Originally Posted by dracir1

No, that was meant as an example.

F9 knows a pay increase will be necessary (as to how much is yet TBD). But, they know it's coming. Their take is to save as much as possible in the interim and delay as long as possible. Assuming that the average difference in pay/hr is about $100, some real basic math would be 2100 pilots x 75 hrs/month x $100 = $15,750,000 per month or $189,000,000 per year.

Let's assume there won't be a new contract for 3 years from Jan 1, 2024. It is difficult to compare this company "savings" to what we COULD do every year w/ more pilots but I would offer that much of that $189M would be MORE THAN OFFSET by the growth of the pilot force that would far exceed existing accession and retention rate. How much more growth is reasonable? Instead of growing by 15 pilots / month (for the next 3 years), let's say we grow at 45 / month. Or 60. Or 85. How much revenu then. In essence, we need to know what is the revenue gained PER PILOT.

Well, this is kinda hard to figure out. Simple way would be dividing gross revenue by pilot or 3.5B / 2100 = 1.7M. That doesn't seem right. There could be a air seat mile exercise that would be crude at best. Let's look at that. According to the 10-K for 2023, air seat miles were 37,822,000,000. That's 37.822B miles or 18,010,476 asm / crew (or 2 pilots) or 9,005,020 / pilot. Current RASM is 9.49 (that's 9.5 cents). Yearly revenue per pilot per ASM is $171,095. But not really - way too many other moving parts.

Actually, there's a much simpler way. CASM vs RASM comparison. CASM (excluding fuel) is 6.51. RASM is 9.49. What is the CASM currently vs. the increase in CASM at the higher pay rate. Current pilot pay percentage of total cost is about 20%. I surmise that increasing by $100/hr increases CASM by about a full cent (maybe). The corresponding increase in needed revenue per passenger would be about 1/4 of that.

So, to raise pay for all pilots, they would need to increase ticket sales by maybe a few dollars. Instead of $85 fares, they charge $89.

When you're dealing w/ 3.6 B in revenue generated from moving 30+ B in passengers being moved, a simple $100 / hr increase for 2200 pilots is not all that much.

Originally Posted by dracir1

No, that was meant as an example.

F9 knows a pay increase will be necessary (as to how much is yet TBD). But, they know it's coming. Their take is to save as much as possible in the interim and delay as long as possible. Assuming that the average difference in pay/hr is about $100, some real basic math would be 2100 pilots x 75 hrs/month x $100 = $15,750,000 per month or $189,000,000 per year.

Let's assume there won't be a new contract for 3 years from Jan 1, 2024. It is difficult to compare this company "savings" to what we COULD do every year w/ more pilots but I would offer that much of that $189M would be MORE THAN OFFSET by the growth of the pilot force that would far exceed existing accession and retention rate. How much more growth is reasonable? Instead of growing by 15 pilots / month (for the next 3 years), let's say we grow at 45 / month. Or 60. Or 85. How much revenu then. In essence, we need to know what is the revenue gained PER PILOT.

Well, this is kinda hard to figure out. Simple way would be dividing gross revenue by pilot or 3.5B / 2100 = 1.7M. That doesn't seem right. There could be a air seat mile exercise that would be crude at best. Let's look at that. According to the 10-K for 2023, air seat miles were 37,822,000,000. That's 37.822B miles or 18,010,476 asm / crew (or 2 pilots) or 9,005,020 / pilot. Current RASM is 9.49 (that's 9.5 cents). Yearly revenue per pilot per ASM is $171,095. But not really - way too many other moving parts.

Actually, there's a much simpler way. CASM vs RASM comparison. CASM (excluding fuel) is 6.51. RASM is 9.49. What is the CASM currently vs. the increase in CASM at the higher pay rate. Current pilot pay percentage of total cost is about 20%. I surmise that increasing by $100/hr increases CASM by about a full cent (maybe). The corresponding increase in needed revenue per passenger would be about 1/4 of that.

So, to raise pay for all pilots, they would need to increase ticket sales by maybe a few dollars. Instead of $85 fares, they charge $89.

When you're dealing w/ 3.6 B in revenue generated from moving 30+ B in passengers being moved, a simple $100 / hr increase for 2200 pilots is not all that much.

Originally Posted by AutoBrksMedium

Where does the day turn only, jump into and out of markets, operate at a level just high enough to function, who cares about the customer they are too poor to fly by any other means variables in your equations?

They seem idealistic and generic.

Originally Posted by Stayontarget

And yet of our competitors are shrinking and unprofitable while we are growing 15% and profitable. I’m not making excuses or justifying. It just is what it is.

Nobody loves the general attitude towards our passengers but a generic scroll through Reddit shows by far the biggest complaint is our flight getting cancelled and the huge inconvenience that has for our pax. Somebody has a bag check problem that’s 1 passenger with a problem. A flight gets cancelled and can’t be recovered for a day or two that is 180+. Probably more like 500+ problems with the dominoe effect. I can’t say for sure that the day trip model will work but you have to give credit where credit is due and the last four months have been a vast improvement. One problem at a time.

Originally Posted by AutoBrksMedium

The entire mathematical proof provided above to show how a $100/hr raise for everyone would only mean an increase to $89/ticket vs $85/ticket is the exact mathematical proof for the company's response:

We are only interested in cost neutral or cost savings changes. Why charge $89 when we can charge $85?

Originally Posted by AutoBrksMedium

The entire mathematical proof provided above to show how a $100/hr raise for everyone would only mean an increase to $89/ticket vs $85/ticket is the exact mathematical proof for the company's response:

We are only interested in cost neutral or cost savings changes. Why charge $89 when we can charge $85?

Originally Posted by dracir1

Because charging $89 means you actually RETAIN pilots!!! For every 2 pilots we hire, 1 leaves. And because we pay LCAs so poorly, we're backlogged on training. One problem creates another and the cycle of loss gets more viscious. It's not important to grow that much now but at some point we will have to. That extra 4 dollars (x 30 Billion pax) is enough to pay more, obtain more gates, grow, etc.

And don't buy the BS about us not being able to charge more - our load factor for 2023 was 84% (higher than 2022)

Originally Posted by dracir1

Because charging $89 means you actually RETAIN pilots!!! For every 2 pilots we hire, 1 leaves. And because we pay LCAs so poorly, we're backlogged on training. One problem creates another and the cycle of loss gets more viscious. It's not important to grow that much now but at some point we will have to. That extra 4 dollars (x 30 Billion pax) is enough to pay more, obtain more gates, grow, etc.

And don't buy the BS about us not being able to charge more - our load factor for 2023 was 84% (higher than 2022)

Originally Posted by HSCompressor

Anyone know why they extended the system bid?

"After analysis of the future schedule,we are adjusting crew base sizes to align more closely with the anticipated schedule."

What's the master plan now?