CHQ announces preliminary DCI routes

[FlyDeltasJets]

We at ASA and Comair only see shrinking, especially at ASA. We at ASA are losing our DFW hub to Comair, and didn't get MCO or BOS or LAX. I think we have a right to be bitter toward a pilot group who is willing to undercut another pilot group just to have a job. Why is our issue with the pilots instead of management? Because if your pilot group wasn't willing to work for so little in pay and benefits you wouldn't be cheaper. That's what we call "whoring oneself out". Mesa also comes to mind in this department.

Why is this different from what Delta mainline says connection is doing to them? Simple. This is a regional screwing a regional. We're on the same level, therefore it's a direct replacement.

IFF,
Guess what? What you are doing to us is EXACTLY THE SAME. DCI is a "direct replacement" to Delta pilots, I could name you dozens of routes which illustrate this.

Many of our guys are upset with you guys at DCI for "whoring yourself out." I am not one of them I blame management for exploiting you, our pilot group for accepting such crappy scope, and the rjdc for trying to take away any protection we have against this. Unlike you, it seems, I do not blame the pilots themselves. All of us are trying to get as much as we can.

It appears that you are throwing some mighty big stones from the porch of your glass house.

 

[surplus1]

Time to Chime In

I'm a Comair pilot. I am also what's known as a "regional" pilot. I support the RJDC and, as most readers know, I've been very vocal in these forums about it.

FlyDeltasJets and I disagree on the RJ issues and about the RJDC. IFF, to the best of my knowledge, does not support the RJDC either.

It is also known that I'm against subcontracting and would like to see it stopped in it's tracks. Scope is the way to do that.

Having said that, it should be clear that I object strongly to the the takeover of Comair's MCO hub by CHQ. I would object equally to the takeover of any ASA hub by an outside subcontractor. That includes ACA, and SKYW as well.

I would not be objecting if ASA had taken the MCO hub. When the market demans a larger aircraft, I do not object to the replacement of a CMR or ASA jet by a mainline 737.

Am I angry at CHQ pilots? ACA pilots? SKYW pilots? No, I am not.

What's the difference then?

1. The RJDC - that's a problem with the National union ALPA. It's not a problem with the Delta pilots, though many of them see it that way. ALPA is not representing the best interests of pilots in the Delta system and our objective is to see that it does. If the RJDC should win, it will take nothing from Delta pilots and there is no such intent. There never was and there isn't going to be. The union must represent ALL of its members fairly. That's the issue there. Just take one look at what the union is doing at USAirways with the TA and J4J and you'll figure out why there's an RJDC.

2. Ownership DOES change things. ASA and Comair are a part of Delta now. Whether the Delta pilots see it that way or don't see it that way is irrelevant. We are still a part of Delta. That's not because I say so. The facts support that allegation hands down. The opinions of the Delta pilots don't change reality and neither do mine. The fact is we were bought, the airplanes we fly are owned and operated by Delta and we are a fully integrated part of the Delta System. Like it or not, that's the way it is.

The 3 of us should be working WITH each other to prevent the transfer of work to all carriers that are not owned and operated by Delta. It makes no sense to be divided internally and fighting with each other. All that does is give the Company an opportunity to take advantage of ALL of us, which it is doing. It's success in that effort will cause it to try again. I predict in the immediate future. The next thing the Company will want is a code-share with a domestic major airline. If the Delta pilots agree to that, they will have sold out their future growth in big airplanes for the forseable future. If you don't think the mainline flying will go to the lowest bidder across that "code-share" line, you'd better think again or get your head examined.

We should agree internally on a method of aligning our seniority and open all Delta flying to all pilots employed by Delta, whether directly or indirectly. Then let our own Company compete and help it to do so. Code-share and subcontracting are synonimous. If you think that flying RJs on a "code-share" is a problem, just wait until you start doing it with 737s, A-320's and MD-80's.

3. We cannot reverse the subcontracting that already exists and I do not propose to try. SKYW and ACA should keep what they have, but should get no more!

4. The addition of CHQ to the equation doesn't only hurt Comair. It hurts ASA too. The way things are right now, it also hurts ACA and could ultimately hurt SKYW. It also hurts Delta mainline.

