I don’t think it solves the pilot problem unless the merger came with a competitive contract. The deliveries are still in the pipeline for both. Maybe Indigo could take those off Frontier’s hands. I really don’t know. A 300 plane ULCC with a couple hundred deep order book looks nice on paper. But it still comes down to there being so much market share for the model, buying planes to meet filling that niche and then being able to staff them. The market is there. The planes are coming. Can enough pilots be recruited and retained to feed the machine?

Not at the moment.

 

If it is a superior model it can afford to recruit and retain those pilots. Heck, if it’s only superior in a niche market it can do that, if the niche is substantial enough.

 

I have no doubt that it can afford to do both. We’ve talked numbers before. The question is whether management is forward thinking enough to stay on top of it. That is something I’m less sure of. They have self preservation motivations too, but their tool set and methodologies are suited for a different hiring environment. We’ll see.

 

The problem is that they will definitely put the brakes on growth if we don't continue to staff the place. An E-3 visa doesn't really do anything to help the company staff the airplanes or hurt us with negotiations. There aren't a lot of qualified Australians sitting around waiting for Spirit to call them. There are a ton of hoops to jump through, and the visa only lasts 2 years.

 

Right now there is an ‘attrition’ thread on the Alaska forum as well. They too have an attrition problem - just to a much lesser degree. The difference is the contract. While there’s also needs upgrading, NKs needs it even moreso. It clearly DOES make a difference. It seems difficult to believe that that would be lost on anyone.

It is possible, I suppose, that all major managements are just praying for a competitor to go Chapter 11 so they can fall like dominos into bankruptcy (and if the regional collapse continues that may indeed happen) hoping they can reset CBAs through bankruptcy judges but that really doesn’t seem likely. Or that a 2-3 year recession would allow time to spool up ab ignition programs and get rid of the 1500 hour rule and the 1000 hr upgrade rule (because the latter is already hurting viability if the regionals) but those things seem like a longshot.

And as others have repeatedly said, on a two hundred pax airplane a $2 increase in ticket price will fund a $50-$70 an hour increase in pay for two pilots (depending on trip length). It’s really the cheapest fix and I suppose we’ll get there in the end.

 

I’m one of the ones saying $1.91 pays for a $50 per hour per seat raise and 15% DC on and 80% full 320. Round numbers and all, and I’m leaving a lot of fudge in there.

I’m sure the bankruptcy game will be played at some point, but the pilot contract arms race is going to play out first imoho. Yes, attrition is the subject of concern for everyone that’s not one of the Big 4 or Big Freight. It’s on our doorstep first because of our contract and because our upgrade time is no longer something special. Really I think each C suite is scared to step out and set the market. Original thought and risk taking aren’t in great supply in upper management. ULCC’s will have to act first for self preservation. And likely up their games as successive contracts and MOU’s are signed. Or tag on Me Too clauses.

We all know what needs to happen. It isn’t happening. Parking the 319s to meet staffing instead of improving the contract would be very telling about management’s mindset. And disappointing given what needs to he open to have us staffed up for summer starting right the heck now.

I’m also sure that this was all gamed out some time ago, but I think the current level of attrition was an outlier outcome in their predictions.

 

Everybody has an opinion, but here is mine:

This is a unique opportunity for the L/ULCCs that may not come again for another decade. The regionals,, even good ‘career’ regionals like Republic and Skywest, are starting to come apart. Business models dependent on that feed are highly stressed right now and the demise of many of those regionals will stress them further. And that demise is also going to open up gates in hubs throughout the country. It is an awesome time to open up new routes in competition to some of the legacies, and despite the mantra of ‘we bring in new passengers and aren’t in competition with the legacies,’ in a lot of places we are, or at least they are in competition with NK. Just look up ‘the Southwest effect.’ And increasingly, as their business and international travel lags, the legacies are paying attention to their economy sections, unbundling fares, doing more VFR and point to point flying, even with aircraft unsuited or poorly configured for it. And most of the legacies simply no longer have the free cash flow - not right now - to allow them to bracket a ULCC flight with a couple of deeply discounted loss-leader legacy economy flights like they once did, and already have done with startups like Avelo, not against NK and probably not even against F9.

This is the ULCCs big chance, with open gates and decreased competition and a lot of regional guys about to see their companies dissolve who would be happy to come to NK, if the CBA were brought up to where it needs to be. I expect management to pressure the pilots - it’s against their religion to give up a dime they can avoid giving up - but I don’t think they are stupid enough to miss a golden opportunity.

 

I think this is accurate in some ways but it ignores the "big chance" this is for the big 4.

