DL 4th Qr Loss and parking RJ's

[Slick]

"The No. 3 U.S. carrier lowered its operating profit margin target to a range....blah, blah, blah"

Warnings of lower profit margin targets have become standard operating proceedure in today's corporate America. It's the new anit-Enron game.

Remember Enron, WorldCom, Tyco, etc. Accounting games where employed purely in the interest of jacking the stock price, whereupon the corporate officers sold their stock at a hyped price and further lined their own pockets. Well, when the S.E.C. finally got wise to the bogus accounting methods, corporate America could no longer employ those same accounting tactics. Instead, the M.B.A.s, C.F.O.s, and C.E.O.s now give "warnings of lower profit margin targets", only to have "surprise earnings" when quarterly/annual results are announced next quarter. And guess what the corporate robber barons do in the mean time. They buy a bunch of stock and take stock options at the depressed price, only to realize a personal fortunace gain when "surprise earnings" are announced in January. Then, do you have any idea what they'll do next? That's right. They'll AGAIN warn of lower "operating profit margin target(s)" for the next quarter and the game continues.

My only question is what took Delta so long to come to the party. Is their CFO that slow? That far out of touch with today's Generally Accepted (wink) Accounting Principles?

 

[ohplease!]

We have pay rates for them, but have not heard lately about any future orders. I guess we could get them if we bought Jetblue and then gave back the A320s to the lessors.

Bye Bye--General Lee

If anyone gets them for Delta, I'd bet on you guys. After all, you agreed to fly them for less than ANY regional out there. Way to hold up the bar...:laugh:

 

[ohplease!]

the number of 76 seaters is tied to fleet growth, so a reduction in the Delta fleet count or at least a reduction in the growth, affects that number. Not sure where we are at now, but last I heard it was something like 50-60 total 76 seaters allowed.

The total number of 70 and 76 seat RJs cannot exceed 200. I have no idea how many 70 seaters are flying around.

this will hold right up until Delta mgmt. comes to you guys with an offer to layoff only 300 pilots rather than 500 if you'll relax scope on the 900's again. Your pilot group will jump on the offer like a duck on a junebug. Always have.

 

[Indy319FA]

Look for Delta to place turboprops on shorter routes? Those BigSky BE-1900D's are going to places we have never flown to before--like Owensboro, KY and Jackson, TN from CVG.

You forgot Cape Girardeau, MO. Also heard they will be going to London, KY as well. I agree the plan was for these guys to go into EAS cities, but I've heard they may be going into LEX, SDF, HTS and DAY on some of the thinner flights. Doesn't make sense to fly a 135 to LEX at 10 am with 15 people when you could do it with a 1900 and save a lot of Jet A.

The SH E170s are being traded ONE FOR ONE for E175s, and those older E170s are going to United. The CR9s and E175s take up a full gate, and therefore do not bring in as much revenue as a mainline plane that could take it's place in that limited asset (the gate). You are right, Pinnacle, Freedom, and ASA will be getting some CR9s in 08 for us, but not a ton of them. Look for more mainline planes to come online in mid to late 08--9 MD90s from China and 7 new 737-700s(coming in July at 2 per month).

Way I heard it was the 175s are replacing the 15 135s we are losing, but you never know with the way Bedford moves these planes around. I do know they are shifting 170s to United and Frontier and we have a bunch of 170 family aircraft on order. It would be wonderful to see mainline aircraft replacing RJs, but I wouldn't hold my breath. With the way these execs are whining about the price of oil, it smells like they are getting ready to come to ALPA to get scope relaxed. I remember reading a Wall Street Journal article a couple of years ago that predicted that in 10 years all of the domestic narrow body flying would be outsourced, and these airlines would basically be a brand name and what you used to think of as mainline would be flying international widebodies only. Would be lovely to see you guys go into your next contract negotiation and demand that all flying be on one list (if its got a widget on the tail, a Delta pilot should be in the cockpit) to get rid of the whipsaw, but I don't see Delta pilots (or any other pilot group) making the sacrifices to make that happen (i.e. a strike that may put the company at risk). Over the short term more mailine aircraft will come on line to get rid of some of the 50 seat flying, but if I had to bet, I'd say over the long term you're going to see scope get relaxed, and "regionals" flying larger aircraft to replace the 50 seaters.

I've also heard that all the 50 and 35 seaters in CVG are going over to the C concourse, and the A concourse jetbridges are going to be rehabbed for 170s, CR7s, and CR9s. Already the temorary ramps are being removed sometimes to park CR9s and 170s at the A gates with no awnings, and supposedly the gates with awnings will have them removed in the spring.

