Any "Latest & Greatest" about Delta?
09-23-2010, 08:27 AM
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I don't think management wants to put more seats in the current RJ fleet. The existing 76 seat "limit" was I believe, at the time, a "oh please mister pilots, don't throw us into the briar patch" negotiating. Of course they wanted more and bigger. They always want more and bigger. But all along they knew that the CRJ705/900/etc and EMB175 were the "next" step up and they had to get that first, and they wanted them with 76 seats all along, which is why the so called "limit" was set there to begin with. The only planes they even can increase the seat count on are the larger EMB and CRJ's currently outsourced anyway. But the only way to do that is to reduce first class. They are so bat poop crazy about first class on RJ's they are actually reducing seat count willingly (and braging about it) on the CRJ700 anyway. If they want more seats (and we can bet they do) they will want us to agree to outsource EMB190/195, C series, etc. IOW bigger planes. The fact that the next immediate step of outsourcing just so happens to be common type with what is already allowed and well established puts enormous pressure on us to "hold the line", which usually means move the line and call it a victory because we didn't move it as much as they wanted.
09-23-2010, 08:28 AM
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Posts: 18,563
I know we like to think that outsourcing is all about us because well it is! 
In reality there is a balance sheet reason too. Taking jet leases and or debt off of the balance sheet and making other airlines assume the note makes our balance sheet have less debt and commitments on it. It allows a better debt rating which works well for a corporation. It becomes a cash flow equation which DAL has no issue with. The debt is off the balance sheet and assumed by other operators which allows DAL the scope of a larger route network without the cumbersome debt. It allows us to be bigger that we would be as a stand alone without feed. Code shares and JV's do the same thing, but on a different level.
This type of accounting saves DAL untold billions of dollars in debt service, lower interest on other debt etc. That is what I suggest that when DAL cannot pay for fleet renewal of its narrow body fleet, ALPA's answer is that SKW, etc can finance your debt and you can cash flow it as you have been doing, but we will fly the jet. The difference is SKW becomes a holding company probably making close to the same money as they do now, but they do not have to worry about flying these jets. If DAL still wants to pay for them to maintain them, well that is a topic for a different discussion.
I am willing to give DAL the balance sheet health they want but I am not willing to allow more jets to be flown by non-seniority listed pilots. This is one way DAL and DALPA can have it both ways. If airlines like SKW do not want to play ball, then other companies will be formed that will be happy to take on aircraft debt for a service fee. I hope it is all the rage because we will be flying that metal. DAL has the cash flow to do this and it is really what we are doing now. They get the benefit of diving us in the process.
In reality there is a balance sheet reason too. Taking jet leases and or debt off of the balance sheet and making other airlines assume the note makes our balance sheet have less debt and commitments on it. It allows a better debt rating which works well for a corporation. It becomes a cash flow equation which DAL has no issue with. The debt is off the balance sheet and assumed by other operators which allows DAL the scope of a larger route network without the cumbersome debt. It allows us to be bigger that we would be as a stand alone without feed. Code shares and JV's do the same thing, but on a different level.
This type of accounting saves DAL untold billions of dollars in debt service, lower interest on other debt etc. That is what I suggest that when DAL cannot pay for fleet renewal of its narrow body fleet, ALPA's answer is that SKW, etc can finance your debt and you can cash flow it as you have been doing, but we will fly the jet. The difference is SKW becomes a holding company probably making close to the same money as they do now, but they do not have to worry about flying these jets. If DAL still wants to pay for them to maintain them, well that is a topic for a different discussion.
I am willing to give DAL the balance sheet health they want but I am not willing to allow more jets to be flown by non-seniority listed pilots. This is one way DAL and DALPA can have it both ways. If airlines like SKW do not want to play ball, then other companies will be formed that will be happy to take on aircraft debt for a service fee. I hope it is all the rage because we will be flying that metal. DAL has the cash flow to do this and it is really what we are doing now. They get the benefit of diving us in the process.
