Orenstein and US Airways

[Bluestreak]

Re: Ummm

When people go out and buy a car, they usually do not plunk down cash for the entire purchase price. Yes some do, but most do not.

The same works for airlines. Airways, in fact nobody, plunks down a few billion dollars cash for airplanes. They are almost always either leased or financed. If Airways can show a leasing or finance company a good business plan involving the integration of RJs and can provide reasonable assurances that payments will be made, they can probably get the airplanes. They don't need the cash.

Hey,let's crunch some numbers for fun,whatsay ? What kind of terms can you get on a $20 million RJ,anyway ? To buy/lease 15,that's $300 miliion-a million here,a million there-pretty soon,you're talking some real money ! Airway's first order of business is to put a viable business plan in front of the ATSB.If your stuff isn't together,you'll get sent packing empty-handed ala Vanguard.Pretend I'm the ATSB and answer these questions for me:
1.I see you need funds to start another airline-you already have a mainline and 3 wholly-owneds-why is it necessary to start ANOTHER airline ? You would have now 5 training departments,5 mx departments,5 dispatch offices-that's quite an infrastructure to support-why is this necessary ? You can't manage the ones you own now properly,why will this be different ? I see your pay rates are twice ($55/hr) the industry average-hasn't U had a problem with high labor costs ?

2.Give me one good reason why PDT/ALG/PSA do not have jets right now.Did the w/o pilots not want jets? No.Did mgt. not want you to have jets ? No.They have been asking for them for years.Did your pax prefer t-props ? No.Do you only fly short trips ? No,actually you go places like CLT-TLH on Dash 8s.Other airlines fly jets painted in your colors,yet you do not- tell me why this is so?

3.Being that your poor performance as airline managers is your reason for applying to the ATSB in the first place (and yes,we are aware you were losing money before 9-11),why should we entrust you with a BILLION dollars of taxpayer money?

 

[FR8mastr]

pooh marks, I think that is a great idea on reorganizing this mess! I don't know if you can convince some of the senior U guys that they should be on the same list as one of our unqualified prop pilots. Another problem is that your idea is well thought out and logical. Managment usually wants nothing to do with any of that. But seriously, it is a good plan.

 

[surplus1]

My solution (which is open to criticism, debate, and correction):
1. Merge the 3 WOs, with an integrated list
2. Create MidAtlantic, with ML pilots at the top of the seniority list.
3. Merge 3 WOs with MidAtlantic, putting WO pilots behind the ML guys
4. Now you have one airline, MidAtlantic, with 2000+ pilots, with flow-thru to ML
5. Acquire their projected 200-400 RJs, with provision that every Dash or Dornier parked must be replaced with an RJ.

One airline, one President, one training department, one scheduling dept, etc.

Why wouldn't this work? Somebody please show me the error in my thinking. Maybe I'm an idiot, but it kind of makes sense to me.

You're thinking, which is exactly what ALPA and the UMEC have NOT been doing. You're not an idiot, but you left a few holes. Here are some suggestions/ideas/modifications to your plan for your consideration.

1) What does the Company want? a) 300 RJs b) $595 million concessions from the pilots; c) flexibility to right size equipment; d) ability to control costs.

2) What do the pilots need? a) Recall of all furloughed USAG pilots; b) a single seniority list permiting access to all USAG flying by ALL USAG pilots on that list; c}stop to further subcontracting; d) No more Alter Egos.

So lets see if we can put that together. We start with your plan and expand a bit.

[Note to self: There are 4 wholly owneds. One of them is a major. 3 of them are regionals. Potomac/MAA has to go.]

1) Merge the 3 WOs, with an integrated list. Yes. Get together yourselves, before you propose anything. Merge your 3 lists by DOH strictly (bite whatever bullet that causes) but do it NOW.

2. Create MidAtlantic, with ML pilots at the top of the seniority list. NO! Eliminate MidAtlantic from the equation. A new Alter Ego is unnecessary and clouds the issues. It has to go. If you don't get rid of it before it starts it will haunt all of you for a long time. Don't give them another NYAir.

