High oil and RJs do not mix well.....

[Speedtape]

Unlikely. We actually were going to buy a bunch of MD90s at firesale prices (rumored at $9 million each including engines--half the price of a CR9). You see, not all of the CR9 flights are going to be parked, only the ones that are not profitable during this slow time. (like SLC to BHM) It will probably restart during the Summer. But, many more 50 seaters will be parked, for several reasons, top among them high fuel and 50 seaters do not mix well. Just not enough seats (like an MD90) to spread out the costs. We are still one signature away from those MD90s, and they could be acquired to possibly replace some old DC9s if we happen to merge with NWA. There are plenty of ways we could use them, and we have the FTDs and Sim for them, along with mx expertise.

Bye Bye--General Lee

What will happen when demand diminishes and you don't have enough passengers to break even on the MD88?

High fuel costs will result in a recession. A recession will result in loss of jobs. Loss of jobs will result in a loss of consumer confidence. Loss of jobs and a loss in consumer confidence will result in a loss of demand. Lower seat costs in larger airplanes will not matter because there will not be enough demand to break even in a lot of current markets. Reduced capacity is the answer. This will be accomplished by reallocation of flying to smaller capacity airplanes to meet demand. RJs will be around no matter what the cost of gasoline. In fact, the higher the cost, the more downsizing or "right sizing" will occur.

 

[General Lee]

What will happen when demand diminishes and you don't have enough passengers to break even on the MD88?

High fuel costs will result in a recession. A recession will result in loss of jobs. Loss of jobs will result in a loss of consumer confidence. Loss of jobs and a loss in consumer confidence will result in a loss of demand. Lower seat costs in larger airplanes will not matter because there will not be enough demand to break even in a lot of current markets. Reduced capacity is the answer. This will be accomplished by reallocation of flying to smaller capacity airplanes to meet demand. RJs will be around no matter what the cost of gasoline. In fact, the higher the cost, the more downsizing or "right sizing" will occur.

The key here is that high gas also affects people driving long distances. If it costs too much to drive also, then people will fly. And, most of our passengers on the INTL side are foreigners, taking advantage of the weak dollar compared to the Euro and other currencies. We are full across the Atlantic and down south, with great yields. That is what is keeping the legacies together--their INTL revenue. LCCs without fuel hedges are the ones in trouble now. And your sense of right sizing is different than most analysts and even our CFO/President Ed Bastian. Again, we were one signature away from getting more MD90s, and the merger/acquisition stuff came up. They have even cross trained our CVG MD88 guys on the MD90--something that would not have happened if we weren't going to get extra MD90s. That is a fact, and there probably will always be a need for RJs, just not as many. Look for more turboprops if gas remains high too--Colgan and their Dash-8-400s would make a good fit on many routes in ATL that RJs and old AT7s fly now.

Bye Bye--General Lee

 

[FishandFly]

General, is it true that you have 2 logins you use simultaneously? 737Pylt and GL?

 

[John Pennekamp]

What will happen when demand diminishes and you don't have enough passengers to break even on the MD88?

High fuel costs will result in a recession. A recession will result in loss of jobs. Loss of jobs will result in a loss of consumer confidence. Loss of jobs and a loss in consumer confidence will result in a loss of demand. Lower seat costs in larger airplanes will not matter because there will not be enough demand to break even in a lot of current markets. Reduced capacity is the answer. This will be accomplished by reallocation of flying to smaller capacity airplanes to meet demand. RJs will be around no matter what the cost of gasoline. In fact, the higher the cost, the more downsizing or "right sizing" will occur.

What will happen is that people will cancel their trips.

Why can't this industry learn from the past?

In the post 9/11 recession, personal travel almost ceased, and business travel greatly diminished because business found cheaper alternatives such as teleconferencing to get things done. then when the business traveler came back, he demanded high frequency, and cheap fares, hence the RJ boom. He also explored the low cost carriers. Maddogs and 737s could not be filled, so Delta and the other legacy carriers "right sized" the route (remember that term?) by downgrading to an RJ.

Expect the same to happen in this next recession. RJs aren't going anywhere, they will only get larger, and 50 seaters will be replaced.

 

[IronCityBlue]

Expect the same to happen in this next recession. RJs aren't going anywhere, they will only get larger, and 50 seaters will be replaced.

If they get larger, then by definition smaller RJ's are going away. Are the same number of RJ's going to be replaced at regional carriers with larger RJ's, or will some mainlines begin to take that flying back? Is the 70 seater, or 86/90 seaters with 76 installed, large enough to fill the gap between "mainline" and "regional" flying? Is there a market for anything inbetween? If so, who will fly it? That's the heart of this discussion IMO.

 

[John Pennekamp]

If they get larger, then by definition smaller RJ's are going away. Are the same number of RJ's going to be replaced at regional carriers with larger RJ's, or will some mainlines begin to take that flying back? Is the 70 seater, or 86/90 seaters with 76 installed, large enough to fill the gap between "mainline" and "regional" flying? Is there a market for anything inbetween? If so, who will fly it? That's the heart of this discussion IMO.

It doesn't matter. A 50 seat RJ employs the same number of pilots as a 76+ seat RJ.

The real issue is which airlines will be losing flying since the consolidation will almost certainly guarantee it. We have seen Comair undergo cuts. SkyWest Inc has an agreement with Delta (that isn't worth the paper its written on) guaranteeing them 80% of ATL connection flying.

