Cincy Enquirer: Comair Wants to Cut Pay

[sleepy]

In many of our markets ASA goes head to head with Airtran (ATL-GPT, ATL-PHF, ATL-TOL, and ATL-CAK come to mind). Airtran is tough LCC competition. If it was more cost effective, wouldn't DAL put Chit on those routes? Why isn't Chit doing all DCI flying? There is nothing to stop DAL from giving you all of our aircraft. I'm sure you guys would be glad to get them all. Right?

 

[captainv]

Medflyer,

>By the way, do Comair pilots have any furlough protection??


yes, to an extent. We have a no-furlough clause in the contract, but it only covers the pilots that were on property when the contract was signed. Anyone hired since then (quite a few of us, maybe 1/3 of the current list?) is not covered.

>What happens to CMR if WN decides to set up shop in CVG? Things would get ugly quick.

how so? i wouldn't think so, unless they can match the number of routes we have out of CVG. it's well known that more than 80% of pax through CVG are going somewhere else. it's a hub, not a destination. we've already got Eagle, Mesaba, Allegheny, even CHQ (for USAirways) going through CVG. and the people in CVG either ride them or drive to DAY, LEX, SDF, or CMH for cheaper fares on DAL/CMR.

 

[surplus1]

Well, now that we've had our "meeting" and the nice speech from Woerth, are you all ready to take the concessions?

I thought the "expectations" of what we might get in return were no less than amazing. Considering that Delta took a 680 million dollar hit in the strike, for less, how do we expect to "buy" the MEC's christmas tree with 8 million?

David Copperfield himself could not match the two "lecturers" at that meeting.

 

[DDpaysoff]

We'll see if DAL comes to the table. We are only getting promises w/o them at the table. If they are serious about Nov. 1, they must know the answer is going to be no. I like the direction our MEC is taking, but it is going to take a lot of time to get all the parties together CMR/ASA, and get DAL to come sit at the table and listen to our proposal.

 

[jarhead]

Hutzpah at it's best

http://www.enquirer.com/editions/2003/10/11/biz_comair11.html

 

[DDpaysoff]

Score one for the team. Nice to finally see some numbers. Let's see what LEO says in CC.

 

[General Lee]

That is interesting. Butrell has a point, though. You've got plenty of competition from the other DCI carriers who want more of the pie. Butrell is wondering if Skywest pilots will take 50 seat pay for planes up to 99 seats, why won't you? Also, I don't understand this paragraph:


"In a memo to employees last Friday, Comair president Randy Rademacher said that the airline was hoping to secure new 70-seat jets that the company had planned on for next year. It also wants to get additional jets and routes. "


I am pretty sure 57 is the limit on the 70 seaters until Dalpa renegotiates, and if they won't give us an extension on the contract and other things Dalpa wants---it might be awhile.....

Bye Bye--General Lee

 

[AFELLOWAVIATOR]

Gen,
What you have to understand is this. We don't give a **CENSORED****CENSORED****CENSORED****CENSORED** where he puts those planes. We will not play the whipsaw game with him, period. That is all it is. We are expected to pay for the planes? I don't think so.

 

[DDpaysoff]

Until CMR/ASA take all future DCI flying, a paycut is not likely. Not with this group.

 

[Wacopilot]

Common

General Lee,

Do you really think that your scope will prevent Uncle Leo from growing his 70 seat fleet???? Common, you can't be that dumb....Scope, as it relates to growth is about as valuable as furlough protection... Look where that got you. If Leo wants 70/90 seaters, he will buy them and deal with DALPA in court. It has happened before. I'm not trying to be disrespectful but those are the facts.

 

[bvt1151]

...I think that Delta will give away growth to the lowest bidder, and they think you (Comair) are too expensive...
Bye Bye---General Lee [/B]

I thought you'd be interested in these stats.

Source: DOT

Cost per ASM 2003 Q2 Domestic (cents per mile):

ACA: 16.3
Air Wisconsin: 15.7
Eagle: 14.7
Express Jet: 13.7
Skywest: 12.2
ASA: 11.9
Comair: 11.2

I don't have CHQ's yet (cause they don't make enough money to be grouped with the above) however I'm doing some research. Funny how the highest paid pilots (CMR) operate the aircraft the cheapest.

