DL/NW Regional Geometry

[C17CHS]

Delta's CEO likes to mention at every opportunity how the proposed merger is "end-to-end" and will not result in the layoff of front-line employees. Perhaps this is the case at mainline (for a while), but what about at the regional level?

To play devil's advocate, let's say Delta and Northwest have customers in Chattanooga that want to travel to New York on May 27th. Delta has 6 regional flights that feed ATL on that date and NW has 3 flights into MEM. Why maintain the duplication? Why would they not want to eliminate some of the duplicate flights and perhaps substitute a larger aircraft on one or more of the runs, either alternating flights to ATL and MEM, or just feeding one hub?

How do you see this merger playing out at the regional level and what's the likely impact for the players involved?

 

[~~~^~~~]

Depends on:
(1) Fate of DC9's
(2) Price of Gas
(3) Your Regional's contracts. Does Delta think they can walk away, or are they stuck in year 4 of a 15 year contract?
(4) How many 50 seaters are in the fleet.

 

[TristarJS30]

The only winners of the merger are top management and shareholders. All other employees and the general public will lose out, either from reduction of flights and/or raised fares. Granted, fares need to be raised to pay for high oil prices, but when competition dies... so do lower prices. Just look at CVG.

 

[C17CHS]

Management Rewards

The only winners of the merger are top management and shareholders. All other employees and the general public will lose out, either from reduction of flights and/or raised fares. Granted, fares need to be raised to pay for high oil prices, but when competition dies... so do lower prices. Just look at CVG.

It is amazing how airline execs get so handsomely rewarded for accomplishing so little. A CNBC reporter recently claimed she added up all the airlines' profits and losses for as far back as she could get data. The result was a wash...i.e. break-even. That doesn't really make airlines sound like ideal capitalistic entities. It's interesting how other forms of mass transit are government run/funded because they operate at a loss but are deemed worth it for the public good and thus subsidized by taxpayers...mild socialism? If oil and the economy continue on their current trends maybe air transportation will end up with the same fate.

 

[~~~^~~~]

How do you see this merger playing out at the regional level and what's the likely impact for the players involved?

No public information available to analyze yet. But, Compass, Mesaba and SkyWest/ASA are well positioned to take advantage of growth opportunities presented by the re-fleeting of the DC9's and some MD88's. Other contenders are Republic/Shuttle and Comair. The future for Mesa and Expressjet is uncertain.

 

[gnx99]

Wasn't there a press conference that specifically named Mesaba and Compass as having the best "cost structure" among the new regional network? They also seem to prefer the wholly-owned's (Mesaba, Compass, Comair, any others?).

Seems like Mesaba, Compass and Comair will come out ahead.

 

[JumpersAway]

Wasn't there a press conference that specifically named Mesaba and Compass as having the best "cost structure" among the new regional network? They also seem to prefer the wholly-owned's (Mesaba, Compass, Comair, any others?).

Seems like Mesaba, Compass and Comair will come out ahead.

Compass was quoted as being the most efficient regarding cost structure. They should- no one there with more than a years worth of seniority. It's back to labor costs again.

 

[Metro752]

Could I get the telephony, and telemetry as well?

 

[JECKEL]

Comair is currently positioning itself to hire and train 400 new pilots by the end of the year.
I would guess that some growth at Comair would have to accompany this hiring.

 

[Turtlesfly]

you used the word "geometry" so eleoquently and naturally I vote you for the grammar police of FI!!!

 

[atlcrjdriver]

When the merger is complete the 50 seat fleet will continue to shrink. Expect to see the DC9 and mad dog to backfill its routes.

 

[wmuflyguy]

Comair is currently positioning itself to hire and train 400 new pilots by the end of the year.
I would guess that some growth at Comair would have to accompany this hiring.

I wouldn't call it growth...more like reducing the losses that we have had.

 

[Jmoney]

High....

When the merger is complete the 50 seat fleet will continue to shrink. Expect to see the DC9 and mad dog to backfill its routes.

You must be completely HIGH!

-Who the hell would sustitute a DC-9 for an RJ? Even a 50-seater is WAY more fuel-efficient! The DC-9 has a greater fuel burn than a freaking 757-and carries like 85 pax! You are talking about NWA DC-9s, I assume, with the old engines? You are defintely on something, sir!

-Have any more of that weed? Pass it over to General Lee....

 

[atlcrjdriver]

I enjoy flying the CR2 but when you think for a minute it makes since. Why send 2 a/c and crews when 1 will do the job. This will happen especially on NW/DL routes that overlap.

I am not saying the 50 seaters will completely go away but it will continue to shrink.

 

[johnsonrod]

You must be completely HIGH!

-Who the hell would sustitute a DC-9 for an RJ? Even a 50-seater is WAY more fuel-efficient! The DC-9 has a greater fuel burn than a freaking 757-and carries like 85 pax! You are talking about NWA DC-9s, I assume, with the old engines? You are defintely on something, sir!

-Have any more of that weed? Pass it over to General Lee....

Are you including financing costs in your calculations? The DC9s are paid for.

Sure, they are expensive but they can take up some of the capacity left behind after the 50 seaters are withdrawn - you just operate few flights. The breakeven load factor on a 50 seater must be in the 48-seat range at the very least at these fuel prices. You just can't make much money (profit) with 50 seaters anymore - at least the Diesel 9 has more seats to spread the operating (not financing) costs over... Nothing is going to be fuel efficient if fuel prices continue to rise.