Originally Posted by Thor

While were clarifying, I’m curious about the statement above.

Given a set number of block hours, lowering caps will actually increase the number of pilots required to fly those hours. No doubt it’s better for labor, but I fail to see cost savings as more bodies are required.

Maybe someone could clue me in to the cost savings to the company realized by lower caps?

Originally Posted by copy

While there will be some higher paid pilots in some categories overall, you gotta look at the macro level overall cost reduction, not individual fleet hourly pilot labor costs. Average longevity will increase with any furlough. I don’t know the exact numbers of how many (and their longevity) are going from WB CA to NB CA or WB FO, or WB FO to NB FO, but let’s use simple math. Let’s say (for simplicity) an airline has 10,000 pilots, of which there are 1500 WB CAs, 1500 WB FOs, 3500 NB CAs, 3500 NB FOs. Let’s say a 30% reduction in pilots. Now there are 7,000 pilots. As you originally pointed out, the 3,000 furloughed are the lowest paid, so that 30% doesn’t translate to a 30% savings. But it’s close. For the sake of simplicity, let’s assume everyone is roughly making min guarantee and just use the old add three zeros to the hourly rate trick to arrive at annual comp, and assuming a rough estimate for average longevity hourly rate for pre/post furlough.

So back to the 7,000...let’s assume the breakdown is now 1000 WB CA, 1000 WB FO, 2500 NB CA, 2500 NB FO.

Using simplified math (10k pilots and 30% furlough with simplified category breakdowns)

pre-furlough labor costs (with my overall avg longevity payrate/earnings WAG):
WBCA: 1500*350,000=525m
WBFO: 1500*230,000=345m
NBCA: 3500*270,000=945m
NBFO: 3500*160,000=560m
total: 2.375b

post 30% furlough labor costs (with my overall avg longevity payrate/earnings WAG)
WBCA: 1000*350,000=350m
WBFO: 1000*240,000=240m
NBCA: 2500*285,000=712m
NBFO: 2500*190,000=475m
total: 1.777b

~25% overall pilot labor cost reduction

I’m sure someone could make a spreadsheet with actual breakdowns by category specific to pre-covid UAL and post displacement 30% estimated furlough (or any percentage for that matter) and get a more accurate number, but that’s my simplified WAG/napkin math for percentage savings for a generic 30% furlough at a 10k pilot airline. While longevity is increased across the board (except WBCA) because the chop happens at the bottom of the list, and therefore average labor cost per flight hour for each fleet may be increased, the overall labor cost is reduced.

Also, training costs aren’t factored in here, so length of furlough goes into the overall cost equation. This is purely the labor cost/payroll side, obviously.

Originally Posted by copy

While there will be some higher paid pilots in some categories overall, you gotta look at the macro level overall cost reduction, not individual fleet hourly pilot labor costs. Average longevity will increase with any furlough. I don’t know the exact numbers of how many (and their longevity) are going from WB CA to NB CA or WB FO, or WB FO to NB FO, but let’s use simple math. Let’s say (for simplicity) an airline has 10,000 pilots, of which there are 1500 WB CAs, 1500 WB FOs, 3500 NB CAs, 3500 NB FOs. Let’s say a 30% reduction in pilots. Now there are 7,000 pilots. As you originally pointed out, the 3,000 furloughed are the lowest paid, so that 30% doesn’t translate to a 30% savings. But it’s close. For the sake of simplicity, let’s assume everyone is roughly making min guarantee and just use the old add three zeros to the hourly rate trick to arrive at annual comp, and assuming a rough estimate for average longevity hourly rate for pre/post furlough.

So back to the 7,000...let’s assume the breakdown is now 1000 WB CA, 1000 WB FO, 2500 NB CA, 2500 NB FO.

Using simplified math (10k pilots and 30% furlough with simplified category breakdowns)

pre-furlough labor costs (with my overall avg longevity payrate/earnings WAG):
WBCA: 1500*350,000=525m
WBFO: 1500*230,000=345m
NBCA: 3500*270,000=945m
NBFO: 3500*160,000=560m
total: 2.375b

post 30% furlough labor costs (with my overall avg longevity payrate/earnings WAG)
WBCA: 1000*350,000=350m
WBFO: 1000*240,000=240m
NBCA: 2500*285,000=712m
NBFO: 2500*190,000=475m
total: 1.777b

~25% overall pilot labor cost reduction

I’m sure someone could make a spreadsheet with actual breakdowns by category specific to pre-covid UAL and post displacement 30% estimated furlough (or any percentage for that matter) and get a more accurate number, but that’s my simplified WAG/napkin math for percentage savings for a generic 30% furlough at a 10k pilot airline. While longevity is increased across the board (except WBCA) because the chop happens at the bottom of the list, and therefore average labor cost per flight hour for each fleet may be increased, the overall labor cost is reduced.

Also, training costs aren’t factored in here, so length of furlough goes into the overall cost equation. This is purely the labor cost/payroll side, obviously.

