Just remember that
we fly airplanes, we don’t buy them.
And yes I will beat that drum til C2015. Because while I will fly our airplanes for whatever price 50.1% of the pilot group agrees to, I do not want to do another “if you… then we will
give you these airplanes to fly”.
That stuff is none of our business. And I think maybe if we get out of that business they won’t take outsourcing to the max allowed out of the fear that we won’t bail them out when outsourcing bites the bottomline as much it bites our bottoms.
Just look at what we found out after we bought ourselves 717s...
2012 Q2 Earnings Call:
RA: The first investment we are making is to restructure our domestic fleet by eliminating a substantial portion of our 50-seat regional jet fleet. We’ve already completely retired our propeller fleet. We will ultimately replace 75% of our 50-seat flying with more cost-effective mainline aircraft and two-class regional jets. Our 50-seaters peaked at more than 500 in 2008 and we intend to reduce it to less than 125 aircraft over the next two years.
EB: We haven’t publicly disclosed the impact. Obviously we believe it to be substantial. If you look at the, not just the cost of continuing to keep the 50-seat RJs in the fleet but even more importantly the upcoming fairly significant maintenance costs that we’re going to be experiencing which will run into the hundreds of millions of dollars on that fleet if we had decided to retain that aircraft. So not just a savings on the current cost structure but a substantial benefit to offset future cost rises.
RA: With the benefits achieved with our new pilot agreement, we have the flexibility we need to both accelerate our fleet restructuring and improve pilot productivity as we vary our capacity by season. The agreement enables us to up-gauge our domestic fleet by acquiring 717s and two-class regional jets which will replace more than 200 50-seat aircraft over the next few years.
2012 Q3 Earnings Call:
RA: So by up-gauging the domestic with MD-90 and 717s which are really capital efficient and then the 737-900s, we’ll be able to produce the same number of seats but we’ll do it with fewer airplanes, fewer takeoffs and landings which is where the scale leverage comes from, from the fleet changes.
EB: No, because actually, we’ll be mindful of our frequency by market and that’s a key driver, and the 717 deal, particularly, gives us much better gauge and the second thing is, I don’t think customers want to fly 800, 900 miles on a 50-seater. Part of what we’re doing here is putting a better product in the market, better fuel efficiency, fewer airplanes in the air and our customers tell us they much prefer flying on mainline airplanes rather than 34-, 44-, and 50-seat airplanes.
EB: So we will look at all alternatives in terms of which balance sheet they end up on, the regional partner on Delta but when you think about it from a total liability perspective, what our goal is, is to take out the debt and significant costs that are part of owning all these 50-seaters.
In all my reading I haven't run across a "we'd been fine either way if the pilots had said no. We could've lived just fine without the 717s and large regional jets and instead just kept our large fleet of 50-seaters." Or "Our only regret is we didn't get to purchase Dash 8-400s."
All I see is we wanted out of 50 seat RJs really bad and we really wanted the 717s and more large RJs. We got rid of airplanes we didnt want and got ones we did want and the pilots were the key.