Delta TA impact on Delta Connection...

[General Lee]

Gotta agree with 777 here. That's just an asinine statement. While I do share some of your apperhension with the new TA(assuming it passes....which it will) and how it will basically gut DCI, I don't think that the business plan for SkyW now is to go into BK. Of all the DCI carriers out there, I think they have the best shot of getting through this upcoming mess.

Assuming the 717's and MD90's make it to DL, along with the return of retirees in 2013, hopefully there will be a lot of hiring at DL. I know there will be a net loss of jobs at DCI, but hopefully that will be canceled out by jobs at Delta and the other majors that may be hiring soon. Let's face it. The 50's are money losers and there are probably to many RJ's out there anyways. Hopefully this creates higher paying jobs and balances out the Delta fleet to a more profitable balance for everyone.

According to Dalpa, the new reserve work rule changes (adding average line value plus 15 hours to reserves in the busy months, plus adding an additional reserve day, allowing reserves to sell a day off if they want, etc) could be a minus 250 pilots to the group. Add the 717s, and that is a plus 1100. So, that would mean 850 new hires right there. Then, there is an early out package for very senior pilots that includes 30 weeks of pay, plus a large chunk in a retirement medical account (maybe 2 years worth of medical insurance (?), that would carry some over to medicare). I have heard that 200-300 may take that. Then add some MD90s (25 this year?), and the DC9s leaving in 2014 now (17 of them), plus 2 new 737-900ERs a month starting in late Summer (replacing some older 757s though, could be a wash there), and hiring is a very good possibililty if this TA passes. Then add normal retirements in the next few years, with some years ballooning to 800 age 65 guys leaving in one year (probably leave before that, medical out), and there will be hiring for years most likely.



Bye Bye---General Lee

 

[Speedtape]

May interject a clarification re: RJs as money losers?

Delta does not lose money by operating RJs of any size. The way it was explained to me by a company beancounter, DL doesn't make AS MUCH as they would if the resources ($) allocated to RJs were allocated elsewhere.

RJs do not lose money for Delta.

I agree with this message! If they were losing money, they would already be gone!

 

[suupah]

The Delta TA involves a net reduction of approx 200RJs. It states that this is possible by being able to back out if current leases in exchange for new aircraft. I'm certain this is 50 seat CRJs vs ERJs. So the replacement aircraft will be CRJs 900s, not E175s. Now, the next question is who has about 200 50 seater leases. Well, pinnacle has, what, about 140(?) and Comair will have about 16, so the remainder have to come from Skywest/expressjet. We have already seen that skywest is willing to renegotiate 50 seat lift at a 2 for 1 deal for 900's (already was done to get the 900's at "ASA")...and since in chap 11, pinnacle can just blow off leases (essentially)...looks to me that the loss of 50 seat lift will be from Pinnacle, Skywest and ExpressJet...with a net reduction in pilot staffing at these companies.

here's the play. delta holds the leases for pinnacle's 200's. they'll swap them out for 900's then send these newly acquired 900's to skywest/asa in trade for their 200's. multiple birds killed with one move.

pinnacle pilots get completely screwed.

 

[ASApuppy]

I would like to offer a different perspective to what this TA is accomplishing. We are in for a serious pilot shortage, at least short term (5years). There are simple no pilots waiting in the shadows to match the upcoming retirements. ASA could not run a new hire class next week if wanted to.

So, the management needs to find a near term solution for their network that requires a sliding scale of fewer pilots. Unlike 10 years ago, airlines are going to be okay with letting a route go, because they know they will not be pounced on by a start-up or otherwise. Fares will go up for the fewer seats left. Airlines will become more profitable, IMO. You have to admit, that for any city pair there are so amny people that will pay $X, so many that will pay $X-10%, $X-20%, and so on. If you cut out seats, the passengers left in the terminal are the ones that paid the least. Happens today on every flight oversold. Do you think Delta is overselling a flight with $99 fares? No, they are overselling it with $1k last minute fares and knowing they have to spend $400 of it to buy off the guy that got his ticket at $250 a month ago. Cut capacity, and you never have to offer the $99 or $250 fare. Airlines for the first time have better control over supply. Much like the refineries have figured out that they can cut output 10% and the price goes up 25%. No other refineries step up and flood the market with gas and they all win.

