Furloughs and break even points
#11
For all of you who have been wondering how much it will cost United to furlough and retrain pilots, I encourage you to contact your reps and/or file a PDR.
And good luck with that. We all know you'll never get an answer. Big John is here to take care of you, though.
PAST FURLOUGH NUMBERS ASSUMING AN 18% REDUCTION
2003: 18% of 12000 pilots = 2160 furlongs
Actual number was 2172
2008: 18% of 8000 pilots = 1440 furloughs
Actual number was 1437
2020: 18% of 13500 pilots = 2430 furloughs
Actual number is N/A
SAVINGS FROM FURLOUGHS
The rule of thumb in 2003 was that for every six first officers that the corporation furloughed, it would save $1,000,000 per year.
Contract 2000 pay rates:
2002 B737 FO year one $50
2002 B737 FO year two $80
Contract 2012 pay rates:
2020 B737 FO year one $91
2020 B737 FO year two $140
Pay rates for these positions, where most of the furloughs will occur, are 75-80% higher than in 2002. The corporation now saves about $1.7M for every six FOs furloughed at present rates.
Projected furloughs = 2430
2430 / 6 = 405
405 X $1.7M = $688.5M annually
TRAINING COSTS
In 2008, the price tag for furloughing 1437 pilots and retraining the remainder of the pilot group was $100,000,000.
I don't know exactly how many pilots had to be retrained, but I heard the price tag was in the neighborhood of $60,000 per pilot.
8000 pilots- 1437 furlongees = 6563 remaining pilots
$100M / $60,000 = 1667
1667 / 6563 = 25% of remaining pilots who have to be retrained
Today's numbers:
13500 pilots - 2430 furloughees = 11070 remaining pilots
25% of 11070 remaining pilots have to be retrained = 2767 pilots
Let's just double training costs versus 2008 and call it $120,000 per pilot at current rates:
2767 pilots X $120,000 = $332M one time cost
$688.5M annual savings = $1,886,300 savings per day
$332,000,000 / $1,886,300 per day = 176 days to break even on furloughing 18% of United pilots.
Even if they have to retrain half of the remaining pilot group, their break even is still under a year at 352 days.
And good luck with that. We all know you'll never get an answer. Big John is here to take care of you, though.
PAST FURLOUGH NUMBERS ASSUMING AN 18% REDUCTION
2003: 18% of 12000 pilots = 2160 furlongs
Actual number was 2172
2008: 18% of 8000 pilots = 1440 furloughs
Actual number was 1437
2020: 18% of 13500 pilots = 2430 furloughs
Actual number is N/A
SAVINGS FROM FURLOUGHS
The rule of thumb in 2003 was that for every six first officers that the corporation furloughed, it would save $1,000,000 per year.
Contract 2000 pay rates:
2002 B737 FO year one $50
2002 B737 FO year two $80
Contract 2012 pay rates:
2020 B737 FO year one $91
2020 B737 FO year two $140
Pay rates for these positions, where most of the furloughs will occur, are 75-80% higher than in 2002. The corporation now saves about $1.7M for every six FOs furloughed at present rates.
Projected furloughs = 2430
2430 / 6 = 405
405 X $1.7M = $688.5M annually
TRAINING COSTS
In 2008, the price tag for furloughing 1437 pilots and retraining the remainder of the pilot group was $100,000,000.
I don't know exactly how many pilots had to be retrained, but I heard the price tag was in the neighborhood of $60,000 per pilot.
8000 pilots- 1437 furlongees = 6563 remaining pilots
$100M / $60,000 = 1667
1667 / 6563 = 25% of remaining pilots who have to be retrained
Today's numbers:
13500 pilots - 2430 furloughees = 11070 remaining pilots
25% of 11070 remaining pilots have to be retrained = 2767 pilots
Let's just double training costs versus 2008 and call it $120,000 per pilot at current rates:
2767 pilots X $120,000 = $332M one time cost
$688.5M annual savings = $1,886,300 savings per day
$332,000,000 / $1,886,300 per day = 176 days to break even on furloughing 18% of United pilots.
Even if they have to retrain half of the remaining pilot group, their break even is still under a year at 352 days.
also dont forget with the crazy movement we have had people may not need a full course REQUAL1,2 and 3 can cover a lot of pilots severely lowering training costs.
