Pinnacle GROWTH and Industry Observations

[CRJ_Driver]

If you've been following the PNCL announcements...you've heard that Pinnacle "announced today that it intends to offer, subject to market and other conditions, approximately $110,000,000 aggregate principal amount of 20-year convertible senior notes through an offering within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933."

NWAC subleases the CRJ's to PNCL. The question we all must ask is "Why is PNCL raising cash?" I beleive Mesa did this about one year ago and used the cash infusion to finance their UAL RJ flying.

I think PNCL has something up going on. They don't need the cash to sustain any operations and I don't beleive they have any debt payments approaching. I've read the annual and quarterly reports..so this is fact subject to my interpretation.


What do you guys think future growth?



Second main point. If the PNCL pilots sell out their FO's in the next contract and if the PNCL pilots don't bring up the quality of their contract....I'll officially place them in the MESA category. What no one realizes is that the dream "legacy airline" job is gone in the numbers it once was. That by 2015, it is forecasted that 50% of the US ASM's will be low cost. When it's all said and done, and all the smoke has cleared...50% of the pilot group will be an FO. Also, it will take years after the smoke has cleared to even attempt to bring up the contract to livable wages. As long as ALPA isn't a real union and as long as every new and current pilot is misinfomred...the pilot profession will keep being flushed down the toilet.

Third point. PNCL has to mature as a company. Alot of you guys don't realize that from an operational point...the company is years behind the curve.

Fourth point. I think PNCL has a chance to do the right thing..but it's the bottom feeders to date that makes it hard for everyone to put their foot down. MESA guys signed off on such horrendous deals that it allows Mesa to underbid for everyones flying. It's not about making 120,000 versus 100,000. Its about making 40K versus 30K. Thats a big chunk of change and PNCL has an opportunity to set a standard like Commair did. ASA did. Express Jet did. AWAC did. Like ACA kinda did (because when Bain was involved in the UAX bidding process out ALPA MEC and pilots screwed the FO's on 70 seater rates. And also, as a sidenote....just like their is a A319 hat club...if we didn't go FlyI, there would be a CRJ-700 I will fail you in the sim club"


I take conservative approaches to practicaly everything. The thing everyone needs to realize is that as pilots, we need to understand mgt's view (something that is being done better now than in the past. UAL and DAL didn't understand biz and that is why they have screwed the pilot profession. If they didn't have such outrageous labor costs...they wouldn't be in as deep waters as they are now..but everyone has to have 500/hr for a 777.) Secondly, we are unique as pilots..so if we lose our job or mgt's whipsaws us against another labor group or another airlines pilots..we need to stick together under a union. ALPA is not the union for everyone. You really need a RJ union, LCC union and Legacy union b/c you can't represent everyones interest effectively. What this means is that we all need to set a baseline and until that is done, MESA and CHT and maybe PNCL will flush us all down the toilet.

Now, if that happens...I'm a capitalist and I understand thats how the system works. I won't be mad...just disappointed that such smart people (pilots) can be real dumb.

 

[General Lee]

"UAL and DAL didn't understand biz and that is why they have screwed the pilot profession. If they didn't have such outrageous labor costs...they wouldn't be in as deep waters as they are now..but everyone has to have 500/hr for a 777"



Wait a second here. When we negotiated these rates at DL, we could afford them. Then things started to fall apart, and management would not accept our initial pay cut offers, and then the fuel hedges were sold. If you look at a per passenger pay rate for a 777 Capt---we actually make less now than a senior Comair CR7 captain per hour. $210 an hour divided by 300 passengers, vs $118 an hour divided by 70 passengers.



Bye Bye--General Lee

 

[Lear70]

Second main point. If the PNCL pilots sell out their FO's in the next contract and if the PNCL pilots don't bring up the quality of their contract....I'll officially place them in the MESA category.

Smoke crack?... Lately?

It's not the Captains selling the F/O's down the river that we're worried about... it's our F/O's selling out the rest of the company for a shot at upgrade when the company dangles the "growth carrot" that we're worried about.

The senior 10% of the seniority list is, for the most part, happy as they sit on $80k+ a year with 15+ days off per month and is also a source of worry. The next 40% has been here for 4-5 years and is PISSED OFF - we're not settling unless it's INDUSTRY LEADING. The bottom 50% is comprised heavily of pilots with no other flying experience other than Gulfstream and/or flight instruction / piston charter; an alarming number of them just want to upgrade at all costs. Take that 50% and add the senior 10% and we have a 60% PROBLEM.

What no one realizes is that the dream "legacy airline" job is gone in the numbers it once was... as long as every new and current pilot is misinfomred...the pilot profession will keep being flushed down the toilet.

The upper 40% here at PCL I mentioned before is well aware of BOTH of those facts; we're trying to educate the bottom 50% of the pilot group and it's an uphill battle.

No comment on the rest of it, I'm not a seer and the only future predicting I ever do is when I see a sinking ship and hustle to find another job like I did when I came here... Right now, I don't foresee that being a problem at PCL for another 5-7 years at least.

 

[Guitar Guy]

Gotta disagree on one point, G. Lee

If you look at a per passenger pay rate for a 777 Capt---we actually make less now than a senior Comair CR7 captain per hour. $210 an hour divided by 300 passengers, vs $118 an hour divided by 70 passengers.

I think that's a specious argument. That one was foisted on the pilot group at Great Lakes once - how on a "PER SEAT" basis, we made more than "747 pilots".

The fact of the matter is that all of us pay our bills in "dollars", not "dollars per passenger-hour".

