Compass/Mesaba best positioned

[JECKEL]

AP News today:

Delta has said that it was evaluating whether to sell any noncore assets, including Comair. President and Chief Financial Officer Ed Bastian said Tuesday at a news conference in Atlanta that the deal will have no effect on Comair.
"We've said all along whether we make a decision to ultimately divest of Comair or retain Comair, either way it's going to be an important part of the Delta network for as far as the eye can see," Bastian said.

 

[outtahere]

WOW! Thats as good as taking the noose off of the Comair pilots neck. Good for you guys, maybe now ya'll can rebuild it to what it once was.

 

[wmuflyguy]

WOW! Thats as good as taking the noose off of the Comair pilots neck. Good for you guys, maybe now ya'll can rebuild it to what it once was.

I hadn't felt that the noose was around our necks...this place has a future. I just don't think its future is in CVG.

 

[SBD]

I hadn't felt that the noose was around our necks...this place has a future. I just don't think its future is in CVG.

Amen. I feel those crusty CVG folks days are coming to an end. Let's see how many N. Kentucky folks will like commuting to DTW/JFK/etc.

 

[79%N1]

Maybe, and maybe not! Overall. all the regionals are inline with cost structure. Having said that, it really boils down to performance at this point. The carriers that can deliver on performance, will be the surviors.

There will only be 4-5 when the dust settles. If those with long-term contracts can meet the performance goals, they have a guaranteed spot on the final team. Performance is now the determinant, the only determinant.

Delta Management will be making those decisions in the future--not Northwest Management. Future decisions are going to put the "Regional" back in the Regionals. When the dust settles, there will only be one regional in every hub!

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.

 

[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