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Pinnacle Contract Terminated by Delta in ATL

Old 06-11-2008, 04:11 AM
  #131  
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Pinnacle Worries About Northwest Contract
Lisa LaMotta, 06.10.08, 6:45 PM ET

Delta Airlines is too busy worrying about fuel woes to play nice.
Delta has been running into a slew of trouble as it tries to consolidate. The legacy carrier has not only been cutting its own capacity, but trying to terminate contracts with its regional carriers; pushing those carriers to the brink of bankruptcy and beyond.
The Atlanta-based airline notified Pinnacle Airlines (nasdaq: PNCL - news - people ) on Tuesday that it would be terminating its contract as a Delta Air Lines (nyse: DAL - news - people ) affiliate due to an inability to meet minimum arrival time.
Shares of Pinnacle dropped 25.8%, or $1.54, to $4.44by the close of trading. Meanwhile, Delta was off 2.6%, or 16 cents, to $5.93. Neither Delta nor Pinnacle returned calls for comment.
The smaller carrier countered, saying Delta's termination of the contract is "wrongful" based on the notion that Delta establishes the company's operational scheduling and therefore is partly responsible for the airlines on-time performance.
"We are extremely surprised and disappointed that Delta is attempting to take this drastic and improper action," said Phil Trenary, Pinnacle's chief executive. "From the very beginning of our Delta Connection operations, we expressed our concern that the flight schedules Delta created were unrealistic. Our position was affirmed when recent schedule changes by Delta allowed immediate improvement in our on-time performance, well above the agreed minimum standard and above most other Delta Connection carriers."
Pinnacle could face the same fate as its regional brethen.

The biggest problem for the smaller carrier may be what this terminated contract will mean for the contract Pinnacle has with its largest customer, Northwest Airlines. Delta is set to merge with Northwest pending regulatory approval and could the merge could bring cloudy skies for Pinnacle.
"At this time, we have no plans to change our relationship with Pinnacle as a Northwest Airlink partner," a Northwest spokeswoman told the Associated Press.
Earlier in the month, a Federal judge blocked the major carrier from ending a contract with Mesa Air Group (nasdaq: MESA - news - people )'s subsidiary Freedom Airlines. Delta notified Freedom Airlines of the termination of the 50-seat, 34 aircraft Delta Connection operating agreement due to operational performance at the end of March. The company told a Federal judge that it wouldn't be able to pay bondholders and would default on aircraft leases if the contract was canceled. (See: " Mesa + Delta = Big Mess")
Delta , which plans to merge with Northwest Airlines (nyse: NWA - news - people ), said it would cut 2,000 jobs through voluntary retirement and reduce its 2008 domestic capacity by 10% year over year. (See “ Delta, Northwest Fall From The Sky”)
Other regional airlines are having better luck. ExpressJet recently turned down a $3.50 per share offer from SkyWest when it retained a new seven-year agreement to provide regional service for Continental Airlines, guaranteeing stable income for the small carrier for the foreseeable future. ExpressJet will continue flying 205 jets for Continental. The legacy carrier said their new deal, which will take effect July 1, includes lower rates that are more competitive with other regional carriers.
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Old 06-11-2008, 06:05 AM
  #132  
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Originally Posted by NWA320pilot View Post
Back in the late 80's I was working for CAL Express (Trans Colorado Airlines). CAL told our management on a Wed that they we were no longer flying any of the DEN hub fligts starting the next Monday. Then within 30 days we were flying no CAL flights by CAL's choice! CAL's managements response to we have a contract was "take us to court". By the time court rolled around we were out of business.

This type of thing really sucks! What we need to work towards is not having contract carriers but rather all flying done by mainline pilots. This would mean bringing all the regional guys onto a mailine senority list and improving their working conditions and pay. ALP has always taken a top down approach to pay improvements, maybe its time to take a bottom up approach.
Amen! This is a problem which all pilots need to work together to fix. It's time to make ALPA a union, and time for pilots to fix our own house.
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Old 06-11-2008, 07:38 AM
  #133  
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Originally Posted by NWA320pilot View Post
This would mean bringing all the regional guys onto a mailine senority list and improving their working conditions and pay..... maybe its time to take a bottom up approach.

Hear, Hear !!!

Plus, the existing mainline folks would have us to insulate them from future furloughs !!!

Win, win
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Old 06-11-2008, 03:14 PM
  #134  
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Originally Posted by LoudFastRules View Post
Amen! This is a problem which all pilots need to work together to fix. It's time to make ALPA a union, and time for pilots to fix our own house.

It would need to be something similar to the Screen Actors Guild, SAG.
One contract for ALL member pilots. Each carrier is free to add their own special flavor or perk, but a solid baseline of pay and benefits would need to be established systemwide.

The first step is getting ALL our contracts to expire the same year, or when making a new contract, do not exceed whatever the present longest contract is (probably Eagle, it doesn't expire until 2013).

