Grab a seat. The music is stopping

Discuss topics relating to airlines.

Moderators: North Shore, ahramin, sky's the limit, sepia, Sulako

Post Reply
Squid
Rank 5
Rank 5
Posts: 319
Joined: Fri Mar 17, 2006 3:35 pm
Location: Timmins

Grab a seat. The music is stopping

Post by Squid »

---------- ADS -----------
  

av8ts
Rank 8
Rank 8
Posts: 827
Joined: Fri Apr 08, 2011 8:31 am

Re: Grab a seat. The music is stopping

Post by av8ts »

I’m not holding my breath waiting to be blocked to 77 hours a month instead of the 87-90 which is the norm.
---------- ADS -----------
  

altiplano
Rank 11
Rank 11
Posts: 4036
Joined: Sat Jan 22, 2005 2:24 pm

Re: Grab a seat. The music is stopping

Post by altiplano »

There will be (is) some industry fallout, but I don't think enough to erase the shortage that already exists in this profession.

Maybe lift the foot off the gas a bit, but I don't see hitting the brakes.
---------- ADS -----------
  

User avatar
complexintentions
Rank 10
Rank 10
Posts: 2107
Joined: Thu Aug 19, 2004 3:49 pm
Location: of my pants is unknown.

Re: Grab a seat. The music is stopping

Post by complexintentions »

Hmmm...that's a pretty sanguine outlook considering the past three days has wiped billions of dollars of value from aviation and travel stocks, and trillions from the markets at large.

The investor in me looks at the near future for buying opportunities, the pilot in me is carefully considering the professional risks.

The problem isn't so much the virus but the fear of the virus. Markets move on perception, not reality.

There is no "pilot shortage" when airlines shift into full defensive mode.

Global pandemic spells a bit of a passenger shortage for awhile though.
---------- ADS -----------
  
I’m still waiting for my white male privilege membership card. Must have gotten lost in the mail.

goingnowherefast
Rank (9)
Rank (9)
Posts: 1825
Joined: Wed Mar 13, 2013 9:24 am

Re: Grab a seat. The music is stopping

Post by goingnowherefast »

As long as the CFOs don't add to the fearmongering, then we'll be okay. Publically telling his airline to prepare for financial hardship probably did as much damage as the effects of the virus.

Most airlines have a shortage of airplanes (capacity) due to the MAX, so shift that capacity somewhere else and continue on. Airline ABC wanted to fly a route twice daily on the MAX, but at 2/week on A320s because of no planes? Well send 1 daily 777 that used to fly to Asia. Money still comes in. Won't work so well for the likes of Cathay that depend primarily on long haul with widebodies, but AC's fleet is diverse enough that it allows flexibility.

Even airlines that don't use 737s are short capacity from the MAX. They can't get A320s because the 737 operators are leasing them.
---------- ADS -----------
  

vrefplus5
Rank 2
Rank 2
Posts: 83
Joined: Mon Apr 04, 2005 2:04 pm

Re: Grab a seat. The music is stopping

Post by vrefplus5 »

Agreed goingnowherefast, not terribly great for Cathay.

https://www.youtube.com/watch?v=EVSvTdquRcQ
---------- ADS -----------
  

User avatar
complexintentions
Rank 10
Rank 10
Posts: 2107
Joined: Thu Aug 19, 2004 3:49 pm
Location: of my pants is unknown.

Re: Grab a seat. The music is stopping

Post by complexintentions »

As long as the CFOs don't add to the fearmongering, then we'll be okay. Publically telling his airline to prepare for financial hardship probably did as much damage as the effects of the virus.
Agreed. And that was my point about perception. It's accelerating, the idea that this is going to be some catastrophic event affecting the whole world. Doesn't matter if that's actually true, it becomes self-fulfilling. Sentiment also goes overboard to the euphoric, but that isn't the mood these days. Welcome to the world of instant "news" and hysterical social media. Where Facebook (or zerohedge) is weighted the same as BBC World for the average citizen.

In hyper-connected market economies, thinking that a few equipment changes will avoid most of the pain is whistling in the dark. Capacity lost due to the Max only matters if people are flying in the same numbers.

