Alaska management verbally announces furloughs for

[SRMairlines]

Commuted with SEA LEC CA chair today. He said Gary Beck was also out of the loop. Mr. Beck thought they had mitigated the whole thing and there would be no furloughs and then Greggggggggggggggg sends the letters. A federal court will settle this in 6 months if they actually make it to the street. Until then I will be happy to help out these pilots and their families so that they have health care and more.

Baze - You are right >>> Straight out of the Ford Harrison Book. I have plenty of experience with them from my previous airlines.

 

[Baze]

I found the following quote from the September Hangar Notes interesting:

"During 2009, our airline will focus on increasing revenue and marketing the Alaska brand. In the upcoming months I will ask each of you for input to assure the company’s success in these areas. This success will drive profitability, profitability will drive growth, and growth will create the need for more crews. "

 

[Old School 737]

Even the newest "Hanger Notes" today don't say much about it and does not mention numbers!

 

[Old School 737]

So we are making money. Very Interesting!!

Air Group reports hedge portfolio loss

Drop in oil prices drives decline,
but lowers airline’s fuel bill, too

October 8, 2008

By Paul McElroy

Alaska Air Group announced yesterday that its fuel hedge portfolio declined about $220 million in value during the third quarter due to falling oil prices. In a filing with the Securities and Exchange Commission, the company also said it expects to report an adjusted profit for the quarter.

“Our portfolio decline for the third quarter is significant, but it’s important to note this represents only a paper loss because it involves hedge contracts that will settle in the future,” Air Group CFO Brad Tilden said. “In terms of actual cash, we received about $44 million from contracts we settled during the third quarter.”

Accounting rules require Air Group to periodically report the market value of its hedge contracts that settle in the future. The valuation, made on the last day of each quarter, is known as “mark-to-market” accounting.

Oil has been trading at higher prices throughout 2008 and reached about $140 a barrel when the company valued its hedge portfolio at the end of the second quarter. But it had declined to around $100 a barrel when another valuation was made on Sept. 30. Consequently, mark-to-market gains in the company’s portfolio that it reported in the first and second quarters were reversed by the decline in the third quarter.

Although the company’s hedge portfolio lost value, it is still worth almost $100 million.

Hedge contracts are settled monthly as Air Group buys fuel. Since the company began its hedging program in 2002, it has received cash settlements every month — totaling $495 million. For the first nine months of 2008, the company has received $129 million. Those amounts represent the net benefit to Air Group after deducting premiums the company paid to purchase the hedge contracts.

“Our hedge program has provided a great benefit to the company in softening the impact of rising fuel prices, but it’s like an insurance policy we’d rather not have to use,” Tilden said. “As oil prices drop, so do our future fuel prices. Although the value of our hedge insurance has declined, a $40 a barrel drop in the price of oil reduces our annual fuel bill by $400 million. That’s good news. But the bottom line is fuel prices need to come down even more than they have already in order for us to return to a normal business model.”

Air Group includes mark-to-market gains or losses on its hedge portfolio when it reports financial results under Generally Accepted Accounting Principles — known as GAAP. The company excludes those gains or losses and includes hedge contract cash settlements from the quarter when it reports adjusted earnings.

“We believe adjusted earnings are a more accurate reflection of the company’s financial performance than paper gains or losses we report under GAAP,” Tilden said. “Investment analysts focus on adjusted earnings and we encourage employees to do the same.”

Air Group will report its third quarter financial results on Oct. 23.

 

[ImbracableCrunk]

I think this one is even more "Uh, loss - what loss?"

http://www.bloomberg.com/apps/news?pid=20601103&sid=aI5prS2WNilc&refer=us

Alaska Air to Report `Significant' 3rd-Quarter Loss (Update2)
By Mary Schlangenstein
Oct. 7 (Bloomberg) -- Alaska Air Group Inc. said it expects to report a ``significant'' third-quarter net loss because of costs to reduce the value of its fuel hedges and pay benefits to laid-off workers.
Capacity at its Alaska Airlines will fall further than originally planned this quarter and in the first quarter of 2009 because a strike by Boeing Co. machinists will delay aircraft deliveries, the Seattle-based company said today in a U.S. regulatory filing.
Alaska Air, which also is the parent of Horizon Air, is among U.S. carriers retiring planes and cutting jobs to help end losses from fuel prices that reached a record high in July. Horizon today said it's in talks with Bombardier Inc. about deferring the 2009 deliveries of 11 Q400 aircraft.
The company didn't give a figure for its expected loss, and said it would have a third-quarter profit excluding one-time costs, also without providing a figure. Alaska Air was expected to earn 67 cents a share on that basis, the average of 9 analyst estimates compiled by Bloomberg.
The company said it expects to record a $220 million loss in the market value of its fuel hedges because of the drop in crude oil prices, and expenses of as much as $4 million for severance and medical benefits for laid-off workers. Alaska Air said it will have more costs this quarter as employees accept early-out packages.
Reducing Capacity
Alaska Airlines' capacity will fall as much as 8 percent for fourth quarter and up to 12 percent in next year's first quarter because of delayed Boeing deliveries, the company said. The carrier's capacity for all of next may drop 8 percent, the company said, reiterating a forecast from September.
Alaska Airlines last month said it would eliminate as many as 1,000 positions as capacity declined.
Horizon Air capacity will fall as much as 15 percent in the first quarter of 2009 from a year earlier, and about 9 percent for all of 2009, the company said. Horizon's capacity is slated to drop 22 percent in October, 21 percent in November and 16 percent in December.
Horizon today said it will furlough about 40 pilots in November, with additional layoffs late in the fourth quarter and early in 2009.
Alaska Air fell $2.14, or 12 percent, to $16:05 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 36 percent this year.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]