Replace your #2 with this: 2) Chose one (1) contract from the 3 that you now have. It will apply hereafter to all 3 regionals. You'll need to modify Section 1 when this agreement is inked.

3. Merge 3 WOs with MidAtlantic, putting WO pilots behind the ML guys NO. MAA has to go (see #2 above) Replace your #3 with this:

3) Merge ALG/PDT/PSA. (Lets name it NEW for now to make it easy) Use list from #1 and contract you picked from #2. Note: It is not necessary to literally merge the corporations. It can be a virtual merger. The single list and single contract is what's important. An actual merger is acceptable too. What we "give" the company with the virtual merger is flexibility. When your MECs meet to do the single list and pick the one contract, elect new Officers for NEW. [When the Company agrees, they take office]

You now have two airlines owned by USAG. One major + one regional. NEW + AAA. You can get all of this done internally without the Company. It will be ready when they agree to the concept.

New #4. 4) Get the NEW MEC with the AAA MEC. [AAA pilots: You need to tell your MEC to hang up the egos, get with the program and talk turkey. Its time to stop working against each other and work together. If you don't work together, ALPA will be in more trouble than it can handle over LOA-81. Can that and get real.]


Merge the AAA + NEW seniority lists. Create a Single System List. Like this:

a. The NEW list is stapled to the bottom of the AAA list. The most senior NEW pilot is now 1# junior to the most junior AAA pilot. (Include all furloughed pilots from both AAA and NEW) Call this new list the USAG Combined System Seniority List (or any name you like better, but name it.)

b. No system flush, i.e., No AAA pilot may displace any NEW pilot from his current position (seat/equipment). No NEW pilot may displace any AAA pilot from his current position. For furloughed pilots current position = last bid held by that pilot.

c. Except for filling of vacancies and pay NEW pilots retain their longevity on the USAG Combined List, e.g., pass priviliges, etc..

d. All pilots on the USAG Combined List may bid any vacancy at AAA or NEW in accordance with USAG seniority. No restrictions, no fences.

Delete your # 4 and your #5. Replace as follows:

4) Do NOT merge the AAA with NEW corporations. Do NOT attempt to merge the AAA and NEW contracts. You have 2 airlines and 2 separate contracts.

Note: This gives the Company the future cost control that they need. Technically it is not a B scale. B scales apply to "same equipment". You don't and will not have that. What you have now is similar to the old Metro Jet arrangment. Not the same but similar.

5) When a AAA pilot is awarded a vacancy at NEW he will work and be paid under the provisions of the NEW contract. He will retain his longevity (earned at AAA) for pay purposes. He will retain retirement benefits accrued at AAA and will begin to earn retirement benefits at NEW.

When a NEW pilot is awarded a vacancy at AAA he will work under the provisions of the AAA contract. A NEW pilot transitioning to AAA will NOT retain his NEW longevity for pay. He will begin at 2nd year pay (no probationary pay unless of course he was on probation) and accrue longevity at AAA thereafter. He will retain retirement benefits earned at NEW and will begin to earn retirement benefits at AAA.

6) Remove the Scope restriction that apply to Regional Jets from the AAA contract. Give the company the 300 RJs that it wants. Except for a - h below, impose no restrictions on how those RJs may be used,

a. The seventy (70) regional jets currently operated at USAG subcontractors may continue to operate at those subcontractors in accordance with their current contracts. NO additional RJs will be placed at any subcontractor. When existing code-share contracts expire, they will NOT be renewed. When a subcontractor agreement expires, if the Company still needs that flying, it will be added to NEW.

b. After the signing of this agreement, the Company will not enter into any new subcontracting agreements with domestic air carriers.

c. All additional RJs (230) added to the fleet will be operated exclusively by NEW and flown by pilots on the USAG Combined System Seniority List. Vacancies will be awarded in accordance with USAG seniority.

d. Should the Company acquire any air carrier operating regional jets, it will be merged with NEW per the terms of the NEW contract and the pilots will be placed on the USAG seniority list.

