Frontier pay cuts?

[Cardinal]

$20-30 million.

 

[CitationUltra]

Can't speak for the others, but at NWA our pay cuts went directly to the NWA executive management team. With 30% pay cuts and drastic work rule changes, we gave NWA 500 million and they shortly there after awarded themselves 400 million in the form of bonuses. I think the last 100 million went towards buying EMB175s for Compass.

The AA paycuts also went to the management "team". Plus AA never declared bankruptcy, but that wasn't why. They always maintained a very large cash warchest, that was partially funded by AMR, when it owned Sabre.

 

[CitationUltra]

FBN makes an excellent point. F9's managers already gave themselves a protected six month severance package.

I see a big difference between the cuts being a required condition of DIP financing and the scenario you are presented with. In your case they are promising nothing in exchange for your pay.

In the grand scheme of the airline's budget, the cuts are not even going to make a marginal difference. The fix for your problem is increased revenue. Raise the ticket prices, the other airlines will follow and F9 has a nice product.

Good luck with a tough decision.

If it were really to obtained DIP financing, they would identify a financing source, and the source would likely make certain cost reductions a contingency of the financing--not the other way around.

As it now stands, in the event that Frontier finds a DIP financing source--no certainty by any means in this market--they may insist on further cuts!

 

[CitationUltra]

Heck, on Friday the COO (who was hired by Potter) said it's unfortunate Menke didn't get here sooner.

He's probably right. But it's only accurate if the new CEO would have made the critical decisions that needed making back in 2006, or would have avoided some or all of the major bonehead moves that Frontier made in '06.

 

[CitationUltra]

Wonder how big a dent the DHC ops put in their finances??

They burned up something north of $25 million, or about three times what it should have cost.

This is an example of an area in which the Frontier management was definitely asleep at the wheel during the last quarter of 2006 and the first half of 2007. They kept making press statements that this was the fault of the FAA, and it was definitely NOT the fault of the FAA.

 

[StaySeated]

tic toc tic toc

Alright, read as slowly as necessary to comprehend the following info.

No one at F9 is stating that a pay cut is going to save the airline.

This paycut vote is a desperate measure to reduce our casm to the lowest in the industry in an effort to attract financing.

Noone should be talking about snap back in the fall. Without DIP, we are done. I would love it if we could hold off the concession until we have financing, however, you need to attend a roadshow if you think we have time to get DIP, then vote, then convince the creditors committee to keep this place in business.

The fate of this company is going to be decided by seven people in a room in NY, and very soon.

 

[The Victors]

For the rest of 2008 and 2009, it is pretty simple. Frontier burns about 200 million gallons of fuel a year but pays about between $1 to $1.25 a gallon more than Southwest. That equates to about a $250 million dollar a year advantage. Fuel costs are now about 50% of total costs whereas pilot labor cost are usually about 10% of total costs. That why fuel matters much more than labor.

Southwest airlines is a well managed airline. When you feel your competition is on the ropes, you go for the kill. They know their cost advantage is greatly reduced on Jan. 1, 2010, so they will try like hell to make sure United and Frontier don't see 2010. Southwest has a strong brand, so it usually doesn't take them long in new markets to grab a signicant amount of revenue.

What exactly are you talking about? The fuel hedges go into 2013 and I'm sure that GK will be up for buying more.

 

[The Victors]

That internal memo reads just like the one we got at Independence Air. You can fly the planes for free and still go out of business. Say "NO", make a good pay check and start looking for a new job, Say "Yes", make a smaller pay check and still end up looking for a new job.

Yes is sucks guys/girls, been there done that and have the T-shirt. No one can really tell you what to do or how to vote, just understand that your pay is not what drove your company into CH.11 it was your over paid management team that does not know how to run an airline.

Indy Air management team walked away with millions in their pockets, we got nothing....

Good Luck.....

This guy is exactly right.

 

[maxblast72]

What exactly are you talking about? The fuel hedges go into 2013 and I'm sure that GK will be up for buying more.

It is true that they have hedges past 2010, however from what I have heard, their major advantage ends Jan 1, 2010. Yes, Southwest has the cash for future hedging, but as of right now, not many good future hedges are being offered right now.

 

[Golden Falcon]

At the end of the day, paycuts never saved an airline did they???

 

[slaquer5]

It is true that they have hedges past 2010, however from what I have heard, their major advantage ends Jan 1, 2010. Yes, Southwest has the cash for future hedging, but as of right now, not many good future hedges are being offered right now.

So great one , I am taking it that you think oil is no longer going to go up. Please tell me the reasoning so I can invest accordingly

 

[pipe]

based on the average pilot there at F9 making $100k-- you're looking at giving the company a little more than $2.5 million over the 3 months- ($10million if it lasts a year) -- in the airline financing world, is that really going to save the situation? Think about what that actually will buy frontier- it's not nothing, but it's close.

One quarter's pilot paycuts will not cover the bankruptcy costs of ONE DAY!!!!

This pay cut will make no difference in the survival prospects of the company -- it will make a difference in a family's bottom line.

