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lightsaber
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 8:26 pm

Take discussion on China to non-aviation. This is your warning.
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casinterest
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 8:47 pm

rbavfan wrote:
joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either



Delta is playing it smart cutting back fleet and noting avter thing improve they will remain a smaller carrier than before. There were already too many flights & too much capacity, except for thanksgiving & Christmas holidays. But I still think after a few years thing will stabilize and travel will eventually be back to last years levels. It's just going to be a while. WN should pull through it, American may not. While they have. a newer fleet they are heavily in debt due to that new fleet. Bad timing.



The issue I see is that if a lot of carriers cut back and pretend to be smaller, then they are going to suffer competition from startups that will generate cash to capitalize on aircraft overcapacity, pent up demand and a general bath that the carriers are in. Laid off workers will be all too willing to move on to a new carrier if the financing is right. It will be the wild wild west when Covid is over if too many carriers take the , "let's make it smaller" approach.
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did..So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.--Mark Twain
 
B752OS
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:06 pm

joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either


Business demand is going to be shot through the end of 2021.We'll see an uptick in 2022. We won't see a serious rebound until Q2, or Q3 2023. You're pretty much correct, imo, with your assessment.
Last edited by B752OS on Tue Oct 27, 2020 9:09 pm, edited 2 times in total.
 
kalvado
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:17 pm

ArcticSEA wrote:
Humanity (science) has never been able to contain or otherwise "zero-out" (hello, New Zealand) *any* respiratory virus. Ever.
You want to talk about a new normal? Don't talk about masks, distancing, and the other BS. COVID is here to stay.
The industry either survives, or it doesn't. I'm betting on survival.

Nope. SARS.
 
VS11
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:17 pm

jfklganyc wrote:
Ive been posting this for months on here, most recently when WN announced its latest round of new cities.

The industry will go through a round of bankruptcy/merger/acquisition/liquidation just like the mid to late 2000s

There is too much debt being piled onto an industry that operates with weak margins historically. This will hinder the ability to conduct business going forward.


Anyone that doesnt realize this is keeping their head buried.

There isn’t a bailout that is big enough or long enough to reverse this.


We are seeing the outline of the new industry geometry already with the anti-Delta coalition of AA, AS, B6. These 3 rolled up together is starting to make more and more sense - branding and fleet would be solved right away. What would WN do? Does going for Frontier and/or Spirit help them?
 
FlyingElvii
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:19 pm

727LOVER wrote:
But they're adding, what, 10 new airports?

Contract provider if under a certain number of flights per day. Not sure if that is both above and below the wing, but I believe it is.
 
FlyingElvii
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:28 pm

Miamiairport wrote:
COVID 19 is going to be around for awhile. I don't care what Trump says it would be years before they could roll the vaccine out to nearly 8 billion people, not to mention the many millions that will refuse to get the vaccine. Add on the impact from the economy and who knows when business travel will return and to what extent. Maybe the CEO is trying to get this thing to a head but these are the options:

1.Never ending billion dollar bailouts to the airlines over the next several years.
2. Tell the healthy to lead their lives as before, protect the old and sick (most of which don't travel anyway) and let herd immunity build. Since a tiny fraction of people under age 65 in good health actually need hospitalization or die from this virus seems common sense to me. But we've long passed common sense.
3. Let airlines all file bankruptcy, try to reorganize in Chapter 11, fire lots more employees, dump leases and assets-which cause even more job losses. And those airlines that are forced into liquidation the hell with them.

Sorry there's no option 4, 5 or 6. And I get tired of people thinking there is.

I have spent most of my adult life in and around the airline business, and for the most part agree with you, no more bailouts. The Big Airlines, especially UA, DL, and AA have crushed new entrant attempts for two decades now, and have total control all the way down to the small cities, that some have abandoned. Time for them to adjust to the new reality.

Will it hurt?? Sure... But history shows that cheap airplanes and plentiful pilots always leads to someone with money taking a chance, and filling the gaps at a lower cost.
 
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lightsaber
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:30 pm

casinterest wrote:
rbavfan wrote:
joeblow10 wrote:
As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either



Delta is playing it smart cutting back fleet and noting avter thing improve they will remain a smaller carrier than before. There were already too many flights & too much capacity, except for thanksgiving & Christmas holidays. But I still think after a few years thing will stabilize and travel will eventually be back to last years levels. It's just going to be a while. WN should pull through it, American may not. While they have. a newer fleet they are heavily in debt due to that new fleet. Bad timing.



