Delta to put 100 Rj's to the desert

[MJ42]

You wish. I'm talking in general terms. Have you noticed that every legacy not currently involved in a merger is reducing domestic narrow body capacity. United for example is parking all of their 737's while expanding the use of CRJ's. Sorry if you career expectations are in decline, but denial is never a good stragety.

What about this (complete unedited) quote:

"Rising fuel prices have particularly impacted the economics of our regional
fleet, and we are working with our partners in the regional carriers to
rationalize our capacity offering. EAS contracts will be modified as they
come up for renewal to include the current economics, and it will be the
choice of the government to decide if the service is worth the costs."

 

[Speedtape]

Sorry....typo. My guess "Is" 25, because I have heard (and hope I'm wrong) that is how many planes, or "equivalant" are coming from ASA. Whether or not it is DC-9's, more 76 seaters from Pinnacle, or just an overall reduction of 50 seaters, IMHO I think ASA is one of a few (Comair, CHQ, Freedom and already ExpressJet) that are about to be whacked. Don't forget, there is a mege also in play here, not just high fuel costs. Remember the word 'synergies'. I think Delta is really going to trim the flying.

If not a large chunk from ASA, where do you guys see 100 RJ's coming from? You seem to think we are insulated due to ATL being a fortress, etc. I disagree. I hope, though, you are right.

Your speculation is contrary to some other information floating aroung. Although all schedules will be reduced this fall, ASA will retain all pilots and will reduce average block line and carry more reserves. There will be some opportunities after the merger at some point early next year and there will b another ramping up, possibly even requiring more hiring.

 

[Jon Rivoli]

I believe I quoted the relevant parts the intent was not to misrepresent. It's more efficient to over utilize a 76 seater than to under utilize 141. SLI done by November? I'll believe that when I see it. The key is what will eventually fill that gap and who will fly it. That ball is in your court, don't drop it.

 

[MJ42]

Sounds pretty streight forward to me so I am not sure what the above poster is getting at in terms of DC9 profitability. Bottom line, there will be a reduction in RJ AND DC9 service and the only thing we can do is wait and see what happens.​

[/QUOTE]

You obviously missed reading ALL of my post. I said DC-9 will be parked, but DAL does have a short term plan for the DC-9-40 and -50 aircraft. The only way DAL will park the DC-9 sooner is IF fuel goes higher. Like I said several times, my info comes from facts provided by our MEC's and DAL. This doesn't mean DAL's plan will happen exactly like they say, but so far they've been very forthcoming and informative.

 

[MJ42]

I believe I quoted the relevant parts the intent was not to misrepresent. It's more efficient to over utilize a 76 seater than to under utilize 141.DC-9 is not a 140+ seat aircraft. -40 is 112 seats. -50 is 124 seats thus filling a gap between 76 and 140 seats. SLI done by November?That's set in stone, a firm date from both MEC's and (if needed) 3 arbitrators. I'll believe that when I see it. The key is what will eventually fill that gap and who will fly it. That ball is in your court, don't drop it.

I agree with some things you are saying, but others seem to be way off. I base this off facts provided to the NWA/DAL pilot groups.

 

[Speedtape]

Post Merger and looking forward, there are some future changes that will probably occur that may support some of the information that the General and others are proclaiming. The following hypothetical will be stated for consideration and discussion. Being a forward looking statment, most of it is speculation, however, it has a strong basis, based on some common sense, objective business strategies. The following is only one change that will probably take place. It supports to some degree the General's information. Here we go:

NWA operates a hub in Memphis. This Hub has 3 defined flight banks or turns a day. Memphis and the surrounding area do not generate alot of local boading traffic. Memphis is primarily a "connecting hub" and has been maintained by NWA over the years because of geographical location in the Southern region and because the Airport operation costs are probably the lowest in the country.

Although a very compelling argument has been put forth regarding very little route competition and overlapping between NWA and DAL by the respective CEO's in the Congressional hearings, there are some other considerations that have not been in focus. One of those considerations is the NWA Memphis Hub and the DAL Atlanta Hub are 384.48 miles apart. Furthermore, there is direct and fierce competition between between these two airlines in these two respective hubs for the passengers that travel to and from the many cities that mutually feed both of these hubs.

When these two airlines merge, it is most probable that the consolidated company will implement hub restructuring to achieve maximum efficiencies. Although, there will be some other Hubs affected also, the focus of this discussion will be on ATL and Memphis. Due to close proximity and the fact that these hubs directly compete for the same passengers for feed in the same region of the country, there is compelling logic that one of these hubs will be eliminated or greatly diminished to achieve greater efficiencies and maximum profitability of the combined company. As most would agree, ATL would be the surving hub. This would result in the funneling of more traffic into the surving hub, ATL.

The hub rationalization in this instance would then divert more traffic to the surviving hub, ATL, from the "feeder" cities that once fed both Memphis and ATL. It is reasonable to expect that the present total of all traffic from these "feeder" markets would not be diverted, in total, to ATL. This will depend on remaining competition in each of those cities. It could be assumed that some of the present total traffic in each of those "feeder" cities could migrate to a competitor. However, due to the combined and strong frequent flyer programs of the new merged company, it seems reasonable to assume that most of the higher yield traffic will be maintained. Again, in each of these "feeder" cities more traffic in total will be diverted to ATL. In this example, most of the traffic will be maintained in the combined company, but directed to one hub, therefore eliminating Memphis and the associated costs.

