Probability of BK within the Airlines

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SWAMECH

Senior
Apr 26, 2005
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I suspect it's just a matter of time before job losses start in earnest. Wages aren't keeping up with inflation, which inevitably leads to less discretionary spending. That has a ripple effect on airlines, hotels, and cruise lines. There's a lot of pent up demand from people who couldn't vacation like they did in 2019, but I don't see that continuing into 2023.

I just saw where one of the largest aluminum plants in the country (20% of present capacity) is shutting down for at least a year because of energy prices. They won't be the only manufacturer to pull back -- certainly companies that needed that aluminum will see cutbacks.

I've seen two local restaurants call it quits over their food price increases and staffing headaches. I've seen a couple franchises close down as well, presumably for similar reasons.
It's happening here as well E. WE have had several small and even a few big name, long time restaurants close their doors here in the DFW metroplex for the same reason of cost of food and supply going so high. The discretionary spending has also started as reported in the news a couple days ago, so now it's being seen and reported by many businesses.
 

eolesen

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Jul 23, 2003
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The easing of inflation pressures is giving the economy breathing room, for now
Instead of going up from X%, it's staying up at X%+.....

Yippee.

We're still being choked by rising prices... But at least the amount of pressure on our necks hasn't increased from a month ago..........
 

WeAAsles

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Oct 20, 2007
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Instead of going up from X%, it's staying up at X%+.....

Yippee.

We're still being choked by rising prices... But at least the amount of pressure on our necks hasn't increased from a month ago..........

I didn’t write that headline but absolutely yes if you don’t have certain costs as locked in as possible people are likely getting crushed. This says real wages are down 3.6% Excluding Food and Energy. Housing, Food and Energy are most peoples largest expense. Rents here in S Florida for instance depending on what you read are up between 35% and 55% since last year. And Housing and mortgage rates are way up as well. So I’m not really buying the 9% inflation and wages only down 3.6% line.

Again though your personal debt depends on if you payed attention during the days of wine and roses and didn’t get too far ahead of yourself.

 

topDawg

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Nov 23, 2010
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You’re the one chasing me around these boards. It’s not the other way around. And you have all those degrees but you’re still doing a blue collar job. Highly skilled I’m sure but you don’t have the capital that Mr Wonderful or Lee has. You don’t. That’s a fact.
Chasing you around? Dude. I don't know if you have noticed but there are like 6 post a day here.....on the entire site.
But if I see anyone saying things that are right, i tend to comment on it. I didn't know ONLY American employees can speak to you. Can you show me that in the rules?

and you like to make some drastic assumptions about me.
You’re also the one who said you didn’t want to go through another Bankruptcy. You have ZERO control over that. Completely and totally beyond your control or that education. I’m cool with it if they do. I’m absolutely not shivering in fear.
So few things. No I don't have ZERO control over that. I have very. very. very. very. little control, correct but I can do things that help the company without hurting myself or others. Cent here, cent there add up.

but I don't wanna do another bankruptcy doesn't = "shivering in fear"
Are you saying you want to go through another bankruptcy and/or don't care if you do?
And yes I love my Union. So what is that to you? I know many of those guys and I like and respect them. I also think they like and respect me. I could care less if you don’t like or want a Union. I’m not coming to the Delta threads or Facebook pages much anymore. Unfortunately that’s nothing but an unending Hamster Wheel. I got too dizzy for the ride.
So two things.
What's it to me? nothing unless you are belittling others while posting things that are wrong and or you don't know what you are talking about.
second thing, what Delta threads?
BTW you wished for the old guys to come back. They won’t be coming back because it’s likely quite a few of them have died. Many were quite a bit older than me the first time I came here so it just stands to reason many have passed on.
Or some people have ran them off with constant TWU/American/Delta ass kissing.
And BTW I’m also not obsessed with Politics but you’ve made some sort of assumptions there too. FYI not all Union supporters are Liberals or automatically vote for someone with a D or an R on their hat. You can go up to the Water Cooler if you want to bat all that crap around though. Not my interest.
I haven't made any assumptions. Haven't said you are believing what he has had to say about it or not. I do find it ironic you are posting quotes from a fed chair on the matter when its fairly well known the Fed has just become yet another partisan arm of the government. (no matter what part is in control)

Although the "two-quarter" definition is handy for analysts, journalists and the general public, it is not how economists think about business cycles.

That's partly because GDP is a broad measure that can be influenced by factors like government spending or international trade. And the first read on it from the Commerce Department's Bureau of Economic Analysis is often revised quite substantially, and should - as Federal Reserve Chair Jerome Powell noted on Wednesday - be taken with a grain of salt.
except it is. As I say below, I'm not looking at it in a vacuum. I posted several other signs pointing to it as well.

