Delta Rumor

[Publishers]

Aircraft Leases

Aircraft Leases for the most part are fixed monthly rates.

There are two main kinds:

Operating and Finance

In an operating lease, you usually have a shorter term and the only limits are usually related to hour cycle ratio.

A finance lease is really like you bought the aircraft but utilizing a lease agreement where someone else owns it at the end.

When someone says it is costing us XXX a day, they are just dividing the lease rate across the month.

 

[sleepy]

TYWEBB,

Well, I don't know much about the lease business. But, I do know about our 9 737-300's that we had in the desert. We were
told in the crew lounge in ATL by our VP of Flt Ops that those 9 airplanes in the desert were costing us $72,000 a day in lease costs----which equates to $8000 a day each. I don't know about the other charges---but that was just for the leases. (Those 9 737-300's are now going to replace 737-800's on the NY Shuttle, and the 737-800's are going to replace some 757 flying that will be taken for the LCC--whatever it is called)
This really is an interesting business, and I am glad I drive the planes and not do the financial stuff associated with it. But, flying the airplanes more throughout the day would help cover those costs. That is why I believe they are going to utilize the 757's on the LCC as much as they can-----probably flying them thru Vegas for all nighters---just to keep the planes moving. And, we'll see how National Airlines is doing in LAS. If they cannot get additional investors they may liquidate, and that would give Delta
and it's LCC a lot of gates right next to their current LAS gates.
It will be interesting.

Bye bye-----General Lee

I hope you are right about the LCC. I am a DCI guy that wants the whole company (mainline included) to do well. I am wondering if your pilots are going to allow changes in the work rules from your PWA for the new LCC. I would think that the LCC would need more flexible work rules to compete against SWA and JB. What do you think?

 

[General Lee]

Sleepy,

I would think so, but there is a problem---and that is that we now have about 1000 pilots on furlough, and we HAD a No Furlough clause. To be more productive---like the Jetblue and Southwest guys/gals----we would have to fly more each month. Right now we have a max of 75 hours per month, with a minimum pay of 70 hours. Pre 9-11 we had minimums of 80 or so hours, and Express
had no limit (upto 100 hours a month)---some guys flew 95 hours a month. That is productivity, and some guys loved to fly a lot. But now----with lots of guys/gals out of work---would it seem fair to them to up the hours? It would seem right to do that for the business, but how would you feel looking from the outside? I want Delta to do well, and I think we should be more productive and maybe relax some of the pay for the LCC, but we need to atleast start a small recall eventually (let's say starting in June
of next year---etc) and get back the furloughs. There needs to be a light at the end of the tunnel----otherwise most of our guys would not budge at all. Our contract sets the max at 75 hours a month while there any guysout on furlough for a reason---Protection. DALPA will not renegotiate until there is something for our furloughed people----give them 90 seat RJ's or whatever, just do something to get them back in the air.

Sleepy, I also want all of us to do well. I think the LCC will be interesting, and according to one of our roadshows in CVG last
week---we should know something about it before Thanksgiving.

Bye Bye---General Lee

 

[sleepy]

I agree that concessions to allow more flying at the LCC would not go over too well with 1000 on the street. I just don't see how they can make the LCC work with both mainline pay and work rules. I would hope that you will be able to use this as leverage to end the furloughs and get everybody back to work.

 

[General Lee]

Sleepy,

You would think so, but who knows these days? You would think that Dalpa would have the upper hand with this code share deal with NW and CO, since our MEC Chair has the final say-----you would think he would say,"Do you want the code share? Then no more furloughs...." Why hasn't he? I don't know. I personally think there should be different rates for the LCC, and allow the pilots to work 5-10 more hours per month and that makes up the difference. (Like Delta Express) I think junior guys/gals should fly the LCC until they can bid something on mainline. (more $$)
But the thing is that the 757 is not a small plane. It will have 198 seats on the LCC, and the pay rate will always be more than an
MD88, or 737. So, it probably won't go very junior unless it's
rates are a lot lower---and Dalpa won't allow that. They might allow something like a 10-15% rate cut, but that will still be fairly high. So, Delta also has to bring in something that is not on the current pay scale----like the A318 or A319----and use that too on the LCC. The rates will be lower and therefore junior.
Remember, everyone else (besides the pilots with a union and a contract) will be new with the LCC. Flt Attend will start at 19K a
year (most of the Flt Attend who fly on Delta Express 737-200's
are very senior (30 year plus) because it has only one drink service in the 3 hour flt and they sit in back and do crossword puzzles----they usually make $60K a year) The mechanics will come from other airlines---like USAir etc who are looking for work.
So, most of the people will be working at discount rates. And, the 757's will have 198 seats----more seats to spread out the costs. So, the LCC will have a cost advantage. (Even the fuel
burn on the 757 will equal the 737-200, but have 79 more seats)

I was also looking at the DCI operation. Wow, it has grown. (not sarcasticly) The new DCA operations and Comair in LGA---that is impressive. I absolutely believe that we need a strong DCI, but also a strong mainline and this new LCC. I think we will thrive
when all of this is over.

Bye Bye----General Lee

 

[sleepy]

Wow, the FA pay will be about the same as our (DCI) FA pay. I don't know what they will pay the mechs, but I'm sure that it will be higher that what we pay at ASA. ASA and Comair could start losing a lot of employees to the LLC (who could blame them for leaving).