The issue I see is that if a lot of carriers cut back and pretend to be smaller, then they are going to suffer competition from startups that will generate cash to capitalize on aircraft overcapacity, pent up demand and a general bath that the carriers are in. Laid off workers will be all too willing to move on to a new carrier if the financing is right. It will be the wild wild west when Covid is over if too many carriers take the , "let's make it smaller" approach.

It will only facilitate new entrants if fares substantially rise by reducing supply enough to prop up the supply/demand curve.

I too believe demand will roll back slowly. We will not suddenly be flying off for cruises, conventions, and concerts as we did last year. Habits changed. Hevk, in my family, who hosts Thanksgiving is normally contested. This year no one wanted to, yet we figured out how to do it socially distanced with multiple families cooking at seperate homes converging at a warm place to eat outdoors. Our flying is permanently down!

A crisis accelerates trends. I always avoided hubbing (less risk missing a connection) if possible.

Currently, supply will outpace demand for years. I hope breeze does well, I fear they will have it tough.

I haven't seen any airline yet cut too much. For Delta and SouthWest, there are so many good used aircraft available cheap, they have no worries. They will buy early before prices creep up.

Lightsaber
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strfyr51
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 9:42 pm

TWA302 wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sooner or later the unions are going to have to accept/make concessions or that water is going to sink the ship eventually and then the employees will have an even larger issue.

Or? Sooner or Later? Executives are going to have to downsize the airlines which includes Southwest. Could be? they've all got one hell of a lot more airplanes than they can fly profitably.
 
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ArcticSEA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:07 pm

kalvado wrote:
ArcticSEA wrote:
Humanity (science) has never been able to contain or otherwise "zero-out" (hello, New Zealand) *any* respiratory virus. Ever.
You want to talk about a new normal? Don't talk about masks, distancing, and the other BS. COVID is here to stay.
The industry either survives, or it doesn't. I'm betting on survival.

Nope. SARS.

Not sure what your point is...
Are you implying SARS-CoV-2 is going to just disappear like SARS did?
It isn't. SARS was too deadly and burned itself out after killing ~770 people.
SARS-CoV-2 is not as deadly and has spread across the entire human population.
PNW-based private pilot and engineer. #fatpnw
 
speedbird52
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:13 pm

Sooner787 wrote:
Those of us in the airline/travel industry are hanging on by a thread.

I'm convinced without additional stimulus from Uncle Sam, we're gonna
lose a major US carrier in the next 12 months.

Hell, we're already seeing consolidation in the travel industry.
That means a lot of travel jobs that went away last March aren't coming back :(

As long as the tech employees, and unemployed college/high school children are happy, the politicians aren't going to care.
 
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ztarizona
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:22 pm

Is it possible with staff contracts for a junior flight attendant for example, to take a long (possibly 12+ month) furlough, work perhaps as a school aide or some other profession with high need but not theoretically great pay (some areas of the country are opening but there are too many school children per room), and then when travel demand finally does return, have that staff member return to the airline?

Are there major costs in re-training that staff member who had been separated for a long time/would they be able to keep their point somehow in seniority to not have to start at the bottom of the pay scale again? My civilian brain is curious if anything like this has ever been tried or history for something like this with a public airline
“The strain of anti-intellectualism has been a constant thread winding its way through political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.” ― Issac Asimov
 
seratonin77
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:23 pm

727LOVER wrote:
But they're adding, what, 10 new airports?


I wonder if the 20% included the jobs at the new airports?
 
nine4nine
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:36 pm

Would it be possible to scrap and part out the oldest frames of the NG to reduce the fleet while putting some $ in the bank? If so, how many frames do they have that could fall into that category?
717, 727-100, 727-200, 732, 733, 734, 735, 73G, 738, 739, 742, 748, 752, 753, 762, 763, 772, 77W, 787-10, DC9, MD80/88/90, DC10, 319, 220-300, 320, 321, 321n, 332, 333, CS100, CRJ200, Q400, E175, E190, ERJ145, EMB120
 
Silver1SWA
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:43 pm

ztarizona wrote:
Is it possible with staff contracts for a junior flight attendant for example, to take a long (possibly 12+ month) furlough, work perhaps as a school aide or some other profession with high need but not theoretically great pay (some areas of the country are opening but there are too many school children per room), and then when travel demand finally does return, have that staff member return to the airline?

Are there major costs in re-training that staff member who had been separated for a long time/would they be able to keep their point somehow in seniority to not have to start at the bottom of the pay scale again? My civilian brain is curious if anything like this has ever been tried or history for something like this with a public airline


That’s what a furlough is at the airlines. A union contract will have a specific time frame spelled out that says before you hire from outside you first have to recall furloughed employees. So a furloughed employee will have a number of years (5 for example on WN ramp) to get recalled before the furlough becomes a permanent separation.

