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Old 06-08-2012, 12:26 PM   #1  
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Default Delta deal could become model for scope

Delta Union Deal Could Become Model For Scope At Other U.S. Carriers
Aviation Daily Jun08, 2012 , p. 1.01
Andrew Compart



Delta Air Lines ’ tentative collective bargaining agreement with its pilots union is worded to ensure that the carrier will have to cut its regional airline services if it reduces domestic mainline capacity under a formula that could spread to union contracts at other carriers.

The tentative deal also could set other precedents. For example, the contract includes language to automatically ensure that Delta pilots retain an “appropriate percentage” of the flying in any new joint-venture agreement—an issue that the Delta Master Executive Council for the Air Line Pilots Association ( ALPA ) is referring to as “big scope” because it deals with international widebody flying, rather than “small scope” regional aircraft operations.

On small scope issues, some union contracts used to include limits on how much mainline operations could be cut, and sometimes those limits were not linked to the size of the regional operations.

The proposed deal with Delta establishes a ratio between domestic mainline and regional flying block hours that Delta must maintain. The national ALPA office says some other agreements also include ratios—based on block hours or hulls—but adds that the Delta deal is “unique” because the ratio would change if Delta revises the composition of its regional fleet to include larger aircraft.

Delta’s ALPA unit says it initiated the ratio concept.

The agreement lets Delta add 70 more 76-seat aircraft to its regional fleet, if it adds 88 mainline narrowbody aircraft and cuts its 50-seat fleet by more than 200 aircraft. But as Delta adds more 76-seat aircraft, the minimum ratio rises.

For example, when Delta adds its first 76-seat aircraft, the ratio starts out as a requirement for Delta to provide 1.1 block hours of flying for every hour of block flying outsourced to Delta Connection carriers. But the ratio increases for every 10 additional 76-seaters that Delta adds to Delta Connection service, ending at a mandate for 1.56 hours of mainline block hours for every hour at Delta Connection if the mainline operator adds at least 61 new 76-seaters to regional carrier operations. Once a new ratio is established, Delta cannot reduce it under most circumstances.

That guarantees mainline pilots at least 60.9% of the domestic block hours if Delta adds 61-70 of the 76-seaters, the Delta ALPA leadership says.

That means—unlike the big shift that U.S. airlines implemented during and after the recession in the early 2000s—Delta would not be able to move domestic services from mainline to regional. That has meaning, Delta union spokesman Buzz Hazzard says, because it would ensure “fairness through proportionality” if Delta were to downsize, and because “how we get paid and how we get employed is block hours.”

The contract includes a provision that allows Delta to go lower than the ratio for a “circumstance over which the company does not have control.” But the contract explicitly states that those allowable circumstances do not include the price of fuel or aircraft, the state of the economy, the company’s financial state or “the relative profitability or unprofitability of the company’s then-current operations .”

On the “big scope ” issue, Delta and the union will try to reach individually tailored production accords on the pilot share of flying in any future joint venture (JV), such as the one Delta already has with AirFrance-KLM and Alitalia for sharing revenue and coordinating schedules across the Atlantic. But if management and the union cannot reach consensus on any particular joint venture, Delta’s share of revenue block hours flown will be at least 75% of the airline ’s share of revenue.

“This makes sure that Delta has ‘skin in the game,’ that Delta must be an active operator in the JV, and the block hours it operates must be proportional to the revenue it derives from the JV,” says a union official.

In another notable provision, the tentative contract would require Delta to remove six seats from the 76-seat aircraft being operated by its regional partners if the carrier furloughs any mainline pilots currently on the seniority list—and forbid the carrier from reinstalling the seats until all the furloughed pilots have been offered recall. There are no “force majeure” provisions that would let Delta change this requirement, ALPA says.

Delta is declining comment on the tentative deal . The pilots union members will vote on the tentative agreement later this month.
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Old 06-08-2012, 12:28 PM   #2  
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And the truth shall set you free!
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Old 06-08-2012, 01:35 PM   #3  
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Until other airlines "pattern" with massive fleets of large RJ's and...wait for it...someone is first to up the seat count even further for a cookie.

Then they're back to square one where everyone hires the same cut throats to fly the same planes for them at the same costs and al they end up doing is raiding eathother's networks as they fatten the coffers of the next delusional IndyAir wannabe.
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Old 06-08-2012, 02:38 PM   #4  
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Until other airlines "pattern" with massive fleets of large RJ's and...wait for it...someone is first to up the seat count even further for a cookie.

