Merger affect on AirTran.......

[General Lee]

Seems to me that DAL has been trying to squeeze AirTran out with 50 seat RJ's for some time now. Doesn't seem to have worked thus far. Is there something different with the high operating costs of NWA?

Coming from the redtail family, I can say that NWA wants to merge before all of their labor groups come screaming for their money back. The fight is not over at NWA or DAL. Non fuel costs will come back up to haunt them.

Lee Moak stated we would have to be compensated for our sacrifices, so I think a raise would be in order, and a stronger airline with DL/NWA together could help pay for that. A lot of things were changed for the better in BK besides the harsh pay cuts and pension cuts for us(DL). Airplane lease rates were cut, airport gate leases etc were renegotiated. BK did it's job o getting rid of the excess and allowing us to start anew. Now, with high oil, we may have to find a partner that will give us an advantage towards the global economy and higher yields that INTL travellers can bring. If this thing happens with NWA, it may not be such a bad thing. If the UAL thing happens, I am interested to see how the heck it would work. Regardless, if we merge, I think you will merge with someone too. It will all be very interesting.


Bye Bye--General Lee

 

[puddlejumper101]

Capacity will never be cut back because there are plenty of airlines waiting for opportunities to open up. Even Mike Boyd says this. Do you think it would be smart to leave a hub and watch Southwest or Airtran come in and develop a new one?

Your Des Moines example is ambiguous. Every airline can route you through one of their hubs to a certain destination, but going on Delta from DSM to LAX via ATL is dumb, not gonna happen. Do you go from MSP to ANC via MIA too? There would not be a shrinkage of flights at DSM, rather more choice for DSM passengers--to go to a whole host of new destinations that the other did not provide. With high oil there may be a shrinkage of RJs, and RJ providers that do not bow down and give the combined company the lowest rates, though.


Bye Bye--General Lee

General, I realize you are a glass almost full kinda guy when it comes to your beloved Delta...but I have a newsflash...Capacity will be cut drastically compared to what it is now if DAL merges with anyone. Can't you see the whole point this is happening is to battle an economy heading south? Why would you merge two carriers with the intent of keeping the current capacity? If that was the case they would stay seperate. There are other motives behind this merger and it has nothing to do with a super carrier...it has more to do with survival. Dal/Nwa/UAUA are in no position to merge just to stay as large as they currently are. AA/TWA, AWA/USAir...did they stay the same size? Yeah...right...that's why 75% of the ex TWA guys are flying for American Eagle...yeah...and this was pre 9/11. I am glad you are being positive about it..but I seriously doubt anything good will come out of this...at least not for a few years. It will be paiful, simply because this merger has consolidation written all over it.

As for giving up capacity...well when carriers can't survive at their current state and merge, something has to be given up no matter how painful it is. Been through PIT lately? Do you think USAir built all of that infastructure to just throw it away? STL??? AA sure put that airport to use.

 

[General Lee]

General, I realize you are a glass almost full kinda guy when it comes to your beloved Delta...but I have a newsflash...Capacity will be cut drastically compared to what it is now if DAL merges with anyone. Can't you see the whole point this is happening is to battle an economy heading south? Why would you merge two carriers with the intent of keeping the current capacity? If that was the case they would stay seperate. There are other motives behind this merger and it has nothing to do with a super carrier...it has more to do with survival. Dal/Nwa/UAUA are in no position to merge just to stay as large as they currently are. AA/TWA, AWA/USAir...did they stay the same size? Yeah...right...that's why 75% of the ex TWA guys are flying for American Eagle...yeah...and this was pre 9/11. I am glad you are being positive about it..but I seriously doubt anything good will come out of this...at least not for a few years. It will be paiful, simply because this merger has consolidation written all over it.

As for giving up capacity...well when carriers can't survive at their current state and merge, something has to be given up no matter how painful it is. Been through PIT lately? Do you think USAir built all of that infastructure to just throw it away? STL??? AA sure put that airport to use.

I have to disagree with you, of course. Most of our combined hubs (If Delta and NWA merge) do not overlap, with the exception of CVG (close to DTW) and MEM (close to ATL). They will likely have to be reduced a bit, but not enough to just give a hub to a LCC waiting for an opportunity. If you think about it, who really has the most to lose in those two hubs---since all of the other hubs are profitable? The regional carriers who dominate there. Comair, which just announced another 14 RJs being parked (why is that?) has 200 or more flights a day. Delta mainline has 56. How about MEM? Messaba and Pinnacle have the majority of flights, with NWA mainline having about 40. Now we are currently hiring 50 a month (for the INTL expansion only--no retirements) and are budgeted for 600, with another 240 if we actually got the MD90s. NWA is hiring also, primarily for INTL expansion I bet. If we are forcasted to be that short, and our INTL expansion is to cities that NWA does NOT go to (starting in June--Amman, Cairo, Tel Aviv, Lagos, Dakar, Edinburough, London Heathrow, Paris Orly, Malaga, Cape Town, Nairobi, and Lyon---all from JFK only)---how are we going to do it on current staffing? We are selling those tickets right now. We put 50 new FOs in the NYC 7ER last month alone.

