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Aviation Industry News

Aviation Industry Updates: June 2, 2020

By Industry News

Delta Publishes 7,000+ Pilot Displacement Bid | What Does This Mean for Furlough?

KEY POINTS & HISTORICAL CONTEXT:

  • This displacement will affect 7,096 pilots of which 6,633 of those pilots will be displaced by force, not choice. This equates to over 47% of the Delta seniority list.
  • Anyone hired after December 2016, within the past 2 years and 3 months, will not be assigned an aircraft. This means approximately 2,327, 16% of their pilots, are in severe danger of possible furlough.
  • For historical comparison, post 9/11, airlines saw a 30% traffic decline, similar to the projections airline executives are currently making for the Covid-19 recovery.
  • Prior to 9/11, if you were to combine their seniority lists, Northwest and Delta employed 13,753 pilots. Post 9/11 they furloughed a combined 1,988 pilots which was 15% of their seniority list.
  • Currently, the most junior Captain at Delta was hired in mid-2018. After displacements and furloughs are complete, a junior Captain will be around a February 2001 hire date.

BOTTOM LINE: Read More

Aviation Industry Updates: May 24, 2020

By Industry News

Leisure Travel on the Rebound? | ULCC’s Show Signs of Recovery

If you’ve been fortunate enough to fly in the past few days I am sure you noticed what I have, the seats are starting to fill up again. It seems one sector is starting to tick toward profitability, or at least toward a halt of cash burn. Many are saying that the recovery in air travel will be led with domestic leisure travel; are Low Cost Carriers going to lead the way to recovery? Read More

Aviation Industry Updates: May 17, 2020

By Industry News

Delta Publishes Displacement Bid | What Does This Mean For Furloughs?

Editorial Disclaimer:

The below post references numerous facts and figures sited by Delta in their recent May 2020 Advance Entitlement/Surplus Bid Posting. When reading the bullets from the Delta memo, you will notice the numbers published are confusing at times. For instance, Delta has stated in an open company memo that they are overstaffed by 7,000 pilots come this fall, yet in this recent bid posting they go on to say that by Q3 2021, they will be overstaffed by between 2,500 and 3,500 pilots. Please read carefully and if you have any questions, don’t hesitate to reach out. Read More

Aviation Industry Updates: May 10, 2020

By Industry News

United Reduces Pilot Displacement Numbers | How Will This Affect Furloughs?

This week saw a reversal in United Airlines initial displacement award according to comments from our clients. Last week United Airlines and the UAL ALPA MEC published memos to their pilot group outlining plans to displace 5,007 pilots. The pandemic of COVID-19 has resulted in a massive drop in demand for the airline industry. Read More

Aviation Industry Updates: May 3, 2020

By Industry News

United Publishes 5,000+ Pilot Displacement Bid | What Does This Mean For Other Majors?

KEY POINTS:

  • United has announced the largest displacement in its history which will impact all pilots in one way or another.
  • The displacement notice stated this is likely the first in a series of changes to pilot staffing that will ultimately be driven by demand.
  • More than 5,007 total pilots were named in displacement letters. Read More

Aviation Industry Updates: April 29, 2020

By Industry News

How is the CARES Act hurting airlines’ futures?

The stringent rules accompanying the CARES act grants are potentially strangling airlines’ futures.  Their ability to cut back on routes now could prove useful in the Fall but the denials from the DOT are painting a grim picture for both the current situation and future planning.  Forcing airlines to maintain routes that are not currently supporting a traveling public puts into question the sustainability of the airline when the funding is exhausted.  But not everyone is receiving the same treatment…

KEY POINTS:

Read More

Aviation Industry Updates: April 26, 2020

By Industry News

Skywest to Receive $438 Million in Payroll Support Under the Cares Act

KEY POINTS:

  • “Skywest Inc. said Friday it has reached agreement with the U.S. Treasury Department to receive $438 million under the Payroll Support Program as part of the CARES Act.”
  • “$337 million will be in the form of a direct grant and $101 million will be in the form of a 10-year loan.”
  • “These funds will cover important payroll expenses as we work together with our people to provide critical air service during this difficult time, and prepare for when demand returns,” said Chief Executive Chip Childs.