 

[General Lee]

Well guys, why are they asking? You have obviously cost them some money in the past, and maybe they are getting even.

Wacopilot,

When will I learn? Come on MAN. Leo can't just do what he wants----he knows about contracts. Yes, our furlough clause didn't help much after 9-11-----but did you see 9-11 coming? You did? Right. We did lose passengers after 9-11, and we did downsize. Our No Furlough Clause did help us with the Iraq "War Emergency", and we are getting back the 250 guys they illeagally furloughed. Why? Because it was in our contract. They knew we would win, and gave in. The other 1060 will be out for awhile due to the decision by an arbitrator. Our new MEC Chair negotiated your SCOPE. He now is in charge. He will not give in---unless it is good for us. Time to come back to reality, ooops--there goes gravity, ooops, there goes gravity. (my best Eminem)

Bye Bye--General Lee

 

[DDpaysoff]

Well guys, why are they asking?

Because they can.
Our managment is actually doing the smart thing, trying to express to DAL that they want growth and that they are doing everything they can to get it and remain competitive. The problem our pilot group has is that our managment can not fullfill those promises because (as I have heard you say before) they are not making the decisions. If DAL comes to the table and asa shows up too something could get done.
This whole F***in thing is being mishandled. We will not pull a whipsaw job like we have seen the rest (besides Eagle and CO-EX) do. Sorry if I left anyone out, Horizon I guess, but this pilot group at least realizes the state of the industry and the fact that most of us might be here a while. Let's see how happy the others are in 5 years w/ their 'growth'. The bottom line is if we are making $$$ and providing excellent service to our customers we will get a large piece of the pie.

 

[Heavy Set]

Unfortunately, it also looks like if Comair doesn't continue to reduce pilots costs, CHQ will get a larger slice of the pie... Classic case of pitting one employee group (or partner) against another to increase profit margins... Lorenzo would be proud!

 

[surplus1]

Re: Hutzpah at it's best

Hutzpah at it's best

It's a good article. That fellow Pilcher does a better than average job of reporting on aviation matters. Too bad for the Company (Delta) that the Feds are now requiring these reports. The timing of the DOT release of information couldn't have been much worse for the Company.

The truth is that it is not Comair that is asking for concessions, it is Delta. That needs to be understood by all. Comair pilots don't get to bargain with Delta management (thanks to ALPA) and Comair management is limited in the type of agreements it can make. When it comes to "future growth" that is not a Comair decision, it is a Delta decision. Unless we can bargain directly with the decision-makers, it's a waste of time. In a nutshell, you can't make a deal with someone who can't make a deal.

There are a few interesting sections in the Pilcher article that might warrant comment.

Comair numbers may bring strife

Well, maybe not "strife", but maybe not concessions either.

RESULTS FOR Q2
Financial results improved for Comair for the second quarter of this year, compared with first-quarter results (in parentheses):
• Operating revenue: $248.1 million ($228 million).
• Operating expenses: $214.2 million ($215.3 million).
• Operating profit: $33.8 million ($12.7 million).
• Operating profit margin: 13.6 percent (5.6 percent).
• Net profit: $32.2 million ($6.2 million).
• Cost per available seat mile: 11.2 cents (12.7 cents).
Source: Department of Transportation Bureau of Transportation Statistics

Those are OK numbers ... for bad times, but only about 1/4 of what Comair used to make before it was owned by Delta.

Comair also had the lowest cost structure of the nation's seven largest regionals, according to the data,

This seems to validate the concept that pilot pay is not the only relevant component of the cost structure. If CMR can better the costs of the big seven, while having the 2nd highest pay, who will we be trying to beat by giving concessions? Sounds like the Company might want us to be cheaper thatn the 3 smallest regionals? I don't even know who they are, but it doesn't seem like there's much chance of the pilots making that happen with concessions.

The company is telling its workers that it needs to lower costs to stay competitive and to continue to grow.

Hmmm. Since the data shows that CMR already costs less than the other six in the "big seven", I guess that means that we not have to "stay competitive" with the "smallest three" with whom we do not really compete. More on the "growth" aspect later.

"Some of those smaller guys are banging on my door asking for more flying, and we've got to look at the bottom line here," said Buttrell. "The regional jet industry is restructuring and is going through consolidation. The market is driving this (request for contract renegotiation), not Delta.

