Any "Latest & Greatest" about Delta?
02-26-2010, 04:04 AM
The Brown Dot +1
Joined APC: Jun 2009
Position: 777B
Posts: 7,775
As much as I'd like to have DCI airplanes at mainline Delta, I can't see it happening - here's why:
Cost.
While some of the pilot group would like to have the EMB-175s, CRJ-900, CRJ-700, the 50 seater, etc at mainline, the pay rates we would have to accept are far too low. I'm not just talking about the rates that other airlines are currently flying them at.
I'm talking, really low rates to pay for all the other costs that Delta would have to absorb. The DCI airplanes right now are maintained by mechanics being are probably paid less than they are at Delta. The planes are dispatched using dispatchers who are paid less than Delta dispatchers. Cleaned by people making less than Delta cleaners (maybe, they might use the same people). The Flight attendants make less than Delta flight attendants. The gate agents are paid less than Delta gate agents.
Also, each of those employee groups are paid the same whether they are working on a CRJ50 or a CRJ-900 (say, at Pinnacle which fly both I think). Pilots get paid more for a bigger plane - other employee groups don't.
So - let us say Delta said, "let brings over the CRJ-900 to mainline". Pilots will be paid the existing rate that we're paying at Pinnacle. We'd ***** and moan, but in the end, we'd understand that it's the competitive rate. Now other employee groups don't get paid more or less for different sized airplanes. The cost of repairing the CRJ-900 would be at mainline Delta costs - not DCI costs. Same for dispatchers, cleaners, and flight attendants.
So - the cost of dispatching, maintaining, serving drinks, etc on the former DCI plane go up, but the pilot cost would be the same. Well - unless the pilot group can convince the other labor groups to be paid less for flying the CRJ-900, the pilots are going to have to take the cost hit for the airplane to remain profitable.
Who else would take the hit? Management isn't going to operate the plane at a loss just to have more pilots on the payroll. Honestly, people aren't going to pay more to fly a CRJ-900 because it's operated by Delta employees vs DCI employees so we can't raise revenue. Most pax don't even know how the whole code-share system works anyway. The other labor groups aren't going to switch to being paid less to work on a CRJ-900 because it's not in the way their pay system is designed.
So - we might have to work for much less than what current DCI pilots are paid if we want the airplanes at mainline, in order for these sized airplanes to be profitable.
This is what I feel ALPA is saying when they say, "you don't want to work for the pay rates that will bring the plane to mainline."
Cost.
While some of the pilot group would like to have the EMB-175s, CRJ-900, CRJ-700, the 50 seater, etc at mainline, the pay rates we would have to accept are far too low. I'm not just talking about the rates that other airlines are currently flying them at.
I'm talking, really low rates to pay for all the other costs that Delta would have to absorb. The DCI airplanes right now are maintained by mechanics being are probably paid less than they are at Delta. The planes are dispatched using dispatchers who are paid less than Delta dispatchers. Cleaned by people making less than Delta cleaners (maybe, they might use the same people). The Flight attendants make less than Delta flight attendants. The gate agents are paid less than Delta gate agents.
Also, each of those employee groups are paid the same whether they are working on a CRJ50 or a CRJ-900 (say, at Pinnacle which fly both I think). Pilots get paid more for a bigger plane - other employee groups don't.
So - let us say Delta said, "let brings over the CRJ-900 to mainline". Pilots will be paid the existing rate that we're paying at Pinnacle. We'd ***** and moan, but in the end, we'd understand that it's the competitive rate. Now other employee groups don't get paid more or less for different sized airplanes. The cost of repairing the CRJ-900 would be at mainline Delta costs - not DCI costs. Same for dispatchers, cleaners, and flight attendants.
So - the cost of dispatching, maintaining, serving drinks, etc on the former DCI plane go up, but the pilot cost would be the same. Well - unless the pilot group can convince the other labor groups to be paid less for flying the CRJ-900, the pilots are going to have to take the cost hit for the airplane to remain profitable.
Who else would take the hit? Management isn't going to operate the plane at a loss just to have more pilots on the payroll. Honestly, people aren't going to pay more to fly a CRJ-900 because it's operated by Delta employees vs DCI employees so we can't raise revenue. Most pax don't even know how the whole code-share system works anyway. The other labor groups aren't going to switch to being paid less to work on a CRJ-900 because it's not in the way their pay system is designed.
So - we might have to work for much less than what current DCI pilots are paid if we want the airplanes at mainline, in order for these sized airplanes to be profitable.
This is what I feel ALPA is saying when they say, "you don't want to work for the pay rates that will bring the plane to mainline."
IA;
I disagree for (at least) three reasons:
1. Fee for departure / guaranteed profit. It would be cheaper to fly them at mainline.
2. Economies of scale - dispatch, mx, gate agents, res, etc. The bigger an enterprise, the (relativelely) less expensive the cost per sample size (widget).
3. We are already doing much of the service work for them.
Bring 'em to mainline, the cost is not that great. It is the new entry level, but at least we are all rowing in the same direction.
