Difficult Decisions
09-27-2024, 05:40 AM
#131
Gets Weekends Off
Joined APC: Jun 2015
Posts: 1,765
You could take it one of two ways.
1. EIM is knocking at the door and wants to fire them all. They are in self preservation mode and looking under the couch cushions via leaseback schemes and other free cash flow generating revenue models to bribe institutional investors to keep their jobs.
2. EIM is knocking at the door and wants to install a board of directors that is going to hollow out Southwest and turn it into a short term cash printer and then dump it. Current leadership are freeing up cash to pay investors and generate earnings to defend the airline and its people from this outside invader.
I am firmly in the option 1 camp after todays announcements. Maybe I am getting jaded after a decade of mostly empty promises from Dallas, but this sure feels like they are in short term panic mode to preserve their jobs so that they can keep on slogging along with their stale and inept leadership that they have demonstrated for the last decade or so. While I am no fan of EM or their founder, I hope they succeed in flushing the C suite and giving this place a fresh start.
1. EIM is knocking at the door and wants to fire them all. They are in self preservation mode and looking under the couch cushions via leaseback schemes and other free cash flow generating revenue models to bribe institutional investors to keep their jobs.
2. EIM is knocking at the door and wants to install a board of directors that is going to hollow out Southwest and turn it into a short term cash printer and then dump it. Current leadership are freeing up cash to pay investors and generate earnings to defend the airline and its people from this outside invader.
I am firmly in the option 1 camp after todays announcements. Maybe I am getting jaded after a decade of mostly empty promises from Dallas, but this sure feels like they are in short term panic mode to preserve their jobs so that they can keep on slogging along with their stale and inept leadership that they have demonstrated for the last decade or so. While I am no fan of EM or their founder, I hope they succeed in flushing the C suite and giving this place a fresh start.
Im just an outsider looking in, but it doesn’t look like the primary plan of your CEO was a golden parachute. He could have already made a deal with the devil and sank the share price for a “retirement bonus” with a whole lot less hassle. Doesn’t look like that’s the game plan.
09-27-2024, 08:42 AM
#132
Line Holder
Joined APC: Mar 2024
Posts: 59
OK, now that everyone has gotten their inner Negative Nancy out, cried a river about stagnation, considered going to SkyWest as DEC... let's get back to reality.
We are stagnant with respect to number of airframes due to Washington DC stupidity and Boeing's troubles. Zero reason other than political johnson measuring that MAX 7 isn't certified... the damn thing was used to re-certify MAX 8 after the groundings. But whatever... it will eventually get certified. In fact, I think that's going to be the biggest spike in our stock price, and that's part of the reason why I think Elliott is here - to do some cleaning and enjoying the big spike when Boeing (and the FAA) get their act together.
However, we are NOT stagnant with respect to retirements because we haven't even hit our age 65 wave yet, nor have we hired ahead of it. Looking at myseniority.com, in 7 years, assuming 0% growth (not very likely) and only retention of the same number of pilots on the seniority list (again, not very likely), that's around 22-25% movement in just retirements. For someone hired post pandemic, that'll put them in the 7-9 years-on-the-property upgrade range which is within our norms. This is not accounting for any possible expansions or overlap.
As for ATL realignment... that's literally what it is. They're beefing up BNA. There are no furloughs or downgrades, just realignment of crews and movement to more lucrative markets. It's all been explained via the company channels.
Put away the SkyWest DEC application, you're fine.
We are stagnant with respect to number of airframes due to Washington DC stupidity and Boeing's troubles. Zero reason other than political johnson measuring that MAX 7 isn't certified... the damn thing was used to re-certify MAX 8 after the groundings. But whatever... it will eventually get certified. In fact, I think that's going to be the biggest spike in our stock price, and that's part of the reason why I think Elliott is here - to do some cleaning and enjoying the big spike when Boeing (and the FAA) get their act together.
However, we are NOT stagnant with respect to retirements because we haven't even hit our age 65 wave yet, nor have we hired ahead of it. Looking at myseniority.com, in 7 years, assuming 0% growth (not very likely) and only retention of the same number of pilots on the seniority list (again, not very likely), that's around 22-25% movement in just retirements. For someone hired post pandemic, that'll put them in the 7-9 years-on-the-property upgrade range which is within our norms. This is not accounting for any possible expansions or overlap.
As for ATL realignment... that's literally what it is. They're beefing up BNA. There are no furloughs or downgrades, just realignment of crews and movement to more lucrative markets. It's all been explained via the company channels.
Put away the SkyWest DEC application, you're fine.
Good read. You think we haven't hired for the retirements? My worry is we basically stop hiring for next 3-5 years and see very little movement. My schedule is fine so I can't really complain, but I haven't moved at all this year.
Sounds like upgrade times are going to be long over at Delta too, especially for anyone hired after this year. So maybe the ole 10 year upgrade isn't so bad? Ha.
09-27-2024, 09:49 AM
#134
Gets Weekends Off
Joined APC: Apr 2013
Posts: 3,668
3. Getting rid of the cash lowers the assets of the company. Makes an outside leveraged buyout less attractive because the banks won’t give you capital as a corporate raider when there’s no (or less) assets to take from the raided company. Also makes the share price higher so the raider has to borrow more to pay for the same shares.
