Rumor SkyWest Inc. receives new jet financing?

[79%N1]

What do you care how many 50 seaters there are? You don't have to fly one, and they aren't taking your precious over-seas routes.....and don't tell me you are just so caring that you want all RJ pilots to fly the "heavy iron"........so, why the hell do you care?

 

[JettBoii]

How many app's does delta have on file?

 

[Gr82Aviate]

Management wanted the talks to start early, so I think they have something else they are thinking about. As far as airplanes, there are a lot of planes that need replacing, but that is already being addressed by Management. Have you seen the number of MD90s coming onboard lately? They supposedly cost around $7 million each used, including the engines.(third world countries? China and Japan? They tend to take fairly good care of their planes. The Saudia ones may have some dust in them, but they may become spare parts, allowing those planes to continue to live on forever) Throw in 120 717s that are out there, and 100 new 737-900ERs. Most of the airbus fleet is fairly new (not all, there are some that were bought back in 1988), and even the MD88s are in fairly good shape. I was told by a jumpseater that even the DC9s will be staying around for an extra year, 2014, and that maybe an extra sim (that makes 2) will be moved to ATL from MSP. Add to that every 757 you see with winglets are supposedly staying, and not being replaced by the 739s. I seem to fly those regularly. So, it appears the domestic market will be taken care of, and the company has been retrofitting the 744s/767ERs/ and some A330s for extended use. All of them have gotten crew rest mods, and new interiors for passengers. That means at least 10 more years for each.

So, scope OR pay, eh? I don't think so. I do think they will want some extra 76 seaters, and hopefully ALPA will squash that before it comes to us. They know the priorities according to that survey.



Bye Bye---General Lee

Maybe they want the "talks to start early", so they'd have time to retrain you as a refinery employee?

 

[General Lee]

Maybe they want the "talks to start early", so they'd have time to retrain you as a refinery employee?

Sure, but I would be the one running it.


Bye Bye---General Lee

 

[General Lee]

What do you care how many 50 seaters there are? You don't have to fly one, and they aren't taking your precious over-seas routes.....and don't tell me you are just so caring that you want all RJ pilots to fly the "heavy iron"........so, why the hell do you care?

It affects my profit sharing check. Btw, I hear hiring could start early next year (just a rumor).


Bye Bye---General Lee

 

[Jon Rivoli]

Future? Two dynamics are emerging: Ground outsourcing will continue and expand. But in the cockpit, the trend will be toward flying shifted back to the major, simply because of changes in airplane economics. As 50-seaters get retired, we can expect that 80+ seaters be the capacity floor - and they will be flown in-house. Plan on it.---Mike Boyd


Careful, Jon Rivoli doesn't want to hear any part of this.

Bye Bye---General Lee

Why? Mike Boyd has been wrong about everything for the past ten years.

Simple economics, the overall cost structure of a legacy carrier (not just pilot pay) requires that any aircraft they operate must be of sufficient size to cover the marginal cost of operation. Simply put, if the tug driver is making $30 / hr. plus bennies, you can cover those costs if he is pushing back a 777, you can't if he is pushing back a CRJ200.

What is the break even aircraft size where you can cover all of your costs and still consistently make money?

The bean counters that run SKYW (to include Steve Udvar-Hazy) put that number at about 150 seats.

In other words, you will not be flying anything smaller than that regardless of what you want in scope language. If you try, you will lose money. If you insist on trying that loss will have to come out of somewhere, namely the wages you could have been making on larger, profitable aircraft.

So what happens if you hold the line on scope? That very question was asked of Brad Rich in a conference call as larger aircraft are in the business plan for the future of SkyWest. The answer, 'We compete.'

As I mentioned above, you don't have the airplanes to replace the feed SKYW Inc. provides. No one does.

Faced with the prospect of losing 20% of their traffic AND having to compete in markets that they can't serve economically, having to invest in a bunch of marginally profitable aircraft; after all is said and done the result will be a code share arrangement. What ever scope restrictions you had will be abrogated and you will be compensated, because under the new arrangement Delta will be more profitable and can afford it.

Anderson and Smisek know all of this and likely would like to skip the drama and get right to maximizing profits.

JA is very conservative and definitely doesn't want drama so he will delay making any major moves so long as SKYW remains profitable. All the while he has been growing SkyWest into an 800 lb. gorilla. Over $750 million cash; add to that all of the "pre-paids" and you are up to about $1.2 billion with very little debt, over 700 aircraft serving 48 states, Canada, Mexico and the Caribbean. By number of operation per day SKYW Inc. ranks 2nd or 3rd in the world. The little airline that started by flying Pipers out of St. George, Utah has come a long way.

Why waste a lot of time and billions of dollars on a losing battle? Focus on your strengths and maximize the effort there. More wide body aircraft means more money for you. More smaller jets means less. There is no going back to the "good ol' days", the future will not look like the past and Mike Boyd don't know Shinola.

Peace.

 

[General Lee]

Why? Mike Boyd has been wrong about everything for the past ten years.

Simple economics, the overall cost structure of a legacy carrier (not just pilot pay) requires that any aircraft they operate must be of sufficient size to cover the marginal cost of operation. Simply put, if the tug driver is making $30 / hr. plus bennies, you can cover those costs if he is pushing back a 777, you can't if he is pushing back a CRJ200.

What is the break even aircraft size where you can cover all of your costs and still consistently make money?

The bean counters that run SKYW (to include Steve Udvar-Hazy) put that number at about 150 seats.

In other words, you will not be flying anything smaller than that regardless of what you want in scope language. If you try, you will lose money. If you insist on trying that loss will have to come out of somewhere, namely the wages you could have been making on larger, profitable aircraft.

So what happens if you hold the line on scope? That very question was asked of Brad Rich in a conference call as larger aircraft are in the business plan for the future of SkyWest. The answer, 'We compete.'

As I mentioned above, you don't have the airplanes to replace the feed SKYW Inc. provides. No one does.

