Future of the Regionals - I am Calling It Here

[outerlimits]

Why do you regional guys want to keep growing? Do you enjoy working harder and getting paid half of what I do?

No the question is ,why don't you guys stand up, get some balls, and make all of us one list ?

You are the ones giving up all the flying . DAL has over 650 aircraft flown by the regionals .

 

[jynxyjericho]

Why do you regional guys want to keep growing? Do you enjoy working harder and getting paid half of what I do?

Want it keep growing? No.

I'd love it if mainline would step up to the plate on scope and hit something (or at least swing for the fences), instead of fouling it off or striking out and blaming it on the farm team (us).

 

[Homer Jay]

No the question is ,why don't you guys stand up, get some balls, and make all of us one list ?

You are the ones giving up all the flying . DAL has over 650 aircraft flown by the regionals .

We are standing up to the plate. We don't have a TA at UniCal for a reason. No amount of money is worth giving up scope. I'm telling you, things are changing for the better.

 

[jynxyjericho]

We are standing up to the plate. We don't have a TA at UniCal for a reason. No amount of money is worth giving up scope. I'm telling you, things are changing for the better.

My God I hope so. This lost decade will turn into two without the mainline guys holding scope.

 

[On Your Six]

By Kyle Peterson
(Reuters) - AMR Corp, the bankrupt parent of American Airlines, on Wednesday proposed a plan to freeze pensions covering many of its workers, retreating from an earlier proposal to terminate them and leave them to government insurers, which could result in lower payouts.
The proposal, which would avert the largest pension default in U.S. history, could move the third-largest U.S. airline a step closer to consensual deals with its major unionized work groups as its struggles to slash uncompetitive labor costs.
AMR, which filed for Chapter 11 on November 29, had been the only major airline to avoid bankruptcy in the last decade and is the only one that still has traditional, or defined benefit, pensions, the company said.
"Freezing the defined benefit pension plans would mean that employees would retain the full value of benefits accrued for service prior to the date the plan is frozen," said Jeff Brundage, AMR's senior vice president of human Resources, in a letter to employees.
"Freezing instead of terminating these plans of course would mean we will have significantly larger pension costs than contemplated in our business plan," Brundage said.
AMR has said it must cut 13,000 jobs as part of a plan to trim costs by $2 billion, including $1.25 billion in labor costs. AMR said it still must achieve the labor savings target and it would seek new capital to cover the incremental annual costs of funding frozen pensions.
AMR said in letters to employees that the pension proposal does not extend to its pilots because their plan includes provisions for a
costly lump sum payout to retiring workers that other work groups do not have.
"Given the number of pilots who are eligible to retire, the company would be at significant operational risk if we emerge from Chapter 11 with a frozen plan that allows pilots to retire with a lump sum benefit," Brundage said. AMR still wants to terminate the pilots' plan unless it can get the lump sum matter resolved.
The Allied Pilots Association did not immediately comment.



A lot of AA pilots would probably have their pension than a large RJ, don't you
think General? Also did'nt the Delta pilots give into the 76 seat RJ long before the company went 11?

Well Tankerclown, did that happen during the NWA BK? They kept their pension and still kept RJs from growing to more than 76 seats. The allowance went from a limit to 70 seats to 76 seats. Don't expect more than that at AA either. And, the PBGC doesn't have to pay for the pensions, they can continue to fight it. Looks like the head of that agency isn't in the mood to pay for the pilot pensions either. I wasn't at DL when the BK occurred, although I do know people who went through it. It really comes down to what you are willing to give up. The NWA guys gave up work rules and pay, but kept scope (although allowed Compass and a certain number of 76 seat E175s) and kept their pensions (frozen). Those guys at AA know the deal by now, many people have gone through with it and they know what to expect. And, none of the others gave up scope to 100 seaters. I don't expect AA to do that either. Pay and work rules, they probably will decline.


Godspeed!