Cathay has issues that go beyond coronavirus (ie HK), but that doesn't mean North American carriers will be immune. Not a chance. United already revising their profit forecasts, for example.
---------- ADS -----------
  
I’m still waiting for my white male privilege membership card. Must have gotten lost in the mail.

altiplano
Rank 11
Rank 11
Posts: 4036
Joined: Sat Jan 22, 2005 2:24 pm

Re: Grab a seat. The music is stopping

Post by altiplano »

complexintentions wrote:
Thu Feb 27, 2020 6:35 am
Hmmm...that's a pretty sanguine outlook considering the past three days has wiped billions of dollars of value from aviation and travel stocks, and trillions from the markets at large.

The investor in me looks at the near future for buying opportunities, the pilot in me is carefully considering the professional risks.

The problem isn't so much the virus but the fear of the virus. Markets move on perception, not reality.

There is no "pilot shortage" when airlines shift into full defensive mode.

Global pandemic spells a bit of a passenger shortage for awhile though.
Perhaps. But as you say perception, not reality.

Obviously the situation is very different for Asian airlines or airlines that rely heavily on the Chinese/Asian travel market.

I'm speaking of airlines in this country, and North America and the fact is that they are strong.

AC has a billions in liquidity, a diversified route structure, and an extremely flexible fleet with its composition and mix of lease/owned aircraft. I think it learned from what happened with SARs, and has responded appropriately and timely with this outbreak.

WS has very low exposure to the Asian market, right now with its predominant N-S vacation operations I doubt they are losing much as winter picks back up, people aren't giving up their week on the beach just because of a flu half a world away.

American carriers, again, variable levels of exposure to the Chinese/Asian market, but they had already drawn back somewhat on the trade war reductions in flying and have highly diverse route structures.

If this thing goes on and on... sure we'll see some pots boiling over, but I don't think anyone expects this to go for a significant stretch before fizzling out. The '03 SARs outbreak was contained by June, I expect we'll see similar timelines here.
---------- ADS -----------
  

User avatar
complexintentions
Rank 10
Rank 10
Posts: 2107
Joined: Thu Aug 19, 2004 3:49 pm
Location: of my pants is unknown.

Re: Grab a seat. The music is stopping

Post by complexintentions »

I hope you're right. Hopefully AC losing 28% of its stock value and $3.9 billion of market cap is only a "buying opportunity".

Just saying that it may take more than shifting a few tails around to make that up by June. Especially if pax loads and yields fall by any appreciable amount, which is hardly unforeseeable.

As to perception, it's everything. A threat doesn't have to be that dire, or even real, for people to be afraid. People aren't rational. They see some scary videos on YouTube and that's it. Then they go out to carry on dying by the millions of preventable heart diseases.

Air Canada was the world's best airline stock two months ago. Now it's the worst.
---------- ADS -----------
  
I’m still waiting for my white male privilege membership card. Must have gotten lost in the mail.

tbayav8er
Rank 3
Rank 3
Posts: 116
Joined: Wed Jan 15, 2014 3:47 pm

Re: Grab a seat. The music is stopping

Post by tbayav8er »

I mean the coronavirus situation is definitely quite serious, with 2800 people having died so far. It's not my intent to downplay the severity, however, as of last week, 14 000 people had died this winter in the US from the flu. It's obviously having a negative impact on the market (more than I would have expected), but I don't think this correction in the market will be long lasting. I think for North American operators, it will have an impact on routes to/from Asia, and will hurt earnings this year, but I don't think it's going to be long-lasting with a negative impact on job creation for pilots....In North America anyways.

Also, unlike something like Ebola, Coronavirus currently has a mortality rate of about 5% so far (which, granted, is way higher than the normal seasonal flu).....Between 2014-2016, the mortality rate of Ebola was about 50%.
---------- ADS -----------
  

hithere
Rank 4
Rank 4
Posts: 237
Joined: Mon May 08, 2006 8:05 am

Re: Grab a seat. The music is stopping

Post by hithere »

I’m only referring to pilot movement/flight crew hiring etc but in all other previous recessions, pilot hiring ground to a halt as airlines stopped expanding or parked aircraft. However the current environment differs from the past(at least in the AC world which let’s face it, is the biggest driver in pilot hiring in Canada anyway) in that even if AC did not grow one more route, their massive wave of baby boomer retirements will still require unprecedented numbers of new hire pilots. This is unlike anything we have seen before. The last time we saw such new hire requirements was in the late 1970s/early 1980s during deregulation but that was entirely due to growth and not due to retirements. This is why, for the first time in over 30 years, I would encourage someone to get into the industry.
---------- ADS -----------
  

derateNO
Rank 4
Rank 4
Posts: 288
Joined: Mon Feb 10, 2020 10:15 pm

Re: Grab a seat. The music is stopping

Post by derateNO »

Also if things slowed down, you'd probably see a lot of people bid into positions like the vacant WB FO jobs. So that by default would create a big trickle up effect.