Faced with the prospect of losing 20% of their traffic AND having to compete in markets that they can't serve economically, having to invest in a bunch of marginally profitable aircraft; after all is said and done the result will be a code share arrangement. What ever scope restrictions you had will be abrogated and you will be compensated, because under the new arrangement Delta will be more profitable and can afford it.

Anderson and Smisek know all of this and likely would like to skip the drama and get right to maximizing profits.

JA is very conservative and definitely doesn't want drama so he will delay making any major moves so long as SKYW remains profitable. All the while he has been growing SkyWest into an 800 lb. gorilla. Over $750 million cash; add to that all of the "pre-paids" and you are up to about $1.2 billion with very little debt, over 700 aircraft serving 48 states, Canada, Mexico and the Caribbean. By number of operation per day SKYW Inc. ranks 2nd or 3rd in the world. The little airline that started by flying Pipers out of St. George, Utah has come a long way.

Why waste a lot of time and billions of dollars on a losing battle? Focus on your strengths and maximize the effort there. More wide body aircraft means more money for you. More smaller jets means less. There is no going back to the "good ol' days", the future will not look like the past and Mike Boyd don't know Shinola.

Peace.

Boyd wrong about EVERYTHING? He said 50 seaters were going to become tin cans a couple years ago, and he's right. They just aren't economical. There is no way around that.

With higher gas prices, larger planes are needed, but that doesn't mean DCI has to have them. DC9s (all paid for) have been put on plenty of DCI routes (that used to be 727 routes), along with A319s. The 717 might be the best fit of all on those shorter segments, which makes guys like you nervous. The price might be right (if the deal does go through), and that has certainly been the case with the MD90s (at around $7-8 million each including the engines---doing the same job as a 737-800 at 1/4 the price). Just think what the 717 could do for the new LGA expansion? The 100 seater would be a perfect fit, and at NYC prices with plenty of businessmen flying, it would very likely be very profitable.

Do you think the DL CEO is nervous about Brad saying he would want to compete? RA wouldn't think twice about dumping contracts and smacking an upstart, like Delta and the rest did to Indy Air. That airline was fairly well funded, but got SMACKED. If you want to go down that road, with high gas and mostly 50 seaters (CRJ2s and E145s), then do it. How long did "Expressjet" last in ONT, btw? A huge encatchment area, and it still got smacked. Delta has shown that it can replace feed with a LOWER cost operator at the change of a hat too. Gojets probably would love to have more feed. That is your competition, not Delta or the others. And I would say your business depends on DL just as much as we need the feed, although parking PNCL RJs could always be reversed and could be put on your routes. That's the key. If you don't like it, you could be replaced. If you on the otherhand wanted to take feed away and start your own business (tried before, not good), it would be even WORSE for you guys. You will likely take the scraps, and say thanks. Also, you may not have been to ATL lately, but there are PLENTY of MD88s and 737s sitting around, thanks to Capacity cuts. We are also slightly fat on pilots, maybe by 700, all waiting for retirements to start in waves. (it was determined it was cheaper to be fat on pilots---and with that DL is still VERY profitable). If feed was ever taken away, I bet some of those planes could be used on turns to some of those cities, minimizing the affect of the loss of feed. And, passengers would probably love it.

Another thing that has broken your cost model is Ancilary revenue. Something that never was a factor before. Change fees, bag fees, etc has changed the game in revenue. In Q3 last year alone, DL made $840 million in ancilary revenue. That was twice what anyone else made, and that was ONE quarter. Delta made a billion dollars plus in net last year, and ALSO paid down $2 billion in debt. What does all that mean? You are dealing with someone who makes a heck of a lot more than you do, and holds the cards.

So, if Delta does get those 88 717s or 75 A319s, it will change a lot domestically. Right now Delta uses 20 or so DC9-50s as the "100" seater on short domestic flights around ATL and DTW. Think what 88 (or more, I've hear 120 717s are out there available) 717s could do? Again, throw them into LGA and that could be the perfect plane for profits there. DL is still getting an additional 22 MD90s this year too, and 100 737-900s. Those won't be going to INTL routes, so they will likely take back a lot of what was transferred after 9-11. You can't change what high oil is doing to your regional industry, and Brad and the others are probably very worried. No more golden contracts with locked in profits. If he takes the Indy Air route, it will likely turn out the same. It doesn't look like RA will only focus on INTL widebodies, and that means you guys will have to do some adjusting. Look at what is happening to PNCL right now. A couple years ago they had 100 Saabs, bought Colgan, RJs all over the place. Now, that isn't the case. Crazy stuff. I am not trying to slam you guys, I am just saying the industry seems to be going back to larger planes "is better." And, it also seems the CEOs may want the mainline crews to crew those planes, and the mainline pilots agree. Maybe that will mean more mainline jobs for everyone eventually. And that all goes back to your friend Mike Boyd. He was right about high gas and RJs. They don't mix well.


Bye Bye---General Lee

 

[Nevets]

Why? Mike Boyd has been wrong about everything for the past ten years.

Simple economics, the overall cost structure of a legacy carrier (not just pilot pay) requires that any aircraft they operate must be of sufficient size to cover the marginal cost of operation. Simply put, if the tug driver is making $30 / hr. plus bennies, you can cover those costs if he is pushing back a 777, you can't if he is pushing back a CRJ200.

What is the break even aircraft size where you can cover all of your costs and still consistently make money?

The bean counters that run SKYW (to include Steve Udvar-Hazy) put that number at about 150 seats.

In other words, you will not be flying anything smaller than that regardless of what you want in scope language. If you try, you will lose money. If you insist on trying that loss will have to come out of somewhere, namely the wages you could have been making on larger, profitable aircraft.

So what happens if you hold the line on scope? That very question was asked of Brad Rich in a conference call as larger aircraft are in the business plan for the future of SkyWest. The answer, 'We compete.'

As I mentioned above, you don't have the airplanes to replace the feed SKYW Inc. provides. No one does.

Faced with the prospect of losing 20% of their traffic AND having to compete in markets that they can't serve economically, having to invest in a bunch of marginally profitable aircraft; after all is said and done the result will be a code share arrangement. What ever scope restrictions you had will be abrogated and you will be compensated, because under the new arrangement Delta will be more profitable and can afford it.