 

[General Lee]

Larger aircraft bring in more revenue, and that is how pay rates were established since the 50's----by number of seats. If you break it down by passenger number and your own hourly rate, you can make that argument. Not specious at all.


Bye Bye--General Lee

 

[Guitar Guy]

So, General, would you give up your Delta job for the higher "per passenger-hour" rate at Comair? The reason I think the argument is specious is because the topic was about pay and I'm pretty certain all of us get paid in dollars, not "dollars per passenger-hour".

If you want to take the per passenger-hour argument to a logical end, consider what flight instructors make on a "per passenger-hour" basis for a discovery flight in a 152 with one passenger seat. They'll easily trump just about anyone else in commercial aviation and certainly anyone at a US airline.

Just consider the context.

 

[General Lee]

No, I wouldn't. I love my job. The problem I had with this thread was blaming all of Delta's problems on labor and "huge salaries"---when if fact there were plenty of other problems out of our control, and at the same time we offered to help early on to no avail.

ALPA set pay rates early on by seat numbers, and I can understand not paying top rates during downturns. I can understand that. But the ability to bring in revenue should count for something, and that is where I was coming from.


Bye Bye--General Lee

 

[labbats]

What no one realizes is that the dream "legacy airline" job is gone in the numbers it once was.


Wow, this board has never noticed that before.

 

[Guitar Guy]

But the ability to bring in revenue should count for something, and that is where I was coming from.

It's actually possible for a smaller aircraft to bring in more revenue than a larger aircraft, depending on utilization, fares, etc.

I do agree that it's not correct to blame all of DAL's (or United's or USAir's or....) woes on pilot wages. Obviously salaries - be they pilot, mechanic or even management salaries - contribute to the cost of doing business. But to blame one work group like flight crews, especially if management can't provide meaningful leadership, is wrong.

 

[flagshipper]

Smoke crack?... Lately?

It's not the Captains selling the F/O's down the river that we're worried about... it's our F/O's selling out the rest of the company for a shot at upgrade when the company dangles the "growth carrot" that we're worried about.


Talking to the Captains I fly with and even TP himself I am often shocked to hear how little they seem to be concerned with the low FO pay. They seem to have the mentality that if they stuck through years of FO pay then everyone else should. They are all more worried about their 401k than 18k a year. Now we have a few groups of FOs each with a different perspective. You have the guys like me who are just a few hundred hours short hoping to get a CA slot before the growth stops. I believe this group is the most militant in the company. Because if we make it we are gonna be on reserve for years especially in MEM. So who cares if you make 55k when the work rules are so d%^& horrible. This group will not sell out for a few more empty promises. There is only so much market for rjs and it is filling capacity very quickly. So the growth at some point will stop for good. That is inevitable.

 

[Always deferred]

Would I be far off if I said those pilots (off the street and former furloughs) who are swooning to PNCL, CHQ, MESA, etc. are contributing to lowering the bar. IMHO the reason pay rates can be so low is because there's always someone who will do it for less. Now I see many of my furloughed bretheren who once cried the "raise the bar" party line, drool over the CHANCE for a quick upgrade. "Yeah I know first year sucks but I'll upgrade really quick" seems to be the new motto for those so intent on that magical upgrade. Why should FOs be paid anymore as long as this attitude prevails? I realize it is a dam'd if you do and dam'd if you don't situation but as long as there is the ample supply you can kiss the prospects of better pay goodbye.

thoughts?

 

[JimBo480]

What will happen to Pinnacle growth if the NWA MEC holds the line on 70 seat aircraft and works a deal that puts 70 seaters at mainline being flown by their pilots? From what I read any 70 seat deal would require holding the line on the number of DC-9's on the property, so the only airframes I can see them replacing are CRJ's.

I only throw this out after reading about the Pinnacle captains who are happy with their lot-in-life and FO's willing to work for nothing for a couple of months in training for an $18k job because it could have rapid advancement. Pinnacle has had tremendous growth at the expense of mainline over the last couple of years, but the tide could flow out as quickly as it flowed in.

Good luck with the negotiations. Jim

 

[Ace McCoy]

What do you guys think future growth?

Wow, Pinnacle needs more growth? I thought it was Mesaba's turn.

 

[Rez O. Lewshun]

Four year FO pay scales are a sign of a bottom carrier....

 

[T-handle]

Mesaba has 8-9 year FO pay scales, with a majority of our FOs being around the 5 year mark.



And unfortunately I think any future growth will happen with a new Airlink like SkyWest or Mesa. NWA pilots will fly 70-90 "RJs" of some sort and I don't blame them one bit for holding the line.

 

[Lear70]

Wow, Pinnacle needs more growth? I thought it was Mesaba's turn.

I didn't say we NEEDED more growth, I just predicted we would get another 10 RJ's (the next exercised options); it's a simple numbers game and no one else is poised to take delivery of them yet.

And unfortunately I think any future growth will happen with a new Airlink like SkyWest or Mesa. NWA pilots will fly 70-90 "RJs" of some sort and I don't blame them one bit for holding the line.

Either UAL or US will have to fold before that happens - either that or NWA pilots will have to give up another airlink in contract concessions; personally I think that's about as likely as NWA pilots giving up 70 and 90- seat flying - not gonna happen.

Either way, it's definitely time Mesaba got some growth!

 

[Ace McCoy]

Either way, it's definitely time Mesaba got some growth!

Cool, you got some nekkid lady pictures then?

Oh that kind of growth. Nevermind, Mesaba will not be growing anytime soon.