SWA plan for 15% ROIC

[SWA Bubba]

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

 

[waveflyer]

Your reasonableness will be lost on some Bubba

 

[scoreboardII]

The numbers most outsiders forget to look at, the difference between our min guarantee and what the average pilot flies. Min is 85, average is 105, which is a difference of 20%.

20% of 7000 pilots is 1400 pilots.

 

[HowardBorden]

The numbers most outsiders forget to look at, the difference between our min guarantee and what the average pilot flies. Min is 85, average is 105, which is a difference of 20%.

Let's also not forget where that increase comes from. OPEN TIME. I will not pick up ANY open time while any pilot is on furlough. SWA cannot fly its full schedule without pilots picking up open time.

 

[waveflyer]

Let's also not forget where that increase comes from. OPEN TIME. I will not pick up ANY open time while any pilot is on furlough. SWA cannot fly its full schedule without pilots picking up open time.

Yep- and my union and company could beg me to keep picking up and I wouldn't- I couldn't do that-

 

[GhettoBeechjet]

Many good points discussion here. My $100 Million was based on 5th year F/O pay at 90 TFP per month +15 percent for benefits. I re ran it and it came up to $99 Million. I understand the seasonal swings in our manning here. I think we are slightly overmanned in Sept and Oct as well since almost no one flys on F/O reserve. I don't see any Capt downgrades coming because we are not upgrading at nearly the same rate that we are bringing people over the partition. The 10.2 number I stated was given to me by a captain. Maybe the number really is 10.8. The issue is that a small change in the manning model number per aircraft or number of aircraft radically changes the date of when the break even point is with retirements. If the number really is 10.8 and we stay at 700 aircraft we most likely Won't furlough. That being said if the number is becomes 10.2 or 10.5 OR we end up with fewer airframes the math changes to where a furlough looks much more likely. The things that concern me are 1. That there is no commitment for replacement aircraft for retiring 300s. 2. That there are so many AAI pilots not flying not just seasonally but anually.

 

[GhettoBeechjet]

Last point the flying the missing pilots would have done in theory I suppose would be covered by building more productive trips like we see in the summer now.

 

[waveflyer]

I think you aren't seeing the commitment because you don't want to.

Seriously, how many companies could Gary go work for and make a whole LOT more money- you may not like his accountants worldview- but that doesn't make him Icahn- he believes this company is a family and values that more than anything. He has committed himself to us over and over and backed it up. How many companies didn't furlough after 9/11. Not Gary running the show you say? How many companies didn't furlough in 2009?

Now please, shut up and relax. Worry about what you control. Don't go buy your captain house no matter how good rates are- save money bc YOU'RE AN AIRLINE PILOT AND WE ALL SHOULD- and enjoy the ride man- go meet a Karla or Kelly and have some fun- you're in one of those dumbest of positions to have as close to a perfect career as you could ask and you certainly don't seem to be enjoying it- thereby PISSING ON ALL THOSE WHO ASPIRE TO BE WHERE YOU ARE.

GRATITUDE IS THE FOUNDATION OF HAPPINESS AND WEALTH.

 

[scoreboardII]

Gratitude? I thought courage is not the absence of fear? Man, you're confusing me...

Gbj, I was hired at 9. Something ratio, I have been told we could easily handle 11 plus at min guarantee.

Relax partner. And not in the way the Dr with a rubber glove says relax.

 

[waveflyer]

Ummm....

Can they both be true? Asks tony Robbins