Follow The Money
 

Figures don’t lie but liars sure do figure. The following is an exercise - possibility in futility - because Regional airline management is a “riddle wrapped in an enigma.“.

Regional ### Delta CRJ900 Captain / FO (12 year) at $139.00 /Hr. with 75 hours flight time costs $10,425 / month. Sixty crews (12 airplanes) cost $7,506,000 per year.

Pinnacle Delta CRJ900 Captain / FO (12 year) at $123.00/Hr (Estimated) with 75 hours flight time costs $9,225/ month. Sixty Crews (12 airplanes) costs $6,642,000 per year.

That’s close to a million dollar difference for only twelve airplanes. Setting aside Cost per seat mile calculations and employee benefit cost comparisons , this difference increases significantly when applied to larger fleets.

Will Delta play shell games with its CRJ-900s ? Your guess is as good as mine.

Dude, what are u saying?

Stated assumptions and then asked the question, "Will Delta play shell games with its CRJ-900s ?"

With the profit sharing included in the TA, that difference decreases as the company becomes profitable.

For example (these are huge WAGs, but it gives some idea)...

Using your difference of $864,000 per 12 aircraft, and going with the 81 promised 900s, the actual difference is $5.8m.

Assuming total revenue of $500m (a little less than half of 2011 revenue) and a 5% profit (equal to 2009 and roughly equal to Delta's 2012), net income would be $25m.

Of that $25m, $2.1m gets paid to the pilots through profit sharing* offsetting a little over a third of the cost difference. It costs money to shift flying. Is $3.7m enough to justify moving another 80 planes? Who knows. Especially considering economy of scale yields a higher profit margin, and higher margins increase the profit sharing rate.




*Profit sharing calculations:
Profit pool = 10% of the first 4% earnings + 15% of next 4% earnings = 20m * 0.10 + 5m * 0.15 = 2.75m
Pilot portion = 76% of pool = 2.75 * 0.767 = 2.1m

@Herb, hahahaha! My wife is wondering why I'm laughing on the toilet.

Laugh if you wish. The question essentially was will Pinnacle get more airplane because the pilots are cheaper. If Pinnacle cannot be profitable, it will be shut down. If not shut down, Delta wouldn't add planes just to increase the loss. Eitherway, the question is moot. The only way Pinnacle gets more planes is if it makes a profit. If there is a profit, pilots get more expensive. That's all I'm saying

Delta has been doing this to its ground handeling service for a while now too. They just get bent over big time because they are non skilled non union labor. Delta would LOVE to hit the reset button EVERY year on the pilots at its regionals if it could. It will always be a race to the bottom. Period. Get out ASAP of the regionals, fighting the good fight always seems to end badly. Maybe not next year, but 5 years down the road... "your" flying goes to the cheaper guy. Im not promoting whoring yourself like blowjetzzz or just taking whatever with out negotiations, but for christ's sake there has got to be a better way...

Well, since they've been doing it successfully for years now, i'll go with YES.