I hope you guys get the Airbus. I have heard that DAL is pretty unhappy with Boeing right now, and they are basically giving the Airbus away right now. I to am wondering why your MEC is not using the code share deal as leverage to stop the furloughs (maybe something is in the works). It is really the only leverage you have until FM is ended. At least you guys have something, I think we at ASA are really screwed this time around.

 

[General Lee]

Sleepy,

I don't think you are screwed at ASA. You have enjoyed huge growth over the past year. And, I have heard that ASA will expand Westward eventually----probably even having flights through SLC. What we need though is for the furloughs to come back, and have growth at mainline or LCC to spur new hiring---and undoubtably ASA and Comair guys will get hired. Then things will really move.

Yes, the flt attendants will be paid a lot less on the LCC, but when Delta is forcasting to furlough upto 2300 flt attend, I am sure they will find a lot of takers for the LCC. Delta is in the process of taking out the number of flt attend per plane to the bare minimum. Normally a 757 would have 5, but it only needs 4 legally. They are doing that on every fleet type---going to minimums.

The mechanics will be paid more than the flt attend on the LCC, but not as much as mainline. There are plenty of people that would love to work period---and some of the people might be based in sunny locations---like Florida---where the LCC will be prominent.

I just got word that SUPPOSEDLY we will find out about the LCC on November 25th. (The Monday before Thanksgiving) Who knows? It will be interesting regardless.

Bye Bye---General Lee

 

[Medeco]

General Lee

Hey guys,

just trying to catch up on the discussion. Forgive me, but do you guys mean to say LLC(limited liability corp.) if not, what is LCC?

Thanks!

I have a family member at DAL, they stated there will be a spinoff company to compete with SWA and JetBlue, and will focus on the northeast. And the 757's will be used, single class.

Maybe I am repeating what was already said.

 

[NYRANGERS]

LCC

Low Cost Carrier

 

[sleepy]

I will believe the Western expansion is going to happen when I am back out West. I think we at ASA are screwed in our current contract talks because we have no scope, and DAL has been effective in bringing in even lower cost carriers that are poised to take over our routes if we were to strike. We have no leverage. At least at mainline you guys were smart enough to get some scope, even if it is weak compaired to the other majors.

 

[SWA/FO]

I was trying to figure out what LCC meant, too..

 

[General Lee]

Another LCC just went out of business---National Airlines in LAS.
It is sad. But, it will be interesting to see if anyone fills in the void.
As I said before, the National gates are in the same terminal with Delta and United. Could Delta use 757's on their LCC thru Vegas?
Will they step up to the plate? Can anyone actually afford to these days? I think Southwest could add more flights, and Jetblue is adding 2 daily flts to JFK soon, but can someone fill
National's void? They really flew a lot of people into Vegas in 3 years-----over 7 million people. Could Delta's LCC fill the void---
good question. I hope so. If not, Southwest will just gain more market share, and Jetblue will also gain flights there. I know
ATA is big there, but they aren't in wonderful financial shape
right now. Who knows?

Sleepy,

I know you guys are in contract negotiations right now at ASA, and the Comair strike did not help your cause. The pay will always be good at ASA, and the opportunity to go to Capt.
happens fast. The airplanes are really nice---that CRJ70 is
pretty **CENSORED****CENSORED****CENSORED****CENSORED** neat. Things could be worse. ATL and DFW are
nice bases----not super cold like Minneapolis. You also get good variety of flying----and it probably will get more interesting.
If you are looking for a big jump in pay----you will want to try for a major when things get back to normal. They will eventually.

Bye Bye---General Lee

 

[rjcap]

sleepy,

I think we at ASA are screwed in our current contract talks because we have no scope,

Its a little early to be throwing in the towel on the next contract. You need to be patient and let the process work.

Also, scope is dead.

Their will always be a way around negotiated scope limitations.

 

[General Lee]

RJ CAP,

That isnt good for either of us. If Delta thinks you guys are too expensive, they will deploy more Skywest RJ's and Chitaqua ERJ's on your routes. You guys are finally seeing what we have to go through when it comes to scope. The key is to protect the highest
paying jobs, and that is what we are trying to do. The only thing we have going for us is our No Furlough Clause. Even though it doesn't seem to work right now, eventually it will. The arbitrator will eventually (maybe not soon) rule FM is over, and then start a recall. So, Delta will someday have to contend with the 1400 guys
it has furloughed (if it gets that far) and do something with them.
Force mejeur will end---the arbitrator said that---and Delta will
have to employee the furloughed as pilots---that is our ace card,
and that is why it is in our contract. Delta will not be able to farm out everything, or they will have 1400 pilots getting paychecks while on the beach.

Bye Bye-----General Lee

 

[sleepy]

sleepy,



Its a little early to be throwing in the towel on the next contract. You need to be patient and let the process work.

Also, scope is dead.

Their will always be a way around negotiated scope limitations.

Scope is the single most important item in any contract. If you do not control the flying all of the pay raises in the world are worthless. Management will just give your work to somebody who will do it for less (and there is always somebody in aviation that will do just that). Scope is not dead, unless the RJDC guys win their lawsuit (a long shot at best IMO).

I am not saying that we throw in the towel, we will just have to accept that we do not have much bargining power (because we do not control any flying), and our next contract will likely reflect that.

What we need to do is get rid of the RJDC, and work with the only employee group at DAL that has any leverage at all, DALPA.