PSA April 11th

 

Sounds like United and AMR will pay for the new RAH pilot CBA. Delta will probably go looking elsewhere, or simply take the flying back (E190). This certainly is the beginning of the end for the tradtional regional model. The good news is most pilots will have the chance to move on to better things.

 

Please elaborate to us with little knowledge to 121 world. So this is good news for newhire at RAH, right?

 

If that is true, it will only be a good thing if RAH stays out of Ch.11. If AMR and UAL will increase the money and RAH can "pay for the contract", then we stand a better chance at keeping the contract as it is now. If RAH goes Ch.11, you can be sure the cost of the new CBA will be the first on the chopping block, closely followed by the 145's.

If Delta or United take flying back (which they both appear to be trying to do by adding E190 and CS300 pay scales), that means more jobs at mainline. This is a good thing for several reasons, to list a few:
- There is a pilot shortage, the airlines will have to decrease size without decreasing pilot jobs. Easy answer? Larger planes to support the lift. Same lift, less pilots. E190's/CS300's are seeming to fit that bill as a starter.
- With all the retirements coming at all of the majors, especially the legacies, that gives pilots at the regionals more space to move up into where the flying should be, at the majors.

With this trend, and as long as there isn't another major economic event like 9/11 or 2008, then youngins at the regionals stand in a very good position, much better than those 10 years ago, to move up into the majors and make an actual lucrative career for themselves within the next probably 5-10 years.

Obvious caveat, this industry is so fluid and dynamic that who knows what will happen. There's no crystal ball, just ask any '07-'08 regional new hire.

 

No matter how much you try to explain how RAH isn't a good idea, people won't listen to you.

Right now, Endeavor is $160,000 over your first 3 years, while RAH is at $110,000. If you can't grasp how large $50,000 is, what else can be used to explain about the differences.

When Pinnacle (Endeavor) went bankrupt, Delta took over the DCI Pinnacle portion and dumped the United flying (Colgan), which United had to scramble and use RAH to staff, which has since dumped it. Delta decided they needed to pay more at Pinnacle to keep it going, but didn't want to fund the United side. RAH is likely going to go through a similar transformation soon, where Delta will pull away from RAH in a way United pulled away from Pinnacle. Delta will probably shift the flying to Endeavor and Mainline Delta (in a way that the Colgan flying shifted to RAH from Pinnacle/Colgan), while UAL, AA, or both UAL and AA foot the bill to make RAH sustainable(if they choose to).

So to recap, 3 years of pay at $160,000 at a growing company with good attrition or 3 years of pay at $110,000 at a company likely to shrink further with standard attrition.

 

And MANY other regionals at $90K or less for the first three years.

 

Just curious what you mean by many? Most are upping their 1st year pay to $35-$40 which puts the first 3 years of pay around $100,000-$110,000, which is just like RAH, but without as much risk.

 

Yet RAH classes are filled for months unlike many other regionals.

 

Why wouldn't Endeavor just permanently raise pay rates instead of having an expiration date on the raises?

 

Two words. Service agreements.

Many of the other DCI carriers still operate under "cost plus" contracts, which means a profit margin and performance bonus/penalties tied to the cost of the operation as negotiated. There are disclaimers that allow costs to increase inline with other carriers. The bonus method is paid by delta and not tied into "payroll" to be used as a cost basis of the operation, meaning the other DCI carriers can't base their costs on the added pay, as it's a "retention payment".

So, to summarize, DL can offer Endeavor the retention payments, which pilots see as direct compensation, but it keeps DL from having to pay any more than the already contracted rates to other DCI carriers. If you look at the service agreement timelines for renewal and expiration, and Endeavor's JCBA (pilot contract), the bonus timeline falls right inline with all the other timelines. So, in theory, the future pay rates will increase instead of a bonus, but will be done when there is no impact to other carriers or overall costing when the next round of contracts, both pilot and service agreement(s), are signed.

That's how I see it all at least.