any news on ACA with UAL's deal?

[100-1/2]

Hey, Let us clarify and contemplate...

First, Hats off to Marko to bother regurgitating half of that above to an audience (probably) eyes-glazed and brain-fried by some of the theory and information presented here. I for one appreciate the insightful information. Vastly unusable or applicable in current form; it allows one to become inlightened and knowledgable on management decisions and programs as they affect little-old us in the front office driving around suckers to clever advertisement and wholesale outlets such as orbitz, priceline and travelocity.

On the matter of Regionals losing money for United(on their books), this can be misinterpreted as Regionals being unprofitable and should be stated clearly to reflect: poor UA Mgmt decisions resulted in more money being farmed out to various regional air carriers than was harvested back from them (pax revenue). Some regional operators may have actually given UA a return on their money while others did not or barely broke even. That should be a reflection on the Regional Operator(case by case). This could not necessarily be considerred a bad thing for UA, for anything that doesn't make money to increase your tax liability counts as a loss to lower it (very small difference in divedends for minority stockholders).

Remember...Regional air carriers were not originally created to operate over mainline routes. They were intended to serve more rural and near distant communities with service under the guidlines of feeding the mainline hubs of the Majors. The development of the RJ allowed "near" distances to be stretched without increasing operating costs (more efficient and faster aircraft). This fooled Majors into believing they could operate these newer aircraft on mainline routes cheaper than their aircraft that were not profitable (not enough buts in the seats) while still contracted to the terms of RJ Coded Flights. Responsible and Reverent Management would figure out how to fill the seats and make it happen or cut the route all together. Since the Rj came around, I have not heard as much emphasis placed on Revenue Passenger Miles. Certaintly this calculation with contract rates for the RJ would have remain unchanged with the only difference being the 50 Seat Rj is now full compared to the once 35% capacity Airbus.

Remember Sept 11, 2001? fourty-something people on a B767 transcoastal departure within an hour of a B757 (with similar passenger load), late-summer Tuesday Morning flight. That right there is an indication that mismanagement and refusal to give up passengers to the competition(UAL,AAL,DA) started this snowball from hell way before these clowns raped four flights of ALL their Life. Their actions simply launched this snowball over a cliff. Consider that they also spent weeks prior casing these flights for their low pax loads.

Sorry, abit offtrack but 'boggle-worthy' of one's mind if considerred.

The abuse of RJ service by mainline management to fly their colors to more locations and those once served by their larger mainline aircraft has brought about their own demise. Jesus walked by a Fig tree once that had no figs about it when it should have ( I don't know anything about figs but the Bible says they were in season then). So, Jesus cursed the tree that is should die for it was useless and produced no fruit. Rose bushes should be pruned periodically so they may bring forth more buds. If a route is not making any money, and their is no passengers to transport (or your competition is prostituting themself for the mediocre passenger count while you can't afford it)... STOP FLYING THERE!!! Let the competion have them. Sure this abuse brings business to the Regionals and hiring is "Booming?"(briefly). But, if you are going bankrupt years later as a result, EVERYONE ENDS UP A LOSER! That Regional that has been flying your colors gets a reputation just like yours (UA), consumers lose confidence and the regional will be lucky if Judge lets them operate if you don't. National didn't get Govt Help after Sept 11 and judge ordered them to Cease Ops. CH11 protection is a privilage not a right. A company should be better after govt help not worse off.

Just my turn on the soap box here, but, CEO should resign and forfeit earnings and reduced salary for period of degrading Company performance. Owes it to stockholders and employees for they stand to lose vastly in this deal. Just read about 4th generation family stands to lose job, 401K and ESOPs.

I used to travel extensively on a lawn-dart, death-tube Metroliner used by a regional where I once lived. These EMB Rj are not much spacier than the garrett sister's pad and I have spent more time traveling on EMB's over more distances than ever imagined on the Metro.. Oh, but IT'S A JET!!! I cannot be the only passenger that is out there avoiding at all cost anything less than a CRJ which for some legs is itself an unacceptable form of travel. Certaintly, an air carrier route partially loading an airbus or B737 will lose pax when sub'd with an RJ.

Okay, let me have it! Flame away!!
Kindest Regards,
100-1/2

 

[throttlejockey]

No flames here!

I believe that the "RJ Revolution" will turn out to be a tragic mistake for all involved in the long run.

1) Mainline will suffer when the beancounters determine that there isn't enough revenue to be had from operating RJ's. They will learn that you cannot compete with low fare carriers Narrowbody CASM when your RJ CASM is double EVEN AT REGIONAL PAYSCALES!

