Originally Posted by
Bucking Bar
Slow,
Kindly address whether the loss of Capital Expenditure lavished on the DCI carriers is included in ALPA's analysis of outsourcing which concludes "mainline pilots can not fly these airplanes for competitive rates."
Between ASA and Comair that is what ... 4.5 Billion? How much did NWA have in its connection operation?
A fair analysis of outsourcing can not be made without also considering the unexpected costs ... just as unscheduled engine removals end up in the MD88's costs eventually.
No, past CapEx is not included in the analysis. We are where we are. I can't change where we've been. Costs looking forward were included and disadvantaged mainline (DCI already has infrastructure to support Embraer/Bombardier products).
Some points, though. One of the best performing assets in the NWA pension plan was PCL stock placed in the plan in lieu of a cash contribution (pre-bankruptcy).
PCL's bankruptcy was not induced by Delta but by bad management decisions. The PCL CRJ-200 and Mesabah CRJ-900 contracts were profitable. Delta is making 12.5% on the DIP financing it has provided PCL and has moved itself up the food chain for claims on assets should PCL not reorganize.
Arguably the worst business transaction Delta entered into was for ASA, with a premium purchase price and fire sale sales price. The capital extracted provided just barely enough to get Delta through bankruptcy. I'm sure CMR is a close second, but the asset stripping, BK car wash and depreciation probably helped the bottom line more than ASA, even including the strike. That's just a guess on my part.