GILD COVID-19 Drug Remdesivir Cleared by FDA

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The FDA has cleared Gilead Covid-19 drug, Remdesivir, for treatment. This is a positive news for the airline industry. Since the shutdown, the airlines has taken a huge toll. Its employees have been furloughed and the its profits has been long gone. Each airlines is losing billions of dollars per month since the pandemic has started.

However, considering the easing of travel restrictions and allowing businesses to open back up, there is hope that the airlines will bounce back in 2021. It may not return to 2019 level for a couple more years but a recovery is a positive news. It certainly provides hope to the thousands of airlines employees who have been put to the side line since October 1st. While, Remdesivir is not a vaccine, it is a positive catalyst in fighting against coronavirus. President Trump was recently diagnosed with COVID-19 and was treated with Gilead’s drug.

If Remdesivir is highly effective for covid-19 patients who require hospitalization and then there is a vaccine, then it provides ways that we can fight the virus for both healthy people and people who are severely affected by Covid-19.

On another note, recently, the TSA Traveler count hit its all time high since the pandemic started, at 1 million passengers in one day. That is 39.5% of previous year’s number. Delta Air Lines, Southwest Airlines, United Airlines and American Airlines have all released their 3rd quarter earning’s number. While the toll from covid-19 continues, the airlines has seen lower cash burn rate and each expected to burn less cash going in to the final stretch of 2020. American Airlines will be sending their pilots to training on the Boeing 737-800-Max starting in December. While the aircraft is still awaiting for approval from the FAA, the European counterpart of the FAA has approved the Max for flying.

So let’s keep our hopes up that the airlines will recover quicker than expected.

1 million passengers traveled through TSA checkpoint

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On October 18, 2020, TSA checkpoint travel numbers for 2020 showed 1,031,505 passengers has traveled through their checkpoints in one day. That is 39.5% of previous year on the same weekday. That is a huge mile stone since the shutdown back in March-May. While thousands of airline employees including pilots and flight attendants have been furloughed, the recovery from the coronavirus is still ongoing.

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6,391 Legacy Airline Pilots Will Be Furloughed Starting In October

Photo by JC Gellidon on Unsplash
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With empty seats and flight reductions, airlines are facing difficult challenges to keep their airlines operating through this pandemic. One of the options that they are forced to do now is furloughing their junior pilots and frontline employees. The big three legacy airlines, American Airlines, Delta Air Lines and United Airlines have all announced and sent out their furlough notices to their employees including pilots. Below is a breakdown of the estimated total number of pilots at each airlines and the number of pilot furloughs that they have announced so far.

The numbers below are only for the big three carriers. It does not include all of the low cost carriers and regional carriers that have sent out their WARN notices to their pilots last month with the intention to furlough them in October. It also does not provide numbers for the other airline frontline workers such as Flight Attendants, Ground Personnels, Customer Service Agents etc. To reference the previous article on WARN notices that were sent out or announced by all the airlines including the regional carriers, click here.

Each of those carriers have offered some type of early retirement options to their senior pilots to mitigate junior pilot furloughs. So the total number of pilots can be inaccurate. However, it is safe to say, that most of these airlines had at the most 2,000 pilots who took the early out option.

Pilot Furloughs For Big 3 Carriers
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How long will the pilots and airline employees be furloughed? That’s a tough call. It depends on whether or not the Cares Act Extension but also the continuous effect from the pandemic on our society and the potential cures or therapy or vaccines that will be coming out hopefully sometime this year or next year. In the past, the furlough recalls can be on average 12 to 18 months. Let’s hope it will be much much less than that for all employees.

One thing that is certain is that this furlough, this time, is much different than in the past. Previous furloughs, pilots could look for jobs at the regional carriers or oversea carriers. Right now, there is not a single airline or company that could absorb the number of pilots who will be out on the street starting in October.

There is one option that airlines could mitigate furloughs for junior pilots. It’s called a Reduction in Average Line Values(by 5 or 10 hours per pilot per month) but paid at the current rates. Of course, some people think it’s a concession. I think it’s because that’s not what it’s always been done.

Potential Pilot Furloughs Update

Percentage of Potential Pilot Furloughs
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Trans States Airlines became the first to shut its door in April due to the effect of the pandemic on US economy. HQ in Bridgeton, MO. It transported 3.5 million passengers annually. It had 47 E145s. Trans States had about 603 pilots.