The OYSter

 

[Golden Falcon]

I am betting the new ual contract caps the 70's and requires anything bigger to be flown under the mainline list. The new technology of the small narrowbody jets is being thrown at the 90-110 seat size. As the 50 seat rj's reach their 50k hour cycle, they will be parked and replaced with the new technology airplanes and flown by mainline pilots. As oil continues to climb, the cost savings of outsourcing the flying to older rjs will be more than offset by the fuel savings of the newer small narrow bodies. As this flying is transferred back to mainline, positions will open up and be filled mainly by regional pilots, as the military pool of pilots continues to shrink. The new higher hourly requirements for new hire regionals combined with the decline of the new pilot pool will put pressure on the regionals to increase pay to attrack pilots into the industry as they struggle to staff due to all the vacancies that are created as regionals pilots move to fill mainline vacancies from retirements and mainline expansion with the new small narrowbodies. This will increase their operating costs, further decreasing the benefits to the mainline carriers of outsourcing the flying. The regionals will be the first to feel the effects of a shrinking pilot pool. I think this will be positive for all pilots currently at the regionals as movement begins again and fos are able to upgrade as captains leave for mainline. If we get the contract we should at ual, there shouldn't be a huge paycut for most of the pilots that come over from the regionals, and it should more than make up for itself over the course of a few years, making it a positive change for most everyone in the industry.

So, my prediction is that over the next 10-15 years, there will be half as many regional flights operating, and that the regional industry will be operating efficient shorter haul turbprops for a truly regional feed to mainline. The regional airlines may offer outsourcing opportunities to mainline carriers for maintenance and gate agent functions, and perhaps even flight attendant functions, but not pilots. I hope that doesn't happen for the sake of all the mainline positions, but that will be those employee groups' individual fights against the companies. I think there is a lot more to this than wishful thinking. Outsourcing has been a huge drag on wages and quality of life, and I think the market forces and dynamics of the current industry point towards a reversing of the regional boom that has taken place the past 10 years. In my opinion this change would benefit the majority of those already at the airlines and certainly future pilot generations.

I would agree with you, one giant circle back to square one, which is where the regionals were when I was flying with them, or "commuter airlines" as they were called then

 

[On Your Six]

By Kyle Peterson
(Reuters) - AMR Corp, the bankrupt parent of American Airlines, on Wednesday proposed a plan to freeze pensions covering many of its workers, retreating from an earlier proposal to terminate them and leave them to government insurers, which could result in lower payouts.
The proposal, which would avert the largest pension default in U.S. history, could move the third-largest U.S. airline a step closer to consensual deals with its major unionized work groups as its struggles to slash uncompetitive labor costs.
AMR, which filed for Chapter 11 on November 29, had been the only major airline to avoid bankruptcy in the last decade and is the only one that still has traditional, or defined benefit, pensions, the company said.
"Freezing the defined benefit pension plans would mean that employees would retain the full value of benefits accrued for service prior to the date the plan is frozen," said Jeff Brundage, AMR's senior vice president of human Resources, in a letter to employees.
"Freezing instead of terminating these plans of course would mean we will have significantly larger pension costs than contemplated in our business plan," Brundage said.
AMR has said it must cut 13,000 jobs as part of a plan to trim costs by $2 billion, including $1.25 billion in labor costs. AMR said it still must achieve the labor savings target and it would seek new capital to cover the incremental annual costs of funding frozen pensions.
AMR said in letters to employees that the pension proposal does not extend to its pilots because their plan includes provisions for a costly lump sum payout to retiring workers that other work groups do not have.
"Given the number of pilots who are eligible to retire, the company would be at significant operational risk if we emerge from Chapter 11 with a frozen plan that allows pilots to retire with a lump sum benefit," Brundage said. AMR still wants to terminate the pilots' plan unless it can get the lump sum matter resolved.
The Allied Pilots Association did not immediately comment.



A lot of AA pilots would probably have their pension than a large RJ, don't you think General? Also did'nt the Delta pilots give into the 76 seat RJ long before the company went 11?

