2006-2007?

[WrightAvia]

Anybody have any predictions how the industry is going to look 2 to 3 years from now?

How will the big guys be doing? How will the SWA's, Midwest Airlines and the Jet Blue type airlines be doing?

Will recalls be completed by then or will there still be guys on furlough?

 

[General Lee]

As long as there isn't another "terror event" that kills the industry, I think most of the legacy carriers will be almost back to full strength (assuming a good economy still), and the LCCs will have gained market share to probably 30-35% of the travelling public (from 25% now). I bet there will still be some furloughs out, but some will have returned to the majors. I bet the Regionals will be larger, but the RJ revolution will be waning--and there will be a return of more mid-sized mainline jets to compete with the LCCs. There may be a couple less current airlines out there(due to Chap 7), with two or three new LCCs. That is my bet. That is all I will say......



Bye Bye--General Lee

 

[Eagleflip]

My God...I find myself agreeing with the General.

What's the world coming to?

Unfortunately, I do not see all of the furloughees returning to work by 2006. I also believe that at least one major will be gone by then as well, but I don't relish the loss.

Losing a carrier would be horrible news for our brothers out there.

I flew on one of the last flights Braniff ever flew years back. It was amazingly sad to see a proud carrier shutting down, much like losing a close friend. Instead I hope for the best, and believe there is enough business out there for all of us.

 

[banned username 2]

Unfortunately, I do not see all of the furloughees returning to work by 2006. I also believe that at least one major will be gone by then as well, but I don't relish the loss.

I agree... I have often heard numbers that AA or UAL can train about 50 pilots per month... Well each of them have over 2,100 pilots on furlough each, so even if they started recalls on Jan 1, 2004 (which we know they won't) and trained 50 pilots each every month until everyone was back would take until probably about April 2007 until everyone was back... Most people don't expect any recalls until very late 2004 and more likely early 2005, so push that whole table back at least a year, you are already into 2008... and that is if they have a steady stream of recalls...

Disclaimer: These are VERY rough numbers used as an example, it doesn't take into account retirements or people who may not come back, etc...

 

[WrightAvia]

Some of the financial news today was very interesting. There was some recommendation of airline stocks and they had specifically mentioned AMR. I must apologize that I didn't listen (hear) what other airline stocks were recommended, but I think other carriers were mentioned as well.

There were stories that "some" Americans had cash in "mattresses" and were anxious to get back into investing. I personally think that there is pent up demand for investing. It also seems that the American capitalism machine is lean and mean and ready for competition, based on the the fact that they said American worker productivity is better than it has been in 20 years.

It may take a little longer than 2006 or 2007 to get all the airline pilots off of furlough...maybe not. I think there is a turn in this thing and we are looking at it.

As far as General Lee's comment about "another terror event", and keep in mind this is a question...does anybody think that airlines will be involved, if there's a next time and second question, does anybody think that the American public would be so skiddish as to let something like that affect their economy again?

 

[AlbieF15]

FDX will have 3250 pilots after coverting a bunch of 3 seat AC to 2 seat and "optimizing" the lines, and losing the postal contract to DHL. Pilots currently there won't be furloughed due to union contracts that forfeit draft/volunteer, but the pilot force will be allowed to atrophy as retirements continue as the bottom 25% sit reserve.

Various Chinese and other foreign carriers will fly 25% of what FDX currently handles in the pacific rim. Other carriers TBD will do the same thing on the European side. FDX will continue to haul premium cost time sensitive shipping but let some freight forwarding slide to cheaper foreign code shares.

I end up being one of the last 200 U.S. ATP rated pilots to be a flight engineer on a 727 at a "major" US airline--in 2008.

God...I hope not...but I'm planning emotionally and financially just in case.

 

[buttercup]

If you really want to make money at least in the short term AAI is the airline stock you want to buy

 

[skirt]

I end up being one of the last 200 U.S. ATP rated pilots to be a flight engineer on a 727 at a "major" US airline--in 2008.

God...I hope not...but I'm planning emotionally and financially just in case.

Albie,

There is always JetBlue for you to consider! Just think how many pilots would give you a recommendation! You would be an A320 Capt. in 2008.

