Council 16 (LAX) Vice Chair letter June 15th
06-15-2012, 03:57 PM
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Council 16 (LAX) Vice Chair letter June 15th
June 15, 2012
On September 11, 2001, a 100-seat jet touched down at London’s Heathrow Airport just minutes before the first tower was hit at the World Trade Center in New York. The flight had been the culmination of over a year’s worth of successful work. This 100-seat jet fleet had recently had its interior completely overhauled, and the airline had rolled out a completely new marketing program in anticipation of launching this new class of service to the public. What happened that tragic morning in New York had a ripple effect across aviation and throughout the world. Separated by thousands of miles, these events are inextricably intertwined in the lost decade of aviation.
The lost decade of aviation is a reality, and it means something different to each of us. It means lost pensions, lost jobs, lost careers, slow career progression, and more. The furloughs, the bankruptcies, and the airlines that no longer exist are all stark reminders of the turmoil of the last ten years. While the events of September 11 were not the sole cause of the turmoil of this period in history, they serve as a never-to-be-forgotten bookmark. Some economists even refer to the period as the lost decade for the world economy.
Future growth of this company will likely come in one of two forms: acquiring/buying planes and/or consolidating. Better aircraft utilization may also provide progression within the current size. Career advancement for the Delta pilots will arise from one of the above events, as well as from retirements.
The DL mainline fleet now consists of approximately 714 planes.
In 1960 it was approximately 84
In 1970, approx. 128
In 1980, approx. 205
In 1990, approx. 433
In 2000, approx. 602
A capacity neutral fleet will grow to approx. 787 (subject to ratification and Delta’s plan).
A further 1% growth (business plan) results in a fleet of approx. 812.
Fleet growth is a minimum of 40 aircraft with the TA block hour ratio.
The L-1011, 727, MD-11, 767-200, 737-200, 737-300, 747-100, 747-200, 747F, DC-10, DC-9-10/30/40 were retired out of both premerger fleets since 2000. Many of the three-pilot aircraft resulted in upward pilot movement by moving new hires from FE to F/O and then repeating the cycle again on the wide-bodies as one moved up the ranks. It was a false progression (opinion), and those planes are gone with the third pilot made superfluous. The pilot seniority list is not just smaller because of consolidation and market rationalization or productivity changes, it is smaller because Delta and Northwest also got rid of three-pilot aircraft and an entire fleet of aging 737s, DC-9s, and 747s in the last twelve plus years.
An argument could be made that the 737 fleet could have served the role filled by the RJ or as a low-cost alternative to the mainline, but three majors tried that game with Delta Express, Shuttle by United, and MetroJet, and we know how that ended. Delta even tried again with Song and UAL with Ted! There’s no way to know for sure how many of the decisions made in those years could have played out differently. The airlines were forever affected by the Airline Deregulation Act of 1978 and are still trying to figure out how to make money in an industry where fare price is king and the government continues to levy punitive taxes.
“What does the industry’s history tell us? Was this effort worthwhile? Certainly it shows that every major reform brings about new, sometimes unforeseen, problems. No one foresaw the industry’s spectacular growth, with the number of air passengers increasing from 207.5 million in 1974 to 721.1 million last year. As a result, no one foresaw the extent to which new bottlenecks would develop: a flight-choked Northeast corridor, overcrowded airports, delays, and terrorist risks consequently making air travel increasingly difficult. Nor did anyone foresee the extent to which change might unfairly harm workers in the industry. Still, fares have come down. Airline revenue per passenger mile has declined from an inflation-adjusted 33.3 cents in 1974, to 13 cents in the first half of 2010. In 1974 the cheapest roundtrip New York–Los Angeles flight (in inflation-adjusted dollars) that regulators would allow: $1,442. Today, one can fly that same route for $268. That is why the number of travelers has gone way up.
So we sit in crowded planes, munch potato chips, flare up when the loudspeaker announces yet another flight delay. But how many now will vote to go back to the ‘good old days’ of paying high, regulated prices for better service? Even among business travelers, who wants to pay ‘full fare for the briefcase?’”
—Supreme Court Justice Stephen Breyer Airline Deregulation, Revisited
Our mainline fleet is roughly the same size as UAL/CAL or SWA and is bigger than AA, UPS, and FedEx (including the 293 “feeders”). The entire fleet of Air France-KLM*[1] including all subsidiaries and cargo is approximately 616, and IAG, the parent group of British Airways, Iberia, and all subsidiaries, has approximately 423 total aircraft, while Lufthansa Group has approximately 710 planes, and Korean Air only has 142.
Delta’s fleet number, including Delta-owned or leased RJs, is 775 and even larger if you factor in DCI aircraft subleases. Basically, Delta Air Lines has the largest fleet in the world when it comes to deploying them as corporate assets. Most of the planes of the larger international mainline fleets are long-haul wide-bodies belonging to flag airlines for those countries. We simply don’t have that here. Wide-body capacity was split amongst a half dozen U.S. airlines who are in direct competition with each other and the flag carriers from abroad. I expect those foreign carriers to keep applying pressure to us going forward.
