Mesaba flow up/flow down with NWA
 

The NWA MEC today approved a flow up/flow down agreement with the company for Mesaba. Any thoughts about how this might make Mesaba more attractive or not.

Sources??????? If thats true thats awesome!

The NWA MEC Hotline

Sorry for the long post. Last December I posted some speculation, then followed up a month later. It now looks like much of the speculation has become fact. What happens to Compass seems to be the one remaining issue.


Originally Posted by Ftrooppilot (6 months ago)

FACTORS
NWA owns 30+ % of Mesaba (Mair Holdings)
NWA Senior Management owns a significant % of Mesaba (Mair Holdings)
NWA owns Mesaba aircraft and equipment
Mesaba is a "body factory." No concrete and bricks to purchase.
NWA has new CRJs and ERJs comming (may need court approval)
NWA short routes with average load factor can be flown by 90 seaters.
NWA pilots object to any regional flying aircraft with over 50 seats.

GOAL
Increase MAIR holdings stock value . (Management makes money.)
Reduce costs by using CRJs instead of A-320s, etc.on some routes
Avoid NWA pilot protest over commuter 90 seat issue.
Exercise greater control over owned assets.
Have a solely owned regional capability (like COMPASS was to be.)
Maintain crew staffing levels. Avoid eventual pilot shortage.
Make money.

SOLUTION
Assign 50 seat CRJs / ERJs to regional contractor (not Mesaba). (To Pinnacle then 17 back to Mesaba)
Purchase Mesaba (ready made regional airline) (Done)
Incorporate Mesaba personnel into NWA. (Done ???)
Assign 90 seat CRJs to NWA (former Mesaba personnel) (Mesaba - for now)
Establish a "flow through" for crew members. (Done as of today)

RESULTS
NWA Makes money and comes out of bankruptcy. (Done)
NWA senior managers make money on their[Mesaba] stock.
(Check both Mesaba and NWA management bonuses)
NWA pilots are happy that 50 seats and below go to regionals. (Done - with flow back they have access. )
NWA has regional capability (foil to testy regional contractors) (Done)
Former Mesaba pilots are happy to be part of NWA with flow through. (Happy with CRJs / Now have flow through)
Compass option is cancelled. (IMHO - It will happen.)
NWA avoids a potential pilot shortage at the "major" level. (Draw from Mesaba)

And they all lived happily ever after.

.

Batting average isn't bad. My best guess - Compass will fade into the sunset or disolve into NWA. The ERJs will go to Mesaba or NWA mainline. Much depends upon the finalized relationship after NWA purchases Mesaba. Will the name Mesaba be dropped ? Lots of interesting senarios possible.:confused: :confused:

Very, very interesting!

uh,, thats what pinnacle thought when they bought us and gave us lots of planes while downsizing mesaba. Oh and we had a weak "flowthrough", (ask the furloughed dc9 captains here all about that) which was really a flow back since no one went up. like i have said before you guys will get built up and i can bet you dollars to donuts that within 2 years you will be sold to the highest bidder, and the cycle will repeat itself once again.

Yeah, if you want to make crap flying for a mainline carrier whose management would pimp out their own grandmothers on a street corner if it would raise their stock price 1%:rolleyes:

Flowthrough ha?, for what its worth CAL is taking more XJT guys now than they did with the "Flowthrough"

And depending on how its worded, beware of "flowthrough" agreements. They almost always benefit the mainline pilots more than the regional partner. Now the mainline pilots who are eligible for flowthrough (or "flowback", as it were) have a guaranteed safety net. What do you (as a regional pilot) have? A chance to go up to mainline? Whoopdy fricken do! How bout you pay me more at the regional level and shove your flowthrough up your a$$.

Possible. Don't have a "dog in this fight." Never been employed by an airline but enjoy doing analysis. Past economic moves (NWA/Pinnacle history) don't always predict future decisions.

In my (humble uneducated) opinion, if anything is sold it will be the Compass operating certificate - but not ERJs which will go to NWA (possibly MESABA) to replace DC9s. Doing so will "uncomplicate" the NWA / Mesaba / Compass relationship and management effectively having to deal with three Corporations (redundant expensive management) and three employee union groups.

Time will tell.:cool:

haha I love it, couldn't have said better myself......................

The reason that many of the flowthrough agreements did not produce flowthrough in the past was because most happened just before 9-11, and because of this, they did not have the chance to come full circle. The majors began the furlough's, and the only flowing was in the downward direction. With a solid industry, why would they not work? The answer is not historically, because we have no history of a stable industry to base it on in my opinion. So, is there another answer, or are the negative nellie's still just PO'd over 9-11!

That's all interesting commentary and speculation. Why do you think they will absorb Compass into NWA? What would be the motivation for that? IMO, they will build both Mesaba and Compass up as companies and then take them public, ala Pinnacle a few years ago. The proceeds of the public offering of Pinnacle's stock went into NWA's pension fund. I dont see any reason why that couldnt happen again. Plus, it will provide a boost to the NWA shares. It seems to me a classic example of buy low, sell high.