Recalls are in order of seniority from the most senior furloughed on down. As for re-training that’s absolutely necessary and is one of the challenges airlines are facing because if you furlough too many and demand recovers you could fall behind in recovery due to training bottlenecks limiting the pace of recalling staff.
Last edited by Silver1SWA on Tue Oct 27, 2020 10:49 pm, edited 2 times in total.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
SkyVoice
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:47 pm

seratonin77 wrote:
727LOVER wrote:
But they're adding, what, 10 new airports?


I wonder if the 20% included the jobs at the new airports?


I believe that Southwest will survive, one way or another. Once that happens, they can declare for any airport and/or any route that they intend to serve. By then, there should be plenty of airports with counter space, gate space & slots to claim, thanks to those carriers that do not survive.
"Tough times never last. Tough people do." - Dr. Robert H. Schuller
 
fly4ever78
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 10:54 pm

I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? It gets very tiresome reading the same comments regarding "free market" economics and all the outrage regarding union contracts. The last time I checked, unions didn't get an hourly raise when the airline was making billions in profits, soooo why should they have to take an automatic pay cut when the airlines are losing money?! I think maybe we should just let all these free market types have it their way. Let's see how expensive that flight from West Palm Beach to New York is when there is only 1 airline operating it. I am all for going back to the days when ticket prices were 3 times higher... are you?
 
bob75013
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Re: Southwest CEO: ‘The ship is taking on water’

Tue Oct 27, 2020 11:30 pm

fly4ever78 wrote:
I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? ?



Yup, I do.

DL, UA and AA didn't drive prices lower. Their smaller competitors did.

In another thread (about WN going to ORD), someone suggested that ORD prices would not drop with WN's addition to the airport. Why?
Because the big 3 were already matching WN's lower fares out of MDW.

WN (and Spirit, Allegiant, Frontier, et all) are the ones that keep the big 3 honest. In Southwest's case it has been written about. It's called the Southwest Effect. It means that when Southwest enters a market, other airlines are forced to match Southwest's lower fares. Happens with other (non Big 3) airlines, too.
 
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barney captain
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Re: Southwest CEO: ‘The ship is taking on water’

Wed Oct 28, 2020 12:43 am

joeljack wrote:
Boof02671 wrote:
WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


Sorry, this is just mind boggling to me. WN management has to have some leeway to make adjustments during times of stress. Recessions, pandemic, etc. I run a small business of 40 people and if we were not able to make adjustments during the last recession in 2008, we wouldn't exist today. In my mind, this is nothing but southwest management's fault for entering into an agreement with a union that doesn't allow adjustments in salaries, pay etc if company isn't making money. No different than adjusting their bonus' if not making money. Instead of getting big 30%-40% bonus, it goes to 0% and a salary or hour cut when not making money.

It's easy, just reduce everybody to a .8 instead of 1.0 and done. 20% less hours = no paycut. That is what we did during recession so we didn't lose anybody.

When times are rough, decisions are tough.



Paid hours have already been cut WAY more than 20% - and that started back in March. Front line employees only get paid when there is flying to be done - right now flying is significantly reduced.

But another 20% will save the ship?
Southeast Of Disorder
 
MohawkWeekend
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Re: Southwest CEO: ‘The ship is taking on water’

Wed Oct 28, 2020 1:33 am

fly4ever78 wrote:
I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? It gets very tiresome reading the same comments regarding "free market" economics and all the outrage regarding union contracts. The last time I checked, unions didn't get an hourly raise when the airline was making billions in profits, soooo why should they have to take an automatic pay cut when the airlines are losing money?! I think maybe we should just let all these free market types have it their way. Let's see how expensive that flight from West Palm Beach to New York is when there is only 1 airline operating it. I am all for going back to the days when ticket prices were 3 times higher... are you?



Airline wages (Union) went up alot in the past 5 years. Every Major is paying their Captains in the $225,000 plus range I don't have the figures for all the carriers but found this 2016 story from Reuters -

December 1, 201610:45
Delta pilots get 30 percent raise by 2019 in new contract
By Allison Lampert, Jeffrey Dastin

MONTREAL/NEW YORK (Reuters) - Delta Air Lines Inc DAL.N pilots on Thursday agreed to a new contract that delivers a 30 percent pay raise by 2019, as the aviation industry deals with mounting demand for higher wages to fly planes at a time of big profits.
    300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
     
    Boof02671
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    Re: Southwest CEO: ‘The ship is taking on water’

    Wed Oct 28, 2020 2:34 am

    MohawkWeekend wrote:
    fly4ever78 wrote:
    I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

    I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? It gets very tiresome reading the same comments regarding "free market" economics and all the outrage regarding union contracts. The last time I checked, unions didn't get an hourly raise when the airline was making billions in profits, soooo why should they have to take an automatic pay cut when the airlines are losing money?! I think maybe we should just let all these free market types have it their way. Let's see how expensive that flight from West Palm Beach to New York is when there is only 1 airline operating it. I am all for going back to the days when ticket prices were 3 times higher... are you?



