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Old 04-24-2013 | 08:51 PM
  #129130  
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Bucking Bar
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From: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
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Originally Posted by block30
What are you saying? Also, I thought that Delta mainline pilots voted in scope easements....(I'm not trying to be argumentative, if you can believe that).
We did.
Originally Posted by Q1 Conference Call

Richard Anderson ... we close on Pinnacle May 1, and it will not replace Comair but will become the most efficient, best-run regional carrier. We actually have -- no, we actually -- it's really important to note this because this is...

Helane R. Becker - Cowen Securities LLC, Research Division - laughed out loud - I'm sorry.

Richard H. Anderson - Chief Executive Officer and Director
Well, this is a big strategic advantage for Delta that I don't think people quite understand. We have fixed kind of the scale and cost issues that have plagued the regional carrier industry. So Pinnacle will probably, as a wholly-owned subsidiary, we have a cap scale and a flow-up agreement now. So we probably will end up having a 20% to 25% all-in once we get it all fully up and running and the 50-seaters out and the 70- and 76-seaters in. We'll have a very significant competitive advantage on the regional industry. And number two, we'll have the ability to really control the product and make it same as the mainline. So very important strategic initiative that we have because the whole up-gauge -- the whole up-gauging strategy is a really massive change in this industry because all those 50-seater airplanes were bought when fuel was $20 a barrel. And when you take the original purchase assumptions and now overlay them on what fuel is today and what the scales were 15 years ago for pilots and flight attendants and overlay where they are today at the independent regionals, that's a very tough equation. And we've actually solved through that equation, and we're going to take our regional carrier fleet down from probably a peak of around 700 -- 600, 700 airplanes down to the low 400s, and we're going to have the best cost structure and the best operations.

Helane R. Becker - Cowen Securities LLC, Research Division
That's huge. And as we think about that then, how many years should we allow for that? I know it's in the pilot contract, right? It's like 2 to 3 years?

Richard H. Anderson - Chief Executive Officer and Director
Well, no, we should be -- we should really, I think in 24 -- well, it's a 7-year pilot contract, Mike Campbell reminds me. But in terms of getting the shift done, it's really in the next 18 to 24 months. And that's where you see a big improvement in our regional carrier line. And we have a big ASM pickup because we're going to be able to operate the airline, the total Delta airline with probably a couple hundred fewer airplanes and still have the same ability to produce ASMs. So there's so much operating leverage in this move that we're excited about closing on the Pinnacle transaction.
As details start to come out about how Pinnacle will become mainline, early plans sure sound like an alter ego. Since they sit at the table with Delta, with ALPA's blessing, we are going to have to deal with that in 2015 (just as Anderson started to say).