The AT7s will probably stick around, especially to fill niche cities like Panama City, FL and Hilton Head, SC. Are there any used large turboprops out there? The SAS Dash-8-400s---but very unlikely they would go to ASA--probably Lynx, Horizon, or Porter in Canada. I don't see any other large turboprops available unless they come off the production line, and there are plenty of orders out there. The 50 seat and 37 seat RJs just do not make money with high oil.

This is JMO, but I don't think DL will take the SAS aircraft because they have not been maintained very well. The recent accidents they had were supposedly related to poor maintenance. I think they have been waiting and hoping that oil prices would come down, and possibly crash like they did in the early 80s. Depending on who you believe, either the price of oil is artificially inflated by speculation or we've reached peak oil and prices are going to keep getting higher. If you believe the former, then you hang on by your fingernails rather than invest in expensive new equipment. If you believe the latter, then you start investing in new equipment that is more fuel efficient.

I think DLs executives are leaning to the idea that high oil prices are here to stay, therefore I think you will see them do something to get larger turboprops, probably off the production line. Also you will see larger aircraft (CRJ7s, 9s, EMB 170/175s and mainline aircraft) replacing 37 and 50 seaters.

 

[Indy319FA]

Rumors I have heard are that we are getting used MD90s from all over the world (more than 50 are out there available supposedly

Sounds familiar, when I worked the ramp at NWA in the late 90s, they were getting DC9s from all over the world. Used to see ex EAL, Alitalia, and Iberia aircraft all the time. Was kind of cool to see the placards in Spanish and Italian on the cargo bins.

 

[General Lee]

You forgot Cape Girardeau, MO. Also heard they will be going to London, KY as well. I agree the plan was for these guys to go into EAS cities, but I've heard they may be going into LEX, SDF, HTS and DAY on some of the thinner flights. Doesn't make sense to fly a 135 to LEX at 10 am with 15 people when you could do it with a 1900 and save a lot of Jet A.



Way I heard it was the 175s are replacing the 15 135s we are losing, but you never know with the way Bedford moves these planes around. I do know they are shifting 170s to United and Frontier and we have a bunch of 170 family aircraft on order. It would be wonderful to see mainline aircraft replacing RJs, but I wouldn't hold my breath. With the way these execs are whining about the price of oil, it smells like they are getting ready to come to ALPA for to get scope relaxed. I remember reading a Wall Street Journal article a couple of years ago that predicted that in 10 years all of the domestic narrow body flying would be outsourced, and these airlines would basically be a brand name and what you used to think of as mainline would be flying international widebodies only. Would be lovely to see you guys go into your next contract negotiation and demand that all flying be on one list (if its got a widget on the tail, a Delta pilot should be in the cockpit) to get rid of the whipsaw, but I don't see Delta pilots (or any other pilot group) making the sacrifices to make that happen (i.e. a strike that may put the company at risk). Over the short term more mailine aircraft will come on line to get rid of some of the 50 seat flying, but if I had to bet, I'd say over the long term you're going to see scope get relaxed, and "regionals" flying larger aircraft to replace the 50 seaters.

I've also heard that all the 50 and 35 seaters in CVG are going over to the C concourse, and the A concourse jetbridges are going to be rehabbed for 170s, CR7s, and CR9s. Already the temorary ramps are being removed sometimes to park CR9s and 170s at the A gates with no awnings, and supposedly the gates with awnings will have them removed in the spring.



This is JMO, but I don't think DL will take the SAS aircraft because they have not been maintained very well. The recent accidents they had were supposedly related to poor maintenance. I think they have been waiting and hoping that oil prices would come down, and possibly crash like they did in the early 80s. Depending on who you believe, either the price of oil is artificially inflated by speculation or we've reached peak oil and prices are going to keep getting higher. If you believe the former, then you hang on by your fingernails rather than invest in expensive new equipment. If you believe the latter, then you start investing in new equipment that is more fuel efficient.

I think DLs executives are leaning to the idea that high oil prices are here to stay, therefore I think you will see them do something to get larger turboprops, probably off the production line. Also you will see larger aircraft (CRJ7s, 9s, EMB 170/175s and mainline aircraft) replacing 37 and 50 seaters.

Regardless, the Be1990s are being used for EAS reasons, and people used to E135s at LEX will not go for a BE1900D when they can go elsewhere on a jet. Nope, they will use those planes on places that have limited or no service, like Cape Girardeau, Jackson, and Owensboro.