    Airline wages (Union) went up alot in the past 5 years. Every Major is paying their Captains in the $225,000 plus range I don't have the figures for all the carriers but found this 2016 story from Reuters -

    December 1, 201610:45
    Delta pilots get 30 percent raise by 2019 in new contract
    By Allison Lampert, Jeffrey Dastin

    MONTREAL/NEW YORK (Reuters) - Delta Air Lines Inc DAL.N pilots on Thursday agreed to a new contract that delivers a 30 percent pay raise by 2019, as the aviation industry deals with mounting demand for higher wages to fly planes at a time of big profits.

    That was over a four year period and you forget DL pilots took massive concessions in bankruptcy which was 32.5%. They had no raises for five years.
     
    MohawkWeekend
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    Re: Southwest CEO: ‘The ship is taking on water’

    Wed Oct 28, 2020 3:10 am

    "That was over a four year period and you forget DL pilots took massive concessions in bankruptcy which was 32.5%. They had no raises for five years."

    You are absolutely correct. But right now revenue doesn't support those wages. Someone mentioned in an earlier post that we've seem this before. Cheap airplanes and unemployed pilots mean a new airline will arise from the rubble with a much lower cost structure.
      300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
       
      N649DL
      Posts: 1113
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      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 3:21 am

      rbavfan wrote:
      joeblow10 wrote:
      As crazy as it sounds - it’s essentially November, and many people STILL aren’t grasping how dire the situation looks for the industry. One more bailout isn’t going to solve it - it’s going to take years and many more rounds of aid if you want every carrier to survive in its current state/size.

      Again - I’ve stressed this before but I’ll say it again, the vaccine is not the solution for the industry. Even once it’s widely rolled out (probably mid 2021 if not late 2021), it’s going to take months for any business demand to start rolling back in. And now we’ve got public health people saying we’re going to have to wear masks and “no normalcy” until a second vaccine, possibly 3-5 years down the road, since it looks like immunity is not long lasting.

      Put simply - unless life does just return to normal after an initial vaccine (starting to doubt it), many in the industry won’t survive... WN may be the last to go, but they are not immune either



      Delta is playing it smart cutting back fleet and noting avter thing improve they will remain a smaller carrier than before. There were already too many flights & too much capacity, except for thanksgiving & Christmas holidays. But I still think after a few years thing will stabilize and travel will eventually be back to last years levels. It's just going to be a while. WN should pull through it, American may not. While they have. a newer fleet they are heavily in debt due to that new fleet. Bad timing.


      AA also had a tremendous amount of debt. They're likely the most at risk because they took on a ton of new airplane deliveries in a very quick amount of time to dump the S80 fleet.
       
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      lightsaber
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      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 11:46 am

      Discuss aviation. Please take the pure Covid19 to non-Av.
      5 months without TV. The best decision of my life.
       
      Miamiairport
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      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:24 pm

      The only way I see this working out is all airlines, including WN, will need to take a trip through Chapter 11 to shed union contracts and leases on planes and other equipment. A few smaller airlines won't survive. There just isn't any foreseeable rise in demand and fares for the foreseeable future. It's going to be messy.

      People keep talking about "new airlines." Yeah new airlines that will make the flying experience even more miserable and find every fee imaginable because it will all be based upon $49 fares. Flying is going to make a NYC subway ride seem like a preferable experience.
       
      FlyingElvii
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      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:30 pm

      VS11 wrote:
      jfklganyc wrote:
      Ive been posting this for months on here, most recently when WN announced its latest round of new cities.

      The industry will go through a round of bankruptcy/merger/acquisition/liquidation just like the mid to late 2000s

      There is too much debt being piled onto an industry that operates with weak margins historically. This will hinder the ability to conduct business going forward.


      Anyone that doesnt realize this is keeping their head buried.

      There isn’t a bailout that is big enough or long enough to reverse this.


      We are seeing the outline of the new industry geometry already with the anti-Delta coalition of AA, AS, B6. These 3 rolled up together is starting to make more and more sense - branding and fleet would be solved right away. What would WN do? Does going for Frontier and/or Spirit help them?

      AA seems to be going back to the 80’s/90’s style of regional management, “ Connection”, rather than the total control model used until Covid. And to be fair, they were moving this way before Covid.

