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Aviation Industry Updates: November 15, 2022

By November 15, 2022November 22nd, 2022Industry News

FedEx Parks Planes

  • FedEx Corp. has reduced the frequency of flights and parked some of its planes, following through on the courier’s plan to reduce costs in response to weak demand for package delivery.

  • The company has halted 23 domestic flights and about nine international ones, Chief Financial Officer Mike Lenz said Tuesday at the Baird 2022 Global Industrial Conference.
  • The efforts are in line with those laid out in September, when FedEx said it would reduce costs by as much as $2.7 billion in its current fiscal year due to a variety of issues, including weakness in Asia and challenges in Europe. The company withdrew its forecast at the time.
  • “Unquestionably, the commencement and the speed and depth of that shift was beyond what we certainly had anticipated,” Lenz said. “That’s why we have been taking down trans-Pacific flights.”
  • Along with the reduced flight frequencies, Lenz said FedEx will temporarily park aircraft because it doesn’t need as much air capacity as anticipated. FedEx is also eliminating older, inefficient planes from its fleet. The company will completely retire its MD-10s by the end of this year and will then look at retiring MD-11s.

Bloomberg

We Just Got A Pilot With FOUR 121 Checkride Failures Hired At A Legacy

I don’t know why you haven’t gotten an interview yet… But, if you book a call, we’ve got the resources to figure it out and help you get one ASAP.

United Gives Pilots Early Raise

KEY POINTS:

  • United Airlines is giving pilots 5% raises — part of a pandemic cost-reduction agreement — months ahead of schedule, days after pilots overwhelmingly rejected a new contract agreement.
  • Negotiations for new labor deals have been difficult at United and other carriers.
  • In 2020, the Chicago-based carrier and the Air Line Pilots Association, which represents United’s more than 13,000 pilots, agreed to offer aviators a round of buyouts as the company scrambled to reduce costs during the industry’s worst-ever crisis.
  • In exchange, the company said it would raise its pilots’ hourly pay by 5% once the airline returned to a pretax margin at or above 5% for 12 months. They also agreed to job and pay protections.
  • United cited the carrier’s return to profitability and upbeat outlook for handing the raises out this year. The airline reported a pretax margin of 9% in the last quarter. While United has still lost money in the first nine months of the year, it expects a profitable end to 2022.
  • The company could have waited until May 2023 to pay the raises, Bryan Quigley, senior vice president of flight operations at United wrote to pilots on Thursday. The raises will take effect during the December bid month.

CNBC

We Just Got A Pilot With A Gear Up Landing Hired At A Major

I don’t know why you haven’t gotten an interview yet… But, if you book a call, we’ve got the resources to figure it out and help you get one ASAP.

Spirit Airlines To Raise $600 Million In New Debt

KEY POINTS:

  • The same Spirit Airlines that is likely to be acquired by JetBlue Airways is seeking another $600 million in new debt. Even more interesting is that Spirit Airlines is using its loyalty programs – Free Spirit and Spirit Saver$ Club – to secure that debt as collateral.
  • This comes against a backdrop of Spirit reducing routes but also investing in new seating and pilot training. Nonetheless, for an airline that seeks regulatory approval to be bought by JetBlue, Spirit Airlines is making big moves.
  • Spirit Airlines is literally using customer loyalty programs to secure debt. Originally, the amount was $500 million, but a subsequent airline filing of November 10 says the amount is now $600 million.
  • According to the original November 9 filing, the debt will be “secured” with the airline’s “Co-branded credit card programs and Spirit Saver$ Club program and intellectual property utilized in connection with the loyalty program.”
  • Independently appraised at a value of $2.6 billion-plus and the brand intellectual property appraised at $1.6 billion, it’s a valuable commodity that Spirit can leverage. It helps that the airline believes these programs will bring in over $150 million in 2022, almost $200 million in 2023, and approximately $250 million in 2024.
  • The debt is intended to pay down $155 million of debt and have more cash on hand with an uncertain 2023. According to Airline Weekly, this is after Spirit Airlines took out $850 million in loyalty program-secured debt in September 2020.

Simple Flying

American Airlines’ Pilots Union Could Merge With ALPA

KEY POINTS:

  • The independent Allied Pilots Association (APA) representing American Airlines pilots has decided to seriously explore a merger with the largest United States national pilots’ union – the Air Line Pilots Association (ALPA). The APA board, on November 11, formed a committee to study the idea, with a final report expected back by Spring 2023.
  • Now that the resolution has passed, there will be an initial APA-ALPA Merger Exploratory Committee that will be tasked with investigating issues related to the matter. Issues for the committee to review include, but are not limited to, benefit plans, financial impacts, governance issues, and seniority.
  • The resolution states if the final report is received on time at the Spring 2023 board of directors meeting, then the APA Board of Directors should vote. It will take a 2/3rds vote of the APA Board of Directors to negotiate a merger agreement with ALPA for Board review.
  • There exists a group of grassroots boosters for a merger in “AA Pilots for ALPA”. The group of American Airlines pilots is pushing for this in the name of gaining better resources to help with bargaining with American Airlines’ management.

Simple Flying

We Just Got A Pilot With 2200 Hours Hired At A Legacy

I don’t know why you haven’t gotten an interview yet… But, if you book a call, we’ve got the resources to figure it out and help you get one ASAP.