Any Chances For Delta Furloughees

[rjcap]

I would have NO PROBLEM with a staple.

The only possible result of the ALPA fragmentation and integration policy enactment would have been a staple. We don't need to rehash what the net result of that would have been, i.e. no furloughs at mainline.

At this time the only benefits to mgmt of a staple would be no restrictions to RJ growth while mainline furloughees would occupy all new RJ positions until recalled to their previous mainline seniority position or some other scenario.

Whether or not anybody could get this pushed through I have no idea.

 

[General Lee]

RJCAP,

If managment wants a lot of new RJs or 100 seaters, they will have to deal with Dalpa, otherwise our contract expires on May 1st, 2005, and expect 2 more years to negotiate. That means no orders until 2007. That doesn't sound good, does it? But, they have to address our needs as well, and we have 1060 still on the street after Dec 1st. A staple could help, but with fences of course. But, I don't think Delta would like to have us all on one list....

Bye Bye---General Lee

 

[FDJ2]

General,
I hate to keep going with this, but in the late 90's Comair had a double diget profit margin. I don't think Delta grew "MY" airline. Comair grew on it's own.

COMAIR grew because of the DL code DAL management was allowed to put on CMR flights due to the DAL PWA. When DAL threatened to change the relationship of the previous 10 years, CMR management readily agreed to be purchased by DAL as a wholly owned subsidiary and as such, CMR management agreed in writing to be bound by the DAL PWA. CMR management was well aware that the DAL profit gravy train they had existed on was coming to an end.

Section 1 of the DAL PWA prior to the acquisition of CMR

" This PWA will be binding upon any affiliate. The Company will not conclude any agreement or arrangement that establishes an affiliate unless such affiliate agrees in writing as an irrevocable condition of such agreement or arrangement to be bound by this PWA and if the affiliate is an air carrier or parent or subsidiary of an air carrier, to operate as part of a single carrier with the Company in accordance with the terms of this PWA, unless the affiliate operates only permitted aircraft types."


E N Q U I R E R B U S I N E S S C O V E R A G E
Sunday, October 24, 1999
Comair faced tough decision to sell



