AirTran Furloughs coming

[gt1900]

Just for the record, AAI's load factors have been good, but they are not great. Most airlines try to price their seats so there load factors range from 70%-80%. AAI's first quarter load factor was 75.3%. However, the break even load factor was about 82%. In other words, raising ticket prices would do the opposite of whats needed. At the prices that AAI charged in the 1st quarter, more people would have to fly in order to make money. Raising ticket prices would actually drive down demand and cause the planes to fly less full, even thow break even load factor may be a bit lower with the higher rates, it still wouldn't offset the higher fuel costs. You guys who say its just so easy to raise ticket prices make me laugh. You really have no idea how this all works. At the average fare that AAI charged in Q1 they would have had to fill up 82% of the seats to break even. AAI only filled up 75% of the seats. Yet you guys so the flight are always full. Guess what, they aren't. We can't even fill up enough seats at the current low rates to make money. Its much, much more difficult then simply raising prices..... But explaining that to a pilot who knows everything will go nowhere..

 

[Citrusflyer]

While it's true that just raising fares is not as easy as it sounds wrt capacity there is one fact that should not be missed. There is no reason to have $49 fare sales in today's market. For every person that purchases that fare you need 3 other full fares just to make up the cost of fuel hauling them to point B.
But what do I know....it's just a pilots opinion.

 

[gt1900]

Citrus.... I somewhat agree... But from the looks of it, AAI has over 25 seats on average available on every flight and people aren't paying the high fares. There comes a point when people are no longer willing to pay the extra price. The cheap seats sell out first, then as demand grows people are forced to pay higher and higher prices. Just look at the website. People simply aren't paying the higher prices. That is the reason AAI offers sales. With leftover seats, selling a seat for $49 is better then not selling that seat at all. Does that make sense? Besides, only a few seats are sold at the rediculously low rates. It really sort of manipulates the supply and demand curve. Some of those people will pay $49 for a seat, but they won't spend $75. Having them on board at $49 is better then not having them on board at all. (don't believe me, just look at some of our less then classy pax). AAI is trying to stimulate travel demand to those who can't afford higher priced tickets by keeping a few low rates. The demand is there for cheap seats, but as prices go up, demand grows lower and lower. There are only so many pax willing to pay the higher prices. Believe it or not, it is not bad managment. Even though it may seem so from face value. AAI is trying to do everything they can to get every single person they can on every flight, and charge them as much as possible. AAI is at a disadvantage to the legacy's because AAI doesn't have any international ops, which actually make money. SWA has the hedges, ALA has the Alaska EAS stuff, DAL, UAL, LCC, CAL, AMR, NWA all have international operations. JBlue had the $350 million Lufthansa gave them.. AAI really is at a disadvantage right now to everyone else. AAI must do it better then everyone else to stay afloat. We will see what happens.. The challenge our managment has to overcome is enormous. AAI isn't going to get any breaks....

 

[scudrunner]

Does anyone know how much the state of GA will giv for new type rating if furloughed?

 

[Bruiser]

For those not furloughed, I believe the no OT pickup will start the day they send out notices. 180 pilots are going to be looking for every penny they can get before going on a forced vacation.

Not looking forward to my forced vacation but will vote NO! to any concessions.

 

[MINIME]

gt1900,

While those challenges that you speak of are very real, the facts remain the same. Even if the AAI pilots flew for free, it would not make a difference in the outcome. Taking a paycut for pilots could end up costing that company more than what it set out to save.

Being that they already have one of the lowest payscales out there, this will only serve to enrage alot of pilots. With that comes lots of bad will, flying safe, not going the extra mile, turning flights around at others' pace, and a host of other issues. These small things have an enormous affect on the bottom line.

An airline like AAI needs the good will of its employees to survive. Their customers need to be won over, one by one. Bigger airlines like AMR, DAL, CAL, and perhaps UAL can afford to have some dissidence. I believe that the AAIs and JBLUEs of the world cannot. At AAI, employees can put a dent on that company considering fuel prices and the current operating environment.