I wonder who he means is "restructuring and going through consolidation"? Mesa has not yet succeeded in its bid for ACA.. To my knowledge, no other regionals have "consolidated". I wonder what he means by "restructuring". Anyone want to offer some ideas on what that really means? I think I smell a rat.

In a memo to employees last Friday, Comair president Randy Rademacher said that the airline was hoping to secure new 70-seat jets that the company had planned on for next year. It also wants to get additional jets and routes. The combination of these could mean a 50 percent growth in Comair's capacity by 2007, the memo said, adding that the decision on whether Comair would get the new flying would be made within the next month.

That is perhaps one of the most imaginative "memos" written by an airline CEO to a pilot and flight attendant group in a long time. First of all the Company's plans for more 70-seat jets were "secured" a long time ago. We already know how many are "planned" for delivery in 2004 and it is not a big number. It is not even a double-digit number.

Let us not forget that the total number of 70-seat jets, for ALL DCI carriers cannot exceed 57. That is not just for Comair. That comes courtesy of ALPA and the Delta pilots' contract. Those aircraft have already been firm ordered. Delta could decide not to give Comair any more and give them all to someone else. I don't know who that someone else might be. It could be the Delta pilots (who have been working hard to make that happen for years), but that would not lower costs, unless of course the Delta pilots agree to fly them for less than Mesa does. Who knows? Since giving up your compensation package for the promise of future growth of an unknown quantity seem to be the "fashion-of-the-day", maybe they will

Maybe it could be SKYW (whose pilots have "agreed" to fly them for the same pay as 50-seat jets) or maybe it could be Chautauqua? If its CHQ, it will be interesting to see how they keep their costs low if they begin to operate 3 different aircraft types for as many as 4 different large airlines. Sounds more like a nightmare than a saving.

When the SKYW pilots agreed to their new pay scales, they all claimed that they would have "new and improved" rates for the 70-seaters in 18 months. Their costs are already higher than Comair's, but that doesn't include 70-seaters so they could improve cost wise. Since their flying all comes from bankrupt UAL and Delta, if they get some of Delta's 70-seaters, they can kiss that 18-month idea goodbye. Plus, they also have a lot of those expensive turboprops that Butrell mentioned. My guess is the SKYW pilots are in for a rude awakening.

Apparently the CHQ pilots think that they will be able to negotiate "good 70-seat rates" on their next contract. Well negotiations for that don't start for 4 years more and the bargaining could last for another 3 years, after which they can get a second shot at being the "low bidder". Maybe they will become and remain Delta's favorite "cheap skate airline". That's what happens when pilots try to "buy growth" with their compensation. I wish them luck.

As for the "additional jets and routes", that makes no sense at all. You would think from their statements that neither Butrell nor Radamacher have read the Delta PWA. DCI flying is already very close to the ratios/limits established by ALPA/DMEC. Unless the Company can get the Delta pilots to give up those restrictions, there is no room for more growth at Delta affiliated regionals. Unless there are major changes in the Delta PWA that eliminate those restrictions, 50% growth for ALL of DCI is not possible, let alone for just Comair.

It looks like the DCI CEO, the CMR CEO, and the ALPA President are all of the opinion that the CMR pilot groups is populated by a bunch of idiots that can't do arithmetic. We Comair pilotsare being asked to gut our contract in exchange for a promise of growth, made by a company that can't guarantee any growth (Comair), supported by the CEO of another company who apparently hasn't read the Delta PWA or if he has does not understand it, and backed up by the President of a union that openly supports predatory contractual provisions at other airlines that are designed to prevent growth at Comair. AlI of this while our company (Comair) has double-digit profits in the middle of the industry's worst downturn in decades, if not ever. If this is supposed to be a Comedy it isn't funny, it's a bad one.

I don't want to call these guys liars but their concept of the truth is a strange one.

Also at the meeting was Duane Woerth, the president of ALPA International, who apparently said that the Comair pilots have the national union's support.