I don't see mainline taking it back unless they manage to recapture RJ flying. Delta et. al. are not going to operate half empty narrow bodies just to keep pilots employed, regardless of what DALPA may demand. I imagine that DALPA and the other mainline groups would have to give some serious concessions to put that genie back in the bottle. Is General Lee ready to be a CRJ-900 captain? I doubt it. As i the past, pride will always get in the way. Thusly, RJs aren't going anywhere.

 

[Speedtape]

If they get larger, then by definition smaller RJ's are going away. Are the same number of RJ's going to be replaced at regional carriers with larger RJ's, or will some mainlines begin to take that flying back? Is the 70 seater, or 86/90 seaters with 76 installed, large enough to fill the gap between "mainline" and "regional" flying? Is there a market for anything inbetween? If so, who will fly it? That's the heart of this discussion IMO.[/quote

RJs and who flys them will not change. Without a doubt, seat mile cost and efficiencies 70vs50 is significant enough to make a shift. However, the number of 700/900s is restricted by scope and that will change--either with increased inventory at mainline or scope relief.

 

[Speedtape]

If they get larger, then by definition smaller RJ's are going away. Are the same number of RJ's going to be replaced at regional carriers with larger RJ's, or will some mainlines begin to take that flying back? Is the 70 seater, or 86/90 seaters with 76 installed, large enough to fill the gap between "mainline" and "regional" flying? Is there a market for anything inbetween? If so, who will fly it? That's the heart of this discussion IMO.

The Delta MEC does not want small jet pilots part of their demographics--they want to fly large airplanes with fewer issues to negotiate. Otherwise, they would be flying them today. Look for the Delta MEC to leverage scope in trade for other benefits and pay for the large jet pilots.

 

[Speedtape]

It doesn't matter. A 50 seat RJ employs the same number of pilots as a 76+ seat RJ.

The real issue is which airlines will be losing flying since the consolidation will almost certainly guarantee it. We have seen Comair undergo cuts. SkyWest Inc has an agreement with Delta (that isn't worth the paper its written on) guaranteeing them 80% of ATL connection flying.

I don't see mainline taking it back unless they manage to recapture RJ flying. Delta et. al. are not going to operate half empty narrow bodies just to keep pilots employed, regardless of what DALPA may demand. I imagine that DALPA and the other mainline groups would have to give some serious concessions to put that genie back in the bottle. Is General Lee ready to be a CRJ-900 captain? I doubt it. As i the past, pride will always get in the way. Thusly, RJs aren't going anywhere.[/quote

Differences of Opinon:

1. The Skywest agreement is a contract. Unless Delta goes back into bankruptcy(highly doubtful), it will be upheld. The contract has to be honored, even with a merger, even if Delta is not the surviving company. The 80% flying is secure.

2. If there is a reduction in DCI flying, it appears that the brunt of it will be endured by the Mesa group due their financial trouble and inability to attract new employees.

3. Although there have been cuts at Comair, their long term outlook is good. Delta will not sell them and will retain the certificate. There is a good chance, given any scope relief, that Comair, the wholly owned subsidiary, would benefit.

 

[John Pennekamp]

Differences of Opinon:

1. The Skywest agreement is a contract. Unless Delta goes back into bankruptcy(highly doubtful), it will be upheld. The contract has to be honored, even with a merger, even if Delta is not the surviving company. The 80% flying is secure.

2. If there is a reduction in DCI flying, it appears that the brunt of it will be endured by the Mesa group due their financial trouble and inability to attract new employees.

3. Although there have been cuts at Comair, their long term outlook is good. Delta will not sell them and will retain the certificate. There is a good chance, given any scope relief, that Comair, the wholly owned subsidiary, would benefit.

1. Since the only parties to the contract are SkyWest Inc and Delta, who is going to enforce it? Are you suggesting SkyWest would sue Delta to maintain it? Doubtful. Or what happens if Delta shifts the flying from ASA to SkyWest Airlines? Inc still has their 80%.

2. Agreed about Mesa, but remember, Delta has always chosen cost over quality, regardless of their lip service to the contrary. And I would submit that ASA is Delta's second worst performer from an operational standpoint, while remaining the second lowest cost option.

3. Comair. I disagree. I see Delta unloading them ASAP so as not to muddy the waters with the merger(s). They (DAL and ALPA) also don't want another can o' worms where the CMR pilots demand a seniority number. I see a buyer for Comair emerging or it being liquidated about a month before the "big merger" closes.

 

[WhatRUSmokinGL?]

Was I really wrong with my post? I don't think so. RJs are dropping like flies, and the MD90s were going to replace them. How do I know that? They have already trained our CVG based MD88 pilots on the MD90--since we were getting 9 of them this year(as stated by Anderson in his townhall meeting). They were going to replace many RJ routes out of SLC--and the CVG guys have been trained and start SLC flights next month. Supposedly the last signature required to actually get a large batch of them is now "delayed" until the merger/acquisition stuff is straightened out. Nobody else in the US flies the MD90, and the airlines that have them overseas are still getting A320s to replace them. Looks like I was either right before, or will be correct soon. Have a great day.


Bye Bye--General Lee

I've been having a great YEAR.

Great try to change the subject when you were called out and it was proven the you are only here to insult people and add angst to their lives.

So sad.

Reading GL/737 posts/rebuttals is like watching the jerry springer show. I always feel better about my own problems and simultaneously hope the people involved on the program don't or can't reproduce.

You shoot blanks, I mean have no kids right GL/737?! Or did you lose them in a divorse?

Have an Outstanding day

 

[PBRstreetgang]

The General and a keyboard don't really mix, either.

Kinda like codeine cough syrup and vodka on the rocks, wait, thats my favorite, makes F/I fun!
PBR