AirTran Furloughs coming

[gt1900]

AAI has several business plans right now. The first one was for oil at $110 a barrel. 2 weeks after they implemented that plan oil hit $125 a barrel. Oil went up so fast that AAI couldn't raise ticket prices enough to overcome the increase in oil for Q1. Most of the AAI tickets for Q1 were sold in Q4 2007. That is the reason for the huge loss in Q1 2008. AAI then came up with a business plan for $125 a barrel and a worse case scenerio of $150 a barrel. At $150 a barrel everything is on the table. Including furloughs, dropped routes, returned aircraft, etc. AAI is starting to implement the business plan for $150 a barrel since oil is slowly bumping up against that mark. At the current time, analysts are estimating a loss of about 103 million for 2008. 153 million on the high side and as little as about 50 million on the low side (the estimate comes from the average of 9 industry analysts). Lets say that AAI losses $125 million in 2008 and $125 million in 2009. That leaves AAI with about $250 million in cash at the end of 2009. At $250 million in cash AAI will start to get itself in a very low cash situation. AAI managment has done a very good job running the airline up to this point. However, the next year will surely test their skills. AAI has a business plan for oil at levels that nobody would guessed just 6 months ago. Unfortunatly, that plan will not be popular with the employees. IMO the real test for managment will be to see if they lead from the top. If they take pay cuts, forgo bonuses, and lay off unecessary managment, then that would go a long way to solidify trust with the employees. If AAI management continues to take bonuses and increase their pay while the employees take cuts, well then AAI employees will burn to the ground. It will be a team effort if managment wants any kind of cooperation from employees. I have faith in BF. But not if he and others in managment don't take cuts to lead the way. Its gonna take a team effort to keep the ship affloat. We may all try and beat our chests and say we won't take concessions, but if it comes down to it, we will. You only have to look at EVERY airline that took cuts after 9/11 (with the exception of SWA). When push comes to shove, AAI pilots will vote for a cut if it means keeping the airline in business. Just like every other pilot group out there has proven. Lets make no mistake about it. Its going to get very, very ugly. It makes me sick to say id love to see the days of $100 a barrel oil.....

 

[olympus593]

Joe you really need to put the crack pipe down and get back under the desk, your CEO need some servicing...And don't forget to swallow...

 

[Ty Webb]

My hunch is that this is not only going to be put down hard by the Pilot group, will probably cost them more in goodwill than any savings they thought they would accomplish . . . . Ty's betting on a 80/20 "NO" vote.

 

[mnboyev]

no paycuts... period... we already the cheapest group out there... pleeez Duh....

 

[Soverytired]

NWA is going to park 100 DC 9,s yea there will be furloughs, lots of furloughs. Nothing will be announced until the merger is approved.

That is certainly one school of thought.

Others here disagree. Who can tell? AirTran, United, Frontier and others may very well fail forever by that time (though I hope not), which could effectively deal with "overcapacity."

 

[Dumb Pilot]

....hey at least we can agree that Bud is horse piss....:beer:

You can buy me a Sam Adams instead....

You two are actually going to sit down together and drink it? I don't have jumpseat privileges anymore but I will gladly pay full fair to witness that:laugh:

 

[Clyde Frog]

I have no faith on this management team to get us out of this mess. Zero respect for the pilot group, more like total distain. Flagrant contract violations.

I have no faith in our union to lead this pilot group.

The oil bubble better burst soon else were all scewed.

They can shove those concessions straight up their asses.

 

[PCL_128]

We may all try and beat our chests and say we won't take concessions, but if it comes down to it, we will.

Beg to differ.

 

[Just thinking]

BWI-MCO
Departing 1 September...
Returning 6 September...
Lowest cost as of TODAY= $78.00 one way.

If this pilot group flew the way they manage fares we would be sitting in the gate with both engines running, aft tail cone deployed, flashing our nose lights to get the catering folks to come empty the lavs while the ground crew is hooking up the air conditioning to the apu air inlet door.

They have failed in their responsibility to ensure this company will succeed. They KNOW what their fuel cost is now and they set a fare that low?

No concession now or ever. We have had nothing for the past four years while they have gorged themselves with bonuses and pay raises. Time for them to get off thier fat arses and do their job.

Typical weak effort on their part to survive in the challenges of the industry... cower and hide while you sacrifice the very people that are responsible for your success.

These pieces if shiite are at the same level of worthlessness as the oil speculators that have artificially inflated the cost of oil.
Poor excuses for human beings.

 

[Marko Ramius]

That is certainly one school of thought.

Others here disagree. Who can tell? AirTran, United, Frontier and others may very well fail forever by that time (though I hope not), which could effectively deal with "overcapacity."

After 30 failed years of, 'we don't have to make money, we just have to lose less and out last the other guy,' theory it's time to bury the elimination of overcapacity theory in this business as well. I know it comes from ECON 101 supply and demand, but there is zero evidence that the airline industry that supports the overcapacity theory. Airlines have come and gone since deregulation, but their capacity always gets picked up and more passengers continue to travel on planes with historically high load factors. What makes people think that if any of the usual suspect carriers fail that their capacity won't be replaced? Braniff's capacity was more than suitably replaced by AA, DL, and even WN in Dallas, Pan Am and TWA in NY were replaced by Delta, AA, and even CO in EWR. Eastern in ATL by DL and Air Tran and so on. Pittsburgh and St. Louis are the main two hubsites that have been lost but their capacity has not been lost. The allure of market share and the incredible barriers to entry that this industry creates with acquisition of slots and real estate at airports all add into the likelihood that carriers will move quickly to fill any true voids caused by failed carriers.