Ornstein letter to UA VP of Operations- Mesa guys seen this?

[ualdriver]

Seems like Johnnie O. is concerned about attrition, especially in the "P.S." part. Is it really that much worse on the UA side then in the other parts of the Mesa operation?

Sorry for the long post. Thought you Mesa guys might want to read it if you haven't already.




Dear Alex,

You have asked me for our thoughts in regard to improving UAX/Mesa performance and we appreciate the opportunity to share our views with you. We believe the following recommendations may be applicable not only to Mesa, but to some degree the entire UAX program and in particular its 50-seat regional jet component. There are a number of significant operational issues that working together we believe can be resolved in the best interests of our customers, employees and shareholders.

In order to best appreciate our recommendations, I thought a little history would be beneficial. After the poor operational results of the summer of 2006 Mesa has worked hard and focused almost exclusively at addressing UAX operational issues. Through this work we have uncovered a number of issues which United and Mesa were either unaware of, or did not fully understand. United's "56k baud" communication system, CORA, the concentration of Mesa operations in high ATC/weather cities, Mesa's contract maintenance and aircraft cleaning program, the lack of adequate ground equipment at United stations, RON requirements, delayed aircraft interior specifications, fuel saving initiatives, bag delivery / ITE, station handling and accountability, are just a few of the many issues we have discussed together. While progress has been made, there remains significant room for improvement.

Given Mesa's operational performance at our other partners as measured by CCF, TCF, D0, A14, MBR, customer complaints and DIR, we continue to believe issues often raised by UA as "Mesa issues" are systemic to UA and a direct result from differences in UA's operational protocol, geography, approach to customer service and accountability. For example, in March, Mesa's controllable completion rate for UAX was 99.4%, roughly the same as for our other operations. Our total completion factor, however, was 94.4%, 4 points lower than what we achieved at Delta and 4.3 points below what we achieved at US Airways. While United continues to point out Mesa's ability to "recover" as the issue, the other UAX carriers have almost identical numbers when compared on a hub by hub "apples to apples" basis. Like Mesa, these carriers do not experience the same disparity between total and controllable completion factor with their other partners. While we appreciate the difficult operating environment in a hub such as ORD, we believe UAX significantly compounds this difficulty by effectively "over scheduling" the hub making it impossible to maintain schedule integrity in anything less than optimal weather conditions. Given ORD experiences irregular operations almost two out of every three days, this approach seems to be counterproductive. As a result, costs (much of which are borne by Mesa) are significantly higher than anticipated, crew disruption is far higher than experienced in our other operations and customer satisfaction is significantly lower as measured by DIR. For example, using the exact same customer satisfaction survey as utilized by UA, Mesa’s US and DL operations receive DIR numbers in the 30’s and 40’s, respectively as compared to the low 20’s in our UA system. The previously mentioned scheduling issues are further compounded by CORA. While CORA impacts all UAX operators negatively, its effects are most pronounced on UA’s 50-seat operations. Neither of our other partners utilize this type of system – in fact DL discontinued a similar system due to the operational disruption it created at its regional carriers. Given our early conversations regarding CORA and the subsequent analysis done by UA in regard to schedule difficulty based on “average delay minutes”, it was clear (CORA slot reallocation was not included) that even people intimately familiar with regional operations did not fully understand the impact CORA has on small jet operations. It is important to recognize the many statistics regarding delays and reassignments and schedule adjustments are more than just numbers, they reflect real disruptions to our passengers and flight crews. It is important this fact be kept in mind as Mesa’s crews repeatedly deliver exemplary service under extremely difficult conditions.

