79 Airplanes Retired

[dd]

Today

[TheStig]

AC is in part a victim of its own success.

Over a decade, CR created and implemented a business plan that doubled revenues. The majority of that revenue growth was derived from international expansion. The WB fleet and utilization expanded dramatically. The NB fleet was expanded to feed greater numbers of connecting passengers in to the domestic overseas hubs from both Canada but increasingly from the US. And this resulted in a greater than doubling of the pilot population. Over 2000 pilots hired since 2015.

And now the consensus is that the COVID event will have the most dramatic impact on international/intercontinental passenger travel leaving AC greatly exposed. This was confirmed by yesterday’s announcement in terms of forecast travel recovery pattern and timeline. But the net reduction of airframes did not factor in what will happen with the WB fleet.

It was pointed out that some mainline WB capacity will be deployed to replace the retiring Rouge 767 fleet. But with no announcement of any fleet reductions in 777/787/330 fleets the unanswered question will be utilization. The utilization rate will directly impact pilot staffing requirements.

US legacy carriers are estimating that their overseas operations will be last to recover. Most seem to be setting pilot staffing plans based on summer 2021 (example is the recently announced UAL displacement bid). Consensus estimates are 70-80% of 2019 capacity. Several of the US carriers have the benefit of dramatic age 65 retirement rates over the next 4 years. UA is lowest at just 1500. DL closer to 3400. Even with early retirements at AA it will be another 3000+. AC is only in the hundreds.

It will be interesting to see where the AC staffing forecast goes. Huge growth leaves AC exposed to potential significant contraction.

The growth at AC was facilitated by not retiring aircraft as their replacements arrived, namely the 767's at both rouge and mainline. AC is actually well positioned given the severity of this slow down. It used its success to secure the pension funds and build a healthy balance sheet. Most of the 79 aircraft being retired were slated for retirement this year and are on short-term leases and had been kept in service due to the MAX grounding. The A220's can be introduced as demand recovers and although the timeline of the Max is unknown, you have to agree that not having them in service is beneficial at this point.

[Fanblade]

And now the consensus is that the COVID event will have the most dramatic impact on international/intercontinental passenger travel leaving AC greatly exposed. This was confirmed by yesterday’s announcement in terms of forecast travel recovery pattern and timeline. But the net reduction of airframes did not factor in what will happen with the WB fleet.

It was pointed out that some mainline WB capacity will be deployed to replace the retiring Rouge 767 fleet. But with no announcement of any fleet reductions in 777/787/330 fleets the unanswered question will be utilization. The utilization rate will directly impact pilot staffing requirements.

I agree that anything beyond domestic is a real unknown at this point. One issue no one seems to be talking about yet, is medical insurance. Currently Covid or anything that has its symptoms is an exclusion. I’m not so sure insurance companies will be changing this in the medium term as questions remain about a second wave.

I know I won’t be doing any leisure travel outside our boarders without medical. Especially not to the US.

[JoeyBarton]

Today

Is that for real?

[rudder]

The growth at AC was facilitated by not retiring aircraft as their replacements arrived, namely the 767's at both rouge and mainline. AC is actually well positioned given the severity of this slow down. It used its success to secure the pension funds and build a healthy balance sheet. Most of the 79 aircraft being retired were slated for retirement this year and are on short-term leases and had been kept in service due to the MAX grounding. The A220's can be introduced as demand recovers and although the timeline of the Max is unknown, you have to agree that not having them in service is beneficial at this point.

I agree.

But 25/30 of the 767 retiring were at Rouge. The Rouge utilization was secondary European markets and sun destinations. The point-to-point North America to smaller/seasonal European destinations will probably be last to recover requiring enough aggregate demand to make a profit on each flight. Therefore, removal of WB capacity was imperative and done at lowest cost due to older owned airframes.

The issue is the primary overseas markets and when they will recover. Canada to Europe/Asia/South America/South Pacific/South Asia. These are the main service points for 777/787/330. I don’t think that even AC Commercial has a good handle on recovery or demand for next summer but that is most likely what staffing will be based on.

Perhaps crew planning will use the lowest DMM to set staffing on the WB with a view that it can flex up DMM by fleet type if demand recovers faster than expected.