09-23-2010, 08:33 AM
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Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
I don't think management wants to put more seats in the current RJ fleet. The existing 76 seat "limit" was I believe, at the time, a "oh please mister pilots, don't throw us into the briar patch" negotiating. Of course they wanted more and bigger. They always want more and bigger. But all along they knew that the CRJ705/900/etc and EMB175 were the "next" step up and they had to get that first, and they wanted them with 76 seats all along, which is why the so called "limit" was set there to begin with. The only planes they even can increase the seat count on are the larger EMB and CRJ's currently outsourced anyway. But the only way to do that is to reduce first class. They are so bat poop crazy about first class on RJ's they are actually reducing seat count willingly (and braging about it) on the CRJ700 anyway. If they want more seats (and we can bet they do) they will want us to agree to outsource EMB190/195, C series, etc. IOW bigger planes.
These jets are certified with a single class configuration of 86/88 seats for the crj900 and 175.
I have noticed that with many fleets they are opting to take a few first class seats out in favor of more coach seats. I suspect that they will happen with the RJ's too. We are giving most of those seats away and they want to tighten the supply. They are doing it with lie flats on the international birds and they are doing it on the 319/320. They can easily take out four first class seats for a total of 80 total seats with six FC seats remaining. Go with four FC seats you have 82 total seats.
Add to the fact that with the rest rules they will need to make every penny they can. I truly beleive that the issue will be forced by these new rest rules. If I am wrong, I will be glad I am. I also see it as an opportunity for leverage. We will be able to operate them here a lot cheaper. We can also make airlines like SKW hold the aircraft note like I listed in my above post.
09-23-2010, 08:36 AM
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Joined APC: Jul 2010
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Posts: 12,538
How is that any different from simply leasing the planes anyway, from say, a leasing company? Why is that considered debt, but a long term, well written, binding CPA with an ACMI (even if its just an AMI and we do the C) not considered debt, when the exact same committments for the exact same financing, depreciation, etc are paid for 100% by Delta in all cases anyway?
I see no reasoning or value in permitting the company to put say, all narrowbodies, "off the books" when in fact they are still on the books anyway because we are committed to 100% of the exact same amount of debt, interest, etc anyway. Just because we enter into a long term binding committment and agree to pay SKY Air Group Holding, Inc. instead of GE Capital or whatever, we are still 100% on the hook for the debt. Those CPA's, which include 100% of the debt, are still "on the books".
As for the original 79 seater proposal that became a 76 seat proposal after a "compromise" yay for holding the line on those 3 seats, but it was still negative progress. Slightly less negative progress than the opposing side's opener can hardly be considered a victory.
I see no reasoning or value in permitting the company to put say, all narrowbodies, "off the books" when in fact they are still on the books anyway because we are committed to 100% of the exact same amount of debt, interest, etc anyway. Just because we enter into a long term binding committment and agree to pay SKY Air Group Holding, Inc. instead of GE Capital or whatever, we are still 100% on the hook for the debt. Those CPA's, which include 100% of the debt, are still "on the books".
As for the original 79 seater proposal that became a 76 seat proposal after a "compromise" yay for holding the line on those 3 seats, but it was still negative progress. Slightly less negative progress than the opposing side's opener can hardly be considered a victory.
09-23-2010, 08:46 AM
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True, but you have to go back to my original statement, the one DAL88 quoted, to understand the context. I wasn't making the point that all RJ reductions are attributable to LM, I was saying that the quote that is often attributed to him about the 50-seaters is not stupid. Which you're confirming: the 50-seaters are taking themselves out. And we have finally reached the cap on the 70-76 seaters.
We're actually saying the same thing.
"...I think LM is often taken for a fool on scope issues, and people attribute to thim statements about the RJ's taking themselves out of existence. But maybe it's not so stupid. And we certainly have not seen an increase in RJ's under his tenure, contractual or actual..."
