Any "Latest & Greatest" about Delta?
08-17-2009, 06:40 AM
Gets Weekends Off
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Posts: 581
Alfa,
If memory serves me correctly (and that's a big "if") American had a fairly good sized fleet of 100 seat aircraft which they subsequently parked. I don't know when they retired them, but it wasn't all that long ago and they were all operated by mainline pilots: Fokker 100's.
If memory serves me correctly (and that's a big "if") American had a fairly good sized fleet of 100 seat aircraft which they subsequently parked. I don't know when they retired them, but it wasn't all that long ago and they were all operated by mainline pilots: Fokker 100's.
08-17-2009, 06:46 AM
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Posts: 581
ACL (or anyone else),
When DAL sold ASA to Skywest during bankruptcy, part of the deal was a long term contract for them to feed DAL. It sure seems from reading your posts, as well as management comments, that DAL management wants to reduce their feed via regional jets and replace at least some of it with mainline.
My question is: Do you know when that contract with Skywest expires and/or can their (Skywest and ASA) flying be substantially reduced in the interim?
When DAL sold ASA to Skywest during bankruptcy, part of the deal was a long term contract for them to feed DAL. It sure seems from reading your posts, as well as management comments, that DAL management wants to reduce their feed via regional jets and replace at least some of it with mainline.
My question is: Do you know when that contract with Skywest expires and/or can their (Skywest and ASA) flying be substantially reduced in the interim?
08-17-2009, 06:50 AM
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Originally Posted by Wasatch Phantom
ACL (or anyone else),
When DAL sold ASA to Skywest during bankruptcy, part of the deal was a long term contract for them to feed DAL. It sure seems from reading your posts, as well as management comments, that DAL management wants to reduce their feed via regional jets and replace at least some of it with mainline.
My question is: Do you know when that contract with Skywest expires and/or can their (Skywest and ASA) flying be substantially reduced in the interim?
When DAL sold ASA to Skywest during bankruptcy, part of the deal was a long term contract for them to feed DAL. It sure seems from reading your posts, as well as management comments, that DAL management wants to reduce their feed via regional jets and replace at least some of it with mainline.
My question is: Do you know when that contract with Skywest expires and/or can their (Skywest and ASA) flying be substantially reduced in the interim?
DAL sold ASA to SKW so they could pay off their AMEX line of credit. They did that and went in to Ch 11 the next day with AMEX providing exit financing. EV was the chip they needed to get the CH 11 done successfully.
08-17-2009, 07:05 AM
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Originally Posted by sailingfun
The feeling in the industry and from anaylists is that AMR is unable to provide feed at a competitive cost structure and it is hurting their core product. This has occurred for several reasons not just scope but it is huge issue. JFK is a example. AMR should be the king of JFK and flying to Europe from NYC. They have a better facility and have had a longer large term presence in the NYC market them most others. They are however unable to feed their operation and can't get the load factors they need.
The question for AMR now is do they give up on JFK. That is why the rumors are starting about a terminal swap in JFK with Delta. I doubt that is going to happen but I never thought USAIR would give up their terminal in LGA. The relationship between feeders and the mainlines will always be a large grey area. When you outsource flying you lose jobs at the mainline if that route would have been operated by the mainline absent the outsourcing. If the route can't be operated by the mainline at a competitive cost structure with other passenger options then you lose jobs at the mainline. Where you draw the line on where that cost break is becomes the hardest point to find. I think that Delta has shifted that point to far in the direction of regional feed. I think the E170/175 class of aircraft should be the battle line. I think American has kept the scope clause to tight and as a result can't compete in many markets with their core product. Profit or loss on routes comes down to can you get the last 10 or 15 passengers on the aircraft. Without cost effective feed you lose the mainline flight.
If tomorrow every major airline could take over all its feed the problem would be solved since the cost structures would all go up. Thats not likely however. AMR has a tight scope clause and a high cost feeder in American Eagle that also has scope. They are handcuffed as a airline at the moment because of those two issues. There is no right and wrong answer on where the scope line should fall. Its a moving target that changes with industry conditions. In the mid 90's I think anything over 50 seats could have been flown at the mainline. With the leverage the court system has given managements under Bush judges the last 10 years the line has been moved. Moving it back will take effort and time. You can't strangle your mainline fleet and mainline jobs in a attempt to take it back in one giant leap. It has to be phased in and your competitors have to follow suit.
