American Publishes Preliminary Displacement | Why So Different Than United & Delta?
The Preliminary American Airlines Displacement award for the September 2020 vacancy run has been published and it affects approximately 2,291 pilots. The final award is expected to be published on June 18th with an effective date of August 31, 2020. We will continue to monitor the airline and Allied Pilots Association union (APA) communications, as well as input from our clients, to provide you with accurate final results.
Bottom line, if you’re an airline, military, or corporate pilot looking for work, American’s displacement bid is optimistic news for you. While American may very well furlough enough pilots to significantly increase competition they may still furlough less than United and Delta. We will find out more as their bid process progresses. All pilot positions are identified by their bid status which consists of four elements:
- Base: ex. PHL, CLT, DFW, etc.
- Position: Captain vs. First Officer
- Equipment: ex. Airbus A330, Boeing 737, etc.
- Division: International vs. Domestic pilots
The awards include terms that will be defined below based on the APA Collective Bargaining Agreement (CBA). Pilots will only be awarded bid or displacement preferences submitted via the electronic bidding system. If a pilot does not submit a preference, they get whatever the company assigns to them.
- Reinstatements: Allow a previously displaced pilot to be reinstated to their previous bid status.
- For example, a pilot who gets displaced from Boeing 757 Captain to Boeing 737 Captain can be reinstated back to Boeing 757 Captain.
- Withheld: A pilot who is eligible to be awarded a new aircraft or position (ex. Captain), at the company's discretion, can be withheld from occupying such a position under the following circumstances. This is a training cost savings metrics not a furlough indicator.
- Age
- Eligibility for promotion to occupy a higher bid status
- For example, a Boeing 757 Captain gets displaced to Embraer 190 Captain in this upcoming displacement bid. (E190 is lower than B757)
- The next month, September 2020, this pilot bids, and is awarded, Airbus A320 Captain. (A320 is higher than E190)
- The company can withhold sending this pilot to Embraer 190 training (lower bid status) while he/she awaits Airbus A320 training (higher bid status)
- Operational reasons, such as staffing requirements or training/simulator availability.
- Once a pilot is removed from withheld status, they are treated as a displaced pilot.
- Displacement: A pilot shall be considered displaced if any one of the following occurs:
- A pilot who has been displaced under any provision of this section may displace a more junior pilot, in which case the more junior pilot may then also be considered displaced.
- The Company eliminates all positions in a bid status (Boeing 777 for example), in which case all pilots holding a position in such bid status shall be considered displaced.
- The Company reduces the number of positions in a bid status, in which case, to the extent necessary to accomplish the reduction, the pilots within the bid status being reduced who have the least system seniority shall be considered displaced.
- A great example of this would be removing 5 Boeing 777’s from DFW, therefore requiring less pilots.
- Entitlement: A position awarded based on pilot preference.
- If a pilot has an entitlement which was awarded while serving a 2-year seat lock, the entitlement shall appear on such pilot's bid preference list but it shall be identified as an entitlement.
- A pilot may have only one entitlement.
- A pilot serving a 2-year seat lock who already has an entitlement may be awarded another entitlement, in which case the previous entitlement will automatically be deleted from such pilot's bid preference list.
- Pilots may arrange their entitlements and bid preferences in any order on their bid preference lists.
- A pilot may forfeit an entitlement by deleting it from the bid preference list.
- Stand In Displacement:
- A senior pilot chooses to be displaced in lieu of a junior pilot.
- This would happen if a senior pilot is willing to take a displacement to a junior aircraft to keep their base (PHL, DFW, etc.)
- Preference Award:
- An aircraft or position awarded outside of a displacement.
- A great example is a pilot who wants to change base or aircraft and is senior enough to not be displaced.
- 2-year Seat Locks come with preference awards.
- Seniority List Integration:
- The award is based on integration rules of the CBA from the previous US Airways merger.
The publication notes that additional 77 Legacy US Airways East pilots have been awarded CA positions in order to maintain the 183 required CA positions in compliance with the Seniority List Integration (SLI) award. It is not clear to Raven, or the clients we consulted, if this result is from within the bid or external in some way. We will have to wait until the final bid award is released.
