Astar Pilots vs. The Dazz

[Whistlin' Dan]

At this point neither carrier can operate the whole system. OTOH DHL is now paying for the infastructure to run two carriers where only one is needed. I've heard estimates of anywhere from $40 to $80 million for that infastructure. Get rid of one carrier and you get to save that money.

Really? I'd be surprised if it was 1/10 of that. Why would it take 40 mil to run a company? You have one extra set of managers...a Sr. V.P. and D.O. at a couple hundred thou each, some training and administrative positions at anywhere between 25 and 100K, and some miscellaneous expenses. I estimate that the price for administering a 121 cargo carrier of this size, at least on paper, would be a little over a million.

That's about 2% of the total operating budget for the smaller of the 2 carriers we're talking about here. A mere 2%, for the assurance that the on-time rates will be as good as can possibly be expected, and to keep a second source of lift intact should I have the kinds of labor difficulties that plague their competition every 4-7 years. A mere 2% of your operating budget to keep some downward pressure on 100% of your labor group.

I don't know what it costs me to clothe and feed my wife, but if I could split the cost between her and a mistress that lived in our house (but slept in an adjoining bedroom) while incurring only an additional 2% penalty, I certainly would. Such an arrangement would probably cure a lot of her frequent nightly "headaches," as well.

In the end I think DHL plans to wind up with one carrier, at least in the US domestic market, maybe worldwide. They have only to look to Purple and Brown to see the advantages.

Oh, they've looked at UPS and FedEx allright! They see pilots making 250-300K per year, compared to guys doing the same job at Kalitta that top out at less than half that. They see retirement plans and stock options, "real" managers (as opposed to some of the clowns that dot the ILN ramp) who motivate, rather than bully, their employees into doing the best job possible.

They also see threats of job actions by those same pilots every few years too, usually when contractual matters aren't being addressed, and usually around the busy time of the year.

DHL has NO intention of consolidating their airline ops into one carrier. They've worked way too long and hard to keep them seperate. If they ever do decide to consolidate their ops, they'll do it in Europe first, where they've been operating a hodge-podge of carriers for 20 years.

 

[rotor&wing]

In the end I think DHL plans to wind up with one carrier, at least in the US domestic market, maybe worldwide.

sorry, i have to really laugh at that comment. it's obvious you haven't been around DHL too long. you better take a look at their operations worldwide to realize that will never happen.

 

[abxaviator]

Actually, John Mullen, two years ago, in discussing the 15+ year plan for DHL addressed the possibility that they may have to abandon the hodge-podge approach and move to a single carrier worldwide. He further stated that 60+% of the world express business is either to or from the US and with US ownership laws as they are a US carrier would be required.

 

[rotor&wing]

Actually, John Mullen, two years ago, in discussing the 15+ year plan for DHL addressed the possibility that they may have to abandon the hodge-podge approach and move to a single carrier worldwide.

plan? DHL have a plan? c'mon, DHL can't even tell you what they did yesterday, much less a plan for even next week. LOL

the fantasy that DHL will have one global airline, much less even one airline in the US is just that, a fantasy.

DHL is not FedEx, and it is not UPS. Nor do they want to be.

get over it.

 

[abxaviator]

Just beacause DHL has not let you or me know anything, to say a multi-billion dollar world conglomerate has no plan is sheer ignorance. I have NO DOUBT they have a plan, what it is and whether it's good, bad or indifferent to me, I have NO idea and very little if any way to affect the outcome. Kinda like ants in an ant hill in the yard, they don't know my plan to eradicate them and have no pssibility of affecting my chosen course. Hopefully we'll fare better than the ants.

 

[Whistlin' Dan]

Just beacause DHL has not let you or me know anything, to say a multi-billion dollar world conglomerate has no plan is sheer ignorance.

I disagree. Before there was a FedEx, before UPS was anything more than a (mostly domestic) package delivery service, there was a DHL, and it was the ONLY practical means of expediting stuff all over the world.

Each of the last 20 years has seen them lose a share of that market to the above named competitors. DHL's only significant bump in market share came as a result of acquiring Airborne Express, a company that was arguably the "Sam's Club" of overnight delivery services. And while DHL has been patting themselves on the back for the "growth" of their operations, they seem to have ignored the simple fact that the market itself has been growing at an explosive rate. Ignorant of the fact that it's been the rising tide that's been floating their ship, as well as all the others in the harbor, they've come to regard themselves as Admirals of the fleet. They attribute their dismal performance in both the financial and operational arenas to the acquisition of ABX and to the fact that they're still paying their employees too much. What they don't say is why those same problems haven't slowed their competitors growth or financial performance.