Read More

Aviation Industry Updates: April 20, 2020

By Industry News

Southwest Pilot Union Discusses “Massive Layoffs” if Bailouts Not Extended

KEY POINTS:

  • SWAPA released a detailed eight-page document outlining the state of Domestic Airlines related to the CARES Act, including funds received and health of the various pilot groups; furloughs, leaves, and bankruptcies. Additionally, SWAPA compares demand to other crisis events, Wall Street forecasts, major airline financial facts, and their predictions for the future of the industry.
  • “Overall, it is expected that business travel should recover faster than leisure travel, although incremental structural shifts amid the accelerated development of new communicator tools such as Zoom may prove to be an effective substitute for some traditional face-to-face meetings. Consumer confidence in flying will take time to recover fully, but medium-to-long term fundamentals for leisure travel still exist. Short-haul travel likely to be more favored in the near-term as many passengers could plan short and simple getaways after being housebound for an extended period of time.” Read More

Aviation Industry Updates: April 15, 2020

By Industry News

U.S. Airlines Reach Agreements for Federal Stimulus Aid

KEY POINTS:

  • The Cares Act protections are less of a grant and more of a loan with additional strings attached.
  • CARES Act funding for payroll only backs approximately 76% of payroll based on expenses from late 2019. This despite most airlines having experienced growth through COVID-19 halting air-travel.
  • Due to higher demand than expected, the award amounts are smaller than required for individual airlines. In the end, the awards were significantly scaled down.
  • While the purpose of this capital injection is to protect jobs, certain CEO’s have pivoted to discussing how these bailout funds will help their passengers vs focusing on how they will protect their employees.

CARES Act Stimulus Awards

*at time of publishing not all Airlines had released their stimulus package amounts; Raven will update as information becomes available

>> Click here to read the entire article written by Michael B. Baker of Business Travel News

Analysts Estimate Up To 1,000 Aircraft Could Be Retired In 2020

KEY POINTS:

  • Becker believes that US airlines will retire between 800 and 1,000 aircraft this year, leading to a much smaller aviation industry than was previously seen.
  • She predicts huge job losses in the sector too, signaling that many of the furloughs that we’re seeing now may well evolve into permanent layoffs. “We believe airlines will be 30% smaller at the end of his year than they were at the start of the year. Also, we expect there will be between 100K and 200K fewer employees at the end of the year than there were at the beginning of the year.” [Click here to read quotes from Delta and United that reinforce this analysis]
  • If Becker’s prediction is right, we could see many more aircraft from the fleets in the US disappearing by the end of 2020. “While many of these will be temporary storage, many of these aircraft will never resume service. We believe the airline industry will look very different when we get to the other side of this.”
  • As well as her take on the shape of the US fleet in the future, Becker has made one of the most damning predictions to date for the return of air travel demand. She told Seeking Alpha, “Demand is 5% of what it was in February, and we continue to believe it will take 3 to 5 years for domestic demand to return to 2019 levels and 4 to 6 years for international demand to get back to those levels.”

  • The author of the article summarizes: “While we may see an uptick in aviation activities before the end of the year, it’s going to be a long, long time before we see the type of demand that was typical of pre-coronavirus, if it ever comes back at all.

>> Click here to read the entire article written by Joanna Bailey of Simple Flying

Video Interview: Tom Nealon, President Southwest Airlines

Watch as Tom Nealon is interviewed by the Global Business Travel Association on how Southwest is performing in these unprecedented times. How does this compare to previous downturns like 9/11 and 2008? How does Southwest see the future? Plus much more from a top executive in the know.

“We don’t want to furlough employees, we don’t want to ground airplanes [and] we don’t want to close cities. All of that depends on passengers and air travel returning.”

Additional Resources

How Does the Coronavirus Compare to 9/11?

How to Survive Disruptive Change

Are Furloughs Coming?

What Should Pilots Do In These Uncertain Times?