The following calculations are estimates only as final numbers and calculations are still being performed by management and the APA union representatives. At the time of original publication, we were unable to find direct verbiage from the company or the union specifying the totalized numbers. Here is what we’ve found based on numerous reviews of company and union documentation:
- (2,291) overall pilots were affected with this award
- (1,586) pilots were displaced
- (316) pilots were awarded their preference
- (175) pilots were awarded withheld
- (87) Senior pilots opted to be displaced as Stand-in protecting junior pilots
- (72) pilots were released from withhold
- (52) Pilots were given an award due to seniority list integration rules
- (3) pilots were awarded entitlement
- There were zero (0) reinstatements
American Airlines has had substantial displacements, but in the wake of what we have seen out of Delta and United they pale in comparison. If you are an American pilot, Raven Careers would highly recommend American Airlines pilots thoroughly review Section 17 of their CBA where there is an extensive breakdown of each category and the rules surrounding award, seat lock, pay, and more.
United, Delta, & American Plot Different Courses | Who Will Win? Who Will Lose?
With passenger air travel dipping to near zero in recent months, the Coronavirus pandemic has sent shockwaves throughout our industry. The past two weeks have shown a few signs that we recommend you follow to gauge the health of the ongoing airline recovery:
American Airlines
- Restored 64 aircraft (of about 435) that have been parked since April including:
- (12) A320s
- (34) 737s
- (10) 777s
- (8) 787s
- Restoring 141 (83 A320s, and 58 737s) additional aircraft in July focused heavily on the domestic market.
- Reported projected service increases:
- 10% increase in service for June
- 13% increase expected in July
- These increases will bring American to 55% of their normal operations.
- Operating at a 62% load factor so far in June.
Delta Air Lines
- Expected to have 46 jets returned to service by the end of June.
- With their planned doubling of domestic flights month over month they plan to bring 74 more aircraft online in July.
- Focusing on being a ‘Premium’ airline with a conservative approach in returning aircraft.
- Allowing for higher ticket prices while maintaining social distancing onboard better than other carriers.
United Airlines
- 17% increase in flying from June to July.
- Reportedly returning to service in July:
Southwest Airlines
- Offered attractive early retirement, leave, and separation deals to their pilots.
- Planned return to their full pre-pandemic operations by late Fall, growth projected beyond.
- Historically low prices (lowest ticket price ever adjusted for inflation) inspiring increased travel by leisure travelers.
It has been noted by multiple sources that leisure travel is leading the way. Customers want to go to the wide-open spaces of the mountain-west, the coastal areas, casinos, and theme parks. Passengers, primarily away from the coastal states, are looking to return to air travel, while passengers in the densely populated and harder-hit areas of the country are continuing to show apprehension.
The specific airline numbers above certainly feel encouraging. However, at the peak on May 18th U.S. carriers had more than 3,204 jets in storage, 52% of the total fleet, according to Airlines for America, 2,882 jets (47%) were still parked as of a week ago.
Delta has 600+ jets parked (regional and mainline) and seems to be returning them to service slower, perhaps more conservatively than American. American has about 153 mainline jets parked with a substantial push to return many to service in July. United has been very quiet about their fleet. Southwest reportedly still has 400 aircraft in storage, nearly one-third of which are in long-term storage.
Southwest CEO Gary Kelly eagerly stated “We have wonderful opportunities to expand this year. We serve 103 destinations where we will restore full operations. Beyond that we have a number of opportunities to expand.” Southwest has made no secret that they plan to oversee a bold recovery, fortunate for them they have the money to see it through in the short-term. Their financial discipline allowed them to start the second quarter with $13B in cash and they are seeing less than half the daily cash burn of the legacy airlines.
The big three will seemingly see substantial competition in ticket pricing from Southwest as well as the ULCC carriers who cater heavily to the leisure market making it likely difficult for them to hold on to their market share and achieve profitability.