BY AMY HIGGINS
The Cincinnati Enquirer
This much was certain: Comair Inc. would cease to exist as it had for the past two decades.
Years of record-setting profits would come to an end. A track record as the fastest appreciating airline stock would be over. And the story of the little airline that changed the industry would have an abrupt ending.
David Mueller knew that two Saturdays ago when he stepped off the plane from Atlanta and 15 minutes later, stepped into the boardroom at Comair's Erlanger headquarters. The fate was sealed in another five hours, after the airline's board of directors voted unanimously to sell the company to Delta Air Lines for $23.50 a share.
''Was there an emotion of, 'God, I wish there was things that we could do to keep this thing going as it was the last 15 years?' That wasn't going to happen. It's not going to happen,'' said Mr. Mueller, who founded the airline 22 years ago and continues to be its holding company's chairman and CEO.
''Our company was going to be a different company one way or another in the very near future, and it was our job to figure out what that looks like.''
During those five hours Oct. 16 in the boardroom -- the third meeting in two weeks -- the directors contemplated three possible paths that had emerged:
Sign another agreement with Delta. That would enable Comair to continue feeding the major carrier passengers from small and midsized cities. Because of increasing competition in the regional airline arena, any new agreement promised to significantly cut Comair's revenues and potential for growth. The 10-year agreement under which Comair has been flying as a Delta Connection carrier expires this month.
Don't sign the contract. That would allow Delta to join with another airline and leave Comair to either seek another major carrier or risk the uncertain skies alone.
Sell the company to Delta. The cost: a share price that's a 31 percent premium over its most recent close.
None of the options were what Mr. Mueller -- who piloted Comair's first flights to northern Ohio in 1977 -- or other executives wanted to do. The option they chose, however, might have been inevitable.
''There's a lot of things in life that you may want to do or may not want to do -- but know you have to do because it's best,'' Mr. Mueller told The Enquirer Wednesday, two days after announcing Comair's sale to Delta.
Mr. Mueller said the first two options were seriously considered. Company executives spent weeks compiling and analyzing industry data, such as looking at similar agreements between major and regional carriers. Other regionals are catching up with Comair's use of the jets that revolutionized the industry and led to record-setting profits -- but they're flying them for a smaller piece of the revenue pie.
Comair executives concluded that a new agreement with Delta -- or any other major carrier -- would be different enough that Comair's revenues, profits and stock value could not be sustained. Analysts agree that one way or another, the good times were over.
''In my opinion, Delta was going to use their leverage to take some of Comair's revenues,'' said Jim Parker, airline analyst and managing director of SunTrust Equitable Securities in Atlanta. ''Profits would come down, and in turn, the stock price would come down.''
Mr. Parker said slashed profits and share prices also would result if Comair risked becoming an independent airline.
Still, taking risks is nothing new to the Mueller family. David Mueller started at age 15 taking those risks by learning to fly. He sought to get into commercial aviation during the late 1970s, during the uncertain atmosphere of federal deregulation.
In 1977, Mr. Mueller and his father, Raymond, sunk almost $60,000 -- mostly from their collective savings -- into buying the assets of Wings Air, another commuter airline that was in bankruptcy. They wanted to risk succeeding where another had failed.
The elder Mr. Mueller remains on Comair's board but has not been involved in the operation of the airline for about 12 years. He retired as chairman in 1990. Contacted at his Florida home last week, he declined to be interviewed.
David Mueller said he and his father leveraged many of their assets, especially in those early days when cash flow tightened after a crash in 1979. An engine inexplicably died, sending the plane down and killing 8 people. The start-up carrier then had such a hard time attracting Cincinnati passengers that it moved the bulk of its operations to Dayton for eight months.
''Dad had to make some (investment) moves, I had to make some moves, but we got out of that relatively quickly,'' Mr. Mueller said.
During even those hardest times, with two small children at home, Mr. Mueller said he never thought about giving up.
''I would always take a big risk for something that I believe in,'' he said. ''You've got to have the idea and the intelligence to pursue that idea.''
Comair's biggest risk came in the early 1990s when Mr. Mueller sought to introduce regional jets to the flying public. No one had considered using the aircraft, which are more expensive to buy and operate than the industry-standard turboprops.
But jets are quieter, are more comfortable, are faster and can fly farther than other commuter aircraft.
And they were right. The jets' popularity, along with a revenue-sharing agreement signed in 1989 that didn't account for the jets' profitability, are keys to Comair's wild success on Wall Street.
''We bet the company in 1990 when we ordered the first jet. That was a billion-five ($1.5 billion for 50 jets) on a company that at that time had a net worth of $100 million, $150 million,'' Mr. Mueller said. ''But we all believed that was the wave of the future and as it turned out now everybody's trying to play catch up.''
Indeed, most regional carriers -- including others that fly as the Delta Connection in other parts of the country -- have added jets to their livery and have hundreds more on order. Atlantic Coast Airlines last month signed a contract to fly 45 of their jets for Delta in the Northeast.
''I will bet my bonus that it's nowhere near what our contract that expires is like,'' Mr. Mueller said.
The explanation is still hard to take for shareholders like Joe Dooley, a 28-year-old cellular technician who bought several hundred shares of Comair for $25.50 each in March.
Mr. Dooley said he bought Comair as a long-term investment after researching the company and finding it performed well for shareholders. But now, he wants to avoid selling.
''I'm going to take a substantial loss,'' he said. ''It's not going to bankrupt me, but it's a disappointment to me.''
Mr. Mueller said the disappointment could be worse with the alternatives the board considered. Airline stocks in general have been sluggish in recent months, and Comair's showed no promise of repeating its 10-year average annual return of almost 35 percent.
''The way our stock was headed, they might have woken up Monday morning with a $15 stock price,'' he said.
At $23.50 a share, Mr. Mueller personally stands to make $23.4 million from selling his 1.3 percent stake in the company. His stock options are worth at least another $12 million, while his contract with Comair guarantees him almost $1.7 million if the company changes hands.
Mr. Mueller knows that he's set for life. With almost nothing out of his financial range, he plans to travel and pursue other interests after fulfilling his three-year commitment to Delta as an adviser.
He might breed horses; he might travel to Asia; he might spend more time with his family. Whatever he does, he'll do it with the knowledge that in October 1999, he did the best thing he could.
''Is it emotional? Hell yes, it's emotional,'' he said.''But I can tell you that the board members, employees, shareholders, customers, we can all hold our heads high.''

