Compass/Mesaba best positioned

[DoinTime]

Looks like the Delta TA is locking Compass into their current fleet commitment with no further growth of the E-175.

 

[JoeMerchant]

Looks like the Delta TA is locking Compass into their current fleet commitment with no further growth of the E-175.

Do you have the text of the language?

 

[DoinTime]

d. one of up to the “total authorized number” of jet aircraft configured with 71-76 passenger seats and certificated in the United States with a maximum gross takeoff weight of 86,000 pounds or less (“76-seat jets”). The total authorized number is 30 plus the number authorized under the collective bargaining agreement between Northwest and the Association as of April 3, 2008. The number of 76-seat jets allowed under the PWA may be increased above the total authorized number by three 76-seat jets for each aircraft that is added above the baseline fleet of 440 aircraft operated by pilots for the Company (in service, undergoing maintenance and operational spares) as of January 1, 2007. The number of 70-seat jets plus 76-seat jets permitted by Section 1 B. 40. may not exceed 255.

Exception: Up to the 36 EMB-175s that were operated, ordered and/or scheduled to be retrofitted by Northwest prior to DCC may continue to be operated with up to a maximum gross takeoff weight of 89,000 pounds.

 

[DoinTime]

I guess it doesn't prohibit them growing beyond 36 airframes it just restricts them to the short range 175's and smaller aircraft.

 

[Medeco]

So, then it's not looking good for ASA. Despite all the back-slapping and feel good memo's, ASA is usually last or second to last every day in D0, which Mamma D seems to be big on. So, if Delta is keeping partners based on performance, it looks like Shuttle, Comair, Skywest and ExpressJet will be the winners....with ASA, Pinnacle and Freedom as the losers.

Thats not the whole picture. First, ASA has 800+ flights for DAL. How many flights does the other DCI carriers have?

D0 is a focus of DAL and ASA, BUT!!!, they really care about the DOT stats, which are Completion, and Arrival within 14 min of scheduled.

So, even though I'm wondering why D0 is not better since W&B launch, it really doesnt matter.

Medeco

 

[Medeco]

transcript

Here is the trancscript of the Q&A I was referring to in my original post.

Raymond Neidl - Calyon Securities

Switching to the smaller aircraft, you are going to have partnerships with almost every regional airline out there, plus you’re going to own a number of regional airlines. Is there any thought to maybe consolidating that and making that a little bit more streamlined.
Douglas M. Steenland

I think the ratio, the consolidation with our regional jet both carefully owned carriers as well as our contracts is a big opportunity for the combined airline. And yes, we expect there to be of significant shuffling of the deck, as well as some cost value out of realigning our portfolio.
Richard Anderson

The great piece here is between Compass and Mesaba you have the very best operators in cost structure. So, our goal with our contract carriers is to bring their margins down over time to more accurately reflect the overall margins in the industry. And Compass and Mesaba will give us that ability to shift flying from contract carriers to owned carriers at much better CASM.
Edward Bastian

It’s a work-in-process, so it hasn’t got that much attention. But between Compass and Mesaba there exists a holding company and they are actually already between those two carriers sharing functions, and we would expect that that would continue and would expand as times goes on.
Raymond Neidl - Calyon Securities

Is there protection there from preventing a third party coming in to try and make a bid for one or the other carriers or for some of the assets?
Richard Anderson

The merger agreement basically positions the two Boards where they are going to meet their fiduciary duties and their fiduciary obligations if anyone would elect to do that. And we will just have to see what happens.
Operator

Your next question comes from Dan McKenzie - Credit Suisse.
Dan McKenzie - Credit Suisse

The new contract with the Delta pilots is ultimately the new contract that the Northwest labor groups will migrate to, or is there yet a new contract that would need to be negotiated?
Douglas M. Steenland

There is a new contact to be negotiated with the Northwest pilots and coming to a combined collected bargaining agreement together with the Delta pilots. So we have a stand-alone Delta pilot contract that now we’ll run if ratified through 2012.
Dan McKenzie - Credit Suisse

At this point do the Northwest pilots have the option to sue to open the arbitration clause if that’s the case? So there was arbitration that the Northwest and Delta pilots were essentially working towards with respect to the seniority and is that a shut conversation at this point or do the pilots have the ability to sue, to go back and to continue those discussions?
Richard Anderson

Each pilot contract contains very specific provisions and protections that govern this situation. And ALPA, which both the Delta pilots and the Northwest pilots are members of, has a very specific merger policy that the collective bargaining agreement of both airlines obligates both the airlines and the pilot groups to follow. And if the two pilot groups cannot on a voluntary basis get there, there is a very clear roadmap and there is very clear precedent as to how this arbitration process would work to integrate the seniority losses.