Im just an outsider looking in, but it doesn’t look like the primary plan of your CEO was a golden parachute. He could have already made a deal with the devil and sank the share price for a “retirement bonus” with a whole lot less hassle. Doesn’t look like that’s the game plan.
Im just an outsider looking in, but it doesn’t look like the primary plan of your CEO was a golden parachute. He could have already made a deal with the devil and sank the share price for a “retirement bonus” with a whole lot less hassle. Doesn’t look like that’s the game plan.
Smart people have peeked under the hood and seen what SWA has going on. It isn't pretty. We got here by thinking we were smarter than everyone else when really we were mostly just lucky. I would agree with your assessment about the corporate raiders and free cash except they just announced stock buybacks which will require a boatload of free cash that they currently don't have. So instead of generating the free cash first and then being like "man, we are out of stuff to spend money on, let's buy our own stock", they are saying "let's sell some airplanes and leverage our order book to generate free cash to buy back stock". That isn't the way it's supposed to work. It's a clear signal to institutional investors that we are willing to buy our way out of this problem.
The funny thing about this whole situation is that neither Elliott nor the company has the final say in what happens. It's just the way the financial markets work right now. Both are sending up big signals to try and get other people to change their minds. That's it. Its a multi billion dollar game where someone behind the curtain picks the winner which definitely won't be any of us.
09-27-2024, 10:25 AM
#135
I licked it, so it’s mine
Joined APC: Mar 2023
Position: AB FO
Posts: 264
SWA got bullied out of ATL, that simple, they haven’t been scheming anything. It’s happened to every airline and “Air Line”. The industry has clearly changed though, I don’t think any style of a low cost carrier model can compete directly with the legacy model.
Last edited by RippinClapBombs; 09-27-2024 at 10:49 AM.
09-27-2024, 12:21 PM
#136
Gets Weekends Off
Joined APC: Dec 2023
Posts: 533
I don't think our illustrious COB is looking to do anything evil, he is just looking out for number one and the legacy that he built after the founder left. Had he bailed in 2019, he would have been hailed a hero and we probably would have had Tom Nealon as our CEO. Instead, that succession plan fell apart and he slashed and burned during Covid, delaying our recovery, then Boeing happened, the meltdown happened, and we all know the rest. Gary Kelly did some remarkable things in terms of growing the company, but he left a legacy of paying investors when we should have been getting the plumbing and electrical upgraded resulting in the biggest meltdown in the industry's history. Now he wants to get his and leave as much of his team that he has in place intact. I don't blame him, I am not mad at him, he just kind of sucks and I don't trust him to do anything more. It isn't personal. Good luck to him and his exotic car collection. Go enjoy the grandkids while there is still time. Adios. Time to leave...like why are you still here?
Smart people have peeked under the hood and seen what SWA has going on. It isn't pretty. We got here by thinking we were smarter than everyone else when really we were mostly just lucky. I would agree with your assessment about the corporate raiders and free cash except they just announced stock buybacks which will require a boatload of free cash that they currently don't have. So instead of generating the free cash first and then being like "man, we are out of stuff to spend money on, let's buy our own stock", they are saying "let's sell some airplanes and leverage our order book to generate free cash to buy back stock". That isn't the way it's supposed to work. It's a clear signal to institutional investors that we are willing to buy our way out of this problem.
The funny thing about this whole situation is that neither Elliott nor the company has the final say in what happens. It's just the way the financial markets work right now. Both are sending up big signals to try and get other people to change their minds. That's it. Its a multi billion dollar game where someone behind the curtain picks the winner which definitely won't be any of us.
Smart people have peeked under the hood and seen what SWA has going on. It isn't pretty. We got here by thinking we were smarter than everyone else when really we were mostly just lucky. I would agree with your assessment about the corporate raiders and free cash except they just announced stock buybacks which will require a boatload of free cash that they currently don't have. So instead of generating the free cash first and then being like "man, we are out of stuff to spend money on, let's buy our own stock", they are saying "let's sell some airplanes and leverage our order book to generate free cash to buy back stock". That isn't the way it's supposed to work. It's a clear signal to institutional investors that we are willing to buy our way out of this problem.
The funny thing about this whole situation is that neither Elliott nor the company has the final say in what happens. It's just the way the financial markets work right now. Both are sending up big signals to try and get other people to change their minds. That's it. Its a multi billion dollar game where someone behind the curtain picks the winner which definitely won't be any of us.
09-27-2024, 12:22 PM
#137
Gets Weekends Off
Joined APC: Feb 2017
Posts: 224
09-27-2024, 12:29 PM
#138
Gets Weekends Off
Joined APC: Dec 2023
Posts: 533
Two buddies I flew with in previous life went to FedX and they are wishing they were here now. Not to long ago all the usual aviation experts on here were telling guys leave and go to the FedX.
09-27-2024, 01:04 PM
#139
I licked it, so it’s mine
Joined APC: Mar 2023
Position: AB FO
Posts: 264
Honestly how funny is that haha! I wonder what happened… 😬
09-27-2024, 01:20 PM
#140
Gets Weekends Off
Joined APC: Nov 2020
Posts: 1,897
LCC and ULCC seemed to prosper when they offered medium sized aircraft, nonstop to easy-to-get-into out of airports, not major airline hubs. Then they all said we can get bigger variants of the planes we fly then they said well now we have to fly to biz centers in order to attract biz traffic and more people. Now they are largely in direct competition with legacy airlines without all the perks and redundancy.
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