Bucking Bar

... oh how I enjoy a race


I'm rooting for the new Scope-Restoration Hardware Special !

Weed

Is Delta trying to cut ties with some of its regionals?

Delta and Mesa Air lock horns again - Business Courier of Cincinnati:

Delta Air Lines Inc. has filed a new lawsuit in its continued attempt to break a contract with Delta Connection partner Mesa Air Group Inc.
Mesa, parent of Connection carrier Freedom Airlines, said in a Friday regulatory filing that Delta had filed suit in federal court seeking declaratory judgment to terminate the contract based on “material breach by Freedom,” according to Securities and Exchange Commission filing.
Over the past 18 months, Delta has had a series of disputes with other Delta Connection partners, some of which have been resolved.
The suit, filed Aug. 19, is the latest salvo in a contractual battle between Delta and Mesa.
“After months of working in good faith to try to resolve a contractual billing dispute with Mesa, we unfortunately have been left with no choice but to ask a court to resolve Mesa’s refusal to honor its contract pricing guarantees," Delta spokeswoman Kristin Baur said in a e-mail. " We expect Mesa and Freedom to keep their promises to Delta and our customers, and so far, they have refused to do so.”
In April 2008, after Delta tried to buy Mesa out of its contract, and Mesa declined, Delta sent a letter to Mesa terminating the contract saying Mesa’s percentage of flight cancellations exceeded contractual limits, counting so-called coordinated cancellations, according to court documents. Mesa won a preliminary injunction to stop Delta from cutting ties, and the U.S. Court of Appeals for the 11th Circuit affirmed a preliminary injunction last month.
The case is expected to go to trial later this year.
Mesa has said it will be forced into bankruptcy if Delta is allowed to revoke the contract.
Airline analysts have said Delta, especially since its merger last year with Northwest Airlines, has agreements with contract carriers to fly too many regional jets. Regional jets are typically cost-effective at oil prices below $50 per barrel.
In the run up of fuel prices in early- to mid- 2008, Delta started exploring its options to reduce its number of contract carriers. Delta tried to terminate contracts with Mesa Air Group and Pinnacle Airlines Inc last year. Delta and ExpressJet Holdings Inc. mutually ended their contract in 2008.
“The alleged material breach relates to Delta's efforts to impose certain cost reductions on Freedom,” Phoenix, Ariz.-based Mesa said in its Friday SEC filing. “Freedom believes that Delta's claims are wholly without merit and are a direct effort by Delta to circumvent the injunction prohibiting Delta from terminating Freedom's Connection Agreement, which was recently upheld by the 11th Circuit Court of Appeals.”
An after-hours message left for Mesa’s Atlanta-based attorneys was not immediately returned.
In an interview earlier this month, Lee Garrett, an attorney with Jones Day representing Mesa, said Delta's actions toward is contract carriers reflected a need to cut cost.
“They’re trying to cut capacity [and] they’re trying to cut costs and if you look at their recent filing they don’t see a good second half of 2009,” Garrett said. “It’s simply a matter of dollar bills.”
Like its mainline service, Delta has also slashed capacity and jobs at its regional subsidiaries, Comair and Mesaba.
Delta plans to cut capacity internationally by 15 percent, and trim domestic capacity by 6 percent to 8 percent beginning this fall, with Delta Connection partners part of the plan. It has also announced it will likely be forced to lay off salaried workers after thousands of workers — including management, pilots and flight attendants — have voluntarily left the combined Delta and Northwest since the merger in October 2008.
Approximately 23 percent of Delta’s 2008 passenger revenue was from regional flights. But revenues dropped 8 percent in 2008 because of high fuel prices and slacking demand.
Delta owns or leases 287 regional aircraft, not including hundreds of regional planes flown by regional partners, according to its annual 10-K filing with the Securities and Exchange Commission.
In a separate case, Delta is fighting a lawsuit by SkyWest Inc. which owns former Delta subsidiary Atlantic Southeast, over reimbursements for certain flight cancellations.
Atlanta-based Delta (NYSE: DAL) operates a hub at the Cincinnati/Northern Kentucky International Airport.