DHL is a slowly sinking ship, and anybody who is "tied off" to her will sink with her as well. At this point, it would take billions to turn this company into a viable competitor...billions that would probably be better spent investing into FedEx or UPS, or one of their subsidiaries.

Does DHL have a plan? Perhaps. The last place teams in the NFL, the NBA, and Major League Baseball all have "plans" for recovery. The "Three Stooges" usually have a "plan" for getting out of whatever dilemma they find themselves in. I'm sure that DHL, too, has a "plan." But in light of their past performance, whether their "plan" has any more hope for success than that of "Tampa Bay" or "Moe" to save their respective a$$es is highly debatable.

Losing market-share in an industry that you virtually created...losing billions in a market where your competitors are making billions...possessing one of the lowest-paid and de-spirited workforces in the industry...service levels at an all-time low...

Some "plan..."

 

[flyinboxes]

Now this is the kind of detailed analysis everyone needs to read. You must have been involved with negotiations sometime during your career. I'm curious about the above statement specifically regarding assessment of parties' motives. Is the mediation board privy to the Dassberg letter indicating his intention to procede to endgame? If so, how would that influence their strategy concerning negotiations?

He most certainly will be. He will be privy to ALL correspondence either at or away from the table.

 

[767pilot]

How are you predicting a release from mediation in March? I've never known a mediator to announce a release date months in advance.

Not only that, but I think this guy is forgetting just what a powerful tool the mediator has by simply putting the pilot group on ice as was done at UPS. All the cries of "another day of retro pay" and "no concessions on anything" go away real quick when it turns into "take this, or who knows when you'll have anything else"

 

[erichartmann]

sorry, i have to really laugh at that comment. it's obvious you haven't been around DHL too long. you better take a look at their operations worldwide to realize that will never happen.

From your posts I conclude you were either a long term DHL employee or spend a lot of time talking to the long term employees and have adoped their views of the company.

Two quick points:

1) DHL is now a wholly owned subsidiary of DPWN.

2) DPWN faces a changing marketplace in Europe and around the world. They have a plan to ensure their survival.

Actually the way this works is you establish a goal. You then develope a plan to reach that goal. Having both means you can measure your progress toward reaching the goal. If you are not making progress, or if your progress is not satisfactory, you alter the plan. Also, as the environment you operate in changes and/or you reach your goals or even realize your goal was based on false premises and is unachiveable you establish new goals, and new plans.

Personally I believe they have near, midterm, long range goals. I also think they have multiple plans or fallback positions to allow them to cope with factors beyond their control and/or changing events.

I thing they will gradually consolidate their airline operations because there are saving to had by doing so. That doesn't mean they will own the airline outright.

For now, my reading of the tea leaves is that Dasburg is getting ready to pull the plug on Astar with DHL's blessing. The 20 727's Dasburng bought will go to either ABX or Polar/AAWW. To a large degree I think which will depend on the terms of Polar's ACMI with DHL.

 

[rotor&wing]

>>>>Two quick points:

1) DHL is now a wholly owned subsidiary of DPWN.

2) DPWN faces a changing marketplace in Europe and around the world. They have a plan to ensure their survival.<<<<<<<<<<

Plan? PLAN? Well, it's obvious you are a new employee (contractor) to DHL and clearly don't understand how they operate.

Let's look at their "plan" since they have been a wholly owned subsidiary of DPWN.
1) Shut down a $300 million dollar, fully automated sort facilty in favor of a run down antiqudated one that is all manual labor, at best.
2) Move their sort operation to an airport in the middle of nowhere, with no available labor pools to draw upon.
3) At this new airport and sort operation, no roads to connect Wilmington to a major interstate for the increased trucking operations to support it.
4) Also at this new airport, no pipeline to supply jet fuel, thus adding even more expense.
5) A major ad campaign ($150million) just when the consolidation of the sort facilities hit, only to blow off many customers due to poor performance.
6) The infamous "C" containers, a one of a kind cargo system that requires special handling equipment, btw that no one else in the world uses.
7) Wilmington airport, or better described as "Designed for Failure".
8) A fleet of old fuel guzzling airplanes (both ABX and Astar)
9) Fire all your loyal hardworking employees in favor of cheap contractors.
10) Theft rate after the ILN move jumped 2500% (that's not a typo)

Actually, the list goes on and on.

