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After looking at what is being said by Delta and ALPA I have come to the conclusion that the “opportunity” that exists right now and is fleeting is the company's desire to get more >50 seat jets due to being at the current contractual 255 line in the sand.
Here is why. Delta has stated many times they want to park 50 seats and have even started doing so but have slowed down recently, many of these aircraft are coming up on heavy maintenance necessitating the need to start parking them again but there is an opportunity to use them as “leverage” to get ALPA to raise the >50 seat jet HARD cap that we are already at, hence Delta opened negotiations early and set a record pace to a TA for seemingly no reason. Delta could possibly purchase 717s and 737-900s while delaying parking aircraft due for replacement in order to use current PWA language to convert CRJ-700s to CRJ-900s however the economics of over-fleeting mainline and replacing CRJ-700s with aircraft only slightly more efficient make this an irresponsible move on Delta’s part. Delta could also just park the 50 seat RJs and be done with them but they would miss out this opportunity to convince the pilots that we are helping them solve this emergency by granting contractual scope relief on the 76 seaters so they can get out of other “contractual obligations.” Magically, there is a solution to the problem, it seems that we can give DCI carriers 1 76 seat RJ and they will give back 2 50 seat RJs. Several posters have disagreed with my statement above that Delta could just park the 50 seaters however I firmly believe that they can do just that with several options currently available if the pilots are resolute enough to vote down this scope giveaway. To better understand first ask yourself why any of the DCI carriers would be willing to give up two revenue making aircraft in exchange for one. The Air Service Agreements (ASAs) that Delta has put in place starting with the sale of ASA to Sky West and with several other carriers since all stipulate penalties to the DCI carriers if their cost fall outside of almost impossible to maintain requirements. This was a brilliant move on Delta’s part since the language gives Delta some major flexibility in compensation as well as aircraft placement if the DCI carriers fall outside the provisions of their respective ASA. As a matter of fact regional airlines profits have taken a steep nose dive since about 2007 when these types of agreements started going into place. Several regional airlines have suffered their first losses ever and several have gone into bankruptcy including most recently Pinnacle. The above then answers the question why would a DCI carrier be willing to give up two 50 seat RJs for one 76 RJ. It is not because you can make more money flying 1 airplane vs 2 it is because every time Delta does a swap out with a DCI carrier the new aircraft come in under a new ASA rate and provide for the DCI carrier to swap out 2 aircraft barely breaking even or even losing money (i.e. PCL) with 1 that Delta has agreed to pay a higher profit margin for. If my statement above is correct then Delta already holds the leverage it needs to dump 50 seaters. By locking the DCI carriers into “self limiting” contracts they have created a scenario where they could offer a ratio of 3-1, 4-1, or even 0-1 to park 50 seaters in exchange for renegotiation and upping the ASA rates allowing the DCI carriers to make higher profit margins similar to what they were making from ‘98 to about ‘08. If Delta truly needs some >50 seat RJs to sweeten the deal for the DCI carriers there are 28 at Comair and 16 that are being pulled from PCL. At a 3-1 ratio that is 132 50 seaters parked and at 4-1 that is 176. There is just no reason to believe that Delta cannot get out of the 50 seat contracts with a little renegotiation, however management must start doing something quickly otherwise the heavy MTC check are going to start kicking in which would require another 10 year investment into a large number of 50 seat aircraft. The expedited timeline and opportunity that exist right now is to get ALPA to up the 255 aircraft limit before they have to play their cards and start parking the 50 seaters IMO. vpr |
Originally Posted by vprMatrix
(Post 1198399)
After looking at what is being said by Delta and ALPA I have come to the conclusion that the “opportunity” that exists right now and is fleeting is the company's desire to get more >50 seat jets due to being at the current contractual 255 line in the sand.
