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Airline Mergers/Industry Problems!!

Old 06-17-2008, 12:11 PM
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Default Airline Mergers/Industry Problems!!

Interesting speech given by Bob Crandall at the Wings Club in NYC on June 10, 2008.....aviationweek.com/extra I am not a Bob Crandall fan but his view of our industry to date is accurate. Consolidation is not the solution and the federal government does need a national transportation plan to turn our industry into an efficient and profitable system. He indicates in his speech and his editorial in the latest issue of Aviation Week that some form of regulation for our industry is the solution!
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Old 06-17-2008, 12:19 PM
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Bob Crandall.... "Rocket Bob"..... love him or hate him.... he was at least an airline boss who knew airlines...... interesting interview with him....

http://www.pbs.org/newshour/bb/trans...dall_5-20.html
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Old 06-17-2008, 12:25 PM
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Oberstar has also said re-regulation is not off the table... It is the best thing I can think of for this industry. There is little to no way to stop the race to the bottom other than re-regulation. I say go for it!
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Old 06-17-2008, 12:32 PM
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DAL/NWA Letter follows-





ALPA: The Pilots Union




June 16, 2008

To All NWA and DAL Pilots,

We are writing concerning the proposed Northwest–Delta merger and the Delta MEC’s Letter of Agreement (LOA) 19.

The Delta and Northwest MECs, as well as ALPA at the national level, agree that achieving a single, joint collective bargaining agreement with Delta management—an agreement that will improve the pay, working conditions, and benefits of both pilot groups—is a top priority.

Our joint message of April 22, 2008 stated that:

“… negotiations would seek a single collective bargaining agreement that will include immediate parity in rates of pay effective on the closing date of the proposed corporate transaction.”

On the important issue of seniority integration, our April 22 statement further provided that:

“… seniority integration should be accomplished through expedited negotiation after the negotiation of the single collective bargaining agreement and, if necessary, using expedited arbitration to be completed before closing of a corporate transaction.”

We continue to fully support these joint goals. In this regard, as you may know, the two negotiating committees met jointly with Delta management on May 29 and presented to management a joint bullet-point proposal designed to establish a framework for further negotiations. The committees received an updated financial briefing on June 12, which will be followed by negotiations with Delta management on June 17–19. Further negotiations are scheduled to commence on June 23.

Management understands and agrees that these negotiations are a high priority and has indicated its willingness to meet as frequently as reasonably necessary to reach an agreement. In addition, we met with Delta CEO Richard Anderson on June 10, when we stressed again the importance of promptly completing a joint agreement. We are hopeful that the process now under way will result in a joint agreement sooner rather than later.

The joint agreement will be built from a base that consists of the Delta Pilot Working Agreement (PWA), including LOA 19, and provisions related to the Northwest collective bargaining agreement, as necessary.

Following completion of joint negotiations, we will focus on the integration of the two seniority lists with the goal of having a single integrated list in place at the close of the corporate transaction.

We all agree on the importance of moving forward now to reach a single joint contract and an integrated seniority list before the corporate closing. The Northwest and Delta pilots will have the collective support and resources of the Association at their disposal to accomplish that goal.

In Unity,



Captain Dave Stevens
Chairman, NWA MEC
Captain John Prater
President
Captain Lee Moak
Chairman, DAL MEC
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Old 06-17-2008, 04:15 PM
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No doubt about it. Regulate this thing. This yo-yo industry is killing our porfession.
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Old 06-25-2008, 02:48 PM
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I am not so sure regulation would be a fix all solution here. Maybe it would assist us in the right direction. The problem as I see it is in the management and business models. For one, management in airlines could be streamlined. Also here's a thought, hire aviation professionals with aviation schooling and experience. In some professions you can use standard business strategies and adapt them to your current niche. Not in aviation. Marketers and managers are interchangeable throughout a wide variety of business, however there are a few business's that need specialized training. For instance, you can't get an undergrad degree in business admin. then top it off with a masters in business admin. and become a CPA. The same holds true to aviation, at least for certain positions within the aviation profession.
Next let's look at what I see as another major disparity. Here's a simple ( at least on paper) route structure problem; I am selecting American airlines at random for this example. Let's look at one city pair, LAX-DFW. A LCC operating one single type can get a fairly accurate cost estimate of this route and based on a certain amount of occupancy make a profit. Now let's take AA. They have many flights during the day between these 2 cities and many different pieces of equipment also. They have an MD-80, 737-800, 757, and 767 all flying between these cities on the same day. While fares fluctuate somewhat, it is basically driven by times( most used time of day)they are fairly similar. The inaccurate models being used to calculate a generic fare spread across the entire fleet you can see how this would not work efficiently. Even if the 767 is full, they are using the same formula that they used for the MD-80.
One other problem no one is addressing is that the airlines are publicly traded companies and the execs answer to shareholders not you. Bottom line is what makes or breaks an airline exec.
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