Originally Posted by vprMatrix

After looking at what is being said by Delta and ALPA I have come to the conclusion that the “opportunity” that exists right now and is fleeting is the company's desire to get more >50 seat jets due to being at the current contractual 255 line in the sand.

Here is why. Delta has stated many times they want to park 50 seats and have even started doing so but have slowed down recently, many of these aircraft are coming up on heavy maintenance necessitating the need to start parking them again but there is an opportunity to use them as “leverage” to get ALPA to raise the >50 seat jet HARD cap that we are already at, hence Delta opened negotiations early and set a record pace to a TA for seemingly no reason.

Delta could possibly purchase 717s and 737-900s while delaying parking aircraft due for replacement in order to use current PWA language to convert CRJ-700s to CRJ-900s however the economics of over-fleeting mainline and replacing CRJ-700s with aircraft only slightly more efficient make this an irresponsible move on Delta’s part.

Delta could also just park the 50 seat RJs and be done with them but they would miss out this opportunity to convince the pilots that we are helping them solve this emergency by granting contractual scope relief on the 76 seaters so they can get out of other “contractual obligations.” Magically, there is a solution to the problem, it seems that we can give DCI carriers 1 76 seat RJ and they will give back 2 50 seat RJs.

Several posters have disagreed with my statement above that Delta could just park the 50 seaters however I firmly believe that they can do just that with several options currently available if the pilots are resolute enough to vote down this scope giveaway. To better understand first ask yourself why any of the DCI carriers would be willing to give up two revenue making aircraft in exchange for one.

The Air Service Agreements (ASAs) that Delta has put in place starting with the sale of ASA to Sky West and with several other carriers since all stipulate penalties to the DCI carriers if their cost fall outside of almost impossible to maintain requirements. This was a brilliant move on Delta’s part since the language gives Delta some major flexibility in compensation as well as aircraft placement if the DCI carriers fall outside the provisions of their respective ASA. As a matter of fact regional airlines profits have taken a steep nose dive since about 2007 when these types of agreements started going into place. Several regional airlines have suffered their first losses ever and several have gone into bankruptcy including most recently Pinnacle.

The above then answers the question why would a DCI carrier be willing to give up two 50 seat RJs for one 76 RJ. It is not because you can make more money flying 1 airplane vs 2 it is because every time Delta does a swap out with a DCI carrier the new aircraft come in under a new ASA rate and provide for the DCI carrier to swap out 2 aircraft barely breaking even or even losing money (i.e. PCL) with 1 that Delta has agreed to pay a higher profit margin for.

If my statement above is correct then Delta already holds the leverage it needs to dump 50 seaters. By locking the DCI carriers into “self limiting” contracts they have created a scenario where they could offer a ratio of 3-1, 4-1, or even 0-1 to park 50 seaters in exchange for renegotiation and upping the ASA rates allowing the DCI carriers to make higher profit margins similar to what they were making from ‘98 to about ‘08.

If Delta truly needs some >50 seat RJs to sweeten the deal for the DCI carriers there are 28 at Comair and 16 that are being pulled from PCL. At a 3-1 ratio that is 132 50 seaters parked and at 4-1 that is 176.

There is just no reason to believe that Delta cannot get out of the 50 seat contracts with a little renegotiation, however management must start doing something quickly otherwise the heavy MTC check are going to start kicking in which would require another 10 year investment into a large number of 50 seat aircraft. The expedited timeline and opportunity that exist right now is to get ALPA to up the 255 aircraft limit before they have to play their cards and start parking the 50 seaters IMO.

vpr