Go Back  Airline Pilot Central Forums > Airline Pilot Forums > Major
DAL to reduce by 4-5% by 4th Qtr >

DAL to reduce by 4-5% by 4th Qtr

Notices
Major Legacy, National, and LCC

DAL to reduce by 4-5% by 4th Qtr

Old 09-15-2011, 06:22 PM
  #41  
Happy to be here
 
acl65pilot's Avatar
 
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Default

Originally Posted by gloopy View Post
That's what I was wondering. If it could be done via that method, then why even involve the ACMI "air groups" at all?
MONEY. Those ACMI groups as you call them, get better rates, offer a way to keep debt off the balance sheet, and keep our debt service and credit rating where it is at.
Why would any existing virtual airline have to be involved when a straight up leasing corporation could just do it?
MONEY Leasing corps charge more than this sort of deal would. Why? They have a motivation to make it in to the next phase of their existence.
To me the risk of a seniority land grab/arbitration/McCaskill Bond situation and/or a good old fashioned DFR suit would be a nuclear price to pay just for some temporary paper advantage accounting trick.
Maybe, but one thing I have not touched on on this round of discussing this is this:
DAL will need pilots and needs to find a way to get em going forward. Regional carriers know that pilots will be hard to come by, and their gauge of jets are going away. This sort of deal works for the regional airline, the regional pilot, and the major airline. I could envision some sort of sunset clause on the existing CPA's in exchange for this type of financial arrangement and some sort of flow to DAL. I really imagine that a double staple where they get tacked to our list and where we if we choose to fly the 76 seat and below flying would fly it at a category seniority below those that opted to stay put being one way of getting around all of this holding company scope, McCaskill Bond situation, DFR issues. It allows our seniority to be preserved, protects their current QOL as long as DAL choose to have it flown, allows DAL out of select CPA's, helps these given airlines find a means of revenue going forward, allows an ordered pulldown of their airline operations, provides the best financing for DAL possible, give these pilots a known future, and allows us to restore our scope of flying. It could be deemed a long shot, but if DAL really wants to fly those types of jets, it gives us true leverage to have it happen, and allows us to determine how the flying is flown, and by whom going forward. By including pilots from the likes of ASA, XJ, etc, though working with them to give them a job here, those sort of issues you mention melt away. Heck a simple flow agreement may do it, but doing it with a double staple allows some of the financial latitudes DAL would prefer. Look no further than AMR Eagle and their willingness to do away with their section one provisos for a flow. Note it, and note the willingness you see from pilots that see the RJ career as they know it being gone in ten years.

Also, how would it be structured? If it wasn't on the DALA certificate, would we turn into a Mesa/RAH where we (our seniority list) technically work for multiple airlines? What about the other work groups? Our pilots with RAH FA's? Mesa mechanics? SKYW dispatchers?
I worry about the pilots. DAL has FA's in asia that are not technically on the seniority list, Mechanics that work on DAL jets that are not DAL Mechanics, etc. (Dispatchers would probably dispatch DAL flying by DAL pilots. They have protections) Keep in mind I suspect or expect that DAL would have total operational control over the certificate if they were not flown on ours. The supposal I made above avoids the messy riffraf that you fear.

What if it was SKYW to avoid the RAH scope (btw how funny would that be...avoiding RAH because of THEIR scope!! LOL OMG!!! I want a mandatory oil painting of that meeting!) but SKYW eventually merged with ASA/XJ and voted in ALPA for all. Now we are flying planes on their certificate and they never agreed? Not claiming I know how that would be settled, but can we really risk that just to shuffle debt around?
See above, and also under stand it is more about debt service and credit ratings that this debt. The rates these airlines can get would be better than we could by assuming all of the debt. As a direct result our debt service for the same level of debt, plus the debt DAL currently carries would go though the roof.

I'm just worried that there isn't enough contract language in the world that could be written to account for all the potential unintended consequences of something as convoluted as this could end up being. The real risk to our pilots in an virtual airline version of this seems to far outweigh any potential paper gain the accountants might enjoy for a couple quarters before every analyst and their brokerage realize what's being pulled.
Again nothing happens and nothing flies until we say so, we own the flying and should never give that authority up. Period.
They have been doing one step below this for 20 years, this is just the next small step.

Speaking of the 787 compensation, I wonder if we spent it all on a phenomenal 737 deal or if some of that involved some 717's, or if we're saving it for something else, like 787-900's in 2020? Is something like that public knowledge or is it secret til it happens?
I often wonder too. Those 20 717's that BCFLC had for sale disappeared within a few days of DAL announcing that 739 deal. Like I said, I suspect that there is a lot more to that deal.

