Scope / Delta MEC verifies RJDC's projections

[publisher]

Thought of

The fact of the matter is that none of the parties ever thought of the situation where the mainline carriers would be in a position where they merely wanted the regionals to defend a market.

It was always a situation of market development and or feed on weak routes or marginal frequencies.

The problem discussing this is that you want to make this a labor issue and ignore any of the other factors involved.

One list is not a reality or even a discussionable point in the big scheme of things. If anything, the mainlines are going to distance themselves from the regionals not come closer to a merger.

Why is this? Comair strike is one. Two, the problem they have is that their markets are being taken by Southwest, Alaska, Air Tran and others who have slid in between the regional and the majors with a different concept.

To look somewhere else as an example, take TV networks... Along came cable and internet, some of which the majors owned. You could have this labor fight going on in the majors but the thing is that 50% of the viewers went to some other guys like Fox or CNN who had their own little niche,

While railroad guys were debating over scope and other issues, someone came and made off with their markets. It was called aviation.

Until you deal with these issues as part of the whole, you are jsut making noise.

 

[~~~^~~~]

Publisher:

Your comparison is apples and oranges. We are not talking about people replacing flying with Star Treck style transporters. If that technology ever comes along you wont see me on this board - I'll zip to Tahiti. Lets deal with the real world.

Southwest and Airtran have the market advantage of paying their pilots significantly less than the established major carriers. Delta's 12 year 737 Captains can make $250,000 at the end of Contract 2000, while Southwests' pilots top out at around 150,000 to 160,000 (if I'm not mistaken).

The majors can only remain in the domestic market over the long term by offering better service (frequent flyer programs, international destinations, Crown Clubs) and being price competitive. With regard to price competition & service one viable option is the CRJ700 and similar aircraft that are replacing 737 and 727's.

Our arguement is over who will operate these airplanes, which is a labor issue. One side believes that these airplanes should not fly and that 737's and MD80 type equipment should continue in their traditional roles. The other side argues that the small jets should fly in the market for which they are suited and that the 737-800's and MD80's should fly in the markets where they are best suited.

The only reason why the piloting profession is elevated to the standards of safety and compensation that has been achieved is because pilots figured out it was better to stand together and negotiate with their employers. The issue of small jets has threatened to tear apart this unity. So it is a labor issue.

Right now the Elephants are winning at restricting the small jets from the marketplace. However, as you mentioned the major airlines now need the small jets in a defensive role.

The first major airline that realizes the proper role of small jets and lifts the restrictions on their use will benefit through the additional growth and feed that their market constrained major can not take advantage of. Again, the control over the operation of the small jets is controlled by union contracts - which again is a labor issue.

The airplanes are only half the story - you need pilots to fly them.

 

[publisher]

right

I am not saying that there is not a labor issue element.

What I am indicating is that the other factors involved eliminate the possibility of solution that people who advocate one list want.

You are also right to bring up the market points that you did.

Ultimnately the question becomes, what will the paying passengers pay for this particular service.

Union contracts, costs of big frequent flier liability, maintenance costs, etc., etc., can drive up the cost of a ticket. The question is who is willing to pay for it. Southwest and others have proved they can produce a quality product by paying attention to all costs, not just pilots, and serving the public at a price they will pay.

It is my personal feeling that scope issues here may well hurt the larger carriers in the market and hence their pilot corp. As Deniis Miller says though, I could be wrong.

 

[FlyingSig]

Not quiet...just not online so much

we can report that management's new plans do violate the contract unless the plans are excused under Section 1 E 6 of the contract as claimed by management. Today, your union filed a grievance for submission to the Delta Pilots' System Board of adjustment to challenge management's claims on this issue under Section 1M. of the PWA. Management has also requested that ALPA and Delta meet to confer for resetting the contractual block hour plans and planned percentages, but your union has advised management that such action is premature. We will continue to update you on this situation as more information becomes available. [/B]

I highlighted the real jist of this code-a-phone. The contract is being violated because of a term circumstances beyond the control of the company.

Here's the definition from our contract:

2. “Circumstance over which the Company does not have control,” for the purposes of Section 1, means a circumstance that includes, but is not limited to, a natural disaster; labor dispute; grounding of a substantial number of the Company’s aircraft by a government agency; reduction in flying operations because of a decrease in available fuel supply or other critical materials due to either governmental action or commercial suppliers being unable to provide sufficient fuel or other critical materials for the Company’s operations; revocation of the
Company’s operating certificate(s); war emergency; owner’s delay in delivery of aircraft scheduled for delivery; manufacturer’s delay in delivery of new aircraft scheduled for delivery. The term “circumstance over which the Company does not have control” will not include the price of fuel or other supplies, the price of aircraft, the state of the economy, the financial state of the Company, or the relative profitability or unprofitability of the Company’s then-current operations.


I highlighted war emergency because that's what the company says allows them to vilotae the contract. The other part that I highlighted is why I believe they can not do what they are doing.

