Hang on Boys and Girls

[Rebel]

We’ve been down this road before and this was one of the solutions. It still resulted in lay-offs but not as many. In the short term it gives both the company and the pilot group breathing space to further access the situation. The company also offered type ratings of your choice at or below cost. Unfortunately this time around there is a world fuel cost dominator causing the downturn so having a desirable type rating may not make a difference in finding a job.

The long-term solution for the indusrty is simple but complicated; Convincing the travelling public that it is not their God given right to enjoy low/below cost air transportation. This is a high cost industry and always will be.

[yycflyguy]

So, pilots would be allowed/encouraged to take LOA's until the company finds solid footing? What guidelines were used to when pilots would be recalled?

[tonysoprano]

You decide when you come back and with your seniority number intact and on the equipment you were on when you left. It's a great oppurtunity to go work in other parts of the world or if you're military, to go back to your old job getting paid military salary and pension at the same time. The LOA duration was a max of 5 years. I believe there are still a few still out there from the last time 2003(?).

[Rebel]

So, pilots would be allowed/encouraged to take LOA's until the company finds solid footing? What guidelines were used to when pilots would be recalled?

Just to add to what was already said the work share program was a good example of senior pilots helping junior pilots although not everyone was happy about it. It diminished the seniority system somewhat as various loopholes had to be shut. Senior pilots were frowned upon if they put time in the bank and no reserve pilot was allowed to break minimum guarantee, as it was a cost item to the company. Junior pilots were allowed to displace for competency as long as minimum guarantee was not broken. So you can see job sharing can work if everyone cooperates and I have a very expensive pen to prove it.

The company also offered both LOA and laid off pilots other goodies such as pass travel, medical coverage and pension recovery. It’s best to talk to those pilots that were involved to get more details.

If I remember correctly all the involved pilots that I spoke to were promoted to Captains at the various companies that they were working for in a year or less or they made a fortune doing other things. With the exception of a few the vast majority returned to the AC fold within the recall specified time frame.

Some plan of action will be worked out, it always has been in the past and will be in the future. Not everyone will be happy but that’s life..

[Spock]

More doom and gloom

Airlines have 'never faced a darker future:' report
Updated Fri. Jun. 13 2008 10:10 AM ET

CTV.ca News Staff

The skyrocketing price of oil has landed the airline industry in the midst of a "full-blown crisis," according to a report published by a U.S. travel industry consumer group.

The dire report conducted by AirlineForecasts, LLC, for the Business Travel Coalition (BTC)claims the industry has "never faced a darker future." It coincides with news from two more North American airlines that have announced they will begin charging for the first piece of checked luggage.

United Airlines and U.S. Airways will start charging customers US$15 for the first checked bag, a move that follows similar decisions in the past few months by other American and Canadian airlines that have announced charges for passengers checking in first or second pieces of luggage.

The airlines have said high fuel costs have cut into their bottom lines and substantially increased their costs.

"As a consequence of the skyrocketing cost of oil, the U.S. commercial aviation industry is in full-blown crisis and heading toward a catastrophe," said the BTC report.

The report notes that if oil continues to hover around the US$130 mark, then "all major legacy airlines will be in default on various debt covenants by the end of 2008 or early 2009."

A business analyst told CTV.ca, there is little doubt the industry is hurting both in Canada and the U.S. But Joe D'Cruz, a management professor at the University of Toronto, said Canadian airlines are in "reasonably good shape."

"In Canada, the industry is insulated by a couple of things," D'Cruz told CTV.ca, noting that the overall Canadian economy is in better shape than its American counterpart.

"We (also) don't have the intense (airline) competition. There is competition, but the airlines refrain from destructive competition. (And they) seem to pass on increases in high oil prices to travelers. They are hurting, but they are not in a disastrous shape."

D'Cruz said that even in the U.S., there have been much worse times for the industry.