-------
Two reasons Comair is getting spanked so hard lately:
1. They were bad and there is no "military school" for DCIs.
2. (subset) Delta doesnt have full control of all of the other DCI's. Comair is the "flex" in the whole DCI system.
02-26-2010, 04:23 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
This one is good, I disagree with most of it and here is why.
Most regional feed operates at a loss. From Delta or American's perspective regional feed is an onboard loss. This is very similar to a telephone company maintaining phone lines, installing fiber optic networks and the other plethora of expenditures associated with providing the entire service. What regional flying does provide is feed. Therefore regional feed in conjunction with larger transcon routes and international routes will typically operate at a profit. I once took a course that analyzed the costs of an American 767 conducting a transcon flight from LGA to LAX. After all things considered, the flight operated at a profit of just under $200, or about $40 an hour for each hour of the flight. Had it not been for cargo below deck the flight would've lost several thousand dollars.
Most regional feed operates at a loss. From Delta or American's perspective regional feed is an onboard loss. This is very similar to a telephone company maintaining phone lines, installing fiber optic networks and the other plethora of expenditures associated with providing the entire service. What regional flying does provide is feed. Therefore regional feed in conjunction with larger transcon routes and international routes will typically operate at a profit. I once took a course that analyzed the costs of an American 767 conducting a transcon flight from LGA to LAX. After all things considered, the flight operated at a profit of just under $200, or about $40 an hour for each hour of the flight. Had it not been for cargo below deck the flight would've lost several thousand dollars.
IMO one of the biggest reasons the RJ sector exists today besides labor whipsaw is that ALL mainline carriers do not have the balance sheets to hold those leases. They need risk sharing partners. Like a JV it is not the first choice for an airline, but it is a viable choice without too much upfront capital expenditure.
That is why, in regard to the 100 seat segment that we are all very concerned about, DAL NEEDS to pay down debt. If they do not we will be backed in to a corner once again. The outcome is known by the last decade of decline and the reaction by us, labor will be a lot worse, but to the airline, it will be a need for the route structure, not just a way to poke a stick in your eye.
From our perspective the overall operation has to stay profitable, not necessarily the feed. Typically the only people that generate a profit from regional flying are the actual companies providing such flying as they operate under a fee for departure. Therefore, when contrasting a contract feed partner in which Delta must guarantee a profit for their operation vs an owned subsidiary, the owned subsidiary can actually operate at a loss and in the larger picture, provide a savings to Delta. Either guarantee someone else a profit or take a smaller financial hit and record the loss on your own books.
For the most part Delta has contracted out most of the support infrastructure associated with flying. Whether the cleaners in DTW are cleaning a DC-9 vs an E-175, the costs are likely similar. Furthermore, rolling such feed into a larger operation would allow existing dispatchers and schedulers to pick up the existing equipment types without having to mirror an entire operation because it's operated under another certificate.
For the most part Delta has contracted out most of the support infrastructure associated with flying. Whether the cleaners in DTW are cleaning a DC-9 vs an E-175, the costs are likely similar. Furthermore, rolling such feed into a larger operation would allow existing dispatchers and schedulers to pick up the existing equipment types without having to mirror an entire operation because it's operated under another certificate.
1) Interest rate on said jets due to the extra debt burden DAL would be liable for with all of these jets on their books. (Our credit rating would be reduced farther in to junk)
2) The overall benefits packages of mechanics, dispatchers and admin staff of regional airlines pales in comparison to that of a mainline. DAL for example has a very senior support staff. They still have pensions, better bennies, and medical. For example regional lead and OCC mechanics top out below 50K a year. Dispatchers used to top out at 35K before they organized at ASA. Yes, the majority of that cost passes though, but there is no way that those groups would not want the same benefits if those companies were folded in. That is where the lion's share of the cost is.
3) Us. Not as large as many think, but it still adds cost to the operation. If this was the only issue, then I agree, but after seeing how a regional airline does it, there are other costs besides us. (That is why Bar makes a great point in the fact that we can fly across certificates and that should be looked at)
When considering all the factors associated with regional feed, mainline pilots are not operating the aircraft because of our hourly wages, DCI is operating the equipment as a future insurance policy against labor unions. It's all about divide and conquer. In my humble opinion, ALPA is way off on their approach to recovering this flying.
What has happened since that initial Band Aid was applied, has been sigificant downward pressure on wages and the overall quality of an airline career. That is undeniable. We we now have is airlines like republic ordering what are clearly airplanes that are viable at our compensation levels. Problem is that those jets will not be flown for what we would be paid. They will be paid less. Even at the same hourly rate for us (which will not happen) the benifits that go along with the job are way below what we have left. That in the end once again lowers the bar for all of us. The race to the bottom is economic. I hope republic proves all of us wrong. We need them to.
We also need another mainline airline to commit to 100 seat flying at mainline. No one wants to be the first, because if one mainline agrees to it and another gives it up you will see a major issue for the one that brought the jet to its mainline. It will be a cost issue. I wish DAL would commit as all are waiting on us, but wishing does nothing.