Anderson and Smisek know all of this and likely would like to skip the drama and get right to maximizing profits.

JA is very conservative and definitely doesn't want drama so he will delay making any major moves so long as SKYW remains profitable. All the while he has been growing SkyWest into an 800 lb. gorilla. Over $750 million cash; add to that all of the "pre-paids" and you are up to about $1.2 billion with very little debt, over 700 aircraft serving 48 states, Canada, Mexico and the Caribbean. By number of operation per day SKYW Inc. ranks 2nd or 3rd in the world. The little airline that started by flying Pipers out of St. George, Utah has come a long way.

Why waste a lot of time and billions of dollars on a losing battle? Focus on your strengths and maximize the effort there. More wide body aircraft means more money for you. More smaller jets means less. There is no going back to the "good ol' days", the future will not look like the past and Mike Boyd don't know Shinola.

Peace.

What assumptions were made by the SKW bean counters? And whatever those assumptions are, I'm sure they are not fixed numbers. If CAL had decided to operate XJT's ERJs for XJT's pilots pay rate and CAL pilot work rules, they'd save massive amount of money. Exact same thing that AMR was trying to do with small aircraft flown by APA pilots. Essentially two sets of work rules and pay depending on size of aircraft for one pilot list.

By the way, SKW is down to about $500 billion and also have about $1.5 billion in debt.

 

[General Lee]

What assumptions were made by the SKW bean counters? And whatever those assumptions are, I'm sure they are not fixed numbers. If CAL had decided to operate XJT's ERJs for XJT's pilots pay rate and CAL pilot work rules, they'd save massive amount of money. Exact same thing that AMR was trying to do with small aircraft flown by APA pilots. Essentially two sets of work rules and pay depending on size of aircraft for one pilot list.

By the way, SKW is down to about $500 billion and also have about $1.5 billion in debt.

$500 BILLION? Wow, they could own Latin America.... just jokin...


Bye Bye---General Lee

 

[Jon Rivoli]

RA had an aneurysm four years ago when Delta's regional feed was making record profits while mother D was hemorrhaging cash picking up the tab for fuel. He still hasn't recovered and much of what he has done since has been to make sure that in the future Delta's regional feed will share the pain. Call it rage, but you would be more profitable now were it not for some of his decisions.

Old airplanes may be cheep, but you lose out on depreciation allowance, MX expence and efficiency.

Buy all of the 717's you want and operate them at a loss; they don't generate enough revenue to cover costs. I'm not talking about pilot salaries, I'm talking about the healthcare costs of retiree's and the wages of everyone from rampers and gate agents to HR administrators and purchasing agents.

It's a one way ticket, airlines grow and move into larger equipment and as revenue goes up so do costs. You can't go back. Smaller aircraft can't generate the revenue to cover the increased expense.

Think of it this way; it takes almost exactly the same amount of labor to operate a 50 seat airplane as it does a 747 (throw in a few more FA's), yet a 747 can generate 10-20 times the revenue. Why the hell would any sane person want to do the same work for a fraction of the revenue? Would you go back to flight instructing in a 152? Hell no! You're a 767 fo making the big bucks. You aren't going back to flight instructing and Delta isn't going back to 100 seat airplanes. Especially when they can subcontract it out to some one who can make money doing it.

If RA goes ahead and buys 163 second hand 717's and 319's, plan on getting bent over to help eat the cost. Isn't that the NWA business model? Run the company into the ground then file chapter 11.

As for "smacking down" an upstart regional, good luck with that. You can't replace 300 planes on short notice and neither Gojets nor anyone could come up with the planes or crews in any reasonable time frame.

Indy Air is everyone's go to, they attempted to go head to head with United at a time when fuel costs were just starting to rise (oil was about $10 bbl in 2001), United still had their 737's (even the 200's) and 727's and they had piss poor management that squandered their cash.

Express Jet was doing just fine until they got spit roasted between SKYW and Continental.

Side note, don't ever try to operated RJ's in SLC; Comair tried - toast, ASA - Owned, Expressjet - Owned, Mesaba - bankrupt/ we'll see. Stay out of Jerry's back yard.

I'm not scared and I am not trying to slam you guys either, though it's clear you've got your sack in a bind. Legacy pilots have seen their pay and benefits decimated over the last decade all the while seeing RJ's take over "their routes". The mistake you make is that it isn't cause and effect, no, the same causes led to both the growth of RJ's AND declines in compensation. Costs went up (primarily fuel) while revenues got squeezed ( say thank you to SWA )resulting in legacy carriers shedding unprofitable flying AND cutting pay.

The decline of this profession began with deregulation, all that has come to pass was the inevitable result.

Who the F__k is Mike Boyd anyway? If I predict that an earthquake is going to hit San Francisco, eventually I will be proved correct though after ten years no one will be listening to me. The economics of the 50 seater aren't good and their days are numbered, which is relevant to the topic of this thread.

Peace.

 

[Jon Rivoli]

If CAL had decided to operate XJT's ERJs for XJT's pilots pay rate and CAL pilot work rules, .......

They would lose their a$$es. It's much more than pilot compensation.

By the way, SKW is down to about $500 million and also have about $1.5 billion in debt.

Yes, I just read the report this morning. Go back and read it again, the difference is that the prepaids went up a corresponding amount. Pay ahead on leases, insurance and other expenses and you get steep discounts. Not a bad idea when interest rates are effectively zero. Get a ten percent discount on your insurance or leave the money in a CD? You decide.

Now, if I paid my mortgage ahead for the whole year, what does that do to my cash flow for the next year?

For a company with about $3.5 billion in revenues $1.5 billion in debt ain't much, especially if the interest rates are really low, which they are, which you can do when you have a lot of cash.

You will notice that the net of the balance sheet went down by about $700,000, hence the loss.

 

[General Lee]

RA had an aneurysm four years ago when Delta's regional feed was making record profits while mother D was hemorrhaging cash picking up the tab for fuel. He still hasn't recovered and much of what he has done since has been to make sure that in the future Delta's regional feed will share the pain. Call it rage, but you would be more profitable now were it not for some of his decisions.