Here is why. Delta has stated many times they want to park 50 seats and have even started doing so but have slowed down recently, many of these aircraft are coming up on heavy maintenance necessitating the need to start parking them again but there is an opportunity to use them as “leverage” to get ALPA to raise the >50 seat jet HARD cap that we are already at, hence Delta opened negotiations early and set a record pace to a TA for seemingly no reason. Delta could possibly purchase 717s and 737-900s while delaying parking aircraft due for replacement in order to use current PWA language to convert CRJ-700s to CRJ-900s however the economics of over-fleeting mainline and replacing CRJ-700s with aircraft only slightly more efficient make this an irresponsible move on Delta’s part. Delta could also just park the 50 seat RJs and be done with them but they would miss out this opportunity to convince the pilots that we are helping them solve this emergency by granting contractual scope relief on the 76 seaters so they can get out of other “contractual obligations.” Magically, there is a solution to the problem, it seems that we can give DCI carriers 1 76 seat RJ and they will give back 2 50 seat RJs. Several posters have disagreed with my statement above that Delta could just park the 50 seaters however I firmly believe that they can do just that with several options currently available if the pilots are resolute enough to vote down this scope giveaway. To better understand first ask yourself why any of the DCI carriers would be willing to give up two revenue making aircraft in exchange for one. The Air Service Agreements (ASAs) that Delta has put in place starting with the sale of ASA to Sky West and with several other carriers since all stipulate penalties to the DCI carriers if their cost fall outside of almost impossible to maintain requirements. This was a brilliant move on Delta’s part since the language gives Delta some major flexibility in compensation as well as aircraft placement if the DCI carriers fall outside the provisions of their respective ASA. As a matter of fact regional airlines profits have taken a steep nose dive since about 2007 when these types of agreements started going into place. Several regional airlines have suffered their first losses ever and several have gone into bankruptcy including most recently Pinnacle. The above then answers the question why would a DCI carrier be willing to give up two 50 seat RJs for one 76 RJ. It is not because you can make more money flying 1 airplane vs 2 it is because every time Delta does a swap out with a DCI carrier the new aircraft come in under a new ASA rate and provide for the DCI carrier to swap out 2 aircraft barely breaking even or even losing money (i.e. PCL) with 1 that Delta has agreed to pay a higher profit margin for. If my statement above is correct then Delta already holds the leverage it needs to dump 50 seaters. By locking the DCI carriers into “self limiting” contracts they have created a scenario where they could offer a ratio of 3-1, 4-1, or even 0-1 to park 50 seaters in exchange for renegotiation and upping the ASA rates allowing the DCI carriers to make higher profit margins similar to what they were making from ‘98 to about ‘08. If Delta truly needs some >50 seat RJs to sweeten the deal for the DCI carriers there are 28 at Comair and 16 that are being pulled from PCL. At a 3-1 ratio that is 132 50 seaters parked and at 4-1 that is 176. There is just no reason to believe that Delta cannot get out of the 50 seat contracts with a little renegotiation, however management must start doing something quickly otherwise the heavy MTC check are going to start kicking in which would require another 10 year investment into a large number of 50 seat aircraft. The expedited timeline and opportunity that exist right now is to get ALPA to up the 255 aircraft limit before they have to play their cards and start parking the 50 seaters IMO. vpr Carl |
Originally Posted by vprMatrix
(Post 1198399)
After looking at what is being said by Delta and ALPA I have come to the conclusion that the “opportunity” that exists right now and is fleeting is the company's desire to get more >50 seat jets due to being at the current contractual 255 line in the sand.
Here is why. Delta has stated many times they want to park 50 seats and have even started doing so but have slowed down recently, many of these aircraft are coming up on heavy maintenance necessitating the need to start parking them again but there is an opportunity to use them as “leverage” to get ALPA to raise the >50 seat jet HARD cap that we are already at, hence Delta opened negotiations early and set a record pace to a TA for seemingly no reason. Delta could possibly purchase 717s and 737-900s while delaying parking aircraft due for replacement in order to use current PWA language to convert CRJ-700s to CRJ-900s however the economics of over-fleeting mainline and replacing CRJ-700s with aircraft only slightly more efficient make this an irresponsible move on Delta’s part. Delta could also just park the 50 seat RJs and be done with them but they would miss out this opportunity to convince the pilots that we are helping them solve this emergency by granting contractual scope relief on the 76 seaters so they can get out of other “contractual obligations.” Magically, there is a solution to the problem, it seems that we can give DCI carriers 1 76 seat RJ and they will give back 2 50 seat RJs. Several posters have disagreed with my statement above that Delta could just park the 50 seaters however I firmly believe that they can do just that with several options currently available if the pilots are resolute enough to vote down this scope giveaway. To better understand first ask yourself why any of the DCI carriers would be willing to give up two revenue making aircraft in exchange for one. The Air Service Agreements (ASAs) that Delta has put in place starting with the sale of ASA to Sky West and with several other carriers since all stipulate penalties to the DCI carriers if their cost fall outside of almost impossible to maintain requirements. This was a brilliant move on Delta’s part since the language gives Delta some major flexibility in compensation as well as aircraft placement if the DCI carriers fall outside the provisions of their respective ASA. As a matter of fact regional airlines profits have taken a steep nose dive since about 2007 when these types of agreements started going into place. Several regional airlines have suffered their first losses ever and several have gone into bankruptcy