ATI and ABX Merging

[Clipperskip]

furn burns

Still not cheaper than Cappy. 727 burns less fuel than 767. Domestic loads are perfect fit for the aircraft size. Aircraft are relatively young and in good shape. Parts are free. Labor is cheap. Performance is outstanding. 757 will replace the 727, not the 767. You just cant undercut this scumbag outfit. At least thats what i've been hearing. Very Very sad!!!!

Dear Lightdriver,

I've flown both the B727-200 and the B767-200F. The furn burns are nearly the same. The 767 carries up to 100K lbs the B727 significantly less (maybe 60K lbs). Lets not forget the extra crewmember on the B727. I think that the B757, and not the B767, is considered the a logical replacement for the B727 more due to its simular cargo capabilities not neccessarily fuel burns. Obviously the B757's operating economics are more attractive than the B727 but its cargo capabilities are comparable.

 

[nitefr8dog]

EXACTLY!!!!!
What if that "Jesus" guy (who ever he is you have running your union) says "guys we have to work for half" or even worse Cappy's pay scale, what will you do? The mortgage is due and the kids need new clothes, oh yeah the power bill is due and the car is broke. Preaching to the choir I hope, but this is a REAL possibility for you guys. What would the majority do? I suspect they would bow their heads and run the "Before Starting Engines Checklist" just like their told to do. Like a guy said in another post"everything looks different according to which side of the fish bowl your on".

Just my opinion

We already turned the first post DHL offer down $150 per hour for 767 captains. We do not have to work for Cappy pay to be more cost effective. Let's see 767 fuel burn 9000lbs an hour, 2 man crew, 100k payload, 7+ hrs range. Most of the flying will be in Central and South America. If you sharpen your pencil my guess is ABX is already the most cost effective. Now change some work rules, stop the DB plan. And ABXis cheaper than everyone without any other changes. JH already knows this or he would have been buying 727's the last 10 years instead of 767's.

 

[727Niteflyer]

We already turned the first post DHL offer down $150 per hour for 767 captains. We do not have to work for Cappy pay to be more cost effective. Let's see 767 fuel burn 9000lbs an hour, 2 man crew, 100k payload, 7+ hrs range. Most of the flying will be in Central and South America. If you sharpen your pencil my guess is ABX is already the most cost effective. Now change some work rules, stop the DB plan. And ABXis cheaper than everyone without any other changes. JH already knows this or he would have been buying 727's the last 10 years instead of 767's.

Thats why I said abx is going to find its own niche. No pitting one against the other and your not going to find a 76 in the bax system.

One of the problems that you will have with that big fuel efficient aircraft that flys 7 + hours and carries 100k of frieght is that its expensive. Got a big payment everymonth. The bax system is inefficient in that the aircraft maybe average 6 hours a day 4 days a week. Thats why 76s or 75s wont work in the bax system.

Im sure ABX will secure some contracts. But like I said the competition is going to be like aircraft, ones with longer range that can carry 100k freight. And in the charter world that freight doesnt carry the price tag of the overnight packages. Bulk freight is priced much differently.

If you look at the new generation aircraft that fly out of miami, ups 75s, 76s, lan 76s, those aircraft fly constantly round the clock. Even the challenge 75s years ago went nonstop around the clock.

Im sure ABX will find contracts. But I dont think ABX can compete against the likes of centurion, arrow, tradewinds, etc...

 

[FastHap]

Thats why I said abx is going to find its own niche. No pitting one against the other and your not going to find a 76 in the bax system.

One of the problems that you will have with that big fuel efficient aircraft that flys 7 + hours and carries 100k of frieght is that its expensive. Got a big payment everymonth. The bax system is inefficient in that the aircraft maybe average 6 hours a day 4 days a week. Thats why 76s or 75s wont work in the bax system.

I predict you will see a 767-200 freighter in Toledo flying the BAX/Schenker system very soon.