Old airplanes may be cheep, but you lose out on depreciation allowance, MX expence and efficiency.

Buy all of the 717's you want and operate them at a loss; they don't generate enough revenue to cover costs. I'm not talking about pilot salaries, I'm talking about the healthcare costs of retiree's and the wages of everyone from rampers and gate agents to HR administrators and purchasing agents.

It's a one way ticket, airlines grow and move into larger equipment and as revenue goes up so do costs. You can't go back. Smaller aircraft can't generate the revenue to cover the increased expense.

Think of it this way; it takes almost exactly the same amount of labor to operate a 50 seat airplane as it does a 747 (throw in a few more FA's), yet a 747 can generate 10-20 times the revenue. Why the hell would any sane person want to do the same work for a fraction of the revenue? Would you go back to flight instructing in a 152? Hell no! You're a 767 fo making the big bucks. You aren't going back to flight instructing and Delta isn't going back to 100 seat airplanes. Especially when they can subcontract it out to some one who can make money doing it.

If RA goes ahead and buys 163 second hand 717's and 319's, plan on getting bent over to help eat the cost. Isn't that the NWA business model? Run the company into the ground then file chapter 11.

As for "smacking down" an upstart regional, good luck with that. You can't replace 300 planes on short notice and neither Gojets nor anyone could come up with the planes or crews in any reasonable time frame.

Indy Air is everyone's go to, they attempted to go head to head with United at a time when fuel costs were just starting to rise (oil was about $10 bbl in 2001), United still had their 737's (even the 200's) and 727's and they had piss poor management that squandered their cash.

Express Jet was doing just fine until they got spit roasted between SKYW and Continental.

Side note, don't ever try to operated RJ's in SLC; Comair tried - toast, ASA - Owned, Expressjet - Owned, Mesaba - bankrupt/ we'll see. Stay out of Jerry's back yard.

I'm not scared and I am not trying to slam you guys either, though it's clear you've got your sack in a bind. Legacy pilots have seen their pay and benefits decimated over the last decade all the while seeing RJ's take over "their routes". The mistake you make is that it isn't cause and effect, no, the same causes led to both the growth of RJ's AND declines in compensation. Costs went up (primarily fuel) while revenues got squeezed ( say thank you to SWA )resulting in legacy carriers shedding unprofitable flying AND cutting pay.

The decline of this profession began with deregulation, all that has come to pass was the inevitable result.

Who the F__k is Mike Boyd anyway? If I predict that an earthquake is going to hit San Francisco, eventually I will be proved correct though after ten years no one will be listening to me. The economics of the 50 seater aren't good and their days are numbered, which is relevant to the topic of this thread.

Peace.

Look Jon, I understand and appreciate your opinion. You have some good points, but I think you don't understand who really is in the driver's seat these days. Back after 9-11, when oil was a bit cheaper and RJs were "in", you guys had solid profits. You had GUARANTEED profits, and life was great. Now, economics are just not on your side. You claim that RA doesn't know what he is doing, when in fact he is the one controlling the game. He is buying used airplanes as a "bandaid" to keep relatively new airplanes around for another 10 years (or newer than some on property), and then will have more money to buy even newer ones. His main focus is to bring down the debt, which he skillfully has since 2008. Next year, after bringing down the debt, Delta will save an EXTRA $500 million per year in interest payments. Per YEAR. The revenue generation in the last few years has been HUGE, and the WSJ said Delta should make $1.86 BILLION this year in profit.

Your airline, on the other hand, has some major obstacles to tackle soon. Not only does your airline mainly consist of 50 seat jets (ASA, SKW, and XJT), but also it is bringing back some 37 seat jets for UAL from the desert. (E135s) WHY? Because Colgan is failing? Maybe. But EVERYONE knows, including Boyd, that the main reason is because you are still paying for those planes anyway in the desert, and you have to use them for something, even if it is at a loss. High oil is here to stay, and none of your 50 seaters can make money. You tried to fly some at break even in MKE for Airtran, and now that's gone. You are running out of places to put them, and the leases (on the E135s it looks like) are still there.

Now that revenues are back up, it is time for mainline pilots to go after things lost during the BK years. That includes money, and routes if possible. Thankfully, high oil is already taking care of the latter problem. There is nothing that can be done about 50 or less seats, you just can't cover the costs associated with high gas. Larger planes though, can spread out the costs, and add fees---can even allow for a profit. Also, I don't think it's 120 717s AND 75 A319s, it's just one or the other. RA seems to want to try planes at about 100 seats, and they would be at bargain rates. Boeing also is a part of the deal, since I believe they owe Delta money over the 787 delay.


Bye Bye---General Lee

 

[Mercyful Fate]

Yup General, go back after all those routes you lost to 50 seat RJs...I am sure that places like PSC, HLN, IDA and GTF would love to see mainline again...

 

[xjhawk]

Why don't you all just go to your respective CEO's and tell them what to do and why it makes sense. Its a given that the 200 (any 50 seat) is on the decline and in the near future more and more will be parked. What will they all replace them with? Look for a lot of 88 seaters at American and a similar scope relief at other airlines in order to compete. How will the scope relief be handled? Its all up to the pilots at the majors. Those in bankruptcy have their hands tied in the matter, but I am sure the others will have a figure in their mind about what it will take to release scope

 

[General Lee]

Yup General, go back after all those routes you lost to 50 seat RJs...I am sure that places like PSC, HLN, IDA and GTF would love to see mainline again...

You're right. Those cities were all flown by mainline planes, and you KNOW the people there would love to see them. In the Summertime I bet all of those could sustain 3 or 4 flights per day. During the rest of the year, probably 2. Funnel people on, and fill the flights. It worked for years. On the East Coast it is happening. Fayatteville, NC, and Gulfport, MS, both all RJ flights a few years ago, are now getting MD88s (GPT), DC9s, and A319s. I hope that continues.


