When the TA was initially released, my first reaction was HELLE NO. My main issue was--and is-- the pay rates. They are initially 6-7% below what I wanted. I took this as a personal affront. How dare they offer to pay us less than Southwest rates?

In reading this board, everyone seems to be mostly okay with the rates; scope is the big issue. This has caused me to reread Section 1. To me, it seems that scope is improved. The arguments on this board in support of the tentative scope clause seem to be more fact based, while the arguments against it seem to be more emotion based. Boomer's question about potential loopholes in Section 1 is, in my mind the central question. I strongly suspect I'm going to have to explore that one on my own in order to find an answer.

Alfa, you make a lot of sense, but your condescending tone is going to turn people off to what you have to say. Carl, I took you off "ignore" after the TA came out. While you started with some good, cogent arguments, your posts have once again become little more than ranting, innuendo, and name-calling. You'll probably be back on my ignore list soon (not that it matters to you).

Sailing, it seems like you're happy with everything but the rates. That's where I am. Is there more money available for that? Maybe. My concern is that we turn down this TA, and the NC is directed to go back to the company to improve scope...or sick leave...or something else that, in my opinion, was okay on the original TA.

If these subsequent negotiations don't result in a TA, then we've passed up an improved contract for nothing. We end up getting the same deal two years from now.

So now I'm left with deciding whether I'm going to play hardball just to put another $600/month (net) in my pay check. I'm increasingly thinking that the risk outweighs the reward.

 

I agree.

According to alpha's number there is 3.6M block hours and we have 53.9%.

IF THIS IS RIGHT... we could add airplanes but have a net reduction of mainline while reducing DCI to the 450 number, still have the same ASMs, near block hours for mainline, etc and be in compliance with the 1.56 ratio.

The left column is now, the right column is after we take 717s and exercise 739 options and the like to get the ASMs up. Sure I made the fleet numbers up on the right, but I just wanted to show we could buy new mainline jets and replace old ones with the help of the 76 seaters and keep that 1.9M block hours and with the reduction in 50-seaters you could still hit the 1.56 ratio:

 

As I have spent more time with Section 1 and slept on the decision, I am coming around to a NO vote. It is my opinion our negotiators did an excellent job with the direction they were given, but the continuation, the Available Seat Mile growth at Delta Connection and carve out for Republic Airlines Holdings to compete directly with us (potentially from within SkyTeam) are concerns which outweigh the pay raises (even though the pay is needed if I am going to quit one of my other jobs).

I am fully aware that a no vote risks results which are not as good as currently presented. But, the Republic carve out was the last straw.

 

Bar the RAH carve out is absolutely.... can't think of the word. I'm tired. It sucks. It's scary.

If the excessive CRJ-200 ordered ended up being something the company needed to be rescued from... what shall become of that RAH exemption?

 

Hey T,

I don't know which way I am going to vote, however, I have a couple questions because of the idea that this is going to bring a lot of jobs to us and is going to be my upgrade. I have done the math (I think it was Alpha's word problem) and I figure that due to the block hours we need 700 additional pilots. Now, we are also going to change work rules that will require approx 300 less pilots which hopefully the early out program takes care of. Now, I am an A320 FO and I just don't see my self moving up that much with 700 additional pilots on the list. I don't live in one of the bases that will have a 717 crew base (those will most likely be ATL, NYC and maybe DTW). 700 additional pilots on a 12,000 pilot list is about 6%.

Don't get me wrong, I love it when pilots come on the list below me, even one, but I just don't see how this contract is going to change my position which with 12yrs longevity is still a bottom A320 FO. Please let me see what I am missing. (I am not being sarcastic, I really am just seeking out information)

 

As FTB's chart points out, your airplane might go considerably senior. Some 767 FO's may bid 717 or MD88 A if they can hold it. Overall there would be displacements to staff some of the 717 flying.

There is no magic bullet to replace a job as good as flying the 757 is (for a number of reasons). As that fleet type is retired there will be displacements under any contract.