Skirt

 

[pilotyip]

In the past

Years ending in 2 are bad years to find jobs inflying, look back to 82/92/02. Years ending in 7 are great years hring is crazy 77/87/97 and if the tread continues 07 will the year. Being a believer in statistics, what has happen with trend before will tend to follow that trend in the future. So get ready for the hiring boom in 2007, start flying right now, do not go to college full time, work on your college degree on the side.

 

[#1 Windmilling]

NEGATIVE! Get your college degree and fly on the side! JMHO....

 

[jbucpt]

unfortunately, i see us air dissolving (they still do not have a business plan to compete)

.... united will be alot smaller...no "ted"... SONG will be gone as well, being that they havent made a profit since its inception (dont even try to "spin" that mr. general)

southwest and jetblue will have profit margins around 9 and 10 percent. (i believe thats when we start paying for our airplanes)

delta, american, and northwest will still be in the same perdictament , (profits one year, losses the next)...with more focus on international routes. less hub and spoke.

 

[Andy]

I have often heard numbers that AA or UAL can train about 50 pilots per month...

You've got bad numbers. UAL was hiring and training more than 100/mo in 2000. AMR was hiring and training somewhere around 150/mo in 2000.
Furlough returnees won't need the full training course; those who have been furloughed the shortest period will be able to take short courses. In some cases, we're talking a couple of sims and then IOE. When recalls initially start, I'd expect the bottleneck to be LCAs. Even so, I don't see any reason why UAL and AMR couldn't pump 200/mo through the training pipeline. The backups will start occurring when there are pilots going to new equipment (for instance, I never flew the 737; it'd be a shorter course for me to go to the Airbus).

Another issue to keep in mind as far as recalls go is that not all 2000+ pilots are going to be available to return to their airline immediately. Some have taken 5+ year active duty military committments; as such, they'll most likely exercise their recall rights immediately followed by a military leave of absence. In UAL's case, a pilot can be on mil leave of absence up to 6 years; none of the time on furlough counts toward those 6 years. AMR's policy (based on USERRA law) will be no less than 5 years.

I expect the following airlines to start recalling in 2004: DAL (already in process of recalling), CAL, UAL, NWA. I'd expect more than half of furloughees to be recalled by the end of 2006.

 

[catIIIc]

One more thing to look at AA has some small number of retirements in 2004 and 2005 but they start to retire in greater numbers, like any where between 300-600 pilots a yeart after that until about 2015. This no doubt wil have some effect. good news is popping up all around, I predict 2004 will be a good year and all airlines will be in recall mode at the end of 2004 and beginning of 2005. I hope i am right.

 

[80drvr]

delta, american, and northwest will still be in the same perdictament , (profits one year, losses the next)...with more focus on international routes. less hub and spoke.

How do you figure they're going to pull this off...it's a contradiciton.

 

[General Lee]

jbucpt,

Where do you come up with that? Song gone. Hmmmm. Most people think Song is the future for Delta domestic because the costs are a lot lower. The CASM (according to Fred Reid our Pres) is somewhere close to 7.0 on Song, and I can only see that part getting larger. Our hub and spoke system is profitable, and brings in many passengers fromm smaller towns on RJs and connects then to larger cities or INTL on 767s etc.... I don't think we will ever give that up. I see more legacy carriers putting the squeeze on the LCCs since they can bring back airplanes faster from the desert than the LCCs can get new ones. Most of the majors have leaned down and that will make a difference in the bottom line when things come back---and the economy improving will only help. The question about Jetblue is: Where are they going to go next? Yes, they have picked BOS and so far they have some good future loads to FLA---but can they get the gate space to compete? (DL is building a large new terminal there) I know that this was my argument with Airtran in ATL, and they are actually building a new one in ATL. Jetblue hasn't spent anything on any new terminal. And their LGB success depends on maybe getting some more slots from the City Council, but you can bet that other airlines will be trying too. So, where will Jetblue expand? More at JFK? Can they build more gates there or use other terminals? (I don't know--just asking) No room at LGA or EWR. Can they go to PHL? Ooops--Southwest is going in there. How about more in FLL? Nope. DEN? ATL? Nope--tried that already. Where will Virgin America be based? How will Independance in IAD affect Jetblue? There will be a lot of things to watch coming up, and I believe the majors will do a good job defending their turf, so where will the LCCs expand to? Good question....Better economy helps the Majors.....