United has substantially more widebody aircraft then their competitors, this is a major reason why we have seen such dire displacements and pessimistic messaging from United. The majority of experts and analysts believe international flying will take the longest to recover, this is a market United has substantially higher exposure to than their competition.
International travel has continued to stay substantially deflated due to strict entry requirements, mandatory quarantines upon arrival, confusion and uncertainty about these shifting restrictions.
American appears to be going “all-in” on domestic service in an attempt to maintain and perhaps grab market share from their competition. This could be a calculated risk considering demand is so far below last year’s numbers. Will having a higher number of bookable flights pay off for American or will it drive them deeper into debt?
With Southwest warning that a “brutal” airfare war is coming to the domestic market, airlines may continue to burn cash while maintaining schedules even amongst higher load factors. Which carriers are set up the best to compete? Cost efficiency may be the key to carriers like Southwest recovering and growing out of this market turmoil.
Emirates Continues Furloughs | What Does This Mean For U.S. Cargo Carrier Hiring?
Recently, Emirates has furloughed approximately 600 pilots out of seniority order, reportedly using sick time, training performance, age, and other metrics to determine who stays and who goes. Each of these pilots now finds themself looking for new flying jobs with a strong desire to return to their home country. Additionally, being typed in Boeing 777 and/or Airbus A380 aircraft make many of these furloughed pilots extremely competitive for U.S. flying jobs. Their international experience, pre October 1st furlough, and desire to return to the U.S. will be attractive to the U.S. cargo carriers.
KEY POINTS:
- The state-owned flag carrier launched the first wave of furloughs two weeks ago laying off 180 pilots undergoing their A380 training and 400 trainee cabin crew, all within their probation period.
- Even though the airline has not given details with regard to how many people were let go, according to sources with knowledge of the matter, 400 Airbus A380 and 200 Boeing 777 pilots, as well as 6500 cabin crew and some engineers have been let go.
- The airline has also extended 50% pay cuts until September to preserve cash as the majority of the airline’s A380 and Boeing 777 fleet remains grounded.
- “We just can’t keep our employees doing nothing for so long so we’re going to have to let some of them go, unfortunately,” said Tim Clark, the chief executive of the airline, in an interview last week with a Gulf-based media outlet.
- However, he believes that the aviation industry will return to normality in 2021 and expects that Emirates will be able to fly its entire fleet by 2022.
- The airline grounded its entire A380 fleet and currently operates only a handful of Boeing 777s on a skeleton network across the globe.
Click here for the full article.
Weekly TSA Numbers:
“There's a lot you can do far above and beyond being positive. There is no reason to be hopeless here, you can take control over how you adapt and react to highly unfair circumstances...Hopium, irrational or unwarranted optimism, is a dangerous and addictive drug. Friends don't let friends do Hopium...it's equally as dangerous as hopelessness but for different reasons.”
-James Onieal
First Class Customers Try Corporate | How Will This Impact Ticket Sales?
KEY POINTS:
- Passengers who typically fly first class on commercial airlines are showing increased interest in business jets because of COVID-19.
- Magellan Jets has seen a 117% increase in new customers compared to 2019; “The numbers are even more important when you consider that last year was a record year for new-client acquisitions.”
- FlexJet reports “unprecedented” activity for enquiries.
- With safety, related to COVID-19, being a primary driver, this crisis has customers behaving quite differently than in previous years. “Typically, flying in a private jet is the first thing you give up. In this crisis, because of the inherent safety we offer, it’s the last thing people want to give up.”
- Magellan Jets states 90% of their clients are traveling for personal reasons, utilizing business jets as a “safety net over commercial”.
- The decreased level of airline service to smaller airports is also driving the increased interest by customers.
- Business Jet operators are creating new products to allow for easier entry into the sector.
- “Both Magellan and Flexjet expect private jet activity to increase in the long term, certainly at least until a Covid-19 vaccine is in place. “I believe business aviation will become more desirable as a result of Covid-19,” Silvestro says.”
Click here for the full article.
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?