 

[koepp]

I guess it doesn't prohibit them growing beyond 36 airframes it just restricts them to the short range 175's and smaller aircraft.

The E-175LR is 85,517 lb.
The E-175AR is 89,000 lb.

The AR is not certified yet. All of CPS's 175s are currently E-175LR models. With a maximum fuel load, you might run into a weight issue on the LR.

 

[Medeco]

Fyi

DAL is almost at the bottom of the list with regard to those metrics for the month of April, within the entire Delta system.

Medeco

 

[DoinTime]

The E-175LR is 85,517 lb.
The E-175AR is 89,000 lb.

The AR is not certified yet. All of CPS's 175s are currently E-175LR models. With a maximum fuel load, you might run into a weight issue on the LR.

I know I've heard that all of the Compass 175's were going to be retrofitted (or delivered that way when the option becomes available) to the ARs max gross weight. The current language prohibits anything bigger than 86,000 lbs with the exception for the planned capacity of the Compass 175s.

Like I said, this doesn't prohibit compass from taking more than 36 aircraft but they aren't going to be the more capable AR models.

 

[saab fixr]

Delta still has Shuttle getting 175s to replace 170s so why would you keep 2 carriers? One has experiance and one is startup Wouldnt it make sense to bring them all under one house and save the money? Just a thought

 

[Moustache]

Delta still has Shuttle getting 175s to replace 170s so why would you keep 2 carriers? One has experiance and one is startup Wouldnt it make sense to bring them all under one house and save the money? Just a thought

Because Compass ALREADY has the 175 and NOBODY over 1 year pay!!!!!!!

 

[BlueRidger]

Delta still has Shuttle getting 175s to replace 170s so why would you keep 2 carriers? One has experiance and one is startup Wouldnt it make sense to bring them all under one house and save the money? Just a thought

Because it allows for Whipsaw!

On the other hand, there are no restrictions on Compass soliciting business from other airlines. It also allows DL/NW to offer a competitor to Republic et.al. for the 170's.

Thats how they save money.
Sucks for us.

 

[SBD]

Because it allows for Whipsaw!

On the other hand, there are no restrictions on Compass soliciting business from other airlines. It also allows DL/NW to offer a competitor to Republic et.al. for the 170's.

Thats how they save money.
Sucks for us.

I agree. "Hey Republic, you want more flying, well cut this cost, this cost etc."

 

[DashTrash400]

Because Compass ALREADY has the 175 and NOBODY over 1 year pay!!!!!!!

Incorrect, we have senior pilots that were flying the CRJ since early last year that are on Year 2 pay, as well as several NWA furloughees that, in accordance with the flowdown agreement, started here at Year 3 captain rates.

But your basic point, that Longevity is keeping costs down at Compass as much as the craptastic contract nwa alpa saddled us with, is correct.

 

[BlueRidger]

This is just an excerpt from a letter I recieved from Compass today.

"We are very optimistic and excited about the merger, and feel it puts us in an excellent position. Neither NWA or Delta anticipate furloughs, therefore no flowbacks. NWA/Delta did confirm that they will be honoring the flow through agreement Compass has with NWA, and once merged the agreement will continue with the global Delta. "


Does anyone have any of the text that confirms this in the TA or other Agreement?

 

[DoinTime]

Does anyone have any of the text that confirms this in the TA or other Agreement?

There is nothing in the Delta TA that provides for a flow through.

 

[Baronman]

The equation is simple at Compass....Big RJ +Low Pay = Winner!

Sorry...There are those who are, but I'm not flying around 70+ people plus first class for less than I'm making now.

 

[Tank Commander]

Money talks and the other walks. Listen to wall street and the brokerage firms. They are privy to insider info that comes out.

 

[FSIGRAD]

The 15 Delta 175's that begin arriving this summer for RAH are all going to be configured exactly the same as the Compass birds. What that means I don't know?

 

[Flybet3]

The 15 Delta 175's that begin arriving this summer for RAH are all going to be configured exactly the same as the Compass birds. What that means I don't know?

I think you should always prepare for the worst but hope for the best. Alot pilots just need to stop being soooo negative and declaring that this will bring about the apocalypse