DON"T DO IT!!! And yes, I have been through it before, and I've even worked at F9 before.

PIPE

 

[USMC319]

DON"T DO IT!!! And yes, I have been through it before, and I've even worked at F9 before.
PIPE

Pipe,
You are one of the level headed FI guys, but (everyone) please don't get on here and tell F9ers how to vote.

Here are the simple facts;
The vote does not matter. The company is worth more dead than alive right now. The LOA for the temporary pay concesion is simply part of a comprehensive effort to lower F9s CASM to a point that they may attract DIP. It may or may not work, but that is what the company is pitching to WaLL Street and that is what they will deliver. So, that means a NO vote will trigger a 1113e which will most likely abrogate the FAPA CBA. In that case not only will F9ers lose their 14.5% pay but they will also most likely lose their work rules, which relatively speaking aresome of the best in the industry. So a YES vote will allow you to talk tough at the bar, how you stood on your principles but really that and $4 will buy you your next beer.

Whether the vote is YES or NO, F9 will need DIP to continue past September. If oil is still at $125/bbl at that time these temporary pay cuts will look modest in comparision to what will lie ahead.

So at the end of the day, why don't you all save your comments and suggestions for your own pilot group when (not if) you are presented with this scenerio in the next 12 months.

Good luck to all. US aviation is dead.

 

[hawk996]

USMC, you are correct. No one can tell what or how to vote. Just understand that I was in your shoes and no matter what or how I voted, we still lost our jobs. Your family sure could use that 14.5% each month you stay in business.

If I could find the memo from Indy Air, it would read just like the one your management sent to you. Our management turned away Branson in the final moments. Our management team walked away from a deal that would have kept money and food on the table for my family, but instead turned the deal down and walked us right out of business. They ran away with millions in their pockets and we were left high and dry.

What has your management team given up? What will they get when the doors close?

Your pay will not mean a thing to the people making the call in a few days, but it sure means a lot to your family.

Keep what you have while you still have it, it will pay off for your family down the road.

Good Luck, god bless my friends. It is a long hard road to walk in front of you, so keep you heads up and do what you feel is the right thing for your families.

Hawk

 

[vtwo]

Ditto

management is very good at using your emotions against you. After all they have no Emotion involved. just Numbers. your family needs are not thier concern.

They will use tried and true methods to get what they can from you. It will have no bearing on the outcome.
That Is from experience. I was told the same things as My airlines kept cutting down.

"we need paycuts so you can keep your Jobs"
next was "we are still loosing money. now we will layoff and still need more cuts, Oh thanks and your the reason we are a great team". Bla Bla Bla. next was Bk court. we need more cuts from employees to save jobs .

Then "thanks for the cut guys we're in this together". Bla Bla Bla. then in the middle of the night they slam the door closed and screw us all anyways. while they move assets to other parts of their company's and take tier wages, bonuses and retirement.

Don't take any pay cuts. If they truly are needed then they will get them. Labor has never bankrupted an airline. Mismanagement has. and Mismanagement won't be fixed by employee's subsidizing Managements failures.

 

[HalinTexas]

Say NO!

Look at ATA's history since 2004.

We gave one concession before the first BK. A little more after the BK in Jan. '05. An 1113(e) was filed for temporary relief to continue the concessions then the 1113(c) was filed. This basically abrogated our contract for three years. We shut down before that contract was amendable.

I gave over $250,000 back to Matlin-Patterson during this time. I was downgraded to FO. I was just beginning to make the income I was making in 2003 right before I upgraded!

Don't give them anything! Make them fight for it!

Save your money, pay off debt (I got mine paid off before we shut down, and I had lots in savings!), get yourself ready for a change of job or career, but keep that money you've earned so far.

There is no guarantee that they won't come back for more in an 1113(c) filing. There's also no guarantee you'll stay in business. Look at ATA and Aloha.

 

[USMC319]

I agree with some of that fellas, but here is the deal. Take a pay cut and keep a relatively good contract in place or take the same pay cut and lose all your work rules as a bonus prize. Remember, a 1113e only takes 10 days, so be careful. The Plan-B advice is great. I have been recommending that to all pilots in this industry for years. But giving advice on a union vote of another carrier is worthless.

 

[reepicheep]

My favorite is "if you just give us these pay cuts then Wall St. will be happy and all the banks will be happy and the hedge fund managers will be happy and we'll keep all these airplanes and jobs and this is the last time no we really mean it this time..."

 

[USMC319]

My favorite is "if you just give us these pay cuts then Wall St. will be happy and all the banks will be happy and the hedge fund managers will be happy and we'll keep all these airplanes and jobs and this is the last time no we really mean it this time..."

I don't think you will hear this promise from anyone in this environment. I know F9 mgt is not promising these things at least. They are being very real and up front. If you hear these things from YOUR management then you know you are being duped.

 

[D-Bo]

I agree with some of that fellas, but here is the deal. Take a pay cut and keep a relatively good contract in place or take the same pay cut and lose all your work rules as a bonus prize. Remember, a 1113e only takes 10 days, so be careful. The Plan-B advice is great. I have been recommending that to all pilots in this industry for years. But giving advice on a union vote of another carrier is worthless.