MORE>>>>>>

 

[ualdriver]

Continued

Mesa is not opposed to CORA and understands the financial benefit it provides United. What is distressing however is in spite of many months of analysis and discussion, much of UA management and almost all line personnel either do not understand or do not accept the operational penalty placed on 50-seat operators by CORA. For example, we believe if UA took into account CORA and wished to maintain operational integrity across its system, there would be a significant difference in scheduling and block times for 50- and 70-seat regional jets and all regional jets versus mainline. While there has been some progress, United has not made the schedule adjustments necessary to accommodate CORA’s impact. Indeed, Mesa's June schedule had numerous lines of flying in high CORA impact city pairs with turn times of 30 minutes or less and block times not significantly different than UA’s narrow body aircraft. While some of Mesa’s suggested schedule changes have recently been incorporated, we believe the changes do not adequately address the impact CORA has on 50-seat jets. While UA agrees 50-seat regional jets are often allocated double the delay hours originally proposed by ATC (the benefit being reallocated to mainline aircraft), we continue to be held responsible for all the operational mishaps that result from such delays. Interestingly, UA's own dispatch management has told us that if UA was faced with the same challenges the results would be "a total meltdown." Mesa has no control over the implementation of CORA's recommendations, yet remains financially and operationally responsible for the delays, cancellations, and crew disruptions that result from the implementation of such recommendations.

CORA also puts a huge strain on our crews in terms of reassignments. In one month of particularly difficult weather our UAX system had over 1600 reassignments compared to less than 100 in our DL operation and 200 in our US operation. While we have explained the cause of this disruption to our people and they have continued to do an outstanding job in spite of these challenges, we are seeing United Express pilot attrition rates four times higher than those in our US Airways system and over twice as high as those at Delta. We simply can not manage this level of attrition on a long term basis. In speaking with departing crewmembers we repeatedly hear that the driving factor behind the decision to leave is schedule disruption, corresponding loss of pay and quality of life. Explaining our Codeshare agreement requires us to operate the schedules we are provided simply does not remedy the effects of the disruption experienced by our crews. It is therefore imperative we have a schedule that can be flown with a reasonable degree of reliability. Here’s a very simple way to look at this issue – what would be the impact on United’s mainline operations if cancellations doubled?

Accountability is a key issue to our joint success. We are firm believers in accountability and believe UA does not foster sufficient accountability. For example, our partnership structure penalizes Mesa for poor baggage handling in spite of the fact Mesa does not handle any bags. While we fully accept that "a deal is a deal", during our initial contract negotiations we were told to expect average ITE expenses be of $0.45 per passenger. In reality, as a result of CORA and United's baggage performance, the expense has been three times the level United told us to expect. Besides costing Mesa over $3 million per year in expenses above what was anticipated at the time the contract was negotiated, it has given your ground handlers a "blank check" and allowed them to remain unaccountable for their performance and how their performance may affect ITE and baggage handling expenses. Further compounding the issue of accountability at the station level is UA's request that Mesa pay all ITE expenses before auditing such expenses. This approach does nothing but reinforce a complete lack of both operational and financial responsibility.

UA's approach on fuel savings initiatives are likewise difficult to understand. After Mesa and UA embarked on a joint program to develop fuel savings (the cost of which, including United employees assigned to the project, was borne entirely by Mesa), which clearly demonstrated Mesa's fuel burns could be improved significantly, United was not only unwilling to share the benefits of such initiatives, but would not even pay the additional cost of pilot training to insure the benefits were realized. The team presented ample and compelling analysis that fuel savings would total nearly $10 million annually (all of which was to benefit UA), yet UA refused to reimburse Mesa the $200,000 in pilot training expenses required to implement the program. Put simply, the cost of implementation was approximately one week of savings. As such, with only cost and without any financial incentive, Mesa's current inclination is to focus on fuel initiatives with its other partners where it will share in the savings. This is just one of the counterintuitive decisions that have seriously impacted both Mesa and UA that we do not experience with our other partners.

To address these and other issues we would like to make the following recommendations:

1) Reschedule the regional jets, and in particular the 50-seat aircraft, to fully take into the account the disproportionate impact of CORA during irregular operations. In addition, it appears, that ORD is simply "over scheduled." It is not possible during irregular ops for a 50-seat regional jet to provide the same level of schedule integrity as a 737 or even larger regional jet given the disproportionate impact of CORA. Mesa can not provide "seamless" customer service if UA continues to schedule 50-seat regional jets in the same manner as it does larger equipment without taking into account CORA. We have recently finished our analysis of the proposed May schedule and continue to be surprised by United's unwillingness to address this issue. It is our belief that, when compounded by the impacts of CORA, May's schedule can not be flown with any degree of reliability. This is not only Mesa's experience, but that of the other UAX carriers as well. In spite of running a 99.4% controllable completion rate in March, Mesa's TCF in ORD was only 90.21, SkyWest had a CCF of 99.14 and TCF of 91.38, TranStates a CCF of 99.77 and a TCF of 92.33 and Republic had a CCF of 97.85 and a TCF of only 87.70. It would not appear to be in either United's, your regional partners’ or your customers’ interests to run TCFs consistently below 95% due to "over scheduling". As a result, such “over scheduling” makes schedule integrity effectively impossible. In addition, D0 is significantly negatively impacted when there are numerous lines with consecutive turns of less then 30 minutes in high congestion, CORA impacted, stations such as BOS, EWR and ORD. Furthermore, some of this flying is done on regional jets scheduled to terminate in maintenance locations reducing available RON time and creating delays the following day.