Also with over 900 vacancies right now, I don't really see it slowing down much. Now that is looking out a year, but even if half of those were just to fill positions we need now (especially the 787 and 320FO in YYZ) that still means more hiring.

150-200 retirements a year from now till 2030. Most of which are WB CA jobs which again will create a large trickle upwards.

I'm not worried in the least.
---------- ADS -----------
  

User avatar
cjp
Rank 1
Rank 1
Posts: 38
Joined: Tue Mar 06, 2018 9:16 am

Re: Grab a seat. The music is stopping

Post by cjp »

Great timing for ACPA to start negotiating their 2020 opener...

Can we all say, arbitration?

Colice.
---------- ADS -----------
  

derateNO
Rank 4
Rank 4
Posts: 288
Joined: Mon Feb 10, 2020 10:15 pm

Re: Grab a seat. The music is stopping

Post by derateNO »

It's a cost neutral opener. We don't have to do shit if we don't want to.
---------- ADS -----------
  

User avatar
Old fella
Rank 10
Rank 10
Posts: 2018
Joined: Mon Jan 29, 2007 7:04 am

Re: Grab a seat. The music is stopping

Post by Old fella »

FWIW I(we) plan to proceed with our travel plans this coming year and can speak on behalf of a good many who plan same( sun destinations, cruises, European etc.). The music continues for us 🍾🍾
---------- ADS -----------
  

User avatar
cjp
Rank 1
Rank 1
Posts: 38
Joined: Tue Mar 06, 2018 9:16 am

Re: Grab a seat. The music is stopping

Post by cjp »

derateNO wrote:
Thu Feb 27, 2020 8:09 pm
It's a cost neutral opener. We don't have to do shit if we don't want to.
🤞🏻 Hopefully you guys can make big steps forward regardless of a slight downturn in the economy based on very recent performance.
---------- ADS -----------
  

dhc#
Rank 5
Rank 5
Posts: 394
Joined: Sun May 05, 2013 7:38 am

Re: Grab a seat. The music is stopping

Post by dhc# »

---------- ADS -----------
  

rudder
Rank 10
Rank 10
Posts: 2057
Joined: Wed Mar 08, 2006 12:10 pm

Re: Grab a seat. The music is stopping

Post by rudder »

It seems like everybody forgot what SARS looked like and how it affected the industry.

This has the potential to be larger.
---------- ADS -----------
  

mixturerich
Rank 4
Rank 4
Posts: 263
Joined: Mon Apr 13, 2015 7:04 pm

Re: Grab a seat. The music is stopping

Post by mixturerich »

Say goodbye to that pilot shortage for a while. This is serious. The stock numbers are very telling, and it’s only getting started.
---------- ADS -----------
  

goingnowherefast
Rank (9)
Rank (9)
Posts: 1825
Joined: Wed Mar 13, 2013 9:24 am

Re: Grab a seat. The music is stopping

Post by goingnowherefast »

SARS happened shortly after 9/11. There weren't any pilot jobs already. As was said before, AC has 900 vacancies, WJ has a lot as well. Jazz and Encore are feeding both despite their own shortages. Then there's all the smaller carriers. There's probably 2000+ pilot job openings available today in Canada. That's probably 3000 more job openings than there were available when SARS hit.

The majors can't freeze hiring when they're this far behind and retirements putting them even further behind.
---------- ADS -----------
  

7ECA
Rank 8
Rank 8
Posts: 913
Joined: Thu Jul 03, 2014 4:33 pm

Re: Grab a seat. The music is stopping

Post by 7ECA »

goingnowherefast wrote:
Fri Feb 28, 2020 7:09 pm
The majors can't freeze hiring when they're this far behind and retirements putting them even further behind.
Says who? What happened when 9/11 hit - retirements slowed significantly while people hung on. Forecasts have airlines, globally, taking a $30 Billion dollar hit due to COVID-19. Doesn't necessarily mean big red or team teal will shut down, but any means, but it will have an impact on the industry.

