LeineLodge

In light of the recurring rumor that a Scope trade-off is being negotiated, I thought it would be informative to pin down exactly what is wrong with our Top End Scope: JV/Codeshare/Revenue Sharing/Cabotage/Foreign Ownership/etc.

It appears that we all have a good grasp on RJ scope and that's good. However, I've noticed that pilots are a lot less clear on our upper end scope protections, or lack thereof. If we are going to be engaging in some sort of Scope trade, then we need to understand the value of the pieces in play. This way we'll be able to better evaluate any potential risk vs. reward of playing ball on "just a few more 76 seaters" or whatever the offer ends up being.

I'm the first to admit that I don't know enough to make an informed decision on that end of the Scope spectrum. With the resident experts around here (ACL, George, Gloopy, Sailing, FTB . . .) I'm hoping we can put together a plain English version of our biggest threats and what would constitute a worthwhile trade.

Don't misunderstand me. I'm loathe to accept 1 single more RJ, but if the payback is so significant on the top end that it makes good business sense to patch the "gaping holes" that I keep hearing about, then I think we owe it to ourselves to understand what we're dealing with here.

LeineLodge

I'm going through the live contract myself. In the meantime, can someone write up a concise, plain English description of the following:

1. JV's: How many do we currently have? In 100 words or less, describe "production balance". What loopholes current exist that mgmt could use to make Delta pilots obsolete? How can we patch these loopholes?

2. Codeshare: GOL comes to mind. How do we ensure that Delta continues to fly south of MIA? What other codeshare loopholes need fixing?

3. Revenue Sharing: What is it? And does it negatively impact Delta pilots? How?

4. Foreign Ownership: What's the big threat? How are we limiting the downside? Again with GOL and AeroMexico being partially owned by DAL, I see this as potentially getting out of hand. Virgin is another often-talked about player in the mix. How do we remain relevant internationally?

Sink r8

Good idea to look into this. I'll read with interest. George usually does a great job of addressing this throughout the L&G, but ther is always more to be learned.

acl65pilot

Off the top of my head

One "real" JV and that is AF. Virgin Australia is not quite a JV but it is different than the AF JV in the fact that AF is profit sharing and VA is revenue sharing. Because of this difference there is no need for a production balance. Any type of JV that is not "profit" sharing is only required to hold a floor of frequency for each party. Flying, by any metric does not need to be grown equally. Its the way its currently written, and is a major hole.

Domestic Codes Shares need our approval. I do not believe International CS's like GOL, China Eastern, China Southern, etc do not.

Come to think of it, we CS with HAA intra-island and I do not believe that needed our approval. I will have to look that up, but do not recall having to approve that.

Revenue sharing is a fall back type of agreement in JV's Read above. This type of agreement does not trigger our language requiring a Production Balance.

First per the PWA DAL is allowed to own 49% or less of a foreign carrier before any of our provisions kick in; 30% for domestic operators. Second, the biggest issue with FO is the fact that labor law, and therefore our PWA does not effect those companies and or pilot groups. Labor law is limited by our boarders.

Just think of a AF, KLM, AZ DAL merger. All unionized pilot groups, all with separate labor laws in four different countries. All we have is the ability to force DAL to negotiate on our behalf within the parameters we set in the PWA.

Furthermore, a foreign company only has to comply with labor contracts for workers here, not overseas. Nail that down, along with holding company language and there might be a way to not get slayed in the process. It also is way IFALPA and our relationships with these other pilot groups is so very important. If you think RJ whipsaw was bad, this would be 100 times worse.

Right now we have a six part, soon to be eight party agreement between all the major pilot unions in the JV and their respective companies. Its a start, but it does not cover everything. It basically states that everyone recognizes the other labor unions.

The way we stay relevant is to push for better international labor law, and holding company language that works for a type of deal that would have a holding company owning all of these airlines, but on the most basic level operate them on separate certificates within their respective countries. Cabotage also will require them to hold these certificates on the respective countries as well.

In the end, one post or series of posts cannot fully explain the effects that this will have.

For this contract we need protections for any sort of JV, Interline or CS agreement. Sunset or near sunset provisions on DCI, Holding Company protection that works inside and outside of the US, and a rider that forces DAL to have our agreement on any sort of flying that will put the DAL or successors code on the flights that we fly, previously flew, or would logically fly.

Scoop

Leine,

You bring up some very good points. My criteria for improving Scope is simple (the following numbers are notional): If for example we currently fly 65% of the passengers who purchase a DAL ticket and after the upcoming contract we will improve to say 70% or 75% with locked in minimums then we have improved Scope. Could this happen with more 76 seaters - yes.

