Wednesday, August 06, 2008

The Highs and the 'Loughs

Has it really been six weeks since the last post? The last time I posted, the sims were just about over. The oral and check ride (L.O.E. - Line Oriented Evaluation) went fine and, after a few more weeks of waiting, O.E. was scheduled and completed.

That's the Cliff's Notes version. Now the meat and potatoes.

A few posts back, I mentioned the volatility in the airline industry and how it could affect things in the coming months. Well now that we're in the middle of the coming months, things have started to take shape. For better or worse.

One day, the last week of June, a sudden message was released from the company. Effective immediately, all new-hire interviews were canceled. Not only were interviews to be canceled, all new hires were to be placed in a hiring pool and classes were canceled too. The next news was the announcement of a major decrease in block hours for the fall. Instead of projected increases, the company was facing a severe decrease and staffing reductions would be forthcoming.

So in the matter of a few weeks, we went from projected hiring of 400 to furloughing of up to 300. Just like that.

Oil had reached nearly $150 per barrel. Merging airlines were getting nervous. A regional airline that had lost a major Embraer 145 contract won a temporary injunction to continue the contract until a settlement or court decision could be reached. There were many factors.

Furloughing is a messy business. In order to begin the furlough process, staffing levels for captains and first officers in each aircraft need to be projected. Once that is done, a displacement bid is issued for the number of seats affected. Everyone bids. It's kind of like musical chairs. Junior captains that aren't displaced to another domicile are downgraded to first officers. Line holding first officers are downgraded to reserve. When the music stops, it's the junior first officers that are left without a chair.

Once the bid "award" is released, everyone finds out their fate. Last week the music stopped and the "award" showed the bottom 90 first officers to be furloughed effective September 1st. More were expected to be announced soon for October 1st.

Fast forward to last Friday. At the close of business, a brief memo was posted on the company intranet. The displacement bid and award was canceled. If the displacement was canceled, that would mean furloughs were canceled. The memo was vague.

Monday morning, the rumors started flying. The gist: expect good news from the company before close of business. By mid morning, the parent company announced the cancellation of a contract with the same regional partner that it had canceled another contract with earlier this year. This time, it was for CRJ-900 aircraft. The difference this time is that the aircraft are owned by the airline we contract to.

Tuesday, the news was official. Our airline would be awarded the CRJ-900's. Our 50 seat aircraft flying was still being drastically reduced, but the amount of furloughs was expected to be reduced significantly. If there are any furloughs, they won't be expected until October.

Although this is good news for my airline, it's not new flying. It's replacement flying. I would much rather hear good news for everyone involved. I wish the best for my fellow brothers that have already been furloughed.

The price of oil has come down $30 per barrel. Today it closed at $118 and change. Technical analysts say a key support level is $117. If it breaks that, it could go back down near $100. Of course, violence in the Middle East, a category 5 hurricane in the Gulf of Mexico or a variety of other factors could easily take it to $200. With long term futures contracts still trading around $100, it appears that oil is never again going to be a bargain. Here's hoping that new synthetic jet fuel technology, along with new geared turbofan technology is as promising as it sounds.

Everyone strap in, it's going to be a wild ride.

2 comments:

Windsor said...

Glad to hear you survived the potential ax. How are you liking the -700?

JAFP said...

Windsor,

It's good to feel safe for now, but it means that someone else will be losing their job. Wish it was new growth.

I like the 900 better than the 700. It has a dual FMS setup and climbs like crazy. 88 seat power configured for 76 seats is very nice.

I haven't been blogging much and will stop by yours to see what's up with you. Good things, I hope.

Mike