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DAL to reduce 35 CRJ-200

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DAL to reduce 35 CRJ-200

Old 04-22-2010, 08:26 AM
  #51  
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Originally Posted by Lighteningspeed View Post
We shall see. I guess we agree to disagree. I find it interesting that you think 9E will be safe from the CRJ200 chopping block. Granted 9E is much cheaper to operate than XJ but the bottom line is DAL does not keep all the profit from 9E operation. XJ has gotten expensive with the very top heavy pilot roster but DAL gets to keep all the profit. Until some DAL beancounter shows us the number breakdown, you can't make such a blanket statement that DAL cannot do it cheaper inhouse. At any case even if contract carriers can do it cheaper, that saving is wiped out if you have to pay them guaranteed profit per contract.

Some of the things may have been in the making for the past few years or so but the next short term tenure of RA is a different ball game. Different dynamics and economic situations makes it for a different strategy.

I just hope I move on before the next big roller coaster ride.
no i agree. I never said pinnacle was safe from the chopping block. But I can say that them sourcing it out is cheaper than doing the flying themselves. If not they (all airlines) would have stopped years ago and brought everything in house to save money. They haven't and they dont want to. They sold ASA and still gave them a contract to fly because it was cheaper if Skywest took the company and they just paid skywest some money and let them handle running the airline. Comair has had a for sale sign in their front yard for a long time. Remeber Pinnacle was wholly owned by northwest and we were sold off. It cost more to manage, run, and handle the everyday business of an airline than it is to just pay a contract fee and handle it themselves.

How many other major airlines own their own regionals? Is Delta the only one? There is a reason for that.
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Old 04-22-2010, 08:30 AM
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Originally Posted by Airsupport View Post
no i agree. I never said pinnacle was safe from the chopping block. But I can say that them sourcing it out is cheaper than doing the flying themselves. If not they (all airlines) would have stopped years ago and brough everything in house to save money. They haven't and they dont want to. They sold ASA and still gave them a contract to fly because it was cheaper if Skywest took the company and they just paid skywest some money and let them handle running the airline. Comair has had a for sale sign in their front yard for a long time. Remeber Pinnacle was wholly owned by northwest and we were sold off.
I see what you are saying and you make a very good point. I guess we agree on most points. You might have just convinced me my position on WO was all wrong. I do think it is very possible if RA can sell XJ or CZ for profit, he'll do it without any hesitation.
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Old 04-22-2010, 08:36 AM
  #53  
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Originally Posted by Lighteningspeed View Post
I see what you are saying and you make a very good point. I guess we agree on most points. You might have just convinced me my position on WO was all wrong. I do think it is very possible if RA can sell XJ or CZ for profit, he'll do it without any hesitation.
Absolutely. If someone walked in with the cash to buy comair, compass, or mesaba Delta would sign and begin the transition before the ink is dried. And in doing so the buying company would make sure they had work to do and would get delta to agree to a flying contract while taking the company off their hands. Its been that way for a long time. Unload them, get some money for the sale, and then start cutting their flying when the contract is up. Once the airline has been brought to its knees and is worth nothing the major will buy them back up, give them tons of flying and use that as leverage against the other contract carriers and then sell them off again for a profit. Rinse and repeat.
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Old 04-22-2010, 08:39 AM
  #54  
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Originally Posted by Airsupport View Post
Absolutely. If someone walked in with the cash to buy comair, compass, or mesaba Delta would sign and begin the transition before the ink is dried. And in doing so the buying company would make sure they had work to do and would get delta to agree to a flying contract while taking the company off their hands.
Someone like SkyWest? Don't be surprised if an announcement is made very soon...
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Old 04-22-2010, 08:43 AM
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Originally Posted by Airsupport View Post
Absolutely. If someone walked in with the cash to buy comair, compass, or mesaba Delta would sign and begin the transition before the ink is dried. And in doing so the buying company would make sure they had work to do and would get delta to agree to a flying contract while taking the company off their hands. Its been that way for a long time. Unload them, get some money for the sale, and then start cutting their flying when the contract is up. Once the airline has been brought to its knees and is worth nothing the major will buy them back up, give them tons of flying and use that as leverage against the other contract carriers and then sell them off again for a profit. Rinse and repeat.
And what happens when the contract runs out and no one wants them? A lot of regionals are about to find out the next couple of years. That's why everyone is using their cash reserves to strike under the table deals.
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Old 04-22-2010, 08:46 AM
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Originally Posted by minimwage4 View Post
And what happens when the contract runs out and no one wants them? A lot of regionals are about to find out the next couple of years. That's why everyone is using their cash reserves to strike under the table deals.
ASA has a 10 years left in a 15 year agreement. All they have to do is buy them and merge them into ASA...
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Old 04-22-2010, 08:53 AM
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Originally Posted by Airsupport View Post
Absolutely. If someone walked in with the cash to buy comair, compass, or mesaba Delta would sign and begin the transition before the ink is dried. And in doing so the buying company would make sure they had work to do and would get delta to agree to a flying contract while taking the company off their hands. Its been that way for a long time. Unload them, get some money for the sale, and then start cutting their flying when the contract is up. Once the airline has been brought to its knees and is worth nothing the major will buy them back up, give them tons of flying and use that as leverage against the other contract carriers and then sell them off again for a profit. Rinse and repeat.
Originally Posted by minimwage4 View Post
And what happens when the contract runs out and no one wants them? A lot of regionals are about to find out the next couple of years. That's why everyone is using their cash reserves to strike under the table deals.
the answer to your question is in my post. get them down to where no one wants them and then buy them back up for pennies on the dollar. Give them more flying and make them look really good and then sell them again.
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Old 04-22-2010, 08:56 AM
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Originally Posted by Airsupport View Post
no i agree. I never said pinnacle was safe from the chopping block. But I can say that them sourcing it out is cheaper than doing the flying themselves. If not they (all airlines) would have stopped years ago and brought everything in house to save money. They haven't and they dont want to. They sold ASA and still gave them a contract to fly because it was cheaper if Skywest took the company and they just paid skywest some money and let them handle running the airline. Comair has had a for sale sign in their front yard for a long time. Remeber Pinnacle was wholly owned by northwest and we were sold off. It cost more to manage, run, and handle the everyday business of an airline than it is to just pay a contract fee and handle it themselves.