5. If the status quo continues, there will be more CHQ's tomorrow and then they will be hurt too. We'll wind up like USAir with everybody and his brother being called "Express" and all fighting with each other for the same flying. That's stupid for us, but it's just great for management. It needs to be stopped. Neither Comair nor ASA or the two combined can do it alone. But, if Delta pilots join with us, the 3 of us CAN do it. We must work that out between us.

6. If Delta can't grow fast enough with CMR and ASA, then let it buy another regional. If Delta buys CHQ, in my book they would be welcome. This way, they are not.

CHQ is there today because they ARE the lowest bidders. It shouldn't have happened and it would not have happened if the DAL pilots were on the same page as the ASA/CMR pilots. Unfortunately they aren't and until they get on the same page, it will happen again and again. They may think they are not affected directly, but they in fact are, just as much as ASA and CMR.

Not only is CHQ another subcontractor but, like ACA and SKYW it also flys for other companies that are competitors of Delta. How can that be advantageous? Why should Delta passengers be syphoned off by subcontractors that also cater to Delta's competition? Delta passengers should be carried on Delta aircraft and those aircraft should be flown by pilots in the service of Delta exclusively. That includes only DAL, ASA and CMR at this time.

Just as it is not the fault of SKYW, ACA or CHQ, pilots that their companies have contracts with Delta, Inc., it was not the fault of ASA and Comair pilots that our companies did either.

Likewise, it is not the fault of ASA and CMR pilots that our companies were purchased by Delta, but it IS partly the fault of Delta pilots that Delta has us fighting among ourselves.

Bottom line: CHQ, ACA and SKYW pilots should be able to understand why we don't want subcontractors. We should understand that it's not the pilots of those airlines fault and we should hold no animosity towards them personally. That does NOT mean that we are happy to have their companies around.

Delta pilots should recognize that ASA and CMR pilots are not their enemy. The enemy is the permitted divisions between us and the contract that allows that "permitted" division to exist is the Delta pilots contract, not the ASA or CMR contracts.

IF, DAL, ASA and CMR pilots would come together and stop the in-fighting, there is plenty of Delta flying for us to share without hurting any of us. We could even find ways to get the furloughed Delta pilots flying again.

However, if the Delta pilots continue to pursue a course that could hurt the ASA and CMR pilots, that isn't going to happen if we can prevent it. The purchase has taken place already and it is too late now to exclude us. We're already there. Just like it is too late to stop CHQ from being a new subcontractor. They are already here.

Will the Delta pilots decide to work with the ASA/CMR pilots instead of against them? I don't know. What I do know is that it's as much in their best interest as it is in ours. We are willing to join forces whenever they're ready.

What we are not ready to do is allow them to transfer our aircraft or reduce our flying. That effort they can direct at the subcontractors. Then we'll help.

Again, I hold no ill feelings towards individual CHQ pilots, but I resent their company taking over one of our hubs and that is exactly what it is doing.

 

[Otto]

Could Someone explain...

Maybe I'm missing something here but could someone explain why CHQ getting MCO was such a bad thing? The way I understood it, Delta would have ASA and CMR doing MUCH more flying than they are doing now except they don't have enough planes. For example, my Comair buddies tell me a few years ago Delta approched Comair with the possibility of flying out of LAX. According to them, Comair simply didn't have enough aircraft to pull it off. The impression I get is that Delta would like to use the wholly owned guys everywhere as their profitiability goes straight to Deltas bottom line but the reason they don't is that ASA and Comair don't have enough aircraft at this time so what they do is farm out to ACA, CHQ, etc. Yes, this serves an added benefit of strike protection but DAL also doen't get as big a chunk of the profit. So with all of that said....everyone knows Florida is an extremely competitive market with low yields. If Delta wants to move it's limited Comair aircraft to a more profitable market, what's wrong with that? It seems like good business to me...seriously, what am I missing here?

 

[Tim47SIP]

Otto, I agree

I have to agree with you on most of what you wrote. I really think it has more to do with supply and demand, who has AC, Delta getting the AC on someone elses dime, etc. As you have stated, Delta is trying to expand way faster than Comair and ASA can grow. The training dept's are running full speed with no let up in site. I know individuals on this board state that the flying is going to the lowest bidder, but I cant imagine how Delta will make more money on a fee for departure basis (even with Chataqua's lower pay scales) then using one of their WO's.