 

[Bluewanabe]

FDJ2,

and what is your point? COMAIR GREW Because Comair generates a PROFIT!

Bottom Line. It was not DALPA's job too ask us for concessions! That is what management is for.

 

[General Lee]

Bluewanabe,

I think management is asking you for concessions, and it isn't Dalpa's fault. Look at the other DCI carriers and see what they will do the job for---and they want to expand also. Delta management hands out the expansion, and they will give it to the lowest bidder. A lot of Comair's growth has been attributed to Delta and our feed, and our growth has also been helped by DCI. To say that Comair would have been this huge on their own is questionable. We shall never know....

Bye Bye--General Lee

 

[Bluewanabe]

Gen,

O.K., I'll agree to disagree.

Your original post talked about "sharing the pain". Specifically DCI. DALPA did not ask me for concessions. They demanded it from management.
I did not say Delta did not help Comair grow.
Things are really starting to get twisted here.
This thread started with a furloughed pilot asking for info.

If you want to continue to sell me on lowering the bar and settling on concessions because it was suggested by another pilot group in the same union, I suggest we start a new thread.

tailwinds

 

[FDJ2]

FDJ2,

and what is your point? COMAIR GREW Because Comair generates a PROFIT!

CMR doesn't generate a profit, because CMR doesn't fly any of it's own code, it just gets assigned revenue and costs as management sees fit. Comair grew because Comair was given a sweetheart deal which was coming to a screaching halt in 1999. Given the option of going it alone, or accepting the terms laid out for acquisition, CMR management readily agreed to the acquisition and all limitations associated with it, as did the CMR pilots through their PWA. That was the CMR growth of the past, the CMR growth of the future, since you have no scope over any flying, will be dictated by how well you compete against Skywest, Chautaqua, ACA and ASA for the DCI flying.

FYI, the mainline generated $201,000,000 operational profit last quarter.

 

[Bluewanabe]

FDJ2,

I am getting real tired of going in circles here. I'm not talking about growth, scope, Skywest, Chautqua, ACA, ASA, or who gets what RJ.

I'll keep it simple. Comair makes money. NO to concession!

 

[FDJ2]

I'll keep it simple. Comair makes money. NO to concession!

Well that's all well and good, but just realize that those numbers can all change with the stroke of an accountants pen. Best of luck.

 

[General Lee]

Bluewanabe,

Hey, I don't want you to take concessions. (Even though Dalpa wants everyone to "Share the pain"--and that amount has not be specified...) But, the fact is that Delta management will give out future growth to the DCI regional that wants it the most. That isn't Dalpa's fault----that is the marketplace. And, we are learning the same thing at mainline--that regular passengers won't pay a lot for fares, and we probably won't be paid as much either. That truely sucks. I wish you luck my friend.

Bye Bye--General Lee

 

[~~~^~~~]

General :

Yes, it is your MEC's fault and I think you know it. For everyone else, lemme 'splain...

Reason 1 : Your MEC undermined our union's Constitution, moved to have the definition of "operational integration" removed and flat out lied at the 2000 BOD meeting to stop ASA and Comair's policy implementation date request. If the ASA and Comair pilots had been successful none of your guys whould have been furloughed and we would not have seven groups of pilots now competitively bidding against each other for Delta's flying.

Reason 2 : Your MEC set preconditions on concessionary bargaining. One of those preconditions are that other employee groups "share the pain."

None of your thoughtless MEC pawns have considered that other employee groups already earn industry standard wages. The Delta pilots in comparison make sixty two percent more than the industry standard and forty seven percent more than the next most highly compensated pilots on EARTH.

Reason 3 : Management is not looking for any real cost savings at Comair, just enough to appease ALPA, as currently hijacked by the Delta MEC. To put this in perspective the 8 million Delta seeks from the Comair pilots is a measly one percent of the over ONE BILLION DOLLAR cost difference between Delta's current pay and what management would be paying under American Airlines Pilots' compensation package.

The irony of this is that DALPA's demand for other employees to take cuts to put them below the industry standard may backfire and result in something the Delta MEC does not want, a DCI merger.

And I can't help but ask the question again, are ASA and Comair Delta, or not? The debate over that question reveals how morally bankrupt ALPA's position is on the matter.

In summation, your MEC has lowered the standard of this industry and continues to do so. I hope the top 1/2 of your seniority list are enjoying what they got, because it is costing us - including your furloughees, a lot.

Nothing personal against you, but you and I have witnessed the further decline of our profession in the last several years thanks to your MEC. I can hardly wait until your own pilots demand change, or we are able to assemble the votes to take back the union and restore the industry.

~~~^~~~

 

[MedFlyer]

I think we have the upper hand, and if they do not agree nothing will be settled until 2007 (2 years after negotiations begin). We shall see.

Bye Bye--General Lee

Why do you think the pilots have the upper hand? Sure the pilots don't have to negotiate, but the pilots have a lot more to lose.

Mullin and Friends can walk away from this company at any time and they will lose nothing. They'll have their millions and a secured retirement benefit. The only things they would lose are some options (most of which are underwater) and it might hurt their reputations. However, in the eyes of the general public, most of the blame will be placed on the pilots.

So while management and DALPA play showdown at the OK corral, Airtran is sneaking in the backdoor and taking all the gold (http://biz.yahoo.com/bw/031022/225223_1.html).


Networ-king,

I won't even try to speculate on the futures of UAL and U, this thread is about DL and the future for DL furloughees (and the standard RJ vs. mainline fight ). Sure DL would benefit if either one of them disappeared. However, if DL's management or DALPA are basing the airlines business plan on the demise of another carrier, than DL's future is definitely dim. I would also hope than no pilot on this board would hope for another carriers demise, just so that they wouldn't have to give concession.

 

[Networ-King]

Fins,

No sir..... I would not go and work for Comair even if you guys got off of your high horse and offered us interviews and jobs without resigning our Delta seniority. I've already done the regional thing and hated it the first time. So stop trying to be the victim here, its getting freaking old. You keep bashing all the Delta guys and we have nothing to do with any of this. Just like you have nothing to do with your flying going to CHQ and SKW. Its amazing how everyone here thinks that Comair and ASA are really profitable all the time. Explain to me how your profitable if your freaking CASM at last count was 11.2 cents a mile and ASA's was somewhere in the 15.0 Cent a mile? I'll tell ya how..... you dont pay for your planes, Delta does. You don't pay for your reservationists, Delta does. You don't pay for your gates, Delta does. You don't pay for D!ck, Delta does. Getting the picture here captain? Stop cutting the general and the rest of us "Delta guys" down all the time. We're not your enemy. By the way..... ASA offered the Delta guys jobs without the resignation thing and guess how many are over there? 13, 14......wwwaaahhhooooo man thats HUGE. HUH? The fact is many pilots would rather go sell houses or get something else going then to get back on food stamps, its just a good will gesture that your management failed to show. I know its not the pilot groups fault, but unfortunately we as pilots always take the blame for majority of it. Just like you keep blaming us for all the crap our piece of Sh!t management is going. Just have a coke and a smile man and fly safe.