EDIT: I didn't realize reepicheep made this point in his reply to you already.



Realize this. If your group votes to take a paycut now that does not mean they won't come back for more later. They can even send it to a judge later. There is usually more than one push for concessions in a bankruptcy. Managements key is to take as much from you as you are possibly willing to give away. And when you aren't willing to give any more, they look for ways to take it away from you. That's how it's played time after time.

About your work rules, some of them are good. You could loose the premium pay above 82. They will come after it especially if you give away 14.5%. They figure if they can take that pay away from you then they won't have to worry about paying a premium above 82. Everyone will have to work more hours anyway.

As far as splitting trips and pretty good trip trading, that benefits the group of pilots of there but all in all, it is at the very worst manpower neutral for the company. I don't think they'd come after that. I can't think of too many provisions work rule wise that are actually manpower positive over there. But if you can think of one, expect them to target it.

 

[AnimalTale]

I hate to say this:

There are only TWO GUARANTEES:

1) The pilots get a pay cut, whether imposed or voted in.

2) MNGMT gets a Severance package no matter what.


WTF why do we always allow this to happen? Who would even want our managers?

CYA

 

[F9 Buff]

I love F9 and I hope things turn around quick but you guys have to remember that the folks over at the GO don't have jobs that rely on a seniority list. If things aren't working out and doom and gloom is on the horizon what reason do they have to stay when they could easily move on to another company? They don't have to start over on reserve after buying a type rating on their own dime then be the junior guy until the next upswing in the economy.

If not for the "golden parachute" most of them would be gone asap to greener pastures and Frontier would be in about as good of shape as the next flight to LAX if both pilots bailed out in flight with the cockpit door locked and barricaded.

The situation sucks, but to me this just points out another reason why pilots need a national seniority list. Wouldn't really help F9 or any airline survive but I am sure it would be nice to know that if your company goes under, you can continue your career instead of starting it over again... Anyway, that is another topic for another day.

I'll keep pulling for you guys... Hopefully some good news happens soon!

 

[waveflyer]

either an NSL or just set some standards and let us compete for openings like everyone else in the world--
when do ya'll vote anyway? i'm pulling for you...

 

[GuppyWN]

USMC319,

Your management isn't being competely "up front" with you. Just a few weeks ago you were filing CH 11 only because the credit card company was screwing you over.

Gup

 

[skystud25]

USMC319,

Your management isn't being competely "up front" with you. Just a few weeks ago you were filing CH 11 only because the credit card company was screwing you over.

Gup

Just a guess, but the F9 guys might not want to be hearing too much advice or otherwise from WN folks right now.

 

[PCL_128]

Voting was supposed to close yesterday. Anyone know what the results were?

 

[waveflyer]

Just a guess, but the F9 guys might not want to be hearing too much advice or otherwise from WN folks right now.

what? you think the pilots had anything to do w/ it? The $180/hour is undercuttting frontier?

Management loves it when we fight each other instead of the real issues....

 

[skystud25]

what? you think the pilots had anything to do w/ it? The $180/hour is undercuttting frontier?

Management loves it when we fight each other instead of the real issues....

No, I'm sure they don't blame the pilots, but since we as employees are the company, indirectly, there may be some resentment. Have a read on this, freshly posted by AnimalTale (F9 guy) regarding the WN announcement today on additional Denver flying. Looks like I might be right...

"We will continue to grow in Denver as it is a major focal point for us, and the market is responding exceptionally well to our service," said Southwest Airlines CEO Gary Kelly.

AWESOME! Guys, enjoy your success.

You will successfully drive Ual out of Denver, put F9 out of business and now you will OWN DENVER.

Congrats, now finally, you can raise the fares because you are the only player in town.

Btw, the $39 fares and "kids fly free" campaign is genius. You guys have the BEST management. Sleep well tonight knowing, you guys are the "NEW SKYGODS" in the USA.

CYA"

Yeah, I'd say they'd rather not hear too much from SW pilots right now. I'm not saying that's the right way to think, but there you are.

 

[Colonel Savage]

Just a few weeks ago you were filing CH 11 only because the credit card company was screwing you over.

Jet fuel being up about 15% more since then may not be a problem for you, Gup, but it is for us more "mortal" airline pilots.

Enjoy sleeping well for now, Gup, as futures have a way of becoming uncertian very quickly in this business, Gup.

 

[GuppyWN]

Step off Colonel.

I'm ex F9 - under the "original" leadership and proud of it. I have been vocally unimpressed with Potter and thought Menke was trying to play nice but the credit card imposed CH 11 and now asking for a paycut while implementing a 9 month severence is over the top.

I'm not going to let you smack talk me without a response. I've got a boat load of friends at F9 that have given blood, sweat and now tears for that company. They stuck around because it was a great company with a bright future. Made sacrifices because they were family. Now the "family" is taking care of themselves and dumping the kids off at the orphanage.

Feel free to respond, jacka$$.
Gup