Also, the 717 is about 16 million a copy and if DAL can get that, they could potentially end up with a fleet of 100 plus the HAL birds if they bought them for a fleet over 130. That is a sizable fleet, and one that they can assume the total liabilities for without this sort of arrangement. What we are discussing is option two. (Actually thee, two would be getting a short term lease from a manufacturer, but I bet they will not play, because they too know that they are selling a 1/2 generation jump in technology that will be out done by mid next decade. )
acl65pilot is offline  
Old 09-16-2011, 04:19 AM
  #42  
Gets Weekends Off
 
Schwanker's Avatar
 
Joined APC: Dec 2009
Posts: 1,224
Default

Originally Posted by iaflyer View Post
So why can't Air France or KLM buy some airplanes then lease them to us? Wouldn't that take the debt off our books? Or create some sort of "dry lease" where they buy them, we use our crews (pilot and FA), they pay for the gas and we pay them? We're all part of a big happy Skyteam and JV family right? The company spends a lot of effort taking flying away from us, why don't they put some effort into allowing us to fly the metal.
Air France-KLM plans $12bn fleet renewal - FT.com

Air France-KLM plans $12bn fleet renewal...

Maybe they just found away to get more block hours across the Atlantic
Schwanker is offline  
Old 09-16-2011, 05:04 AM
  #43  
Gets Weekends Off
 
Joined APC: Feb 2008
Posts: 19,221
Default

Originally Posted by Schwanker View Post
Air France-KLM plans $12bn fleet renewal - FT.com

Air France-KLM plans $12bn fleet renewal...

Maybe they just found away to get more block hours across the Atlantic
Read section 1 of your contract.
sailingfun is offline  
Old 09-16-2011, 11:42 AM
  #44  
Gets Weekends Off
 
Joined APC: Jan 2007
Position: west coast wannabe
Posts: 815
Default

Originally Posted by Schwanker View Post
Air France-KLM plans $12bn fleet renewal - FT.com

Air France-KLM plans $12bn fleet renewal...

Maybe they just found away to get more block hours across the Atlantic
As much as DL loves used airplane, maybe we can get some scraps off the floor from AF-KLM?
rvr350 is offline  
Old 09-16-2011, 11:59 AM
  #45  
No longer cares
 
tsquare's Avatar
 
Joined APC: Mar 2008
Position: 767er Captain
Posts: 12,109
Default

Originally Posted by sailingfun View Post
Read section 1 of your contract.
I'm no lawyer.. as I have said elsewhere and also a Kentucky public school graduate, so forgive my ignorance. How does our scope help us when the number of seats are limited that can be sold on (say) AF as DAL coded flights, yet they are flying 380s like nobody's business? They might have to sell 200 seats and give the revenue to DAL, but they have 2000 seats across the Atlantic to JFK whereas we have 214 or 184... IOW, I don't see a limit on the number of flights they can provide across the Atlantic, but only the number of seats that can be revenue shared. So what it seems to me is that we have ceded that market to AF even though we get a piece.. albeit a small one.. of their action. How does this help us? I still see only 34 super premium widebodies on the DAL property.. and that many welded to the terminal everytime I am in CDG.
tsquare is offline  
Old 09-16-2011, 12:16 PM
  #46  
Happy to be here
 
acl65pilot's Avatar
 
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Default

Originally Posted by tsquare View Post
I'm no lawyer.. as I have said elsewhere and also a Kentucky public school graduate, so forgive my ignorance. How does our scope help us when the number of seats are limited that can be sold on (say) AF as DAL coded flights, yet they are flying 380s like nobody's business? They might have to sell 200 seats and give the revenue to DAL, but they have 2000 seats across the Atlantic to JFK whereas we have 214 or 184... IOW, I don't see a limit on the number of flights they can provide across the Atlantic, but only the number of seats that can be revenue shared. So what it seems to me is that we have ceded that market to AF even though we get a piece.. albeit a small one.. of their action. How does this help us? I still see only 34 super premium widebodies on the DAL property.. and that many welded to the terminal every time I am in CDG.
In the AF-KLM-DAL JV it is not just about seats, but ESK's (Equal Seat Kilometers) What that means is that cargo carrying capability as well as seats are taken in to account to come up with the ESK metric for each jet. Because of this one flight of a 380 equates to three flights of a 767ER. We fly about 2/3rds of the block time in the JV but only half of the ESK's.

I have tried to point out that since they cost more them flying larger metal with less block actually works better for the JV partners. (Not us but the airlines) As a result we will see more flying in smaller aircraft like the 767 and 330 here at DAL.
acl65pilot is offline  
Old 09-16-2011, 02:18 PM
  #47  
Gets Weekends Off
 
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
Default

Originally Posted by acl65pilot View Post
In the AF-KLM-DAL JV it is not just about seats, but ESK's (Equal Seat Kilometers) What that means is that cargo carrying capability as well as seats are taken in to account to come up with the ESK metric for each jet. Because of this one flight of a 380 equates to three flights of a 767ER. We fly about 2/3rds of the block time in the JV but only half of the ESK's.