 

btw if anyone has numbers to help that worst case table, I'll take em!



and i still standby the worse fear, what if dci 450 is the number network wants anyways?

such they could live with 255 large jets + 195 small jets but are hoping that in exchange for 717s they'd get anyways if we would be so kind as to give them an awesome giveaway of 325 large and 125 small?

are we being suckered?

 

Many know my views on the whole DPAv. ALPA conflicts. Mainly, until DPA is on the property I have to support ALPA. Of course with this TA out and being analyzed, I have to ask the question. Where is DPA? Time to sieze an opportunity.

What I am clearly looking for is the promised competent lawyers of "several successful" negotiations etc. Not a flame at all. But since we do have real time contract language to sift through before a vote, where is the DPA evidence where we are (yes US as in DALPA, facts are facts every DAL pilot is represented by ALPA).

I cannot think of a better time for DPA to prove to all the pilots in the ranks where they would do a better job for us with specific proof and examples of very dangerous language that DPA's lawyers would never allow. What would DPA's language say. If DPA has a lawyer looking at this share it! It may be the best way to move forward.


Just asking!

 

ALPA kind of lied to us on this one. They say we could not bind a holding company ... then they provide a carve out for a group of subsidiaries which they deem to be "affiliates."

Affiliates is not nearly half the story. These airlines have been found to be a single transportation system for representational purposes (yet Compass, ASA, Mesaba or Comair were not !?!).

Today, Frontier neither breaks my leg or picks my pocket. But, the preferential treatment for a Teamsters unit in direct competition with us shows our lack of strategic orientation.

 

Okay, 50-Seaters Are Going Away...
What About The "Regional Airline" Segment Itself?
Will Players Morph, or Go Morti?

Product obsolescence.

It's happened in other industries. The real issue is how incumbents evolve.

The copier business shifted out from under Xerox. The film business evaporated out from under Kodak. Xerox morphed and evolved into other, wider service lines. Kodak, on the other hand, did not. It lived on revenues from patent-infringement lawsuits, and later, sale of patents themselves. Today, it's in bankruptcy.

It's Not "Regional" & The Business Is Tougher Than Being An "Airline." The "regional airline" industry - which in the 1980s mostly left behind both the "regional" and the "airline" parts as they evolved into the then-lucrative business of leasing airplanes and crews to major airline brands - now faces a situation similar to that faced by Xerox and Kodak. Much of its core product - small jet lift - is becoming more and more economically obsolete. Worse, the options for growing into larger aircraft are exceedingly limited.

Now that it's about as obvious as a full moon, the usual suspects on Wall Street and in the aviation analysis world are "predicting" a decline in 50-seat RJ fleets. Aside from having incredible insight into the already-occurred, these gurus haven't passed - yet -on how this will affect the companies that operate these airplanes.

In about 6 months to a year, they'll be out with dire "forecasts" on the future of regional airlines. As usual. they will be several zip codes from reality.

Cancel The Funerals. Most of Them. Here's the bottom line: the small lift leasing business is a non-growth sector. Players in this part of the aviation industry will need to decide if they're going to be Xerox or Kodak - because the current business base is eroding fast.

Two events over the past week point to the imperative: find another set of revenue streams. The cost dragon is fixin' to come knocking. But regardless, it's a near certainty that we will see a number of today's "regional airlines" evolve successfully and profitably into other areas of aviation - and maybe non-aviation, too.

The DC-3 Was A Profitable Machine Once, Too. The 50-seat jet segment is, regardless of some prognostications to the contrary, going the way of 400 ASA color film. On the other hand, jets in the 80 - 110 seat range do have a future. But that does not necessarily translate into continued opportunities for what are today still mis-labeled "regional airlines."

Now, put this in context. The majority of 50-seaters will be retired due to escalating costs. The next step up - 66/70 seat CRJs are a potential, but it's more likely that carrier systems will seek 80-110 seat airliners such as the CRJ-900/1000 and the E-190 platforms as fleet additions. (Remember, it's NOT seat capacity that drives airline fleet decisions - it's sector costs. As the expense of hurling 50-seaters through the sky goes up, the sector cost variance between these aircraft and larger versions shrinks markedly.)

