Maggie’s How long until they shut down domestic flights?

[PinesAndProjectiles]

I'm traveling to PHL this morning.

There are three people on the plane.

Yes, three.

Delta has to be losing more money than I could ever imagine. I don't understand how this is feasible.

 

[bigwatchpilot]

My brother is a Delta pilot and its is a bad situation but SHOULD be short lived...they need to and will cut frequency and the GOV bailout will float the loss. Small airlines will be the hardest hit. The industry has survived this before...

 

[1moaoff]

Typically I'm flying multiple times a week domestic.

Wife generally x2 or x2 international a month.

That can be 40k a month. So it's going to hurt them. .gov will help though.

Fuel prices are down and they will buy it now on contract for years to come so there margins are quite different than most industries. Also slot of the cost is rolling upgrades and maintenance which isnt happening now.

 

[Flintdog2011]

Oddly enough, it seems the airlines are doing their level best to maintain normalcy for flight crews and maintenance folks. There are several smaller regionals going out of business, but most are status quo to keep people on the payroll until there is more clarity on grants/loans (bailouts). My flight schedule has been decimated, but no talk of furloughs yet. A few airlines have furloughs, but much smaller than I would expect. I believe the (maybe perceived) shortage of pilots and mechanics have the airlines thinking about holding on to the talent that they have for a change.

 

[rjacobs]

Airlines wont shut down. We are a level above "essential". I think the government labeled us "national strategic" or something like that.

My airline is cutting a planned ~30% with strategic cancellations going further than that.

The problem with shutting the airlines down is you might not start them back up again.

We have parked 50 airplanes in long term storage and they say they are trying to avoid parking more long term, but will park them in a rolling 1-2 day setup. Every 3 days the airplanes need to touch a maintenance station.

Furloughs, surprisingly, have a HUGE cost associated with them. My company doesnt have some issues that AA, Delta, or United would have with furloughs. If those 3 were to furlough it could cause 5 or 6 training events(2-3 months long) per person furloughed. Each long term training is generally valued at 30-50k dollars. They could have training events stretch out for 2-3 years...and have millions of dollars involved in it when this whole shit show could be over in 2 months.

I think if this thing stretches much beyond May or June you will see some different moves by the airlines, but for now they are all trying to remain status quo as much as possible, slash the schedule to keep from burning gas, but airplane payments, salary, rent, etc. still has to get paid. The hope is a short term aberration, just as the rest of the country is hoping for. Right now things are changing day by day really so any planning beyond 7 days is really a crap shoot at this point.

 

[LawnMM]

They make a lot of their money on freight/cargo which is still moving even if people aren't.

Also, as some have eluded to, closing down may actually be more expensive than staying open when it comes to retaining flight crews, training, hiring, etc.

 

[rjacobs]

They make a lot of their money on freight/cargo which is still moving even if people aren't.

Not true domestically unless you are FedEx or UPS.

Internationally, sure, Delta, United and American made a boat load of money in belly freight going to asia and europe... That shit is shut down now. They may be running a hand full of flights to Europe and Asia combined, but thats definitely not enough to cover the billion+ a month they are bleeding right now. I "heard" United was bleeding 50 million a day during this. You aint covering that with 1 or 2 flights a day with belly freight.

 

[tna9001]

Delta, American, and United are all going to emerge from this crisis smaller than they went into it. Delta is burning through $50 million a day, that's $1.5 Billion a month, reduced its schedule by 70%, and will be parking 600 aircraft, many of which won't fly again. The COVID-19 crisis is going to be much worse for the airline industry (and the country) than 9/11 or even the financial crisis of 2008. None of the airline management wants to deal with all the strings that come with the government money and would rather take the airline through bankruptcy than limit their personal income.

Here's my prediction, but the end of 2021 American, United, and Delta will all be going through another round of bankruptcies with American leading the way. If your working for one of the big three airlines and you are in the bottom 30% of the seniority list, you better be planning on finding a new job.

 

[rjacobs]

would rather take the airline through bankruptcy .

Here's my prediction, but the end of 2021 American, United, and Delta will all be going through another round of bankruptcies with American leading the way.

Here's the problem this time as I understand it.

You need a certain amount of cash to even go into Chap 11... That level of cash doesnt exist at any airline right now.

So if an airline, right now, today, were to go into BK it would likely be Chap 7 and that airline would be GONZO...

I dont disagree that AA will likely be the first(if it comes to that) because they have 33 BILLION in debt...and the weakest cash position(less than 30 days as of a week ago, so likely less than 20 days cash now, unless the .gov money has already gotten there).

 

[tna9001]

Here's the problem this time as I understand it.

