proposed delta cuts

[On Your Six]

This can't be good...

"Jetblue just released their 190 payrates.

First year capt $70.71 for first 70 hours/ $106.57 over 70
2nd year $72.32
First year F/O $37.10 for the first 70 /
2nd year $39.95"

Just copied this from the Jet Blue EMB190 pay rate thread. Just imagine what the DAL management thinks about these proposed rates... I am sure someone is throwing a huge party... Do the Comair/ASA pilots have anything to worry about in terms of their own wages? You bet. You can thank Jet Blue's management for the potential reduction in ASA/Comair rates (gotta be competitive)... The bar continues to be lowered.

 

[BlackCoffee]

As the current ASA contract stands, it looks to me that CHQ makes a buck or two an hr. comparing the emb145 to ASA CRJ200. I guess all the outsorcing should go to ASA.

 

[On Your Six]

You're forgetting CRJ financing costs... Not cheap.

 

[Oakum_Boy]

I think I'm getting nauseous.

 

[USCtrojan]

USCtrojan,

Once again for you----Delta can manipulate your balance sheet by not charging you for things that mainline really pays for---like Distribution (Delta.com) and reservations, airport gate usage, and putting you on routes that used to sustain 727s or 737s--and your planes would be naturally full. Notice how Coex has developed a whole bunch of new city pairings to Mexico (I think they go to 25 or 30 cities from IAH) and a bunch of new routes from IAH to Boise, Bakersfield, and Palm Springs.... DCI mainly flies on routes that were once flown by MD-88s or MD-90s from DFW. Besides a few new cities from our main hubs (New Haven, Binghampton, etc form CVG and Freeport and Key West from ATL)---DCI has covered old routes flown by Mainline. Now the passengers are supposedly back---and more and more have to fly on cramped RJs for longer and longer flights. Debate that please.

Bye Bye--General Lee

General,

I just logged in and there's a million more replies to this thread already!! I ask then in response to your question, does Delta also manipulate Skywest, Chitauqua's balance sheet as well with all ticketing, and reservations, etc? Just so I understand you correctly, are you basically implying that Comair and ASA are only profitable for these reasons that you state? (ticketing, etc.) I agree with you that long legs in an RJ would be uncomfortable. That definition, "uncomfortable long leg," is not for you and me to decide. That definition is left up to the market. Right sized aircraft for the right market. Unfortunately ALPA is trying to strong arm the company into manipulating where it sends its aircraft, and how frequently. I disagree with this. And I believe it's costing the company the ability to compete effectively.

 

[USCtrojan]

USCTrojan,

No offense taken. Keep this in mind, IF DAL managment gets the chance, they will improve their margins with Comair and ASA by reducing costs there too. Under bankruptcy, all contracts will be subject to change through negotiations - not just the mainline pilots. Why would GG leave cash on the table when he could reduce EVERYONE'S wages too - that's what the bankruptcy process would provide - an opportunity to trim all labor contracts. I am not a Delta pilot, but a lot of my buddies are. They are so tired of being the sole target in this long debate. Sure, LCCs have changed everything - nothing will EVER BE THE SAME FOR EVER AND EVER AND EVER. Wages will need to come down. But wait, the pilots aren't the only labor group in Delta - right? What about everyone else contributing to the "investment" in the future?

I think most Delta pilots (except for the random good-ole-boy Southern jacka$$) believe that it's time to accept the facts that wages will need to be lower to compete BETTER. But they are tired of being blamed for everything - they won their current contract through tough negotiations (sure, back in the golden days). Leo once said "a contract is a contract." The mainliners have been ready to talk for quite some time - this is a negotiation right? Now DAL management is trying to shape public opinion and the opinions of other Delta constituencies like the FAs and the regional folks - focus the blame and your "futures" on the actions of the pilots. The pressure on the pilots is BUILDING.... GG is brilliant - it's called divide and conquer...