02-26-2010, 04:30 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
-------------
IA;
I disagree for (at least) three reasons:
1. Fee for departure / guaranteed profit. It would be cheaper to fly them at mainline.
2. Economies of scale - dispatch, mx, gate agents, res, etc. The bigger an enterprise, the (relativelely) less expensive the cost per sample size (widget).
3. We are already doing much of the service work for them.
Bring 'em to mainline, the cost is not that great. It is the new entry level, but at least we are all rowing in the same direction.
-------
Two reasons Comair is getting spanked so hard lately:
1. They were bad and there is no "military school" for DCIs.
2. (subset) Delta doesnt have full control of all of the other DCI's. Comair is the "flex" in the whole DCI system.
IA;
I disagree for (at least) three reasons:
1. Fee for departure / guaranteed profit. It would be cheaper to fly them at mainline.
2. Economies of scale - dispatch, mx, gate agents, res, etc. The bigger an enterprise, the (relativelely) less expensive the cost per sample size (widget).
3. We are already doing much of the service work for them.
Bring 'em to mainline, the cost is not that great. It is the new entry level, but at least we are all rowing in the same direction.
-------
Two reasons Comair is getting spanked so hard lately:
1. They were bad and there is no "military school" for DCIs.
2. (subset) Delta doesnt have full control of all of the other DCI's. Comair is the "flex" in the whole DCI system.
I agree 100% that these costs are not that great. It is:
1) Something that more than likely management would not give us for free. Ala they would want something big in return. Why? Just because.
2) As I pointed out in another post, the cost in regards to more debt for holding the leases obligations for said jets.
I would LOVE to see it and beleive that we NEED to secure as much flying as we possibly can. More flying is better for the company and us. Outsourcing will one day blow a hole in our business plan. (My opinion) Problem is the cost of buying it back. Does a pawn shop ever give you your ring back for the same price of less? Nope never? Why? You know why.
02-26-2010, 04:32 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
I want both, but I also realize a few things.
02-26-2010, 04:35 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 2,539
Only in certain hubs. Many outstations they're doing the underwing and other services for us through Regional Elite Staffing services.
One note, Mesaba has a bunch of contractual "snap-backs" coming late this year. Note that they've decided to shrink the Saab fleet and DCI is abandoning Mesaba service to some smaller airports as their pay/rules are restored to pre-bankruptcy levels. I'm not suggesting that pilot wages alone are responsible for that reduction, but it appears to me that they contributed to that decision.
As an aside, the relationship between the ALPA represented DCI's and mainline has improved significantly over the last 18 months. I think that's good for all parties.
Last edited by slowplay; 02-26-2010 at 05:00 AM. Reason: added the aside...
02-26-2010, 04:41 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
I'm not suggesting that pilot wages alone are responsible for that reduction, but it appears to me that they contributed to that decision.
02-26-2010, 04:49 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 2,539
I agree with you. There is no way in this economy and working in this industry that I'd ever want a "straight" DB.
02-26-2010, 05:03 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 354
DVMs have their own issues to face.
There are VERY high barriers to entry...arguably higher than MD, but the fact is there are only 26 vet schools in the US.
Despite this, the ROI on a DVM degree is quite low, and the ROI on an MD, and even a DO degree is siginficantly higher.
DVMs have their own versions of "Mesa" and their own version of LCCs making things hard for the traditional practices. They also have a large problem with an influx of part-timers and people who do NOT price themselves according to their true worth (AKA "doing it for fun").
Add it all up, and unless you're in some niche specialty, your W2 barely nudges 100k. You need to be into a high-margin specialty, like onocology or opthamology to make scratch, or own your own practice, which brings a whole new set of headaches. The only thing similar to a MD is the balance on your student loans.
Most DVMs don't make squat compared to your run of the mill MD/DO GP.
Nu
There are VERY high barriers to entry...arguably higher than MD, but the fact is there are only 26 vet schools in the US.
Despite this, the ROI on a DVM degree is quite low, and the ROI on an MD, and even a DO degree is siginficantly higher.
DVMs have their own versions of "Mesa" and their own version of LCCs making things hard for the traditional practices. They also have a large problem with an influx of part-timers and people who do NOT price themselves according to their true worth (AKA "doing it for fun").
Add it all up, and unless you're in some niche specialty, your W2 barely nudges 100k. You need to be into a high-margin specialty, like onocology or opthamology to make scratch, or own your own practice, which brings a whole new set of headaches. The only thing similar to a MD is the balance on your student loans.
Most DVMs don't make squat compared to your run of the mill MD/DO GP.
Nu
I have to disagree!!! My dad is a vet in in a small city( Montgomery AL) and clears over 250K but he owns his own hospital. You would be shocked to know how much money people spend on their best friends. There is NO money in large animal medicine!!!
02-26-2010, 05:08 AM
veut gagner à la loterie
Joined APC: Apr 2008
Position: Light Chop
Posts: 23,286
I tip my hat, very informative reads slow and acl.
02-26-2010, 05:43 AM
Gets Weekends Off
Joined APC: Apr 2008
Position: 767A
Posts: 791
I'll back that up. My dog just had a torn ACL fixed at Auburn. 3,000 bucks.
Our orthopedic surgeon friend told us that's more than double what he gets for a human ACL!
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