Originally Posted by
Numero Crunchero
Yeah on an update they have said the WEF date is now 30Sep20.
Yeah maybe it was obvious to others that this was just a long term money grab - but my initial instinct was that any VR or ERS scheme costs money in the short term but saves money in the long term. But after doing a little 'back of the fag packet' this ERS costs nothing at all other than bringing expenses forward from say end of April next year back to 30 Sep this year.
Now to put this into more perspective - my best guess is that there was $10-15B in cash by the time the government bailout happened. Add another $39B - total today of say $45-50B.
SLS 2, assuming 100% uptake by pilots, would have saved around $200-250M. (I don't know what the uptake rate was - but clearly not 100% because of the freighter).
If 100 pilots take ERS let's say $100-200M in salary&benefit payments brought forward from Oct20 -Apr21. So basically, we have funded our own ERS.
If all Hong Kong pilots worked for free - we would go from losing $1.5B a month to losing about $1.15B per month.
Net conclusion of all the previous numbers I have just thrown around? Deck chairs on the titanic metaphor springs to mind.
With the exception of a few dozen 777 pilots going to the 747, the Company is not conducting training to get ahead of the seemingly very slow recovery. Clearly, the A350 will be deployed entirely before the 777 is brought back in a meaningful fashion. Therefore, it would make sense to me to start training A350 crews sufficiently senior to backfill those who may be made redundant. I believe we have 1000-1500 too many pilots for the foreseeable future.
Why isn’t the Company setting itself up for furloughs? Are they just planning to pay everyone until the money is gone and claim they did their best via SLS, VR, and pay cuts for based pax crews? It makes no sense and seems they are waiting for visibility that is not necessarily forthcoming. Put another way, it’s a massive gamble (we know they are capable of gambles via the fuel hedging debacle, 30B+ HKD disappeared from the CX ledger). They are betting the entire airline on a travel recovery that isn’t materializing thus far.