      Incremental revenue, without the risk. The deals with Alaska/B6 are the biggest, but also Boutique and Southern. IMHO, this is the best moves going forward. Americans greatest assets are brand, the CC program, and FF program. And these have been the biggest obstacles to new entrants for the last two decades.

      A true Northeast Regional For instance, feeding traffic to other airlines, under it’s own brand at it’s own risk, with aircraft sized to actual market demand, while code sharing with the mother carriers system, with “ seamless” connections used to be the norm.
       
      Flflyer83
      Posts: 126
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      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:38 pm

      ArcticSEA wrote:
      Parking planes is the opposite of what needs to happen.
      In ~April thru the early summer, consumer confidence in flying was essentially non-existent.
      To restore that confidence, flying must expand (in volume as well as into new markets).

      The problem in the US is the media, who seeks to extract every penny of value out of this pandemic.
      This is why we went from "15 days to slow the spread" in March to "CASES! CASES! CASES!" today.
      It is in their best interest to freak the public out to the fullest extent possible; "stay at home" orders and the like are big business for media companies and Amazon.
      But that is a topic for non-av; although it directly correlates to this discussion.

      In China, there is no vaccine. And yet domestic travel there is already to ~90% of pre-pandemic levels, and their economy is slated to grow by 10% this year.
      In the west, we're in a feedback loop.


      And in China people didn’t scream about their civil rights being violated by being asked/told to wear a mask. China also tested every single resident in cities of 10+ million people with 2-3 days. In China, people quarantined when they were sick, they didn’t have parties.

      Let’s not compare the two countries when the responses where light years away from each other.
       
      FlyingElvii
      Posts: 1234
      Joined: Wed Dec 27, 2017 10:53 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:38 pm

      Miamiairport wrote:
      The only way I see this working out is all airlines, including WN, will need to take a trip through Chapter 11 to shed union contracts and leases on planes and other equipment. A few smaller airlines won't survive. There just isn't any foreseeable rise in demand and fares for the foreseeable future. It's going to be messy.

      People keep talking about "new airlines." Yeah new airlines that will make the flying experience even more miserable and find every fee imaginable because it will all be based upon $49 fares. Flying is going to make a NYC subway ride seem like a preferable experience.

      GA flying is now cheap enough, with pilots being plentiful again, to be competitive against full fares, especially C’s, especially when other considerations are added like convenience, schedule, or Covid. The cost difference starts to fade, especially for trips under 1k miles., for important staff.

      That leaves the rest of us flying cattle class, unfortunately. The same happened in the 90’s, when fractional ownership of biz jets became a thing. The airlines lost the best paying passengers to them. Now, with the added incentive of Covid, an entirely new generation of flyers is discovering the utility of it.
       
      UPNYGuy
      Posts: 339
      Joined: Thu Jan 06, 2011 4:14 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:51 pm

      bob75013 wrote:
      fly4ever78 wrote:
      I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

      I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? ?



      Yup, I do.

      DL, UA and AA didn't drive prices lower. Their smaller competitors did.

      In another thread (about WN going to ORD), someone suggested that ORD prices would not drop with WN's addition to the airport. Why?
      Because the big 3 were already matching WN's lower fares out of MDW.

      WN (and Spirit, Allegiant, Frontier, et all) are the ones that keep the big 3 honest. In Southwest's case it has been written about. It's called the Southwest Effect. It means that when Southwest enters a market, other airlines are forced to match Southwest's lower fares. Happens with other (non Big 3) airlines, too.


      Look at the EWR-CUN fare since B6 entered the ring. United price matched on the nonstop.
       
      Ziyulu
      Posts: 1076
      Joined: Thu Oct 13, 2016 10:35 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:53 pm

      I guess it's time for WN to charge baggage fees?
       
      Ziyulu
      Posts: 1076
      Joined: Thu Oct 13, 2016 10:35 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:55 pm

      fly4ever78 wrote:
      I agree... I think at this point we should just let capitalism take over and eliminate a couple major airlines. LOL.

      I wonder how long it will take before passengers cannot afford the ticket price that results? Do you think tickets will stay the same price or decline with a couple less major airlines? It gets very tiresome reading the same comments regarding "free market" economics and all the outrage regarding union contracts. The last time I checked, unions didn't get an hourly raise when the airline was making billions in profits, soooo why should they have to take an automatic pay cut when the airlines are losing money?! I think maybe we should just let all these free market types have it their way. Let's see how expensive that flight from West Palm Beach to New York is when there is only 1 airline operating it. I am all for going back to the days when ticket prices were 3 times higher... are you?