I have tried to point out that since they cost more them flying larger metal with less block actually works better for the JV partners. (Not us but the airlines) As a result we will see more flying in smaller aircraft like the 767 and 330 here at DAL.
That's how I thought of it too, but tsquare brings up an interesting angle: how those ESK's are calculated. Is it 100% certain that any plane AF puts across the pond counts for total seats and cargo, regardless of the percentage allocated to the DL/SkyTeam partnership? IOW, can AF put a 380 CDG-ATL with 500 seats (keeping the numbers simple and assuming cargo per seat is about the same) and then saying "oh no monsieur, only 200 seats are sellable/codeable by DL the rest are purely AF" so all mother D has to do is slap one 76ER on the route and call it even Steven?

Does the terms of our JV lock in 100% of all ESK's total, in their metal, including all their affiliate companies (KLM, who knows maybe one day Britair?, etc) plus all of their code shares and JV's including those they haven't entered into yet?
gloopy is offline  
Old 09-16-2011, 02:23 PM
  #48  
Gets Weekends Off
 
Schwanker's Avatar
 
Joined APC: Dec 2009
Posts: 1,224
Default

Originally Posted by sailingfun View Post
Read section 1 of your contract.
I have....and find it sad. Are you impressed with it?

At least Alaska is booming! And those great RJ's now have WiFi!!!
Schwanker is offline  
Old 09-16-2011, 02:45 PM
  #49  
Gets Weekends Off
 
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
Default

Originally Posted by acl65pilot View Post
Look no further than AMR Eagle and their willingness to do away with their section one provisos for a flow. Note it, and note the willingness you see from pilots that see the RJ career as they know it being gone in ten years.
Yes, but an important thing to acknowledge about that deal is AA is an independant union. That alone eliminated any and all DFR claims, which is one of, if not the, biggest risks to our pilot group in a convoluted financial smoke screen such as this potential theory.

Also, since pretty much everyone flies for everyone these days in the ACMI "air group" sector, how would a staple work for the SKYW "air group"? What if they merge with ASA/XJ (and 100% they will if they see those pilots getting a sweet deal) how do we "flow" UALexpress, USAirexpress, Eagle, etc pilots back and forth?

Would it be like a Mesa/RAh style "master list" monstrosity where pilots bid constantly among half a dozen fake airline certificates? Many of which have nothing in whole or in part to do with Delta? In good times and in bad, that has constant DFR written all over it.

While many (arguably most?) regional airline pilots at virtual fake airlines may indeed realize their bubble is bursting to the point of complete sector collapse (although not all do FWIW) they still have all the incentive in the world to go for a land grab at anytime in this process. Including and especially after the ink is dry on our little Rumpelstiltskin-ish deal with a Lorenzo-esque pretend airline experiment.

This is what many have been waiting for. Take the runway, reach V1, and then figure out how to sort it all out. Even though the deals are signed, it will be a guarantee of DFR's for the career of the youngest pilot on our list. Either way financial resources will be diverted to pay for the squabble, and worst case we could lose. You know they will claim that while their represenatives agreed to it and maybe it even passed MEMRAT, maybe even by large margins, that they only did so under duress, and they will illustrate the "harm" they recieved in staggering dollar terms. Just look at TWA to see how easily they can sue after the fact. And they will if we are ALPA, 100%. One hundred percent.

And they won't just be suing for our dues money or the mothership's MCF. No, they will be suing for our seniority numbers too.

And my appologies to the dead horse in all this, but I still don't see why its such a given that a fake airline gets better terms than a real airline espcially when the ONLY thing they can back up their financing with in the first place is the real airline's overall credit risk. SKYW only gets planes at a good rate to fly for Delta if they can prove to their lines of credit that they will be flying them in iron clad long term agreements with Delta Air Lines and therefore the financiers must be assured that Delta Air Lines is a good enough credit risk relative for the spposedly preferential credit terms of SKYW to begin with.

Have we avoided debt with our RJ partner catastrophy? I guess we have, on paper, and only on a technicality. But the costs associated with separate ops and ACMI guaranteed profits plus the devistating lack of flexibility in those long term deals with the devil that we sign just for quarterly bonus time today have cost us billions.

I just can't wrap my head around why we would ever go along with this. If the company needs the planes for the network, we will get the planes. We are an airline. That isn't just their operation job, its pretty much their only one. If we don't sign off on a convoluted monstrosity like this and we still need the planes, they will have to deal with us to put them on our certificate in our PWA on our (and only our) seniority list. We can't say we refuse to do a B scale when we would otherwise go along with a B scale on another certificate. That is moral grandstanding and no one buys it anymore.
gloopy is offline  
Old 09-16-2011, 02:46 PM
  #50  
Gets Weekends Off
 
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
Default

Originally Posted by Schwanker View Post
I have....and find it sad. Are you impressed with it?

At least Alaska is booming! And those great RJ's now have WiFi!!!
And AF/KLM is growing like crazy and just ordered 110 next gen planes. Yay for SkyTeam!!!!!
gloopy is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
Razor
Cargo
0
02-04-2009 11:53 AM
Scoop
Mergers and Acquisitions
4
10-02-2008 09:45 AM
Past V1
Major
88
07-16-2008 07:28 PM
jetBlueRod
Major
80
06-11-2008 07:27 AM
freightguy
Major
39
12-13-2007 11:59 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices