20 ABX DC9 Captains Surplussed

[erichartmann]

ATSG will remain alive and prosperous using ATI and Cappy. I suspect that the same fate awaits ABX as did ATA. The holding company shifted all debt from North American and World to ATA and Sank it. I have a feeling thats whats gonna happen here.

It is my understanding that the debt is held under the parent ATSG. Much of it comes from the purchase of CHI. I'm not sure it would be particularly easy to transfer that to ABX at this point, but this is not my field.

 

[erichartmann]

Off the subject a little here... We at Pace Airlines just accepted delivery of a leased ABX 767-200. Of course our management doesn't say why or what it's for. Can anyone at ABX shed any light on this? Is ABX leasing a/c or is Pace "stealing" someone's flying. I'm just trying to get an idea.

Do you know what the "N" number is?

If its a cargo aircraft it would most likely be N714AX, which as someone else pointed out was never in revenue service for ABX. Our management has used this to justify a transfer of this aircraft to CAM and dry lease it elsewhere. This is widely regarded as pressure on the union for contract negotiation purposes. Since it hasn't worked I have no doubt they will follow through and this may be the proof. Now the union will have to decide if this represents a violation of our scope language. Who you wind up flying cargo for may make a difference.

If its a pax aircraft it may be the ex Air China aircraft equipped with the odd-ball P&W engines that ABX decided was not worth converting to cargo config for our use.

The scope language pertaining to pilots "following" the aircraft involves a "Substatial Assest Sale" which in turn is defined as the disposition or and/or transfer directly or indirectly more than 25% of the company's aircraft in a single or multiple transactions over a rolling 30 month period.

 

[b707guy]

I would suspect that any debt incurred by the purchase of CHI would come from CAM, who owns and is trying to pay for a bunch of 767s, a 757 or so, and conversions to boot. Before CAM snapped up all of our aircraft, we owned about half of them, and lease rates on the rest, even on the -73s, were pennies on the dollar compared with 767 lease rates. Heavy checks and 100k hour checks were (and still are...) the only really pricey aspect of living with DC-8s.

Every time we (ATI) have been bought over the years, the ensuing financial report showed an incredible revenue spike on the part of the purchaser. This includes both our individual sale to CHI, and CHI to what was ABX at the time. ATI's and Cappy's contribution to ATSGs overall revenue stream is accompanied by very little debt that can attributed to us directly. Here's a wild assertion of which I have no evidence to back up as I've never been aboard an ABX aircraft, so maybe you can help deny or at least verify the possibility of this: My guess is that the aircraft operated by ABX Air have not been transferred to CAM, so that ABX Air can be shown as a losing entity (and therefore a scapegoat) on the books due to 767 purchases and conversions that are still being paid for. CAM by itself may be losing money, but can be shown as contributing to a positive revenue stream down the road. All just a guess on my part...

 

[nitefr8dog]

Never made that claim. Just think your opinion as expressed here is wrong, and gave mine. Opinions are like the redeye, everybody has one.



Perhaps. I think the whole place goes under if that happens and I don't think Joe wants that. He's already made a ton of money off this deal, more than enough to live very comfortably for the rest of his life. So it's not about money.



First, though, DHL will park the -9's. If they haven't yet parked the 767's there will be money for retraining. Big "IF" I admit. Since the ACMI runs into 2010 there may well be money for some money for retraining even if they pull the plug in Jan '09 as part of a cancellation. I think it possible there will be people who go home and collect paychecks until their number comes up for furlough. In fact, I think that the most likely senario if DHL pulls the plug on or before Jan 1. All the -9's and the PC 767's get parked, the relatively junior 767 CA's who are needed for the right seat will go to training, everybody else not needed to fly the SF's go home, and as soon as the first former 767 CA comes out of training for the right seat everybody at home is furloughed along with the 767 F/O's who are still flying.



The implication was there.



I never said they weren't on the hook for retirement. That, after all, is part of the "C" in ACMI.

Well Eric, Joe may not want the whole place to go away but 500M in dept and no revenue means the banks do not care what Joe wants. As far as parking the 9s and retraining, when the 9s are all parked the 767s will be shortly after hence the doors will be bolted shut! As far as KIX you may be a mind reader but you are not very good at it. I was very vocal about the company being able to open KIX. No mater how much the union stomped thier feet and rolled around on the floor a judge now days needs to see some damages. Just saying we do not like will not and did not get it stopped. JMHO.

 

[erichartmann]

...I was very vocal about the company being able to open KIX. No mater how much the union stomped thier feet and rolled around on the floor a judge now days needs to see some damages. Just saying we do not like will not and did not get it stopped. JMHO.

I was not particularly vocal about it, but felt from the beginning that the union had zero chance of prevailing on KIX. One had only to read the CBA language to understand how that would go.

 

[erichartmann]

I would suspect that any debt incurred by the purchase of CHI would come from CAM, who owns and is trying to pay for a bunch of 767s, a 757 or so, and conversions to boot. Before CAM snapped up all of our aircraft, we owned about half of them, and lease rates on the rest, even on the -73s, were pennies on the dollar compared with 767 lease rates. Heavy checks and 100k hour checks were (and still are...) the only really pricey aspect of living with DC-8s.

Every time we (ATI) have been bought over the years, the ensuing financial report showed an incredible revenue spike on the part of the purchaser. This includes both our individual sale to CHI, and CHI to what was ABX at the time. ATI's and Cappy's contribution to ATSGs overall revenue stream is accompanied by very little debt that can attributed to us directly. Here's a wild assertion of which I have no evidence to back up as I've never been aboard an ABX aircraft, so maybe you can help deny or at least verify the possibility of this: My guess is that the aircraft operated by ABX Air have not been transferred to CAM, so that ABX Air can be shown as a losing entity (and therefore a scapegoat) on the books due to 767 purchases and conversions that are still being paid for. CAM by itself may be losing money, but can be shown as contributing to a positive revenue stream down the road. All just a guess on my part...

Some of the debt comes from the purchase itself. Those who owned it wanted compensation for it. Not all of that compensation was in the form of stock. Some of the debt was "transferred" from CHI to ABX Inc (now ATSG). This was the outstanding long and short term debt CHI had at the time of the purchase.

 

[nitefr8dog]

I was not particularly vocal about it, but felt from the beginning that the union had zero chance of prevailing on KIX. One had only to read the CBA language to understand how that would go.

Well Eric, what does your all knowing crystal ball say now? Still think we will seeing any retraining? HAHA, WHEN PIGS FLY!

 

[erichartmann]

Well Eric, what does your all knowing crystal ball say now? Still think we will seeing any retraining? HAHA, WHEN PIGS FLY!

From a previous post of mine:
"First, though, DHL will park the -9's. If they haven't yet parked the 767's there will be money for retraining. Big "IF" I admit. Since the ACMI runs into 2010 there may well be some money for retraining even if they pull the plug in Jan '09 as part of a cancellation. I think it possible there will be people who go home and collect paychecks until their number comes up for furlough. In fact, I think that the most likely senario if DHL pulls the plug on or before Jan 1. All the -9's and the PC 767's get parked, the relatively junior 767 CA's who are needed for the right seat will go to training, everybody else not needed to fly the SF's go home, and as soon as the first former 767 CA comes out of training for the right seat everybody at home is furloughed along with the 767 F/O's who are still flying."

Whether or not there is any retraining will depend on whether or not ABX continues to operate as an airline. There are a hand full of DC-9 CA’s who are senior enough to “bump” into the 767 in this case.

Given the recent news from negotiations regarding dry-leasing of the 767 aircraft I have my doubts about continuing airline operations. While I think these are negotiation tactics I fully expect ABX management to follow through with the “letters of intent” mentioned. They are not making empty threats. IMO they have the union and the pilots over a barrel. Those that that remain will have to take a huge pay cut to keep a job.

 

[nitefr8dog]

From a previous post of mine:
"First, though, DHL will park the -9's. If they haven't yet parked the 767's there will be money for retraining. Big "IF" I admit. Since the ACMI runs into 2010 there may well be some money for retraining even if they pull the plug in Jan '09 as part of a cancellation. I think it possible there will be people who go home and collect paychecks until their number comes up for furlough. In fact, I think that the most likely senario if DHL pulls the plug on or before Jan 1. All the -9's and the PC 767's get parked, the relatively junior 767 CA's who are needed for the right seat will go to training, everybody else not needed to fly the SF's go home, and as soon as the first former 767 CA comes out of training for the right seat everybody at home is furloughed along with the 767 F/O's who are still flying."

Whether or not there is any retraining will depend on whether or not ABX continues to operate as an airline. There are a hand full of DC-9 CA’s who are senior enough to “bump” into the 767 in this case.

Given the recent news from negotiations regarding dry-leasing of the 767 aircraft I have my doubts about continuing airline operations. While I think these are negotiation tactics I fully expect ABX management to follow through with the “letters of intent” mentioned. They are not making empty threats. IMO they have the union and the pilots over a barrel. Those that that remain will have to take a huge pay cut to keep a job.

So if you have your "doubts about ABX continuing airline operations" (which is what I have said all along) why would ABX retrain anyone? I say no one will be retrained and the recent surplussed DC-9 Captains class will be cancelled.

 

[erichartmann]

So if you have your "doubts about ABX continuing airline operations" (which is what I have said all along) why would ABX retrain anyone? I say no one will be retrained and the recent surplussed DC-9 Captains class will be cancelled.

A key phrase from my previous post is:"Given the recent news from negotiations regarding dry-leasing of the 767 aircraft I have my doubts about continuing airline operations." Additionally, DPWN/DHL's latest announcement speeding up their timeline and exiting completely the US domestic business changes the picture as well.

If ABX intends to dry lease all of the aircraft there will, as you say, be no retraining. While management had made it clear they might do this, there had been no actual concrete moves in that direction I was aware of. Now there are. This changes my opinion regarding the possible future, and as I said, I have my doubts. Management is clearly prepared to play hardball, and if the union does not move more in their direction they will follow through with "Plan C"; i.e. dry-lease the aircraft. If the union does move, and they reach a deal with management there may yet be some re-training. At this point I think it likely that the surplussed DC-9 CA's will not be re-trained. They will be sent home and furloughed as soon as someone senior is up for furlough.

At this point I see ABX having perhaps 10 767 SF's in service for the short term with perhaps a max of 50 crews, more likely 30 to 35 if the union and management reach agreement.