So where does Delta go from here? The airline’s growth from 1980 through today was born more out of mergers and consolidation than purchases in my opinion. We merged, consolidated, and even parked planes. The resulting airline was bigger but not as big as the sum of both. Is rinse, wash, repeat to be our future?
The Wright Brothers’ first powered flight was in 1903. The speed of sound was broken in 1947, and by 1969 the world was introduced to the brand new 100-seat jet mentioned earlier, the Concorde. I can’t think of anything that contrasts more than a 100-seat DC-9 and the SST. Yet, in 2003 the entire fleet of airworthy Concorde aircraft was parked, primarily due to economics, the extenuating circumstances of the drop in high-yield air travel due to 9/11 and one single accident. Yet, we are still operating DC-9s in this country and at Delta. If you could look into the future, would you ask, “Is there a future in 50-seat planes?” How about 70, 76, and 100 seats? What about larger aircraft? The last time Delta had 70-seat jets in their mainline fleet was in the 1970s with the early model DC-9s, and they only had a handful.
An airline’s pilots don’t decide what plane an airline buys or what route it should be flown on. When you sit down and think of the entire Section 1 of our contract and how it affects you, you should think beyond just the RJ hull. Do you simply want a Delta pilot to fly that RJ at any cost or do you want scope language that provides protections throughout the entirety Section 1? After all, what happens when Delta is involved in another consolidation event of some kind? What happens if Japanese Open Skies talks fail, and Narita becomes unusable in our route structure? What happens if Congress allows further foreign investment to “save” U.S. airlines?
The airline industry is in a constant state of flux and is irrationally influenced indirectly by outside sources, such as the news media, and directly by other influences, such as oil prices (albeit fraught with speculation). Our industry is taxed at a rate higher than that of tobacco and alcohol. Those “sin taxes” are designed to stop people from consuming those products. We are often a forgotten budget item or inconvenience for the family traveling on us to their prepaid vacation at Disney. Open skies agreements between governments, landing rights, slots, route authorities, and other items are often influenced by politics in our nation’s capital. We lack the ability as pilots to control many of these things, but we have the ability to craft language to influence them.
This article has simply been an attempt to provoke some thought about some of the issues that have come up recently and in the lounge. You are now in the middle of learning about the TA and contract changes. It is important to look at scope and every section of our contract in the aggregate.
Please take the time to make an informed decision. It’s your contract.
BK
DAL Council 16 Vice Chairman
On September 11, 2001, a 100-seat jet touched down at London’s Heathrow Airport just minutes before the first tower was hit at the World Trade Center in New York. The flight had been the culmination of over a year’s worth of successful work. This 100-seat jet fleet had recently had its interior completely overhauled, and the airline had rolled out a completely new marketing program in anticipation of launching this new class of service to the public. What happened that tragic morning in New York had a ripple effect across aviation and throughout the world. Separated by thousands of miles, these events are inextricably intertwined in the lost decade of aviation.
The lost decade of aviation is a reality, and it means something different to each of us. It means lost pensions, lost jobs, lost careers, slow career progression, and more. The furloughs, the bankruptcies, and the airlines that no longer exist are all stark reminders of the turmoil of the last ten years. While the events of September 11 were not the sole cause of the turmoil of this period in history, they serve as a never-to-be-forgotten bookmark. Some economists even refer to the period as the lost decade for the world economy.
Future growth of this company will likely come in one of two forms: acquiring/buying planes and/or consolidating. Better aircraft utilization may also provide progression within the current size. Career advancement for the Delta pilots will arise from one of the above events, as well as from retirements.
The DL mainline fleet now consists of approximately 714 planes.
In 1960 it was approximately 84
In 1970, approx. 128
In 1980, approx. 205
In 1990, approx. 433
In 2000, approx. 602
A capacity neutral fleet will grow to approx. 787 (subject to ratification and Delta’s plan).
A further 1% growth (business plan) results in a fleet of approx. 812.
Fleet growth is a minimum of 40 aircraft with the TA block hour ratio.
The L-1011, 727, MD-11, 767-200, 737-200, 737-300, 747-100, 747-200, 747F, DC-10, DC-9-10/30/40 were retired out of both premerger fleets since 2000. Many of the three-pilot aircraft resulted in upward pilot movement by moving new hires from FE to F/O and then repeating the cycle again on the wide-bodies as one moved up the ranks. It was a false progression (opinion), and those planes are gone with the third pilot made superfluous. The pilot seniority list is not just smaller because of consolidation and market rationalization or productivity changes, it is smaller because Delta and Northwest also got rid of three-pilot aircraft and an entire fleet of aging 737s, DC-9s, and 747s in the last twelve plus years.