including most recently Pinnacle. The above then answers the question why would a DCI carrier be willing to give up two 50 seat RJs for one 76 RJ. It is not because you can make more money flying 1 airplane vs 2 it is because every time Delta does a swap out with a DCI carrier the new aircraft come in under a new ASA rate and provide for the DCI carrier to swap out 2 aircraft barely breaking even or even losing money (i.e. PCL) with 1 that Delta has agreed to pay a higher profit margin for. If my statement above is correct then Delta already holds the leverage it needs to dump 50 seaters. By locking the DCI carriers into “self limiting” contracts they have created a scenario where they could offer a ratio of 3-1, 4-1, or even 0-1 to park 50 seaters in exchange for renegotiation and upping the ASA rates allowing the DCI carriers to make higher profit margins similar to what they were making from ‘98 to about ‘08. If Delta truly needs some >50 seat RJs to sweeten the deal for the DCI carriers there are 28 at Comair and 16 that are being pulled from PCL. At a 3-1 ratio that is 132 50 seaters parked and at 4-1 that is 176. There is just no reason to believe that Delta cannot get out of the 50 seat contracts with a little renegotiation, however management must start doing something quickly otherwise the heavy MTC check are going to start kicking in which would require another 10 year investment into a large number of 50 seat aircraft. The expedited timeline and opportunity that exist right now is to get ALPA to up the 255 aircraft limit before they have to play their cards and start parking the 50 seaters IMO. vpr The part of the puzzle you are missing is the de facto ownership of the CRJ-200 fleet. Many of the airplanes are actually owned by Delta and leased to the operator. Even in the case where Delta transferred the leases, or the leases originated with the operator, Delta provided guarantee provisions in most cases. It is my guess that part and parcel of this deal is a significant debt restructuring which will likely result in the Next Gen CRJ-900's specifically being an operating expense instead of a capital expense. By taking this obligation off balance sheet and making it a monthly payment to a service provider Delta helps get down to their 10Bn debt goal. With less debt comes an improved ability for Delta to obtain new wide body jets. To add a guess to a guess, the 777-300 would be 15% to 30% more efficient doing most of what our 747's do, especially in Asia. |
Question was, "why does the 717 work at Delta and not Southwest," followed by a request for comparison with the C Series.
Originally Posted by slowplay
(Post 1198122)
It works because of our network. It doesn't work for them because of theirs and their cost structure.
There are an awful lot of sub 2 hour legs at hubs like ATL, DTW, and MSP that used to be flown by DC-9's. There are regions of the country that have too many airports too close together for the population base. Look at PIA, BMI, and SPI, all within an hour's drive of each other. DL provides service to both PIA and BMI with multiple RJ's to multiple hubs. Flying half to 2/3rds as many flights on B717 vice 50/70/76 seat RJ's gives Delta lower costs and potentially higher revenue. For an airport that is slot constrained like LGA, up gauging is the only way to increase capacity. There are a lot of places within 3 hours of LGA. As the LGA hub is built out and connectivity increases it will be upgauged. The C series is still a paper airplane. The 787 is over 5 years late on realizing its economic promises, and that's from a company that's built lots of different types of aircraft. At its acquisition cost, the B717 is a very competitive airframe for its intended role in Delta's network. Folks, this is good stuff. |
Originally Posted by 1234
(Post 1198210)
I couldn't agree more. We have to get the word out to the majority of pilots though, regarding these poorly worded sections. There are a lot of pilots that are on the fence with regard to this TA and if they can be educated as to the current issues with the TA I am guessing that they would most likely vote no. That said, a lot of this language could easily be fixed prior to a vote on the TA. It would be unprecedented, but if the MEC said, "ok, we hear your concerns over some of the language and we are addressing it with the company right now" They could get the language cleaned up and I bet the TA would pass MEMRAT. That would take real leadership though.
Just my thoughts. |
Originally Posted by orvil
(Post 1197880)
This article comes from Aviation Daily.
Delta Deal With Pinnacle Provides Option For Additional 50-Seater Flying Delta Air Lines’ revised Bombardier CRJ200 contract with Pinnacle Airlines includes a provision allowing the major, at its “option and sole discretion,” to place 163 more of the 50-seat regional jets in the regional operator’s fleet. Delta also can place 24 more spare engines for the aircraft with Pinnacle, under the contract terms disclosed in a Pinnacle filing in its Chapter 11 restructuring case. No one from Delta or Pinnacle immediately responded to Aviation Week requests for an explanation for the provision’s inclusion. Pinnacle currently operates all 140 of its CRJ200 aircraft for Delta. Delta also relies on SkyWest subsidiaries SkyWest Airlines and ExpressJet for additional CRJ200 feed, with the airlines operating 61 and 99 CRJ200s, respectively, for Delta, for a total of 160, according to the regional airline holding company’s 2011 annual report. New bankruptcy court filings also show a revision in the labor cost reduction required in Delta’s agreement to provide debtor-in-possession financing. Under the original agreement Delta gave Pinnacle 45 days from the time it presented its cost-cutting proposals to its unions to reach a voluntary agreement with them. If it did not negotiate agreements by then, Pinnacle would have to file a so-called Section 1113 motion asking the court to reject each union contract. The revised agreement gives Pinnacle and the unions a little more time to agree on a deal—until July 13, which is more than 60 days from the company’s May 8 presentation of its proposal to the unions. Delta said the same thing with Comair in Ch11. I don't know if it was to sway pilot votes into fast concessions, or to convince the BK judge that they aren't going to destroy the airline anyway. Maybe it sounds good for creditors, I don't know. |
Originally Posted by orvil
(Post 1198357)
I know it's a small item buried in the TA, but details do matter. Most legacy fall in the 2.00 range. SWA was 2.15.
