Thread: Comair updates?
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Old 01-11-2009 | 04:45 AM
  #11443  
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From: Big...So Big
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RA's reply:

Normally I do not read or reply to anonymous letters or e-mails but since your name appeared in the e-mail, here is the response.

I understand the concerns at Comair and it is the same as we are hearing from all regional carriers as the economic model in this sector shifts from one of unlimited growth to one that more closely resembles what is happening at the mainlines - - very limited if any growth. No carrier with no P&L risk, regional or mainline, will be insulated from the tough economic times we face as an industry and the tough waters ahead. I would like to address your points and ensure there is no misunderstanding about what is happening in the regional space:
  • Delta intended to terminate Freedom for poor performance and “fired” them earlier in 2008. They have since filed and won a preliminary injunction to prevent us from “firing” them on the E145 contract. Freedom has, however, flown its last CR900 flight for Delta. Those 7 aircraft have been temporarily transferred to Pinnacle on their way to Mesaba - - a wholly-owned subsidiary.
  • ASA, Freedom, SkyWest and possibly more partners are flying to CVG, (even though Comair is headquartered there). There are now 9 different Delta Connection partners and we have abandoned the concept of hub ownership - - no carrier will be the sole provider of lift to a hub, our network group will determine the best flow of aircraft to serve the needs of our customers.
  • Mesaba will eventually receive Freedom’s 7 CR900s and 1 additional CR900 that we contemplated for Comair because Mesaba already possesses 36 CR900s and there is advantages to reaching that critical mass of 40+ shells of any fleet type. Mesaba is a wholly-owned sub.
  • Comair is challenged from a cost structure standpoint in that its costs are higher than our contract carriers, even after mark-up is added to the costs. In-house costs are still costs, and if outside costs, (including mark-up), are cheaper, then a prudent decision would be to contract the work. This applies not only to the airline industry, but to all industries. Not only to flying, but to maintenance, technology services, etc.
  • Your question about why does Comair have so many 50-seaters is answered by looking at the history of Comair. Comair was the innovator of the 50-seat RJ. Comair was first and biggest into this new platform. Unfortunately, growth opportunities were missed in 2003 and even as late as the bankruptcy process itself as Comair’s management team and the unions’ leadership could not reach agreement on growth where our contract partners could.
  • Your observation about the Comair pride of quality is spot on - - you provide a solid product to Delta and our customers everyday - - I personally thank you and your counterparts for this professionalism.
I do appreciate your reaching out to me about this subject and am hopeful I shed some light on this difficult subject that plagues the regionals, whether you are Comair or American Eagle - - high cost structures in a slowing industry make for a difficult proposition for all, frontline and management employees alike.

Richard
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