Weed

sinca3

ACL,
Just got your email, glad you have entered the campaign....
Cheers

Bucking Bar

A little data point that backs up my thinking on what Delta considers to be its core business. This is the list of attendees at Boyd’s aviation forecast summit. Notice the list and notice who Delta sends to a forum on future domestic route forecasting and planning.

It is at least tangentially apparent that Delta perceives domestic flying as a topic best addressed by an Executive from Delta Connection.

sailingfun

[quote=vprMatrix;670760]I'm not sure you read what I wrote. While these numbers can be used for comparing companies they are not an apples-to-apples comparison. Also, excluding fuel hedging losses and special items we are far better off than our own numbers show (look at the 2Q 2009 report).

One reason SWA numbers have been low is due to their fuel hedging. On average for 2008 they paid $600/hr less for fuel than other carriers that operate 737-700s and $900/hr than Delta 737-800s.

For comparison SWA reports a fuel burn avg of 697 gal/hr @ $1612/hr for their 737-700s and 783 gal/hr @ $2510/hr for the Delta 737-800s. Even if you account for the 737-800s higher burn rates you are still left with a $700/hr difference in fuel cost for 2008. On the other hand SWA crew cost is $584/hr and Delta's is $577/hr.

Maybe DALPA should be focusing some attention on the poor business decisions that are affecting the company rather then telling the pilot group how "frightening" our CASM is. Are you trying to lower expectations with your comments?

Maybe you are implying that with a CASM as high as ours we can't compete with the cost structure of DCI for 69+ seat flying?



The CASM numbers you posted are non fuel CASM numbers. Hedging ect.. has nothing to do with those numbers. The numbers I posted the link to reflect total CASM including fuel and that is why as you pointed out they are much worse. Excluding fuel Delta is still 25% higher CASM on the same stage length and same aircraft as SWA.

As far as implying we can't fly 69 plus seats at the mainline I have pointed out on here many times that I believe the E170/175 is a mainline aircraft and can be flown at a competitive cost by the mainline. I know that past MEC officers elected who where very strong scope hawks when given all the data and real numbers have a shift in thinking on aircraft below that size. John Malone gave up the E170/175 under the threat of a Chapter 11 filing. The subsequent scope changes that allowed more of those jets came while we were in court on a 1113 motion. They were not given away because reps felt we could not fly them. They were taken while the company held all the high cards including a judge in their hip pocket. The MEC cut the best deal they could under the circumstances. The deal they cut has every Delta pilot employed today with zero furloughs.
When the new round of reps gets elected they will have access to the same numbers and data. I don't have the real numbers on the 175. I believe it can be flown at a competitive cost structure at the mainline but like every poster on this forum I don't know that they can be. The reps will have the numbers. I hope they make good choices in looking at those numbers. I do know from direct talks to the reps who have seen the data that we can't get anywhere near a competitive costs on jets under 70 seats and we would end up losing not gaining jobs if we were able to force the companies hand on those jets.

acl65pilot

ACL did not send out an e-mail!

I am his biggest fan though, and my opinions are his.

ComairFO

Either that or they consider this conference to be a waste of their time, so they ask DB to go and do some dirty work for them. Remember, he was also "asked" to take the helm at Comair for a bit..........

NERD

Not that we have a vote, but can pilots from other domiciles get the names of and their campaign info?

forgot to bid

I didn't get an email from ACL?

But I DID get an email from someone running for LEC 44 FO rep that I really liked and that was well written and well thought out.

I don't know if I can share the meat of it but I will share my takeaways:

a) scope is not for sale,

b) this airline is a potential powerhouse and that there will be significant opportunities prior to 2012 that could, if handled correctly, could position all Delta pilots to win big in more ways than one, and

c) this particular pilot running for LEC rep is waist deep in the muck of line flying and has the knowledge and experience and the big picture perspective necessary to wisely lobby and fight for all of us and in particular the handsome debonair pilots of LEC 44.

In so many words.

He's got my vote.

I thought about running but my campaign slogan of "I am not as dumb as you look" didn't pan out and I went back to ATC 4.0 on my iphone. Tomcat... ATC 4.0. Get it, love it and score big crossing the Atlan... gulf, on the way to Georgetown.

acl65pilot

I am sure that if you e-mailed the MEC office they would provide you with that information.