Medflyer,

No really..... I want to know when UAL and U are going to go under so I can plan ahead. I don't want to prosper from the fall of UAL or U, but since you can see into the future and all I'd be very interested. The general told me to take it easy on you, but a guy with your vast 1200 hours of experience can surely take care of himself....right? I mean heck.... you've been around the block about a quarter of the way already and you already know the year that Delta is throwing in the towel. WOW. So Im still waiting to know what your crystal ball says. Unless you dropped it and now it has a crack in it?

 

[General Lee]

Fins,

You really can't compare American or UAL to Delta. They were backed into a corner, and lost. They have more unions and less flexibility. We are 80% NON-union, which means 80% No protection. We pay dues each month to protect what we have, and the others who don't are really gambling. Yes, we are paid more than our peers, and that will probably go down a bit. So is Comair--compared to their peers. I guess that means they should also take a large cut--and that would affect ASA also. Comair probably makes 50-80% more than Chitaqua, but you don't compare those two. How are Delta's rates compared to Northwest's? Not 80% higher, but you choose American which has even worse economic problems. Just because their management backed them into a corner, doesn't mean we will allow them to do that to us. Even Leo said we are in no immediate threat of Chap 11.(by the way, how many RJs are we buying over the next two years? Guess what, passengers do NOT like flying them long distances, it is embarrassing that we are competing with Frontier A318/19s and AA MD80s on the DFW--DEN routing--between two cities that each have well over 2 million people. Can you explain that? It is ALL the pilot's fault, right??? We provide 150 total seats a day in a cramped CRJ50 between two very large cities.....We do the same to Phoenix, and OAK, even SNA or the "OC" on TV.(CR7s on those two) Why? I guess no one wants to go there. It is obviously the pilots' fault.)

And, we keep saying that we are willing to give them some paycuts right now, if they need the cash so bad----just with some restrictions. They will have to decide whether or not they need it right now. Our contract is like a safe, that can't be opened. We will consider opening it, and maybe giving them a loan. They will have to pay it back eventually. Your situation is different---you will give money if you want any new expansion. They have to keep us at a certain level, or will have to pay our guys to sit--thanks to our still existing No Furlough Clause. But, the money is there waiting for them.....

As far as waiting for UAL or USAir to go under, I don't think they are doing that. They are moving forward and looking forward to the holiday travel pick up and a better Spring and Summer. We have plenty of cash to survive this bump. The economy is growing and gas prices will come down. Enjoy!

Bye Bye--General Lee

 

[FDJ2]

General :

Yes, it is your MEC's fault and I think you know it. For everyone else, lemme 'splain...

Do you always blame others for YOUR shortcomings. Have you ever taken responsibility for never having successorship language that would have protect your interests in the event of an acquisition. But I guess it's just easier to blame the mainline than take responsibility for your own inactions. Because YOU failed to have any meaningful successorship language in your PWA you are now a wholly owned subsidiary with scope over zero hours. You have become a vendor of small jet lift and you must now compete against lower bidders for the flying. It's not the fault of the Delta pilots that YOU failed to protect yourself.

 

[tbkane]

Once again this thread is totally a DCI vs mainline arguement. I would also like to hijack this thread back and address the MAINLINE FURLOUGHS and ask other mainline employees their prognosis on weather we will ever get to go back.

If you want to argue DCI VS mainline why don't we get another category so the rest of us don't have to read it all the time.

 

[SWA/FO]

Hey Clown!!! or I mean Net-working,

Take it easy. We all know how you feel now. You bleed Delta blue and white (if that is what it is?). You will never consider working anywhere else, we get it. You would rather sell houses, dig a ditch, scoop fries etc... we get it.

If I may ask, how long were you at DAL before they stopped paying you a pay check? You seem very loyal to a company that has stopped paying you, probably over two years ago.