2) Increase RON times at maintenance bases to required levels and take into account delays resulting from irregular ops. For example, our operations with US Airways average RON times of over 1 hour more ground time per aircraft than with our UA operations. Currently 85% of our incoming RON flights are delayed and over half are delayed over one hour. In order to fully offset the delays imposed by CORA, and be more in line with the run times we average with our other partners, our UA RONs need to be increased by approximately two hours. While there has been some movement in the right direction, the June schedule actually reduces RON time from an average of 10.14 to 9.36 hours in our maintenance bases.

3) Provide for additional crews to cover for delays that result from next day crew rest requirements from CORA imposed delays. Given the disproportionate impact of weather and ATC, Mesa crews can not be reliably scheduled to FAA limits. While there are significant benefits to United from CORA, it is our belief that United underestimates the impact CORA has on crew staffing. At United's guidance, Mesa bid its code share agreement assuming a certain number of crews and didn't anticipate the level of disruption caused by CORA. In fact, at no time was CORA and its likely impact to Mesa ever mentioned during our negotiations. We cannot continue to press our crews to overcome the impacts created by the scheduling disruptions experienced during irregular operations.

4) Eliminate Mesa's $0.45 ITE expense reimbursement and make ITE expenses the responsibility of the party liable for the expense - place accountability where it belongs rather than passing it along to operators who have no control over the creation of the expense. Penalize operators when certain controllable requirements that impact ITE are not met. If UA or its ground handlers do a poor job, it should not be the responsibility of the non-responsible operator to bear the resulting financial burden. Place responsibility for bag performance with station management, rewarding those who succeed, removing those who do not. This strategy in particular was extremely successful at Continental during my tenure as Senior Vice President – Airport Services. Additionally, under the current system there are approximately $1 million of disputed ITE claims that have remain unresolved for over one year after multiple agreements with UAL to have the issue settled expeditiously. At UAL’s request Mesa paid expenses before it’s contractual right to audit and reject these expenses. Mesa can no longer fund ITE expense it is not contractually responsible for, and given the lack of resolution, no longer waives it right to reject incorrect ITE before payment.

 

[ualdriver]

Continued

5) Reduce Mesa’s concentration of high ATC/weather cities and distribute this flying equally among all UAX regional operators. Given the downline impact of delays, it is counterintuitive to providing good service to concentrate high ATC/weather city operations on one operator. Recovery will be much faster and disruption far less when the burden of flying in these cities is distributed across all UAX operators rather than placed almost entirely on one carrier. While there has been some progress, it is my understanding Mesa continues to operate approximately 80% of the regional flights into the “Big 6” east coast cities. Even in June, after a year of discussion, Mesa will continue to operate over 60% of flying.

6) Allow Mesa to self handle in a few select locations to demonstrate UA's willingness to change vendors and require accountability. We suggest CLT be the first station.

7) Increase the level of GSE. Ground equipment is inadequate in most locations. We have provided UA with a detailed analysis comparing GSE levels among UA, Mesa and our other major airline partners. This analysis clearly demonstrated United's deficiency in GSE levels. For example, at IAD UA has 55 gates, approximately 215 Express departures and only three AC carts and three air start units. Mesa's APU usage in the United system is approximately double what it experiences in its US and DL operations and we estimate this results in an additional cost of $6.5 million dollars to UA (it is interesting to note DL has a specific program aimed at reducing APU usage and increasing GPU usage in order to reduce costs). The additional APU usage also drives significant added maintenance expense and less reliability for Mesa. Without adequate ground equipment this in turn leads to delays, rerouting of aircraft, passenger inconvenience and discomfort, and further drives increased fuel usage resulting from continuous APU usage.