ARE RECESSIONS ALWAYS TWO STRAIGHT QUARTERS OF FALLING GDP?​

Usually, but not always.

For example, GDP in 2001, after revisions, fell in the first three months of the year, rebounded in the next three months and declined again in the fall.
So I'm confused and maybe I a misunderstanding. Are you (and/or your source) saying we didn't go into a rescission in the second half of 2001?
because unless you are going to call it a depression, which without WAR! ALL THE WAR! would have probably be the case, we sure as **** were in a rescission in the second half of 2001. Its was trending that way for all of 2000/early 2001 but went into it hardcore at around 11am or so on 9/11.

either way, I'm not just looking at GDP. I am looking at several other things I said in my first post. Energy prices and housing prices are softening because someone is being nice.
I suspect it's just a matter of time before job losses start in earnest. Wages aren't keeping up with inflation, which inevitably leads to less discretionary spending. That has a ripple effect on airlines, hotels, and cruise lines. There's a lot of pent up demand from people who couldn't vacation like they did in 2019, but I don't see that continuing into 2023.

I just saw where one of the largest aluminum plants in the country (20% of present capacity) is shutting down for at least a year because of energy prices. They won't be the only manufacturer to pull back -- certainly companies that needed that aluminum will see cutbacks.

I've seen two local restaurants call it quits over their food price increases and staffing headaches. I've seen a couple franchises close down as well, presumably for similar reasons.
Already starting to see some of that. Other discretionary spending is starting to slow. Airlines are still living the dream right this second because of pent up demand. "I'll pass on buying this thing I don't need on amazon but I'm doing to Disney dammit I haven't been out of the house for 3 years" That will come to a huge stop come winter and id bet you see a huge YOY drop in leisure/VFR next summer. The big guys are just hedging their bets on corporate travel to rebound.

and the issue for airlines is a they are going to be getting hit from both sides. As you said, most people took a big pay cut this year due to inflation. Airline employees are wanting more money, and airlines are struggling to hire. Something has to change on that end as well.
The good thing is "well we will just outsource it" isn't really going to work cause venders and regionals sure as **** can't hire people and keep them.
My hope is airlines are going to be forced to bring more work in-house and the industry unions are smart enough to take advantage and get that work in writing.

The jobs market is way too hot as it is. The turnover we have at AA is thru the roof when it comes to jobs like FA’s, CSA’s and Ramp. They’ve raised the starting pay in many cities but absolutely not enough to offset the flow. Wages haven’t kept up but they have increased. But that also obviously causes a lot of the inflation. The Fed raising rates will eventually solve some of the problems but the question is will it be a hard or soft landing?

I agree with you that demand for air travel will soften some next year. It has to. People obviously are still flush with cash that they want to blow and thankfully for my industry they want to blow it on flying right now.

Energy prices have been falling under the pressure of inflation. WTI has even gotten close to $85BP before now being back up to $90. Some Gas stations here in S Florida have Gas down to $3.35. The economy should be able to handle prices in that range. Housing is also starting to move down but food prices are still through the roof. (Edit: Two Gas Stations at $3.19 per GasBuddy)

I just had a meal in a restaurant last night and it used to cost $13.95 before the pandemic. Now it cost $17.95 for the same meal. Luckily I can afford the price rises but the question is how long do I want to?
I think you might be looking a little too airline specific on the job market part. Airlines (and vendors) can't hire fast enough for sure, but we are already starting to see hiring slow and in some industries layoffs happen.

And if they really want to drastically slow inflation, the fed has to rase the rates to the point that it will cause a hard landing. I don't think they will because as I have said, it has become just another partisan arm of the government and no president right or left is going to get the Fed to do what is needed because it will be ugly for the polls. They will just keep kicking the can down the road hoping its the other guys team that is in the office when the shoe finally drops.
 

WeAAsles

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Oct 20, 2007
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Chasing you around? Dude. I don't know if you have noticed but there are like 6 post a day here.....on the entire site.
But if I see anyone saying things that are right, i tend to comment on it. I didn't know ONLY American employees can speak to you. Can you show me that in the rules?

and you like to make some drastic assumptions about me.

So few things. No I don't have ZERO control over that. I have very. very. very. very. little control, correct but I can do things that help the company without hurting myself or others. Cent here, cent there add up.

but I don't wanna do another bankruptcy doesn't = "shivering in fear"
Are you saying you want to go through another bankruptcy and/or don't care if you do?

