NWA thinking of terminating ASA w/ XJ and 9E

OMG7778

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There have been a ot of rumblings floating around the crew room about NWA terminating our ASA and opening our flying up for open bid by other regional carriers. Has anything heard anything about this? I dont have anything to back this up just curious.
 

meatwallet

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It seems that expanding the regional portfolio is the latest trend, after of course pay cuts, lost pensions, fuloughs...
 

Detroitpilot22

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another classic move if it happens, you cant get any cheaper than having 9e operate for you.
 

Lear70

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Highly unlikely. Especially when NWA can "negotiate" just about whatever it wants in a new ASA between both carriers.

That's nearly the entire point of Ch. 11 for the airlines - EVERY contract can be negotiated at lower rates AND the contractors in question (everyone from XJ and 9e all the way down to the pretzel and soda vendors) are REQUIRED to keep working and supplying the airline, even though the airline isn't required to pay them what they're owed.

Additionally, it really doesn't matter how "cheap" XJ or 9e is to operate, as NW isn't paying for the operations of either carrier, only a fee per departure and guaranteed fuel costs and aircraft lease rates.

That's why I expect pretty drastic cuts in the ASA (Air Service Agreements) with both carriers, plus allowing other carriers (such as Mesa, Air Whiskey, etc) to bid for future flying at NWA, including future 50 seat deliveries already ordered with Bombardier (if they don't renegotiate that, too). They can do all that when Scope goes out the window and thereby the redtail restrictions.
 

superjet

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Oh Oh Here comes Skywest

I know Skywest wants to get a 3rd carrier under contract for more diversity.
 

ImbracableCrunk

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superjet said:
I know Skywest wants to get a 3rd carrier under contract for more diversity.
. . . and Mesa and Chautauquackie and Whiskey and and and . . . .
 

PCL_128

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superjet said:
I know Skywest wants to get a 3rd carrier under contract for more diversity.
Maybe so, but it would be impossible for Skywest to underbid 9E for the flying. Our block-hour costs are roughly $300-400 less than Skywest's. The closest competitor would be Mesa, and their block-hour costs are still about $200 more than ours. Northwest will most likely renegotiate our ASA as Lear70 suggested, but that will just reduce our profit margins. Northwest would have to actually spend more money to get someone other than Pinnacle to do their 50-seat flying.
 

CurlyD777

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They're not terminating XJ and 9E's ASA...

read from :
[FONT=TimesNewRoman,Bold]Docket 664[/FONT][FONT=TimesNewRoman,Bold]


NORTHWEST’S APPLICATION TO​

REJECT COLLECTIVE BARGAINING
AGREEMENTS PURSUANT TO 11 U.S.C. § 1113


Paragraph : F. Proposal to the Unions, (3), (ii)



[/FONT]


Restrictions on Use of Regional Jets: The ALPA CBA severely restricts Northwest’s ability to use smaller regional jets with its regional partners, including Mesaba and Pinnacle, putting Northwest at a severe disadvantage to LCCs and other Legacy Carriers.​
For example, subject to certain limited exceptions, the ALPA CBA prevents Northwest from having its regional partners fly aircraft larger than 55 seats. In addition, the ALPA CBA caps the number of 50-seat jets that Northwest can use at its regional partners to a current maximum of 104, subject to certain adjustments depending on the size of its mainline fleet. Northwest’s traditional competitors no longer have these restrictions and have been using large numbers of regional jets at their commuter partners in an effort to offset the cost advantages of the LCCs. For example, American, United, Continental, and Delta have no restrictions on the number of 50-seat jets that they can use at their regional partners and their regional partners are allowed to use a significant number of 70-seat jets. US Airways has very broad ability to use both 50 and 70-seat jets at regional partners (as well as larger planes). In contrast, as noted above, Northwest’s ability to do the same with its regional partners is greatly hindered by the restrictive scope clause in the ALPA CBA. Northwest’s proposal would, among other things, eliminate these inefficient restrictions on its use of regional partners. Furthermore, Northwest proposes to establish a separate new feeder carrier that would operate aircraft of up to 100 seats. There would be no numerical or use restrictions on Newco aircraft. These changes will allow Northwest to better compete in the industry through efficient utilization of aircraft and resources. (iii) Restrictions on Code-Sharing and Alliances: The ALPA CBA also contains restrictions on Northwest’s ability to generate revenue by means of code-sharing and marketing alliances with other air carriers. Allowing other carriers to share Northwest’s “NW” designator code for reservations and ticketing permits Northwest to have a presence in, and the benefit of connecting traffic to its flights from, markets in which actual flight operations by Northwest are not economic. Removal or narrowing of such restrictions has become the norm for carriers in bankruptcy and is necessary for Northwest to compete effectively.


Both XJ and NWA have a website full of stuff for us who can't find anything to do but read boring documents...

www.nwa-restructuring.com
www.mesaba-restructuring.com

(it's on the legal info. tab)



 
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No matter what Northwest says, it is still a poker/chess game. I think they intentionally spread rumors, and it is impossible to know what will happen next. I learned this a few years ago when I realized most airlines don't operate based on logic. They operate based on emotion and politics. Northwest managment has not openly expressed an interest in messa/chq/skywest. But, they have expressed interest in a third party regional which I probably shouldn't name because it is just upper managment speculation.
 
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