The chance for them is to focus their hiring on as many pilots from the ULCCs as possible. Balancing their hiring something like 3 to 1 of ULCC guys vs regional guys, will allow them to desimate the ULCC staffing model while also showing the regionals that guys there can come straight to AA,DL,FDX,WN,UA,UPS rather than taking a detour to the ULCCs. So can the training capacity of the ULCCs withstand the short term spike in attrition? Can you hire/train enough in the next 3 months to withstand the attrition that will happen in the next 6 months. If you cannot then the summer is a huge problem. I think this is already a major problem at the regionals, but I also think that AA, DL, and UA recognize this and since they currently represent the majority of the hiring that is happening, they have the ability to change the target of their hiring and have it start/continue to inflict real pain on the ULCCs.

I am not sure what the plan/capacity is at Spirit, but seeing the plan at Frontier of 40 a month in the hiring tells me they are not going to keep up. Not sure what Spirit's current hiring plan is, and not sure how successful they are at getting the number they want in class, but figure you have to start by late Mar or early Apr to be an asset that can help by June sometime. So that means that hiring in the next 2 to 3 months (at the most) is what needs to match your attrition between now and the end of June.

 

Since this is sort of a unique situation, your analysis is likely equally probable with mine. But I think it ignores a few things.

The comeback from COVID has ALSO placed an enormous training burden in the legacies and despite some of them trimming their fleets, they all still have multi type fleets. Every single vacancy bid creates a domino effect, not just one new type rating but oftentimes two or three, and some of those training departments are still trying to catch up on the training required of their existing pilots. For NK every single pilot can fly every single aircraft, and somebody moving into the left seat is a simple upgrade, not a new type for three other guys as they play the 737 to 777 to 778 shuffle with FOs. The training needs of a multi type fleet are VASTLY greater than those of a single type fleet and always will be. And as long as those different types pay different amounts, there will always be churn. And that is costly, even just as downtime, because people in classes and sims are not flying the line. Once again I see this as - advantage ULCC.

And the breakup of the regionals is going to hurt the legacies far more than the ULCCs. Already the regionals are having to contract their schedules due to losing so many CAs. You are going to find a lot of FOs stranded - hired during COVID or slightly before who spent a year on reserve who will have four or five hundred hours of 121 time - nowhere near upgrade - who will fly less and less because there aren’t enough CAs to support the flying. Look at the bonuses the regionals are offering for DECs. They are desperate. So when the more vulnerable of the regionals go under because they don’t have enough CA’s to fly their lines, where are those mid-level FOs going to go? To start over at another regional? He//, why not a ULCC, new and more desirable type. As long as your seniority is shot anyway, why not? You might like it enough to make a career of it, rather than starting all over as the plug at another regional.

And yes, management is going to have to pony up some money to make it happen, certainly give insurance coverage and better pay to new hires and more to everyone else as well, but they already knew they’d have to do that at the next CBA anyway. They just need to not drag it out and to do it a few years quicker than they thought, to take advantage of a huge opportunity.

 

Joe Smith, a CA flying the 787 is coming up on retirement. He’s going to get the last flight water cannons and all that. Of course the 787 will still have to be staffed. Someone will require an upgrade - and maybe a new type rating. But of course it doesn’t end there.

Fred Schulz, currently a CA flying the 767 has always wanted to fly the 787. Why not? It’s damn near $60 an hour better pay, and while he will slide down in seniority relative to his CA group, he’s still senior enough to avoid reserve. So he puts in his bid for the open 787 spot. But of course, it doesn’t end there.

Cindi Schroeder is a CA flying 319s. A 767 slot will pay her another $20k a year, $23k counting the 401k. And she’s senior enough to not go on reserve. H€||, why not?

Ernie Anderson is a junior 787 FO. He’s on reserve still, after four years. With more senior guys from the other fleets jumping in over him, he’s going to be on reserve forever in the 787 fleet. But he’s senior enough to be a line holding CA in the A320 fleet - which would be a $60 an hour increase in pay. And in a few years, when he is senior enough to hold a line, he can always come back to the 787 as a CA. Hell, why not?

Greta Cunningham is a new hire. They offer her a 787 slot. Granted, it’s in a high cost of living area and the first year pay is the same as everyone else’s, and she’s going to be on reserve for years, but after that first year she’ll be making $35 an hour more than other FOs with her seniority. (It doesn’t occur to her that if it were that great a deal, other more senior FOs would have already jumped on it). Oh, H€||, why not?

……
Overall, this one retirement has generated four type ratings and 1 upgrade for United.

The comparable ULCC retirement (or attrition) generates one type rating and one upgrade. Additionally, you only need one type training program and sims avoiding a lot of overhead. Now, granted, that won’t do much good without a more competitive pay scale, but the idea that the legacies are going to exhaust the training capacity of the ULCCs seems a little far fetched. They have problems of their own.

my opinion. YMMV.