 

[ualdriver]

I take my hats off to the NWA ALPA - when over 700 of us wee furloughed in 2002 the pilots gave between $4-12 a month to take care of the furloughees medical COBRA. I for one will be one of the first to voluntarily give for COBRA assistance. As far as I'm concerned, the Co should pay their COBRA since they were the ones to missmanage this company to the point of furlough!

Baja.

Baja-

I don't know if you're an Alaska guy, but the way to get something started like that is through a resolution at your local council meeting. You don't have to be present to write and have a resolution passed.

Have your LEC guys get into contact with the UA MEC guys if they want details on how to set up a fund so that furloughees have medical insurance. Heck, they'll all be at the same meeting in the next week or two. I'm sure they'd be glad to help.

We're in the process of voting for the SECOND time on this health insurance for furloughee deal because unfortunately this is our second furlough in the past several years. I was surprised (and embarrassed) by the fact that it passed with less than a 100% vote for providing the fund, but I bet the majority of pilots wouldn't mind throwing a few bucks a month into a fund to help these guys out until they get a new job that provides insurance for their families.

 

[QCappy]

I just got word that the furlough letters were NOT sent out. Management is in complete disaray.:beer:

 

[becket]

I just got word that the furlough letters were NOT sent out. Management is in complete disaray.:beer:

WTF game are these guys playing?

 

[Mookie]

to say this whole thing has been like watching two monkeys ******************** a football would be an insult to both the monkeys AND the footbal. no one on the second floor has a clue of whats going on including our own chief pilot. sad but very true.

Mookie

 

[turbodriver]

I just got word that the furlough letters were NOT sent out. Management is in complete disaray.:beer:

Source??

And to the Alaska nine: can you confirm? Have you receive your letters yet?? A certified letter from SEA to ANC sent this past Mon. should be here by now....

 

[Rhino]

No letters yet

In speaking with members of the MEC today, October 9th, no pilots have received letters. They did receive a letter from management regarding the company's "intent" to furlough 9 pilots. So, until these letters are sent and received, it is all talk.

Also, the rumor of a cap on "early retire" numbers at 75 is just that, a rumor.

 

[Chief Pilot]

This whole scenario smacks an aweful lot of "Stockholm Syndrome", just on a small scale. Let everyone believe there is going to be a furlough, no matter how small, which gets emotions running high. Then when you don't do it and release that it was all a rumor and maybe a mistake, everyone takes a collective sigh of relief and thinks, "well maybe these guys aren't so bad after all. They aren't really playing mind games and screwing with the lives of these poor guys (and their families) who are still on probation."

This is the beginning of the heavy hitting folks. I'm happy for the 9 if they don't get the official letter. It was bogus to begin with, but don't think for a minute that this wasn't an orchestrated event. They know exactly what they are doing. We need to fly the contract. Be smart individually and collectively so that management can't use any of us as hostages, and realize that these events are part of a greater strategy.

My $0.02.

 

[turbodriver]

Second!

 

[Going2Baja]

Third!

Baja.

 

[Mookie]

I don't think there is a single guy who thinks that these guys aren't so bad b/c the letters were not sent. if there are...and there's always a couple of dbags in every group, then they should have their ATP's revoked for being functionally retarded.

here's how it went down: the second floor was told to make staffing adjustments, and they did based on what they thought the contract stipulated and came up with a number to reduce and began the EO and LOA process. way more people apply for both and they start taking their time as they realize that furloughs probably wont' be necessary but have some issues to work thru. Then...GS, the narcissisted syncophant, swoops down mid meeting (true story) and says FURLOUGH..FURLOUGH...do it now!!!! everyone spazzes, and a low level manager with no knowledge of the contract tells ALPA that there will be a need to furlough up to 9 pilots. alpa calls those 9 hostages to warn them, and then someone on the second floors realizes that the company will get their asses sued and lose if they arbitrarily do this, and somehow those letters are never sent out....shocker

if anything this whole thing has galvanized everyone here against those bafoons. Hopefully alot of you guys were at the Boeing picket yesterday. I was, and was very impressed at the solidarity those guys showed. just hope some of that rubs off on us when the time comes.

Mookie