Where's CFIT? Oh, hey, here's what I found on a seperate thread. A memo supposedly from the APA, about voting to FREEZE the pension for the pilots, not eliminate it. AMR did want to eliminate the lump sum option, but that was deemed an item that couldn't be saved even by the APA people. A frozen pension is better than no pension, but I believe when you die you cannot give the rest of it to your kids or wife. The lump sum would have allowed that. I bet there may be some angry kids and grandkids out there now.....


Fellow pilots,

APA has repeatedly expressed strong opposition to termination of our defined-benefit pension plan, as have other interested parties, including the Unsecured Creditors’ Committee and most especially the Pension Benefit Guaranty Corporation (PBGC). The APA Board of Directors recently made the decision to support continuation of the A Plan in the form of a “hard freeze.” Your leadership has taken this and other concerns directly to senior management.

I am pleased to report that APA and management have achieved meaningful progress on the issue of our defined-benefit pension plan, which is good news for all of our pilots. In what I would describe as the first breakthrough we have achieved since bargaining resumed on Feb. 7, management has indicated they would work with APA to identify alternatives to terminating our A Plan. Management also informed the APA Negotiating Committee yesterday that they have decided to pursue a “hard freeze” of the other employee groups’ defined-benefit plans, rather than the plan terminations they had originally sought in their 1113(c) proposal.

There are some hurdles to overcome with respect to obtaining a hard freeze of our defined-benefit plan. Our plan is the only one on the AMR property that includes the option of a lump sum and our experts have concluded that attempting to preserve a lump-sum option is not achievable, in that it would lead to a termination of the A Plan. Therefore, before changes to our pension plans can be accomplished, we will need to ballot those pilots covered by Supplement B of the APA-American Airlines Collective Bargaining Agreement. An affirmative vote would pave the way to preventing an A Plan termination by agreeing to a freeze and elimination of the lump-sum option. If the pilots covered by Supplement B do not agree to a freeze, the A Plan will likely be terminated, which would also result in the elimination of the lump sum. By voting to support a freeze, thousands of pilots will preserve their earned annuity benefits by avoiding plan termination and the much lower annuities based on PBGC limitations.

Additionally, we plan to work with management to obtain funding relief from the Treasury Department and the Internal Revenue Service to help secure the frozen A Plan benefit.

In a hard freeze, each plan participant’s earned annuity benefit is permanently fixed at its dollar value at the date of the freeze. If the participant retires at or after age 60, they would receive the amount as a life annuity, adjusted for the form of annuity selected. If the participant elects to retire before their sixtieth birthday, the A Plan’s early retirement factors would apply as they do today




Godspeed!


The OYSter

 

[CFIT]

I'm right here watching.

It remains to be seen what the AA pilots will do, but, I think they will have the biggest effect to scope.

From what I can see the AA pilots will vote for or against scope before any other legacy group. Management has their opportunity for to gain the first step, I don't think they have really shown what they are up to. Plus, I really don't think they care about anything other than cost, first and fore most.

I don't think UniCal will get their contract to the masses anytime soon, and from discussions within, it appears to be going the way of USAir.

All the "tea leaves" are pointing to a strong possibility that scope will further erode, as human nature takes immediate placement. (me first)

Good luck to all!

 

[On Your Six]

I'm right here watching.

It remains to be seen what the AA pilots will do, but, I think they will have the biggest effect to scope.

From what I can see the AA pilots will vote for or against scope before any other legacy group. Management has their opportunity for to gain the first step, I don't think they have really shown what they are up to. Plus, I really don't think they care about anything other than cost, first and fore most.

I don't think UniCal will get their contract to the masses anytime soon, and from discussions within, it appears to be going the way of USAir.

All the "tea leaves" are pointing to a strong possibility that scope will further erode, as human nature takes immediate placement. (me first)

Good luck to all!

