Mesaba getting 15 more CRJ's out of ATL

[777forever]

The planes that ASA was holding out hope ARE going to Mesaba FOR NOW. There were some emotional people in the GO when the word was passed down. Delta doesn't have to honor the 80% number right now since we did not meet the second lowest cost for the three year mark. Word is that ASA will likely meet the goal for the five year mark. Then there will be wailing and gnashing of teeth when these other guys lose their planes to SkyWest Inc.

Do you work in the GO? If the 80% is indeed out the window then we're in trouble. I have not heard anything besides your post that the 80% is no longer valid.

 

[Tarzan]

Tarzan,

Correct me if I'm wrong, but I thought the 80% was a hard number? There were rumors that SkyWest Inc. was giving Delta relief on that 80%, but if what you're saying is true, then Delta allocated those aircraft based on the DCI agreement not being met? Does that make sense?

Trojan

The 80% number is based on second lowest cost. We did get the growth aircraft as the purchase contract specified but the majority went to SkyWest Airlines. I asked Brad about the relief as well. He wouldn't comment about it. ASA needs some relief for some of those provisions since we have a senior pilot group, higher MX costs, less AC to spread the cost over, and AC leaving without a backfill.

If SkyWest Inc has granted some relief, there must be something in it for SW. However, I have it on good authority that when the 900's going to Mesaba were announced, there were some emotional folks as in very angry.

 

[Tarzan]

Do you work in the GO? If the 80% is indeed out the window then we're in trouble. I have not heard anything besides your post that the 80% is no longer valid.

No, I don't don't but I've done enough stuff around there to somewhat understand the in's and out's of the contract with DL. My understanding of it is there are two marks ASA must met for the 80% number to be maintained. One happened on the three year mark, the other happens at the five year mark. Our metrics were pretty out of whack compared to other companies. Unless DL gave some relief, they do not have to abide by the 80% number unless we are the second lowest cost carrier at these marks. SH seems to believe we are on our way to making it for the five year mark. SH is not a liar regarless what guys here like to spout but he is an overly optimistic guy.

My prediction: Post contract guys may be gone. Concessions or PBS will be offerred.

 

[79%N1]

So the question begs again.....If ASA was to have to trade 2 50's for 1 90 (and declined), does Mesaba have to make the same deal? If not, why?

 

[777forever]

So the question begs again.....If ASA was to have to trade 2 50's for 1 90 (and declined), does Mesaba have to make the same deal? If not, why?

No, because their operating costs are less. The only way to get ASA to have the same 900 operating cost as Mesaba would be to get rid of 2 50s for every 900.

 

[callowayhd]

i heard pinnacle is buying mesaba

 

[blesko]

No, because their operating costs are less. The only way to get ASA to have the same 900 operating cost as Mesaba would be to get rid of 2 50s for every 900.

Isnt mesaba scoped out at the number of 90's they use?

 

[McNugent]

No, because their operating costs are less. The only way to get ASA to have the same 900 operating cost as Mesaba would be to get rid of 2 50s for every 900.

Shrinkage raises your costs. I don't know how having a net decrease in airplanes makes us more cost effective.

Hang on, this will get interesting. I'm getting my winter jacket ready, because I think we might get spread around the Delta/NWA system once the dust settles. MSP anyone?

 

[SiuDude]

Shrinkage raises your costs. I don't know how having a net decrease in airplanes makes us more cost effective.

Hang on, this will get interesting. I'm getting my winter jacket ready, because I think we might get spread around the Delta/NWA system once the dust settles. MSP anyone?

I knew where that link was taking me before I ever clicked on it, not that there's anything wrong with it.

 

[79%N1]

No, because their operating costs are less. The only way to get ASA to have the same 900 operating cost as Mesaba would be to get rid of 2 50s for every 900.

I don't buy that at all. Either Delta wants to eliminate 50's or they don't. If they were trading out 50's for 90's at ASA to reduce the number of 50's, then Mesaba should have had to accept the same deal. Me thinks ASA will be losing the 50's anyway, while not receiving any 90's at all. Like I said......Comair and ASA out......Pinnacle and Mesaba in.