LUV understands this part of the equation perhaps better than anyone operating today. That along with solid investments have paid off handsomely for them. DAL appears to be headed in that same direction. DAL and its combined pilots are making gains in a very difficult environment. That in itself goes to show that pilot expense is not something that breaks a company. Rather, it empowers pilots to operate in a manner which becomes beneficial to them and their employer.

Most CEOs worth their pay know this. They know that taking from employees will not solve their problems. They do it however, because the time is ripe for the taking. Those that are easily intimidated will stop at nothing to assure that their job does not go away. All the while, the CEO laughs straight to bank with his/her inflated bonus.

 

[Citrusflyer]

......With leftover seats, selling a seat for $49 is better then not selling that seat at all. Does that make sense? Besides, only a few seats are sold at the rediculously low rates. It really sort of manipulates the supply and demand curve. Some of those people will pay $49 for a seat, but they won't spend $75. Having them on board at $49 is better then not having them on board at all.....

gt1900,
Once upon a time I would have agreed whole-heartedly with that sentiment. However, when (considering our current average stage length) it takes almost $95 just to pay for the fuel to haul a "200 lb" pax to their destination I think that the argument of fire sale fares is a false one.

One person ponies up $49, but it costs us $95 in fuel to haul him, that puts us in the hole $46. Which means we have to make up that cost in other areas. Add $46 to one ticket; or, as from the logic of our own management team (i.e. not being able to sustain price hikes over $5 to $10 without loosing significant traffic) we'd have to spread out that cost over 4 to 7 other passengers.

You yourself said it was only 25 seats/flight with those low fares. Well, using the most conservative estimate ($10 over 4 passengers of "make-up" fare increases) you'd have to hike the fares of 100 seats to make up the 25 low fares. Which equates to break even on a 737, and a looser on a 717.

IMHO, it would be cheaper NOT to have that person in the seat, NOT have the "revenue" in that seat, and raise the LOWEST average fare to $100 to cover the price of fuel.

With the volatility of fuel prices I don't know why we don't just charge a low fare and then add a fuel subsidy to the price of the ticket based on the day the ticket was purchased (you know...those "surprise" add-ons that no one thinks about after the big purchase has already been made).

Again, I just fly the planes.....however, I'd like to keep doing that for a while longer.

 

[gt1900]

Minime..... I do agree with you. However, we should just look at the UAL guys to see how well flying angry worked out for them. It is best to work with the company, and have the company work with the employees. DAL has figured that one out. But remember, the DAL pilots used to be the highest payed pilots in the industry. The only reason they are now making gains in a highly difficult environment is because the DAL pilots took huge paycuts. I guarantee you if the pilots and managment hadn't worked together DAL would not exist today. The DAL pilots knew how to pick there battles. They gave up huge amounts of money to live to play another day. Not to long ago the DAL pilots were some of the most discruntled pilots out there. However, they did their job everyday without a slowdown, or trying to p1ss off the pax. The UAL pilots did there best to p1ss off everyone and now look at the position UAL is in (for the record, I blame the managment more, but the pilots were no saints). SWA is a poor example because they have the hedges to offset much of the higher fuel costs. I guarantee you though that if they were in the same position as AAI, the SWA pilots would take cuts to help save the company. My point is simply this. We can beat our chests all we want but right now is not the time to being playing tough guys. I would like to see managment take a bigger cut (around 25%) to show some good will, and NO FRIGGIN BONUSES. If AAI saves 12 million on employee costs, renegotiates A/C leases to save 15 million a year, and increased yeilds to gain an additional 20 million a year, we would have just cut the 100 million we are estimated to lose this year in half. All of these things add up. Lets face it, at current oil levels AAI has maybe 18 months of operational cash. If everyone, and I especially mean managment, chips in, AAI just might make it through to better times when we can renegotiate a great pay scale. I don't think a 6 month pay cut is the end of the world, but only if managment shows us a business plan that would actually get us through this mess. Right now they haven't, so obviously I'm not voting for a pay cut. But, if managment showed the pilot group a black and white business plan that would work, cuts are not out of the question. In this environment, airlines are going to fold. Its just a matter of who and when. I would like to make it through these times and see what happens when things turn around. Taking a 8-10% pay cut for 6 months or a year is no big deal if I get to keep my job for another 25 years. We need to remember the big picture. I do not want to start over. And lets face it, the job market aint exactly rosie for pilots right now. We as pilots need to remember that getting emotional will not solve anything. We need to use our heads. Right now pay cuts are out of the question, but with the right leadership, I would vote for them. Lets see if our managment is worth a chit...