How many other major airlines own their own regionals? Is Delta the only one? There is a reason for that.
Delta sold ASA to Skywest because they needed the cash not because it's cheaper. And they gave Skywest/ASA a great long term contract to facilitate the sale. Delta needed the money for the BK.

I did not see a For Sale sign at Comair
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Old 04-22-2010, 09:03 AM
  #59  
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Delta needs the W/O for flexibility. They can increase and decrease the flying as they wish. You will never get that kind of flexibility with a contract carrier. Even if Delta wants to sell the W/O, they will have a very tough time finding a buyer. The days of guaranteed fee for departure are long gone. The contract carriers will have to share the risk with major carrier on any new contracts to be signed. Sharing expenses and risk is not a good thing for contract carriers. IMHO, you will see a couple of W/O and 2 contract carriers flying for DCI.
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Old 04-22-2010, 09:09 AM
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Originally Posted by Airsupport View Post
no i agree. I never said pinnacle was safe from the chopping block. But I can say that them sourcing it out is cheaper than doing the flying themselves. If not they (all airlines) would have stopped years ago and brought everything in house to save money. They haven't and they dont want to. They sold ASA and still gave them a contract to fly because it was cheaper if Skywest took the company and they just paid skywest some money and let them handle running the airline. Comair has had a for sale sign in their front yard for a long time. Remeber Pinnacle was wholly owned by northwest and we were sold off. It cost more to manage, run, and handle the everyday business of an airline than it is to just pay a contract fee and handle it themselves.

How many other major airlines own their own regionals? Is Delta the only one? There is a reason for that.
IDK...seems like they'd be better off in house than having 9 diff. regionals. THink about it...they are supporting operations for 9 other companies...that's 9 different upper level mgmt teams (MILLIONS per team), with 9 diff. physical locations/offices, 9 diff. ops/sched. groups...cannot make financial sense to have so many...maybe 3 makes sense for stability/cost control. 9 is chaos and waste.
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