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Author Topic: Continental Layoff
robw
Fourm Captain
Member # 75

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Continental is eliminating about 20% of it's flights, and is begining large layoffs. However, NPR is reporting that the Government may consider some kind of financial help for the airlines.

CO anounced that bookings were already down before this week and now bookings are non-existant.


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ss278
Post Captain
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I heard an interview with Gordon last night wherein he said that 50% of current confirmed bookings for the next three months were cancelled, "virtually overnight", and that new bookings were nonexistant.
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rampguy
Post Captain
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And according to my inside source (my son), Continental has withdrawn the sale of Continental Express. Probably couldn't get much for it right now anyways.
Posts: 137 | From: Tulsa, Ok USA  |  IP: Logged
acvitale
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Rumors on CO CLE shutdown...

1. Apprx half of CLE rampers and Ticket agents gone.
2. CLE will go to apprx 33 daily jet flights and apprx 108 daily express flights.

3. Concourse D will be closed, all flights will operate out of concourse C.

4. All DC-10's and MD-80's grounded.

5. CLE-LGW route among others gone.


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rampguy
Post Captain
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quote:
Originally posted by acvitale:
Rumors on CO CLE shutdown...

1. Apprx half of CLE rampers and Ticket agents gone.
2. CLE will go to apprx 33 daily jet flights and apprx 108 daily express flights.

3. Concourse D will be closed, all flights will operate out of concourse C.

4. All DC-10's and MD-80's grounded.

5. CLE-LGW route among others gone.


What is your gut feeling about load factors heading into thanksgiving. I kinda feel that all of this is kinda like the leak in the dam. Passengers will be a trickle at first and progressivly get bigger and bigger although I recognize it will take more than one holiday to get back to normal. I'd like to have your opinion on this as I do respect what you have to say. Also, I would like Bob Herbst O also.


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Bob H
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quote:
Originally posted by ramp guy:
I would like Bob Herbst O also.

RG-

Since you asked-

AND IMO..

With the expected route, city, ASM etc. reductions and eliminations, the LF's (directly related to available capacity) will probably build back up to "normal" historical levels as we approach the holidays.

Between Labor Day and Thanksgiving and again mid Jan towards Easter the airlines **ALWAYS** experience low LF's.

In my 27 years of watching the industry, every October, airline employees start to wonder how we can continue operating without passengers (low LF's). You can check the historical "numbers" for all airlines to verify this.

Obviously the tragic events of this past week add dynamics that no one has ever experienced or been forced to deal with.

I could spend many pages expressing industry analysis, opinions etc. on the industry both historically and what my expectations are.

Anyone who's read my comments from the past know that I've made it no secret that 3-5 years from now I expected large reductions (furloughs, consolidation etc.) specific to the airline industry.

IMO, there were two primary reasons for my "expectations".

  • Labor cost increases, starting with UAL's pilot contract were going to add in excess of $1 Billion annually to the total salary/benefit expense for AA, UAL & DAL.

    As a percentage of gross revenues, salary/benefits were going to exceed 40% for most of the major airlines. A historical review will, IMO, show that there must be a balance between.. revenues, labor and fixed expenses. For success, this balance dictates that salary/benefits cannot exceed (approx) 37-38% of gross revenues (much less for the smaller lower fare carriers).

  • Through the 90's, the industry experienced record growth in ASM's, fleet expansion, employee additions etc.

    This APPARENT growth was in large part specifically related to the very large "wealth factor" directly related to financial markets, (similar to Japan's in the 80's).

    This "wealth factor" was ARTIFICALLY expanding the US economy to the explosive limit, which as we all know, imploded in March of 2000.

    The resulting effect of this "financial market" implosion was the inevitable slowing of our entire global economy.

    Just as the "tech" industry built up for the continued record growth the airlines expanded to record levels which were far to excessive to justify on any long term basis.

    The events of last Tuesday will immediately force the airline industry (and employees) back to **HISTORICAL** reality.

    As a side comment..

    In just the past decade, many airlines have doubled in size, including employee staffing .

    When compounding the vast number of pilot retirements with new hires required from record growth it *FELT* normal to upgrade to bigger aircraft, captain seats and overall seniority in "historically record" time.

