Originally Posted by Astro14
I dismissed no one. Sorry if I sound cold, but we're talking about the realities of airlines.
Mechanics, FAs, gate agents - all are fungible. All can be assigned to any position, and all can be furloughed on a moment's notice without impacting the operation, since they are universally trained.
That's precisely what happened as major carriers went through bankruptcy. Thousands of fungible employees furloughed at once while pilot furloughs took years. Entire employee groups were dismissed at airlines - the employee newspaper, for example, gone. City ticket offices - closed. My airline alone laid off a total of 50% of the workforce. Nearly 50,000 employees. Most of those were done quickly. Very few got any severance. Most pensions were liquidated along the way.
The pilots took longer. Much longer. That's just how it works when you have specialized, trained, certified employees.
That's why you can look at the fleet reductions, and pilot furloughs, to gauge the long-term intent of a company. It takes a long time to move them to furlough, and a long time to bring them back.
Finally, and this is important, flight attendants and pilots are not at all subject to the same risk. Both are airline employees, but that's where the comparison ends. A flight attendant can be hired with zero experience, and trained for the job in a week. A pilot, hired with zero experience, will take several years to train to the minimum hours and certifications (ATP, type rating). The labor markets are entirely different. The risk, therefore, is entirely different. Mechanics are much closer to pilots, they take a long time to train and certify, but again, they are fungible.
As far as fleet reductions, they don't save that much money, not in the short term. Staffing reductions do. But which airplanes are AA and DL parking? 757s and MD80/90. They have nearly zero value. They have no lease or finance payments, so where is the savings? The only significant savings with parking old jets is that you can reduce the commensurate staff. In the medium term, you save on heavy maintenance and in the medium-long term, you save a bit on fuel when your routes are flown by more efficient aircraft.
UA took deliveries of a couple of 787s this month. Why - wouldn't it make sense to cancel orders and keep the cash?
Well, perhaps, except that those airplanes were already paid for, and as new, efficient airplanes, have value on the market, so they don't detract from the balance sheet.
The cash flow is the C-suite's problem. Just like an engine fire on takeoff is mine. There are a lot of avenues open to a good management team that can be used to handle the cash crunch, even though the revenue is barely a trickle (perhaps 5% of normal). A lot depends on the the company's financial position/strength going into this, as well as the confidence that big banks, and others, have in the management team.
I dismissed no one. Sorry if I sound cold, but we're talking about the realities of airlines.
Mechanics, FAs, gate agents - all are fungible. All can be assigned to any position, and all can be furloughed on a moment's notice without impacting the operation, since they are universally trained.
That's precisely what happened as major carriers went through bankruptcy. Thousands of fungible employees furloughed at once while pilot furloughs took years. Entire employee groups were dismissed at airlines - the employee newspaper, for example, gone. City ticket offices - closed. My airline alone laid off a total of 50% of the workforce. Nearly 50,000 employees. Most of those were done quickly. Very few got any severance. Most pensions were liquidated along the way.
The pilots took longer. Much longer. That's just how it works when you have specialized, trained, certified employees.
That's why you can look at the fleet reductions, and pilot furloughs, to gauge the long-term intent of a company. It takes a long time to move them to furlough, and a long time to bring them back.
Finally, and this is important, flight attendants and pilots are not at all subject to the same risk. Both are airline employees, but that's where the comparison ends. A flight attendant can be hired with zero experience, and trained for the job in a week. A pilot, hired with zero experience, will take several years to train to the minimum hours and certifications (ATP, type rating). The labor markets are entirely different. The risk, therefore, is entirely different. Mechanics are much closer to pilots, they take a long time to train and certify, but again, they are fungible.
As far as fleet reductions, they don't save that much money, not in the short term. Staffing reductions do. But which airplanes are AA and DL parking? 757s and MD80/90. They have nearly zero value. They have no lease or finance payments, so where is the savings? The only significant savings with parking old jets is that you can reduce the commensurate staff. In the medium term, you save on heavy maintenance and in the medium-long term, you save a bit on fuel when your routes are flown by more efficient aircraft.
UA took deliveries of a couple of 787s this month. Why - wouldn't it make sense to cancel orders and keep the cash?
Well, perhaps, except that those airplanes were already paid for, and as new, efficient airplanes, have value on the market, so they don't detract from the balance sheet.
The cash flow is the C-suite's problem. Just like an engine fire on takeoff is mine. There are a lot of avenues open to a good management team that can be used to handle the cash crunch, even though the revenue is barely a trickle (perhaps 5% of normal). A lot depends on the the company's financial position/strength going into this, as well as the confidence that big banks, and others, have in the management team.
