Is United Furloughing

[contrail67]

Friend on the 737 fleet just got his furlough notice for Jan/Feb. He left a solid regional job for UAL and he is pi$$ed. He is currently looking at opps in China, India and Dubai (FlyDubai).

First of all....the announcement for the additional furloughs in Jan. came out yesterday afternoon. It is impossible that your friend already got a furlough notice already...less than 24 hours. Voluntary furloughs have their opportunity now to take a leave....they have until October 29 to put their request in. For every person that takes the voluntary furlough...a involuntary furlough is saved.

 

[BigRed1]

If they did the hedges the old fashion way, and not the SWA way yes they will loose money. I think that many airlines are going to loose a bunch this quarter.

It's much more complicated than a simple contract to purchase at a certain price. According to United's press release from this summer, we hedge fuel using three-way collars.

What these contracts basically do is lock in the fuel price if it rises and protect the buyer if the price falls through the floor. For an example just using numbers I made up, let's say United sets up a 3-way with a cap at $110/bbl, and a "floor" of $100 (actually called put levels, but never mind the jargon).

Clear as mud???

Once again, just using a super simple model, if fuel rises above the cap of $110/bbl, the fuel vendor reimburses the buyer (United) for the difference, so we only pay $110 regardless how high it goes. If fuel prices remain (float) within a certain range between $110 and $100, there is no adjustment. If however, fuel prices plummet to say $85/bbl, the buyer must pay a small amount back to the fuel vendor, but we still pay well under the $100 contract price.

 

[GuppyPuppy]

Today I feel lucky that I didn't go back to UA. Tomorrow might be a different story.

3/2000 hire.

GP

 

[contrail67]

They are trimming down...in the slowest time of the year...most cuts in Jan.... before a merger. Smarter to do it that way...from a cost viewpoint. Just trying to have a realistic view instead of a short sided negative viewpoint. Will see what happens...just my opinion.

 

[Captzaahlie]

Alot of folks did this to achieve a goal they had.

I resemble that remark, lets hope the wait is not forever......

 

[dispatchguy]

...most cuts in Jan.... before a merger.

Who in the hell is their hopeful dance partner? CO looked at UA and said "No Way UA"

They considering another bite at a AWE/USA/UAL merger? There's some smart management...

 

[pilotgolfer]

They are trimming down...in the slowest time of the year...most cuts in Jan.... before a merger. Smarter to do it that way...from a cost viewpoint. Just trying to have a realistic view instead of a short sided negative viewpoint. Will see what happens...just my opinion.

Here is another thing to look at. Assuming the DAL / NWA deal goes through soon. Delta had about 7400 pilots and 450 planes. Northwest had 4500 pilots and 350 planes for a combined total of 11,900 pilots and 800 planes. (approximate numbers from AirlinepilotCentral).

United has 7600 pilots and 450 planes (before parking any and furloughs). Continental has around 5000 pilots and 375 planes for a combined total of 12,600 pilots and 825 planes.

My guess is that CAL and UAL are going to trim the head count and number of airplanes down to some level that they are smaller than the combined DAL/NWA. This will make it an easier task to get the merger approved by regulators. Knock a 1000 pilots and 100 airplanes off of United's list and voila...it will be a done deal.

I can't wait to see when Tilton has to go before the Congressional Board begging for this deal and he is going to get completely raked through the coals when they bring up Executive Compensation.

Time will tell.

 

[Jetjockey]

Mergers and buy-outs are not finished by a long shot. Just the quiet before the storm.

 

[jmreii]

Mergers and buy-outs are not finished by a long shot. Just the quiet before the storm.

When management finishes cutting jobs and planes you will not be able to recognize it as a airline.

 

[WSurf]

Friend on the 737 fleet just got his furlough notice for Jan/Feb. He left a solid regional job for UAL and he is pi$$ed. He is currently looking at opps in China, India and Dubai (FlyDubai).

It happens and many didn't see this coming. I remember having two Jumperseater's that flew for JetBlue on my plane at the same time. Both were about to UpGrade to Captain at Blue.

One told me he was taking his recall to United, the other also close to upgrade said he was gonna stay at JetBlue.

Amazing how this industry spins.

 

[Yuppyguppy]

FUK Glenn Tilton

 

[DTW320]

Assuming the DAL / NWA deal goes through soon. Delta had about 7400 pilots and 450 planes. Northwest had 4500 pilots and 350 planes for a combined total of 11,900 pilots and 800 planes. (approximate numbers from AirlinepilotCentral).

The combined list that is being used at the arbitration has a total of 12,554 pilots.

 

[ultrarunner]

Pilot numbers vs. numbers of airframes are not a fair comparison. Too many variables....fleets, staffing for long haul, etc...

Heck, SWA has darn near 550 airframes and less than 6000 pilots...to use an expample.

 

[Andy]

Mergers and buy-outs are not finished by a long shot. Just the quiet before the storm.

There are HUGE integration costs associated with mergers. I don't see this as vey likely. Pull up data on the costs for AMR to integrate TWA into their system.
At this point in time, the very best strategy for any airline is to cut as much as possible in order to minimize future losses. This is rapidly turning into a 'live to fight another day' landscape.
On the bright side, worldwide oil demand destruction should get oil prices below $50/BBL in the not-too-distant future. Probably significantly below $50/BBL.

 

[iflyhigh]

Andy:

Are going to be one of the lucky ones to keep your job this time through?

Was not sure what your hire date was. I know if I had come back, I would be furloughed again. Crap I being furloughed from my current position anyways. Just now I am currently at the top of the furlough list, last to go, versus being in the middle.

I wish all my friends at UAL good luck

iflyhigh