get the money back and violated forever. The pay never comes back and the paycuts don’t help anything.

Yeah I’d rather come back to full pay after my furlough then a crappy pay rate. I’ll just drive door dash in the mean time. Business is booming.

I agree. No pay cuts. I could agree to a MOU reducing average line values, even if it takes us below guarantee. That’s our only hope to preserve jobs if this crap gets prolonged.

On a side note, I was reading in dismay section 23 of the contract:

“The Company will be excused from compliance with the pro-visions of Section 23.A.3 and Section 23.G in the event that a circumstance over which the Company does not have control causes the furlough”

So basically the company can furlough without honoring the 30-day notice and no furlough PAY! A freaking email can be sent out saying “don’t come to work tomorrow” and that would be it. Please tell me I’m reading it wrong.

There could be many furlough mitigation strategies if or when it comes to that but we shouldn’t discuss them here. Paycuts are never the answer. It’s a convenient time to come for pay and when it’s convenient for us they stall and don’t pay. There is no way to know what the next few months will hold but it’s way to early for any airline to come for pay. Layoffs yes put paycuts way too early. It will test our nerve for sure. I find United’s timing impeccably convenient.

When I got furloughed I came back at lower pay and never reached my pre furlough payrate at that company. The paycuts accomplished nothing.

I have a hard time even considering IF we get to pay cuts when I still see the ridiculous amount of waste on the line each day. Pilots taking a cut to help subsidize the running of the #1 engine when it takes a gate agent 10 minutes to show.

How about that plot of land in FLL goes up for sale?

nothing even mentioned here at Spirit yet so we don’t want to get ahead of ourselves but given the posturing coming from United management today got to assume we will hear something eventually. They know paycuts won’t save the airline or jobs but it’s a good time to look for cuts before the fear subsides. Furloughs will be based on a projected block hours not any amount of paycuts

And who would buy it with the economy collapsing?

China......duhhhhhhhhhh

haha

That would be assuming that you have an airline to come back to.

no amount of pilot paycuts will change that though.

^^^^ This. You guys are talking furloughs, I’m much more concerned we won’t have an airline.


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I have that on my mind too. This airline survived 9/11 and ‘08. Both as a much smaller airline and when small airlines usually didn’t. I’m hoping this is the same. Coming out the other side won’t be for us giving a decade of charity for a crisis that will be much shorter than that. If spirit pulls through it will be a combination of good management and luck.

When Ted and Bendo come forward and offer to cut their salary 50% and no bonuses, then we can discuss salary concessions.

Where's my quid??? 😬

No! Their salary is a small percentage of total compensation. If/when we come through this, their temporary pay cuts will be far overshadowed by huge gains in stock they are given for free. No!

I would be willing to reduce our profit sharing though.

definitely. As team players and company people we should agree to reduce our profit sharing percentage... it's the right thing to do

Now we're getting somewhere here.

Plane Coffee

I love this group

Btw creative solutions starting to happen at other airlines besides United that don’t include paycuts.

further United hasn’t formally asked for them yet but it appeared they were interested.

for all we know Spirit needs nothing but I wanted to get in front of the fear wave about paycuts.

every airline flushed tons on money in corporate welfare from the 2018 tax law into stock buy backs when it could’ve been kept for a rainy day.

To be fair there’s rainy days and then there’s the biblical flood. This is the latter as Spirit and most every airline not named American was well situated to weather the run of the mill recession.

I agree that the stock buy back money should have been put aside for a bigger emergency fund, but no one knew what that meant until now. I suspect the new gold standard for airline health will be the ability to shutter the doors for 4-6 weeks and still be viable at the end of the year.

Not to defend any particular airline's fiscal practices, but how many businesses of ANY kind can do that?

Traditional thinking was that idle cash was useless, why give up equity if you’re not going to use the cash? I think this will change things, as I’m sure there will be strings attached to the forthcoming govt money.


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What is your source for this information? I have been monitoring multiple sources and have not seen anything of the sort (United looking for paycuts) as of now.

I'm hoping you tell us that your source is one of idiots who post on APC or perhaps the JBLU FA who started the 'United is buying JBLU' rumor a couple of years ago that didn't really die until coronavirus.
I have, to date, seen zero from either UALALPA or UAL management hinting at paycuts. Not much overall news, except that we can expect to be offered more leaves of absence (0 hrs pay) and surplus reduction lines (50 hrs pay). If one views those as paycuts, OK - but not a pay rate cut.

It's safe to say that there are some pretty intense discussions going on right now at all airlines and I'm sure there's a whole gamut of options on the table at every airline. All we can do is prepare for the worst and hope for the best.

We're all in the airline business so we're all screwed. Take care of each other and watch out for fellow workers who get deeply depressed - there have already been a couple of suicides out there. .

In closing, this calls for a little bit of Ozzy. https://www.youtube.com/watch?v=-9yYJ6ZAYns

All the best to everyone.

i don’t blame you for not seeing it, but I’ve argued that very point several times on this forum. Up til now that hasn’t been something any group of execs would have contemplated. Simply being able to weather a normal downturn, which every airline was in pretty good shape to do, was the standard.