The second step is to begin creating a master union pilot seniority list. The easiest way is to simply use a person's first date as a member of the union... ALPA most likely. That would be their senioirty date as an airline pilot.... regardless of which carrier they work for. Your first day on property anyplace as a member starts the clock. None of this running the place bankrupt, selling off, re-organizing and wiping out pilot seniority.

The third step is to begin supporting our EXISTING union. That means not just doing your, my, our part in ALPA now, but also supporting the other ALPA local's... not letting them whipsaw one ALPA pilot group against another. A major step in this would be for ALPA national to grow a pair and stop relying solely on bargaining, and arbitration. Many things should be taken straight to court, injunctions obtained to prevent the offending action from happening in the first place, until it can be resolved in court. ALPA should also sue the carriers when they break out contracts. WHat happens now? ALPA files a greivance, and six months to two years later the company tells an arbitrator... ok, we won't do that anymore. F that.
There is a prior case law of an airline suing it's pilot group for breaking the contract... and they won a huge dollar award against the union. Well, the case law is there, and it should work both ways. ALPA national needs to get on the ball.

Step four. When the date rolls around that everybodies contracts expire, we walk until they agree to our terms. Period.

It starts with attending your local meetings, calling your reps, telling them what you want, showing up when they ask you to, doing union related activities, and working as part of a team, instead of against eachother.
Eventually, we would get enough of the right like minded people elected into these ALPA offices to effect change.

Prater needs to get off his duff. His "we're taking it back" slogan is great, but so far, it has been without much teeth.
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Old 06-11-2008, 03:57 PM
  #135  
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Originally Posted by Mason32 View Post
It would need to be something similar to the Screen Actors Guild, SAG.
One contract for ALL member pilots. Each carrier is free to add their own special flavor or perk, but a solid baseline of pay and benefits would need to be established systemwide.

The first step is getting ALL our contracts to expire the same year, or when making a new contract, do not exceed whatever the present longest contract is (probably Eagle, it doesn't expire until 2013).

The second step is to begin creating a master union pilot seniority list. The easiest way is to simply use a person's first date as a member of the union... ALPA most likely. That would be their senioirty date as an airline pilot.... regardless of which carrier they work for. Your first day on property anyplace as a member starts the clock. None of this running the place bankrupt, selling off, re-organizing and wiping out pilot seniority.

The third step is to begin supporting our EXISTING union. That means not just doing your, my, our part in ALPA now, but also supporting the other ALPA local's... not letting them whipsaw one ALPA pilot group against another. A major step in this would be for ALPA national to grow a pair and stop relying solely on bargaining, and arbitration. Many things should be taken straight to court, injunctions obtained to prevent the offending action from happening in the first place, until it can be resolved in court. ALPA should also sue the carriers when they break out contracts. WHat happens now? ALPA files a greivance, and six months to two years later the company tells an arbitrator... ok, we won't do that anymore. F that.
There is a prior case law of an airline suing it's pilot group for breaking the contract... and they won a huge dollar award against the union. Well, the case law is there, and it should work both ways. ALPA national needs to get on the ball.

Step four. When the date rolls around that everybodies contracts expire, we walk until they agree to our terms. Period.

It starts with attending your local meetings, calling your reps, telling them what you want, showing up when they ask you to, doing union related activities, and working as part of a team, instead of against eachother.
Eventually, we would get enough of the right like minded people elected into these ALPA offices to effect change.

Prater needs to get off his duff. His "we're taking it back" slogan is great, but so far, it has been without much teeth.

A year ago this would have seemed ludicrously impractical...but if enough doom and gloom is headed our way in the near future, who knows?

But if you really want to start people thinking about this you have to include the non-union carriers and all furloughees in the initial seniority assignment...otherwise they won't play along and the whole idea is hopeless. Gojeters and scabs all get an arbitrary seniority date of Jan 1st. 2015
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Old 06-12-2008, 04:22 AM
  #136  
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heres a really funny little tid bit. asa's ceo sent out a memo to management saying and i quote "There has been a lot of speculation about our contract with delta in light of the cancellation of pinnacle's and freedoms delta contract. Our contract is written differently so we are not under the same on time scrutiny that these carriers are." hahahaha. that cracks me up. asa's numbers are way worse than pinnacles, and we have only been there 7 months. no wonder he sent out that memo. and my buddy once again sent me the ontime numbers. here they are IN ORDER

1. express jet
2. Pinnacle
3. CHQ
4. Skywest
5. Shuttle America
6. ASA
7. Freedom

i think that most of you are right. delta saw a way to get rid of a contract and we were an easy target.

here is what i think is really going on. like pinnaclefo said our performance on the nwa side is great. FAR from being able to be cancelled LEGALLY, and currently between nwa's 3 regionals we are number 1 for completion and ontime performance right now (hence our kool-aid drinking pizza party yesturday). we signed a cheaper contract with NWA so they would let us fly for other airlines. I think delta realized in a post merger world that pinnacle would be cheaper to them coming from the nwa side instead of building up their delta flying. this is delta's way still getting us to fly for them but at a cheaper rate, AND part of uncle phils scare tactics to get us to sign a concessionary or at the least less than average contract.