8) Put in place a fuel program that financially motivates Mesa's adherence to all fuel savings procedures. Mesa currently receives no benefit for fuel savings in spite of having paid for developing the program. At a minimum it would seem reasonable to at least try a test program to determine if savings can be achieved.

9) Insure ground handlers are adequately staffed. Mesa is currently penalized due to poor station operations over which it has no control. Again, there is no accountability and Mesa carries the financial burden from poor staffing levels. For example, Air Wisconsin, United's ground handler at IAD, refuses to provide our crews transportation to the aircraft hard stands and Mesa has to rely on Bombardier (a Mesa contractor) and local Mesa management to provide this service. This function is clearly a station ops function and not the job of Mesa's Regional Chief Pilot.

10) Change performance bonus from straight D0 over which we have little control to controllable D0. The target to reach the bonus should also change to reflect the elimination of events such as weather and ATC from the calculation. Focusing on controllable delays again puts accountability where it belongs - rather than the current system in which the only real determinant is weather and ATC and the areas where we can improve are "statistically insignificant" when it comes to making incentive goals. Apply the same goals to each carrier by equipment type and hub.

11) Finally, and one of the most important changes necessary to improve operations and put accountability where it belongs, involves accurate coding of delays. While the current system of delay codes is accurate in terms of where the delays are placed pursuant to UA's definitions, they are inaccurate in terms of determining "root cause" of the delays. This was a huge problem at CAL prior to their restructuring and once fixed gave the company a "road map" to recovery. For example, according to UA data Mesa routinely has "crew delays" accounting for over 20 percent of our total delays. In reality, delays caused by crews is approximately one tenth that number - the other crew delays are a result of missed connections or timeouts requiring re-crewing due to weather/ATC/CORA or maintenance delays from earlier in the day. The entire definition of "late turns/late arriving equipment" should also be eliminated and the root cause of the delay should be applied to the delay. Without this type of "redefinition" the root cause of the operational challenges may never be addressed.

MORE>>>>>>>>>>>

 

[ualdriver]

That's all of it

Alex, I strongly believe it is in the best interests of United, Mesa and most importantly our passengers that the above issues are addressed in a timely manner. When United first came out to Mesa to discuss operational issues this past summer I stated it was my goal to demonstrate to you that not only was Mesa not your worst operator (as had been suggested by our UA liaisons) but possibly your best. You may recall that comment prompted a fair amount of disbelief from the UA people who stated it was highly unlikely Mesa had a better operation than your best carrier (again according to United) SkyWest. I think if you carefully review the performance metrics of Mesa and SkyWest in ORD, where a comparison is fair, you will quickly determine my assertion was not entirely without merit. Unfortunately, in spite of our collective good efforts we still have a long way to go. The crux of the issue from Mesa's perspective is UA's acceptance that its current practices create an extremely difficult operating environment for both the operator and customer, and it's willingness to address these issues proactively. It is not just an issue about money - much of the "fix" is placing accountability where it belongs and rewarding and penalizing appropriately. If UA continues to blame Mesa for poor D0 numbers and resultant DIR scores rather than look to the schedulers who, according to UA's own ops people, create schedules that would lead to a "meltdown at UA", the problem will never be fixed and there is nothing Mesa can do about it.

Likewise, Mesa does not cause, and can not fix, the baggage problem and, without station accountability, and as long as Mesa continues to foot the bill, the stations have little incentive to fix it either. Furthermore, Mesa does not cause, and can not improve, station delays when station managers are directed not to respond to our emails regarding these delays - again a lack of accountability for which Mesa and your passengers suffer. I hope you can appreciate we can not in good conscious continue to push our people as hard as we have in what appears to be an impossible situation. We respectfully request that you carefully review our recommendations and consider implementing them, even if only on a temporary basis, to determine their effectiveness. Having served as the Chairman of the Operation Performance Committee at CAL during its turnaround in 1995-96, my experience tells me these issues can be resolved satisfactorily but not without strong action on the part of UA. While we appreciate UA's approach to analyzing issues carefully, we truly need these issues to be addressed as quickly as possible. Please know that this letter comes to you in an effort to improve our operations in the spirit of partnership. It is our hope we can move forward together in everyone's best interest. Thanks for your understanding and support.

