Displacement vs Furlough - What does it mean for Airline Pilots?
Many of us have seen the ominous news of displacements in recent weeks. Most notably, United Airlines announced a massive displacement bid that they anticipated would affect over 4,400 pilots. Of course this news was immediately sensationalized by the media as “United to layoff 4,400 pilots!” but is that really the case? As we expect more displacement announcements from other airlines in the coming weeks, let’s take a step back and look at how to interpret what all this means.
What is a displacement?
Recognizing that different contracts and union nuances might vary between airlines, generally a displacement means that there is a reduction or elimination of a pilot status. For example, United is completely closing their LAX 787 base*, so all LAX based 787 pilots are going to have to re-bid to new equipment, domicile, or both. During most displacement bids, you are allowed to pick any aircraft and domicile that your seniority can hold. So let’s say that 5 LAX 787 captains decide that they want to fly out of Denver instead, and that there are 100 total 787 captain slots in Denver (I’m totally making that number up for the example). If those 5 pilots have the seniority to hold Denver, they’ll be awarded it, and the 5 most junior 787 captains will get displaced. Then the whole process starts over with the 5 Denver 787 captains bidding for their next landing spot. You can see how just one closure can cause a chain reaction throughout the entire seniority list.
If we play out our above example to its conclusion, we can see that there can be many displacements from a single base closure. Let’s follow a hypothetical chain of events:
LAX 787 CAPT displaces to DEN 787 CAPT
DEN 787 CAPT displaces to SFO 777 CAPT
SFO 777 CAPT displaces to SFO 737 CAPT
SFO 737 CAPT displaces to SFO 777 FO
SFO 777 FO displaces to LAX 320 FO
LAX 320 FO displaces to LAX 737 FO
LAX 737 FO displaces to Furlough
That’s 7 displacements before a pilot gets furloughed! Now that’s an extreme example, but the point is, one displacement does not necessarily equate to one furlough. A lot has to do with the amount of different fleet types, but it’s been said that often two displacements equal one furlough.
Displacements don’t happen overnight (usually)
As you can see, a whole lotta pilots have to be retrained after a displacement and that can take a lot of time. Now there are some mechanisms in place, such as training out of order, to expedite massive training cycles, but when United is potentially looking at retraining a third of their pilots, there’s just no way around a massive training bubble.
With many fleet types and domiciles, the legacy airlines have to shuffle around a lot of pilots, but what about the single fleet carriers? They have a massive advantage in flexibility when it comes to displacements and furloughs. This is a double edged sword if you’re a pilot. Displacements and furloughs can come much faster, but recalls from furlough may also come faster as well.
Options to avoid Furlough
You’ve probably heard about some options being offered to pilot groups including leaves of absence and ‘early outs’. These can often be a good deal for the pilot and for the company as it can mitigate a lot of costly retraining of pilots during a training bubble. Most of the major airlines have offered leaves and at American Airlines, for example, over 600 pilots have already taken an early retirement.
The F word, eventually
Unfortunately furloughs have already occurred in 2020 and more are on the way. As of right now, because of language in the CARES Act, we know most carriers won’t be able to furlough more than 10% of their pilots until October 1st. Once all of the displacements have been sorted out, there will be those that are left without a chair. As you can see, furloughs are expensive for airlines so they typically won’t furlough a pilot unless they expect them to be ‘on the street’ for at least six months. Car Valeri, a former ALPA Furlough rep, says a good rule of thumb is to plan on at least doubling the estimated time of furlough.
A furlough is likely coming my way, what should I do?
As we write this in May of 2020, there are still a lot of unknowns. It’s impossible to tell how quickly travel demand will rebound. If we look at a worst case scenario, 15,000 to 20,000 pilots could be given furlough notice in Q4 2020. We all hope that doesn’t happen, but we should prepare for it nonetheless. Here are some practical and free things all pilots, both airline and corporate, can do to prepare right now:
Get your logbook up to date and consider converting to digital
While you’re going through your logbook, look for pilots you have flown with and reconnect with them on LinkedIn
While you’re on LinkedIn, sharpen up that profile. That photo of you in a Hawaiian shirt on your last Detroit overnight isn’t going to cut the mustard.
Join your local business aviation association or consider volunteering with a local aviation group. Give back and increase your network at the same time!
We’re going to see a lot of employment numbers thrown around in the next few months, and it’s easy for fear to creep in when there’s uncertainty. Furloughs are out of our control, so focus on what is in your control: how you prepare in the coming months for a very competitive job marketplace. Make sure you use this time wisely to prepare financially, enhance your resume, and warm up your network!
Check out Episode 31 - Furloughs Explained by a Former ALPA Furlough Rep
And Episode 26 - How to Survive Disruptive Change for more information on furloughs and how pilots can prepare for potential job loss.
*per displacement bid 20-07D