IFF wrote:
"We at ASA and Comair only see shrinking, especially at ASA. We at ASA are losing our DFW hub to Comair, and didn't get MCO or BOS or LAX".

You know, I work for the same company (I have been out of the net for a few weeks as I have been recalled back to the mil off of retirement) and I don't see the shrinking. I cant even think of how anyone could call what is going on at Comair and ASA shrinking? Don't get me wrong, I am deffinitely on your side concerning ASA's future. Yes, we didn't get the MCO hub, and we didn't get the LAX one either, but let me ask you, what aircraft were we to use? We don't have enough to fly the routes we have now! Can Delta fund the number of aircraft needed to get these hubs up and working? What if they fail? Wouldn't it be more prudent for management to build these routes now so that Delta mainline can pick them up in the future instead of waiting for DCI to get AC (I know your answer on this, I to would like to get all of the flying)?. You know, we are getting the 70 seater like crazy, more than Comair will get, 50 and 40 seaters every month. New routes opening up. ATR's moving up north untill the 70 seater's come on line, etc.. Additionally, I read the bulletin that stated DCI flying would go the the lowest bidder. For going into contract negotiations in the near future, I don't see management stunting our growth to prove a point (which I know you didn't bring up). As far as Comair in DFW, your point would be what? Don't get me wrong, I would like to see ASA get most of the flying, but as I understand this, Comair will be going to DWF on new routes from the north. They are not taking our existing routes, at least not in any great numbers. Remember, they are also DCI and we are in this together. Maybe when you made the comment that ASA was shrinking, you meant that ASA will not be able to grow to the size that it could have with Comair and other subs out there. That I agree with, but I dont think it is a bad thing. To bad we don't have cross bidding between the two companies, then we would essentially be one! Boy, what a concept.

Surplus, please don't tear this into little pieces. I deffinitely mean no harm. I am talking only on a management perspective here and this has nothing whatsoever to do with the Delta mainline guys or their scope. I am just speculating on managements tacticts as if I were in their shoes. I understand that there is another side to what individuals feel about management and the way they do buisines, ie. the reasons unions are around, so I fully understand your position concerning this. Thanks, Tim.

 

[surplus1]

Tim,

I won't try to tear it into little pieces, but I do think both you and Otto are missing something and it is this.

Chautauqua didn't replace Comair in MCO because we did not have enough airplanes or, as some management types implied, the right type of airplane.

CHQ doesn't have enough airplanes either. Since they signed the deal with Delta they had to place an order for some 22 new aircraft and they did. They aren't exactly going to be "up and running" overnight. They will have to receive those aircraft and train crews to fly them both. That is not different from what Comair would have had to do.

The difference there is 220 pilot jobs and 110 captain upgrades that will go to Chautauqua pilots instead of Comair pilots. "No big deal" as someone said. Tell that to the guys that don't get the upgrade and the 40% pay raise that it brings.

The idea that we "couldn't service" some of Florida's airports was also BS. The shortest runway by far, that we've ever used is Key West. It hasn't been served by our jets in the past, but guess what. Service begins from MCO, on a Comair jet, on Sept 1. We've also announced new service from PBI to TLH. Meanwhile, CHQ has announced long range service from CMH to both MCO and TPA. Comair already serves CMH but not to MCO and TPA. Think we couldn't have? Easily.

IMO, the "insufficient aircraft" and the "wrong type of aircraft" are both myths. Placebos, courtesy of management.

Otto mentions that Delta would like to use ASA and CMR everywhere because the profits go directly to Delta. While he didn't say it in so many words, he's implying that owneship is a "better deal" for delta because the profits are bigger when you own. A flase premise.

Chautauqua will operate on a "fee per departure" basis, just like ACA and SKYW both do. That's a little gimmick that the airlines started introducing in early '99 or perhaps late '98. They buy all the seats and guarantee the seller a profit somwhere in the neighborhood of 9-10%. However, this isn't a cost plus contract. The seller makes an offer, based on it's own ability to control costs and Delta guarantees that cost plust the profit margin. So whoever alleges that he has the lowest cost, gets the contract.