      I'm all for airlines to bring back meals, stop charging for checked or carry on bags.
       
      jayunited
      Posts: 3357
      Joined: Sat Jan 05, 2013 12:03 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 12:59 pm

      ztarizona wrote:
      Is it possible with staff contracts for a junior flight attendant for example, to take a long (possibly 12+ month) furlough, work perhaps as a school aide or some other profession with high need but not theoretically great pay (some areas of the country are opening but there are too many school children per room), and then when travel demand finally does return, have that staff member return to the airline?

      Are there major costs in re-training that staff member who had been separated for a long time/would they be able to keep their point somehow in seniority to not have to start at the bottom of the pay scale again? My civilian brain is curious if anything like this has ever been tried or history for something like this with a public airline




      First a furloughed employee is free to go find a job anywhere including working as a school aide and it is up the the employee whether or not they want to return when they are recalled. I know here at UA most contracts give employees 2-3 weeks to return to work once they are recalled.

      While there are major cost involved in retraining staff the highest cost centers around pilots. The cost to an airline if a pilot is furlough and no longer current, then recalled can be in the tens of thousands of dollars before that pilot can get back to flying passengers. The second most expensive group to retrain are dispatchers, it is why we saw UA come to an agreement that avoided pilot layoffs however we could not avoid dispatch layoffs and it is why (as far as I know) DL is still trying to reach an agreement with their pilots to avoid layoffs.

      As far as pay is concerned, union members when recalled do not start over at the bottom of the pay scale, your company and/or class (some airlines use both) seniority is not wiped out because an individual was furloughed.
       
      Westerwaelder
      Posts: 317
      Joined: Fri Apr 03, 2020 12:27 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 1:07 pm

      Boof02671 wrote:
      WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


      I would imagine the unions will either reconsider or go down with the ship?
       
      LCDFlight
      Posts: 941
      Joined: Wed Jan 01, 2020 9:22 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 1:17 pm

      Miamiairport wrote:
      The only way I see this working out is all airlines, including WN, will need to take a trip through Chapter 11 to shed union contracts and leases on planes and other equipment. A few smaller airlines won't survive. There just isn't any foreseeable rise in demand and fares for the foreseeable future. It's going to be messy.

      People keep talking about "new airlines." Yeah new airlines that will make the flying experience even more miserable and find every fee imaginable because it will all be based upon $49 fares. Flying is going to make a NYC subway ride seem like a preferable experience.


      New airlines will do just fine. I agree Chapter 11 is the way out of this. The same airlines will continue to exist. Some lenders/lessors/landlords will not be paid (which was always a risk in their business) and some employees will be laid off for a while (which is a risk in any private sector job, especially airline jobs).

      When Delta went into bankruptcy, it didn't kill Delta. It allowed it to become strong again. WN would be the same.
       
      VV
      Posts: 2065
      Joined: Sat Feb 13, 2016 1:03 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 1:23 pm

      Is the possible A220 order part of their strategy to get out of this crisis?
       
      User avatar
      TWA302
      Posts: 903
      Joined: Mon Jul 04, 2005 12:17 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 1:32 pm

      strfyr51 wrote:
      TWA302 wrote:
      Boof02671 wrote:
      WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


      Sooner or later the unions are going to have to accept/make concessions or that water is going to sink the ship eventually and then the employees will have an even larger issue.

      Or? Sooner or Later? Executives are going to have to downsize the airlines which includes Southwest. Could be? they've all got one hell of a lot more airplanes than they can fly profitably.


      Sure that is a possibility, but downsizing results in job losses. Catch-22.
       
      Boof02671
      Posts: 2492
      Joined: Sun Jul 10, 2016 12:15 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 2:18 pm

      Westerwaelder wrote:
      Boof02671 wrote:
      WN is the highest percentage of unionized workers, they can’t just impose paycuts across the board and all the unions have told WN no concessions. And WN is imposing paycuts 1/1/21 on non-union workers.


      I would imagine the unions will either reconsider or go down with the ship?

      WN would file chapter 11 and the use Section 1113C to force negotiations or abrogate and impose if no agreement is reached. Negotiating concessions outside of bankruptcy doesn’t protect further cuts if bankruptcy is still filed.
       
      jeffrey0032j
      Posts: 946
      Joined: Wed Jun 15, 2016 3:11 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 2:37 pm

      VV wrote:
      Is the possible A220 order part of their strategy to get out of this crisis?

      Further capital expenditure in a crisis? No, that will kill them faster.
       
      SWADawg
      Posts: 683
      Joined: Tue Dec 03, 2013 6:43 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 2:58 pm

      VV wrote:
      Is the possible A220 order part of their strategy to get out of this crisis?

