Section 1 – Purpose of Agreement
-Still does not bind the Holding Company except by two side letters, neither of which specifically require the AirTran Holdings to specifically honor the Agreement, but only say “Holdings will not allow Airways to breach the Scope provisions of THEIR Agreement”. Doesn’t say ANYWHERE that Holdings will be bound to the Scope provisions. Worthless letter.
-Removal of provision in 1-C-1 where the company CURRENTLY, in the event of furlough, cannot use non-seniority list pilots to perform non-revenue flying (i.e. they can use retirees currently working in the training center to move aircraft, perform maintenance flights, ferry flights, acceptance flights (new deliveries), etc, even if we have pilots on furlough).
-Removal of similar provision in Section 18 that says they must furlough training center pilots not on the Master Seniority List before they furlough line pilots. Training center retirees are now a protected class of employees.
SCOPE
-Addition of new language: The requirements of Section 1-C-1 (use of seniority list pilots for ALL company flying) do not apply for subsidiaries the Company (or the Holding company) create to fly Turboprops OR Turbojet aircraft under 86 seats. In other words, AirTran Holdings can create ‘AirTran Express’ to do ALL allowed flying in this section and not have to use AirTran pilots to do it.
-The MEC has been telling you that the company is limited to 5-8% of the block hours flown by RJ’s; that’s ONLY true IF the company has an “unavailability of aircraft or pilots” as defined in Section 1.C.2 and 1.C.2.a. If there’s no “unavailability”, that limit does not apply, and the contract SPECIFICALLY STATES THIS in the very next section, 1.C.3.
-1-C-3. Allows unlimited use of turboprops by the company at regionals (express or commuter carrier), including the 90-seat Q-400 turboprop that flies at almost 400 KTAS. Frontier Airlines pilots are enjoying zero, stagnant growth while their company has purchased Q-400’s and has placed them at a regional carrier. This aircraft is more cost-efficient to fly than any of our aircraft on 600NM and shorter segments (ref Bombardier cost analysis).
-1-C-3-a. Allows the regional we contract with to operate larger aircraft than previously allows, up to 106 seats and 114,000 pounds (with other airlines, not ours). They have to do this IF we give up Scope because the companies we would contract with are already operating 100-seat jets over 100,000 pounds (Mesa, etc). The tricky part also is that if that sub-service regional LATER gets larger aircraft, we are not required to terminate our Agreement with them. We can’t renew the contract, but it can run for its duration, and there’s no contractual “duration limit”.
-1-C-3-e. There are reductions of up to 2% of ASM’s for RJ use based on how many aircraft we operate, but we are already over 100 aircraft and that remained the same at 20% total operations, 10% of those can be 79-86 seats.
-1-C-3-e-1. Tries to say that if the company isn’t growing ASM’s, that the number of ASM’s operated by an “express carrier” is limited to 75% of the above ASM limit, but LATER goes on to say that if a contract is already in place and our growth stops, that limit will not apply. In other words, we could set all these RJ contracts in place, then stop taking 737 deliveries indefinitely, and we would not be allowed to rescind those contracts OR stop deliveries of new RJ’s to the feeder AND, what’s worse, we have NO furlough protection in the event they decide to reduce the 717 fleet. Don’t take my word for it (or the MEC’s), read it for yourself, ZERO protection in the Scope or Furlough section in this scenario.
-ASM’s – this is very ambiguous, and no one has done the math for you, so I will. The currently-flown AirTran ASM’s were obtained using the company’s last-quarter 10k statement which is public information available on Yahoo! Finance. RJ calculations made certain assumptions on average stage lengths and legs flown per day based on my last regional which is average for the industry (Pinnacle Airlines)
[FONT="]o [/FONT]AirTran Airways flew 5.21 Billion ASM’s for the 3 months ending March 31st, 2007 (5,207,132,000). Divided by 3 is 1,735,710,667 (1.7 Billion ASM’s operated per month).
[FONT="]o[/FONT] Assuming an 86-seat RJ (a 90- or 100- seat aircraft configured to 86 seats with a business class) operates 6 legs a day on an average of an 600 mile stage length (2 hours, 10 hour per day utilization). 10% of the total current AirTran ASM’s above is 173,571,067 seat miles per month. Divided by 86 seats is 2,018,268 miles each 86-seater can fly per month. Divided by 600 SM average stage length is approx 3,364 legs per month. Divided by 30 days per month is 112 legs per day. Divided by 6 is 19 of the 79-86-seat aircraft can be operated on property RIGHT NOW by feeder carriers. Doesn’t sound too bad. But do that math with all 20% as 70-seaters.
[FONT="]o [/FONT]A 70-seat RJ (a 70-seater or a 90-seater configured to 70 seats) operates the same way as the 86-seater: 6 legs per day, 600 mile average stage length. Up to 20% of the total ASM’s can be 70-seat aircraft which equals 347,142,133 seat miles per month. Divided by 70 seats is 4,959,173 miles each 70-seater can fly per month. Divided by 600 SM average stage length is approx 8,265 legs per month. Divided by 30 is 276 legs per day. Divided by 6 legs per day is a total of 46 of the 70-seat aircraft that can be operated on property RIGHT NOW by feeder carriers. That’s more than 25% of our total fleet size.
- They could put all those airplanes on contract, then completely suspend 737 deliveries. Didn’t we just defer some of our 737 deliveries and sell 2 others? If the RJ’s under contract are just as cheap to operate (or cheaper on a seat-mile basis), why would they NOT do this? The answer is that there’s nothing stopping them from just this scenario.
- So, to recap Scope in our current market environment, we’d give up Q-400 turboprops just like Frontier has and is getting hosed with, give up to 25% of our fleet to be replaced by outsourced 70-seat RJ’s, and sign for up to a 40% pay cut for 90-100 seat RJ’s to come here. Is that the future “growth” you want at AirTran?
- Lastly, the MEC will tell you that the company doesn’t really WANT any of these RJ’s and you won’t see them under this contract. When is the last time you saw a company bargain for concessions in a contract and then not use them? Is there ANY language that protects us from the company “changing their mind” after they get more financial data for these aircraft and implementing a plan similar to the above? The answer: “No, there is NO protection in this T.A. for us to continue our current growth plan.”
SMALL JET PAY 78-100 Seats
-I put this in this section simply because, to me, it’s more critical to what I believe the company has planned, which is the addition of SJ’s to replace most, if not all, of the 717 fleet as the 195 is a more cost-effective aircraft than the 717.
(See SJ pay scale in T.A.)
-EVERY SINGLE YEAR AND SEAT is less than jetBlue blended rates.
-EVERY major carrier who flies SJ’s on-property has a higher rate than our proposed rate. These, combined with the Scope giveaways (which are the worst in the major airline industry), will make us the lowest-compensated and lowest-scope major in existence for these aircraft.