If Chapter 11 happens, expect everyone's wallets to get thinner because DAL management will have the ability to renegotiate every labor contract - and I doubt they will give up a chance to reduce overhead when offered. DAL management doesn't want to wait for Comair's next contract negotiations - they will act to reduce the difference between Comair/ASA and Mesa or CHQ. Tough times ahead I am afraid...

Six,

I definitely agree, tough times ahead. For all legacy carriers. Legacy carriers seem to be the only groups fighting within each other. Legacy carriers are the only carriers asking/demanding their employees take pay cuts--which ultimately effects its passengers. ALA pissed off employees=pissed off passengers=no more airline. I have no idea what to expect in a Ch 11. I do know it will get worse before it gets better, unfortunately.

 

[MedFlyer]

You're forgetting CRJ financing costs... Not cheap.

You don't think that CHQ/SKYW don't factor these costs into the fees they charge DL? Again...provide a link that shows CHQ/SKYW are cheaper. If you can't, I'll just assume you are making things up.

Let me ask you this, if CMR is so expensive, why has DL given CMR so many planes in the past three years?? Why have ALL the CR7's gone to wholly-owned carriers?

I'm sure management wants to lower pay for CMR/ASA and in BK they might just have their way. But just remember, the lower the pay at CMR/ASA, the less mainline growth there will be. Personally, I would think the mainline guys would want regional pay to go as high as possible, so that the regionals become less appealing for future flying. But apparently, you want all your flying done by regionals.

 

[wms]

Please provide us with the link that shows CHQ and SkyWest are cheaper than ASA/CMR?

There are none. DAL refuses to release the financials on DCI, so there is no data to compare. Airways had a good CA article and RR said they are "moderately profitable", but said Airways that they were denied any specific data because "DAL will not reveal operating costs or financial stats for any WO." I suspect if we knew the real numbers, we would see how bad we are being taken advantage of.

 

[captainv]

>Please provide us with the link that shows CHQ and SkyWest are cheaper than ASA/CMR?

medflyer,

i'm not contesting your point, but Skywest pilots fly the 50 and the 70 for the same rate, which is less than the CMR 50-seat rate, i remember hearing that from a Skywest crew member. they switch airplanes on trips, but can only fly one or the other on a given day. one of those airline contract websites should have the numbers. as for what any of us really cost, only GG and the CFO truly know...

 

[FDJ2]

Internal Memorandum

Date: July 6, 2004
To: All Delta Employees
From: Jerry Grinstein, Chief Executive Officer
Subject: Recent Media Reports

This morning’s USA Today carried an article on the subject of Delta’s need to reduce pilot costs and the level of savings that will be necessary. As noted in the story, the information was obtained from an unnamed source. Because we want to keep you fully informed about developments within our airline, including responses we make to press reports such as these, the statement from me issued this morning is provided below:

"It is no secret that our situation grows more urgent with each passing day. As I have said to Delta people in meetings with them around the system – and again as recently as last week, it is painfully clear that last year's estimate of the cost savings we will need if Delta is to survive and compete is no longer valid. Instead, the hole has deepened during the intervening months. That is why we're working overtime on the strategic planning initiatives announced earlier this year – and why we are heartened by the recent positive and constructive initiatives from ALPA and Delta’s pilots."

As noted in last week’s memo, we will continue to update you in the coming weeks and months. Your clear understanding of the challenges Delta faces and the steps we must take together are absolutely essential to our company’s future.

Jerry Grinstein

It looks like Jerry's propaganda machine may have over stepped it's bounds and came close to derailing the negotiating process. Many Delta pilots wanted to with hold any future concessions in response to managements tactic of negotiating in the media and not at the table. The response from the DAL MEC was quick and very sharp to mismanagements leak to the media from an "insider." It looks like Jerry wants to distance himself from that "insider", while still justifying concessions and letting DALPA know that he is "heartened" by DALPA's efforts to reignite the negotiating process.