Come back in 6 months and tell us all about the great "DHL Plan"........you'll be singing a different tune by then.

Trust me, been there, done that.........and I don't want the T shirt!

 

[Whistlin' Dan]

For now, my reading of the tea leaves is that Dasburg is getting ready to pull the plug on Astar with DHL's blessing. The 20 727's Dasburng bought will go to either ABX or Polar/AAWW. To a large degree I think which will depend on the terms of Polar's ACMI with DHL.

"Pulling the plug" on Astar right now would virtually guarantee the exact thing that DHL is trying so hard to avoid...a sole-source provider of domestic lift at what would almost certainly be market (read;$225/hr) rates.

If anything, DHL will keep Astar alive, in order to leverage their contract negotiations with the much-larger ABX group. Because the ABX pilot group is half-again as large as Astar's, every dollar they can squeeze out of this contract equals $2.50 in the combined Astar/ABX contracts.

DHL may be trying to force a job-action at Astar, which would leave them free to seek other, and undoubtedly cheaper, carriers. Leaving the carcass of Astar to rot in view of the ABX pilot group would no doubt have an effect on their forthcoming negotiations.

My "reading of the tea leaves" as you put it, is that DHL will employ Astar at their current strength (minus however many they can fire or encourage to leave) for at least the next 5 years, because they're contractually obligated to do so. That contract, as I understand it, specifies a "cost plus" arrangement with DHL. What is at question is what those "costs" will be...ACMI, bottom of the barrel labor rates, or UPS/FedEx rates. You can bet your sweet donkey that some portion of whatever Dasburg manages to save DHL in labor costs will be returned to him in the form of a performance bonus.

By asking for "industry standard" wages, the pilots of Astar are taking money directly out of Dasburgs pocket...money he could be using to buy bigger houses, or other companies to compete with Astar when this contract runs out. It's as simple as that...

Pay attention, ABX! You're on deck...

 

[LarryinTN]

a sole-source provider of domestic lift at what would almost certainly be market (read;$225/hr) rates.

You mean our 767 Captains would have to take a pay cut down to $225/hr from their current $239/hr and the DC8 Captain's from their current $228/hr?

 

[abxaviator]

It's actually quite funny how many opinions here are stated as if they were written in stone fact, especially from those who seem to be rather disgruntled. The only facts are that NONE of us (myself included) has any idea whatsoever of what will be in 1 year, 5 years or 15 years and that DHL/DPWN as a company most assuredly DOES have a business plan that we may or may not benefit from or like. Good luck to us all.

Oh, and Merry Christmas, I hope everyone had a wonderful Holiday with their families.

 

[goastar]

The only factual paragraph in 3 pages, we will all certainly be the last to know. Back at you on the Merry Christmas and have a Happy New Year.

quote=abxaviator;1205655]It's actually quite funny how many opinions here are stated as if they were written in stone fact, especially from those who seem to be rather disgruntled. The only facts are that NONE of us (myself included) has any idea whatsoever of what will be in 1 year, 5 years or 15 years and that DHL/DPWN as a company most assuredly DOES have a business plan that we may or may not benefit from or like. Good luck to us all.

Oh, and Merry Christmas, I hope everyone had a wonderful Holiday with their families.[/quote]

 

[goastar]

Thanks for the clarification, the whole world is impressed.

You mean our 767 Captains would have to take a pay cut down to $225/hr from their current $239/hr and the DC8 Captain's from their current $228/hr?

 

[abxaviator]

How can this be?

John Dasberg negotiates a ten year ACMI with DHL Where he gets paid
ten M/yr. buys a ten million dollar house in Florida in addition to his ten million dollar lake home in Minneapolis and then unilaterally forces Astar pilots to pay for all of this via ten percent in pay concessions. He probably wipes his azz with ten dollar bills. This guy really is laughing all the way to the bank. I hope when that fateful day in March (release from mediation) arrives Astar pilots won't balk and allow their dignity to be further trampled by The Dazz.

Which day is that? not too many days left in March.

 

[flyinboxes]

5 days ago I think.....LOL.

 

[hvydriver]

True that. The dreaded "Ides of March" came and went without a whimper.

 

[Cargoav8or]

I'm sure there was a wimper, it just wasn't made public.

True that. The dreaded "Ides of March" came and went without a whimper.

 

[Cargoav8or]

"The company is focusing on raising volume and sales and doesn't foresee a need to expand market share in the U.S. beyond the current 9 percent, he said. "

Very telling hvydriver, definitely time for me to move on.