The question for AMR now is do they give up on JFK. That is why the rumors are starting about a terminal swap in JFK with Delta. I doubt that is going to happen but I never thought USAIR would give up their terminal in LGA. The relationship between feeders and the mainlines will always be a large grey area. When you outsource flying you lose jobs at the mainline if that route would have been operated by the mainline absent the outsourcing. If the route can't be operated by the mainline at a competitive cost structure with other passenger options then you lose jobs at the mainline. Where you draw the line on where that cost break is becomes the hardest point to find. I think that Delta has shifted that point to far in the direction of regional feed. I think the E170/175 class of aircraft should be the battle line. I think American has kept the scope clause to tight and as a result can't compete in many markets with their core product. Profit or loss on routes comes down to can you get the last 10 or 15 passengers on the aircraft. Without cost effective feed you lose the mainline flight.
If tomorrow every major airline could take over all its feed the problem would be solved since the cost structures would all go up. Thats not likely however. AMR has a tight scope clause and a high cost feeder in American Eagle that also has scope. They are handcuffed as a airline at the moment because of those two issues. There is no right and wrong answer on where the scope line should fall. Its a moving target that changes with industry conditions. In the mid 90's I think anything over 50 seats could have been flown at the mainline. With the leverage the court system has given managements under Bush judges the last 10 years the line has been moved. Moving it back will take effort and time. You can't strangle your mainline fleet and mainline jobs in a attempt to take it back in one giant leap. It has to be phased in and your competitors have to follow suit.
You bring up many good points but left out a few. DAL is losing money - Some of our connection carriers are making money - maybe we are not getting such a good deal after all.
Southwest, Airtran, Jetblue - all have no DCI type of feed and yet they manage to get by. Different business model you say, I say correct, but if outsourcing is so good why can they not come up with a way to use it to thier advantage?
AMR purchased TWA and this caused thousands of furloughs. DAL had thousands of senior Pilots retire to protect their pensions - I don't feel you can make a fair comparison of furlough numbers.
How can DAL create a "Brand" with 10 different carriers?
From the American Heritage dictionary:
Brand- A trademark or distinctive name identifying a product or a manufacturer.
I guess our product for a DAL ticket is flying on any one of 10 airlines, most who owe their position to being the lowest bidder. This does not seem too "distinctive" to me, but hey, I am not in management.
Is the outsourced product (DCI) comparable with DAL?
How about outsourcing the flightcrews, but using DAL gates, gate agents, baggage personnel etc? It seems in some instances we are only outsourcing Pilots and FA's - How does this affect the cost savings of outsourcing?
With all that said, I will agree with you that there is a proper place for RJ feed in our system. If done correctly I feel it would serve us well. The problem is management went bonkers and now we have RJs connecting cities such as New York, Atlanta, Chicago etc where there is very little reason to do so.
Saying Scope and lack of feed is the reason for the number of furloughs at AMR is an oversimplification at best and may be just incorrect - I doubt any of us have access to data to know other then what management wants us to know.
Finally, hopefully ACL is correct and the RJ boom is coming to an end with flying slowly being brought back to mainline which I think is good for Pilots and good for passengers.
Scoop
08-17-2009, 08:32 AM
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PNCL's in play.
http://finance.yahoo.com/q/bc?s=PNCL...=on&z=m&q=l&c=
Remember what I wrote about RJET.
http://finance.yahoo.com/q/bc?t=3m&s...=rjet+dal+skyw
My guess is a few have inside information and are trading on it. Since 90% of Pinnacle's business is Delta, it more than likely is Delta news. Extrapolate from that the "debate" whether LGA slots regional slots and the fact the LGA deal is supposed to be "staffing neutral" for Delta pilots. Not sure what is in the crystal ball, but someone thinks something is in there.
http://finance.yahoo.com/q/bc?s=PNCL...=on&z=m&q=l&c=
Remember what I wrote about RJET.
http://finance.yahoo.com/q/bc?t=3m&s...=rjet+dal+skyw
My guess is a few have inside information and are trading on it. Since 90% of Pinnacle's business is Delta, it more than likely is Delta news. Extrapolate from that the "debate" whether LGA slots regional slots and the fact the LGA deal is supposed to be "staffing neutral" for Delta pilots. Not sure what is in the crystal ball, but someone thinks something is in there.
