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Spirit MEC economic update

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gatorbird

What readfile?
Joined
Mar 2, 2004
Posts
144
Just received this in an email:

Fellow Spirit pilots:

Yesterday the MEC chairman, vice chairman, and a representative from ALPA’s Economic and Financial Analysis department met with the company, at their request, to discuss Spirit’s financial status and the state of the industry. Historically, these meetings usually accompanied a request for pilot pay concessions, or the threat of a reduction in force. Like you, we had heard all the same rumors percolating on the line and leaking out of Miramar . Since we were not provided an advance agenda, we decided any information on the meeting was purely speculation. What we learned immediately was:

  • <LI class=MsoNormal>There will be no bankruptcy. <LI class=MsoNormal>There is no talk of liquidation or merger.
  • There is no planed furlough or reduction in force.

Spirit management told us they are committed to Spirit’s business plan. They believe in the business plan but have to be concerned in our high oil environment (these talks were in reference to the $125-130/bbl range). They told us they will continue to adjust and fine-tune our operation to reduce our CASM from its present 5 cents to 4.5 cents through aircraft utilization improvements, operational efficiencies, and outright cost control wherever possible. As an example, efficiency improvements may include a further reduction in turn times from the current 30-minute turns to 25-minute turns, to keep the airplanes aloft longer, and revisiting our current average stage length to help increase revenue and reduce fuel cost.


I think this was one of the wiser moves by management, to address the situation in a timely fashion before the rumor-mill festered. Everyone here knows the DOT numbers were just released 2 days ago, and this could have really escalated the grumblings had it gone into weeks or months with no news from the company.

By no means are we in the clear, but at least we know we've got a fighting chance (until $150/barrel oil...). I for one intend to carry myself as professional as possible and do my part to save the place a dime when I can; I would encourage all other NK pilots here to do the same, lest we quicken our steps toward the unemployment line. They didn't come knocking asking for consessions from me, so my hat's off to that decision.



 
Proactive management... how novel.

I'm glad that Spirit is doing what they're doing. Congrats and good luck with the future.
 
I for one intend to carry myself as professional as possible and do my part to save the place a dime when I can; I would encourage all other NK pilots here to do the same, lest we quicken our steps toward the unemployment line. They didn't come knocking asking for consessions from me, so my hat's off to that decision.

Yeap. Same here.
 
No dog in the fight here, but really come on:

"There will be no bankruptcy".

"There is no planned furlough or reduction in force."

WOW.

Unplanned ones however, are just that.
 
My take:
It's a Union newsletter. Not a company internal memo. Don't see any problem on sharing it with other pilots, mostly union members.
 
My take:
It's a Union newsletter. Not a company internal memo. Don't see any problem on sharing it with other pilots, mostly union members.

Thanks for posting the memo, it would not contain any confidential info anyway. The MEC would have had to sign a confidentiality agreement and you would have never gotten a memo in the first place... Good to hear management is communicating!!
 
No dog in the fight here, but really come on:

"There will be no bankruptcy".

"There is no planned furlough or reduction in force."

WOW.

Unplanned ones however, are just that.

The execs always say that to prevent people from bailing out while the execs loot the company. Shutdown notices are sudden and after hours.
 
Spirit is the official airline of spring breakers, duuuuude! They must be totally righteous, for now, bros!
 
Any indication on cash reserves or liquidity? That's what everyone needs to know to believe their statements.
 
Any indication on cash reserves or liquidity? That's what everyone needs to know to believe their statements.

I thought Spirit was the nation's largest privately-held airline, and therefore does not have to publicly post all of their financial information.

That being said, here's their 3Q 2007 Operating Info from www.aviationdb.com. I edited it to just revenue, expenses, and profit. (Quote: "The data comes from the Bureau of Transportation Statistics (BTS), Form 41 Financial Schedule, form P-12. There are records available from January 1990 through September 2007."):


Carrier operating revenues: 204,647,050
operating expenses: 196,995,430
income: 2,050,680

That being said, unless you work in accounting at Spirit, there is no telling for sure whether or not this is accurate information.
 
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P.S., as a comparison: The same website shows Virgin America's 3Q 2007 LOSS as $34,824,550, if the numbers are to be believed.
 
I think that is accurate. Virgin America had a 34+ million LOSS for the third quarter. Unlike almost every other airline, they didn't release their number for the fourth quarter 2007.

I heard a few months ago that they were trying to get out of publishing their numbers for the 4th quarter. When the numbers were published last week it said that Virgin hadn't published their 4th quarter. I'm not sure how that works or how long they can choose not to play by the U.S. rules.
 
I thought Spirit was the nation's largest privately-held airline, and therefore does not have to publicly post all of their financial information.

That's precisely why I was asking if they gave any indication as to there current liquidity. Otherwise, I would have just looked it up.

The gnawing question is how much cash they have available to weather the downturn in the industry and rising oil. Since they don't share that readily, it leaves us to wonder how much to believe any pronouncements that everything is fine.
 
With the new pay calculations starting June 1 doesn't that change status quo?

Is that legal?

And how crappy is that...
 

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