We're actually saying the same thing.
"...I think LM is often taken for a fool on scope issues, and people attribute to thim statements about the RJ's taking themselves out of existence. But maybe it's not so stupid. And we certainly have not seen an increase in RJ's under his tenure, contractual or actual..."
Yes, I see now.
09-23-2010, 08:47 AM
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Joined APC: Dec 2007
Position: No to large RJs
Posts: 369
Like I have told you, I too have an issue with Prater's ineffectiveness. I do not blame the organization, I blame the person for his lack of response. Ergo, change the person not the organization as a first level of resolution. If the pilot's next choice is as ineffective then it may be time to move on to other options, but lest try the non-nuclear option first.
Just my .02
Just my .02
09-23-2010, 08:55 AM
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Position: A-320A
Posts: 18,563
Gloopy,
It is a long term commitment to pay a fee for use. We would pay a users fee. As I have researched it, it is in how it is written. It does not change a P/L statement it just changes the amount of asset debt DAL has, not commitments. (We pay landing fees for the use of an airport, but do not asses it as debt) As one of my fund buddies explained it to me it becomes a user fee and not a debt so it will change slightly on how it hits. (Granted we will not get to take the depreciation of said asset either)
On a side note DAL has stated it is done with financing jets. I sure hope our balance sheet is good enough to do that with hundreds of jets going forward.
I have been toying with idea for awhile. I have talked to some of the financial weenies that I know and they see the thought process and the balance sheet maneuvering it does.
Error check the heck out of it. It is just one of many ideas floating around in my gray matter. It does not mean it is fool proof, it just means it is a concept to thwart an argument.
It is a long term commitment to pay a fee for use. We would pay a users fee. As I have researched it, it is in how it is written. It does not change a P/L statement it just changes the amount of asset debt DAL has, not commitments. (We pay landing fees for the use of an airport, but do not asses it as debt) As one of my fund buddies explained it to me it becomes a user fee and not a debt so it will change slightly on how it hits. (Granted we will not get to take the depreciation of said asset either)
On a side note DAL has stated it is done with financing jets. I sure hope our balance sheet is good enough to do that with hundreds of jets going forward.
I have been toying with idea for awhile. I have talked to some of the financial weenies that I know and they see the thought process and the balance sheet maneuvering it does.
Error check the heck out of it. It is just one of many ideas floating around in my gray matter. It does not mean it is fool proof, it just means it is a concept to thwart an argument.
09-23-2010, 09:03 AM
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Joined APC: Apr 2008
Position: DAL FO
Posts: 2,165
Add to the fact that with the rest rules they will need to make every penny they can. I truly beleive that the issue will be forced by these new rest rules. If I am wrong, I will be glad I am. I also see it as an opportunity for leverage. We will be able to operate them here a lot cheaper. We can also make airlines like SKW hold the aircraft note like I listed in my above post.
I honestly don't know enough about the FTDT proposal to know if it's a good thing or not. So far it doesn't seem like a good thing to me:
2 man crews deeper into Europe
More block hours/legs per day - potentially
Transcon turns that were previously not legal
Probably more that I cannot think of.
I'm asking because I don't know. How does the new proposal HELP pilots, and Delta pilots specifically?
09-23-2010, 09:14 AM
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Position: Space Shuttle PIC
Posts: 2,007
Can you explain how the new rest rules will make the regionals more expensive/less efficient? My understanding is they will now be able to fly more block hours, just less duty time. If scheduled properly this could make them MORE efficient, but will require them to get rid of the 3-5 hour hub sits.
I honestly don't know enough about the FTDT proposal to know if it's a good thing or not. So far it doesn't seem like a good thing to me:
2 man crews deeper into Europe
More block hours/legs per day - potentially
Transcon turns that were previously not legal
Probably more that I cannot think of.