Proposed Per Diem: 2.10/2.20 dom 2.60/2.70 intl. Current Per Diem at FDX Per Diem : $2.15/hr (dom) $2.95/hr (int'l) Current Per Diem at UPS Per Diem : $2.40/hr (dom) $3.05/hr (int'l)* $3.55/hr (Pac Rim)* $4.05/hr (Europe)* *revised each January using formula (figures shown for 2012) These new per diem rates are less than we received in 2000. But, I can't find those exact numbers. Last time I looked, the cost of living had increased around the world. This is an item that should have been addressed and a better result should have be achieved. I bet RA doesn't have to eat ramen noodles when he travels. One of many shortfalls in the proposed TA |
Originally Posted by tsquare
(Post 1198358)
You might be old, but you are a very one dimensional thinker.
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Originally Posted by NuGuy
(Post 1198298)
Guys,
Its clear that there are some glaring and critical errors that have been made with this TA. It is time to practices some TEM... Threat and error management. Several of the threats have already been listed...it is time to manage the errors before they lead to an unacceptable outcome. Remember, the goal of TEM is not to assign blame, but to put the aircraft in a safe condition, reevaluate, and move ahead. I see some of the supporter's postings, and I'm just reminded of an stubborn guy, pressing a bad, unstable approach, and he keeps saying "just wait, it will come together", when the SAFEST course of action is to go around, get the aircraft stable, and set up for another approach...one that follows the criteria more closely. Alfa said :" I still don't understand what this issue is with Republic and Skyteam, I haven't yet heard one description of this that makes a lick of sense to me. Why would Delta try to make Frontier grow and prosper? They can't put any Delta passengers on Frontier or some C-Series jet whenever that paper airplane actually flies" The last time I heard hubris like this was from the fNWA NC saying that there was no possible combination of events that would lead NWA to park then DC-9s in favor of the 76 seaters. "They need the lift" we were told. We all know how that turned out. Are we ready to make exactly the same mistake again? There have been a number of cases where TA's have been pulled from consideration to be reworked. It's time we thought about doing that. Nu If I missed something in this Republic thing help me out. Delta cannot place any code, enter in a joint venture, or enter into a profit/loss arrangement with Frontier unless they negotiate with us. Frontier and Skyteam? Give me the route network on that supposal. Frontier feeds Air France and KLM in Denver to go to Paris and AMS? Isn't there already a pretty big carrier in Denver that flies to Europe? If Frontier wanted to feed someone wouldn't it be United? I like your aircraft analogy. You sound to me like a guy that is calling go around at 30,000 feet because "well something might go wrong on the approach." Your "reevaluate and move ahead" path will probably mean three or four more years with no additional protections, so how does that reduce the threat? You sound like we are loosening restrictions rather than not tightening them enough for you. As some point our agreements with Republic will run out. At that time they will be gone because Delta is not happy with the Frontier play. Until that time, you cannot buy out of that contract, at least with the money we have to play with. I see Frontier as a dying carrier. They have no route network, they have no mass, they don't even have a unique product like Virgin America, they are just one more struggling carrier living day to day on the ultra low labor costs they have. If there was some value there, then why hasn't someone ponied up the money to buy them? It can't be worth more than $100 million or so, Delta could buy them with pocket change. If I had a nickel for every goofy idea that Bedford trots out to the press to gain attention, then I would have a lot of nickels. Delta and United could squash Frontier like a bug if it was worth squashing them. So if you can show me a way where one Delta passenger on Delta code gets on a Frontier jet, then I will reevaluate. Until then, it seems like a boogy man that has no teeth. |
Originally Posted by alfaromeo
(Post 1198438)
Your "reevaluate and move ahead" path will probably mean three or four more years with no additional protections, so how does that reduce the threat?
Carl |
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