Just answered your own question there bub. Because the industry is cyclical the only time a flowthrough agreement is in your favor (as a regional pilot) is:

1) You are flowing through to an airline you want to be at.
2) You are one of the first flowthroughs in the door.

Other than that, they are usually not in your best interest as a regional pilot. Now, if this were an industry that did not go from boom to bust every 10 years (historically) then flowthrough agreements would be great. But personally, I'd rather bank a little more hard cash now rather than have the carrot of MAYBE flowing up to a mainline carrier that i MIGHT want to work for if things don't change in the next 5 years. But thats just me.

I understand what you are saying, but to say that they do not work is not accurate. They have not worked in the recent past, because once the people who met the qualifications per the agreement were eligible to flow-up, the fuloughs started at the mainline and they lost it. That is not to say that they don't work though...the cards just didn't fall toward the regionals at that time.

If it is a ten year cycle like you are saying, then the guys that get in now will be well placed in the major when the ten years rolls around and they will have a nice cushion with the flowback if it is necessary. When the industry is good, they do work. You take the good with the bad. It is a gamble, but for the people that have their sights set on a particular carrier, I think that they are a good thing. Mainline is not going to give it up for free...nor should they, so of course there is going to be a flowback part of the agreement. Some people would rather have the money now, like you say, but many would rather have their sights set on where they want to be in a few years instead. For those people, I think that flowthroughs are a good thing.

The problem with these flow through agreements is not only the cyclical nature of this industry but also the fact that they are never straightforward, explicit or binding in any way.

So in addition to the unpredictability of the industry you have the unpredictability of how management will interpret the agreement or in fact if management will throw out the agreement altogether at any future date for any reason (e.g. to sell off the regional). The bottom line is that these agreements are good for management as it enables them to dangle the carrot in your face, yet ultimately management can do anything they want and the agreement is not worth the paper it is written on.

If you go to a specific regional with the hope to flow through to a particular major you will most likely be disappointed. Instead, get you turbine PIC, become marketable and then go where you can go based on the market conditions.

You mean like a capitalist, free market economy? Wow, what an idea! Just like each airline having its own seniority list, a flowthrough deters movement from company to company which plays into the hands of management. They hold you by the gonads b/c who in their right mind is going to give up all that seniority until things get really bad.

AND ANYWAY,, NWA IS NOT AN AIRLINE I WOULD WANT TO FLOW UP TOO.... ever talked to an employee there?

Flowthrough? Flowback? at PCL? There has never been any such thing.

Back in 2002, NWA/PCL opened up preferential hiring for furloughed NWA pilots. They had no super seniority and started at the bottom with everybody else.

Most were FO's/FE's with little time at mainline, the furloughs didn't go terribly deep.

There has never been a flowthrough/flowback provision on paper between the PCL and NWA MEC's. Ever.

The only reason any of those guys became captains is because thier seniority held the position and they bid it. Not because of a J4J type deal.

good point, very good point

All things equal I would rather have the possibility of flow through over no possibility of flow through. However, it is a carrot as sgrd0q says.

Flow through is a way to recruit and retain pilots. Would I go to a carrier with a flow through vs. one with out... maybe. Would I stay at the carrier if a better opportunity was to present itself... highly unlikely.

If I read the Compass flow up/down correctly, which I would imagine the Mesaba agreement would closely match, when you flow back you loose your mainline hire date and start over with the regional hire date. Anyone have any insight on this? (I believe that the details were posted on the Compass website. But, I can't quite remember.) If this is the case I, personally, would never flow back. I'd go do about anything else during a furlough; make better money, let the wife work for a while, raise my kids and keep my hire date.

If there's one thing that can be sure about this flow through, its gonna be interesting to see how this all plays out. There are some serious pros and cons to it (from a XJ pilots perspective). I'm going to be watching this thing very closely...

uh yeah,, i tried to make air quotes but i couldn't find them on my key board so i made real quotes around the word "flowthrough". usually the quotes mean something sarcastic. like this.... Yeah our f.a. is "hot" !....
see how that works. and the reason they became captains is because of the hiring of street captains. it was an easy pool to get people from.

Whatever buddy, I had 4 furloughed NWA guys in my class when I started in early 2003 at Pinnacle. None were street captains.

yeah, kinda like we aren't hiring street captains today right??? oh wait, they go through new hire, pass checkride, head back to cec, go through upgrade, pass checkride and then they are on the line... all within 3 months... call it what you want, i call it street captains.

NWA Press Release.

". . . . . . Neal Cohen who will be executive vice president strategy, international and CEO-regional airlines. Cohen will have lead responsibility for strategy development, manage NWA’s international passenger and cargo businesses, and oversee NWA’s wholly owned regional carriers. Cohen will report to Doug Steenland, Northwest president and CEO."