#12
mic thought of this too but it seems cold to think about......we have some unhealthy pilots around here......
#14
#15
Gets Weekends Off
Joined APC: Mar 2006
Position: SFO Guppy CA
Posts: 1,112
Before any of this nonsense begins they’re going to have to start displacement bids. Those aren’t cheap and let’s face it, some seasoned veterans are going to play the bump game. Dolla, dolla bills y’all!!!
#16
Banned
Joined APC: Mar 2018
Posts: 1,358
Especially when you start with 777 pilots. Stuff rolls downhill and generates a ton of expensive training cycles. I expect a much higher percentage of reduction lines on all fleets, with the 777 being hit the hardest for the next few months. If it looks like this will last longer, then possible displacements and shrink with attrition. Right now the biggest thing in our favor is cheap oil, high attrition, and contractual penalties if the company decides that a furlough is necessary.
#17
Gets Weekends Off
Joined APC: Mar 2006
Position: SFO Guppy CA
Posts: 1,112
Especially when you start with 777 pilots. Stuff rolls downhill and generates a ton of expensive training cycles. I expect a much higher percentage of reduction lines on all fleets, with the 777 being hit the hardest for the next few months. If it looks like this will last longer, then possible displacements and shrink with attrition. Right now the biggest thing in our favor is cheap oil, high attrition, and contractual penalties if the company decides that a furlough is necessary.
#18
New Hire
Joined APC: Mar 2020
Posts: 2
how much does it cost to bring those pilots back? And then retrain back up. Or is that not a factor?
also dont forget with the crazy movement we have had people may not need a full course REQUAL1,2 and 3 can cover a lot of pilots severely lowering training costs.
also dont forget with the crazy movement we have had people may not need a full course REQUAL1,2 and 3 can cover a lot of pilots severely lowering training costs.
Let's say you're making $10,000 per month. You get booted from the A320 to the B737. You get one month in Denver:
$10,000 monthly pay
Hotel $50 x 30 days is $1500
Per Diem $50 x 30 days = $1500
Travel charged PS $500 x 4 = $2000
PI = $10000
Sim time 6 hours x $2000 (guess per hour) = $12000
LCA = $4000
Then you get furloughed.
Not sure what else to throw in there. That's about $41,000. Repeat when you return. Some guys never come back. Some guys get two or three training cycles. Some get zero and get furloughed and never return.
#20
for example I’m a junior A320 CA.
i could just bid A320 FO in DEN because I know that’s where I’m going to end up. Instead I bid 737 CA on the first round of displacements. So I’m hoping they won’t train me because on the second round I’m going to be tossed from there.
second round I get bumped from the 737 CA seat so I bid WB FO in ORD knowing I won’t be able to hold it later hoping they won’t train me......I remain an A320 CA.
next round I take WB fo in SFO....if I get stuck there I’m ok with that but I don’t expect to keep it....so I remain an A320 CA.
finally we hit the round where I know I’m going to be able to hold any NB base so I take the NB bid I want and go to training. I stretched out my CA pay a lot longer then I could have had I just took the bid I knew I could hold.
its a risk sometimes you will get trained several times and you run the risk of miscalculating what you don’t expect to hold and now you are stuck with a bad commute or reserve for several years until things start moving again. Iv seen pilots benefit and Iv seen pilots kick themselves.
i could just bid A320 FO in DEN because I know that’s where I’m going to end up. Instead I bid 737 CA on the first round of displacements. So I’m hoping they won’t train me because on the second round I’m going to be tossed from there.
second round I get bumped from the 737 CA seat so I bid WB FO in ORD knowing I won’t be able to hold it later hoping they won’t train me......I remain an A320 CA.
next round I take WB fo in SFO....if I get stuck there I’m ok with that but I don’t expect to keep it....so I remain an A320 CA.
finally we hit the round where I know I’m going to be able to hold any NB base so I take the NB bid I want and go to training. I stretched out my CA pay a lot longer then I could have had I just took the bid I knew I could hold.
its a risk sometimes you will get trained several times and you run the risk of miscalculating what you don’t expect to hold and now you are stuck with a bad commute or reserve for several years until things start moving again. Iv seen pilots benefit and Iv seen pilots kick themselves.