e. If the Company acquires another major airline, it will be merged with AAA and seniority integrated with the USAG Combined System Seniority List per the terms of the AAA contract.

f. If USAG is acquired by another air carrier it will merge AAA & NEW with that carrier and integrate seniority using the USAG seniority list.

g. When a NEW turboprop is retired it will be replaced by a newly acquired regional jet at not less than a 1:1 basis. Additional regional jets may be acquired at the Company's discretion until a total of 300 RJs are being operated at NEW. Regional jets will not be added to the AAA fleet. Mainline aircraft will not be transferred to the NEW fleet.

h. For the purpose of this Agreement, aircraft with 70-seats or less are classified as regional jets. Aircraft with 71-seats or more are classified as mainline jets.

Note: Since all AAA pilots on the USAG list are senior to ALL NEW pilots on the list, this means that furloughed AAA pilots, (who chose to bid) will have first crack at all new RJ seats, including Captain vacancies, created at NEW. This will continue to be the case until all AAA furloughed pilots have been recalled. Since 10 pilots are normally required to crew one RJ, the first 100 RJ vacancies will go to furloughed AAA pilots. Thereafter, NEW pilots will be awarded the remaining vacancies as they occur. [This allows the AAA MEC to protect its furloughed pilots and should also handle the ego problems.]

This eliminates all conflict of interest between USAG pilot groups. It phases out all subcontracting, but does not cause any current subcontracting pilot to lose his job. It eliminates J4J protocol. It solves future Scope problems (for the Company and the pilots) and restores Scope to its original purpose and intent, i.e., all USAG flying (without exception) is conducted by pilots on the USAG seniority list, It gives the Company all the RJs that they want, it provides them with total flexibility in their operation, it provides for cost control via separate contracts. Even ALPA eventually winds up with one MEC and 2 contracts instead of 4 MECs and 4 contracts. Everybody gets what he wants and noone gets hurt of forced out of his job. Its a win/win deal.

The one remaining item is the $595 million in concessions that the Company wants. You are really in the drivers seat for the Company NEEDS this deal. Don't kill your company but get what you need too. You are in a very strong negotiating position if you and the AAA pilots can agree to work as one. If the pilots want this deal, it is doable. You may not get another chance. If the company wants all those new RJs plus concessions, then they have to pay the price of a sensible agreement for the pilots. Its a quid pro quo.

None of the basics cost the pilots any money or the Company any money. Its all a paper exercise until we come to the concessions. That part is whatever you work out.

Obviously this is just a concept. Details have to be refined, but it is not complicated. Its not rocket science, but I think it could solve a lot of problems for everyone.

Since I wrote it, I like it. What do you think?

Best wishes,
Surplus1
CMR

 

[surplus1]

One more PS note to all. While I like what I proposed and believe it is doable, I do NOT believe it will happen.

The ALPA and the USAir MEC will continue to negotiate independently as if the other USAir Group carriers did not exits. They don't care what harm they do to them and they will not attempt to correct LOA-81.

I predict they will offer major considerations with no consideration for the wholly owned and thus give away the leverage that they have to get a really good agreement for all. It is what they have always done and they will do it again.

Therefore, my post is actually a waste of time. But I still enjoy pointing out some of the possibilities even though I realize it is useless. The brotherhood of ALPA is fiction.

 

[JetProp]

Surplus 1,
Good job. It makes sense, seems like a good compromise to benefit many, and could stop a lot of the "us against them" attitude. I've grown weary of the division in this corporation that it is getting us no-where fast.
Regards

 

[Pooh Marks]

Surplus1,

If I ever get drafted into the NFL, will you be my agent and structure my contract?

Seriously, that post made way too much sense! Nice job!
Are those at upper management USAG trying to run this airline, or run it into the ground? Are they trying to make money by sound business planning or just trying to sell it?
I can't figure out this company, ALPA, or airline industry for that matter.

Hopefully we at USAG can come to some sort of long-term plan and agreement instead of the band-aid type fixes that I have seen here over my 4 years.

Has USAG always been reactive instead of proactive?