You ask if we can grow or stay the same size. AA bought TWA and 9-11 happened. The STL hub was between ORD and DFW, and was never a very good O&D city. Did you ever want to just "go take your wife to St Louis for a romantic weekend?" Who would do that? TWA also didn't have any major strengths by the time AA bought them. Did they have any LHR slots? Anything else? They had some 717s that AA didn't use long. They also had some 757ERs that we just bought. And, their union head had to give away the farm or risk liquidation. Neither DL nor NWA are in immediate danger of liquidation. UAL may be, but not DL or NWA. We actually could probably weather most of this longer than some of the others because we cleaned house during BK. You can't compare TWA and AA to anyting going on right now. And, USAir and AWA are actually growing, and will be starting A340 service to China next year, and are replacing old 737-300s with new E190s. They are hiring too.

Also, both PIT and STL are dying towns. They are. After USAir vacated PIT, did Southwest come in and start a large hub there? Did anyone? Nope. How about St. Louis? What about that rumored new terminal and that Jetblue would start a focus city there? They have the opportunity, and nobody has taken it. (even in good times) Southwest is removing some flights from STL I believe. So, those two cities are not good examples to back up your claim, since nobody has taken the bait and started up large operations there since the others downsized.


Bye Bye--General Lee

 

[Citrus531]

When I say I will wait and see, I am going to wait and see who wins the republican nomination and then vote for them. None of the dems are worth a turd.

Neither are those Republican losers like former fat A** Huckabee, Catchers Mitt Rommney, or Fred I'm not really interested Thompson.....Rudi's a dud and McCain's a hero but he's older than dirt

I agree with General about no overlap if NWA/delta get married. I don't see an LCC like AirTran taking over MEM or DTW if they were downsized and we(AirTran) still don't fly to CVG...wonder if it'll come in 2008?!?

And yes, STL is a dying town...have family up there and parts of it are really Sh**ty now....don't see much happening there.

 

[slinky]

Ok something very strange is happening here. General Lee, Secret Squirrel and puddlejumper101 are having a logical discussion, presenting their differing arguments and disagreeing on professional terms without having some moron like tanker clown come in and spin everyone up into a "mine is bigger than yours" argument.

I had to check several times to make sure this was still Flight info.

I only wish every thread was a professional exchange of ideas from pilots who just want to go to work, make some money and go home.

slinky

P.S. I just hope that if we merge with NW or UAL that no one goes home, we get paid more and that after the fences come down we are drinking buddies on the layovers.

 

[Secret Squirrel]

General,

Under you hypothesis A combined NWA/DAL or DAL/UA will have 12-15000 pilots, 10-12 HUBS, 700-800 airplanes and almost every different type of airplane. At a certain point you lose benefits of scale. And I believe the combined company would turn into such a monster. The only way to make it profitable is to cut out the fat. I agree with you that the RJ's are a huge part of that. I wish everybody at those companies the best of luck because I have a lot of friends there, and lots at the bottom of the list. But it will be an ugly time, not because I think so, but because every time it has happened it has been ugly.

 

[~~~^~~~]

The regional carriers who dominate there. Comair, which just announced another 14 RJs being parked (why is that?)

Bye Bye--General Lee

General:

Comair is getting parked because RJ flying is unprofitable and because SkyWest, Republic Airlines Holdings and other alter ego contractors have Delta locked into contracts Delta can not break. SkyWest was getting premium rates as part of the payback on the ASA asset purchase agreement. IMHO Delta would be better served buying back ASA, so that the SkyWest tail is not wagging the dog. Of course that deal is already written, no one could make a quick buck, so there is not much interest.

This will have a disproportional effect on small jet contractors because as you well pointed out, they do most of the narrowbody domestic flying.

NWA's DC-9 fleet concerns me. It is high cost RJ flying and NWA already has some flow down deals to RJ's that I am trying to understand. Their Airbus fleet is also an unfortunate mix, since it is a less efficient airplane than a MD90. Seems like there is an opportunity for a lot of NWA pilots to be looking on the Delta property for slots and they are way more senior than the relatively young Delta pilot group.