The more passengers that fly on DAL metal - the quicker the stagnation will end. While it especially burns me to see DCI flying so many of our passengers to some very big cities, in reality it is really no different than Alaska or Air France, etc flying our passengers.

George is really the guy who can shed some light on the top end scope - he is normally all over it.

Scoop

Wheel Landing

Maybe I'm naive but...

I can't believe what I'm reading! How eroded has this industry become because of statements just like that?

The worst part is that there may be people from this thread on the radio broadcasting snide remarks about all the RJs you see lined up for takeoff ahead of you.

You want to talk strategy? Try this: Don't give up one more aircraft or seat in scope. Convince your company that they should right size the aircraft to the market. An E-190 sized aircraft makes good sense in certain markets. Flown by pilots at your airline, aircraft like that will help return this industry to stronger proffitts. If a 76 seater is truely needed in certain markets then it should be a good fit to put a 175 where needed as it is a common type with the 190 and shares 90 percent common parts with the 190. It appears to be working well for Air Canada. Then, begin the process of removing the 50 seat jet. It never really made sense and it certainly doesn't now with fuel costing as much as it does. Explore the possibilities of larger turboprops.

Last and most importantly, please don't consider the idea of giving up additional scope an option.

I'm looking forward to hearing your constructive ideas on how to increase proffittability and raise top end wages to what they should be.

forgot to bid

Why Lein started this thread was to talk about the top end scooe issues, all of which are far more unique and as far as I know new territory. It's a global airline operating in a global market with friends and alliances that we agree are critical and can be mutually beneficial... as long as our scope clause handles this correctly.

Right now, we're not getting the warm fuzzies. We have a problem of seemingly being replaced by AF/KLM. Just look at ATL-CDG. Hence, the need to figure this out and provide the correct solution.

The benefit of having this done properly is it could mean international growth. Having it wrong means the opposite. We have no intention of burning the candle at either end much less at both. Swapping 70 seaters for 76 seaters is a disgusting thought, but, as Lein correctly said we have to consider the section 1 package. It would be nuts to say no more converting 70 seaters to 76 seaters and lose out on the top end. That's all he means by that and I think that's wise to review everything in its entirety.

That said, I hooe we push for a section 1 that makes the company sick, not us.

Scoop

Wheel,

I like the way you are thinking but do not think it is that easy. I think you might be forgetting about the long term contracts DAL is currently stuck with. Our previous management team went bonkers locking us into very long term contracts with the DCI airlines. This was an agreed to contract so DAL can not just stop flying these aircraft. Thus DAL needs to entice the DCI airlines into letting us out of our contracts.

One way to do this is to trade. A lot less 50 seaters for a few more 70 seaters may be the "least bad" option we currently have. Another option the pilot group may prefer is to just wait it out, holding the line on Scope where it is now. Long term this might be the best option for the Pilot group but only if our management teams would not then exploit other current Scope weaknesses such as codeshares, JVs etc?

One thing a lot of guys don't take into account is that our Scope currently sucks. we are starting in a big hole whether forced into it via BK or Sold out in prior negotiations it does not matter.

As far as selling Scope - THE BOTTOM LINE IS THAT WE BASICALLY DON'T OWN SCOPE TO SELL IT.


Scoop

Wheel Landing

I appreciate the responses. It is just a little sickening to think that there is more scope relief (of any kind) on the horizon. I understand that there are issues to be solved with some of the wide body code shares that are taking place. However, please just make sure that we are not gaining 10 wide body lines at the cost of adding 30 76 seat RJs. That is exatly how the first 76 seat 175s and CRJ 900s first appeared if I remember correctly. Wasn't it 3 76 seaters allowed on property for every 1 757 aquired? Please don't let that happen again.

johnso29

No, it wasn't 3 76 seaters for 1 757. There is a formula to determine the allowable number of 76 seaters. It is based off the number of airplanes in the mainline fleet. We are under that trigger by at least 20 planes. Even if we hit that trigger, it only allows 70 seaters to be exchanged for 76 seaters at a 3:1 ratio. However, 51-76 seat jets are capped at 255 airframes. That may seem bad, but UAL has no limit to their 70 seaters, and Us Air isn't much better.

Bottom line is we have a lot to deal with. Wide Body aircraft create more jobs then Narrow Body aircraft. That doesn't mean I'm advocating for more 76 seaters. It just means the situation is not as simple as just demanding we fly 76 seaters. The E190 is not popular in the USA. JB has the most, and RAH & Us Air have a handful. It's performance has been less then desirable.