Bye Bye--General Lee

 

[banger]

keep up!

Originally posted by General Lee

So, where will Jetblue expand? More at JFK? Can they build more gates there or use other terminals? (I don't know--just asking) Bye Bye--General Lee [/B][/QUOTE]


http://www.nycp.org/Web_News/General_Partnership/Queens Chronicle - South Edition.htm

jetBlue to build new 26 gate terminal at JFK summer of 2007

 

[FlyBoeingJets]

SWA has firm orders for 90, net of -200 retirements, aircraft by '06
Airtran has orders for 50 and options for another 50 by '07
JBLU has orders for 50/options for 50

That's 300 more airframes. Frontier and America West are also getting deliveries.

I'm anticipating crowded skies, again, by '07. If USAir or others go Chapter 7, it may still be crowded with airplanes coming out of the desert.

I'm also anticipating recalls to within 200 of the bottom at UAL and AA because some furloughees have moved on. Some of the pilots flying the 300 planes above will be former furloughees.

'07 may actually see some new hires at UAL, NWA. Maybe '06 at Continental. I see new hires possible at AA '07-'08. Don't know about the Delta folks. Popular thought is they will also come back sooner than others but I think it will have a lot to do with their return to profitability and Song's success. Both of which I think are uncertain at this point. Since '01 we have witnessed Delta dwindle their superior financial position down to a shadow of what it was.

If Albie's nightmare happens, Astar (DHL) will be hiring.

 

[FlyBoeingJets]

oops.

 

[jbucpt]

mr. general,

if song were profitable then delta would submit those numbers to wall street to prove their new and improved concept (a LCC within a major) has been a success. it has not. why?

hub and spoke is one of the most inefficient business models ever establish. ask any industry expert. compare southwest business plan to that of any major. point to point makes money, hub and spoke does not. the numbers and efficiency speaks for themselves.

jetblue's future gates (or any other future airline) situation is not a problem. you seem to forget about united and us airways situation. they will not be keeping all those gates they horde at certain airports. therefore someone will have to occupy and pay the bill.

the only way the major's will be able to profitably defend their turf is if they totally change their business model. (bringing airplanes out of the desert when they are still losing money will not help)

 

[FDJ2]

Re: keep up!

http://www.nycp.org/Web_News/General_Partnership/Queens%20Chronicle%20-%20South%20Edition.htm[/url]

jetBlue to build new 26 gate terminal at JFK summer of 2007 [/B]

$600M. Wow!!! That's a whole lot of money. I guess as you continue to grow those types of large infrastructure expenses are necessary.

 

[80drvr]

mr. general,

if song were profitable then delta would submit those numbers to wall street to prove their new and improved concept (a LCC within a major) has been a success. it has not. why?

hub and spoke is one of the most inefficient business models ever establish. ask any industry expert. compare southwest business plan to that of any major. point to point makes money, hub and spoke does not. the numbers and efficiency speaks for themselves.

jetblue's future gates (or any other future airline) situation is not a problem. you seem to forget about united and us airways situation. they will not be keeping all those gates they horde at certain airports. therefore someone will have to occupy and pay the bill.

the only way the major's will be able to profitably defend their turf is if they totally change their business model. (bringing airplanes out of the desert when they are still losing money will not help)

Ok, I'll bite. Why is the hub and spoke the most inefficient business model ever. If someone flies from BUF to JFK and then gets on a plane to LGB, it that inefficient?

 

[dlredline]

the JB guys sure are confident and seem to have alot of spite for the carriers that wouldn't hire them or let them go. Their confidence reminds me of the pilots from the big boys during the late 90's. Its all a cycle. One start up has done well since it started. SWA is it guys. Best of luck, but be careful in your hate for everyone else. All you do is fly the planes, your boss is in control of your future....hope he stays as good as he seems so far.