Oh yes, we have the national union's "support" all right, but maybe we should define what support means to the ALPA President. It means, support for the Delta pilots' imposed limitations on the future growth of Comair pilots; support for the concept that it is OK for the mainline pilots to use the careers of regional pilots as a bargaining chip; support for the concept that concessions are appropriate because the mainline pilots are in trouble and want us to "share their pain"; support for the concept that we should be "scoped out" of our jobs; support for the idea that the Delta pilots should control our flying, with or without our consent. Yes indeed, we have the national union's support.

It's the same kind of support that the union gave to ALG, PDT and PSA when the chips were down. The same kind of support that the union gives to the Eagle pilots, while the AA pilots take their jobs. The same kind of support that helped to create Freedom at Mesa and Republic at Chautauqua. The same kind of support that instituted "Jets for Jobs" and the associated transfer of regional pilots' seniority to the mainline pilots.

Who could ask for anything more?

 

[surplus1]

Well guys, why are they asking? You have obviously cost them some money in the past, and maybe they are getting even.

Naww General, they are asking because the Delta MEC wants them to ask. It costs them nothing to placate you with this and they do want you all to make concessions. So they're playing your game. If we say no, they'll say "well, we tried". It's a small price to pay.

 

[bvt1151]

Lorenzo would be proud!

For those of you who know airline history, this one sentence sums it all up. I agree completely.

 

[General Lee]

Surplus1,

You did give some good points. But, I highly doubt that our MEC Chair is now in "Cahoots" (SP?) with the Delta leaders. I think you are throwing darts at a dart board looking for answers. So, I wasn't at that DW meeting---did you guys ask the tough questions like you said you were on this board? Did you ask him what he supported?

As far as the "expensive props" issue---I think there are plenty of high priced full fare airports that they do make money on from SLC and don't have the runway length for the RJs---like Sun Valley (full of the super rich), Jackson Hole, and some of those little Idaho towns that have huge Gov't contracted sites that do Gov't work.....And, I have heard that Skywest will be sending some Brasilias to DFW to do some towns that ASA used to do. (Kind of like the COEX--Skywest deal in IAH)

You are correct about the Delta PWA and the lack of growth for DCI without new negotiations. The point that you don't seem to get is that more DCI growth can also mean less mainline growth, and less high paying jobs. I know Surplus1 that you are comfortable and don't want to leave Comair--and that is fine---and it is natural for you to want growth without looking at the big picture. The big picture shows mainline eventually growing again in better times, and regaining mainline service to some of the cities that DCI took over. That is the best case senario. We all hope that mainline gets some 100 seaters, that the furloughs return, and hiring eventually begins again. Wouldn't that be great if we could drum up the passenger base again to fill 100 seaters from LGA to SAV, JAX, BNA, TYS, BHM, CHS, GSO--and from DCA to PBI, FLL, BOS, CHS, SAV, JAX etc..(provided we got extra slots at DCA)...Wouldn't that be great? Not for Comair guys---but what would happen is that those assets would be moved to find newer markets that MAINLINE could eventually go to. That is the real strategy---right? Not just Comair taking over the US. Comair and DCI supporting new growth for Mainline. We want a healthy Mainline--and then eventual profits can fund better contracts for DCI as well...

Bye Bye--General Lee

 

[George Jetson]

I thought you'd be interested in these stats.

Source: DOT

Cost per ASM 2003 Q2 Domestic (cents per mile):

ACA: 16.3
Air Wisconsin: 15.7
Eagle: 14.7
Express Jet: 13.7
Skywest: 12.2
ASA: 11.9
Comair: 11.2

I don't have CHQ's yet (cause they don't make enough money to be grouped with the above) however I'm doing some research. Funny how the highest paid pilots (CMR) operate the aircraft the cheapest.

BVT1151,

While those stats are generally relevant, they do not paint an entirely accurate picture. CASM is largely and commonly misunderstood. It is difficult to accurately and truly compare the CASM of one Small Jet Provider ("SJP") to another because there might be different "pass through" costs in their mainline-SJP contract (our contract at XJT is called the Capacity Purchase Agreement...other are called Airline Services Agreement, etc). Our deal with CAL might be structured differently than CHQ's deal with Delta. For example, we might not pay for certain services or bear certain costs that CHQ might have to pay for and as such, our block hour rate might be less than that of CHQ's...and that will reflect in our differing Operating CASM's, even though our crew costs might be similar, different, or higher. Conversely, we might bear a cost that CHQ doesn't have to pay for as a result of their capacity-buy agreement with Delta. If we all had the same line items, then it would be a more relevant metric in my opinion. At the end of the day, all the CASM reflects is how one airline or SJP (SJP's aren't really airlines, they are providers of lift/capacity) reports it's costs and then divided by the ASM's generated.