The SA E175s are replacing the current E170s one for one, and those E170s are going to United. That is the deal. Hey, I like them better than the CR9s, but that wasn't part of the deal I guess.

Mainline will be replacing RJs, this next year. We are getting 9 MD90s (already given the green light by Anderson, and he said so in his town hall meeting) for domestic use, along with 7 737-700s slated for 08 delivery. The parking of some RJs will move other RJs around, and the MD90s will take the place of some of those CR9s or E175s that are now full. That just makes sense. The CR9s/E175s will cover 50 or 37 seat routes that are currently maxed out.

As far as Delta pilots wanting to fly E190s or 100 seaters, we would. You have to remember that our last negotiation involved a BK judge watching. That doesn't help when you want something and the company does not. You should know that with your involvment at Indy Air.

I also don't think ASA would fly the SAS Dash 8-400s, primarily because a whole new aircraft type would be too expensive. I am sure SAS would clean the airplanes up before selling them, or just give them to Bombardier and they would do it. Bombardier doesn't want anymore bad press, so they would be immaculate. I see them going to Horizon, Lynx, or Porter.

Bye Bye--General Lee

 

[FDJ2]

As I understand things, Delta has returned 13 mainline aircraft this year and recieved other aircraft.

Fins, I believe those aircraft were returned to the lessors pending negotiation of new leases. Delta expects to get most of them back, but only if the lease rates are right.

Overall the Delta fleet should grow by some 14 jets by the end of 2008.

That's about right. I believe DAL is also planning on receiving 9 MD-90s in the first quarter of 2009. My understanding is that DAL will be getting them for about 1/3 the price of a 737-800 and that their fuel burn is less than a 737-800.

 

[Indy319FA]

Regardless, the Be1990s are being used for EAS reasons, and people used to E135s at LEX will not go for a BE1900D when they can go elsewhere on a jet. Nope, they will use those planes on places that have limited or no service, like Cape Girardeau, Jackson, and Owensboro.

We'll just have to disagree on this one. I agree pax do not like the turboprops, used to watch people avoid brand new turboprops to get on a 35 year old jet all the time. But financial realities trump all else, and I think these realities will make DL put 1900s on routes out of CVG less than 30 min that routinely carry 15-25 people.

As far as Delta pilots wanting to fly E190s or 100 seaters, we would. You have to remember that our last negotiation involved a BK judge watching.

I understand, but after being a part of the last two major pilot strikes (NWA and Comair), and seeing what these put both striking and non striking employees through, I just don't see any of these pilot groups going through that over scope. I would love to be proven wrong on this, but I expect scope to be continually relaxed until the majority of domestic flying is outsourced.

I also don't think ASA would fly the SAS Dash 8-400s, primarily because a whole new aircraft type would be too expensive. I am sure SAS would clean the airplanes up before selling them, or just give them to Bombardier and they would do it. Bombardier doesn't want anymore bad press, so they would be immaculate. I see them going to Horizon, Lynx, or Porter.

Agreed. I would expect that any new turboprops at DL will be with regionals that already have them on the certificate.

 

[General Lee]

We'll just have to disagree on this one. I agree pax do not like the turboprops, used to watch people avoid brand new turboprops to get on a 35 year old jet all the time. But financial realities trump all else, and I think these realities will make DL put 1900s on routes out of CVG less than 30 min that routinely carry 15-25 people.



I understand, but after being a part of the last two major pilot strikes (NWA and Comair), and seeing what these put both striking and non striking employees through, I just don't see any of these pilot groups going through that over scope. I would love to be proven wrong on this, but I expect scope to be continually relaxed until the majority of domestic flying is outsourced.




Agreed. I would expect that any new turboprops at DL will be with regionals that already have them on the certificate.

Do you see any BigSky Be1900s on any current mainline routes? They fly out of BOS doing normal BE1900 routes--to Bangor, Albany, ISP, ABE, Quebec City, Frendericton, and to out of the way EAS places like Watertown, Massena, and Ogdensberg. That is what BigSky does, and I doubt you will see them on large cities from CVG. If we get any feed from Owensboro, Cape Girardeau, or Jackson (TN), then great---but the EAS is paying for most of that.

As far as the scope issue, well, time will tell. I don't see ANYONE here willing to give up 100 seaters, especially since we have the rates. We know what has happened, and had the negotiations been without a judge, I don't think it would have passed. Ohplease! and lifers like that may think we would give them up, but it would have to take another BK and judge for us to even consider that, and that is unlikely now. Also, we can buy 2 used MD90s for the price of one E190 now, and we already have the sim and mx expertise. There are 50-100 out there that are available, and they are supposedly more fuel efficient than a 738.