You need a certain amount of cash to even go into Chap 11... That level of cash doesnt exist at any airline right now.

So if an airline, right now, today, were to go into BK it would likely be Chap 7 and that airline would be GONZO...

I dont disagree that AA will likely be the first(if it comes to that) because they have 33 BILLION in debt...and the weakest cash position(less than 30 days as of a week ago, so likely less than 20 days cash now, unless the .gov money has already gotten there).

That's a great point about C7 vs C11. The biggest problem (for employees) is the bankruptcy laws for corporations that allow for bankruptcies of convenience, I'm sure the management will find a way to get the companies into bankruptcy.

It's still hard for me to wrap my brain around how quickly things have changed, a couple of months ago we (Delta pilots) were looking forward to negotiating a new contract during times of record profits and now we're worried about keeping our jobs.

 

[rjacobs]

That's a great point about C7 vs C11. The biggest problem (for employees) is the bankruptcy laws for corporations that allow for bankruptcies of convenience, I'm sure the management will find a way to get the companies into bankruptcy.

Again, I dont believe ANYBODY has cash to go into Chap 11(ive been trying to find out how much operating cash is required, but my google search skills are lacking), so a "bankruptcy of convenience" aka, AA's in 2011, isnt going to happen with no cash in the bank to continue to operate.

The other thing is that I believe there was a law change to where just because you went into BK protection, doesnt mean you get to automatically abrogate labor contracts... this is a win IMO. I believe AA was the first to go into BK after this law change and the company attempted to abrogate the contract, but the BK court wouldnt allow it. So the post Sept 11 BK where the first thing to go was "that damn pilot contract" cant really happen anymore.

 

[tna9001]

Again, I dont believe ANYBODY has cash to go into Chap 11(ive been trying to find out how much operating cash is required, but my google search skills are lacking), so a "bankruptcy of convenience" aka, AA's in 2011, isnt going to happen with no cash in the bank to continue to operate.

The other thing is that I believe there was a law change to where just because you went into BK protection, doesnt mean you get to automatically abrogate labor contracts... this is a win IMO. I believe AA was the first to go into BK after this law change and the company attempted to abrogate the contract, but the BK court wouldnt allow it. So the post Sept 11 BK where the first thing to go was "that damn pilot contract" cant really happen anymore.

Well, at Delta the company usually just asks for concessions and the pilot just cave so we've got that going for us.

 

[rjacobs]

Well, at Delta the company usually just asks for concessions and the pilot just cave so we've got that going for us.

Im not there, but I was reading stuff about your all's agreement with the company for reduced paid leave(SIL I think it was called) and then the company came back for something else(reduced ALV) and so the SIL was thrown out. Then I was reading guys saying "fuck the company, they are getting 6 billion from the government to make payroll until the end of September"... kind of a "full pay to the last day" stance...

Making payroll is great, but if operational losses eat the rest of the cash in that time period, Oct 1 there is no airline to come back to... Payroll at a company Delta's size is but one aspect of the overall problem.

I dont know what the right move is. Im all for "full pay to the last day" under most circumstances, but at what expense in the present?

My company has not come to us for anything...yet. They put some stuff out on their own and the union hammered them over it because they had been trying to talk to the company and got blown off, for like 10 days. They are claiming a violation of the CBA, yet there is nothing in our CBA covering company offered leaves of this kind(bereavement, mil, child birth, etc... is covered, but nothing like this). So we will see what comes from the negotiations this week.

 

[Shooter McGavin]

I normally fly 6 times a month. I would love to give the airlines my companies money. Also, I need to get back out there as this is hurting my small business.

 

[rjacobs]

I normally fly 6 times a month. I would love to give the airlines my companies money. Also, I need to get back out there as this is hurting my small business.

Keep flying if you can.

The airports are empty and super clean.

The airplanes are empty and super clean.

Ticket prices are super cheap.

 

[Shooter McGavin]

Keep flying if you can.

The airports are empty and super clean.

The airplanes are empty and super clean.

Ticket prices are super cheap.

I would if I could, but my customers are not allowed to see anyone because of COVID 19.

 

[tna9001]

Im not there, but I was reading stuff about your all's agreement with the company for reduced paid leave(SIL I think it was called) and then the company came back for something else(reduced ALV) and so the SIL was thrown out. Then I was reading guys saying "fuck the company, they are getting 6 billion from the government to make payroll until the end of September"... kind of a "full pay to the last day" stance...

I think the right strategy will only be known looking in the rearview mirror. If Delta had a management team that was interested in running an airline it would make the decision process much easier for the union and its membership. Ed Bastian has collected $150 million in profits over the last 4 years while borrowing money to buy back stock to the tune of $12 billion, it'd be nice to have some of that money to weather this storm.

