scoreboardII, while I agree that there aren't going to be any furloughs, your math doesn't work. First, assuming furloughs of about 700 pilots as he claims, you also have to figure for the resultant captain displacements of about 350 captains. There's more cost savings. You also have to figure for the fringe benefit costs of the furloughed pilots. The typical airline pays about an extra 25% per pilot for all of the benefits and taxes that the company picks up. SWA is likely less, but they certainly aren't going to get to less than 15% extra. Once you factor it all in, his numbers might even be a little on the low side.
But again, I agree with you that furloughs aren't coming unless something really dire happens.
Also, GBJ is forgetting that all the flying these mythical "700 furloughees" did still has to be done by someone. He said the company's wasting $100 million dollars per year by employing 700 too many pilots. That's $143,000 per pilot per year, or the cost of paying them for all the flying they do. Well, get rid of those 700 pilots, and the flying still has to be done by the remaining pilots, thus
still costing the company that same flying money. Actually even more, since the same hours of flying will be done by more senior pilots (higher rate), plus some portion of it at 1.5x premium. The only money the company would "save" is the cost of benefits/employee taxes paid per "furloughed" employee (non-flying expenses). And that would be probably be completely offset, if not way overcome, by higher flying pay as described above, and grossly higher training costs for downgrade training, requals, etc. Oh yeah, and let's not forget the furlough pay the company would have to pony up, averaging 300tfp per furloughed pilot (over $21 million), plus benefits for four months, etc.
The only months that Southwest is
truly "overmanned" is January and February, in that lines fall slightly below the guarantee, causing the company to pay a coupla' tfp per pilot extra coded as "line guarantee." On the other hand, there's tons of premium flying in the summer, when we're "undermanned," and also there's still premium here and there during the rest of the year. That's the tradeoff the company made when it went to larger swings in flying from high to low season. They've run the numbers and decided that doing this is the most cost effective for the way they put up a flight schedule.
Barring God-knows what kind of circumstances that have never happened before,
there will be NO furloughs. The company can't afford it.
Bubba