So two things.
What's it to me? nothing unless you are belittling others while posting things that are wrong and or you don't know what you are talking about.
second thing, what Delta threads?

Or some people have ran them off with constant TWU/American/Delta ass kissing.

I haven't made any assumptions. Haven't said you are believing what he has had to say about it or not. I do find it ironic you are posting quotes from a fed chair on the matter when its fairly well known the Fed has just become yet another partisan arm of the government. (no matter what part is in control)


except it is. As I say below, I'm not looking at it in a vacuum. I posted several other signs pointing to it as well.

So I'm confused and maybe I a misunderstanding. Are you (and/or your source) saying we didn't go into a rescission in the second half of 2001?
because unless you are going to call it a depression, which without WAR! ALL THE WAR! would have probably be the case, we sure as **** were in a rescission in the second half of 2001. Its was trending that way for all of 2000/early 2001 but went into it hardcore at around 11am or so on 9/11.

either way, I'm not just looking at GDP. I am looking at several other things I said in my first post. Energy prices and housing prices are softening because someone is being nice.

Already starting to see some of that. Other discretionary spending is starting to slow. Airlines are still living the dream right this second because of pent up demand. "I'll pass on buying this thing I don't need on amazon but I'm doing to Disney dammit I haven't been out of the house for 3 years" That will come to a huge stop come winter and id bet you see a huge YOY drop in leisure/VFR next summer. The big guys are just hedging their bets on corporate travel to rebound.

and the issue for airlines is a they are going to be getting hit from both sides. As you said, most people took a big pay cut this year due to inflation. Airline employees are wanting more money, and airlines are struggling to hire. Something has to change on that end as well.
The good thing is "well we will just outsource it" isn't really going to work cause venders and regionals sure as **** can't hire people and keep them.
My hope is airlines are going to be forced to bring more work in-house and the industry unions are smart enough to take advantage and get that work in writing.


I think you might be looking a little too airline specific on the job market part. Airlines (and vendors) can't hire fast enough for sure, but we are already starting to see hiring slow and in some industries layoffs happen.

And if they really want to drastically slow inflation, the fed has to rase the rates to the point that it will cause a hard landing. I don't think they will because as I have said, it has become just another partisan arm of the government and no president right or left is going to get the Fed to do what is needed because it will be ugly for the polls. They will just keep kicking the can down the road hoping its the other guys team that is in the office when the shoe finally drops.

Dawg I’m going to say this politely but you got too much going on in your responses to tackle. I’m sitting on my couch with a phone listening to Steve Morse’s, High Tension Wires and not on a desk top like I was in the old days. I’m not even sure I remember how to pick apart the boxes for all those separate quotes anymore? And I honestly do appreciate you putting in all that work though.

But I’ll try to pick some pieces apart with a few sentences if you don’t mind.

I’d love to chat with you. I like hearing people opinions when they’re civil. If I feel they’re not civil though I’m going to bust chops. Call it a defense mechanism or the NYer in me.

On Bankruptcy or whatever comes yea I’ve reached the point of resignation. I don’t take care of anyone but myself and I doubt I’m going to wind up under a Railroad Bridge cause I do have my House (Condo) in order. I can easily afford to get by on much less than I’m getting now. That’s me though.

Delta threads, Delta Facebook pages, Delta Union Drives. I’m done trying. Like I said it’s nothing but an endless Hamster Wheel. The Hamster gets great exercise but looks hilarious every time it flies off the wheel.

On all the rest you wrote I absolutely don’t disagree. I just know I’m only an Ant on a surfboard so it’s kinda where I base my mindset and philosophy these days. Yea when AMR announced that big BK back then I did get some major goosebumps and thought about climbing out on the ledge. But that gave me the motivation to prepare in case that ever comes to pass again.

Airlines are a necessity. And ultimately people want to go places. Maybe we’re all too big to fail now? Did you know that AA pretty much got the same amount of cash from Uncle Sam in those PSP’s as they wasted on those share buybacks. Kinda seemed like a bit of a scam there. Hedge Funds got all that extra revenue from the Taxpayers and then the Taxpayers got stuck on the hook for double. And they’re still paying for it with inflation from all that Monopoly money printed.

The can down the road I’m most concerned about is Social Security. I don’t really want to take that 30% cut. I think eventually they’ll put the kids and grandkids on the hook for that since a lot of those Politicians are in our age ranges. The longer they wait the more painful it’s eventually going to be when they have to make those adjustments.

Sorry I missed a few things but my answers would have to come from speculating and I can only shrug my shoulders and say we’ll see what happens (More Money and more work in house) ?????
 