You make the comment that everyone will be working for a LCC and living off of 150,000/yr. (something like that..). Just think those people have made 300,000 in the two years that you have been laid-off. There is something to be said about a stable company and that stable paycheck. I'm not just talking about SWA, there is AirTran and JetBlue - Most of these folks just worry about where to spend their money not where it will come from. BTW, you will never make back the money from DAL you are missing out on now.

Be easy on our 1200 hour fellow aviator, you were there once?
You don't sound happy and frankly, I think your posts make you look like a$$. You like those dollar signs?

 

[jetflyer]

It's not Comair's fault anyways that there are furloughees on the street!! It's amazing how it's the fault of the RJ and Comair in Delta pilot's eyes. The problem is a lot of the Delta pilot's eyes are closed. Blame the low cost carrier, blame the economy, blame the terrorism or Iraq war, blame anything else! Or in the words of Milli Vanilli (OK lip-sinked words), "Blame it on the Rain!"

Delta, Comair, and ASA are part of the same company. Let's learn to live with each other. Let's form some solidarity and together we can add market share, all grow together, and be prosperous. If we continue to fight, blame each other, and not find a way to work together we'll stagnate, continue to have furluoghs on the street, and always be miserable. I THINK WE NEED TO ALL GROW UP, apologize and move on.

These DCI bashing threads are frankly getting old for everyone.

Back to the topic now, sorry.

 

[Networ-King]

Aaaahhh the famous Jacka$$, SWA FO,

I see your sticking your nose in it again. If you can stop being an idiot for one second why don't you re-read my post. I said I am not interested in flying for any regional making 17K a year again. Thats just me, but you had to stick you nose in it again didn't you. For your information I am employed and flying and not jerking gear like you are.....whats the matter not enough flying. Are you close to your 1000 hours for the year already? I know that the LCC's are doing well and they are good companies and yes I would fly for them.... You also forget other good companies, like Frontier, Alaska, ATA, AWA.

And the 150K a year you were refering to is after how many years? 10-12..... Yeah I doubt a 3rd year LCC FO is making that kind of coin, even with open time flying. (Jetblue quick Capt upgrade is an exception)

And why don't you check out my other posts about my "wonderful Delta management team" <----- sarcasm......sorry folks just had to spell it out for this moron....then you'd see that YOU are the one that looks like an idiot with your post. And as for the 1200 hour pilot....yeah I was there, but I knew my limits. All I asked was for this experienced pilot to clue us all in some future happenings in the airline industry so we can all plan better. If that hurts his feelings well then maybe he should just read and not post or maybe you should let him take care of himself.

by the way SWA FO ..... your application at Delta has expired by now so your not gonna get a call for an interview, so when Delta starts to hire again you might want to reapply.

let me know I'll walk it in for you.....

Hey does your naked captain ever tell you to
to make this face ---------->

 

[General Lee]

Man alive, this is getting nasty. Even after we get paycuts, we will still be the highest paid in the industry. The economy is getting better, and passengers are flying again, albeit for lower fares. That is something Delta will have to deal with, and they are working on it partly with Song, where the CASM is 7.0---not bad. Now, the rest of Delta has to get better, but the rest of Delta is not only domestic---we have a lot of INTL ops that are very profitable. Bringing extra RJs on board will NOT help, since they increase CASM, and the lower fares do not make RJs profitable. This management team of ours will hopefully come up with a way to combat these LCCs----probably by lowering some salaries, and increasing frequency with bigger planes--like Song is doing. People don't want to fly on long planes rides in RJs--not when they can hop a comfortable Frontier A319 instead. That is the truth, and hopefully management will see that. Why fly DTW to DFW on a 50 seat RJ when you can fly on a NW A319 or AA MD80? The price is probably the same, and with the RJ comfort, you probably will have a hard time filling it. Don't get me wrong, I think the RJs have their place, and they are better than props. But, when you have to go head to head against a LCC with a larger airplane and the same price, the RJ will lose. Time to wake up.

Bye Bye--General Lee