An argument could be made that the 737 fleet could have served the role filled by the RJ or as a low-cost alternative to the mainline, but three majors tried that game with Delta Express, Shuttle by United, and MetroJet, and we know how that ended. Delta even tried again with Song and UAL with Ted! There’s no way to know for sure how many of the decisions made in those years could have played out differently. The airlines were forever affected by the Airline Deregulation Act of 1978 and are still trying to figure out how to make money in an industry where fare price is king and the government continues to levy punitive taxes.
“What does the industry’s history tell us? Was this effort worthwhile? Certainly it shows that every major reform brings about new, sometimes unforeseen, problems. No one foresaw the industry’s spectacular growth, with the number of air passengers increasing from 207.5 million in 1974 to 721.1 million last year. As a result, no one foresaw the extent to which new bottlenecks would develop: a flight-choked Northeast corridor, overcrowded airports, delays, and terrorist risks consequently making air travel increasingly difficult. Nor did anyone foresee the extent to which change might unfairly harm workers in the industry. Still, fares have come down. Airline revenue per passenger mile has declined from an inflation-adjusted 33.3 cents in 1974, to 13 cents in the first half of 2010. In 1974 the cheapest roundtrip New York–Los Angeles flight (in inflation-adjusted dollars) that regulators would allow: $1,442. Today, one can fly that same route for $268. That is why the number of travelers has gone way up.
So we sit in crowded planes, munch potato chips, flare up when the loudspeaker announces yet another flight delay. But how many now will vote to go back to the ‘good old days’ of paying high, regulated prices for better service? Even among business travelers, who wants to pay ‘full fare for the briefcase?’”
—Supreme Court Justice Stephen Breyer Airline Deregulation, Revisited
Our mainline fleet is roughly the same size as UAL/CAL or SWA and is bigger than AA, UPS, and FedEx (including the 293 “feeders”). The entire fleet of Air France-KLM*[1] including all subsidiaries and cargo is approximately 616, and IAG, the parent group of British Airways, Iberia, and all subsidiaries, has approximately 423 total aircraft, while Lufthansa Group has approximately 710 planes, and Korean Air only has 142.
Delta’s fleet number, including Delta-owned or leased RJs, is 775 and even larger if you factor in DCI aircraft subleases. Basically, Delta Air Lines has the largest fleet in the world when it comes to deploying them as corporate assets. Most of the planes of the larger international mainline fleets are long-haul wide-bodies belonging to flag airlines for those countries. We simply don’t have that here. Wide-body capacity was split amongst a half dozen U.S. airlines who are in direct competition with each other and the flag carriers from abroad. I expect those foreign carriers to keep applying pressure to us going forward.
So where does Delta go from here? The airline’s growth from 1980 through today was born more out of mergers and consolidation than purchases in my opinion. We merged, consolidated, and even parked planes. The resulting airline was bigger but not as big as the sum of both. Is rinse, wash, repeat to be our future?
The Wright Brothers’ first powered flight was in 1903. The speed of sound was broken in 1947, and by 1969 the world was introduced to the brand new 100-seat jet mentioned earlier, the Concorde. I can’t think of anything that contrasts more than a 100-seat DC-9 and the SST. Yet, in 2003 the entire fleet of airworthy Concorde aircraft was parked, primarily due to economics, the extenuating circumstances of the drop in high-yield air travel due to 9/11 and one single accident. Yet, we are still operating DC-9s in this country and at Delta. If you could look into the future, would you ask, “Is there a future in 50-seat planes?” How about 70, 76, and 100 seats? What about larger aircraft? The last time Delta had 70-seat jets in their mainline fleet was in the 1970s with the early model DC-9s, and they only had a handful.
An airline’s pilots don’t decide what plane an airline buys or what route it should be flown on. When you sit down and think of the entire Section 1 of our contract and how it affects you, you should think beyond just the RJ hull. Do you simply want a Delta pilot to fly that RJ at any cost or do you want scope language that provides protections throughout the entirety Section 1? After all, what happens when Delta is involved in another consolidation event of some kind? What happens if Japanese Open Skies talks fail, and Narita becomes unusable in our route structure? What happens if Congress allows further foreign investment to “save” U.S. airlines?
The airline industry is in a constant state of flux and is irrationally influenced indirectly by outside sources, such as the news media, and directly by other influences, such as oil prices (albeit fraught with speculation). Our industry is taxed at a rate higher than that of tobacco and alcohol. Those “sin taxes” are designed to stop people from consuming those products. We are often a forgotten budget item or inconvenience for the family traveling on us to their prepaid vacation at Disney. Open skies agreements between governments, landing rights, slots, route authorities, and other items are often influenced by politics in our nation’s capital. We lack the ability as pilots to control many of these things, but we have the ability to craft language to influence them.
This article has simply been an attempt to provoke some thought about some of the issues that have come up recently and in the lounge. You are now in the middle of learning about the TA and contract changes. It is important to look at scope and every section of our contract in the aggregate.
Please take the time to make an informed decision. It’s your contract.
BK
DAL Council 16 Vice Chairman
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