Most sincerely,




Jonathan



PS. I think it goes without saying that we were very disappointed in the outcome of our recent discussions with you regarding the short-term relief we requested due to the significantly higher than anticipated pilot attrition we are experiencing in our United Express system. As mentioned in this letter, attrition at United is significantly higher than experienced at our other operations which, based on exit interviews, we believe is due to the operating environment and scheduling philosophy in our UAX operation. We came to you proactively to “get in front” of what we believe is potentially a serious issue. We asked you to (a) remove up to 6 RJ-50s for a short period of time while we recovered and (b) allow us to replace these 6 RJ-50s with RJ-70s as per our contract. In addition, we asked that given we would not be receiving the benefit of the RJ-70s until such time as they were placed into service, that the 6 RJ-50s removed be out of the “expansion contract” until such time as the RJ-70s were placed into service. While we explained this was our preference, we also discussed permanent removal of the RJ-50s from the “expansion” contract. In this scenario we would effectively “unwind” the contract as it pertained to the “expansion” RJ-50s – Mesa would remove these RJ-50s from service at our expense and UA would repay Mesa the prorated portion of the $1 million dollars Mesa paid United (minus the $100,000 UA induction payment). In our conversations last week you stated you felt that was a “fair way” to execute their removal. In our most recent discussions you stated you were unable to remove the required number of aircraft and your counterproposal was for Mesa to (a) take out the aircraft under the “old” contract and not replace them for a minimum of a year or (b) remove aircraft under the “expansion” contract permanently but with United only repaying half of the $1 million fee. We find it extremely discouraging that we came to you proactively as a partner only to find ourselves penalized for doing so. Mesa could have easily not mentioned the potential problem and lived up to its contractual minimums and UA would have continued to pay for the aircraft. Additionally, after Mesa has spent hundreds of thousands, if not millions, of dollars on issues that are not required contractually (such as fuel savings programs) we were very surprised United would not grant our preferred solution – the removal of aircraft for a short period of time to help with the pilot issue and allow us to back fill with RJ-70s a few months later. Please be advised that, while we have agreed to your proposal and have moved forward accordingly, we believe it does not fairly or adequately address the issue.

 

[homerjdispatch]

Gotta love that guy, JO. He is my HERO!

 

[~~~^~~~]

WOW - what a letter.

Lousy business strategy - when you have a problem, blame the customer.

But it is an interesting commentary on how difficult it is to outsource your brand to an alter ego air carrier.

 

[~~~^~~~]

PS. I think it goes without saying that we were very disappointed in the outcome of our recent discussions with you regarding the short-term relief we requested due to the significantly higher than anticipated pilot attrition we are experiencing in our United Express system. As mentioned in this letter, attrition at United is significantly higher than experienced at our other operations which, based on exit interviews, we believe is due to the operating environment and scheduling philosophy in our UAX operation.

Yeah, that's right. People are quitting MESA because of United's operation. Not the lousy pay or bad working conditions, but because of the operations of United. That's some funny stuff there.

Exit interviews? Exit interview? What? At most airlines the "exit interview" is taking your SIDA badge, making sure you return Company property and then unceremoniously kicking your butt out of the secure area of the airport. Adios'

 

[J32driver]

I'm not a JO fan by anymeans. But being a former Air Willy guy and operating in ORD for more than 5 years, I think the letter is spot on. UA runs a jacked up Express division.

I went into (I think it was) Grand Rapids one day when ORD was running T'storm delays. I had a 3 hour ATC hit. When it expired, a 737 rolled in and took my slot, and then rolled back out. I took another 3 hour hit. Then another 737 rolled in and took my slot. I wound up sitting for 9 hours while I watched 2 737s come and go.

 

[doug_or]

Fins said it better (and with less swearing)

 

[eaglefly]

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

One ethically bankrupt crook, trying to convince other ethically bankrupt crooks he's not an ethically bankrupt crook.

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!