This hub elimination and subsequent increase in total traffic to the surviving hub in ATL, would require the need for larger airplanes in these "feeder cities." Thus, this supports the information that the General and others are sharing. In many instances, it may require narrow body airplanes. It could also require more 70/76 airplanes. From an efficiency perspective, it most likely would require a combination of both. It does appear that most likely, it could result in a decrease, but not elimination, of 50 seat airplanes.

In summary, in effect, competition is eliminated in these "feeder" cities, resulting in diversion of additional traffic to ATL. There will be a need for larger airplanes to right-size for the new traffic.

As an example, VPS is a "feeder" market for ATL and MEM. NWA, from Memphis, currently serves VPS with 3 DC-9's a day. DAL currently serves VPS, from ATL, with 9 flights a day. Of those 9, 5 are ATR's, 1 CRJ 50, 2 CRJ 70, and FOR NOW only 1 MD-88. If Memphis is eliminated, then most of that traffic would be diverted through ATL. This will most likely require the replacement of the smaller aircraft with more narrow body aircraft. This market example may not be the best for the reduction of the 50, but it demonstrates the possible change very well. There are probably better market examples for the 50. What will happen in XNA, LIT, BTR, MLU, SHV, and many of the others that already run high load factors? Post-merger, there will be a need for larger airplanes if Memphis is eliminated, and to some undetermined degree, the need for less smaller aircraft.

 

[sweptback]

As and example, VPS is a "feeder" market for ATL and MEM. NWA, from Memphis, currently serves VPS with 3 DC-9's a day. DAL currently serves VPS, from ATL, with 9 flights a day. Of those 9, 5 are ATR's, 1 CRJ 50, 2 CRJ 70, and FOR NOW only 1 MD-88. If Memphis is eliminated, then most of that traffic would be diverted through ATL. This will most likely require the replacement of the smaller aircraft with more narrow body aircraft. This market example may not be the best for the reduction of the 50, but it demonstrates the possible change very well. There are probably better market examples for the 50. What will happen in XNA, LIT, BTR, MLU, SHV, and many of the others that already run high load factors? There will be a need for larger airplanes if Memphis is eliminated.

Not necessarily. They may replace a RJ with a mainline plane here and there, but assuming one hub is closed I doubt that capacity will be replaced. Remember that one of the goals of this merger, stated or not, is to reduce capacity.

In the case of VPS, DL was a commanding carrier out of there before you added in NW. If capacity just disappears, people will either pay higher prices or quit flying. Just because a flight is full doesn't mean it's making money, especially in a leisure market like VPS.

 

[Speedtape]

Not necessarily. They may replace a RJ with a mainline plane here and there, but assuming one hub is closed I doubt that capacity will be replaced. Remember that one of the goals of this merger, stated or not, is to reduce capacity.

In the case of VPS, DL was a commanding carrier out of there before you added in NW. If capacity just disappears, people will either pay higher prices or quit flying. Just because a flight is full doesn't mean it's making money, especially in a leisure market like VPS.

Thanks for your reply, as it adds more dimension to the discussion that I had not considered.

I agree with your statement on the reduction of capacity. Not only will capacity be reduced, but in effect, in these "feeder markets," COMPETITION is eliminated. Reducing competition is the more important element Ultimately, this will give DAL more pricing power with the reduction of both capacity and competition. Fares will rise, yields will rise, and yes, there could be a decrease in demand as a result. However, I am sure that in the end, profits will rise in these markets with the reduction of competition. With technology, and historical data, pricing has almost become a science. Armed with these tools, pricing models can be devolped that will result in maximum profit for the given and known amount of traffic. They will try to maintain the high yield traffic by right-pricing.

Right-sizing airplanes for the hub traffic shift will occur. I agree that there is no one solution, but there will be a need for more narrow bodies in these markets if my guess is right.

 

[79%N1]

So, Speedtape....

It seems to me like you are further proving potential pain for ASA. Replacing ASA aircraft with narrowbodies from Delta and/or NWA, which reduces the need for ASA flying! Not to mention that if MEM closes, the merged carrier will have a further glut of RJ's Pinnacle flies out of MEM. What is to stop them from using Pinnacle if there are increased opportunites in ATL.

Also, I must disagree that any more traffic can be pushed to ATL. ATL is running at max capacity, and Delta cannot stuff any more in there.

But, to disagree with my assertion that ASA has some hard times ahead.....and then state that you believe there will be smaller airframes replaced by larger ones is quite a contradiction! Are you saying you believe it will be ASA supplying these larger aircraft?

 

[MJ42]

So, Speedtape....