Find me a post where a JetBlue pilot showed "spite" for a fellow aviator. And for the record, I had job offers from 4 seperate "majors" during my career before getting furloughed from the one I chose, after 15 years with that carrier. I hold no ill will (or "hate" as you put it) toward any pilot or airline, and though I don't wear glasses, they certainly wouldn't be rose colored if I did. Am I proud to be where I am? You bet! Hopefully you (and everyone here) can say the same. Please be careful how you generalize people until you've had a chance to walk (or fly) in their shoes.

Redline

 

[Ty Webb]

I agree with the General . . . for the most part, and also with Andy, although I think re-training 100 a month is much more realistic.

Safe to say, though, if they absolutely HAD to have those pilots on line, they'd get whatever waivers and concessions were necessary, but I think the focus will be on achieving a profit then maintaining reasonable growth, which means trainng costs will need to be managed and many of those pilots will be returning to different aircraft, unless they can get union concessions.

 

[Andy]

$600M. Wow!!! That's a whole lot of money. I guess as you continue to grow those types of large infrastructure expenses are necessary.

A bit off topic, but that in a nutshell is the difference between LCC startups and legacy carriers. When legacy carriers expand their infrastructure, the costs are incremental. When LCC startups expand their infrastructure, the costs are exponential. The cost of this project is more than all of JBLU's cash on hand (from 3Q earnings release, $574 million cash and equivalents; unknown how much is restricted).
In that same article, it mentions that JBLU is building a $45 million hangar at JFK, due to be completed in 2004.
Another advantage that startup LCCs enjoy during their infancy is sweetheart deals with airport authorities. As the LCCs become profitable (and when legacy carriers lean on said airport authorities), those sweetheart deals evaporate.

 

[46Driver]

I'm gonna disagree on that last statement. Many of the airports have been held hostage by high airfares from legacy carriers and have no desire to repeat the past as it will affect the business's within the city. Also, if a city does not give the LCC a sweetheart deal, there are plenty of others nearby that will.

 

[Daedalus]

Hostage:

Not everyone that disagrees with you is a touchy jetBlue pilot. Your postings are indeed revealing about your feelings in regard to other pilots. While you're free to make yourself look like a tool, it doesn't mean you can walk in and out of this forum without some people taking you to task.

In case you haven't checked the calendar lately its almost 2004, not 1964. Your view of the "perfect" world is just a waning memory of an industry that will never see those good ol days again. I don't have a problem with LCCs. They exist because people like you created the environment to let them come in and beat you at your own game. Your generalizations about who populates the growing ranks of LCC pilot rosters are wrong and out of order. You are obviously a person who feels very threatened by the inevitable changes in this business.

 

[lowecur]

andrew

incremental/exponential.

It's called financing. When you buy $7B worth of aircraft, you don't use your cash reserves to pay for them. These are long term debts, that offer a return on investment.

Is Jetblue going to bypass the expenses that most of the majors had to incur in order to grow? No. But, what they have done is set up a combined corporate culture/business model that will translate into profits for many years.

Is Jetblue going to experience a reduction of profit in the next few years? It depends on how the economy does, and how quickly US Airways morphs. US Airways must change their business model in the next 6 months (they need to cut their system by at least a third). This means giving up gates and slots in many major markets. If they don't, they are quickly headed for Chapt 7 by the middle of 2005. Either way, Jetblue will be the major winner.

 

[atpcliff]

Hi!

From what I've heard, NWA will begin recalling pilots in spring, 2004. It will take about 2.5 years to recall everyone. Once the recalls are over, I've heard, they will be hiring LOTS of pilots.

So, in about fall/end of year of 2006 NWA should be hiring a lot of pilots. That fits in with the 2007 being a good hiring year.

CLiff
DTW

 

[tbkane]

ATPCliff,

I sure hope your numbers are correct, because as one does so do the rest. If NW can have everyone back in 2.5 years I would imagine so can DAL. I have not heard one person say anything about recalls there though.

If you don't mind me asking what is your source?

 

[atpcliff]

Hi!

One of the guys I fly with is furloughed from NWA. I also commute on NWA almost exclusivley, so I ask every crew (almost) what the situation is at NWA.

CLiff
DTW