United would be smart to take all the First Class seats out of its B737's and A320's, modifiy contract language to get better crew utilization and run those planes on routes being flown by RJ's.

2) Regionals will suffer when mainline forces them to take more risk, and the profits that they have learned to love fade away into a sea of red ink. This will put additional pressure on pay scales at Regionals.

3) Small communities will suffer when the RJ's start pulling out of town and the terminals in small-town American turn into ghost towns.

The only folks that may (potentially) not suffer will be the last remaining Turboprop operators who will come into those markets and operate profitably without subsidy's from the government or mainline.

throttle

 

[Marko Ramius]

100 1/2

Outstanding post!

 

[Marko Ramius]

It didn't take long....

Well the worm has officially turned for UAX(along with the rest of UAL). I just got finished perusing some of the court documents UA presented to the judge, and it looks like the pain will be definately shared by the UAX carriers. UA has targeted between 70-80 million in cuts as needed from their express carriers, and claim that they are already in talks about this with them. Might explain some of the random cost cutting and other erratic behavior going on at some places. While the affadavit doesn't say who did what, it pretty much places the cost burden right where I said it would be. The document said that two of the Express carriers have negotiated increased subsidy rates that they claim are too costly, while one has agreed to remain at 2001 rates. So the gun is squarely pointed at ACA and Skywest, using Air Wisconsin as the foil initially. But Air Wisconsin's "cush," position doesn't seem like it's going to last long: the affadavit also mentions that two other regionals have offered to fly flights for UA at a significantly lower cost. Looks like the boys over at Comair are going to have to take a break from blaming the regional industry's labor woes on Skywest and start picking on Mesa and Chautaqua. It appears that the scope clause will not protect (how this for irony) will not protect the UAX REGIONALS in this case. By that I mean that right now, they aren't any RJ's available to go to additional carriers because UA has already alloted the deliveries provided for under the current UA pilot scope clause to it's three regionals. The court document seeks unspecified changes to these limits which UA has been largely ignoring anyway, so that protection will not be there to keep away the Mesa and Chautaqua threat. This has the potential to spread across the rest of the regionals, especially since ACA and Skywest serve both UA and DL. Another interesting tidbit in the document was that at best RJ's provide about a %4.25 unit revenue advantage over the CURRENT mainline cost structure under 500 miles despite at %52 lower unit cost. The document didn't draw any firm conclusions but seemed to imply that if mainline costs were lowered that a mainline jet would work better, once again proving Herb correct.

 

[Caveman]

Not all RJ operators use the fee for departure setup. Comair doesn't and never has. As I understand it DAL wanted a FFD arrangement with Comair but CMR management refused it outright so they bought us instead.

Comair serves about 120 cities with 800 daily departures. You can get from any one of those cities to any of the others with one stop in CVG and never get on a 'real' Delta airplane. I forgot the exact numbers, but less than half of Comair's pax ever see the inside of anything bigger than an RJ.

Comair, as one example, doesn't depend on mainline. If big D were to disappear tomorrow we would definitely feel the hit but there is no question we would recover nicely. We have own own hub and spoke system that pretty much covers the eastern half of the country.

 

[Azul]

Ual and Uax

I rarely ever respond to posts here but the past post by Marko really bothered me. And he's not the only offender. I really don't apperciate your apparent gloating in the pains of Ual and the potential problems for the Uax carriers. Do you realize that peoples lives are at stake here??? Its not just some game where no one is affected. But I guess sitting on the bench ie. 0 total time it must be pretty easy to think that it is. As far as Air Wisconsin is concerned, while we might not be able to have the "cush" position that we have now, but I can assure you that we have been in far worse conditions before and survived and we will continue to do so!
To all the pilots on this board we are all in the same boat, we all love to fly and most have familys to support and I wish ALL the best in these troubling times

 

[throttlejockey]

Azul:

No one here (well at least not myself) is trying to gloat about the problems UAX may face.

This is strictly a discussion about the potential problems that UAX (and other regional carriers flying for other majors) may face in the current situation. The truth is that RJ flying will not be as lucrative in the future as it has been in the last few years, and the regional carriers will have to adjust the ways in which they conduct business in order for them to survive.

Yes, this may have a direct effect on your job, or it may not. Who knows. You may actually benefit from this, then again you may not. None of us have crystal balls.

I know that you are worried (I am worried about getting a paycheck every two weeks at the lousy regional I fly for) but these things are out of any of our control.

