Experts predict Comair may be sold

[FlyComAirJets]

You won't see me defending Truly Stupid Delta Management Practices, look at how many we can come up with between us all. Although it may take more pursuasion than it's worth, what you might want to consider is that Comair was profitable before it ever became a Delta Connection and certainly was while it was a publically traded company. Skywest and Chautauqua operate similar equipment, currently report profits, and are public corporations. Since Comair operates the same sized aircraft, I do not see it as unreasonable for Comair and ASA to continue their long track record of profits if they were spun off.

Oh, that's right, we are all SUBSIDIZED. And Jet Blue doesn't pay for their Airbus maintenance. Now I understand what they are up against.

When it comes to wages/work rules, our costs are pretty much in-line with other DCI carriers, can you say the same about Delta's costs compared to the other legacy carriers?

NWA's profit margins might not be the best example to cite since an overwhelming proportion of their RJ seats are in the venerable Bae-146 and its other four-engined varients. It must be like trying to run a taxi service with a Land Rover, I'll take my chances with something a bit more economical.

Take care.

 

[RichO]

....ARRGGGG>>>

Oh no, I leave for a little bit and suddenly Comair is being sold.......Haven't you guys yet heard in your investments, to never pay attention to the analysts........and never buy a stock after it's been on the cover of Fortune.......

 

[FDJ2]

it's a fact that CMR posted a 4th quarter profit of @ $40 million. what we don't know is how much we cost the company. DAL does pick up the tab on a lot of things, but to what extent? you don't know any more than I do, so the argument is academic at best.

Well we do know from the latest DAL SEC filing that DAL picked up over $100M in RJ debt payments alone, and DAL will make over $500M in RJ debt payments this year. That sure does take a bite out of a $40M quarterly profit, without even beginning to look into all the other subsidies.

 

[Pez D. Spencer]

Yes, and as a matter of convenience, you forget the fact that Comair and ASA make lease payments to DCI for those planes. How 'bout commenting on FlyComairJets' post -- really, take a company that was making profits and buying airplanes, and suddenly now, that Delta owns us, we're unprofitable?? You wish. Keep the blinders on, it will make reality less harsh for you.

 

[FDJ2]

Oh, that's right, we are all SUBSIDIZED. And Jet Blue doesn't pay for their Airbus maintenance. Now I understand what they are up against.

While much of JBLU's aircraft are still under warrantee, they certainly are getting a break on mx costs. Forbes magazine wrote a large article on JBLU last year and dealt with this issue among others. The annual mx costs on each airframe are expected to increase by $1.7M once they come out of warrantee. Nothing unusual about that. As far as your subsidy, the latest DAL SEC filing has DAL paying over $100M in RJ debt payments this last quarter and DAL expects to pay over $500M in RJ debt payments this year. That's quite a subsidy for a carrier that can only squeeze out a $40M quarterly profit while having someone else pick up the tab on your aircraft debt payments, which is probably why M. Burns, DAL's CFO, wouldn't say that CMR is profitable for DAL.

 

[FDJ2]

Yes, and as a matter of convenience, you forget the fact that Comair and ASA make lease payments to DCI for those planes. How 'bout commenting on FlyComairJets' post -- really, take a company that was making profits and buying airplanes, and suddenly now, that Delta owns us, we're unprofitable?? You wish. Keep the blinders on, it will make reality less harsh for you.

How much did you pay on that lease? BTW, I didn't say you were unprofitable, I only stated that you might not be profitable for DAL, since much of your costs are paid by DAL. As far as your previous profitability goes, that is a matter of the contract you got to fly DL code passengers, not because of any revenue that you generated. Any carrier can be profitable with a lucrative contract that guarantees a profit. But than again those days were coming to an end, and when DAL refused to extend the CMR contract, CMR management knew the gig was up, and opted to be a wholly owned subsidiary rather than an independent carrier. I guess CMR management didn't think CMR could be profitable without DAL footing the bills and providing the revenue.

 

[ATR-DRIVR]

Riiiight..and ms burns is really taking one for the 'team'...oh riiiight...out of the boiling oil into the fire...I'm SURE Mirant is SOOO glad to have another "top level executive"...

 

[Palerider957]

Give me a fu%kin break.....most of our costs are paid for by DAL??? DAL "charges" us everytime we use our own ground power equipment, DAL "charges"us every time we have our planes cleaned, or use ATL radio, or have a wheel chair meet our airplane...and they "charge" us a H-U-G-E sum...FAR more than it really costs.

If RJ's weren't profitable, would they be buying then hand over fist??

GG has a plan for DAL, he just doesn't know how to break it to DALPA.

**CENSORED****CENSORED****CENSORED****CENSORED**.....let me off of this Titanic Delta ship wreck.....Please God, sell us to someone who knows how to run a buisiness.