Bye Bye--General Lee

 

[rptrain]

Look for Delta to place turboprops on shorter routes? Those BigSky BE-1900D's are going to places we have never flown to before--like Owensboro, KY and Jackson, TN from CVG. The BOS BE1900 feed is essentially taking over Commutair and Colgan's old routes from BOS. They are not covering any previous regional or mainline flights, rather they are an experiment.

TTN, YFC, BGR, and possibly YQB were all previously DCI RJ routes.

Not saying this is the start of a trend, but to claim that no markets were downsized is not true.

 

[General Lee]

TTN, YFC, BGR, and possibly YQB were all previously DCI RJ routes.

Not saying this is the start of a trend, but to claim that no markets were downsized is not true.

YQB and YFC were experiments, and they did not work on the RJ. Trenton has never been served by any Delta Connection until they gave it a 3 month try at Comair, and it failed. There was no data to support the starting of any of those RJ routes. They should have been BE-1900 routes all along. Do you remember PBA and Business Express? They are the ones who flew to Bangor and other routes from BOS, all in props. Then we downsized after 9-11 and BK and Comair RJs were all that were left, and they failed too. So, in reality, they were BE1900 routes all along. Commutair and Colgan were the original competition, and now BigSky is taking the EAS routes as the others retreat. Please don't think Comair was the answer to everything. They were the default after 9-11 for any route that was marginal. And, a lot have not worked.

Bye Bye--General Lee

 

[~~~^~~~]

Open question to anyone here. There was a rumor going around a while back that Delta was thinking of operating the E190/195 on their certificate, is that still a possibility or has it gone by the way side??

Driver: It was a consideration, but Delta is convinced the airplane is going to have a short life before Boeing's 737 replacement makes it obsolete. The CRJ900 is a gap filler and when the replacement airplane comes, Delta will not be stuck with these old technology jets on their balance sheet.

Every airline is clamoring for a 100 to 160 seat jet with Dreamliner technology. However, Airbus is floundering and Boeing is busy. Besides, as long as the 737 is selling and making money Boeing is in no hurry to expend a bunch of cash to make their own 737 product obsolete.

GE is gearing up for engine development. Most everyone knows this airplane is coming.

There is an opening for the Canadians if they could get together with the Italians on a plastic airplane.

 

[~~~^~~~]

That's about right. I believe DAL is also planning on receiving 9 MD-90s in the first quarter of 2009. My understanding is that DAL will be getting them for about 1/3 the price of a 737-800 and that their fuel burn is less than a 737-800.

2009? I was hoping they might be in service earlier rather than later. Another smart move by Delta. It is an airframe that can beat the competition on most routes where it would be employed.

 

[~~~^~~~]

this will hold right up until Delta mgmt. comes to you guys with an offer to layoff only 300 pilots rather than 500 if you'll relax scope on the 900's again. Your pilot group will jump on the offer like a duck on a junebug. Always have.

Keep it up Making them mad helps strengthen their resolve.

DL Management sounds like they would like CRJ700/900's as a bridge airplane they can contract out while they wait for the jet they really want. But I would never expect it to have anything more than 76 seats in it. (Which actually makes it a nicer airplane & better matches the available performance anyway).

 

[rptrain]

YQB and YFC were experiments, and they did not work on the RJ. Trenton has never been served by any Delta Connection until they gave it a 3 month try at Comair, and it failed. There was no data to support the starting of any of those RJ routes. They should have been BE-1900 routes all along. Do you remember PBA and Business Express? They are the ones who flew to Bangor and other routes from BOS, all in props. Then we downsized after 9-11 and BK and Comair RJs were all that were left, and they failed too. So, in reality, they were BE1900 routes all along. Commutair and Colgan were the original competition, and now BigSky is taking the EAS routes as the others retreat. Please don't think Comair was the answer to everything. They were the default after 9-11 for any route that was marginal. And, a lot have not worked.

Bye Bye--General Lee

This is mostly true, except for the Colgan part. I don't think Big Sky took over any former Colgan routes, just Mesa and Commutair. I could be wrong.

At any rate, you can't just dismiss this flying as always having been turboprop flying in the past. If DAL started flying DC-7s from CVG-BOS would you just say that it was always a DC-7 route and that whole jet experiment just didn't work out? The point is precisely that these routes didn't "work" for jets.