"For example, after the dot-com bust in the 1990s -- when business travel was the main profit engine of the industry -- that era was much worse than the current era."

The BTC report notes that consumers will continue to face rising air travel costs in the coming months. The study said that industry fares in the U.S. will have to increase at least 20 per cent to cover the increased fuel costs.

"Airlines can attempt to radically shrink the industry," according to the study, but it notes that is unlikely due to the competitive nature of the business.

"Instead, absent direct policy intervention, the likelihood is that there will be more bankruptcies, including some liquidations."

The study recommends that government regulators and politicians take action, noting that in the coming weeks, BTC will make specific recommendations.

Spock


Live long and prosper

[Hadji Ramjet]

LOAs are still being offered; I'm waiting to hear about a certain opportunity and if it pans out will be taking one.

[yycflyguy]

What time frame are you asking for? When requesting can you stipulate from (ex.) Jan 09 to Jan 11 or when they approve it is it effective immediately? It was my understanding that during CCAA when LOA's were being requested only the requests for greater than 24 months were approved. I am surprised to hear that they are granting LOAs if they have been hiring up to April of this year and showing open spots on the EMB.

[Rebel]

British Airways said on Thursday its traffic fell 3.7 percent in June, as a ticket price increase and the UK economic slowdown put passengers off traveling on both business and economy flights. "UK consumers are reluctant to spend more, and seeing as fares have risen there will be some effect (from that), but it's hard to attribute (the decline) to one or the other," BA Head of Investor Relations George Stinnes told reporters. BA raised ticket prices via a fuel surcharge last month, and Stinnes said the group would not rule out further increases despite the impact on passenger volumes.

"In a period of two months brent crude oil prices have risen from USD$110 per barrel to USD$147. Surcharges don't cover the full increases but we have to try to cover costs," he said. He added that there was too much capacity across all markets as the industry faces the twin threats of high fuel costs and slowing demand, and that BA was close to announcing details of cuts to its winter schedule. (Source: Reuters )

El Al Israel Airlines said on Thursday it would halt direct flights to Miami from September as part of its plan to optimize flight operations. El Al President and Chief Executive Haim Romano said the unprecedented surge in jet fuel prices had led to a dramatic increase in the cost of operating flights, especially long-range flights. At current fuel prices and given the size of the market, the economic viability of the route to Miami has been eroded. The Israeli carrier plans to strengthen its foothold in North America through its direct flights to New York, Los Angeles and Toronto as well as through its code-sharing agreement with American Airlines. (Source: Reuters)

Air France KLM, the world's biggest airline by revenues, confirmed on Friday it was considering offering high-speed rail travel and will adjust its winter seat capacity in the face of rising jet fuel costs. The Franco-Dutch airline pulled out of a bid to rescue Italy's Alitalia earlier this year and competes with the emerging transatlantic partnership of British Airways, American Airlines and Spain's Iberia.

On Friday, it confirmed media reports it was discussing a high-speed rail alliance with Veolia -- a French utility that runs several rail connections but is not yet active in high-speed travel, which is dominated by state-owned SNCF, Deutsche Bahn and the equally state controlled Thalys and Eurostar firms. Veolia Transport, part of French water utility Veolia, could run trains under the Air France brand from the airline's hub at Paris Charles de Gaulle Airport to destinations across Europe, the Financial Times said on Friday. The move could mark the beginning of a decline in short-haul air travel on routes such as Paris-Frankfurt, which now enjoy good high-speed links, the paper said. Air France has been exploring for four years the possibility of using rail to complement its air services. (Source: Reuters )

[Kelowna Pilot]

People should read some of the US Aviation forums.

It's a blood bath down there.

It's like just a few months ago they were talking about the hiring boom.

And, then, like somebody threw a light switch, the psychology all changed and now it's all doom, gloom and what to do when you're furloughed.

It's post 9-11 all over again, except this time the concern is it could last a lot longer.