Would this cause DCI pilots to be furloughed. I hope not. Unlike skydiverdriver, I don't wish that upon anybody. But I believe that it would not. What Delta is doing is flying less mainline block hours than the minimum that is contractually required (2,267,000 hours). By flying the same amount of DCI flying with this lower mainline flying the DCI percentages are exceeded. If we win the grievance and the minimum hours must be restored, the DCI percentages (which have already been reset to higher numbers) will be within limits. Also keep in mind if this grievance is won that also means that everyone that is furloughed was furloughed illegally and must be recalled. Why would Delta keep an additional 565 pilots around and pay them not to fly.... esp when UAL and AAL are announcing their spring schedule will bring them back to within 7% (in AAL's case) of their pre-9/11 flying. Doesn't add up but sure make good RJDC propaganda.

Delta enters a US Air style death spiral due to constraints on its ability to compete in a free market.

Another good one..... let's see, who is the #1 RJ operator in the world right now? Oh, yeah, DCI. I'd say DAL Inc. is doing ok in that area. Compare the percentage scope to AAL... UAL....NWA ... USA , the only airline that has less constriants then Delta does is CAL and they are following the DAL playbook right now in regards to RJ's.

 

[~~~^~~~]

Flying Sig:

So let me get this straight - if you win your grievance - you believe Delta would start operating all kinds of unprofitable flights just to get your block hours up to the minimum required?

They are loosing money already, if there was profitable mainline flying out there - they would perform it.

If forced to follow the contract Delta will park RJ's. Because the amount of money an RJ can earn is less than what it costs to build your block hours flying around an MD88 with 19 people on it. Delta will follow the path that looses the least amount of money. Delta will follow the patch chosen by American and begin reducing Delta Connection.

Your path leads to mutual assured destruction. Your patch leads to furloughing Connection pilots & harming your employer.

I fully expect your MEC to come after the small jets just like the US Air MEC is doing. Anybody want to guess where we go from there?

By the way - no "Mea Culpa" for the fact that the RJDC was right on the scope exceedences?

 

[~~~^~~~]

American Eagle to cut back 500
Pilot job losses at larger sister company trigger furloughs

02/02/2002

By TERRY MAXON / The Dallas Morning News


Commuter carrier American Eagle Airlines Inc. in early April will furlough 500 employees, who are losing their jobs because some American Airlines Inc. pilots have lost theirs, officials said Friday.

The cutbacks come as many U.S. airlines are using their lower-cost commuter affiliates to help them recover traffic lost after the Sept. 11 terrorist attacks.

American Eagle is barred from adding capacity if sister company American has pilots on furlough. With 595 American pilots off the job, Eagle is limited to the capacity it had when the furloughs began.

As part of the cutbacks, American Eagle will close its stations in Beaumont-Port Arthur and Lafayette, La., and halt its daily service from Dallas/Fort Worth International Airport.

In addition, American Eagle is leaving five other routes in its system on April 7 and reducing flights on other routes. And it will remove a row of seats from turboprop airplanes to cut capacity.

The capacity limit is part of American's contract with its pilots' union, the Allied Pilots Association, which has vigorously fought efforts to expand flying by non-American Airlines pilots. In the contract, a "scope clause" limits all flying done on behalf of American to American pilots.

American asked the union to waive the rule.

In response, union negotiators proposed that American's pilots fly the regional jets. American rejected that proposal as too costly.

American Eagle pilot James Magee, spokesman for the Air Line Pilots Association, which represents Eagle pilots, said his pilots are caught in the middle.

"Anything that's going to take jobs away from American Eagle pilots, we're going to oppose," he said. "The job losses they propose are artificial and they're not necessary."

Flying Sig - there is my future if you win your grievance...

 

[darling pretty]

who would lose ????

~~~^~~~, you are right on with your comment to flying sig that this is our destiny if DALPA wins the grievance, but what I am wondering is who would lose out ?

IMO Skywest, ACA, and AE would be the first to lose out to meet the scope provisions. Remember Delta completely sold off their stake in Skywest and even if Buttrell says that he is interested in the financial health of all the DCI carriers, I got to believe they keep the WO intact as much as possible as all the money from us stays with ma DAL.

If I remember correctly DAL pays the same to Skywest whether they fly 1 or 50. I don't know how it is with ACA or AE.

Additionally, I know they wanted AE for a West coast feed, but I think we are going to see United sell off some routes in the near future and ma DAL will be there salivating.

Your thoughts ??

By the way, your comments are by far some of the most intelligent and well thought out I've seen. Keep up the good work.

 

[~~~^~~~]

Darlingpretty - Thanks for the kind words.

Remember when the company announced that they were keeping the E120's? I believe maintaining the size of the E120 fleet correlates with the decision that Delta was going to exceed the scope limits.

Just like last year when hiring went from 40 a month to just a trickle. The "event" was a tentative agreement on the scope section of the Delta contract.

Based on the indecision on the E120 fleet, my guess is that they would get cut first.

Whether or not ACA, or Skywest, would get cut depends on their contracts (which I have not seen yet).

Just like American Eagle, the Company will continue to acquire the small jets and use them defensively on mainline routes that are losing money. The E120 service is highly profitable, but the numbers just don't add up to justify parking a small jet.

The logic of this scope escapes me. It is mutual assured destruction. The E120's and ATR are no threat to mainline, but since they use "block hours" the scope will eliminate them first.

Regards,
~~~^~~~

 

[FlyingSig]

Everything here is pure speculation... but I think you guys are right in saying that AE and ACA would be the first to get cut. Now I know that wouldn't help either of these carriers, esp Eagle given the above news release.