As mentioned in another thread, there's no way in hell the global industry is going to wake up one day and say "well, we're going to shut things down for 14 days or so, and see what happens". Air travel certainly helps any contagious disease have more freedom to spread, but being how connected people are regardless of air travel just means it'll get there eventually. Look at Europe, you can travel through numerous countries in a day or two via rail or road - shutting down the airports just slows the large leap and bound spreads that will instead occur more slowly...
---------- ADS -----------
  

derateNO
Rank 4
Rank 4
Posts: 288
Joined: Mon Feb 10, 2020 10:15 pm

Re: Grab a seat. The music is stopping

Post by derateNO »

7ECA wrote:
Fri Feb 28, 2020 7:17 pm
goingnowherefast wrote:
Fri Feb 28, 2020 7:09 pm
The majors can't freeze hiring when they're this far behind and retirements putting them even further behind.
Says who? What happened when 9/11 hit - retirements slowed significantly while people hung on. Forecasts have airlines, globally, taking a $30 Billion dollar hit due to COVID-19. Doesn't necessarily mean big red or team teal will shut down, but any means, but it will have an impact on the industry.

As mentioned in another thread, there's no way in hell the global industry is going to wake up one day and say "well, we're going to shut things down for 14 days or so, and see what happens". Air travel certainly helps any contagious disease have more freedom to spread, but being how connected people are regardless of air travel just means it'll get there eventually. Look at Europe, you can travel through numerous countries in a day or two via rail or road - shutting down the airports just slows the large leap and bound spreads that will instead occur more slowly...
Retirements based on 65, show a minimum of 100 per year for the next decade with many years well above that.
---------- ADS -----------
  

GhostRider6
Rank 3
Rank 3
Posts: 104
Joined: Sat Feb 25, 2017 9:14 am

Re: Grab a seat. The music is stopping

Post by GhostRider6 »

I’m not personally worried about the Coronavirus. The flu is far deadlier.. Each year, the CDC/ WHO/ health authorities warn of how bad the flu season is forecast to be. People don’t stop traveling...

I think it will be interesting to see how current dynamics in the industry play out.

With this being said, we have a cyclical industry and I think each slowdown since 9/11 has had a major commonality : experience levels required increase and wage and working conditions decrease and never truly rebound. These slowdowns have manufactured the consent for further denigration of working standards by employers.

Similarly, the media and elites love injecting sensationalism and good doses of fear and hysteria is into society. I see this playing out currently and that is my worry. - look at what can be historically justified with sensationalism, fear and hysteria !

To me, at minimum, this virus has the potential to further degrade conditions in our industry. ( In my opinion) I’m basing that off of the current climate of fear in the markets and society as a whole. I think it’s going to get rough.

This is my opinion.. I’m no expert.
---------- ADS -----------
  

North Shore
Rank Moderator
Rank Moderator
Posts: 5404
Joined: Mon Feb 16, 2004 3:47 pm
Location: Straight outta Dundarave...

Re: Grab a seat. The music is stopping

Post by North Shore »

goingnowherefast wrote:
Fri Feb 28, 2020 7:09 pm
SARS happened shortly after 9/11. There weren't any pilot jobs already. As was said before, AC has 900 vacancies, WJ has a lot as well. Jazz and Encore are feeding both despite their own shortages. Then there's all the smaller carriers. There's probably 2000+ pilot job openings available today in Canada. That's probably 3000 more job openings than there were available when SARS hit.

The majors can't freeze hiring when they're this far behind and retirements putting them even further behind.
When I was doing my PPL, back in the early 90s, a couple of my instructors were on layoff from Air Canada; also, IIRC, Air Canada was laying off people in YWG with 10 years of seniority...never underestimate the power of the dark side.
---------- ADS -----------
  
Say, what's that mountain goat doing up here in the mist?
Happiness is V1 at Thompson!
Ass, Licence, Job. In that order.

User avatar
'97 Tercel
Rank 7
Rank 7
Posts: 507
Joined: Fri Jul 19, 2013 5:19 pm

Re: Grab a seat. The music is stopping

Post by '97 Tercel »

Image
---------- ADS -----------
  

Post Reply

Return to “General Airline Industry Comments”