Scope / Delta MEC verifies RJDC's projections

[~~~^~~~]

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.