But yes, I do think DAL would operate a route at a loss if forced to. Look at the shuttle right now. It's called keeping market share, not to mention keeping up witht the Jones (with UAL and AAL adding more flights to their schedule).

However you make some very valid points and right now and it's really coming down to a no win situation for all parties involved (Mainline, DCI, and management). Hypathetically speaking though, would stapling you guys to the bottom of our list do anything? Not really... all the furloughed guys at DAL would get their jobs back and bump the bottom pilots off the new combined list from DCI (ala CAL/CoEx). I don't think that's how you would want to "win" your way onto our list. If we loose the grievance and DAL furloughs "up to 1400" pilots while they grow DCI to "rightsize the airline for the economy" ... well, I know some of the people on this board don't have a concience but I know I would have a queezy feeling in my stomach if I upgraded because some other family lost their job "due to circumstances beyond the control" of Delta.

Another question.... what happens when the economy recovers and all this "defensive" flying goes back to mainline? If your growth were to stagnate because DAL was "rightsizing" the network for the new economy whose fault would it be then? My guess is the "defensive" flying is lost forever due to the cost structure at DCI...not that a route wouldn't be profitable at mainline...it's just MORE profitable at DCI when you add multiple frequecies instead of rightsizing the airplane. Thus, your growth opportunities will never stop.

As for the "event" that stopped your hiring...another thing just happened to occur at the exact same time as the DAL TA... Comair just happend to go out on strike for three months and cost DAL $500 million (half the CY01 loss) and at the same time, DCI just happened to get reorganized, and get new leadership.... that wouldn't have an effect on ASA hiring would it?

 

[~~~^~~~]

Hypathetically speaking though, would stapling you guys to the bottom of our list do anything? Not really... all the furloughed guys at DAL would get their jobs back and bump the bottom pilots off the new combined list from DCI

No, not necessarily. Hypothetically speaking, the CRJ has been a "recession proof" airplane. If the company could deploy these aircraft in the right markets the furlough might not be happening at all. Delta guys would be in CRJ700 school - there are enough airplanes on order to absorb all of 'em.

Another question.... what happens when the economy recovers and all this "defensive" flying goes back to mainline? If your growth were to stagnate because DAL was "rightsizing" the network for the new economy whose fault would it be then?

If we were on one list I would welcome the return of mainline equipment to the route because we would all benefit from the opportunity to bid larger equipment.

My guess is the "defensive" flying is lost forever due to the cost structure at DCI...not that a route wouldn't be profitable at mainline...it's just MORE profitable at DCI

That is why it is in your interest to integrate us, to get rid of the low cost competitor.

As for the "event" that stopped your hiring...another thing just happened to occur at the exact same time as the DAL TA

No, that was not the way it happened. Your TA on section 1 of the contract was reached on, or about, February 10. Until then ASA had a hiring binge going (perhaps to aid in the event of a Comair strike). The Comair strike was not until March 26th.

It is my theory that Delta realized the scope constraints gave them the choice of dissolving Comair and accepting planned growth at ASA, or reducing growth rates to around 4% with Comair operating their full block. As such, the Comair pilots lost a lot of their negotiating power. However, the Comair MEC had already raised everyone's expectations so high that nobody stopped to realize that under scope, Comair could have been dissolved and rebuilt in less than 6 months.

Not that I'm blaming the Delta MEC for the strike - it was unintended consequences. Just like I'm sure you don't blame DCI pilots for Delta furloughs. Bottom line the truth is that we are better off together on one list than we are separate.

 

[flyermon]

One question regarding all this, when will a decision be made?

 

[~~~^~~~]

Delta's ALPA unit has a grievance going forward this week (2-4-02) on the furlough portion of "forces beyond the company's control." Another grievance has been filed on the scope exceedences, but no hearing date has been announced.

Preliminary numbers show that at the conclusion of December DCI was 2% over the limit. That means at the end of 2002, with aircraft deliveries, as many as 80 DCI aircraft could be parked. These numbers are not final yet - ALPA's economic analysis department has not shared them with members at DCI.

 

[Otto]

My God I've got a headache after reading all of this. I think I'll stay in the military for awhile longer!

 

[FlyingSig]

These numbers are not final yet - ALPA's economic analysis department has not shared them with members at DCI.

Nor have they shared them with their mainline members.... don't add this to your conspiracy to keep the DCI man down! Trust me, we would love to know the actual figures just as much as you!

 

[Tim47SIP]

Hey fins,
If DCI was only over by 2% how did you come to the assumption that 80 DCI aircraft need to be parked. That seems a little high, but I am not sure of the total number of DCI aircraft out there at the 4 carriers (excluding Eagle). Was just wondering how the math worked out. Additionally, do you really think that Delta management will allow the only thing that is making money be hindered in this capacity? Surley even DALPA will want to come up with a plan to keep Delta solvent.