      No. Think M&A with a carrier that already operates the A220. Industry Consolidation 2.0 is coming on the backside of this pandemic possibly as a consequence of numerous bankruptcies throughout the industry.
      My posts are my opinion only and do not reflect the views of Southwest Airlines
       
      User avatar
      NameOmitted
      Posts: 970
      Joined: Sun Oct 23, 2016 7:59 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 3:12 pm

      It seems that Alaska did very well by having a large fleet of leased aircraft that they can unload without much liability inherited from Virgin America. Back in May, Southwest announced they were selling and leasing back several of their aircraft. What sort of penalty is involved with them breaking those leases early?
       
      raylee67
      Posts: 980
      Joined: Mon Oct 24, 2011 11:06 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 3:19 pm

      DalDC9Bos wrote:
      it mentions that they are still 20% overstaffed.


      If it's only 20% overstaffed, it's a lot better than many others such as CX and SQ that are only operating at less than 10% of original capacity.

      With just 20% redundancy, the easiest way would be temporary lay-off of 15-20% of staff, with the expectation to call them back gradually in the next 12-18 months. Or else they can ask if they are willing to take a 15-20% pay-cut so everyone shares the pain but everyone gets to keep the job (and some income).
      319/20/21 332/33 342/43/45 359/51 388 707 717 732/36/3G/38/39 74R/42/43/44/4E/48 757 762/63 772/7L/73/7W 788/89 D10 M80 135/40/45 175/90 DH1/4 CRJ/R7 L10
      AY LH OU SR BA FI LX
      AA DL UA NW AC CP WS FL NK PD
      CI NH SQ KA CX JL BR OZ TG KE CA CZ NZ JQ RS
       
      Miamiairport
      Posts: 828
      Joined: Tue Apr 10, 2018 8:14 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Wed Oct 28, 2020 3:40 pm

      Anyone that thinks "new entrants" are going to make this industry flyer friendly is delusional. Any new carrier is going to want to gain critical mass asap and there's one sure fire way to do that. Have ridiculously low fares and hope that you can eek out a profit on endless fees (that any number of clueless flyers won't know about until they hit the airport) and much lower costs. Also, degrade the experience by shoving people into seats made for seven year olds and about as comfortable as seats on the kind of school buses I rode to school in the 1970s.

      Then people of course complain on social media but will book that same airline, or one just like it, for another $39 fare. And the cycle repeats. I'd rather stay with the status quo because at least pre COVID the legacy airlines offered a beverage service, economy plus and premium economy. The "new entrants" will have an a/c full of 28 inch pitch seats and who knows what width. Endless inflight hawking of crap. You might get lucky with a "big front seat." But it's Ryanair or worse.
       
      jplatts
      Posts: 4254
      Joined: Sat Mar 18, 2017 6:42 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 6:12 pm

      SkyVoice wrote:
      I believe that Southwest will survive, one way or another. Once that happens, they can declare for any airport and/or any route that they intend to serve. By then, there should be plenty of airports with counter space, gate space & slots to claim, thanks to those carriers that do not survive.


      I agree that WN will probably survive in one way or another, especially with WN having had a strong presence prior to the COVID-19 pandemic in some markets where AA, DL, or UA do not have a hub such as AUS, MCI, LAS, BNA, MSY, MCO, STL, SMF, SAT, SAN, and TPA.

      WN also already has strong brand recognition in most of the contiguous U.S., and WN also serves some markets in the contiguous U.S. that aren't served by B6, NK, or AS.

      There are also a few smaller Texas markets that are served by AA, UA, and WN but not by DL or any ULCC's such as AMA, CRP, LBB, and MAF.
       
      Boof02671
      Posts: 2492
      Joined: Sun Jul 10, 2016 12:15 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 6:27 pm

      MohawkWeekend wrote:
      "That was over a four year period and you forget DL pilots took massive concessions in bankruptcy which was 32.5%. They had no raises for five years."

      You are absolutely correct. But right now revenue doesn't support those wages. Someone mentioned in an earlier post that we've seem this before. Cheap airplanes and unemployed pilots mean a new airline will arise from the rubble with a much lower cost structure.

      With what start up capital?
       
      VV
      Posts: 2065
      Joined: Sat Feb 13, 2016 1:03 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 6:57 pm

      So, how does the plan to order A220 fit into all this?
       
      slcdeltarumd11
      Posts: 5056
      Joined: Fri Jan 09, 2004 7:30 am

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 7:54 pm

      Every ship is taking on water. Every airline in the us is losing money. Nothing really specific to southwest here, they are all losing money.

