Merger affect on AirTran.......

[Secret Squirrel]

General,

Under you hypothesis A combined NWA/DAL or DAL/UA will have 12-15000 pilots, 10-12 HUBS, 700-800 airplanes and almost every different type of airplane. At a certain point you lose benefits of scale. And I believe the combined company would turn into such a monster. The only way to make it profitable is to cut out the fat. I agree with you that the RJ's are a huge part of that. I wish everybody at those companies the best of luck because I have a lot of friends there, and lots at the bottom of the list. But it will be an ugly time, not because I think so, but because every time it has happened it has been ugly.

 

[~~~^~~~]

The regional carriers who dominate there. Comair, which just announced another 14 RJs being parked (why is that?)

Bye Bye--General Lee

General:

Comair is getting parked because RJ flying is unprofitable and because SkyWest, Republic Airlines Holdings and other alter ego contractors have Delta locked into contracts Delta can not break. SkyWest was getting premium rates as part of the payback on the ASA asset purchase agreement. IMHO Delta would be better served buying back ASA, so that the SkyWest tail is not wagging the dog. Of course that deal is already written, no one could make a quick buck, so there is not much interest.

This will have a disproportional effect on small jet contractors because as you well pointed out, they do most of the narrowbody domestic flying.

NWA's DC-9 fleet concerns me. It is high cost RJ flying and NWA already has some flow down deals to RJ's that I am trying to understand. Their Airbus fleet is also an unfortunate mix, since it is a less efficient airplane than a MD90. Seems like there is an opportunity for a lot of NWA pilots to be looking on the Delta property for slots and they are way more senior than the relatively young Delta pilot group.

I'm just concerned about your upgrade... not in this for me

The threat to outsource NWA flying is going to be an issue. One way mother Delta can get out of 50 seat RJ contracts is to retire and replace with BIGGER RJ's. That is how Republic got the E170's for DL, remember?

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

 

[PCL_128]

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

 

[General Lee]

General:

Comair is getting parked because RJ flying is unprofitable and because SkyWest, Republic Airlines Holdings and other alter ego contractors have Delta locked into contracts Delta can not break. SkyWest was getting premium rates as part of the payback on the ASA asset purchase agreement. IMHO Delta would be better served buying back ASA, so that the SkyWest tail is not wagging the dog. Of course that deal is already written, no one could make a quick buck, so there is not much interest.

This will have a disproportional effect on small jet contractors because as you well pointed out, they do most of the narrowbody domestic flying.

NWA's DC-9 fleet concerns me. It is high cost RJ flying and NWA already has some flow down deals to RJ's that I am trying to understand. Their Airbus fleet is also an unfortunate mix, since it is a less efficient airplane than a MD90. Seems like there is an opportunity for a lot of NWA pilots to be looking on the Delta property for slots and they are way more senior than the relatively young Delta pilot group.

I'm just concerned about your upgrade... not in this for me

The threat to outsource NWA flying is going to be an issue. One way mother Delta can get out of 50 seat RJ contracts is to retire and replace with BIGGER RJ's. That is how Republic got the E170's for DL, remember?

AirTran - don't think of the RJ's as competition. Think of them as airplanes Delta has entered into contracts to operate and which have to fly somewhere. When they run out of good ideas, I think they just copy the AirTran schedule.

According to all of the NWA guys on this board, NWA cannot just get rid of the DC9s without a replacement, according to their contract. Compass is also regulated to a certain number of planes, and cannot just replace all DC9s. The DC9s, while expensive with fuel and mx, are owned, and they are the only 100 or 110 seater they have right now. As far as getting new or larger RJs, I have no reason to believe any DL or NWA regional will get larger RJs (without a BK judge present), or will get more than the allotted (only with new additional mainline aircraft). We are getting a lot of new mainline planes this year, so they will be allowed to get more 76 seaters. (Ed Bastain doesn't appear to like them very much either, since some of those flights are being discontinued for the Winter season--SLC--BHM, etc) Those 76 seaters may "look neat", but they also take up a full gate, and use an asset while not allowing full potential of revenue--an MD88 or larger could use that same gate. Our management is slowly learning this fact.

The DC9s can be replaced right now with MD90s that are sitting all over the world, waiting to be replaced soon by new A320s (all of the China airlines we have talked to (China Northern and China Southern) have announced that, and Saudi just announced it too)--and we have the sim and means to fly and fix them, for cheap. I know our guys have been talking to those airlines (not Saudi yet though), and I know that could be an answer. They would be a good 10 year stop gap while waiting for something new.


Bye Bye--General Lee

 

[~~~^~~~]

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

Don't get running an airline confused with deal making, most of the reason SkyWest is in the picture is as a lender of last resort.

 

[PCL_128]

Ah, very true.

 

[scrub]

if you guys are so smart, why are you pilots?

 

[Secret Squirrel]

I am smart enough to know that working in the finance field takes up way too much time. I am too lazy to do anything other than flying.

 

[funnyman12]

Being a pilot is one of the most difficult and stressful jobs out there and don't forget it!! =)

 

[scarlet]

Airtran=Frontier

 

[Kharma Police]

Airtran=Frontier

Are we getting Airbuses with TVs?!?

 

[RIDETHELIGHTING]

Airtran=Frontier[/quote/]
nope, what are we going to do, go into DEN and get our a$$ spank.

 

[Lear70]

I am smart enough to know that working in the finance field takes up way too much time. I am too lazy to do anything other than flying.

I've had two successful businesses.

I agree with Squirrel... they take WAY too much time and effort.

I have *ZERO* interest in working 13-hour days, 5 days a week, including some weekends, just to make bundles of money I have no time to spend and never see my kids. I'm away from them too much as it is...

 

[jester757]

Which is exactly why the FFD deals are so ridiculous. You can't make money flying a gas-guzzling CRJ on the same routes that we fly a 717. Delta tries to match our fares, and you simply can't make money with those fares on an RJ.

BUT, DAL can fly the 88s for less than a 717 because of the stupid cheap lease rates they have on those things. Thats why DAL has approval to get nine more of the MD90s which are even more efficent and just as cheap.

 

[PCL_128]

BUT, DAL can fly the 88s for less than a 717 because of the stupid cheap lease rates they have on those things. Thats why DAL has approval to get nine more of the MD90s which are even more efficent and just as cheap.

True, but DAL seems to be in the habit of putting lots of expensive and uncomfortable RJs on the routes that they compete with us on. If they wised up and got rid of some RJs and replaced them with MD-90s, then they'd be much better off.