Similiarly, one cannot accurately compare the CASM of a SJP to that of a "full service" airline such as Delta or even Airtran. Their cost structure is set up differently than an SJP's since they have to pay for some departments, products, and services that SJP's don't have (such as marketing and advertising, etc). These types of costs are not incurred by small jet providers and the more traditional regional airlines. Thus, looking at our CASM versus that of Airtran's or Delta's would be a flawed analysis in that respect. You can couple it with the fact that the operation of Delta is severely different than ours...multiple fleet types doing all sorts of flying...from short haul like most of our flying (high CASM) to long haul such as international flying (low CASM).

My 3 cents.

GJ

 

[surplus1]

Surplus1,
You did give some good points.

Thanks. You made some interesting points as well. This is what I think of them.

But, I highly doubt that our MEC Chair is now in "Cahoots" (SP?) with the Delta leaders.

Try not to be unnecessarily defensive. I did not say that your MEC Chairman was in cahoots with Delta management nor did I imply that he was. What I said was that Delta management is asking for concessions because the Delta MEC wants them too.

Where do I get that idea? Simple, from the public statements of the DMEC, confirmed by nearly every Delta pilot writing here. The public position of your MEC has been (ever since the Company asked you) that you will not give concessions unless "everyone" else participates. We are an integral part of "everyone."

Since it is no secret that Delta, Inc. is essentially a non-union company it does not have to ask for concessions from any employee, other than those represented by unions. At Delta itself that is the pilots, the dispatchers and the pilot instructors? At Comair it is the pilots, the FA's and the mechanics. At ASA it is the pilots and the FA's (I'm not sure about the mechs.).

The Company wants concessions primarily from the Delta pilots. Therefore, since you want the "others" to participate as a condition of considering those concessions, it is common sense that management should ask for them in an effort to placate you. That is what they are doing.

Since the concessions requested of Comair pilots would (according to the Company) amount to approximately $8 millions per annum, a drop in the bucket when compared to the losses generated by your division, asking this from a subsidiary that has contributed a better than double-digit net profit in the last reported quarter is tokenism at its finest. It gives you what YOU demand, it costs Delta nothing to ask and, if we say yes, they make $8 millions more per year. Why would they not try to grant your publicly expressed desire? They certainly don't need concessions from Comair __ we are making them a hansome net profit.

That's not throwing darts looking for answers, it is simply common sense deduction. I doubt that it really escapes you.

So, I wasn't at that DW meeting---did you guys ask the tough questions like you said you were on this board? Did you ask him what he supported?

The ALPA President spoke for more than an hour (uninterrupted) and took about another 40 minues of questions. So yes, he was asked what the asking pilots wanted to know while he permitted tham to ask.

I presume you are smart enough to recognize a few things. 1) The ALPA President is an accomplished politician and public speaker; 2) He does not walk into meetings without advanced breifing and preparation; 3) He prepares __ for what he will say, i.e., the spin of the day, and prepares for the questions he is likely to receive, just like any other politician.

It happens I do not like this man's administration of ALPA, but notwithstanding, I have known him well for at least 8 years prior to his appointment to his current position and he is now in his second term. His MO is no secret to me. When I know the issue, and I certainly know the issues related to Comair and related to ALPA's policy towards regional carriers, there are few surprises in what he says or how he will answer questions. He's a well versed "spin doctor".

The only real "problem" is ensuring that the pilot group is educated as to the policies and political positions of the union's national leaders and staff, before they make their orchestrated appearances, thus reducing the gulliblity of the pilot group. Every Comair pilot is not an expert on DW, but we are not babes in the woods either. The ALPA President is a tool of the mainline pilot groups tha put him in office and keep him there. Any regional pilot group that thinks otherwise is simply naieve.