What does Delta get? 1) Total control of the operation. DAL decides when the aircraft will fly and where they will fly, sells the tickets and gets all the revenue. It then deducts the "fixed" expenses based only on what it has to pay to the service provider. 2) Since the service provider bids as low as it can to get the contract, if it can control it's own cost it makes the 9-10%. Delta pays the same thing no matter what. 3) Delta has no capital outlay to setup the operation or acquire the equipment. No employess to pay, insure or provide benefits to, only one contract to negotiate and no worries about labor relations. It's the perfect deal for the major and all the risk goes to the contracting regional carrier. 4) Delta has an escape clause in the contract. If it wants out, for whatever reason, it can get out in a very short period of time and won't have a worry in the world as to what it will do with all those airplanes and the associated support equipment, not to mention a plethora of disgruntled employees. It's a near perfect deal for Delta. It sucks for the regional carrier.

So why then do the regional carriers do it? Simple. Airlines like those I mentioned, simply can't survive operating on their own. If they say no to Delta, a different one of them will say yes. Thus, Delta (and Delta isn't the only major that does this, they now all do) always gets the lowest bidder and the regional carriers scramble to control their cost and compete with each other for the business.

Notice that all three of these carriers have agreements with more than one major airline. That's the regional's way of hedging it's bets. If SKYW loses DAL, it has UAL. So does ACA. CHQ has USAirways, America West and American.

Noticed that both SKYW and ACA keep announcing double digit growth and much improved load factors? But what's happened to the value of their stock? It's tanked! Think that's 9/11? Wrong, it's lower profit margins due to fee for departure. The excellent returns that investors used to get on both those stocks have dried up inspite of the growth and the improved load factors, etc. Regional airline stocks should be booming, but they aren't. The high return days have ended and the investors have gone elsewhere. The companies grow, but the profit margins don't.

How do the regionals keep there costs low? Well, guess what the biggest cost item is at any airline? You got it, labor. Don't think of labor as just pilots, because it isn't. It's the whole shmear. FA's, ramp agents, CSRs, mechanics, secretaries, dispatchers, schedulers, every tom, dick and harry. Why can't labor get more at the regionals? Because it would remove the already low, single digit margin. The ball game is the same folks, but the rules have changed.

Before this "fee for departure" concept was initiated, code-share agreements (which is what the regional contracts were) involved revenue sharing. If the regional provided good service and got full airplanes, it split the revenue with the major for those passengers that connected to the major. If they didn't connect, the regional kept the revenue for itself. There is no revenue sharing on these new deals. Also, the big partner did not have total control of the flights and the marketing and the passengers. The regional had to provide certain feed as agreed in the contract, but it was also free to go where it chose and enter markets on its own.

That is exactly what made Comair the airline that it used to be. Sixty percent of the revenue and the passengers were not "shared". They didn't connect to Delta at all and all the revenue belonged to Comair. Comair could develop its own markets and not just go where Delta wanted it to go. If the revenue share in a proposed market didn't meet Comair's needs, it didn't have to go there. Independent market development was Comair's forte. The airline didn't depend on Delta to survive.

I'm not saying that the deal with Delta wasn't a good on. It was a great one and very beneficial to Comair. But the ability to do our own thing was far better and that's what we did. Comair was growing for the sake of Comair, the benefit of its shareholders and its employees. Today there is no Comair, it's Delta and Comair is just a memory and a name on a piece of paper.

While its only nostalgia, I don't mind telling you that its just not the greatest to go from being the "best lilltle airline in America" to becoming somebody's gofer. Truth is it sucks.

In contrast, ASA although also revenue sharing before its purchase by Delta, had a very different management from Comair and very little traffic of its own. Nearly 90% of ASA business was a "connection to Delta". ASA's owners were not as entrepreneurial as Comair's. They ran the company poorly, crapped on the employees, and wouldn't buy jets even when their success was proven by Comair. Delta literally had to pressure Bubba and company into buying the RJs. They didn't need them according to Bubba. They owned most of the old Brasilias free and clear and were making ton's of money on the Delta deal. Why spend all those big bucks and take those long term risks?