Compass was the second US Airlines to shut its door. HQ in Minneapolis, MN. Founded in 2007. It had 581 pilots.

ExpressJet could be next to shut its door with the recent announcement by United Airlines to cancel their contracts by year end. It has 1,375 pilots.

Here are a list of current airlines that have sent WARN letters to their pilots to warn them of the potential furlough as of October 1st.

  1. United Airlines 3,900 Pilots (Total 13,300 Pilots)
  2. Delta Air Lines 2,500 Pilots (Total 14,600 Pilots)
  3. American Airlines 2,500 Pilots (Total 15,176 Pilots)
  4. Allegiant 275 Pilots (Total 1,021 Pilots)
  5. Repuplic Airways 933 Pilots with 400 Captain Downgrades. They’re closing their IAH and MCI crew domiciles (Total 2,461 Pilots)
  6. Hawaiian Airlines 15-25% of Pilots (Total 864 Pilots)
  7. Spirit 20-30% of Pilots (Total 2,598 Pilots)
  8. Frontier 500 Pilots (Total 1,493 Pilots)
  9. Piedmont Airlines 15% of Pilots with 40 Captain Downgrades (Total 746 Pilots)
  10. PSA 730 Pilots with the closure of TYS and ORF domiciles. (Total 2,041 Pilots)
  11. Envoy 350 Pilots (Total 2,500 Pilots)
  12. GoJet 35% to 50% of Pilots (Total 600 Pilots)

For the majors, Southwest and Alaska Airlines are the two that have announced that they will not be furloughing pilots this year.

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$250k Lifetime First Class Airplane Travel Pass

The price of a lifetime travel pass with American Airlines was $250,000 back in 1981. It was an unlimited first class travel on American Airlines. Today, that same ticket would be worth about $700,000.

While that same ticket today may not be worth its price considering the severe restrictions on travel throughout the globe, one could wonder how wonderful it must have been to have that type of privilege.

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Delta Air Lines seeks to lower pilot’s hours to avoid furloughs

Delta is proposing a 15% reduction in pilot’s monthly hours to save some of their pilot jobs. The federal aid will expire in October 1st, in which case, the airlines can start furloughing their pilots. WARN notices, which is not a furlough notice, has been sent out by the big 3 airlines.

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According to an article written by CNBC Airline Reporter Leslie Josephs, Delta Air Lines is looking to reduce pilot’s minimum guaranteed hours to avoid furloughs.

So far more than 1,700 Delta Air Lines pilots have signed up for the early retirements. This is more than the 730 plus pilots from American Airlines who took the early retirements. However, no data has been provided on how many pilots Delta Air Lines has awarded the early retirements.

Will the amount of pilots taking the early retirement be enough to save jobs? You can read more about it by clicking here.

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American Airlines has issued 25,000 WARN notices to its employees

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Today American Airlines has sent out WARN notices to its employees. Here are the breakdown by workgroup:

  1. Pilots: 2,500 or 18% of workgroup
  2. Flight Attendants: 9,950 or 37% of workgroup
  3. Maintenance & Related: 3,200 or 22% of workgroup
  4. Fleet Service: 4,500 or 26% of workgroup
  5. Passenger Service: 2,900 or 30% of workgroup
  6. Reservations: 1,000 or 23% of workgroup
  7. Dispatch: 175 or 36% of workgroup
  8. Flight Crew Training Instructors and Sim Pilot Instructors: 50 or 15% of workgroup
  9. Flight Simulator Engineers 10 or 7% of workgroup

A WARN notice is a Worker Adjustment and Retraining Notification letter. It is a written notification required by federal law to let employees know of potential furloughs. A WARN notice is NOT the same as a furlough. American Airlines still have opportunity to work with their respective union partners to workout the deals. They are offering incentivized voluntary leave and early retirement programs.

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COVID19 Risk Among Passengers. Should middle seat stay open?

While this article from medRxiv has not been peer-reviewed, the study found that the COVID-19 mortality risk to uninfected passengers is less than one in 1 million.