    In 1969, UAL ran full page adds for "private" pilots with a college education and UAL would pay for the rest of their flight training.

    Only a few months later, the early 70's saw every airline furlough thousands of pilots. To even get interviewed, (one) airline hiring in the mid-70's required you to be a graduate of West Point, Annapolis or the AF Academy with 1200 hours of jet time.

    Through the 70's & 80's those of us still here experienced the failures and near elimination of not only large carriers (Eastern, Pan AM & Braniff) but also hundreds of medium and smaller airlines failed or were consolidated into the stronger carriers.

    30 years after UAL would hire a private pilot, (1999) airlines were AGAIN lowering minimum hiring standards, applicant pools were getting very low, record hiring etc. etc.

    30 years after the 1971 airline industry cutbacks, furloughs etc. began we are now once again repeating history!!

    Sorry for the rambling-

    Bob H

    [ 09-17-2001: Message edited by: Bob H ]


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  • bayman
    Junior Poster
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    >Labor cost increases, starting with UAL's pilot contract were going to add in excess of $1 Billion annually to the total salary/benefit expense for AA, UAL & DAL.<

    Bob,

    Some of these increases may become a mute issue if AA and UAL face bankruptcy considerations as the result of recent events.

    As TWA and Continental pilots are well aware, contactual provisions have a way of disappearing in times of financial crisis and lower wages at the mega carriers could put pressure on others in the industry to remain competitive.


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    gt66k
    Post Captain
    Member # 223

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    Iam dismayed and disgusted at Continentals Layoff.Their CEO shows his true lack of patriotism and understanding of what is required from a country and its people and corporations during war.
    What do you think the US citizens whould have done IF on Dec 11th General Motors anounced a layoff of 20% because "people are not buying cars".
    Mr. Bethune compounds the terror by adding 12000 more to a casualty list.He couldn't even wait for the dead to be found and laid to rest.It is a sorry display of "corporate patriotism".

    Posts: 328 | From: Bridgeton MO  |  IP: Logged
    robw
    Fourm Captain
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    Well, now US Airways has announced a layoff of 11,000.00.

    One would hope the layoffs could be delayed, but U must be getting hammered with National still not open. With U's VERY high cost structure, I actually expected them to be the first to scale back.

    I don't know what I would do if I was a CEO in this situation. Lay off employees, or wait to see what happens. If the situation continues to deteriorate, it becomes an issue of scaling back, or going under.


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    rampguy
    Post Captain
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    quote:
    Originally posted by gt66k:
    Iam dismayed and disgusted at Continentals Layoff.Their CEO shows his true lack of patriotism and understanding of what is required from a country and its people and corporations during war.
    What do you think the US citizens whould have done IF on Dec 11th General Motors anounced a layoff of 20% because "people are not buying cars".
    Mr. Bethune compounds the terror by adding 12000 more to a casualty list.He couldn't even wait for the dead to be found and laid to rest.It is a sorry display of "corporate patriotism".

    I gotta think GB is wanting to preserve something so that those that are layed off will have a company to come back to. I would rather be layed off now than stay employed for 2 or 3 months then permanently lose that same job. That is the kind of patriotism that won't fly.

    [ 09-18-2001: Message edited by: rampguy ]


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    gt66k
    Post Captain
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    I don't doubt there will be jobs lost in these trying times.
    Timing is everything they say, and imho GB's "timing" smacks of opportunism of the worst kind.The public needed to see confidance not more colapse from corporate America.Waiting a week or so....we will never know.

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    G4G5
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    I give GB a lot of credit for ANNOUNCING(nobody's gone, yet), layoffs. With everything that is currently going on, he had to get the financial viability of the nations carriers to the forefront of congress's financial bailouts. It would have been easy to wait a month and then scream for help. Who knows where the funds would be in a month, insurance company bail outs, invasion funding, it's anyone's guess? If GB is successful in his efforts, he may have succedded in saving a tremendous amount of jobs. Just another reason why he the industries top CEO.

    Let's hope the dollars start coming and soon. Call your Congressman and let him know that you support the supporting funds.


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