Originally Posted by Aviation Week and Space Technology
SkyWest Concerned About 50-Seater Fleet Under Delta’s New Feeder Plan
Aviation Daily Jul16, 2012 , p. 1.01
Andrew Compart
Delta Air Lines ’ plan to encourage its regional airline partners to end their 50-seat regional jet flying before feeder contracts expire could run into resistance at SkyWest , the largest regional operator in the U.S., unless the affected aircraft can continue to generate revenue.
Delta plans to offer its regional airline partners contracts for new or additional 76-seat flying as an incentive to break current capacity supply agreements and reduce 50-seat regional jet operations, Delta’s pilots union says. Enabling that plan was a major motivator for the new labor contract that Delta and the AirLinePilotsAssociation ( ALPA ) finalized in June.
SkyWest CFO Michael Kraupp, however, tells Aviation Week that such an offer would not be acceptable unless an alternative is provided for the 50-seat jets.
“We have no interest in parking aircraft,” Kraupp says. “I don’t think you can make enough on dual-class aircraft coming in to justify the costs in parking the aircraft.”
Various DeltaConnection carriers currently operate about 345 50-seat regional jets for Delta, but the airline wants to reduce the number to 125 as soon as the end of 2015 because high fuel costs have made the aircraft increasingly uneconomical and many of the engines are coming due for expensive overhauls.
Delta is contractually obligated to operate 311 of its 50-seat aircraft through the end of 2015 and 155 through 2019, according to ALPA .
SkyWest subsidiaries SkyWest Airlines and ExpressJet operate about 90 and 60 Bombardier CRJ200 aircraft , respectively, for Delta, under 15-year contracts that Kraupp says do not expire until 2020. Kraupp is emphatic that Delta does not have any rights in the current contract to tell SkyWest to cease the 50-seater operations before the agreements expire.
Apart from SkyWest ’s two divisions, Delta also contracts 50-seat jet feed from Pinnacle Airlines, which is operating under Chapter 11 bankruptcy protection with Delta financing, and from Republic Airways subsidiary Chautauqua Airlines. Delta’s own subsidiary, Comair, also operates 50-seat jets .
Pinnacle, however, is the most venerable of these feeders , with 141 CRJ200s assigned to the Delta contract .
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Position: Douglas Flight Test & Work Around Engineering Field Representative
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Adding color ....
Quote:
Maintenance costs compound the problem. As reported earlier this week, data compiled with Aviation Week Intelligence Network’s MRO Prospector tool showed that three of every four of the GE CF34-3 engines will need to be overhauled within the next three years at a total cost of more than $1 billion, if those aircraft remain in service. But Prospector also shows that nearly every Rolls-Royce AE 3007 will need to be overhauled over the same time period, some of them more than once, at a projected cost exceeding $1.4 billion for all the engines’ operators.
The AE 3007 powers Embraer’s 37-seat ERJ-135, 44-seat ERJ-140 and 50-seat ERJ-145. It also is used for the Cessna Citation X business jet.
If SkyWest subsidiary ExpressJet, the largest operator of the ERJ, were to retain its entire fleet of these aircraft, it would need to overhaul all of the engines within the next three years at a projected cost topping $470 million. U.S.-based SkyWest says ExpressJet engine overhaul expenses are reimbursed as incurred under the regional airline’s contracts to operate the jets for Delta Air Lines and United Airlines.
The Delta PWA is between ALPA and Delta....Skywest and the other lift providers aren't a party to that agreement. Delta can only use incentives to get out of agreements they signed. If the price is right, Skywest Inc. will help park 50s early....If the price isn't right, they will fly them until the original agreement runs out.
The biggest problem with the section 1 ratios and draw down compliance is that a regional can simply say no. I posted about this earlier. Now Skywest or the offending carrier is operating as an alter-ego carrier of Delta. The main problem you have with this, is that if DALPA files a grievance over this, the remedy to comply with mainline section one will require a scope relax, or a regional SLI between Skywest(or the offending carrier) and Delta mainline. This was the ultimate result of the Colgan/Pinnacle grievance when Colgan was operating as an alter ego of Pinnacle. You either allow them to operate the scope violation or merge the seniority lists, there is no longer the cease and desist option.
The additional 76 seaters obviously won't go to them, meaning fewer "heavy" RJs for SKW and ASA, with fewer associated pay increases. Gojets will love them. I think that may equal tough times ahead for Comair and PNCL.
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Joe and Mesaba,
It is looking like a repeat of errors in C2K, when previous contractual commitments made the Delta PWA economically unenforceable. IMHO they should have merged the lists and ALPA should have fought for it.
I think we understand where this is probably going and it is unfortunate for ALPA members at Comair and the carriers Delta has some control over through bankruptcy.
Or, potentially nothing much happens. Under the PWA, "nothing" is an option. Perhaps it is the most viable option.
It is looking like a repeat of errors in C2K, when previous contractual commitments made the Delta PWA economically unenforceable. IMHO they should have merged the lists and ALPA should have fought for it.
I think we understand where this is probably going and it is unfortunate for ALPA members at Comair and the carriers Delta has some control over through bankruptcy.
Or, potentially nothing much happens. Under the PWA, "nothing" is an option. Perhaps it is the most viable option.
Delta doesn't have the extra 76 seaters yet. If one airline like SKW balks by an extra 25 50 seaters over the cap, then maybe that will result in 25 fewer additional 76 seaters. So instead of 70 new ones, it could become 45.
It is looking like a repeat of errors in C2K, when previous contractual commitments made the Delta PWA economically unenforceable. IMHO they should have merged the lists and ALPA should have fought for it.
I think we understand where this is probably going and it is unfortunate for ALPA members at Comair and the carriers Delta has some control over through bankruptcy.
Or, potentially nothing much happens. Under the PWA, "nothing" is an option. Perhaps it is the most viable option.
Correct, but Delta still has the ability to add 70 more 76 seat jets and can park or operate as many 50 seaters as they want, at any block hour ratio they want. The language in the PWA simply was not tight enough.
Position: Douglas Flight Test & Work Around Engineering Field Representative
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Not without pulling some 70's, which they will do in 2015. They can't use "any" BH ratio, but the contractual limits would allow some DCI growth from today's status quo.
Correct, but Delta still has the ability to add 70 more 76 seat jets and can park or operate as many 50 seaters as they want, at any block hour ratio they want. The language in the PWA simply was not tight enough.
No, there are caps. If one cap is known ahead of time to be violated, and the other planes haven't be ordered yet, good chance they will have to look at alternatives.
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