here is something very similar from mesabas bad times... straight out of the play book.

http://news.minnesota.publicradio.or...atlinb_mesaba/

oh and here is another tid bit.

delta's ceo Richard Anderson was on CNBC this morning. Speaking live on TV from Memphis, and they asked him about cutting pinnacle airlines. he said "To put the Delta Emblem on the side of your aircraft, we hold these carriers to a high standard, we are still in discussion with Pinnacle"

i think this will all be worked out. who knows.
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Old 06-12-2008, 07:31 AM
  #137  
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Unfortunately for Pinnacle pilots, their management signed a bad contract. They had to maintain a completion factor over 95% during 3 of the last 6 months. When they didn't, Delta canceled their flying. It's unfortunate that Delta management didn't give Pinnacle any "spool up" time to learn the ropes and adjust to the system, but it didn't happen. Most likely Pinnacle management overpromised and then underdelivered.

My totally uninformed speculation is that this was all a plan to put pressure on ASA/SkyWest Inc. to finish the ASA pilots' contract. The plan worked, ASA pilots gave up a few of their demands, ASA management gave up a little and once they got a contract, there really was no use for Pinnacle. Delta knew that ASA/SkyWest Inc. must have 80% of the ATL flying, and with the projected growth for Pinnacle as well as the continued loss of aircraft to retirement at ASA, they were going to fall way off that mark. So Delta could either move Pinnacle to another hub and somehow get more aircraft for ASA/SkyWest, or cancel Pinnacle outright to comply with the protections that Jerry Atkin wrote into his contract. They picked the less costly route.

Unfortunately for Pinnacle pilots, you all are caught in the middle. You didn't sign the deal with Delta, nor do you really have any control over completion factor or A14. While you may have great numbers this month, one airplane going down for MX hugely affects your operation when you only have 10.

The good news is that the 900s are in huge demand right now and most likely you will find homes for those aircraft. Don't let it affect your goals for your contract negotiations... ASA lost countless growth opportunities during their contract negotiations and still came out with an above-average contract. If you stay strong and unified good things will happen.
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Old 06-12-2008, 07:40 AM
  #138  
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Originally Posted by sweptback View Post
Unfortunately for Pinnacle pilots, their management signed a bad contract. They had to maintain a completion factor over 95% during 3 of the last 6 months. When they didn't, Delta canceled their flying. It's unfortunate that Delta management didn't give Pinnacle any "spool up" time to learn the ropes and adjust to the system, but it didn't happen. Most likely Pinnacle management overpromised and then underdelivered.

My totally uninformed speculation is that this was all a plan to put pressure on ASA/SkyWest Inc. to finish the ASA pilots' contract. The plan worked, ASA pilots gave up a few of their demands, ASA management gave up a little and once they got a contract, there really was no use for Pinnacle. Delta knew that ASA/SkyWest Inc. must have 80% of the ATL flying, and with the projected growth for Pinnacle as well as the continued loss of aircraft to retirement at ASA, they were going to fall way off that mark. So Delta could either move Pinnacle to another hub and somehow get more aircraft for ASA/SkyWest, or cancel Pinnacle outright to comply with the protections that Jerry Atkin wrote into his contract. They picked the less costly route.

Unfortunately for Pinnacle pilots, you all are caught in the middle. You didn't sign the deal with Delta, nor do you really have any control over completion factor or A14. While you may have great numbers this month, one airplane going down for MX hugely affects your operation when you only have 10.

The good news is that the 900s are in huge demand right now and most likely you will find homes for those aircraft. Don't let it affect your goals for your contract negotiations... ASA lost countless growth opportunities during their contract negotiations and still came out with an above-average contract. If you stay strong and unified good things will happen.

Just some more info on our delta contract, there was supposed to be a spool up clause where we were not supposed to be penalized until all 16 aircraft were delivered becuase of the amount of money we placed into buying these aircraft. Also, we just started utilizing a spare aircraft finally. One thing I want to say also is that the other DCI carriers do well, and I take nothing away from them, but I think if we are given more time, we will succeed.
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Old 06-12-2008, 06:02 PM
  #139  
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Originally Posted by mike51135 View Post
However, many factors affecting on-time performance are beyond Pinnacle's control, said Phil Trenary, Pinnacle Airlines Corp.'s president and chief executive officer. .
This place says EVERYTHING is beyond their control.
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Old 06-12-2008, 06:09 PM
  #140  
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Originally Posted by XJPILOT1 View Post
Are all of you blind? Delta is beginning to dump all it's regionals. Comair and Mesaba will win out this time. Two words, "wholly owned".
Don't be so sure. The only thing Richard Anderson likes about wholly owneds is the trip he takes to the bank when there sold.
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