The centralization of management and intergration of owned regionals has started. Which names will survive ? IMHO - only NWA. The words Compass and Mesaba will be history in a year. :eek:

So they were street captains even though the time between thier FO initial and Captain upgrade was somewhere in the neighborhood of 18 months? They're mostly all back at NWA anyway now, so it's a moot point.

You're really talking out of your ass here, most of this happened before you got hired.

I know what's happening NOW, I'm talking 4 years ago.

Exactly. Ask all the guys here at ExpressJet that were hired under the flowthrough how that went for em:rolleyes: Basically after 9/11 CAL flowed back all their pilots (and we furloughed) and then said "ok, our guys are safe...Hey Express! You can forget about that flowthrough now." That was before Express was spun off.

For REAL! Same with CAL. Unless they completely gut their contract and pay scale I have no desire to go to CAL.

have to second that. I've said it a million times.......flow throughs don't work. take it from ex amr gals like me!:mad:

[ . :confused: like i have said before you guys will get built up and i can bet you dollars to donuts that within 2 years you will be sold to the highest bidder, and the cycle will repeat itself once again.[/quote]

Fuloughed DC-9 Captains??? Where in the world did you get that info? We never furloughed anyone close to being Captain.

[:confused: . Oh and we had a weak "flowthrough", (ask the furloughed dc9 captains here all about that) which was really a flow back since no one went up.

Furlouged Captains??? NWa never furloughed anyone close to Captain?

Just ask those American Eagle guys who were captains before 9/11. Top of the list to move up...? No wait, now you are moving way way way down. Sure, its great if you work for NWA, cause just in case they have to furlough more ppl (not that a class act airline like NWA would ever have to do that) at least you have a safety net. But the guys as Mesaba are getting screwed.

I couldn't agree with you more. By far one of the worst airlines to fly on. It’s hard to blame the crews though after management sucked the life out of them. It will be interesting to see what happens to the DC9 crews in the future. But from NWA’s history, I can guarantee it will be more a$$ raping!

Flowup / down makes for good controversy - but not in the current context where we have an expanding industry with a pilot shortage. (I know the pundits will say "qualified" pilot shortage.) Airlines have restructured and instituted changes that save money. Like it or not the old $300,000 "brass ring" prize Captain slot in twenty years is gone. Lower cost per seat mile is the name of the game.

Northwest will keep the seat mile cost low enough to compete with other carriers. In doing so profits and stock value will increase. They know that crew costs will gradually rise because of supply and demand. More efficient aircraft being flown by wholely owned regionals can offset these increases. The expanding industry also makes the sale of a regional / operating certificate attractive.

As I have said before, I don't have a "dog in this fight" (never been an airline employee) but enjoy discussion and analysis. The following is strictly speculation.

1. NWA will sell Compass and its E175 fleet (including options) when it has ten aircraft. Pilots will be given the option of being NWA new hires of going to the new operator.

2. NWA will exercise its CRJ900 options buying additional aircraft for Mesaba (a name that will be quietly dropped).

3. NWA will use the proceeds of the Compass sale (and other funds) to start purchasing Q400s to replace the "aging" SAABS.

:rolleyes: :rolleyes:

Everyone keeps saying Compass will be sold and the Mesaba name will go away. So what then will we be called? Are you suggesting Mesaba will become NWA mainline? Furthermore, I would say NWA would probably like to get theirs hands on more E-jets, not less. So how would selling Compass and their a/c accomplish that?

You kidding, their posting the pics of the CRJ 900's on their myspace pages right now, they got the BIG SHINY JET :p

SAAB...I don't think many newhires are flocking to Mesaba because of the upflow to NWA or the fact that they fly CR9's. I think it has more to do with the fact that Mesaba is growing by 51 a/c and they have low mins. I got the -900 but don't have a big head about...the pay is the same for all F/O's regardless of type.

Mesaba will continue to exist as an organization, just the name will be changed. Maybe we need a naming contest (I can't wait to see what PinnacleFO suggests). The NWA relationship will become closer (ie: flow up/down, etc.) NWA wants the regional/legacy line to be transparent to the customer.

I know it's company propaganda but you might read http://www.bombardier.com/en/0_0/0_0...ay_16_2006.pdf
pages 23 and 26. (the whole document is interesting). It claims that a CRJ 700 is much cheaper to operate then an E170. The cost per seat mile in the CRJ900 is even more efficient.

Standardization of the fleet (Bombardier CRJ and Q400 aircraft) is both effective and efficient. Many operators have gone in this direction. The proximity of parts and service helps.

I'll buy that. Looks like it might go this way.

Let me ask those other regional guys out there, does your CR9 have first class and do you serve hot meals in first class? We do. NWA spared no expense on these planes. One of which will be on display at the Paris Airshow. It's the finest CR9 Bombardier has ever built (this comes from Bombardier).

I think the future is bright for MESABA. That's why people should come here. We have really great people here. Many changes are coming our way but sometimes change is good.