I wish you all the luck with your company and job.

 

[Arc Light]

Here's a novel idea. When this shit is over, maybe the airlines could try and woo customers back with something resembling decent customer service. Let's face it, this industry has a well deserved rep. for atrocious CS and fucking the customer at every opportunity. They invented the term "nickle and dime you." There is a good reason the airlines rank below used car lots in terms of customer satisfaction, they earned it.

They should take the opportunity to institute some serious changes to their corporate attitude. Especially considering they are taking tax payer bailouts. Not gonna hold my breath.

 

[striped1]

I fly 125+ times a year, mostly for work. I am currently off the road until further notice. It is not good. This COVID 19 response is going to result in a greater depression.

 

[tna9001]

Here's a novel idea. When this shit is over, maybe the airlines could try and woo customers back with something resembling decent customer service. Let's face it, this industry has a well deserved rep. for atrocious CS and fucking the customer at every opportunity. They invented the term "nickle and dime you." There is a good reason the airlines rank below used car lots in terms of customer satisfaction, they earned it.

They should take the opportunity to institute some serious changes to their corporate attitude. Especially considering they are taking tax payer bailouts. Not gonna hold my breath.

Agreed.

 

[benchmstr]

Should have already happened....Americans are too selfish and entitled for this shit.

Bench

 

[THEIS]

Hi,

Please raise your hand if you believe ANY medium or large business is actually hurting financially during this shit.
I am talking about the business itself, not the workers.

IF anyone believes that medium and large business entities do not have Loss of Income Insurance policies that are typically triggered by a 12% reduction at that months income then you guys are not looking at the big picture.

That is why corporate/business bailouts do not work.....those entities are not missing a beat in income..they are just getting it from a different source (Insurance company instead of customers).

We have not even seen the tip of the iceberg in regards to bailouts.....if you think GM and banks were too big to fail....wait for about 8 months when the insurance companies head to DC for their bailouts.

These company Loss of Income policies pay everything from bank notes, lender notes, payroll, accounts payable, etc etc.

In 1 year we are going to see the Loss of Income policies be stipulated that the Federal Government is responsible for 80% of the payouts if the loss of income comes from a specific list of reasons/events....just like we seen from the Terrorism Insurance Act.

Sincerely,
Theis

 

[Shooter McGavin]

I fly Delta pretty much exclusively because of the customer service I receive from them. I have been Platinum for the last 15 years. I could be Diamond medallion, but i just don't want to fly that last flight before Christmas.

 

[Slash0311]

So here's a question you guys may help with.

What is the possibility of the airlines being stable by lets say next year? My wife and I were planning a vacation next summer but with all of this, my concern is about if things will be "back to normal". For example, I don't want to be mid vacation flying and have flights canceled (at least fairly sure like before convid.)

 

[R0man]

We are way past the point of no return in terms of fiscal sanity. They will just throw another 2 or 3 trillions. Then another. Then we will have another problem.
When I was young in Eastern Europe, in the payday I ran to buy something with all the money in same day, because by next week they would lose some 20% of the value.

 

[rjacobs]

So here's a question you guys may help with.

What is the possibility of the airlines being stable by lets say next year? My wife and I were planning a vacation next summer but with all of this, my concern is about if things will be "back to normal". For example, I don't want to be mid vacation flying and have flights canceled (at least fairly sure like before convid.)

I wouldnt worry about anything beyond say August or September of this year for international and probably June or July for domestic. My airline is planning to start turning on our caribbean, Hawaii, and Mexico starting mid May. I would say Europe and Asia will be furthest out as far as getting turned back on.

If this shit is still going on in 6 months there will be 1 or 2 less MAJOR airlines left in the market... but at that point the whole economy of the world will be in shambles so travel will be the least of your worries LOL.

 

[Slash0311]

^^^ That's kind of what I tthought. But Ive had flights out right canceled before (a whole leg was canceled while I was mid-air) and it caused major headaches since I was traveling with my elderly parents. It was more or less because of a union issue/dispute. Im really hoping things are stable enough by next year. But next year's trip was supposed to be this year so I'm kind of happy I put it off.

 

[1moaoff]

Haed to see but theres 20 Delta planes sitting across the street from my office

 

[tna9001]

 

[Sean the Nailer]

The two big carriers up here in Canada have 'greatly reduced' their flights. Westjet and Air Canada both. And their subsidiaries, of course.

 

[PinesAndProjectiles]

There's a carrier that goes by "Boutique Airlines" that has a ticket counter in MSP. I'm going to pretty much guarantee they will never re-open.