Back on point. Delta will have not have a problem filling classes compared to their DCI carriers. If, however, UniCal and AA get their act together in the next couple of years and can come to equal contracts with Delta, then they will have the advantage in pilot hiring. While Delta does still have quite a few retirements coming, they pale in comparison to others. All the pre-bankrupcy retirements at Delta has pushed off career earnings for 5 years. Upgrades will be longer. This assumes that those carriers can match Delta's contract. They might not. Especially if they play the earlier upgrade card.

So, bottom line, I think that even if this TA does not pass, the DCI carriers will be parking 50's. Not because of their economics, but because there will be nobody sitting in the front 2 seats. Delta is just trying to spin it that they are uneconomical. They fail to mention that while the costs for regional routes are higher, but so too are the yields.

So, ask yourself this. If I was an airline tycoon and I knew I had no new pilots to cover my short term retirements and that I needed to modify my fleet and route structure. What would it look like?

 

[flyboyike]

So, ask yourself this. If I was an airline tycoon and I knew I had no new pilots to cover my short term retirements and that I needed to modify my fleet and route structure. What would it look like?

I would park more airplanes until staffing was no longer an issue. A bonus would be that such a move would give me even more control over the supply and thus enable me to raise fares. I've said this before and I'll say it again: Richard Anderson isn't paid to operate 600 airplanes, he's paid to run a profitable airline. If it's profitable at 150 airplanes, he's done his job.

 

[79%N1]

Eliminating a bunch of planes from XJET's fleet solves a couple of problems. Needing more staffing for the new rest regs, and needing to find qualified applicants from a dwindling pool of prospects. They will be able to right size the fleet to match the current labor pool as they disappear. When attrition comes, they can just keep pulling down the fleet to match it until they get to the magic number. The problem with this is if attritiondoes not outpace the devolution of the fleet, and FO will never get the chance to upgrade. I can see upgrade times reaching 10 years at the regionals that still exist in 5-10 years.

 

[flyboyike]

Eliminating a bunch of planes from XJET's fleet solves a couple of problems. Needing more staffing for the new rest regs, and needing to find qualified applicants from a dwindling pool of prospects. They will be able to right size the fleet to match the current labor pool as they disappear. When attrition comes, they can just keep pulling down the fleet to match it until they get to the magic number. The problem with this is if attritiondoes not outpace the devolution of the fleet, and FO will never get the chance to upgrade. I can see upgrade times reaching 10 years at the regionals that still exist in 5-10 years.

I'm at nearly six years already with no hope of upgrade in sight.

 

[McNugent]

Eliminating a bunch of planes from XJET's fleet solves a couple of problems. Needing more staffing for the new rest regs, and needing to find qualified applicants from a dwindling pool of prospects. They will be able to right size the fleet to match the current labor pool as they disappear. When attrition comes, they can just keep pulling down the fleet to match it until they get to the magic number. The problem with this is if attritiondoes not outpace the devolution of the fleet, and FO will never get the chance to upgrade. I can see upgrade times reaching 10 years at the regionals that still exist in 5-10 years.

Your doom and gloom is nauseating. You were preaching that the end was near back when we were bought by Skywest. Take some happy pills or something.

 

[79%N1]

How is that doom and gloom? ASA is GOING to lose planes and be smaller than today. If you can't see that......I also said that it will HELP the future staffing as the need for more pilots would be helped by that. They would have trouble finding 1500 hr ATP pilots going forward. I also said that most of the losses in positions would be mitigated by attrition as people move on to other jobs. So, all in all......it won't be so bad. Hopefully those that stay here will still be ableto move up, but since upgrades are currently over 6 years if it all goes slower (i.e bigger fleet losses, less attrition) then upgrades could take a while. Sorry for bumming you out. May I suggest Pepto!

 

[Redan]

Your doom and gloom is nauseating. You were preaching that the end was near back when we were bought by Skywest. Take some happy pills or something.

79% has some very insightful views on our dealio. I'm always interested in what he has to say...