[JBI]

I agree that anything beyond domestic is a real unknown at this point. One issue no one seems to be talking about yet, is medical insurance. Currently Covid or anything that has its symptoms is an exclusion. I’m not so sure insurance companies will be changing this in the medium term as questions remain about a second wave.

I know I won’t be doing any leisure travel outside our boarders without medical. Especially not to the US.

Very good point Fanblade. I'm by no means an expert, but I think you'll see domestic travel return much quicker than international and US Transborder. Lots of families have missed key events and as soon as the risk is low enough there will be a fairly strong return for missed births, birthdays, anniversaries, weddings, memorials and family reunions. I also think you'll see more people deciding to vacation in Canada this year, but on a budget.

But at this point we're all just kinda guessing... even the experts!

[dd]

600 reductions.

[dd]

600 surplus pilots.
Lots of reductions to seats but many were unfilled.

[Fanblade]

600 surplus pilots.
Lots of reductions to seats but many were unfilled.

I don’t see anything published.

[iflyroads]

600 surplus pilots.
Lots of reductions to seats but many were unfilled.

I don’t see anything published.

Something will be published later today.


Those numbers is what I heard as well. Over 600 surplus. Close to 1600 reductions from the last bid

[rudder]

600 surplus pilots.
Lots of reductions to seats but many were unfilled.

I don’t see anything published.

Something will be published later today.


Those numbers is what I heard as well. Over 600 surplus. Close to 1600 reductions from the last bid

After CEWS expires, Skyregional will lay off around 75%. Jazz will lay off 50% (and that may not be the end of layoffs).

600/4200 active is 14%. If these numbers are accurate then while it will be sad news for those affected it seems a relatively favourable outcome considering the circumstances.

[sanjet]

Haven't got anything official yet. The 600 number is from the MOU only until September.

Hoping for the best but preparing for worst news.

[Fanblade]

I don’t see anything published.

Something will be published later today.


Those numbers is what I heard as well. Over 600 surplus. Close to 1600 reductions from the last bid

After CEWS expires, Skyregional will lay off around 75%. Jazz will lay off 50% (and that may not be the end of layoffs).

600/4200 active is 14%. If these numbers are accurate then while it will be sad news for those affected it seems a relatively favourable outcome considering the circumstances.

Pilots with a seniority number equal or junior to 3704 will be declared Inactive (Surplus)

As bad as that is. It’s still a relief.

[skypirate88]

Something will be published later today.


Those numbers is what I heard as well. Over 600 surplus. Close to 1600 reductions from the last bid

After CEWS expires, Skyregional will lay off around 75%. Jazz will lay off 50% (and that may not be the end of layoffs).

600/4200 active is 14%. If these numbers are accurate then while it will be sad news for those affected it seems a relatively favourable outcome considering the circumstances.

Pilots with a seniority number equal or junior to 3704 will be declared Inactive (Surplus)

As bad as that is. It’s still a relief.

That puts everyone hired beyond about August 2018 as surplus

[mbav8r]

So, the original 675 has been reduced to 600? Or, is that 600 more over the original 675?
Is that also based on the 55 hours job sharing MOU?

[babybus]

Surplus from seniority 3704 to 4499
795 surplus.
Based on 1/3 of the fleet being parked I was expecting +-1300 ...still a real heartbreaker.

[hithere]

Yes but as stated previously it is only a net loss of 40 airframes or 17% of your fleet. Still crappy for those affected. I guess we will find out soon what the Express fleet plan is

[babybus]

Yes but as stated previously it is only a net loss of 40 airframes or 17% of your fleet. Still crappy for those affected. I guess we will find out soon what the Express fleet plan is

correct...these layoffs pretty amount to about 17% of our pilots....massive massive amount of guys...2 months ago all guys were talking about is what position they wanted to upgrade to....it's crazy.

[altiplano]

Last bid was 4900+, now down to 3300 and change. That's about 1/3 of positions gone

[mbav8r]

Last bid was 4900+, now down to 3300 and change. That's about 1/3 of positions gone

Correct me if I’m wrong, 4900 included the 800 vacancies that were not filled.