slowplay

Bakken is cheap right now because it's hard to get it to market. It has to be railed and/or barged to get to refineries which adds a bunch to the total cost of the fuel. Estimates I've seen are $12 per bbl to the Gulf coast and $20/bbl to the east coast. Those costs will ease over time as new transportation options are put in place.

COLUMN-U.S. coastal refiners' Bakken lifeline eroding: Campbell | Reuters

gloopy

So when will we start hiring the 5000+ for the next 10 years and 2000-3000+ for the next 5 years like was "hinted" pre-TA?

Since the first year of that is a big goose egg, and the second might be as well, the years right after that are going to have to be monster to meet those numbers.

Although to be fair, no one this summer had any idea the economy kind of sucked, nor did anyone have any idea that things were gettin kinda hectic in the United States of Europe. Those are two huge post TA suprises that can wipe out thousands of projected hiring numbers (although AS keeps hiring so that's good).

gloopy

So once the transportation costs get lower, won't the price just settle up to match the other crude sources? IOW, what's the long term pricing prognosis relative to other crudes? And is DL doing anything now that will yield a somewhat permanent cost advantage of Bakken crude specificially once the transportation costs go down, or will we just pay that same money to the crude market that we're currently paying for its transportation today?

IOW, will that source truly be cheaper long term for us or will it all come out in the wash?

cni187

Die Hard 2 - Classic!! Who wants to work when I get to sit around and watch the kid and classic movies!!

Doug Masters

Don't blame the kids, you don't watch cuz your team sucks!!!

TeddyKGB

Another DPA bonehead comment,

"ITEM FOUR: GOOD NEWS/BAD NEWS! ALPA just announced a dues rate reduction to 1.90%. Here is the math:

A pilot making $100,000 in income subject to dues annually currently pays 1.95% or $1,950 in dues.

Following the 2013 pay increase, a pilot making $108,000 will pay 1.90% or $2,052 in dues for 2014.

This pilot will, in reality, pay an additional $102 in dues!"

How do I withdraw my card?

Roadkill

Where's the AE.....

80ktsClamp

Caplinger is doing a stellar job of making sure I don't renew my card, haha.

forgot to bid

Half of the increase of what though if capacity cuts were a part of the equation in increasing the unit costs?

It makes sense that if you cut capacity and costs stayed the same then the unit costs increase. If the cost rose then they increase even more.

But at this point in the life of C2012 there really isn't a reason for the cost of the contract to do anything but rise, right? We're paying pilots more and reserve pilots make more hours and none of that has been offset by re-fleeting and some of the productivity stuff hasn't kicked in to make a difference. It's going to be something measured down the road 'ceteris paribus'.

When asked how will you pay for the pilot contract RA and GH responded that overall value to refleet plus productivity plus the reduction in profit sharing will improve margins and fund the growth. To me that says the pilots will cost us more but we're going to make it up in working them more, requiring fewer of them and paying them less in profit sharing and of course swapping out RJs and adding 717s to fund their increased cost.

Now to me, if pilot cost increase 5% but decrease both 2% on productivity and 1% on profit sharing (making up the % there) then the pilot cost increase is 2%. If we make 4% more revenue because of refleeting then the pilots are paid for.

That'd be cost neutral. But also staffing negative. Again % are made up as an example.

You know, on a side note. I was lambasted for saving we'd keep reducing capacity but we keep doing it. I only said it because that's what we've been doing for years, why in the world would we change that? A jump in capacity with the 717s even offset with the smaller decrease in RJ capacity still means an increase and I worried we didn't have sufficient protections with the ratio or the erased hull count requirement.

Now I think I'm left to hope that macroeconomic factors kick in next year and we need that extra caacity.

That said it seems like they're okay increasing our costs as long as revenue increases sufficiently to cover it so that we don't eat into the profits.

Quote:

Originally Posted by slowplay

We currently enjoy a cost advantage compared to some of our full service network airline peers, but that will be stressed next year with our pay increases (12.84% over same period previous year) and no offsetting revenue increases from upgauged mainline (B717) until late in the year. If the revenue doesn't materialize as forecast, the cost increase still remains.

Wouldn't that mean if the revenue does materialize cost increase does not remain?

johnso29

The DPA embarrassment continues. It's a good thing DPA isn't like ALPA, otherwise I might think they're trying to spin things.