      At some point the government needs to decide so we commit to helping the airlines ride thru this (in for the long haul) or do we let them file for bankruptcy protections eventually and stop the bail outs. This middle ground proves nothing and costs the most money . We should decide one or the other and let them know so they can plan. 2021 demand is not gonna help them demand will remain too low even in a best case scenario.
       
      User avatar
      klm617
      Posts: 5467
      Joined: Sat Jul 04, 2015 8:57 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 8:14 pm

      75driver wrote:
      Sooner787 wrote:
      Those of us in the airline/travel industry are hanging on by a thread.

      I'm convinced without additional stimulus from Uncle Sam, we're gonna
      lose a major US carrier in the next 12 months.

      Hell, we're already seeing consolidation in the travel industry.
      That means a lot of travel jobs that went away last March aren't coming back :(


      Of course many jobs are not coming back and the writing has been on the wall for months. If anyone is just realizing it they haven’t been paying attention.

      I can’t remember what CEO said it but it was something alone the lines of “human beings have changed their behavior forever”. He was referring to business travel which paid the bills for most sectors of the industry. I think “forever” is a bold claim but as it relates to business the ones who have survived already made their changes permanent. The smart ones did this early and the industry needs to quit chasing fairy dust and accept the long term being very different.

      I don’t think we need another government check to kick the can down the road. We need a government stimulus that will retrain people who can pursue jobs where they are needed and not hang on in a resized industry that’s vastly over staffed in all sectors. The travel industry will survive albeit with a smaller footprint. The government needs to help those displaced and plan for the future. If I was junior and this happened I would jump at the opportunity for more education, a degree or retraining into employment areas where long term prospects are better.


      Exactly the stimulus should be about the people and moving on from this. We are talking about people who for the most part are living from paycheck to paycheck not people who have squired away tens of thousands of dollars through shrewd investments. These people when they have no income they are busted with no where to turn. Those investors who are flush with cash always have something to turn back on. We need to put people first because if they lose the ability to fuel the market place the whole system collapses like a house of cards.
      the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
       
      User avatar
      klm617
      Posts: 5467
      Joined: Sat Jul 04, 2015 8:57 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 8:18 pm

      slcdeltarumd11 wrote:
      Every ship is taking on water. Every airline in the us is losing money. Nothing really specific to southwest here, they are all losing money.

      At some point the government needs to decide so we commit to helping the airlines ride thru this (in for the long haul) or do we let them file for bankruptcy protections eventually and stop the bail outs. This middle ground proves nothing and costs the most money . We should decide one or the other and let them know so they can plan. 2021 demand is not gonna help them demand will remain too low even in a best case scenario.


      I think we need to let them go it alone and let the strongest survive and let the chips fall where they may. We can not continue to provide cooperate welfare for a situation that we have no idea how long it's going to last so the airlines need to adapt to the situation as it is. As far as I can tell there are airlines that are still capacity foolish now route at this point in time needs 5 completers.
      the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
       
      User avatar
      AirlineCritic
      Posts: 1777
      Joined: Sat Mar 14, 2009 1:07 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 8:22 pm

      There's a lot of deck chair arrangements in this thread, plus some blaming of governments as if that's the one that is preventing people from travelling.

      I think the reality is that demand has taken a massive hit, and even a big permanent hit. Business travel will not return to the same level it was in the next 5 years, even if everyone got a vaccination tomorrow. Maybe 10 years. Aviation isn't the only thing hit this way, for instance public transport has taken a big hit as well, and likely permanently.

      I'm sure WN will find a way to figure out (with their employees, aircraft vendors, etc) what to do. It is in the best interest of everyone that they'll find a reasonable way to reduce capacity, effort, and costs.

      But more broadly, the industry cannot survive on waiting for "return to normal" or living off government handouts. Not even governments have the kind of money needed to sustain a massive industry for years or decades.

      There has to be an adjustment. Those will win who are already doing it. It may not be happy news, but unfortunately that's the reality.
       
      hiflyeras
      Posts: 2330
      Joined: Thu Jul 14, 2011 6:48 pm

      Re: Southwest CEO: ‘The ship is taking on water’

      Thu Oct 29, 2020 9:25 pm

      They're going about this totally wrong. Begging your employees for pay cuts while announcing dozens of new flights on multiple routes says to me that they have plenty of money for expansion...yet not enough money to keep honoring their employees contractual pay agreements. That would be my feeling...and I'd tell them f* no to your pay cuts. Especially if I was a more senior union employee. Every other airline has had to make painful decisions and they do too...they are just clinging to this 'we're Southwest and we've never furloughed'. Who the f* cares.

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