 

[General Lee]

You soon will be, but you will still have the Delta PWA to follow---and to get other contracts---you will have to slash costs--or wages. We wouldn't vote for any plan that included more RJs---just a fact---and he knows that.

BYe BYe--General Lee

 

[surplus1]

DAL pilots can imagine being bought, which is why we have "change of control" protections written into our contract as well as "fragmentation" protections. In the event DAL were to be bought or DAL were to acquire a carrier with other than permitted aircraft integration of the transferring pilots would occur in accordance with the ALPA Merger Policy, or the Allegheny-Mohawk Labor Protection Provisions.

That's good, a nice comeback. It is also true that you could imagine a decline in the business and that is why you have a "furlough protection" clause written into your contract, right? It prevented you from being furloughed didn't it?

There's no joy in the furloughs but that's not the point. The point is that your "contract" can be changed. Any "contract" is only as good as long as both parties choose to keep it. Go ahead and hang your hat on ALPA's Merger Policy if that makes you feel good. It has alwaysworked to the benefit of the acquired carrier. You knew that right?

Tell me about the Allegheny Mohawk LPP's. Have they ever been enforced for anyone? Has any pilot group ever actually received what they say? Do you even know what they say or did you just read that in your "contract" and think it sounds nice?

Ask a TWA pilot how Allegheny/Mohawak LPP's work. Ask an Ozark pilot how ALPA Merger Policy works. Check out a few of the other glowing examples, before you crow so loudly. I think you'd better pray that merger never happens.

I think you guys would do best in a merger with AA, your personalities seem to fit each other well.

Perhaps Surplus you should of thought of these protections prior to your acquisition, but then again, you could never have imagined being acquired.

Given the success of ALPA's Merger Policy and the Allegehny Mohawk LPP track record, it may well be that the our stupidity in not having that in our contract is the best thing that ever happened to us. Otherwise you would be flying our airplanes and we would be pounding sand. Did you ever think of that?

They say the Lord protects drunks and fools; maybe He was on our side when we "forgot" that clause.

 

[surplus1]

You soon will be, but you will still have the Delta PWA to follow---and to get other contracts---you will have to slash costs--or wages. We wouldn't vote for any plan that included more RJs---just a fact---and he knows that.

General,

I really hope that nothing goes wrong that forces Delta into Chapter 11. Your group arrogance is so great that I really don't think you guys could handle what will happen to your PWA.

To paraphrase, The [higher] they are the greater the fall.

 

[General Lee]

Surplus1,

Never underestimate the Union. They won't kill the golden goose. But, with better times coming---they will compromise
with a deal that is good for the airline and the union.

If Chap 11 would happen, the PWA might be changed--but not as radically as you would think, and most analysts don't think that we will get there. But, unfortunately---Comair's future is mired with a couple different possible pot holes----the 50 seat RJ demise, and the possibility of an IPO. It will be interesting to see what happens.

Bye Bye--General Lee

 

[sleepy]

Well we do know from the latest DAL SEC filing that DAL picked up over $100M in RJ debt payments alone, and DAL will make over $500M in RJ debt payments this year. That sure does take a bite out of a $40M quarterly profit, without even beginning to look into all the other subsidies.

I don't know about Comair, but here at ASA we contract everything from DAL.

DAL operates our baggage service, for a fee.

DAL provides and maintains our GSE, for a fee.

DAL overhauls our CRJ engines, for a fee.

DAL buys RJ, then sells them to the State Street Trust (or something like that), then we lease them from the Trust. We pay a fee for that.

So, after we pay DAL for all of these services (they probably make a small profit on it too), we still make about $40 million in profit per quarter. Now imagine if we were independent corporations, and could either do these things ourselves or contract with a cheaper and better provider than DAL (why does our baggage service and GSE service in ATL suck, ask DAL, they provide it), and we could make even more money.

It is really DAL, with their sweetheart deals to provide sorry service to ASA and Comair that are dragging us down. I'll bet we could get better baggage service if we contracted with AirTran.

What an arrogant bunch you DAL pilots are. You are like the emperor in his new clothes. SWA, AirTran, JB, etc.... can all see that you are really naked, but you can't see it. You seem to think that selling ASA and Comair will somehow save your current likestyle. It might postpone the inevitable for a few more months, but something is going to give at DAL, you are going to give massive pay and work-rule concessions now, or you are going to give them in CH11. ASA and Comair have nothing whatsoever to do with this, USAir, AMR, and UAL do however.

The sooner that you come to grips with it, and stop looking to ASA and Comir as both your boogey man and savior, the better off I think you all will be.

 

[FDJ2]

NWA's profit margins might not be the best example to cite since an overwhelming proportion of their RJ seats are in the venerable Bae-146 and its other four-engined varients.

