Originally Posted by slowplay (Post 1201545)

Denny,

I'll repost a previous answer I've given to a very similar question. Suffice it to say if anybody is promising you growth then they havent' worked in the airline industry. This agreement should be compared to our current agreement (where we actually are) and not to where we "wish" our agreement would be. Any stress test applied to this agreement should also be applied to our current agreement. Does our current agreement guarantee growth? Does our current agreement restrict DCI if mainline downsizes? The answer to both of those is clearly "no."

The block hour ratios in the TA ensure that Delta executes at a minimum level on their business plan, and that if it doesn't that Delta mainline isn't the only hydraulic accumulator in the system.

There are no mainline fleet counts in this agreement other than the delivery of small narrow bodies (B717)...there are block hour ratios. There is a DCI fleet count in this agreement. As DCI takes delivery of 76 seaters which is only enabled by mainline receiving SNB's, DCI must shrink according to a table in the PWA.

There is no guarantee of growth in this agreement. This agreement protects us if there's not growth and serves as a backstop to business plan failure. If management accepts delivery of all 88 B717's, then they get access to up to 70 76 seat jets AND they must reduce the DCI fleet to 450 by the end of 2015. 125 of those can be 50 seat jets. As described before, Delta currently has obligations to 311 of those aircraft at the end of 2015. They will also be capped at 223 76 seat aircraft and 102 70 seat aircraft. If they shrink mainline block hours below the minimum ratio, then for every hour mainline shrinks DCI will shrink more due to the requirement to maintain a 1.56-1 minimum ratio. If mainline grows, DCI will still be capped by the 450 aircraft limit and their physical ability to utilize the aircraft. Remember that DCI's fleet seating capacity is being reduced by 15-16% over time and they are currently (depending on month) 46-48% of domestic equivlent block hours. While the math isn't pure due to differences in aircraft utilization rates, if Delta stayed static whle DCI shrank there would be a significant capacity reduction going on in our domestic system, and almost all of it would be borne by DCI. That means that something else is going on that is negatively affecting Delta. Compare the contractual result in that case under the TA with our current scope, where management is unfettered except for furlough protections in downsizing mainline in favor of DCI.

Oh, and the planned ratio (not guaranteed) of flying is about 1.76-1. That number and even the backstop number of 1.56 are a far cry from today's 1.19-1.

Let me know if this is not responsive to your question, and I'll try again. I'm going to be away from the computer for most of the day, so any response will be later tonight.

Originally Posted by Bill Lumberg (Post 1201568)

So, you want to keep planes that don't make money? Capping the 70/76 seaters means having to keep MORE of the 50 seaters, and those obviously don't make enough money in this environment. If Delta parks 150 50 seaters, will they just stop flying to all of those cities? No, the 102 70 seaters will take over and try to make money on those original 50 seater routes. The 76 seaters will fill in where the 70 seaters leave, and the 717s (88 of them BTW, a lot) will cover routes that we now see 76 seaters. It's the only way to improve the profits and lower the CASM during high oil. Tie the 717s up to the additional 76 seaters, and that means mainline growth, or NO additional 76 seaters. Then throw in a ratio that helps us and not DCI, and that is a win.

The only way to make a widebody order is to actually MAKE MONEY, and tons of 50 seaters flying around isn't helping. Those leases will not be cut unless they can trade up to larger. Parking 150 50 seaters can only help us.

Originally Posted by Bill Lumberg (Post 1201568)

So, you want to keep planes that don't make money? Capping the 70/76 seaters means having to keep MORE of the 50 seaters, and those obviously don't make enough money in this environment. If Delta parks 150 50 seaters, will they just stop flying to all of those cities? No, the 102 70 seaters will take over and try to make money on those original 50 seater routes. The 76 seaters will fill in where the 70 seaters leave, and the 717s (88 of them BTW, a lot) will cover routes that we now see 76 seaters. It's the only way to improve the profits and lower the CASM during high oil. Tie the 717s up to the additional 76 seaters, and that means mainline growth, or NO additional 76 seaters. Then throw in a ratio that helps us and not DCI, and that is a win.