In the Jul 1st ATSG earnings conference call http://www.earnings.com/company.asp?ticker=ATSG&coid=146387&client=cb , Peter Fox was asked by an analyst if BAX/Schenker had been approached about using 767's in their system. As you mentioned the 4 day utilization was brought up as an issue. Mr. Fox went on further to say that certain city pairs would be able to have and aircraft in the BAX/Shenker system during the week, and fly charter work on the weekends. LAX is my bet on the first city.

Now, the $64,000 question is will it be an ATI plane, or an ABX?

Some further reading if you really want a flavor of what is to come. http://seekingalpha.com/symbol/ABXA/transcripts

 

[nitefr8dog]

Thats why I said abx is going to find its own niche. No pitting one against the other and your not going to find a 76 in the bax system.

One of the problems that you will have with that big fuel efficient aircraft that flys 7 + hours and carries 100k of frieght is that its expensive. Got a big payment everymonth. The bax system is inefficient in that the aircraft maybe average 6 hours a day 4 days a week. Thats why 76s or 75s wont work in the bax system.

Im sure ABX will secure some contracts. But like I said the competition is going to be like aircraft, ones with longer range that can carry 100k freight. And in the charter world that freight doesnt carry the price tag of the overnight packages. Bulk freight is priced much differently.

If you look at the new generation aircraft that fly out of miami, ups 75s, 76s, lan 76s, those aircraft fly constantly round the clock. Even the challenge 75s years ago went nonstop around the clock.

Im sure ABX will find contracts. But I dont think ABX can compete against the likes of centurion, arrow, tradewinds, etc...

I guess you missed my point about droping to Cappy pay scales. Really not that hard to figure out. Wherever or however ABX puts the 767 it really is cheaper to run than than the 727 and hauls more. Divide the 3 crew pay into the 2 crew pay our hourly wage stays the same.

 

[727Niteflyer]

I guess you missed my point about droping to Cappy pay scales. Really not that hard to figure out. Wherever or however ABX puts the 767 it really is cheaper to run than than the 727 and hauls more. Divide the 3 crew pay into the 2 crew pay our hourly wage stays the same.

I agree it is cheaper to operate. But you have to operate the aircraft so many hours to pay for itself. If you had a contract flying 300 hours a month ( just pulling numbers) it would be viable to have a 75 or 76. But if a contract is only flying 150 hours than a 75 or 76 would be sitting around to much. It wouldnt pay for itself.

Now I do stand corrected about the bax system. Their is certain lines that probably would be good for a 75 or 76. LA is one and I know office people told us that if we did put a 75 in bax than it would probably do Mexico. Again its hours of utilization. Not how much it burns or how many crewmembers are on it.

The line is how many hours it operates a month. That figures aircraft lease, maintenance, fuel and crew. The more utilization, the nicer airplane pays for itself.

I would have guessed that if a 76 was coming to toledo it would be ATI. But I dont think anyone knows what the 76s are going to do with ATI to begin with. Mybe they have committments for them overseas, in that case maybe ABX would be in TOL.

 

[LIGHTDRIVER]

I guess you missed my point about droping to Cappy pay scales. Really not that hard to figure out. Wherever or however ABX puts the 767 it really is cheaper to run than than the 727 and hauls more. Divide the 3 crew pay into the 2 crew pay our hourly wage stays the same.

First of all you could double the entire cappy crew pay scale and the labor would still be cheaper with 3, yes 3 crewmembers. The planes are paid for, the parts are freeeeeeeee, and fuel burn is a wash compared to the 767. Long haul the 767 is more efficient. Yes it can carry alot more, but with Bax domestic loads the 767 would lose money.Short haul lighter loads, this is the perfect set up for the 727. The profit margins are mind blowing. No contest in this arena, and by the way Jh aquired the 767s over the years, but aquired 14 727s in one day. Still very viable for years to come.

