XJ to get 17 CRJ200's from 9E

[Lear70]

However, I would like to point out that when they finally do file the petition, NWA will have the choice of either liquidating mesaba or giving the mesaba pilots mainline seniority. Both scenarios are extremely unlikely, instead NWA will comply with the contract and compass will disappear.

This tells me you are firmly seated in MIDDLE management (and not on the financial end of the building), simply because you have no understanding of the market forces behind simply "shutting down compass".

First, Northwest negotiated a sweetheart deal while in Bankruptcy for all those large RJ's going to Compass. Northwest needs that RJ as a DC-9 replacement moving forward to gain a cost advantage over the other legacy carriers. Those leases have a hefty penalty to just "cancel" them.

Northwest is prohibited from sub-leasing them to another red-tail carrier because of Scope, so they'd have to sub-lease to another airline, and what executive in their right mind would help their competition get earlier delivery of needed operational assets?

Second, they're not going to liquidate Mesaba... too much money to lose. They MIGHT spin it off sooner rather than later, especially if they can get them firmly into the jet age with PCL's 50-seaters (most or all of them) over the next 2 or 3 years, but liquidate? No.

Lastly, seniority integration is the only COST-EFFECTIVE way for Northwest to deal with it. The longer the MEC waits, the better the financials protect the shut-down of compass and the more money NWA stands to lose from a loss of an IPO of Mesaba down the road.

Pop quiz, hotshot: How much money did NWA make with PCL's spinoff? Now adjust for inflation. Now tell me NWA is going to pass that money up or try to sell the goods before they're fully ripe for the picking.

When given a choice between liquidating Mesaba (a wholly-owned), giving them mainline seniority, or liquidating Compass (and defaulting on millions in leases OR selling those lucrative leases to their competition), giving them mainline seniority is the only choice that doesn't cost millions (especially if they integrate seniority now before they hire off the street, make the deal that they start at year 1 NWA rates (they'll still go for it to get that mainline seniority number), and replace the high-seniority MSA list with lower-time guys, thus making the MSA balance sheet look even better for an IPO with lower labor costs).

Do the math. I thought that's what you management guys were "supposed" to be good at?

No wonder these airlines keep going bankrupt. My grandmother makes better money decisions that most of you clowns...

 

[timmay]

Razor,

Now those are the last sober words your going to hear. And on that note, I'm going back to my bottle of Jack Daniels. Peace out.......

Keep livin the dream spartacus.

 

[DoinTime]

However, I would like to point out that when they finally do file the petition, NWA will have the choice of either liquidating mesaba or giving the mesaba pilots mainline seniority.

Option #3: Mesaba gets operationally merged with Compass and the two pilot groups get held apart with fences working under their respective contracts A'La USAir/AmWest and Skywest/ASA. Operational efficiencies would be streamlined and the resultant company would be worth significantly more than the acquisition costs in an IPO.

This scenario would allow NWA to maintain super seniority at Compass and allow the Mesaba pilot group to operate aircraft larger than 50 seats. Many indicators are already pointing to this type of "teamwork" between Mesaba and Compass.

 

[YourPilotFriend]

First, Northwest negotiated a sweetheart deal while in Bankruptcy for all those large RJ's going to Compass. Northwest needs that RJ as a DC-9 replacement moving forward to gain a cost advantage over the other legacy carriers. Those leases have a hefty penalty to just "cancel" them.

Northwest is prohibited from sub-leasing them to another red-tail carrier because of Scope, so they'd have to sub-lease to another airline, and what executive in their right mind would help their competition get earlier delivery of needed operational assets?

There are opt out clauses for the ERJ and not the CRJ, so yes NWA would have to accept the CRJ, i'll give you that. The 9's simply can't be replaced by a 76 seat jet, they need a replacement as well as compliance with a soon to be established narrowbody floor. All of these are still leverage items. Also I'm sure if XJ and compass merged, the Xj pilots would allow a separate compass list and not file a PID.

 

[Ridgeback]

Also consider,

NWA has a vested interest in Mesaba's staffing, i.e. they don't want and can't afford another 9E. With Compass getting hundreds if not thousands of apps with guys that have thousands of hours and several types one has to ask "what does Compass have that Mesaba does not"? HMMMMM, A NWA flow through number.

From NWA's prospective a very cheap way to attract pilots to Mesaba and cure any staffing problem that will arise from this growth.

 

[YourPilotFriend]

Also consider,

NWA has a vested interest in Mesaba's staffing, i.e. they don't want and can't afford another 9E. With Compass getting hundreds if not thousands of apps with guys that have thousands of hours and several types one has to ask "what does Compass have that Mesaba does not"? HMMMMM, A NWA flow through number.

From NWA's prospective a very cheap way to attract pilots to Mesaba and cure any staffing problem that will arise from this growth.

Staffing isn't going to be a problem very long. There will be an over-surplus once things settle in.

 

[DoinTime]

With Compass getting hundreds if not thousands of apps with guys that have thousands of hours and several types one has to ask "what does Compass have that Mesaba does not"?

What Compass has is the opportunity to be high seniority in the left seat right out of training. Once those opportunities go away so will the pool of qualified applicants. Its amazing to watch the types of applicants that come in when upgrades at 9E go down to the bottom of the list.

The notion of a flow through (which is still unresolved and unlikely to carry through after NWA sells the airline) is offset by the elimination of any kind of job/seniority protections while at Compass.

NWA has a vested interest in Mesaba's staffing, i.e. they don't want and can't afford another 9E.

Staffing at 9E actaully accounts for a small number of cancellations. NWA wanted us to take delivery of 15 new airplanes, staff them, and operate a full schedule over the coarse of a single month with less than two months notice. We were not able to meet NWA needs and nobody else could have either. Mesaba had this same problem in the late '90's when they were taking delivery of the Avros, their fleet of Saabs, and all of the airplanes NWA stripped from Express I.

 

[DoinTime]

Staffing isn't going to be a problem very long. There will be an over-surplus once things settle in.

YPF = clueless on current pilot hiring market.

 

[YourPilotFriend]

YPF = clueless on current pilot hiring market.

We are short staffing to prevent additional furloughs or the recalls to get furloughed again.

 

[DoinTime]

The post was about Mesaba and Compass staffing not NWA.