What will they do? They just won BIGTIME, the PBGC obviously told AMR they wouldn't be allowed to fully dump the pensions. So, they get a frozen pension which is better than NO pension. Good for them. They didn't give in on their pensions, and that being successful will probably mean they won't give in on major scope. They may have to give away some additional 70 or 76 seat RJs, but I don't see anything larger. Thanks to the pension dispute being resolved, that is one more hammer AMR cannot use on them. Now pay and work rules, they may decline.

Unical is still in a quagmire, but I don't see them giving in on any scope issues, they would have already had they been desperate for a payraise.



Godspeed!


The OYSter

 

[On Your Six]

I'm right here watching.

It remains to be seen what the AA pilots will do, but, I think they will have the biggest effect to scope.

From what I can see the AA pilots will vote for or against scope before any other legacy group. Management has their opportunity for to gain the first step, I don't think they have really shown what they are up to. Plus, I really don't think they care about anything other than cost, first and fore most.

I don't think UniCal will get their contract to the masses anytime soon, and from discussions within, it appears to be going the way of USAir.

All the "tea leaves" are pointing to a strong possibility that scope will further erode, as human nature takes immediate placement. (me first)

Good luck to all!

Hey CFIT,

Looks like AA's unions want binding arbitration, and since AMR went into BK with so much cash, it may be tough to ask for so much.


Unions seek arbitration with American Airlines

Unions want binding arbitration to force deal with American Airlines on cost-cutting proposal

FORT WORTH, Texas (AP) -- Labor unions at American Airlines have are seeking binding arbitration to settle negotiations over the company's cost-cutting plans.



The move would head off the chance that American could ask a bankruptcy judge to throw out its labor contracts and impose company terms on workers.

American and parent AMR Corp. filed for bankruptcy protection Nov. 29 and are seeking to cut $2 billion in annual costs, including $1.25 billion from labor through moves such as slashing 13,000 jobs.
The company has been negotiating with unions for pilots, flight attendants and ground workers since early February. Dave Bates, president of the pilots' union, said late Thursday that his group will keep negotiating with management, but a deal might not be possible.
The unions asked the National Mediation Board to offer binding arbitration to settle the standoff.

American spokesman Bruce Hicks said the company was reviewing the request and would have more comment later. Companies in bankruptcy can seek to throw out labor contracts if they first try to negotiate with unions and show that they must change labor terms to succeed. American has warned unions that time for negotiations is running out. American has 73,000 employees. It is the nation's third-largest carrier behind United Airlines and Delta Air Lines.




Godspeed!


The OYSter

 

[Draginass]

Horton is going for the whole enchilada against the American pilots. There's no negotiating going on. They've backstepped on pensions because the PBGC has put up a huge stink about Horton using pension money from last year to fund his huge $4 billion manufactured bk war chest. THAT is the ONLY reason why Horton has backtracked on throwing pensions on the taxpayer, despite the lies his minister of propaganda has spun publicly. Horton wants to be the Frank Lorenzo that actually "got it done." He's Frank ok, but still isn't going to get the "get it done" part.

Now the AA unions have filed for binding arbitration with the NMB. If approved and Horton says no, everyone goes into a 30 day cooling off period, then possibly self-help.

Horton and his minion enablers were hoping for a quick bum's rush cram-down with the unions. They've fatally miscalculated and are now in a stall and entering into a proverbial spin.

Unless there is a radical change of corporate management and culture, things do not bode well for AA.

 

[Jetjockey]

Horton is going for the whole enchilada against the American pilots. There's no negotiating going on. They've backstepped on pensions because the PBGC has put up a huge stink about Horton using pension money from last year to fund his huge $4 billion manufactured bk war chest. THAT is the ONLY reason why Horton has backtracked on throwing pensions on the taxpayer, despite the lies his minister of propaganda has spun publicly. Horton wants to be the Frank Lorenzo that actually "got it done." He's Frank ok, but still isn't going to get the "get it done" part.

Now the AA unions have filed for binding arbitration with the NMB. If approved and Horton says no, everyone goes into a 30 day cooling off period, then possibly self-help.