Bye Bye---General Lee

 

[General Lee]

Why don't you all just go to your respective CEO's and tell them what to do and why it makes sense. Its a given that the 200 (any 50 seat) is on the decline and in the near future more and more will be parked. What will they all replace them with? Look for a lot of 88 seaters at American and a similar scope relief at other airlines in order to compete. How will the scope relief be handled? Its all up to the pilots at the majors. Those in bankruptcy have their hands tied in the matter, but I am sure the others will have a figure in their mind about what it will take to release scope

American will most likely merge with USAir, and DP at USAir had to give the unions "a lot" for their support of the merger. I have a feeling they discussed 88 seaters, etc, and I would think they would have indicated who they wanted to fly them, if they do show up on property. DP and the APA really want to get away from AMR management, but DP had to agree to a lot of things that he may not have wanted to. He also stated in the APA notes from their "contract discussions" that he hated 50 seaters. (no joke, I can re paste that if you want me to)


Overall, I want more mainline type jobs available for the Regional guys. Some may not want to come over, instead trying to enjoy their QOL being senior at the Regionals. That's fine. But, the Regionals may transform into something totally different in the next 5 years. The fatigue and rest rules will have an impact on productivity at Regionals (no more CDO's). The hiring minimums will also change (1500 hours or 800 from a specific university program). All of that will make it tougher to attract lowtime pilots, and the low pay won't attract other pilots that have more hours. The Regionals will have to increase the pay, which is great for everyone there, but it will be tougher for the Regional to make profits because Mainline partners will always try to get the "cheapest" regional. (like Gojets) The Regionals will become inefficient, less profitable, and may go into BK like PNCL to restructure everything. That's not fun, and being through an Airline BK, I wouldn't wish that on anyone. High fuel prices and new rules won't help your side of the industry at all.



Bye Bye---General Lee

 

[Jon Rivoli]

I'm sorry Genny, but I find out amusing that you think that anything significant would come out of an AA/ AIRWAYS merger. They haven't even finished integrating the last merger and already have two feuding pilot groups. You want to make out three and expect miracles.

 

[PBRstreetgang]

Genny, et al.
It was a paper DAL put out about 10 years ago explaining the philosophy of the RJ. The RJ is a supplemental asset, it fills the last seats on a widebody by bringing them in on long thin routes. The RJs were never intended to be a stand alone piece of equipment. When you finally figure out the airline business you might actually have some insight. An RJ with one empty seat is still more economical than an MD 80 with 10 empty seats. The RJ should be filling the last few seats going to London or Frankfurt, there will never be enough revenue to justify a RJ from BOI-OAK, unless there is an overseas connection being made. The RJ was used as a union busting tool by mainline management after 9/11, unfortunately they were successful, just about every tier in the airline business is warring with other, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

 

[pilotyip]

The RJ was used as a union busting tool by mainline management after 9/11, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

This is after the mainline union pilots voted to keep RJ's off of the mainline seniority list. As posted by many others; mainline union senior pilots are the source of the whole RJ, Regional subset.

 

[General Lee]

I'm sorry Genny, but I find out amusing that you think that anything significant would come out of an AA/ AIRWAYS merger. They haven't even finished integrating the last merger and already have two feuding pilot groups. You want to make out three and expect miracles.

Jon,

from another forum:


The unions representing US Airways and American Airlines pilots will seek to negotiate together for a joint contract as the airlines move closer to a possible merger, officials from both unions said Monday in Charlotte.

The president of the Allied Pilots Association, Capt. Dave Bates, visited Charlotte to talk to members of the U.S. Airline Pilots Association. He answered questions about job security, pay rates, and other contractual issues from about 50 US Airways pilots at the union’s headquarters on East Woodlawn Road.

Bates rated the odds of a merger “very high.”

Capt. Gary Hummel, president of Charlotte-based USAPA, said it would be in both unions’ best interest to work together. “We both agreed there’s more value for both our unions if we work together,” said Hummel.

USAPA represents about 4,300 active US Airways pilots, 1,463 of them in Charlotte. Coming to an agreement for a joint contract with the APA’s 8,000 active pilots could smooth the path for a US Airways-American merger, which US Airways has been pursuing since American sought bankruptcy protection last year.

US Airways CEO Doug Parker announced last month that he had secured support for a merger from unions representing American’s pilots, flight attendants, and ground workers and mechanics. The three groups, with more than 50,000 members, were swayed by Parker’s promise of higher wages and about half as many job cuts as under American’s standalone bankruptcy plan.



Bye Bye---General Lee

 

[General Lee]

Genny, et al.
It was a paper DAL put out about 10 years ago explaining the philosophy of the RJ. The RJ is a supplemental asset, it fills the last seats on a widebody by bringing them in on long thin routes. The RJs were never intended to be a stand alone piece of equipment. When you finally figure out the airline business you might actually have some insight. An RJ with one empty seat is still more economical than an MD 80 with 10 empty seats. The RJ should be filling the last few seats going to London or Frankfurt, there will never be enough revenue to justify a RJ from BOI-OAK, unless there is an overseas connection being made. The RJ was used as a union busting tool by mainline management after 9/11, unfortunately they were successful, just about every tier in the airline business is warring with other, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

Why would RA state he is trying to get rid of as many 50 seaters as possible then? They don't make the connections work if they are money losers. You either have to put in larger planes (like DC9s and A319s are doing on routes to FAY and GPT for example), or you dump them. And wait, an RJ with one empty seat is more economical than an MD80 with 10? Really? I think you have that mixed up. If all 50 seats are full on an RJ, it is still losing money. There aren't first class seats on a 50 seater, and the larger the plane, the more you can spread out the costs. Boyd is correct about 50 seaters going away---look at LAX and SkyWest with Delta. No more 50 seaters in June. All 70 or higher, because they have figured out they can't make money. That means they brought in 70 or 76 seaters from elsewhere to make it work, and probably are dumping the 50s totally soon. PNCL and Comair are now pretty much owned by Delta, and they will decide which 50s go away first, with Comair going down to 44 total planes by the end of this year.


Bye Bye---General Lee

 

[General Lee]

This is after the mainline union pilots voted to keep RJ's off of the mainline seniority list. As posted by many others; mainline union senior pilots are the source of the whole RJ, Regional subset.