 

[Seaknight1]

As far as ASA's 2nd lowest clause, the way I read it is that if there is an RFP, and you get outbid, you have second chance of rebidding as to beat the lowest bidder. That's almost economic suicide for high cost carriers like ASA and Comair.

Well none of this flying is being bid. Delta is making the decision as to who gets what and where to fly it. So in reallity that clause has no merit for the current situation at the new Delta.

 

[RJLoser]

These 15 are the freedom a/c. Not new aircraft.

 

[Seaknight1]

These 15 are the freedom a/c. Not new aircraft.

No, 7 are from Freedom, the remaining 8 are coming from Bombardier. 7 were to go to Freedom and 1 that was suppossed to go to Comair.

 

[sweptback]

No, 7 are from Freedom, anf the remaining 8 are coming from Bombardier. 7 were to go to Freedom and 1 that was suppossed to go to Comair.

They were the remainder of the Freedom orders.

 

[sweptback]

As far as ASA's 2nd lowest clause, the way I read it is that if there is an RFP, and you get outbid, you have second chance of rebidding as to beat the lowest bidder. That's almost economic suicide for high cost carriers like ASA and Comair.

It's not economic suicide. It just means that SkyWest has to accept lower profit margins. They have indicated in the past that they are not willing to do so... however times have changed and we don't want to end up as ExpressJet did. They waited too long to renegotiate their deal, and when they finally realized they had to, they had no leverage.

Long term, the fee-per-departure model is just not that lucrative. When there's 10 or 12 bidders all competing for the same job, where do you think the price is going to go? The mainline partners dictate the terms and the FFD carriers either agree or go out of business.

Well none of this flying is being bid. Delta is making the decision as to who gets what and where to fly it. So in reallity that clause has no merit for the current situation at the new Delta.

That's one way of looking at it. However, SkyWest has smart lawyers and I'm sure they are on top of the language in their contract. It very well may get ugly.

 

[Seaknight1]

It's not economic suicide. It just means that SkyWest has to accept lower profit margins. They have indicated in the past that they are not willing to do so... however times have changed and we don't want to end up as ExpressJet did. They waited too long to renegotiate their deal, and when they finally realized they had to, they had no leverage.

Long term, the fee-per-departure model is just not that lucrative. When there's 10 or 12 bidders all competing for the same job, where do you think the price is going to go? The mainline partners dictate the terms and the FFD carriers either agree or go out of business.

That's one way of looking at it. However, SkyWest has smart lawyers and I'm sure they are on top of the language in their contract. It very well may get ugly.

I know ALPA has something big in the works for FFD cariers, but I don't think they'll be able to pull it together soon enough to help. Now Delta's going to have to renegotiate with the contract carriers, since they are going to begin making the contract carriers pay for their own fuel expenses. Profit margins won't be the same at the regionals

 

[Cpt Oveur]

ASA needs to get their costs in line with the competition or they won't be around soon. One way or the other, ASA needs to be more competitive.

Is anyone else sick of hearing these "pat on the back" messages from management and not getting anything in return. More people need to call/write/e-mail/ask face to face to BH "if our performance is this good, why aren't we seeing growth?"

 

[SplitBar]

Even if Skywest could become cheaper than Mesaba, Delta still ends up paying a "middle-man" fee with them. Since XJ is wholly owned and 100% of the profits flow up to Delta makes, it all the harder to compete with. With the 900 being a profitable a/c, Delta is better off having wholly owned regionals fly them. Why pay a middle man fee?

 

[blesko]

ASA needs to get their costs in line with the competition or they won't be around soon. One way or the other, ASA needs to be more competitive.

Is anyone else sick of hearing these "pat on the back" messages from management and not getting anything in return. More people need to call/write/e-mail/ask face to face to BH "if our performance is this good, why aren't we seeing growth?"

Yeah, doesnt to much for securing our future, guess we're just hoping for mesa to die....

 

[Smarta$$]

Even if Skywest could become cheaper than Mesaba, Delta still ends up paying a "middle-man" fee with them. Since XJ is wholly owned and 100% of the profits flow up to Delta makes, it all the harder to compete with. With the 900 being a profitable a/c, Delta is better off having wholly owned regionals fly them. Why pay a middle man fee?

This has always been true for any wholly owned, yet that has still never become the total model of choice. And it still will not be.