Horton and his minion enablers were hoping for a quick bum's rush cram-down with the unions. They've fatally miscalculated and are now in a stall and entering into a proverbial spin.

Unless there is a radical change of corporate management and culture, things do not bode well for AA.

Sounds like a Mexican stand-off. Management, labor and the government. Everyone is tired of taking it in the shorts.

 

[Draginass]

Except management has been getting rich off AA while they've been underfunding pensions and running the airline into the ground.

 

[scoreboardII]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

 

[jynxyjericho]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

You are forgetting to add, "and blame the young for their own actions and incompetence".

 

[jayme]

I kind-of like how Obama's PBGC told AA mgmt to pound sand. Does anybody still really believe all politicians are all the same?

 

[skywdriver]

The Writing's In The Sky & At The Fuel Pump:
The Regional Airline Era Is Long GoneIt makes no real difference how much labor will give in concessions. It really makes little difference how much more - if any - a major airline can be cajoled in to paying more for lift. It makes almost no difference how much slack can be won from lenders. The facts are clear:The "regional airline industry" (a misnomer) is in massive, fundamental, and permanent decline. The reason is simple and cannot be danced around any longer: the services they generally provide - leasing small units of capacity to large airlines - have a declining market need, and deteriorating market economics.It has to do mainly with changing airline operating economics. Fifty-seat jets, once highly contributive to major airline revenue streams, have been relegated to a much smaller market need than five, and ten years ago.Back in 1999, Boyd Group International cautioned its supplier clients that there was a limit to the number of small jets the airline industry could absorb, and the number in operation, on order and on option at that time far exceeded what the US industry could really operate profitably. That was not received well, but our unit forecasts for these aircraft have proven far more accurate than any others at that time, particularly those done by big chop-shop consulting firms who, on an ethical level, are in the business of competing directly with the young ladies who hang out on the corner in front of a 'Vegas casino.In 2003, we forecast an immediate glut on the market of these smaller jets. Again, that was certainly not what some lightweights in the financial industry were babbling about. "Regionals" were making money, they told us, and they had a model that major carriers should emulate. Which is as stupid as telling General Motors that its radiator supplier was profitable, so it should go into the radiator business instead of building cars. Some of the last people to listen to regarding the airline industry are these financial-house garbage can gurus who think that because they buy airline tickets occasionally, they are experts on the industry.Going forward, the US airline industry simply cannot afford to support the number of 50-seaters still in operation - regardless. The costs are going up, both in fuel and in maintenance, and therefore the number of viable mission applications are disappearing rapidly.Wake Up & Smell The Reality. It's not like rocket science or magic - the trends are there, right in the open. We saw Mesa file Chapter 11. We've had Pinnacle file Chapter 11. We have American Eagle desperately trying to convince itself that it can spin off from AMR into to some wondrous world where lots of major carriers will be hankerin' to lease-in more 37-50 seat jets. ExpressJet was acquired by SkyWest. And even SkyWest - one of the best-managed companies in US industry - has now reported losses.The facts are clear: While there will continue to be a role for small lift providers ("regional airlines"), skyrocketing fuel costs and increasing maintenance on out-of-production RJs point to continued shrinking of this sector.Yes, it's not real pleasant. But it is reality. And avoiding reality can come with a very big bill later on.

 

[cynic]

I guess you forgot that very few people are starting piloting careers these days (too expensive for many), and that there will be a shortage eventually. People are still flying more per year, but huge retirements are just a few years away. That is called eventual leverage.

I agree completely that there is a looming shortage of pilots. What you guys fail to comprehend (and I don't understand why) is that there is not necessarily a realtionship between wages and demand.

In the future there will be a demand for pilots willing to work long hours for low pay and no job security or retirement.

Wages will continue to fall.

 

[outerlimits]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

A very accurate statement .

 

[scoreboardII]

And when the RJ companies fail, they will then be used as new "cheap labor/cheap/equity" through bankruptcy laws. RJ's will be back.