 

[gt1900]

Citrus.... Your right, but lets face it, as pilots, we don't really have the perfect numbers to say whats exactly going on. For grins I looked up flight at the end of this month.. Atl-Bos and Atl Jax. The cheapest ATL-BOS ticket would be $99. But with the exception of the 9:30pm flight, the next cheapest direct flight is $201.. Look at the Jax tickets. Later in the day when demand is higher the ticket prices go up. They go from $69 to $139 for a flight to Jax. That tells me that AAI managment knows what flights have the highest demand and charge accordingly. None of us really know what the numbers are, so we are just speculating (friggen speculators). But the fact is that it seems AAI has a grasp on ticket prices and are trying very hard to increase revenue. We are all in for a wild ride, and our careers are in managments hands... Lets hope they do a good job..

 

[PCL_128]

Minime..... I do agree with you. However, we should just look at the UAL guys to see how well flying angry worked out for them. It is best to work with the company, and have the company work with the employees. DAL has figured that one out. But remember, the DAL pilots used to be the highest payed pilots in the industry. The only reason they are now making gains in a highly difficult environment is because the DAL pilots took huge paycuts. I guarantee you if the pilots and managment hadn't worked together DAL would not exist today. The DAL pilots knew how to pick there battles. They gave up huge amounts of money to live to play another day. Not to long ago the DAL pilots were some of the most discruntled pilots out there. However, they did their job everyday without a slowdown, or trying to p1ss off the pax. The UAL pilots did there best to p1ss off everyone and now look at the position UAL is in (for the record, I blame the managment more, but the pilots were no saints). SWA is a poor example because they have the hedges to offset much of the higher fuel costs. I guarantee you though that if they were in the same position as AAI, the SWA pilots would take cuts to help save the company. My point is simply this. We can beat our chests all we want but right now is not the time to being playing tough guys. I would like to see managment take a bigger cut (around 25%) to show some good will, and NO FRIGGIN BONUSES. If AAI saves 12 million on employee costs, renegotiates A/C leases to save 15 million a year, and increased yeilds to gain an additional 20 million a year, we would have just cut the 100 million we are estimated to lose this year in half. All of these things add up. Lets face it, at current oil levels AAI has maybe 18 months of operational cash. If everyone, and I especially mean managment, chips in, AAI just might make it through to better times when we can renegotiate a great pay scale. I don't think a 6 month pay cut is the end of the world, but only if managment shows us a business plan that would actually get us through this mess. Right now they haven't, so obviously I'm not voting for a pay cut. But, if managment showed the pilot group a black and white business plan that would work, cuts are not out of the question. In this environment, airlines are going to fold. Its just a matter of who and when. I would like to make it through these times and see what happens when things turn around. Taking a 8-10% pay cut for 6 months or a year is no big deal if I get to keep my job for another 25 years. We need to remember the big picture. I do not want to start over. And lets face it, the job market aint exactly rosie for pilots right now. We as pilots need to remember that getting emotional will not solve anything. We need to use our heads. Right now pay cuts are out of the question, but with the right leadership, I would vote for them. Lets see if our managment is worth a chit...

I don't care who the leadership is. No pay cuts!!! FOs can't afford to pay the bills, gt, yet you think we should consider additional paycuts if the "right" leadership asks for them? Sorry, it's not worth it to us. We're looking at 8+ year upgrades now. On these FO rates, that's not livable.