sailingfun

The flaw in your last argument is that most airlines look 18 to 24 months out when making a decision to furlough. They will carry a surplus for some time.

Excargodog

Not a flaw at all. I’m not wishing furloughs on anyone. I’m hoping none will ne necessary 1 October, but that doesn’t seem to be the majority opinion.

rickair7777

Normally. But revenue essentially went to zero within a few weeks and stayed there, they know it will come back later this year or next year to some new lower baseline. After that it will depend on the economy for future growth.

It's possible we may see some panic furloughs, looks like UAL is headed there, priority to stop the bleeding asap by massively shrinking the company and accepting that they may lose market share if the recovery comes faster than expected.

AA is taking the opposite approach, looks like they are retaining capacity to jump on market share if there's a rapid recovery... but they are obviously going out on a limb, no way they can carry that much staff for an extended period if the recovery doesn't pan out the way they seem to hope.

Also I'm frankly alarmed that AA and UA are apparently headed in such different directions... means that not even management with all of their tools has any kind of consistent model for how this will play out.

You do have to realize that it's really starting to look like vaccine timing will be crucial to economic recovery... many states have authoritarian regimes who are hell-bent on lockdown until the problem is solved, but herd immunity will never happen under full house-arrest so it's basically lockdown for life or until a vaccine arrives. Several of those states are large enough to drag down the US economy all by themselves...

SoFloFlyer

Dr. Fauci said that a vaccine is about 18-24 months out. So I really hope it’s not gonna be dependent on a vaccine because it would be REALLY bad for the economy. Lockdowns aren’t sustainable. It worked to flatten the curve, but it’s not a feasible option to completely eradicate the virus. I just Really hope people continue to be responsible, start going out so we can start turning this economic machine.

Irishblackbird

Dr. Fauci has been wrong or reversed his opinion on several points. In the beginning he said that the virus would unlikely be an issue in the US, then he completely missed the mark on the number of deaths several times, and reversed his belief on the effectiveness of wearing masks. Now we are supposed to believe that there will be a vaccine in 18-24 months? We may never see a vaccine. I really hope when our industry returns to economic prosperity is not based on his prognostications.

SoFloFlyer

I really hope you’re right. It’s unfortunate that this is happening. Hoping we go back to transporting 2 million people a day.

iahflyr

I mostly agree with your thoughts, but the biggest fallacy is that training costs actual money. It does not. Training is free. Training has an “opportunity cost” in that if someone is in training, they are being paid, yet not on the line making money. However right now when you can’t furlough anyone until Oct 1, there is zero opportunity cost as a pilot is either sitting at home being paid, or in training being paid. The cost of training right now is $0.

Fortunately United seems to realize this, which is why they announced a large displacement bid and are has training effective dates starting almost immediately.

American published their displacement bid but it is much smaller, and Delta still has yet to make a move. Any training after October 1 will have an opportunity cost associated with it.

Excargodog

Training cost has real cost to the extent that you are forced to do extra training events that you would not otherwise have ever been forced to do, although granted, starting the training Before the 1 October date ameliorates the greater part which is the opportunity cost. But there is also the flip side.

Eventually, international flying WILL come back, and those widebody international guys displaced to narrow body aircraft (that many were not even previously typed in) will now be bidding back into their old equipment (or whatever has replaced it) generating new training events and these will have the associated lost opportunity costs.

And these are issues (and expenses) that an airline flying a single aircraft type - like SWA, NK, or F9, simply isn’t going to have to deal with. All they are going to do is downgrade junior captains and furlough junior FOs until the flying comes back and then upgrade and rehire which is going to cost less. Not saying everybody can’t survive or that I want anyone to be furloughed, just that in this situation as I see it developing, this is advantage LCC/ULCC. If international flying should somehow come back first it would be advantage Top 3.

I’m not emotionally invested in this, that just seems to me to be the way the cards read.

rickair7777

It is dependent on a vaccine. Even if everybody opens up now, people are still scared stiff, air travel will be small fraction of what it once was for years.

But all of the experts saying 18-24 months for a vaccine are just hedging their bets to the worst case.

There is a massive full-court press across government (multiple governments) and industry to develop vaccines, and do it quickly. There are already 100 in development, with several in clinical trials. The trials are expected to be expedited as soon as they see some results, and several companies are starting to manufacture the vaccine to lead the problem (at risk of having to pour it all down the drain if the tests fail).

While it's remotely possible that it will prove technically challenging to develop a vaccine, odds are very good that several in development now will pan out. COVID is not some bizarre thing (like HIV, which actually eats the immune cells which respond to it), it's a fairly straightforward virus from a familiar family. Unlike in the old days of trial and error, vaccines are now developed by computer modelling of genetic function. The first vaccine to enter trials (in WA state, because that was ground zero in the US) was developed by computer modelling literally within a few hours after China released the full covid genome data to the world. The computer model should work fine, what's unknown pending clinical trials is safety, side effects, and efficacy.

There's always some uncertainty in biology, it's vastly complex, so there is a small but real possibility there will be no vaccine in a timely manner. It's a pretty low possibility, but you'd better hope something pans out because this industry (and the economy in general) will be a shadow of it's former self for the foreseeable future without a vaccine.

If you want a rational perspective on vaccines (and you should if you're an airline pilot in the bottom 80% of your list), look to academic publications and impartial news outlets. The big agenda-driven media outlets are naturally hyping the "no vaccine ever or any time soon" party line to maximize hysteria. If that were true there wouldn't be many dozens of companies investing big-time in vaccine manhattan projects.

Excargodog

Barrons predicting SWA and NK to rebound first...

in all likelihood, F9 too, although they are privately held...


https://www.barrons.com/articles/sou...ic-51590078390