 

[BoredToDeath]

The thing that frustrates me most of all is that most ALG/PDT/PSA pilots are silent and don't seem to realize what ALPA and the USAir MEC are really doing to them.

Surplus,

We're not all silent, just frustrated. Our (PSA)own MECs appear to be no better than ML. In light of recent events I truly belive that the pilots in this company have no voice.


I dig your ideas in the above post but I think the pilots are just along for the ride. Time will tell.

IP,

In regards to your previous post about people blaming the contract carriers for the problems in our own back yard, I would'nt say that we blame you persay, but I would say that we're not happy about the fact that contract carriers fly routes that WO pilots should be flying but don't because contract carriers do it for less. In turn by doing this you are lowering that standard of pay that pilot groups should be able to seek in future contract negotiations. And now that WO pilots are being faced with furloughs while you continue to fly is a problem.

I don't know you from a hill of beans, and your probably just a working stiff like me, but I'm on one side of the fence and your on the other, and from this side of the fence I can tell you that I get sick to my stomach everytime I see another airline flying under U colors.

Now I know that ML pilots could say the same thing to us WO that I just said to you, so whos right? I don't know. The fact is with this companys route structure they, the ML, need express carriers, but it should be all done under one roof. Contracting needs to go away.

 

[Beantown]

Surplus1, nice job. Unfortunately, you are right it will never happen for these two reasons,

1. The one thing U needs the most right know is to cut all costs. By creating one large WO (NEW), you are taking away the whipsaw. MGMT uses the whipsaw to keep regional costs to a minimum. The way you have structured the deal, NEW would have to much power in the future and leave MGMT no way out. The Comair strike has taught most CEO's that you need not have all your egg's in one basket. (In Comair's case, all the flying in CVG). That is why you see Delta spreading the flying around. Same with United and with NW (Mesaba vs. AirLink), ect. Even American has resisted giving all the TWA express flying to Eagle. I know this sucks but it is the way it is.

2. The fact is the contract carriers can and will do it cheaper. U is two weeks from chapter 11 and they will be trying to cut every corner to keep the costs down. I think that the POT deal is only to get the mainline boys in the game. I think that they will get the first 70 or so but I will be very surprised if they get anymore. I think the majority of the rest of the 230 (assuming that they get the 300 rj's as part of the restructuring deal) will go to contract carriers, many of whom already have options that can be exorcized much faster then POT could get RJ's up and flying. U need RJ's in the air yesterday. If you read between the lines on all the talks about rj's, they have always said that they will put AS MANY rj's as they can at POT. That could be three hundred or it could be one. I think it will be on the low side. But who the hell am I anyway.

I know this is not what most want to see happen (for the most part me neither) but it is what I would do if I were Segal. It sucks but it makes business sense and after all, this is business.

These are just my personal opinions and are backed up by almost no facts or inside info. thanks,
-Bean

 

[Tim47SIP]

Boaredtodeath

"We're not all silent, just frustrated. Our (PSA)own MECs appear to be no better than ML. In light of recent events I truly belive that the pilots in this company have no voice. "

Why do you thing this is so?? I'll bet I know. ALPA controlling it's interests. If you try to negotiate on your own, ALPA will put your MEC into receivership. Remember ALPA'S motto - One for one and all for one! Good luck to you guys, your going to need it!

 

[surplus1]

Surplus,

We're not all silent, just frustrated. Our (PSA)own MECs appear to be no better than ML. In light of recent events I truly belive that the pilots in this company have no voice.

I dig your ideas in the above post but I think the pilots are just along for the ride. Time will tell.

Thanks for the thumbs up on the concept. In my follow-up post I predicted the UMEC would give away the marbles before anything good could happen and sell you (and themselves) out again. From what I've read since posting that, they already have.

I also read that your MEC has cut some sort of a deal to accept J4J. If that's true, you're right. They drank the Kool Aid again.

I hate to say it, but regional pilots contribute much to their own dilema. Good Pavlov candidates salivating over placebos.

I'm sure glad I don't have to suffer from it, but I still hate to see it happen.