Woerth came with the "party line", presented it well, fielded the questions with the party answers, and side stepped the one's that he didn't like or was not prepared for. If he "mispoke" or deviated it was not more than once or twice. Not unusual

It is not necessary to "ask him what he supports". All you have to do is be informed and listen to what he says. Neither he or his administration are a mystery. At least not to a very large number of Comair pilots. We know what side his bread is buttered on, and so does he.

As far as the "expensive props" issue---

I agree with your assessment of what the turboprops do and why they may be needed. The idea that they are "expensive" and contribute to the higher costs of carriers that operate them was not mine, so don't give me credit for it. All that I did was throw a well deserved barb and the remarks of DCI CEO Butrell, which were included in Pilcher's story. One more conflicting statement by one more Delta executive. Nothing new about that.

You are correct about the Delta PWA and the lack of growth for DCI without new negotiations.

Congratulations! I applaud your acknowledgement, even if it is somewhat belated. Be careful however, you may be deviating from the "party line" of your MEC and your peers, both of whom claim that your "restrictions" do not affect our growth or harm us in any way.

The point that you don't seem to get is that more DCI growth can also mean less mainline growth, and less high paying jobs.

I get the point alright, I simply know that it is spin designed to promote a political agenda. It is flawed and patently inaccurate.

Whether you all like it or not, the fact is that the existence of DCI has consistently enhanced the growth of mainline in good times, and in these not so good times, it has prevented the further downsizing of the mainline. It is therefore a plus for the Delta pilots, a plus for the pilots of the DCI carriers, and a plus for the Company. What is unfortunate is that the Delta pilots are in denial and will not admit reality.

Your failure to admit reality does not equate to my missing the point. In fact it supports rather handily that you all are missing the point.

None of that has anything to do with where I personally prefer to work. There is no link between the two except in your mind. The tactic is ineffective and irrelevant.

I agree that the mainline will eventually grow again and I hope that it does. The more the mainline grows, the more we can grow. The relationship is symbiotic.

We hope too that you will get some new and replacement aircraft of the right size. When your equipment is able to serve a market more profitably than our equipment, I fully expect that you will replace us on that route. I support that and believe that you should. That is not a new position on my part, I've stated it many times before.

General, it is not we of CMR that object to the Company's justifiable replacement of one or more routes by the "right size" equipment for the market. The objection to right-sizing of aircraft is the policy of the Delta pilot group. You are the one's that have invented, promote, and continue to pursue a series of artificial restrictions on our flying, that are not beneficial to you, not beneficial to us, and not beneficial to our Company. Additionally, they divide our union and place it at risk. Do not blame us for what you do.

That is the real strategy---right?

That is the real strategy of the Company and it is also the right strategy. That is precisey why it is so unfortunate that the politics of both ALPA and your MEC are the exact opposite.

Your agenda is designed to prevent right-sizing and force the Company to operate the equipment that you fly, whether or not it is the wrong equipment for the market. Your leadership and the ALPA leadership have both pursued that flawed policy for more than a decade. If anyone is "missing the big picutre" in all of this, it is not too difficult for the informed to see who it is. If you still have any doubts, it is ALPA and every "mainline" pilot group.

That agenda and policy reminds me of the now infamous "Full Pay to the Last Day" slogan attributed to the former USAirways MEC Chairman who, having contributed to running his own pilot group into the ground, has since been "elected" as an ALPA National Officer.

Very much like the senior executives of many major airlines who, while demanding major concessions from pilots and other employees, simultaneously and secretly vote themselves extraordinary compensation/benefit "deals" when their own failure to manage is costing the shareholders billions, bankrupting their companies, and devastating the lives of thousands of employees.

Tell me again, who doesn't have the "big picture"? It certainly isn't Comair pilots.

Not just Comair taking over the US.

That statement jeopardizes your credibility, unless of course you're just being facetious. I'll give you the benefit of the doubt.

We want a healthy Mainline--and then eventual profits can fund better contracts for DCI as well...

Sorry, but I don't buy the implied altruism. What you want is to keep what you have, increase what you have and, if you can get away with it, reduce what we have. If a healthy mainline happens to give you what you want that's OK, but if it takes an unhealthy mainline to get it, that's OK too. As for funding better contracts for DCI, that's quite a stretch ... I don't see you devoting a lot of interest in that direction. On the contrary, I see you working to eliminate or reduce DCI. You just haven't been very successful so far, but you're still trying.