Don't let the uncertainty get you down, but don't stick your head in the sand either. You need to find a good balance between knowing whats going on around you, and not letting all the uncertainty get you depressed. Hang in there. You are flying for a good company, with good equipment, and decent management.

You should be lucky you don't fly for my outfit!

throttle

 

[dogg]

So in the end, when a bankruptcy judge looks at all the facts and figures and decides that fee for departure at United is over and that they may only code share with the UAX carriers, what happens? What happens when every RJ flying must make a profit for its owners based on the number of passengers flown and the price those passengers paid for the seat on that RJ.

And on another note; With the obvious cost advantage of a turbo-prop on short routes does anyone see a resurgence of the sf-34 or the emb-120 at any of the current carriers

 

[Pilot877]

Re: Ual and Uax

I rarely ever respond to posts here but the past post by Marko really bothered me. And he's not the only offender. I really don't apperciate your apparent gloating in the pains of Ual and the potential problems for the Uax carriers. Do you realize that peoples lives are at stake here??? Its not just some game where no one is affected. But I guess sitting on the bench ie. 0 total time it must be pretty easy to think that it is. As far as Air Wisconsin is concerned, while we might not be able to have the "cush" position that we have now, but I can assure you that we have been in far worse conditions before and survived and we will continue to do so!
To all the pilots on this board we are all in the same boat, we all love to fly and most have familys to support and I wish ALL the best in these troubling times

Thank you, my thoughts exactly! I just try to remember that its a forum and what they say doesnt matter nor does it have any effect on our situations. I just think of them as tiny elves with megaphones and signs that say "LOOK AT ME, LISTEN TO ME!"
That being said, my friend, your post is one of the most intelligent I have read yet regarding the United situation.

 

[Jetsnake]

Re: It didn't take long....

But Air Wisconsin's "cush," position doesn't seem like it's going to last long: the affadavit also mentions that two other regionals have offered to fly flights for UA at a significantly lower cost. [/B]

This is interesting, never knew we had a "Cush" position with
UAL. And I'm sure the private owners know this also.
I'm betting that the other 2 UAX carrier's are trying to figure
out how to accept what AWAC is currently getting on there
pay per departure fee. 1/3 that of there's. You can't really get
any lower than what AWAC is getting now. And they(3 owners)
are still making money. And I hope they continue to get rich...

AWAC agreed to stay at the current 2000-2001 agreement
with UAL after 9/11. The other 2 UAX carriers did not; and not everyone saw explosive growth like those 2 did.

UAL has never had a good working relationship with it's
Union's. Unless this changes, I think they will be liquidated
in 2 years. And the possibility of CRJ 900's and Embraier 195's
flying all over could be a reality. Along with Boeing finally entering
the Regional Market with a 80-100 seater.

And my crystal ball also say's "Time for a Dump"

 

[throttlejockey]

Dogg:

Good Question.

Most likely you will see the UAX carriers renegotiate their deals with UAL. In the end, there will probably be a small net GAIN in flying by the UAX carriers. However, you will most likely see the UAX carriers flying to larger markets at higher levels of utilization then they are now. This is the only way to make $$ with an RJ on your own. You can't make money with an RJ flying lower utilization to small communities.

This will result in a lot of smaller communities that have RJ service now, loose it perminently (and possible forever).

I do not think that those carriers that have retired their props will bring them out of the desert. With that being said, I do think that the smaller third tier carriers (Shuttle America, Air Midwest, Great Lakes, Gulfstream, Big Sky, Corpex, Trans States) may enter into these markets but they will do so only at there own risk, on a pro-rata profit sharing basis with the major partner.

In the end you will see the following structure:

Mainline: Trunk Routes, Hub to Hub, International
Regional: High Utilization Flying (300-400 Hr/Mo. per A/C), Large and Middle Size Markets, Point to Point.
Commuter: Props - Small Communities, EAS, and Middle-Size Markets. May be used to feed both Mainline and Regionals at RJ "Hubs".

throttle

 

[Marko Ramius]

Azul, Pilot877

Easy guys, I think you misunderstand my commentary. This thread is simply a discussion of what the effects of the nasty BK situation over at UAL may have on the UAX carriers and possibly(again only possibly!!) on other regionals out there. A few of you seem to have an objection to my use of the word cush. You'll notice that I put it in quotation marks. I did that for a reason. Just as airlines like UA, DL, Comair, ACA, Air Wis, Horizon and Skywest have engaged in one form or another of upward pattern bargaining over the past few years, the BK's at UA and UsAirways have started a trend of reverse pattern bargaining. Pattern bargaining is one of the multitude of complaints UA has in their court filed documents. If you read UA's court documents carefully, you will see that although they love RJ's and want more, they want them at a reduced cost over what is currently paid. Specifically, they point out that they believe that the fee per departure agreements of Skywest and ACA are too high. They do point out that Air Wis management did remain at last year's rate to help UA something which is excellent and I pointed it out as such in my previous post.