08-17-2009, 08:39 AM
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Yep there is a lot in play.
08-17-2009, 08:47 AM
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Grits
Originally Posted by tsquare
What's all that white stuff on the ground? Looks slippery. I'm scared.
08-17-2009, 08:57 AM
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Originally Posted by alfaromeo
There is no other airline that has lost more mainline flying in the last five years than AMR. Explain to me how their scope has saved mainline jobs.
After DAL "sold their scope" in 2006, they offered recall to all remaining furloughed pilots and then hired 700 more, including you and Bucking Bar, the most vocal scope hawks on this board.
AMR just lost an arbitration about the minimum size of their active pilot group. As far as I know, AMR has not bought one single 70, 76, or 100 seat jet for their mainline due to their "tight" scope clause. They are buying 737-800's but are still retiring MD-80's faster than they are buying new jets.
You are going to have to go real slowly now and explain how DAL sold mainline jobs and AMR protected theirs.
After DAL "sold their scope" in 2006, they offered recall to all remaining furloughed pilots and then hired 700 more, including you and Bucking Bar, the most vocal scope hawks on this board.
AMR just lost an arbitration about the minimum size of their active pilot group. As far as I know, AMR has not bought one single 70, 76, or 100 seat jet for their mainline due to their "tight" scope clause. They are buying 737-800's but are still retiring MD-80's faster than they are buying new jets.
You are going to have to go real slowly now and explain how DAL sold mainline jobs and AMR protected theirs.
First, DAL has sold the most scope. It is only logical for airlines like AMR and CAL to force upon the respective pilots unions a scope sale. AMR is in contract talks as is CAL. There is no management team around that is worth their salt that would just say "uncle" and buy 70+ seat jets for mainline in the middle of a heated contract negotiation period. Duh!
We can look at what AMR management is trying to do. Yes, with our scope allowance as well as UAUA's it makes sense for them to appear as it they cannot compete unless APA gave in and realized that small jets are better at Eagle. That is our external pressure to keep us outsourcing.
AMR has not cleaned their books as we have. Fact is that they have paid their bills and have to compete differently than we do.
Post the TWA acquisition, they shrunk. This deal had a ton of similar overlap. They kept STL, which is really an inefficient hub. They have as a result been dealing with a fairly inefficient hub and spoke system, this on top of the inability to reduce costs in CH11 has raised their seat mile costs.
As you suggest, a simple fix would be do out source the 70+ seat flying and not deal with the static cost issues AMR has. It would exert tremendous pressure on APA to lower their overall compensation as more of their jobs would be outsourced.
Your statement that if they gave AMR, DAL's type of scope they would be hiring is just not true. AMR was the worlds largest airline and has been shrinking with the economy. It is not do to scope that is too tight. They are trying to shrink to profitability due to a weak market, high debt burden, liquidity and maturing debt issues et al.
If one thing that DAL has proven, it is the fact that taking the seats out of the market does not mean you can raise ticket prices. It just means that you cost per seat mile goes up. AMR has a high static cost. New terminals, maturing debt, and a sour market. If APA got their contract done tomorrow, I am sure that AMR would be looking different than it does today. If they needed a 76 seat jet and they had to fly it at mainline, they would do so. APA is not stupid enough to price themselves out of a market. (First hand accounts)
Funny thing is that if you look at DAL and what our route boys are doing, it is moving to more of a AMResque model. Our growth was not due to scope. It was to improper utilization of our jets. 777's to MCO where the aircraft just could not make money for one example. We are moving jets to the routes they were intended for. We want a ton of 777's like AMR has had for 10 years. We simply needed bodies because the jet that was doing a 1.5 hr flight is now doing a 15 hr augmented flight. Because of this the aircraft utilization has gone up. It is not because of scope being where it is here. We also stopped hiring when the international expansion ended, not because we tightened scope.
You really are trying to compare apples to oranges, and all it is doing is making a smoothie.
08-17-2009, 09:03 AM
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Good analysis ACL.
08-17-2009, 09:17 AM
No longer cares
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Originally Posted by ExAF
Just think of them as cool grits on the ground.
kinky...
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