It seems to me like you are further proving potential pain for ASA. Replacing ASA aircraft with narrowbodies from Delta and/or NWA, which reduces the need for ASA flying! Not to mention that if MEM closes, the merged carrier will have a further glut of RJ's Pinnacle flies out of MEM. What is to stop them from using Pinnacle if there are increased opportunites in ATL.It doesn't appear MEM will close. One thing people forget to mention is that a big use of the 787 was to go nonstop MEM to Asian cities to support Asian auto makers and their plants in TN and MS(some of which are being built). The auto makers want/need/desire non stop service to/from MEM. The high demand for this service along with the overflow from ATL will keep MEM open. This is subject to change based on DAL's opinion of the 787, but there is high demand for this service.

Also, I must disagree that any more traffic can be pushed to ATL. ATL is running at max capacity, and Delta cannot stuff any more in there. Correct, MEM will be an overflow hub/or potential focus city.

But, to disagree with my assertion that ASA has some hard times ahead.....and then state that you believe there will be smaller airframes replaced by larger ones is quite a contradiction! Are you saying you believe it will be ASA supplying these larger aircraft?

I know your response was directed toward speedtape but see above response.

 

[B727FA]

Well, Pinnacle got an extension until the end of September for 9 CRJ-900s. Once September 30th comes around, we'll know more. But that's 9 out of 100 that Delta can cut.

They just reaffirmed on the deal with them.

 

[B727FA]

I don't really know, but I think it was stating the company could be worth X Amount after a merger, and watching the stock go down and now saying it will be worth less. I think that is right.


Bye Bye--General Lee

"Impairment of Goodwill" is the reduction of Community Service they're going to do this year. They have to account for that lowering...and that's how they do it.

 

[imisscorplife]

I was in Tucson yesterday and saw almost a dozen Delta CRJ200's sitting there at Bombardier along with 2 Go Airlines CRJ's. The Delta paint scheme was there, but no Delta name. Look like Comair birds. Who knows!!

 

[Dannone]

I say none of you knows anything! So why do all keep speculating. Like the rest of us you will find out when it happens.

 

[79%N1]

It's not speculating to say Delta is ridding 100 RJ's this fall. It has been said by top management. Everyone wants to think their company will be immune from the pain.....

 

[Superpilot92]

It's not speculating to say Delta is ridding 100 RJ's this fall. It has been said by top management. Everyone wants to think their company will be immune from the pain.....

the above is 100% accurate

 

[79%N1]

But Superpilot.....you don't have to be so happy about it! You, much like GL seem to show glee at the mere mention of the misfortune of Regionals.
Pilots are losing their livlihoods, others will be taking a hugh loss of income (myself included). It almost seems like you guys root for it.

 

[Speedtape]

So, Speedtape....

It seems to me like you are further proving potential pain for ASA. Replacing ASA aircraft with narrowbodies from Delta and/or NWA, which reduces the need for ASA flying! Not to mention that if MEM closes, the merged carrier will have a further glut of RJ's Pinnacle flies out of MEM. What is to stop them from using Pinnacle if there are increased opportunites in ATL.

Also, I must disagree that any more traffic can be pushed to ATL. ATL is running at max capacity, and Delta cannot stuff any more in there.

But, to disagree with my assertion that ASA has some hard times ahead.....and then state that you believe there will be smaller airframes replaced by larger ones is quite a contradiction! Are you saying you believe it will be ASA supplying these larger aircraft?

It may seem like a contradiction based on what was stated and what is known today. However, there is more to the story. ASA will have some future opportunities that have not been announced yet. Those opportunities will be in another hub. Stay tuned.

However, given comments by the CEO's in the early announcements, there is no regional that will not have risk if they do not play ball. But for that matter, mainline will have a few surprises as soon as the honeymoon is over, shortly after the merger.

 

[Speedtape]

What about this (complete unedited) quote:

"Rising fuel prices have particularly impacted the economics of our regional
fleet, and we are working with our partners in the regional carriers to
rationalize our capacity offering. EAS contracts will be modified as they
come up for renewal to include the current economics, and it will be the
choice of the government to decide if the service is worth the costs."

Essential Air Service contracts go through this bidding process every few years or anytime in the past when there have been sustained fuel price increases. It's the only way to adjust for inflation. Most of the time, no one else bids, and the incumbent carrier gets the new contract and the increased subsidy. Even if there is a competing bid, the carrier offering that bid has to pass a financial and safety of operation fitness test. This means that the lowest bid does not necessarily win the bid.

This process is very common in the EAS arena. However, bottom line is if the current subsidy and the meager traffic in those markets cannot surpass the break-even point with a small return, then it makes no sense to operate in those markets. Nothing is lost.

 

[DoinTime]

It's not speculating to say Delta is ridding 100 RJ's this fall. It has been said by top management. Everyone wants to think their company will be immune from the pain.....

If the comment on RJ reductions was typical management speak then that number includes airframes they have already taken down or plan to take down.

Mesa (If they still think they can get out of that) = 36.

Express jet = 22

Skywest = ??? (didn't they pull some delta 50 seat RJs out for Air Midwest?)

Comair = 7+?? (I thought there were more than this due to replacements from the -900s coming on)

The "equivalent" statement is no doubt a reduction in productivity from contract carriers that they are unable to actually pull aircraft from.

Delta looks to already be close to their goal of RJ fleet reductions.