The only way to make a widebody order is to actually MAKE MONEY, and tons of 50 seaters flying around isn't helping. Those leases will not be cut unless they can trade up to larger. Parking 150 50 seaters can only help us.

Originally Posted by vprMatrix (Post 1201598)

This is a very fair and honest answer.

My reasoning is that there is no growth promised because there is not likely to be any appreciable increases, if there was this we be touted as a win for the pilot by both Delta and DALPA.

Originally Posted by vprMatrix (Post 1201598)

Reading you response did prompt another question though.

How many 50 seats are under contract without this TA?
and
How many 50 seats are under contract with the TA?

Hint- The same number.

Originally Posted by vprMatrix (Post 1201598)

What happens if we agree to the TA and start taking delivery of "new small narrow body" aircraft and order 70 shiny new 76 seat RJs and then finds out that the DCI carriers wont let them out of their contracts for a 2-1 trade?

Will we end up having to just accept the new 76 seat aircraft since the contract to buy them has already been signed just like happened with the last 76 seat aircraft that we had the grievance settlement over? DALPA seem to be very good at excusing Delta from little problem they get themselves into.

Originally Posted by acl65pilot (Post 1201615)

What would your response be when the current 76 seat aircraft are not profitable and the company wants to operate something like the CS100 w 76 seats instead of those jets? How about a rj with a gtf? They would be "more profitable"as well.

Originally Posted by DLpilot (Post 1201602)

Are you saying you want the outsourced product to be highly profitable to benefit a widebody order? So why not just drop all the 50 seaters and make the 70/76 seaters unlimited, then delta can make as much money as they need. What happens when you make it more profitable for a company to outsource a product?

Originally Posted by Bill Lumberg (Post 1201645)

Overall profits can help contribute to a big order. As far as dropping all 50 seaters, some of them are newer than others. I believe Pinnacle has some of the newest, with plenty of cycles left on them. Notice I said MANY of the routes of the 50 seaters need to be covered by 70 or bigger seaters, but not all. Maybe MSP to Bemidji or SLC to Butte on a 50 seater does well? Thanks to the parking of all of the Saabs, some routes are left with 50 seaters as the smallest equipment. Only Network Planning knows if that plane is the correct fit, but they apparently need atleast 125 of them, which is better than 270 or more of them.

Originally Posted by Bill Lumberg (Post 1201645)

Overall profits can help contribute to a big order. As far as dropping all 50 seaters, some of them are newer than others. I believe Pinnacle has some of the newest, with plenty of cycles left on them. Notice I said MANY of the routes of the 50 seaters need to be covered by 70 or bigger seaters, but not all. Maybe MSP to Bemidji or SLC to Butte on a 50 seater does well? Thanks to the parking of all of the Saabs, some routes are left with 50 seaters as the smallest equipment. Only Network Planning knows if that plane is the correct fit, but they apparently need atleast 125 of them, which is better than 270 or more of them.

Originally Posted by Bill Lumberg (Post 1201568)

So, you want to keep planes that don't make money? Capping the 70/76 seaters means having to keep MORE of the 50 seaters, and those obviously don't make enough money in this environment.

Originally Posted by slowplay (Post 1201545)

Denny,

I'll repost a previous answer I've given to a very similar question. Suffice it to say if anybody is promising you growth then they havent' worked in the airline industry. This agreement should be compared to our current agreement (where we actually are) and not to where we "wish" our agreement would be. Any stress test applied to this agreement should also be applied to our current agreement. Does our current agreement guarantee growth? Does our current agreement restrict DCI if mainline downsizes? The answer to both of those is clearly "no."

Oh, and the planned ratio (not guaranteed) of flying is about 1.76-1. That number and even the backstop number of 1.56 are a far cry from today's 1.19-1.

Let me know if this is not responsive to your question, and I'll try again. I'm going to be away from the computer for most of the day, so any response will be later tonight.