They are all retired now mostly. The rest of us now have to try to clean up the problem, but high gas prices are slowly doing it for us.


Bye Bye---General Lee

 

[Nevets]

They would lose their a$$es. It's much more than pilot compensation.



Yes, I just read the report this morning. Go back and read it again, the difference is that the prepaids went up a corresponding amount. Pay ahead on leases, insurance and other expenses and you get steep discounts. Not a bad idea when interest rates are effectively zero. Get a ten percent discount on your insurance or leave the money in a CD? You decide.

Now, if I paid my mortgage ahead for the whole year, what does that do to my cash flow for the next year?

For a company with about $3.5 billion in revenues $1.5 billion in debt ain't much, especially if the interest rates are really low, which they are, which you can do when you have a lot of cash.

You will notice that the net of the balance sheet went down by about $700,000, hence the loss.

I was just correcting your wrong information.

As for CAL losing their a$$es, no one really knows. But it is fact that AMR offered this very approach for 50+ seat aircraft to the APA before their bk filing. So maybe there was something to it.

In any case, I hope that ALL mainline pilot groups tighten scope. Just a hope.

 

[dojetdriver]

They are all retired now mostly. The rest of us now have to try to clean up the problem, but high gas prices are slowly doing it for us.


Bye Bye---General Lee

We can only hope. But the insanely high oil prices of a fews years put barely a dent in the overall RJ count.

 

[General Lee]

We can only hope. But the insanely high oil prices of a fews years put barely a dent in the overall RJ count.

Here is what Delta has lost. All of the LAX XJT flying(E145s). All of the Mesa ERJ and Dash-8 flying (JFK/CVG---Freedom Air). Comair will be down to 44 total planes. ASA lost some CRJs that went to UAL in IAD and ORD. Mesaba lost all the Saabs. Now PNCL is in BK, and there is a chance all of their CR9s in ATL will go somewhere else, along with some of their CRJ2s. The only airline to GAIN extra flying is GOjets.



Bye Bye---General Lee

 

[dojetdriver]

Here is what Delta has lost. All of the LAX XJT flying(E145s).

That was only a 2 year agreement anyway, with only 10-15 aircraft on a CPA. The other aircraft were on a pro-rate agreement that were virtually risk free to DAL. The agreement was terminated after about 18 months by CAL leveraging XJT, with the help of SkyWest. And those aircraft on the CPA were NOTHING but placeholers on the LAX gates till DAL could get their crap together in LAX. Crap that NEVER came together anyway thanks to the economic woes in 2008.

You'd be surprised though how many LAX/SLC based DAL pilots were ever so happy those ERJ's were out there. They provided service to markets that didn't have any service before then, as well as additional flights to places they commuted from. And didn't take the same weight restrictions that ASA/SKW CRJ 200's did.

All of the Mesa ERJ and Dash-8 flying (JFK/CVG---Freedom Air). Comair will be down to 44 total planes. ASA lost some CRJs that went to UAL in IAD and ORD. Mesaba lost all the Saabs. Now PNCL is in BK, and there is a chance all of their CR9s in ATL will go somewhere else, along with some of their CRJ2s. The only airline to GAIN extra flying is GOjets.



Bye Bye---General Lee

I'm not sure why you're mentioning the props. Something has to serve those markets, like east jesus nowwhere and who gives a fukc somewhere. You know, the places that management said was necessary to serve. Served in fact by the RJ's that mainline to too proud to fly, that would feed the emerging international market that needed more heavy jets. So how they feed those markets?

GoJet got extra flying, for GoJet. But those aircraft are simply replacing ASA aircraft. And keep in mind, DAL isn't the ONLY airline out there that outsources flying. As mentioned in a previous post, UAL is 50% outsourced.

 

[General Lee]

That was only a 2 year agreement anyway, with only 10-15 aircraft on a CPA. The other aircraft were on a pro-rate agreement that were virtually risk free to DAL. The agreement was terminated after about 18 months by CAL leveraging XJT, with the help of SkyWest. And those aircraft on the CPA were NOTHING but placeholers on the LAX gates till DAL could get their crap together in LAX. Crap that NEVER came together anyway thanks to the economic woes in 2008.

You'd be surprised though how many LAX/SLC based DAL pilots were ever so happy those ERJ's were out there. They provided service to markets that didn't have any service before then, as well as additional flights to places they commuted from. And didn't take the same weight restrictions that ASA/SKW CRJ 200's did.



I'm not sure why you're mentioning the props. Something has to serve those markets, like east jesus nowwhere and who gives a fukc somewhere. You know, the places that management said was necessary to serve. Served in fact by the RJ's that mainline to too proud to fly, that would feed the emerging international market that needed more heavy jets. So how they feed those markets?

GoJet got extra flying, for GoJet. But those aircraft are simply replacing ASA aircraft. And keep in mind, DAL isn't the ONLY airline out there that outsources flying. As mentioned in a previous post, UAL is 50% outsourced.

I never said I didn't like the E145 operation out of LAX, I bet many West Coast DL guys liked it. The XR is a better plane than the CRJ2 because of the full load plus Jumpseater capability. But, even with that today, high gas is killing it. It just can't cover the costs. 70 and 76 seaters are a bit better because there are more seats to sell, but the 50s and 37 seat ER3s are just bad economically, and if high oil persists, they will go away.

You're right about the props, some of them went to EAS routes like Watertown and Mason City, and that brought people into hubs like MSP. But, often there were only 5 people on board, and that really didn't make any sense. Yes, EAS money was paying for a lot of it, but I guess it became a hassle because RA dropped it. Great Lakes has started to pick up a lot of that type of stuff in MSP, and maybe the BE1900 is a better fit for some of those cities, and those same people now will just have to lug their bags over to a Delta ticket counter in MSP after they deplane off of the 1900.


You're right about Gojet, they did get some of the same planes that DL owned, that were used by ASA I believe. But, they are going to CVG mostly, and filling in where Comair lost a TON. Again, they will be down to 44 aircraft by the end of the year. That is NUTS. Delta got rid of 100 or so RJs in the last couple years, and according to the tone in the last couple of conference calls, that may not be the end of it. But, I hope that less RJs means more mainline jobs for those who want them.