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The article states that recent study shows that when all coach seats are full on a US jet aircraft, the risk of contracting COVID19 from a fellow passenger is 1 in 7,000. But even with the middle seat empty policy, the risk falls to 1 in 14,000. Risks would be lower in lesser full flight. Their estimates imply that while the risk of filling up middle seat with another passenger is higher than those associated with plane crashes, the probability is still LESSER than one in 1 million.

Less than one in 1 million probability of mortality risks from the virus while traveling on a jet plane even with every seat occupied, sounds reasonable considering that the trajectory of water droplet from a coughing person is forward and toward the back of the seat in front. However, even with the middle seat open, the space between the people sitting in that row is maybe 2 feet. But the space between the person sitting either in the front or the back of you is still much closer than the recommended 6 feet distance from the Center of Disease Control.

The article was authored by Arnold Barnett(abarnett@mit.edu) MIT Sloan School of Management.

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TSA 2020 Passenger Count Is Trending Up

Prior to the COVID-19 bringing the whole world to a halt, the airline business was good as usual. Obviously all that has changed. The bailout from the government has defered airlines from furloughing their employees until the end of September. However, furlough warning notices have been sent by some of the biggest airlines in the world. Delta Air Lines and United Airlines have both sent warning letter to their employees. Delta is looking to furlough over 2,500 pilots and United is looking to furlough over 2,200 pilots. Both companies have also sent out tens of thousands of furlough warning notices to their flight attendants and other ground workers. American Airlines is expected to do so next week. Rumors have their numbers to be around 1,600 pilots. Only time will tell.

Now furlough warning notices are not necessarily the final decision that the airlines make to furlough their employees. In fact, it merely serves as an administrative compliance. Federal law requires airlines to notify their employees 60 days in advance. Some airlines are contractually obligated to their pilots to notify them 90 days out. Whether or not the airlines will ultimately have to furlough their employees including pilots will depend on a lot of variables. When it comes to their pilots, the airlines will be willing to keep pilot overages a little bit longer than their other employees. Simply because for pilots, their skill is perishable. Each month that goes by, pilot skills degrade. Also, a lot of the legacy airlines such as the DAL, UAL and AAL, have a lot of different types of aircrafts. Even with the recent downsizing of their fleets, most still have multiple narrowbody aircrafts and multiple widebody aircrafts. With the fleet downsizing, pilots have been displaced as well in reverse senority order. Junior widebody First Officer may be displaced to either a Captain seat or a First Officer seat on a narrowbody. All the seat shuffling will require trainings that could cost the airlines millions of dollars. Therefore, the airlines will not furlough pilots simply because they are fat on pilots for 6months or even 1 year. Other variables such as future customer booking, market shares and union contracts are some examples of the big factors that airlines will have to consider prior to furloughing their pilots.

Below is the data from the TSA 2020 passenger count. A link at the bottom of this page can be used to obtain the data below.

Figure 1. TSA 2020 & 2019 Passengers Count

The graph shows that the “blue” passenger count is trending up. One month ago, the percentage of traveler compared with the previous year was at 13.9%. Another month prior, that number was 8.5%. Three months ago, the number was 4.1% during the peak of the shutdown. Yesterday, the percentage of traveler was sitting at 27.2% of the previous year.

While the trend is up, we are still short of the previous year by roughly 1.8 million passengers. As an airline employee, I cannot say that I am jubilant about where we are now. Certainly, not when millions of people are infected, hundreds of thousands have perished because of the coronavirus, and many more are fighting through it as you are reading this article.

Now something to keep in mind as you look at the TSA passenger count data is that it includes flight crew as well. The number of flight crew should not make any meaningful difference in the passenger count. After all, on aircraft of 160 passengers, you have 6 crews. So even adjusted for the flight crews who are traveling to work and for leisure, the number of passengers still outweigh the amount of flight crews going through their security line.

You can access the TSA Passenger Count here.

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American Airlines’ pilot union reviews Boeing 737-Max training draft

Faa and Boeing Engineers boarding a Boeing 737-Max

According to flightglobal.com, the Allied Pilot Association, representing 15,000 pilots at American Airlines, is reviewing the pilot training draft that it has received.

Boeing 737-Max has been grounded all over the world since March of 2019. While the training draft as been received by American Airlines, the FAA has the final authority to approve the pilot training draft for airlines.

For more on this topic, please check out below:

American pilots review Boeing’s latest Max training draft

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