Bailouts are preventing layoffs now but that restriction ends in September. Modeling shows a best case return to flying at 10% reduced capacity but more likely 25% reduced capacity through the end of the year and into next. Listen carefully when Ben and Brad say that we will emerge as a smaller airline. Layoffs are inevitable. Smaller airline, smaller workforce.
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no one is flying until 2021. Surprised there are even planes in the air other than for emergencies and cargo.
No company wants to be the first to furlough but it’s going to be inevitable. How deep the cuts go is still to be determined. How long the furloughs will last will be longer than most would want. Nobody is flying. Everyone is scared to fly. This will be a slow process to turn around.
Govt will own a small percentage of American and others. Coming to an airline near you.
Pretty much every airline has been downgraded.
DL: BB+
AA: B
B6: BB
WN: BBB
UA: BB-
AS: BB+
So really, the only one better positioned is WN. Most analysts put WN and AS as the best positioned to get through this.
RAVN already shuttered. Some of the other small airlines probably also not going to hold up well. AA not in a great cash position.
Regarding AS being bloated, definitely not. Those aircraft are mostly unencumbered. That's capital that can be leveraged for loans. And the labor costs are way down due to contractor terminations, front line voluntary leave, and government assistance. Executive team are now openly talking about furloughs in Oct. So, AS will survive, will appropriately downsize, leverage assets, and come out of this a little smaller but more strongly than most other airlines. And that means opportunity for new markets. This will bode well for AS in the 5-10 time frame for sure.
ALK is junk bond status today BB+ . Lost its investment-grade (IG) status!
Alaska has 3-4 months of cash like most other US airlines. No summer bookings! Govt will save big three (Delta, United and America).
Do you think Jet Blue, Spirit, Allegiant, Hawaiian, Frontier, Southwest will all survive intact? Who is the weakest?? Who is best for consolidation? ALK is too bloated with aircraft and employees.