Bye Bye---General Lee

 

[BOX OFFICE]

I think this discussion is kind of dumb. You both make great points, but what is your goal? You're not going to change each others minds, so is your goal to convince others to come you your "side"? Not likely. How about we just quit playing MBA know it alls and just fly planes? Why do pilots think they're an authority on all topics?

 

[ASApuppy]

General,

You and I could have a great conversation over a beer (or 6). You make several good points. But some assumptions that are not accurate though. So, lets chat.

LAX was all about squating on gates that the LAWA ( Los Angeles World Airport Authorty) wanted back while you were in Bankrupcy. They were one of two groups that were opposing the reorginazation plan. So, Delta responded as quickly as they could. Skywest still had non-compete clauses with UAL. Comair was too far away and Pinnacle was not in the picture yet as a DCI carrier. Xjet had many aircraft sitting around idle but could not deploy as quickly as needed. Enter ASA. 6 months for us, 18 months for Xjet, and now its all flown by Alaska.

Turboprops left the system because they were old and have worn themselves out. The other reason is Delta insists on wanting jetway boarding and first class seats for their medallions. Seeing 62 peeps on an upgrade list for 8 1st class seats tells me that system is broken, but save that discussion for another thread. Back to TP's. They were cheap to fly though. When Delta owned us and the EMB-120, several Delta managers told me that the break even point for a Brasilia was 6 pax. That was back in the day of $20/b oil. I remember when oil hit $40/b and then retreated to $30. Same managers were asked about why Turboprops were leaving and if they ever would come back. They said that if oil ever hit $40/b again then we would be ordering new TP's. That was 2004. The bottom line is that the 50 seat RJ was designed around a quick entry jet to fly through a loophole in a pilot contract. For a clean sheet aircraft designer, that is about as dumb of a design constriant as you could imagine. I think a clean sheet design for todays enviroment is a "wide-body", straight wing turbo prop. Short field, lots of room inside, fuel-mizer. Have it seat 100 and have bin space for 100 bags. It would burn less fuel per seat mile than an A-380. But, this is all dreaming.

Real World issue number one right now has nothing to do with the economics of a 50 seater. We are full, as is most mainline. The real issue is pilots. Nobody is training right now to replace us when we retire or otherwise quit. I was recently talking to some of our hiring Dept peeps and they told me that ASA/Xjet has virtually ZERO qualified applications on file. We have bumped up our min hours to 1100 or so, for ATP reqmt coming next year. We are turning away extra flying requests from DAL and UAL because we fear not being able to staff. Gojets is having a hard time staffing their gift of only 8 planes. Sure they are cheaper when they bid at a loss. Wages need to go up. When I learned to fly, I paid $35 hr wet for a C-150. When I came to ASA, Delta was paying $323/hr for 777CA. What are those numbers now?

As for moving on, thats not so easy either. Many Regional Capt's are in their 40's plus now. I ran some numbers. Alaska is hiring. Cool. Looking at retirement numbers, one might expect the left seat with a line in 14 years. So, how much would you earn as a 14y FO? I did simple math, 80 hr/mo, no retirement stuff, just wages, $1.39M. What if I stayed at ASA? $1.38M. Same hours worked. Left seat, no reserve, and most weekends off. Where is my incentive to start over? Give me FedEx or UPS wages and we're talking. Wages need to go up. In the meantime, CEO's like RA need to be planning a network of flights with fewer pilots required. You have to assume that UAL/CAL and even AA will evolve to DAL payrates. Since your mass exodus of 50+ guys prior to bankrupcy, DAL is behind the curve in future upgrades. Yes, NWA helped, but you are far from par against the other legacies. While Delat may be the most solid financially, anybody that scrubs the senority list should know that Delta (and SWA) are amongst the last choices. We, ASA are anticipating a mass exodus of our FO's as soon as we type them and give them ATP's. Hello Qatar. Delta cannot afford to have flights scuttled at the last moment because of pilot staffing. That is approaching fast. So, what will save the day? Simply eliminating RJ's sound good on paper, but how many peeps on your 767 connected on an RJ? I bet enough to no longer keep you in the black. A happy median is larger planes on less freq. You have to keep the biz traveler happy with freq, and yes it does matter. I think we almost had the perfect solution back in 2000. We should have been stapled to your list and scope sealed up. Since that ship has sailed, what next? You have to honor the time and experience of some of our senior pilots, especially like guys in the Training Dept with APD's. Are they really equivlant to a 3 yr FO? Perhaps DAL could "franchise" its DCI pilots. Flow through or such, but also with the elimination of 1st yr pay and probation. Movement at the regional is good for mainline too. I predict offers for scope changes that revolve around swapping 50's for 70-90's. Just my guess.

 

[General Lee]

General,

You and I could have a great conversation over a beer (or 6). You make several good points. But some assumptions that are not accurate though. So, lets chat. Sounds good. I will buy the first few rounds...

LAX was all about squating on gates that the LAWA ( Los Angeles World Airport Authorty) wanted back while you were in Bankrupcy. They were one of two groups that were opposing the reorginazation plan. So, Delta responded as quickly as they could. Skywest still had non-compete clauses with UAL. Comair was too far away and Pinnacle was not in the picture yet as a DCI carrier. Xjet had many aircraft sitting around idle but could not deploy as quickly as needed. Enter ASA. 6 months for us, 18 months for Xjet, and now its all flown by Alaska. I understand the process. We needed those gates, and you guys were placed there. If it would have been profitable, you might have stayed. Terminal 6 is now Alaska and Horizon, but that just happened. The XJT experiment ended when it ALSO became unprofitable. As far as Alaska taking over XJET routes, that isn't necessarily the case. Some of the routes were the same, but since then they have cut back on Cancun, and some of the Mexico flying thanks to the Cartel stuff going on down South. They still rule SEA, PDX, YVR, and have a DCA flight too. They had that before the move.

