Are you sure?

ASA and Skywest both have 2-for-1 clauses in their DCI agreements.

 

I thought the TA with delta is a 5 for 2 deal.

 

Delta doesn't need the TA to add 76 seaters. Under the current Delta PWA, the company has a lot of room to add 76 seaters. I don't know the exact # off the top of my head but the current PWA allows a lot more 76 seaters WITHOUT parking 50 seaters.

 

Currently out of 255 51-76 seat RJs 153 76 seaters are being operated. Under our current contract, Delta may operate up to 255 76 seat RJs. The catch is that 1) the mainline fleet has to exceed the fleet count at time of merger(767 airplanes, currently around 710) 2) 102 70 seaters would have to be swapped for 102 76 seaters as 255 large RJs is the cap. The 70 seaters may be replaced by 76 seaters at a 3:1 ratio with mainline aircraft. So as it stands now, Delta needs to add around 58 airplanes to get to 768 mainline aircraft and then it could trade 3 70 seaters for 3 76 seaters. In order to swap all 102 70 seaters for 102 76 seaters(total 255 76 seaters), Delta would need a mainline fleet count of 801 airplanes. Clear as mud?

The catch is that once the number of 76 seaters is established, it will not be reduced. So nothing stops management from bringing the fleet count to 801, getting 255 76 seaters, then parking mainline planes. The proposed TA establishes a block hour ratio between mainline and regionals(to keep mainline higher then DCI), establishes a DCI airframe cap of 450, adds 88 B717's, and eliminates the 3:1 ratio. Unfortunately, it adds seventy 76 seat aircraft in exchange for parking 211 50 seat aircraft. Is it worth it?

 

The 800lb gorilla in the room is that if management can't keep the ratio, they must provide due compensation to the mainline pilot group. That could be pay or other contract improvements instead of reducing DCI block hours, the parking of DCI aircraft, or maintaining a certain number of mainline aircraft. This is the problem with scope relief, once you agree to it, it has a dollar value associated with it. What road will ALPA take if management doesn't comply with section 1; Negotiating for more money for mainline, or a grievance to park regional aircraft?

 

I'm talking about the individual Capacity Purchase Agreements with Skywest and ASA, rather than the DALPA TA.

I know ASA has a 2-for-1 clause. I.e- for every 76 seater, 2 50 sweaters can be withdrawn without penalty at Delta's discretion.

And Skywest is either a 2-for-1 or a 3-for-1.

Comair is at the whim of DAL.

Pinnacle can't have any aircraft withdrawn while they are a standalone company unless they are bought.

Chautauqua's 145 agreement is up soon, I believe.

 

FWIW, the 24 DCI E145s operated by Chautauqua/RJET is good until May 2016.

 

It doesn't matter what each agreement says. Delta will come to these companies and renegotiate their agreement for 76 seaters with a higher payment per block hour for the regional. Most regionals looking at the massive training costs associated with HR3371, increasing maintenance costs with erj 145's and crj 200's, and the hope of a better profit margin will make them sign whatever Delta is offering.

Even if your airline has X amount of airplanes until 2050 it doesn't matter. Everything is up for negotiation and Delta is pretty good at shuffling flying around.

 

Why do they have to renegotiate? There is already sufficient language in the current air service agreement that allows Delta to pull down 50-seat flying in exchange for 76-seat flying.

Delta may not want to enter talks.

Straight from Sean Menke's mouth on a conference call- Delta wants to use the Pinnacle bankruptcy to reset regional costs because the gap between mainline costs and outsourced costs have shrunk. Delta will not want to renegotiate for higher 76-seat rates.

 

The biggest problem with them trying to use Pinnacle that way is they won't be able to whipsaw because they won't be able to staff Pinnacle once this is all said and done.