Eventually, they were forced into springing for the RJs due to pressure from big D and customer demand. However, the overall service didn't improve and eventually Delta was forced to buy them out in an effort to keep some semblance of service in its Atlanta hub. Bubba and company were tired of it anyway and more than happy to take the money and run. They didn't exactly leave in poverty.

Comair was acquired for entirely different reasons. 1) It was time to renew the code-share agreement and Comair flatly refused to accept the fee for departure concept. 2) It had become too big to replace conveniently. 3) The Delta CVG hub was neither profitable of feasible without Comair.

In trying to push that FFD concept on Comair, Delta did two things of note 1) It cut a deal in BOS with Trans States, knowing full well that it wouldn't and couldn't last. That put a lot of pressure on Comair (which had already set up all the planning for that hub) and immediately lowered the price of Comair stock. 2) Next it cut a deal with ACA in DC, again deliberately taking the ACA "low bid" on a FFD basis to further undercut Comair.

Comair still refused fee for departure and starting looking for alternatives to Delta. Aware that it had to s**t or get off the pot, Delta (having successfully reduced the price of CMR stock through the TSA and ACA deals) made its move for the unfriendly, friendly takeover. Comair refused the offer. Delta upped the anti and the Comair board, knowing exactly how long it would take to recover the stock price following a complete severance with Delta, accepted the offer. Comair was history.

Ironically, the market cap of all of Delta last Friday, was less than the price Delta paid to buy just Comair, only two years ago. We live in interesting times.

Maybe all that history isn't important, but it ought to give you a clear perspective on what happened to the Company called Comair, and particularly why it is cheaper for Delta to subcontract than to own.

One more aspect you should consider as you look at the potential future. If the Delta pilots are successful in reinstating their Scope ratios, DCI will have to shrink. If there has to be a reduction in DCI flying, which one of us do you think will be cut? Will it be a Chautauqa, ACA or SKYW job that goes down the drain or will it be an ASA or CMR job?

Now do you understand why I object to subcontracting (which is just another word for code-share)? It's a detriment to pilot careers, that's why.

Just my opinion, with a few facts here and there.

 

[CaptBiff]

A little light is needed here...

CHQ is owned by Wexford mgmt, a small investor group in Greenwich CT. Currently CHQ, AKA Republic Airways group, has something like 70 options on airplanes the emb-135, 140, 145. They also have 50 options of the emb-170 and larger which an unconfirmed source said they have excersized 20. That is neither here nor there. Our current fearless leader Bryan Bedford is trying desperately to take CHQ public with an IPO but he can't because investors are scared poopless. ASK any Mesaba pilot or Biz ex pilot what they think about him and you will get the same answer.

Why would Delta code share with us? Because the Dornier company is going t!tts up. Delta originally wanted the 328Jet to replace comair in FL. Make any sense yet? Otherwise ACA would be doing the flying to replace comair. Would you still be mad? You don't have to answer that one, it was loaded question.

So just like our AA, HP, and US code shares we fly for a fee for departure. Yes CHQ assumes all the costs and gets a percentage of the profits. This means we, meaning CHQ has to finance the jets and that is what the bottom line folks care about. You don't have to be an accountant to figure out the benefits of that one.

But you are still missing the BIG picture. Every RJ that goes into service for whatever mainline is replacing their jobs. Take US service into GSP and DAY for example. I have seen a huge reduction in the amount of US mainline jets and an increase in RJs. I really want to fly for a mainline carrier but how can they make money with larger planes and wages in a market that is more suited to a small jet. They can't. So the RJs move in. And there is the growth, not at the mainline level but at the regional level. And here we are doing the same thing again except to Delta. My girlfriend is a FA at Delta and even she can figure out that it is good for me and bad for her, meaning Delta. You are just as guilty as me. In my opinion, collectively we are reducing the number of mainline jobs.

I had hopes and dreams of working at a major and make great money but that is gonna be real hard now. Honestly I am happy to be employed as a pilot. I'ld hate to have to go back to instructing and leave my wonderful RJ that to everyone loves to hate.