[Flightlevels]

American, Delta beat estimates, despite losses
Special charges push carriers deep into red, but better-than-expected operating results drive stocks higher.
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See all CNNMoney.com RSS FEEDS (close) By Aaron Smith, CNNMoney.com staff writer
Last Updated: July 16, 2008: 10:02 AM EDT

Airlines want Congress to act

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NEW YORK (CNNMoney.com) -- American Airlines' parent AMR Corp. and Delta Air Lines reported hefty losses Wednesday, primarily from fuel-related costs, but still managed to beat the dire expectations of analysts.

The stock for both companies jumped at the start of trading, with a 7% increase for Delta (DAL, Fortune 500), and a 6% increase for American Airlines parent company AMR (AMR, Fortune 500). Without counting those gains, the stocks for both companies have plunged 69% year-to-date.

AMR, the nation's No. 1 carrier, reported total operating revenue of nearly $6.2 billion for the second quarter, up 5% from $5.9 billion for the same period last year. The carrier exceeded revenue projections from Thomson FirstCall's analyst consensus, but just barely.

AMR reported a net loss of $1.4 billion, or $5.77 per share, for the second quarter. Excluding more than $1.1 billion in charges related to the writedown of discontinued airplanes and severance costs, the net loss was $284 million for the quarter, or $1.08 per diluted share.

That was not as bad as the $1.40 per share loss projected by Thomson First Call's analyst consensus. But it's a lot worse than American's performance in the year-earlier quarter, when the carrier reported a profit of $1.28 per share, or $1.08 including charges.

American Airlines, like many other carriers, blamed escalating fuel costs for its financial woes. The company said it paid $838 million more for fuel in the second quarter, compared to last year.

"Our company continues to be severely challenged by the fuel crisis that has afflicted our entire industry, and we expect these difficulties to continue for the foreseeable future," said AMR Chief Executive Gerard Arpey, in a press release.

Delta, the nation's No. 3 carrier, overcame a spike in fuel costs to report better-than-expected operating income Wednesday, although a special charge resulted in a large net loss.

Delta reported income of $137 million, or 35 cents per share, for the second quarter, excluding special charges and despite a $1 billion year-to-year increase in fuel costs. That was more than triple the 10 cents per share projected by analyst consensus provided by Thomson First Call.

Including special charges of $1.2 billion, Delta said its net loss for the second quarter was $1 billion, or $2.64 per diluted share.

Delta also reported total operating revenue of nearly $5.5 billion for the second quarter, a 10% increase from the year-earlier total of $5 billion. The carrier beat the Thomson consensus revenue estimate of nearly $5.4 billion.

Like many other U.S. carriers, the Atlanta-based Delta is offsetting its soaring fuel costs by cutting capacity, meaning that it is discontinuing or reducing its least fuel-efficient flights to save money. Delta said it expects domestic capacity to decrease 13% in the second half of 2008, while increasing international capacity by 14%. Overall, capacity would decline by 4%, the airline said.

Delta said that ramping up its international presence and hedging fuel costs allowed it to offset some $3 billion of the estimated $4 billion of higher fuel costs in 2008.

"The fact that we mitigated nearly 80% of the impact of higher fuel cost this quarter while improving our liquidity is a testament to both the strength of our action plan and the can-do spirit of the Delta people," said Delta president and chief financial officer Edward Bastian, in a press release.

Delta said it plans to have $3.2 billion in liquid assets by year's end.

Delta also said it expects its merger with Northwest Airlines (NWA, Fortune 500) to be completed in the fourth quarter. It said it expects this merger to result in about $2 billion in annual cost savings by 2012, but the acquisition would also cost $600 million over three years.

Between American and Delta in annual sales is the No. 2 carrier, UAL Corp.'s (UAUA, Fortune 500) United Airlines.

First Published: July 16, 2008: 8:07 AM EDT

Bankruptcies loom for airlines: report