That brings us to a new reality: It's becoming more and more obvious that it will be mainline airlines that fly these new aircraft fleets. There are two clear indications. The first is what US Airways has reportedly discussed with American's pilot's union. The second - and more immediately concrete - is the tentative agreement between Delta and ALPA. Both include aircraft in the E-190 size category, and in the case of Delta, it even mentions the CRJ-900.

That "Lost" Feed Traffic: Not Always All That Valuable. There's the argument that major airlines won't dare give up the capacity and the hub feed now carried by 50-seat jets. Unfortunately, that doesn't hold water. Airlines only offer capacity where they can make money, and if they don't have fleet types that can do so, they are out of the route. Gone. History. Good-bye. No more. Tsai-jian. Adios.

Also, it's not much capacity that will be lost, anyway. In fact, Boyd Group International recently analyzed* "regional" feed markets at one of the nation's largest hubsites, With a retirement of 50-seaters. 33 of 40 "regional" spokes would be deleted. Wow! Almost three dozen nonstop destinations lost! Catastrophe!

Nope - at least not for the hub or the hubbing airline. The total traffic lost would be around 4% of the airport's traffic. If recapture of "spill" at the hub is factored back in, it would be well under 3% - and, again, it's still lost traffic that doesn't pay the bills, anyway.

Then there's the nonsense that majors will have no choice but to rely on "regional" entities to get "cheap" labor costs. Wrong. The fact is that pay rates are negotiated by airplane type - as the tentative Delta ALPA contract demonstrates.

Send In The Clowns. This isn't good news for a few small airports in some regions of the nation, particularly those where the location does not allow access to an alternative omni-directional airline connecting hub, or where the traffic generation cannot support 75-100 seat airliners.

Not to worry. For some, there will be - at least for a few months - what can be called "consultant hospice" - where a wizard is hired to "lure" another airline with all sorts of promised magic potions, when in point of truth, "luring" a visit from Elvis would be more likely. There are no other airlines out there.

But it makes the community believe that there's hope - that the air service cavalry is coming to save the day. They're right. Unfortunately, it's General Custer, and he's planning to stop by the Little Big Horn on the way.

After the hand-holding at lost-cause air service speed-dating events is over, after the silly internet surveys are accomplished, and after tens of thousands of long green are splattered on "studies" that don't say anything that a partially-intoxicated gibbon wouldn't know, the communities will find themselves back at square one. Or, behind square one - having wasted time and money, instead of looking for communication alternatives. Air service is no longer an economically-viable mode of transportation for many small airports.

Point: like "regional airlines," the longer communities ignore reality, the more damaging this new dynamic will be. If air service can't work at the local airport, it's time to seek other options.

Bottom Line: It's Crunch Time. Today, right now, the "regional airline industry" is at a crisis point.

The real story in the next 18 months will be how current players in this sector will evolve into revenue streams other than leasing 50-seat and 70-seat jets.

Ground handling? Maybe - but some are in it already, and it's really low-margin. Aircraft leasing - maybe, depending on the company's cash and ability to get into the game, with new-generation aircraft, in an already crowded sector. Buying into a major carrier? It's been done in the past - Mesa was involved in a deal with America West, Continental, etc., in the 1990s. Investing in airlines in emerging nations? Big potential in China, but the Kunpeng/Mesa experience isn't a lot of* encouragement. Taking the cash hoard (which some have) and getting completely out of the business? Maybe, too.

There are opportunities for aggressive, forward-thinking "regional airlines." But those that insist on remaining primarily as a small lift provider are relegating themselves to a no-growth sector, and perhaps a front-row seat to the Titanic's open-air orchestra.

Not An "If" - Just A "When" & A "How" - All this is clear, King's-English writing on the economic wall. Boyd Group International pointed out this industry trajectory as far back as 2003 - on this site. As for RJ demand, back in 1999 we pointed out to our clients in the airframe and supply sectors that there was no way that the skies would ever see the number of RJs then in operation, on order, and on option. Not popular, but we're not in the business of being popular.

But one thing is absolutely 100% certain: The "regional airline industry" as we know it today is going to evolve in several directions.

Xerox? Kodak? Or something in between. But it will be different.

Aviation Data And Insights From Boyd Group International