The DOT papers state that C360 purchased SA (monies from Oakhill) and then Oakhill formed SAH and placed both companies into the holding company. The reason for placing the weight on Conditional is this is not a for sure job. It could still be pulled out from under us and we will have to start sending out the applications, again. In a real merger the two groups would intergrate the seniority lists and job offers would not being going out, you would become an employee of the new company.

 

I guess this is way above my paygrade. I hope you all get the offer you are looking for. I hope the offer comes soon and it is acceptable to you and your group. I look forward to all the C360 folks joining the team. If I had to guess it will probably be something like SACG's contract. I know what it is like living in limbo. Good luck my friend.

 

The details of the legal/financial shell game are insignificant as far as we are concerned. For us peons, it doesn't really matter. What it boils down to in the end is really quite simple. Here it is in a nut shell:

1. The Neffs sold their soul to the devil (Oak Hill). In return, they get to "play airline" with an additional 3 classic 74's, 2 -400's and 6 or so 777's in a few years.

Neff needs crews to operate his new toys. The logical path is to offer employment to C360 guys, but until this happens. We don't have enough info to make any decisions. From what it looks like so far, Mr. James K. Neff has not offered much in way of an olive branch to anyone that has a smaller bank account than his.

A very wise man once told me, "You can't polish a turd!"

 

Call it what you will. There is a reason Oak Hill chose the Neffs over C360 managements team. I am not defending the Neffs, and I doubt your offer will be much better than the SACG's contract. If you think it is that bad, by all means move on. This is a time builder for me. I wanted to get heavy time and see some new places. If it turns into a great place maybe I will stay. Who knows.

 

JEEZ! 27 pages about a small cargo start-up! I vote you geys get your own Category, like "Purple Tails", or move this thread to "Cargo". Whaddya say???

(There is obviously great interest...)

 

Need to put this thread over in the "Cargo" section and change the title to "From Start-up to demise: Cargo 360 -The Complete Story-"

 

Unfortunately, I think you are right. I believe Oak Hill has no plans on running an airline (putting SA management in charge). It's a bunch of investors finding new ways to write taxes off and depreciate assets in order to line their pockets. This move was a tactful and makes no sense for creating an airline for the future.
Cargo360-97%on time 2nd in the world for cargo ops, management averaging over 30 years of airline experience, profitable in first year of operations, good labor relations, customers aligned for future operations with aquiring aircraft etc.
The 2 things I see that SA brought to the table were the fact that they were the bigger company and the narrow minded Oak Hill bean counters thought that's all that mattered not the product. Also the 30+ spare engines they have look great on paper, BUT talked to a SA mechanic and he stated that those engines were mostly junk and just barely better than the ones they were replacing, but that dosen't matter to an Oak Hill bean counter.

I hope I'm wrong for all the labor involved.

 

You probably nailed it. They will maximise their cash flow for a few years and move on. I don't think there are any real long term plans. I also hope I am wrong. Time will tell.

 

Unfortunately, I think you are right as well. From what I have been able to ascertain, the depreciation write-offs on the airplanes alone as a result of the structure of this deal more than make up for any losses, including an unanticipated early shut down of Cargo 360 and the loss of the KAL contract due to personnel shortage.

Say what you will about Neff, but the present bottom line at Southern is what Oak Hill's after, not the future value of an exceptional cargo airline. Neff pays cash or gets short-term financing on airframes that are 90% used up, flies them until they are 110% used up, and then parks them in the desert to prop up what's left or part out for profit. Is that the kind of business I'd want to run? Probably not. But is it profitable? Hell yes. I heard from one source that each of those airframes generates around $200,000 per month in pure profit.

Oak Hill likes money, and they don't particularly care about anything else, apparently, as long as it doesn't interfere with the bottom line. Why should they? They have a fiduciary responsibility to their investors to make money--not to improve your quality of life. SA's management team is in place instead of Cargo 360's because they have the higher cash flow to show for it. On time performance and all those other metrics only matter to airlines that are trying to build something great. For SA and Oak Hill, it's the money that matters, and if they can make that kind of cash doing what they're doing, then Oak Hill sees no need to tweak it.

And let's not fool ourselves. The offer of employment to the C360 crews is only on the table to bridge the staffing gap. Come this time next year, it won't matter one bit whether anyone crosses over as the hiring will have caught up. It might cost them a bit in the meantime, but I'm betting that they will recoup most of that by working the pilots like dogs to cover the shortage, and that is precisely why the C360 guys will be insisting on amendments to whatever offer eventually shows up...someday.

I'm not sure what the hold-up is on the SA/SACG end, but it doesn't matter really. Anything that C360's pilots negotiate on the side will virtually have to apply to the SACG as well or I'm betting that there will be no "consensus" among them on seniority list integration. For now, any delays just serve to turn up the heat on SA and OH, which is fine with me. But make no mistake: this deal has already served Oak Hill's needs with the tax write-off. If the airframes move over with no pilots and SA just parks its two highest-time freighters and works the crews overtime to staff the extra plane, it's still been profitable for Oak Hill and SA and even the heavy investors at C360, although I'm sure the latter group would rather have just maintained control of the operation they were so carefully crafting.

So who gets screwed? The pilots at both groups unless we come together and seize this limited opportunity to demand change. Will that happen? I doubt it. I have seen very little but tough talk from many of our guys in the past, and I expect that to continue. Anyone who has something better to go to is a fool to stick around to see how this plays out (and many already have moved on). Everyone else is more than happy to shut up and take the promise of double pay for the next few months. God forbid we do or say anything that might jeopardize that!

And I've enjoyed meeting and talking with all the SACG guys in ANC the past couple of months. I empathize with you, and some of us will be sympathizing with you very soon. However, I also get the impression that the SACG is looking for a large portion of the C360 crews to come over and take a stand, but it's just not going to happen. Someone said it a few pages back--most of us are here for the unique opportunity of building something great alongside our management team. We believed in Cargo 360. Many of us purchased stock in the company when it was offered. And although there have been some really dumb policies come out of Seattle from time to time, the pendulum has always swung back to the middle with the gravitational pull of reason from the majority of both sides.

No matter how great the SACG is, the fact remains that Neff and his management team don't care about you, and they won't care about us either. Certainly Oak Hill won't notice until it begins impacting their bottom line, which means that a labor action is in the cards if you're ever to improve anything. But the contract isn't even up for negotiation for several more years, so all they really have to do is stick to it and we've got no legs to stand on. (It's my understanding that they often aren't even doing that, but with no formal grievance process or the bankroll of a national union, there's really no recourse.) As one of our captains said after a meeting with Tom and Bill in ANC, "It doesn't matter if they let me rewrite that entire contract from scratch myself, I'm not going over there." There is no trust of SA's management.

So yes, on paper, it looks like this has all kinds of small benefits for the C360 crews that transition over, which might add up to something significant. However, the scheduling, corporate culture, and trust issues trump all of that, and there is nothing at all that can be done about the latter two, short of replacing the entire SA management team, which OH will never do because of the cash flow they're generating.

Sorry to be such a downer, but the big money boys really ruined what was going to be something great, and I'm going to be surprised if any pilot at the combined "Southern 360" ever sees any tangible benefit from it. The bottom line was that Oak Hill Capital was absolutely the wrong investor for Cargo 360 to be courting. However, at the time, the company didn't have much of a choice--they made a deal with the devil, and this is the result.

 

StripAlert,
IMHO I think you are right on. I would be suprised if there is a SAH flying in 5 years. I will also be suprised to see any 400's or 777's in SA's colors. Sad but unfortunately true. For the investors is all about "profit now" and us pilots are just an avenue to those profits.