If you only read UA's document to that point, it looks as if ACA and Skywest will only have to bring the rates back to what Air Wis gets and all will be well at Wally World with zero effect on Air Wis. Unfortunately, the last part of the document concerning UAX states that they have two additional regional carriers(Mesa and Chautaqua) willing to provide service at a much lower cost. UA likely intends to try and reverse pattern bargain, their UAX carriers down to whatever the costs of Mesa and Chautaqua are or lower. That is what I meant by putting cush in quotes, that Air Wis is only safe cost wise in relation to ACA and Skywest but not Mesa and Chautaqua. It was meant a sarcastic comment about how management can never get enough from labor-look at how many times UsAirways keeps going to the well. This is the same thing as when the UsAirways WO's complain that the contract carriers are dragging down their pay/benefits or Comair pilots complain about Skywest holding them back. Remember when Air Wis won the Air Tran contract(smart move, good thinking), and there were all those negative quotes from Ornstein at Mesa about UAX carriers going bankrupt and Mesa taking over? While I think he's largely full of hot air and mad that he lost one, I think his comments were reflective of his intention to severely undercut ACA, Skywest, and Air Willy in an attempt to return to being a UAX carrier. Anybody else, notice that Mesa just started a voluntary pay reduction program today?

As far as my cush position of zero time on the bench goes, that's not true either. I have worked at two regionals and also was furloughed from United. I have no desire to see anyone furloughed, and just like you feel that you need to turn the other cheek on some of my comments, I feel the same when I hear pilots at regionals talking about how much flying their going to get from the troubles of their partners when many of those employees are "on the bench." I know livelihoods are at stake, and have clearly felt the effect of this all. Compassion however, isn't going to stop UA management, creditors, or a judge from taking a shaft to us all with little to no regard of the consequences because it is a game to THEM. Some of the stuff we've been speculating about on this board, seems pretty close to reality-at least in UA management's view as evidenced by their court papers. If you want to point fingers, point them at UA management because they're the ones who want to start this train rolling down the tracks.

Bottom line is that it's ugly out here and likely getting uglier. There is going to be alot of jockeying going on pretty soon and we as labor need to understand as much as we can, and be ready for what could be at the other end of the tunnel now versus later. That's the best way for us ALL to survive this and prosper down the road when things inevitably take a turn for the better.

 

[Marko Ramius]

Not all RJ operators use the fee for departure setup. Comair doesn't and never has. [/QUOTE

Absoltuely true Caveman. I don't that there is a question on whether or not the RJ is a profitable aircraft. The question here is how profitable can they be for mainline under fee per departure agreements? Comair, ASA, and other wholly owneds only cost their parent companies the actual cost of the flight while contract carriers cost that plus more. If the operational cost of a contract carrier is lower than a corresponding wholly owned than adding on the fee would likely result in the same overall cost or possibly less depending on the profit margin. You would know better than I, but isn't this part of what happened to Comair's MCO base versus Chautaqua? Either way UA's management seems to feel that their current setup is too expensive. I expect that they are mostly just going for blood on all involved, and want third world costs for their express carriers since they have massive plans to increase their usage. Many people already think that regionals are a C scale, looks like UA wants to make it and F scale! That's why I was saying that this could ultimately have an effect on Comair and ASA. Not because they aren't profitible in their own right, but because UA may try to force the costs of ACA and Skywest down to the point where they become more attractive to DL and put pressure on Comair/ASA. Unless DL comes to ALPA with request for more scope relief, it's likely a moot point for DAL connection carriers, but with the situation at UA likely cause more contractural changes across the industry I think it bears watching.

 

[Pilot877]

Speculate all you want, its your freedom. What you are saying is above my pay grade and I have no control over what the future holds at United.
All I can do is go to work, fly my airplane to the best of my ability, and present the best image for United Airlines possible and support my brothers and sisters at UAL in their company's dark hour.

 

[46Driver]

I don't know if this is fact or fiction (I work on the Delta side of ACA's operation and seldom visit DC) but I think the gates ACA uses at Dulles are owned by ACA and not United. If that is correct, that would give us some extra leverage with UAL. If anybody knows the actual situation at IAD, please post it.