This is may be the new one. And maybe not so hard to achieve if things like stock buybacks are stopped or at least delayed until that level of liquidity is attained by the respective organization. Honestly, that kind of emergency fund is recommended for our personal lives. It’s not so far fetched for it to be valid in the business sector. There may be s legislative benchmark set going forward as a strong attached to any government assistance, or as part of some blowback to the stock buy backs.

So if a person gets his paychecks and spends money to buy things, had a 6 month emergency fund, and decides to spend some of his extra cash on a vacation, new surround sound system and a boat...and then an economic collapse happens, so we say “you shouldn’t have spent money on luxury items like boats, you should have had 2 years savings!” So that person shouldn’t be eligible for financial assistance?

You can’t use hindsight for the airlines and say “they should not have done stock buybacks, they should have had unprecedented levels of liquidity, in case of a global pandemic that nobody had forecasting models for or if Godzilla himself walked in from the ocean and destroyed all cities in his wake. Just as the banks learned that more liquidity is needed for what was once unforeseen events, the same will be needed for airlines and should be tied to any government backed loan.

I don’t remember anyone ever saying the airlines needed more liquidity in the bank for a mass event like this. I do remember everyone asking for more profit sharing and higher wages from that idle cash. Hey, don’t blame anyone for that, but let’s not act like the pilots on this forum were screaming for more cash in the bank. We didn’t like that the cash was going to buy backs and not the pilots.

revisionist history perhaps....

To add to that, popular opinion up to this point was that extra liquidity would lead to a company being a merger target.

It has been determined that the OP over on the United thread that started that, had interestingly enough, created that username in March of 2020. Seems to be a troll account.

Outside of Oscar and Kirbys letter there hasn’t been anything.

That's where poison pill strategies MUST be employed by all airlines. We're tremendous targets for greenmailers and robber barons because the business is so capital intensive.

OK, that's what I figured that the OP was using for a source. I put as much credence in his posts as I did the stupid rumors that UAL was going to buy JBLU in the last couple of years. UAL is going to be fighting for survival, but so are every other airline out there. This is a tsunami that will cause major damage to every airline's balance sheet.

Seems like an easy add on from the BOD, and probably standard practice if extra liquidity is required moving forward.

I posted this the night of that Oscar sent the email to employees. A family member forwarded it to me. He spoke of executives taking paycuts and needing to control payroll costs. When a CEO and other executives take a paycut it’s to set an example. The money is inconsequential to the health of a company to burns billions but it’s hard to ask for one without taking one yourself. So to me that says appears to be “looking” for paycuts. That was also before APA released their voluntary leave packages. It looks like and are are two different things.

I’m Not close to retirement but I’ve been at this long enough to know that airline managements will absolutely use a major short term crisis to lock in long term concessions. Even if they have snap back provisions, they will be violated and the pay never returns. I’m also aware of the major cascading training costs involved at carriers with multiple types when it comes to furloughs. Management always tries what’s easy. This is not new.

again they haven’t asked so far but United management was the first to release the “we need to control payroll” message and I’ve seen this movie before.

I think Alpa national knows this is huge but also short term and hopefully are working with each airline’s MECs to work on big solutions but that have us all that want to be back working as quickly as possible and at full pay.

Copy all and I understand exactly how you interpreted the management message as a pretense. I've been furloughed twice at the lazy U and have seen firsthand the paycuts during down times.
We're still waiting to rebid next month, although I suspect it will pretty much be 50 hour surplus reduction lines for everyone … perhaps even a lower number than 50 hours? I don't know and am just waiting for information from leadership.

Will there be paycuts? Us keyboard warriors are hardcore on no paycuts, but we all know that resolve can fade rapidly when faced even more undesirable choices. So I have learned to not comment with 'full pay til the last day' because that never seems to happen.

so how concerned should we be with $1,000,000,000.00 in the bank (rapidly diminishing) and a market cap of $600,000,000.00 and falling

Also getting emails from big retailers that say they are now closing but will continue to pay employees salaries and benefits. It’s going to get less palatable for big businesses to screw over employees this time around

Btw we all have an ALPA call to action in your email about prioritizing pilots in any assistance package to the airlines.

63,000 ALPA members and there is zero reason 63,000 of these shouldn’t go out today.

two clicks and it sends. You don’t have to do anything

Already Done ✅👍🏻

Fulllpay to the last day.

Everytime the furlough mitigation strategies kick in, the only thing ensured is that those management have slated for furlough go out to the street lighter in the pocket book and those left are making a good bit less than the CBA stipulates .

Unfortunately, union leadership never seems able to grasp this axiom . Carrier after carrier, union after union.

This is beyond my basic knowledge, but see TPG Capital and Midwest Air.

A bit concerning. Take some azzhole like carl Icahn, who bled a ton of cash out of TWA. He could go in and buy controlling interest in the company and then leverage everything to the hilt, pumping up the cash balance. Then he would turn around and do a 'special dividend' which would cover his initial buy in. Or a myriad of other strategies to bleed an airline dry.

It's not a concern at the moment because no one's going to loan him a bunch of money on airline assets. But if the industry starts recovering, it will be something to be concerned about. And this applies to all airlines, both big and small. Smaller is easier, but big is also possible.

But this is not the 5 meter target; we have other things to worry about in this industry right now.