 

[727Niteflyer]

First of all you could double the entire cappy crew pay scale and the labor would still be cheaper with 3, yes 3 crewmembers. The planes are paid for, the parts are freeeeeeeee, and fuel burn is a wash compared to the 767. Long haul the 767 is more efficient. Yes it can carry alot more, but with Bax domestic loads the 767 would lose money.Short haul lighter loads, this is the perfect set up for the 727. The profit margins are mind blowing. No contest in this arena, and by the way Jh aquired the 767s over the years, but aquired 14 727s in one day. Still very viable for years to come.

funny thing when oil was 140 a barrel the only directive that we received was to try to limit apu use. Bax isnt even concerned with fuel.

 

[LarryinTN]

One of the mistakes made by Astar/ALPA was believing that their management was basically benevolent

And trusting that DHL would take care of them...

 

[nitefr8dog]

funny thing when oil was 140 a barrel the only directive that we received was to try to limit apu use. Bax isnt even concerned with fuel.

These are all the same arguments ABX used comparing the DC9 to the 727 parts are free aircraft are paid for etc, etc. I still do not see a market for DC9s. What aircraft are ATI and Cappy adding to their certificate and why? My guess is it will not be 727s or DC8s. Even if they are free and parts are free way to expensive to operate or UPS and Fedex would be ordering new ones. Unless you guys know more than them? If any company has a business plan (BAX) my guess it woud have some growth in the future larger more efficent aircraft makes sense. Maybe you are right maybe we will see a return from the desert of free 727s and DC8s but I am not holding my breath.

 

[LIGHTDRIVER]

These are all the same arguments ABX used comparing the DC9 to the 727 parts are free aircraft are paid for etc, etc. I still do not see a market for DC9s. What aircraft are ATI and Cappy adding to their certificate and why? My guess is it will not be 727s or DC8s. Even if they are free and parts are free way to expensive to operate or UPS and Fedex would be ordering new ones. Unless you guys know more than them? If any company has a business plan (BAX) my guess it woud have some growth in the future larger more efficent aircraft makes sense. Maybe you are right maybe we will see a return from the desert of free 727s and DC8s but I am not holding my breath.

Yes, the 757 fits in perfect.

 

[nitefr8dog]

I agree it is cheaper to operate. But you have to operate the aircraft so many hours to pay for itself. If you had a contract flying 300 hours a month ( just pulling numbers) it would be viable to have a 75 or 76. But if a contract is only flying 150 hours than a 75 or 76 would be sitting around to much. It wouldnt pay for itself.

Now I do stand corrected about the bax system. Their is certain lines that probably would be good for a 75 or 76. LA is one and I know office people told us that if we did put a 75 in bax than it would probably do Mexico. Again its hours of utilization. Not how much it burns or how many crewmembers are on it.

The line is how many hours it operates a month. That figures aircraft lease, maintenance, fuel and crew. The more utilization, the nicer airplane pays for itself.

I would have guessed that if a 76 was coming to toledo it would be ATI. But I dont think anyone knows what the 76s are going to do with ATI to begin with. Mybe they have committments for them overseas, in that case maybe ABX would be in TOL.

ABX bases its bids on hourly operating costs. Per hour you have to figure a hell of a lot more than just aircraft payments. A 'C' on a DC8 costs around 1.5M. A 'C' check on a 767 costs around 150K. I would guess a 727 somwhere around half of that. No write off left on the DC8 or 727 so no tax savings. All this figures into the hourly cost. Also as far as payments go most of the 767s have been paid for for years.

 

[nitefr8dog]

Yes, the 757 fits in perfect.

Also comes with twice the purchace price of the 767-200.

 

[LIGHTDRIVER]

Also comes with twice the purchace price of the 767-200.

But easy to do when ya dont need them all and swap 2 for 1.

 

[nitefr8dog]

But easy to do when ya dont need them all and swap 2 for 1.

Agreed if that was the plan. Instead it looks like the money for the aircraft "put" to DHL will be used to install cargo doors in the ones ABX is keeping. JH has said he is not in favor of buying 757s because they are too expensive.