Kev3188

Veteran
Oct 5, 2003
18,401
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Right in the middle.
I didn't know ONLY American employees can speak to you. Can you show me that in the rules?

Any time a user tries to invoke the only XXX employees can comment on XXX threads, it's a tell that they've lost.

but I don't wanna do another bankruptcy doesn't = "shivering in fear"
Are you saying you want to go through another bankruptcy and/or don't care if you do?

The people that talk tough about BK are usually the first ones begging their coworkers to take concessions to "save the pension," or similar. It's all hot air...

Already starting to see some of that. Other discretionary spending is starting to slow. Airlines are still living the dream right this second because of pent up demand. "I'll pass on buying this thing I don't need on amazon but I'm doing to Disney dammit I haven't been out of the house for 3 years" That will come to a huge stop come winter and id bet you see a huge YOY drop in leisure/VFR next summer. The big guys are just hedging their bets on corporate travel to rebound.

Already seeing this on an anecdotal level.

The good thing is "well we will just outsource it" isn't really going to work cause venders and regionals sure as **** can't hire people and keep them.

That's really the only thing holding the line right now. Of course, JV unions would throw line station employees under the bus in a heartbeat, then talk about some "great contract" they signed for somewhere like McGhee.


My hope is airlines are going to be forced to bring more work in-house and the industry unions are smart enough to take advantage and get that work in writing.

We should be so lucky!

I think you might be looking a little too airline specific on the job market part. Airlines (and vendors) can't hire fast enough for sure, but we are already starting to see hiring slow and in some industries layoffs happen.

Yep. Seeing it in the IT & graphic design spaces quite a bit already.
 
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WeAAsles

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Any time a user tries to invoke the only XXX employees can comment on XXX threads, it's a tell that they've lost.



The people that talk tough about BK are usually the first ones begging their coworkers to take concessions to "save the pension," or similar. It's all hot air...



Already seeing this on an anecdotal level.



That's really the only thing holding the line right now. Of course, JV unions would throw line station employees under the bus in a heartbeat, then talk about some "great contract" they signed for somewhere like McGhee.




We should be so lucky!



Yep. Seeing it in the IT & graphic design spaces quite a bit already.

Your opinions have been and always will be irrelevant as to what Unions should do that might help you to achieve more. You’re nothing more than a free rider who has been riding coattails for more years than you haven’t been now.

The IAM owe you nothing anymore and the TWU never did owe you anything.

Now run off and go brown nose some little lowly CSM son. Chop Chop.
 

eolesen

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Jul 23, 2003
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I don't think Kev's airline has CSMs. Pretty certain he was in favor of remaining union when his airline voted it down?

Regardless, you might benefit from commentary outside your bubble...
 
OP
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SWAMECH

Senior
Apr 26, 2005
348
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Any time a user tries to invoke the only XXX employees can comment on XXX threads, it's a tell that they've lost.
So true. Along with spelling, grammar and punctuation corrections as a close second.
 

WeAAsles

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Oct 20, 2007
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I don't think Kev's airline has CSMs. Pretty certain he was in favor of remaining union when his airline voted it down?

Regardless, you might benefit from commentary outside your bubble...

Yes he was and that Kev left the building a very long time ago. And of course they have some form of managers whatever label they want to place in them, IE: Team Leaders.

And I gain lots of commentary from all over far outside Airline Forums.
 

WeAAsles

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Oct 20, 2007
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And back on subject. This bit of News as an early indicator does seem to bode well. The question being how much more aggressive does The Fed feel he’s going to need to be if the air is coming out of the balloon? WTI for Sep and Oct down to $87 and $86 right now.

“U.S. freight rates increased 28% year over year, but declined almost 2% month over month in July, a likely signal that the U.S. market has reached peak freight rates, according to the July Cass Freight report, just as peak shipping season encompassing both back-to-school and the holidays begins.

“We’re coming into this peak season with much more free capacity. I think that’s going to be a good thing from a cost perspective for those big retailers who have been struggling with a lot of cost inflation,” Cass Freight report researcher and author Tim Denoyer told CNBC”


U.S. freight rates have likely peaked in another sign that inflation is easing
https://www.cnbc.com/2022/08/15/us-freight-rates-have-peaked-another-signal-inflation-is-easing.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard
 

Kev3188

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Oct 5, 2003
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Right in the middle.
Pretty certain he was in favor of remaining union when his airline voted it down?
Correct. And would be first in line to vote yes again for a union that figures out that it’s 2022, not 1996.

Right now, no one is offering up a model my coworkers (collectively) want to help build.