Turboprops left the system because they were old and have worn themselves out. The other reason is Delta insists on wanting jetway boarding and first class seats for their medallions. Seeing 62 peeps on an upgrade list for 8 1st class seats tells me that system is broken, but save that discussion for another thread. Back to TP's. They were cheap to fly though. When Delta owned us and the EMB-120, several Delta managers told me that the break even point for a Brasilia was 6 pax. That was back in the day of $20/b oil. I remember when oil hit $40/b and then retreated to $30. Same managers were asked about why Turboprops were leaving and if they ever would come back. They said that if oil ever hit $40/b again then we would be ordering new TP's. That was 2004. The bottom line is that the 50 seat RJ was designed around a quick entry jet to fly through a loophole in a pilot contract. For a clean sheet aircraft designer, that is about as dumb of a design constriant as you could imagine. I think a clean sheet design for todays enviroment is a "wide-body", straight wing turbo prop. Short field, lots of room inside, fuel-mizer. Have it seat 100 and have bin space for 100 bags. It would burn less fuel per seat mile than an A-380. But, this is all dreaming. I am surprised the Dash-8-400 was never brought up, which might have worked well on certain routes. I don't think we ever had a restriction on those. The problem is those planes are mainline plane replacers too. CAL is a great example. Those Colgan DH8-400s replaced a lot of 737-500s out of EWR and IAH. Now of course they are going away because UAL wants to pay PNCL less than what they cost per hour, and that is the key here, the Mainline carriers are the ones demanding how much to pay now, not the regional carriers. Sure, someone else will fly those DH8-400s for UAL, (maybe Republic), but it will be for what UAL wants. Delta has that pricing power too, and if certain airlines don't want to play, they will lose out (even on 8 CR9s at Gojets).

Real World issue number one right now has nothing to do with the economics of a 50 seater. We are full, as is most mainline. The real issue is pilots. Nobody is training right now to replace us when we retire or C-150. When I came to ASA, Delta was paying $323/hr for 777CA. What are those numbers now? That is a problem. One of my friends told me first year at Embry Riddle now costs over $50K if you stay at the dorms the first year, which I think is required, along with the flight program. Who can afford that? That's called a lot of debt for people who might not make a lot at a regional, and now with new hiring standards and rules coming out, it may take a couple years before you actually get hired to try to pay off that debt. Not good. I think the Legacies will have flow up programs, and maybe sponsor some schools to help keep that flow going. I don't really know. As far as what a 777 CA made, that was sustainable. The problems was the selling of the fuel hedges that we had, and then the run on the pensions when people thought things were going downhill. That has all been cleaned up through the BK process, and DL is now very profitable again. We are currently doing face to face negotiating with the company, and it was requested by both sides, so something is going on. Pay raises are back on the table, and other interesting developments could occur soon. Will there be a request for more 76 seat RJs? I bet there will be.

As for moving on, thats not so easy either. Many Regional Capt's are in their 40's plus now. I ran some numbers. While Delat may be the most solid financially, anybody that scrubs the senority list should know that Delta (and SWA) are amongst the last choices. . A happy median is larger planes on less freq. You have to keep the biz traveler happy with freq, and yes it does matter. I think we almost had the perfect solution back in 2000. We should have been stapled to your list and scope sealed up. Since that ship has sailed, what next? You have to honor the time and experience of some of our senior pilots, especially like guys in the Training Dept with APD's. Are they really equivlant to a 3 yr FO? Perhaps DAL could "franchise" its DCI pilots. Flow through or such, but also with the elimination of 1st yr pay and probation. Movement at the regional is good for mainline too. I predict offers for scope changes that revolve around swapping 50's for 70-90's. Just my guess. Stagnation at the Majors and furloughs pushed a lot of younger RJ pilots to stay at the Regionals. Now there is a huge amount of retirements coming up, and even Delta is concerned. I read an article stating 7600 Delta pilots will retire at age 65 (if they get there) within 15 years. Yes, a lot of Delta guys left pre-BK, but there are still a lot of FNWA pilots to go. UAL/CAL never lost any pre-BK, and AA/US are full of old guys too. I see Regionals getting smaller, still having 76 seaters (nothing larger), but still having some. The 50s will leave, and overall the Regionals will be half the size, with mainly 70 and 76 seaters, but again half the size as they were. Pilots there may stay for QOL reasons, but the legacies will be looking for anyone, and thanks to better profits lately, the wages will go up. Right now first year at DL is around $55 an hour, with second and third years rising about $25 an hour each year. After 3 years you could be looking at $100K per year, and that is without the upcoming raise (some people saying maybe 20% first year, with 4 or 5% a year for a few after that). If guys do leave in droves, you can expect to fly quickly through the ranks, up to Widebody FO within a year or so, or stay on narrowbodies for better QOL. One thing the Majors have is a better retirement program (DC fund besides the 401K. 2% match on your own 401K contribution, and then 12% extra on whatever you make over the month, into your own seperate account) Add to that profit sharing (near $10K each year for me over the last couple), and better benefits. It's not just the pay, it's the variety in flying, the option of bases, and the clear advancement that will happen thanks to known retirements. Southwest doesn't have that same problem. They will have one type of plane (if they dump the 717s). Everytime a SWA Captain leaves, one FO moves up, and then they hire a new guy to replace that FO. At the Majors, when a senior Widebody Capt leaves, a lot of people move up. It might be 8 people (other Captains moving up, then FOs, then a newhire). That isn't the pilot group's fault, that is how the airline chooses to manage it's fleet. 737s don't work well flying nonstop to Hong Kong. So, I see good things happening coming up here. If you choose to stay at your regional, that is your choice, but I see it shrinking, with half the size eventually. If you want to take a chance at quicker advancement, better pay and benefits, and flying something and somewhere different, then throw an app into a Legacy. It's all up to you... Sure, people can go over to Dubai etc and live in the Sandpit, but a lot may not like it as much, and they may be waiting for something closer to their actual home. Flying over there may be fun for you, but maybe not for your wife and kids.

Good discussion. I went over the 1000 limit and had to delete a portion of your initial responses. Sorry about that.



Bye Bye---General Lee