Originally Posted by copy

While there will be some higher paid pilots in some categories overall, you gotta look at the macro level overall cost reduction, not individual fleet hourly pilot labor costs. Average longevity will increase with any furlough. I don’t know the exact numbers of how many (and their longevity) are going from WB CA to NB CA or WB FO, or WB FO to NB FO, but let’s use simple math. Let’s say (for simplicity) an airline has 10,000 pilots, of which there are 1500 WB CAs, 1500 WB FOs, 3500 NB CAs, 3500 NB FOs. Let’s say a 30% reduction in pilots. Now there are 7,000 pilots. As you originally pointed out, the 3,000 furloughed are the lowest paid, so that 30% doesn’t translate to a 30% savings. But it’s close. For the sake of simplicity, let’s assume everyone is roughly making min guarantee and just use the old add three zeros to the hourly rate trick to arrive at annual comp, and assuming a rough estimate for average longevity hourly rate for pre/post furlough.

So back to the 7,000...let’s assume the breakdown is now 1000 WB CA, 1000 WB FO, 2500 NB CA, 2500 NB FO.

Using simplified math (10k pilots and 30% furlough with simplified category breakdowns)

pre-furlough labor costs (with my overall avg longevity payrate/earnings WAG):
WBCA: 1500*350,000=525m
WBFO: 1500*230,000=345m
NBCA: 3500*270,000=945m
NBFO: 3500*160,000=560m
total: 2.375b

post 30% furlough labor costs (with my overall avg longevity payrate/earnings WAG)
WBCA: 1000*350,000=350m
WBFO: 1000*240,000=240m
NBCA: 2500*285,000=712m
NBFO: 2500*190,000=475m
total: 1.777b

~25% overall pilot labor cost reduction

I’m sure someone could make a spreadsheet with actual breakdowns by category specific to pre-covid UAL and post displacement 30% estimated furlough (or any percentage for that matter) and get a more accurate number, but that’s my simplified WAG/napkin math for percentage savings for a generic 30% furlough at a 10k pilot airline. While longevity is increased across the board (except WBCA) because the chop happens at the bottom of the list, and therefore average labor cost per flight hour for each fleet may be increased, the overall labor cost is reduced.

Also, training costs aren’t factored in here, so length of furlough goes into the overall cost equation. This is purely the labor cost/payroll side, obviously.

Originally Posted by Excargodog

But you really DO need to figure the nonproductive down time for training both ways.

That wide body Ca’s last type might well have been a 727 and you are now moving him/her to a 737. So you pay him/her while waiting around for scheduling, again while they are getting their new type, while simultaneously still paying the guys you intend to furlough to keep the domestic flying going in the interim.

Since you are having massive training events on the narrow body equipment, the dead time will not be trivial.

As soon as international flying begins to recover you need to bring the furloughed guy/gal back and get them current and then do the same for the one going back to his/her original seat, assuming it is still there and that fleet hasn’t been phased out in the downside.

the cost of the training churn - both actual costs and lost productivity - will be appreciable, unlike an airline like SWA who could simply furlough their junior FOs and downgrade a few Ca’s fairly cheaply.

Originally Posted by Excargodog

But you really DO need to figure the nonproductive down time for training both ways.

That wide body Ca’s last type might well have been a 727 and you are now moving him/her to a 737. So you pay him/her while waiting around for scheduling, again while they are getting their new type, while simultaneously still paying the guys you intend to furlough to keep the domestic flying going in the interim.

Since you are having massive training events on the narrow body equipment, the dead time will not be trivial.

As soon as international flying begins to recover you need to bring the furloughed guy/gal back and get them current and then do the same for the one going back to his/her original seat, assuming it is still there and that fleet hasn’t been phased out in the downside.

the cost of the training churn - both actual costs and lost productivity - will be appreciable, unlike an airline like SWA who could simply furlough their junior FOs and downgrade a few Ca’s fairly cheaply.

Originally Posted by Airhoss

And let’s not forget that a not insignificant percentage of 737 instructors are on the furlough chopping block as well. This will further reduce trading capacity. Not to mention you can’t just bring in a bunch of new instructors as it takes a long time to get an instructor up and running to just do basic transition work. Most do not become MV qualified for at least a year.

Originally Posted by GoCats67

It can save them money in the short term if they are truly willing to be "overstaffed" so they can be ready to flex back up. By this I mean, if they are willing to plan to be overstaffed this Fall in case demand returns, they could use the Lower caps and associated lower line build values to allow them to pay us less than 70/73, until the demand returns.

So, the company would love something like that, but what restrictions on it would we need to make that even remotely a consideration. At the very least, if we accept lower line values/pay and credit caps they must remain in place till all invol furloughs have been offered recall. So, the growth in demand would "force" the recall of furloughed pilots.

Without something like that, why would we even consider it??? All it would do is allow the company to furlough all they want, pay the remaining pilots less hours, and then add hours to those pilots when needed rather than recalling pilots. That would let them have their cake and eat it to, while not mitigating even 1 furlough.

Originally Posted by Airhoss

And let’s not forget that a not insignificant percentage of 737 instructors are on the furlough chopping block as well. This will further reduce trading capacity. Not to mention you can’t just bring in a bunch of new instructors as it takes a long time to get an instructor up and running to just do basic transition work. Most do not become MV qualified for at least a year.