 

[skiddriver]

Medflyer,

What are the differences in pay rates between ASA/Comair and Skywest/CHQ? I bet a pretty good gap - especially when you consider Skywests CRJ-700 rates. What about financing charges on the CRJs, etc.? Delta doesn't cover anything for CHQ and Skywest. I have flown on both Comair and CHQ recently for repositioning, and service levels were identical... If Comair and ASA remain expensive vs. Skywest and CHQ, I'll bet a lot of future growth is outsourced to the cheaper alternatives. There will be a lot of pressure to close that expense gap if you want any growth going forward...

But you're forgetting that the non-wholly owned DCI partners (all of whom are reporting profits) take their profits away from Delta Inc. ASA and CA black ink flows back into the corporate coffers.

And you have yet to demonstrate that ASA and CA cost more to operate a flight than the other DCI carriers. On a superficial level, you might try and say that the pilot's wages at CA are higher, therefore CA is more expensive. But if CHQ or SKW are turning a profit (which they have been) on DCI flights, then Delta is paying for all of their labor, aircraft acquisition, administrative, and fuel costs - PLUS adding a profit margin on top of that. You can't make an accurate comparison of the costs and profits without access to financial info I don't think you are privy to.

If you asserted that Delta would make more money if they paid ASA and CA pilots less, I'd agree. But that assertion works for any airline and pilot group, making it less relevant when you try and compare the efficiencies of the DCI carriers.

 

[FDJ2]

But you're forgetting that the non-wholly owned DCI partners (all of whom are reporting profits) take their profits away from Delta Inc. ASA and CA black ink flows back into the corporate coffers.

ASA and CMR's profits do not come from passenger revenue, it comes from cash DAL pays for the lift ASA and CMR provide, same goes for the non- wholly owned. If DAL were to pay CMR $5000 for a flight, CMR might make a profit on that, but that doesn't mean that DAL received $5000 in revenue from the passengers on that flight.

 

[skiddriver]

ASA and CMR's profits do not come from passenger revenue, it comes from cash DAL pays for the lift ASA and CMR provide, same goes for the non- wholly owned. If DAL were to pay CMR $5000 for a flight, CMR might make a profit on that, but that doesn't mean that DAL received $5000 in revenue from the passengers on that flight.

Nice dodge. Delta can either pay ASA/CA for feed, and keep whatever profit is made on that leg, or pay the non-wholly-owneds and give the profit to them. CHQ and SKW have been reporting corporate profits, which means that Delta and their other employers are giving up bucks they could have kept in house. CMR doesn't make a profit. We pay our expenses, and any profit goes to Delta. CHQ, SKW, etc. take their profit and Delta just gets the feed.

If the non-wholly-owneds were consistently reporting red ink, your argument would hold water. Unfortunately, they are showing profits.

 

[amcnd]

I use the work "TAKE" because Eagle was flying these airplanes and the APA tryied to move them to the AA certificate. Is that not "taking" them? As for ASA/Comair getting 100 seat aircraft in a BK. This was'nt the case at United or all the UX airlines would be flying them.

 

[bvt1151]

This from Aviation Week:

CASM's for Q4 2003

ACA - 16.2
Air Wisconsin - 14.7
American Eagle - 13.5
Sky West - 13.4
Express Jet - 12.9
ASA - 12.0
Comair - 10.9


Comair has lower CASM's (unit cost) than ASA, and yet ASA was awarded aircraft because mother "D" said they had lower costs. General and clan (you know who you are) bought it hook line and sinker that Comair had the highest costs in the industry without even doing the research. And, yes, those costs include all financing, reservations and gate fees. Delta claims that Comair's costs are the highest because their pilots are paid the most, but apparently even AviationWeek disagrees with that. What they didn't mention was that ASA has higher costs than Comair, and that the 25 aircraft would be applied to some of the ATR's leaving.