Correct me if I'm wrong, but Pinnacle flies a fleet of 70 CRJs and Mesaba flies about 70 Saabs and only about 30 Avros (four engine jets).

 

[FDJ2]

That's good, a nice comeback. It is also true that you could imagine a decline in the business and that is why you have a "furlough protection" clause written into your contract, right? It prevented you from being furloughed didn't it?B]

Surplus , once again you display your superficial understanding of the DAL PWA . DAL is not allowed to furlough due to a decline in business, or for economic reasons, that's why the furloughs were cut short and 250 pilots brought back and a recall will soon begin. The DAL furloughs were a result of a force majuere event , 9-11, which is covered in the DAL PWA as a circumstance beyond the control of the company. Had 9-11 not occurred DAL could not have furloughed 1060 DAL pilots. It was the nexus between 9-11, a force majeure event, and the cliff like drop in passenger traffic that followed that allowed DAL to initiate furloughs. Once that nexus no longer existed DAL was forced to stop furloughing and once DAL achieves certain historic RPM triggers, those furloughed pilots will be recalled due to the language contained in our PWA.

 

[FDJ2]

You are like the emperor in his new clothes. SWA, AirTran, JB, etc.... can all see that you are really naked, but you can't see it.

Sleepy, what an intersting choice of "profitable" carriers you have chosen as an exemple. Let me see SWA has no CRJs, JBLU has no CRJs and Airtran is dumping their CRJ lift, CRJs were deemed too costly. Perhaps these profitable airlines do see the naked truth about the CRJ and its high costs and low capacity. It's not a matter of if DAL will spinnoff ASA and/or CMR, it's just a matter of when and how the spin off will be structured. JMO, but I'm sure DAL will retain the small jet lift even if you are spun off.

 

[MedFlyer]

Sleepy, what an intersting choice of "profitable" carriers you have chosen as an exemple. Let me see SWA has no CRJs, JBLU has no CRJs and Airtran is dumping their CRJ lift, CRJs were deemed too costly. Perhaps these profitable airlines do see the naked truth about the CRJ and its high costs and low capacity.

You may be right, but using your logic WN, JB,FL also don't operate widebody planes. Maybe they've seen the naked truth that you can't make money filling these big beasts. Maybe DL should sell off all the 777's (not many of them anway) and all the 767's, so they can be like those profitable LCC's.

 

[General Lee]

Medflyer,

You know, as well as I do, that a lot of those widebodies are used on our INTL flights------which have no LCC competition and are profitable. Those LCCs with no RJs are doing very well domestically. Boy, you fell for that one.....

Bye Bye--General Lee

 

[Lear70]

Correct me if I'm wrong, but Pinnacle flies a fleet of 70 CRJs and Mesaba flies about 70 Saabs and only about 30 Avros (four engine jets).

Actually, PCL is up to 90 CRJ's now, 3 times the number of Bac jets over at MSA.

General, what was that about the 50-seat RJ demise? Where is that premise coming from? The 50-seat RJ has a break-even operational CASM at 40% load factor, that is, only 20 seats have to be occupied to break even, which includes all costs - fuel, lease payments, crew, mx, ground ops, etc. Many of the smaller markets that we are serving (SCE, ERI, SBN, GSO, GSP) only fill about 30-40 seats which mostly connect to international high-yield flights and makes NW enough money to not consider putting something bigger on it or by any means getting rid of the 50-seaters.

Obviously the system could benefit from 70- and 90- seat RJ's on some runs, but I'd personally rather see those aircraft flown by mainline pilots, even if it was on a B-scale, so that more RJ carrier airline pilots can move on to the majors eventually (with our size, income, and route structure I don't consider us a regional airline anymore).

So why do you think the 50-seaters are going away, or is that a DAL/CMR thing?

As far as comparing legacy carriers with LCC for RJ use, there's a REASON the LCC don't use them. At NW it would be a HUGE mistake to dump the RJ's, because our entire function is to provide feed from smaller markets for the high-yield international flights at hopefully a break-even or slightly profitable level. Most of the other legacy carriers are, as someone else posted above, working on the same premise. The LCC don't have international feed, so RJ's under 100 seats are, for most LCC operations, a bad idea due to their operational costs. THAT'S why the LCC aren't using them, not because they aren't profitable for anyone...

 

[MedFlyer]

Medflyer,

You know, as well as I do, that a lot of those widebodies are used on our INTL flights------which have no LCC competition and are profitable. Those LCCs with no RJs are doing very well domestically. Boy, you fell for that one.....

Bye Bye--General Lee

General...I was being sarcastic and just showing the fallacy in his logic.

Keep in mind, a lot of the RJ's fly to small markets with no LCC's as well.