 

[ifly4food]

I apologize for my comments towards Chautauqua pilots. My issue is a result of management, not the pilots. I should realize that. Yes you voted down J4J. I'm glad you did.

However, comments like this:

Honestly I am happy to be employed as a pilot. I'ld hate to have to go back to instructing and leave my wonderful RJ that to everyone loves to hate.

Are what perpetuate the feelings I expressed before and what play right into managements hands. Management knows you feel this way, and will use it against you every time. You at CHQ are in negotiations now. Making comments like this will not get you an industry leading contract if management knows you'll settle rather than lose your job.
Negotiations are just like poker. If your hand sucks, you don't let it be known unless you plan to fold.

Surplus hit it on the head as usual. We are being replaced by cheaper labor, plain and simple.
ASA Should be operating 40 seat CRJs in MCO if CMR can't. We only have 5 more seats than an E135 and 5 less than an E145. Why is CHQ so much cheaper to operate than us? Contrary to Delta's claims, it's the labor rates, not the aircraft. The fee per departure is what makes this possible for Delta.

The notion several of you brought up that we are still growing just because we are getting airplanes is bunk. We are only getting 70 seaters for the rest of the year now. These airplanes are replacement... they take CRJ200s off the most profitable routes and those airplanes replace E120s which are being retired. The net gain is zero. If any of you have been to MCN lately, you will see that the number of Brasilias in the Boneyard very conveniently match the number of recent CRJ700 deliveries.
We are not growing. If we were we would be expanding service. In the last year, we have announced service to a handful of cities. Meanwhile, SKW has about 40 new flights a day in DFW, Comair has 20 or so, and we have two or three. That was our secondary hub. Now, all new service from DFW being announced is CMR or SKW. While I support our CMR brothers in this endeavor, and am at least glad the routes are staying in house, I feel routes like DFW-ORD should have been ASA. I resent the Skywest service, and their even being there. They are cheaper and we can't compete... fee per departure.
Then we have ACA. They got BOS, we didn't (neither did Comair). The 40 seat jet was meant for those size routes, but why didn't we get it? Fee per departure. Now ACA is flying to cities from BOS and CVG we jointly serve. Why aren't we sharing their Northeast routes? They're cheaper... fee per departure.

The bottom line is that ASA is the only DCI that is not growing. We are the only one who hasn't had a new hub announced. It's no coincidence that we enter contract negotiations next month.

Let me ask you this, CHQ pilots (and SKW for that matter), point blank:
If we at ASA strike, will you support us when DAL management asks you to fly our routes and those we share? Will you be willing to lose your job by refusing flights? Think long and hard before you answer. Delta is betting that you won't.

I know what CMR will do. I hope you will make the right decision too.

 

[CaptBiff]

Of course we would support you just like we supported Comair. Would you support us when we might have to do the same thing? I have already voted one TA down and I am prepared to do it again and that isn't counting the Jets 4 Jobs crap.

We want a fair contract with a lot of improvements and our committees are working over time on it. I/we will not settle and I am sorry you got that impression. Frankly, our pilot group is pi$$ed off at mgmt and we are playing hard ball. That said, I am still happy to have a job and my sympathy goes to all the pilots on the street right now including the 30 or so pilots at CHQ who were fired out of senority who still have not been brought back.

I have no hard feelings to any pilot out there on the board. It isn't their fault nor mine, only mgmts. I am smart enough to know that. And that is where my ill will is directed, at mgmt. This is an opion board and I value everbodies opinion. Everyone is welcome on my jumpseat anytime.

Biff

 

[ifly4food]

Of course we would support you just like we supported Comair. Would you support us when we might have to do the same thing? I have already voted one TA down and I am prepared to do it again and that isn't counting the Jets 4 Jobs crap.

If you guys strike, not only will I refuse any flights that conflict with yours, I will dress up and march with you in Indy! I sincerely mean that. It's about time you guys stood up and said "We're not going to take it anymore".
Good luck in your negotiations.

 

[Guam360]

ASA should be operating 40 seat CRJs in MCO if CMR can't. We only have 5 more seats than the E135 and 5 less than the E145.

37+5=42 (E135/CRJ40)

40+5=45 (CRJ40/E145)

???

E145 has 50 seats and the E135 has 37 seats