I'm just concerned about your upgrade... not in this for me

The threat to outsource NWA flying is going to be an issue. One way mother Delta can get out of 50 seat RJ contracts is to retire and replace with BIGGER RJ's. That is how Republic got the E170's for DL, remember?

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

 

[PCL_128]

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

 

[General Lee]

General:

Comair is getting parked because RJ flying is unprofitable and because SkyWest, Republic Airlines Holdings and other alter ego contractors have Delta locked into contracts Delta can not break. SkyWest was getting premium rates as part of the payback on the ASA asset purchase agreement. IMHO Delta would be better served buying back ASA, so that the SkyWest tail is not wagging the dog. Of course that deal is already written, no one could make a quick buck, so there is not much interest.

This will have a disproportional effect on small jet contractors because as you well pointed out, they do most of the narrowbody domestic flying.

NWA's DC-9 fleet concerns me. It is high cost RJ flying and NWA already has some flow down deals to RJ's that I am trying to understand. Their Airbus fleet is also an unfortunate mix, since it is a less efficient airplane than a MD90. Seems like there is an opportunity for a lot of NWA pilots to be looking on the Delta property for slots and they are way more senior than the relatively young Delta pilot group.

I'm just concerned about your upgrade... not in this for me

The threat to outsource NWA flying is going to be an issue. One way mother Delta can get out of 50 seat RJ contracts is to retire and replace with BIGGER RJ's. That is how Republic got the E170's for DL, remember?

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

According to all of the NWA guys on this board, NWA cannot just get rid of the DC9s without a replacement, according to their contract. Compass is also regulated to a certain number of planes, and cannot just replace all DC9s. The DC9s, while expensive with fuel and mx, are owned, and they are the only 100 or 110 seater they have right now. As far as getting new or larger RJs, I have no reason to believe any DL or NWA regional will get larger RJs (without a BK judge present), or will get more than the allotted (only with new additional mainline aircraft). We are getting a lot of new mainline planes this year, so they will be allowed to get more 76 seaters. (Ed Bastain doesn't appear to like them very much either, since some of those flights are being discontinued for the Winter season--SLC--BHM, etc) Those 76 seaters may "look neat", but they also take up a full gate, and use an asset while not allowing full potential of revenue--an MD88 or larger could use that same gate. Our management is slowly learning this fact.

The DC9s can be replaced right now with MD90s that are sitting all over the world, waiting to be replaced soon by new A320s (all of the China airlines we have talked to (China Northern and China Southern) have announced that, and Saudi just announced it too)--and we have the sim and means to fly and fix them, for cheap. I know our guys have been talking to those airlines (not Saudi yet though), and I know that could be an answer. They would be a good 10 year stop gap while waiting for something new.


Bye Bye--General Lee

 

[~~~^~~~]

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

Don't get running an airline confused with deal making, most of the reason SkyWest is in the picture is as a lender of last resort.

 

[PCL_128]

Ah, very true.

 

[scrub]

if you guys are so smart, why are you pilots?

 

[Secret Squirrel]

I am smart enough to know that working in the finance field takes up way too much time. I am too lazy to do anything other than flying.

 

[funnyman12]

Being a pilot is one of the most difficult and stressful jobs out there and don't forget it!! =)

 

[scarlet]

Airtran=Frontier

 

[Kharma Police]

Airtran=Frontier

Are we getting Airbuses with TVs?!?

 

[RIDETHELIGHTING]

Airtran=Frontier[/quote/]
nope, what are we going to do, go into DEN and get our a$$ spank.

 

[Lear70]

I am smart enough to know that working in the finance field takes up way too much time. I am too lazy to do anything other than flying.

I've had two successful businesses.

I agree with Squirrel... they take WAY too much time and effort.

I have *ZERO* interest in working 13-hour days, 5 days a week, including some weekends, just to make bundles of money I have no time to spend and never see my kids. I'm away from them too much as it is...

 

[jester757]

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

BUT, DAL can fly the 88s for less than a 717 because of the stupid cheap lease rates they have on those things. Thats why DAL has approval to get nine more of the MD90s which are even more efficent and just as cheap.

 

[PCL_128]

BUT, DAL can fly the 88s for less than a 717 because of the stupid cheap lease rates they have on those things. Thats why DAL has approval to get nine more of the MD90s which are even more efficent and just as cheap.

True, but DAL seems to be in the habit of putting lots of expensive and uncomfortable RJs on the routes that they compete with us on. If they wised up and got rid of some RJs and replaced them with MD-90s, then they'd be much better off.