Then they're back to square one where everyone hires the same cut throats to fly the same planes for them at the same costs and al they end up doing is raiding eathother's networks as they fatten the coffers of the next delusional IndyAir wannabe.
No, it's just better to cap the type and have ratios, rather than have "unlimited" of anything. CAL had only 50 seat jets (terrible with high oil), and unlimited Dash-8-400s, which killed their 737-500 operation out of the NE from EWR. AA had Eagle flying a limited number of 70 seaters, and unlimited E145s, E140s, and E135s. The next largest plane to their limited 70 seaters was the MD80, since they parked all of their Fokker 100s after 9-11. There was nothing in between. They could have bought some 100 seaters, but did not. That could have lead them to BK.
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Old 06-08-2012, 03:25 PM   #5  
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Until other airlines "pattern" with massive fleets of large RJ's and...wait for it...someone is first to up the seat count even further for a cookie......
Looking at what the proposals are at US and AMR, not to mention the 500 plus hulls at UCal....they better hope and pray to "pattern" themselves something similar to this TA.
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Old 06-08-2012, 03:41 PM   #6  
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Looking at what the proposals are at US and AMR, not to mention the 500 plus hulls at UCal....they better hope and pray to "pattern" themselves something similar to this TA.
People think it's great that UA, CAL, and AA have more 50 seaters than 70 or 76 seaters. If the 50 seaters can't make money with high oil prices, then why do you want those types ONLY? Can you throw a 737-500 on the IAH to Laredo market? There are some routes that will have an RJ on it. On those routes, I want planes on there that can make money. When the company makes money, then everyone gets more profit sharing, and big airplanes can get ordered. If you put 50 seaters between IAH and DCA Regan, then that might be bad. But IAH to Texarkana or Cedar Rapids? I would say that needs to be an RJ, unfortunately.
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Old 06-08-2012, 04:18 PM   #7  
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Bill,

Not really my fight, but it sure seems better to have dalpa fly those q400's to Cedar Rapids. If SWA wants to fly c152's, they better have swapa pilots at the controls.

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Old 06-08-2012, 04:25 PM   #8  
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Bill,

Not really my fight, but it sure seems better to have dalpa fly those q400's to Cedar Rapids. If SWA wants to fly c152's, they better have swapa pilots at the controls.

Rolf
Sounds great Rolf, but really, if Colgan can't do it for costs, and they are among the lowest paid pilots out there, what are the chances you could do it at mainline? You have to be competitive, or the airline won't use them.

And notice SWA doesn't want to have 717s in their fleet either. They only want 737s, because it cuts down on training costs (1 type), and costs for retiring pilots (one guy moves up, one guy gets hired). That is how they run their business. They aren't a worldwide carrier with different fleet needs. Delta has a hub and spoke system that includes small cities that a 717 wouldn't profitably go to. That's the point, we want all city pairs to be profitable, so we can add more to cover the map, and world domination(joking!). Southwest just announced 17 cities that will be dropped when they give the 717s away. They determined that their 737s couldn't make a profit going to those 17 cities.
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Old 06-08-2012, 05:28 PM   #9  
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I agree that a lot of the feed is done at a loss on the route, but the sum makes up for it, say Cedar Rapids-Frankfurt. Thats why money loosing routes stay. Your company has to be competive (damn you,15% roic!) but the problem with outsourcing is that you are not only competing against us but also against every feeder lowballing your route. If 2 76 seaters costs less than 1 150 seater in casm, who is DAL or SWA going to pick?
As for the 717's at swa, I think we could use 2 or 3 types with our current map. The 717 is too close to a 737 to justify its cost.
Just my opinion, good luck to you all. Or y'all.

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Old 06-08-2012, 09:07 PM   #10  
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People think it's great that UA, CAL, and AA have more 50 seaters than 70 or 76 seaters. If the 50 seaters can't make money with high oil prices, then why do you want those types ONLY? Can you throw a 737-500 on the IAH to Laredo market? There are some routes that will have an RJ on it. On those routes, I want planes on there that can make money. When the company makes money, then everyone gets more profit sharing, and big airplanes can get ordered. If you put 50 seaters between IAH and DCA Regan, then that might be bad. But IAH to Texarkana or Cedar Rapids? I would say that needs to be an RJ, unfortunately.
If your goal is more profits so you can get profit sharing and widebodies then why put hull limits? The large RJs are profitable. Do you support raising the limit on large RJs just to make more profits?
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