I'm asking because I don't know. How does the new proposal HELP pilots, and Delta pilots specifically?
I honestly don't know enough about the FTDT proposal to know if it's a good thing or not. So far it doesn't seem like a good thing to me:
2 man crews deeper into Europe
More block hours/legs per day - potentially
Transcon turns that were previously not legal
Probably more that I cannot think of.
I'm asking because I don't know. How does the new proposal HELP pilots, and Delta pilots specifically?
09-23-2010, 09:20 AM
At home on the maddog!
Joined APC: Mar 2009
Position: ATL MD-88A
Posts: 2,874
That is getting in to trade secret data that is protected by NDA. I am sure if can be data mined but the only public data you will get is city pairs, frequency and what is reported to the government on the 8 and 10-K's.
As I have stated, we are close or at the upper limit on allowable 70/76 seat airframes. This phenomenon that you see will no longer be allowed to occur without further scope sales. They can still replace 70 with 76 seat jets as our size allows, but they cannot go above the 255 total.
Pilot numbers have gone done, but depending on the NPRM they count may spike. That depends on a lot. Based upon current staffing models the number of pilots at DCI is going down. Go look at the airline data pages on this site.
ASM's are reported and as you say have gone up.
Total block hrs peaked at around 63% and have declined from that high water mark. I do not have the specific number in front of me but my guess is that it is in the mid to love 50's. Just a guess though.
I do not have public passenger data, and have not data mined number of seats and number of city pairs. It can be done though. I like you look at block hrs and airframes.
You know where I stand on scope, and it is my guess that another opportunity will present itself when the rest rules change the staffing requirements at these airlines and the CASM goes up even more. There will probably be a urge to put more seats in these jets due to these costs, and I am sure I know what our answer will be. Like I have said, I have no fear that our reps will do the correct thing, and that National will back our decision because frankly there is no way they cannot. We have leverage at national and frankly there is nothing in the by-laws that prohibit it.
On a greater level if I were ALPA President I would want more mainline pilots because they provide more money per pilot. It works in their best interest as well.
As I have stated, we are close or at the upper limit on allowable 70/76 seat airframes. This phenomenon that you see will no longer be allowed to occur without further scope sales. They can still replace 70 with 76 seat jets as our size allows, but they cannot go above the 255 total.
Pilot numbers have gone done, but depending on the NPRM they count may spike. That depends on a lot. Based upon current staffing models the number of pilots at DCI is going down. Go look at the airline data pages on this site.
ASM's are reported and as you say have gone up.
Total block hrs peaked at around 63% and have declined from that high water mark. I do not have the specific number in front of me but my guess is that it is in the mid to love 50's. Just a guess though.
I do not have public passenger data, and have not data mined number of seats and number of city pairs. It can be done though. I like you look at block hrs and airframes.
You know where I stand on scope, and it is my guess that another opportunity will present itself when the rest rules change the staffing requirements at these airlines and the CASM goes up even more. There will probably be a urge to put more seats in these jets due to these costs, and I am sure I know what our answer will be. Like I have said, I have no fear that our reps will do the correct thing, and that National will back our decision because frankly there is no way they cannot. We have leverage at national and frankly there is nothing in the by-laws that prohibit it.
On a greater level if I were ALPA President I would want more mainline pilots because they provide more money per pilot. It works in their best interest as well.
But the quote I was responding to was asserting that RJ flying has not gone up during Lee Moak's "tenure". You seem to be citing recent reductions in number of hulls, etc. But that's not the same thing as saying RJ flying has gone down over Lee Moak's tenure. Captain Moak became MEC Chairman in 2004? If you take a snapshot of RJ flying (including things like airframes, seats, block hours, city pairs, passengers carried, etc.) at the moment in time when he first became MEC Chairman, and compare it with a snapshot of all those things as they are today, has RJ flying gone up, down, or stayed the same during his tenure? That is the question as I understand it.
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