gloopy

And the total cost once determined, can then be broken down into how much everything would cost, just 51 seats and up, the 70 seaters or just the 76 seaters. I doubt bringing the 76 seaters to the mainline would break the bank. We can at least afford that, since it is the primary DC-9 replacement aircraft so far (and even if the MD90's come on line as promised, there is no reason to outsource a 76 seat dual class jet anyway).

iaflyer

Once I remember I wasn't carrying them around nor doing the revision, I got over any angst in about ten seconds.

Jughead

FYI...the going rate for Jepp binders on eBay seems to range anywhere from $10 to $75.

Sell early and often.

Bucking Bar

Slow, it is a very truthful question when you consider ASA did have its own code, was bought, stripped of its code and its pilots had to apply and get hired with a complete loss of longevity and seniority. The Northwest merger is an interesting contrast. The only people with the right to be angry about that are ACL and his ilk. ACL65, amigo, if I upset you by the example, I apologize.Then why did ALPA intercede on our behalf to stop ASA from negotiating scope to protect "its" flying from non union whipsaw?

The ugly truth is that we (our MEC and Management) want that flying done as cheaply as possible. In concept, the net cost savings is used to cross collateralize our pay.

We still make legal claim to control of that flying. If we have in fact lost control of our scope, yours is the first admission I've heard. I find it highly alarming!Actually they did take staff from outstations and managers run back and forth from division to division like the single company it was. While trying to find an exception, you overlook the point that longevity has never stood in the way of a transaction that anyone wanted done. It has always been figured out.

Delta & ALPA owe nobody anything if we simply cancel our contracts for outsourced work.

Bucking Bar

The President of our Association, our Master Chairman and my Council Chair are on record stating an analysis has not been performed as of last fall.

I would suggest any member in good standing who is curious, ask the question next time you see your Rep, or a member of our MEC Administration.

ACL65, care to post the confirmation?

Bucking Bar

Let me re phrase the question slightly. What if we just let those contracts on 76 seats die as the airplanes expire?

What concerns me about these new contracts, is that we are signing up for long term deals which tap our revenue at the roots. THis harms our future competitiveness and flexibility.

What really concerns me is that we lose control over that capacity. If fuel prices head to $200bbl again the only capacity management can park in a hurry is small jets at mainline. The MD88 is a prime target since its costs per seat mile are higher than other alternatives.

Our junior pilots are the accumulator in the system.

Check Essential

That statement is a 15 yard scope penalty.
We own ALL of the flying done on behalf of Delta Air Lines. The subcontractors operate only because they are permitted to do so under the terms of our PWA.

I did that search years ago. You are correct. None of that information about the ASAs was made public in the bankruptcy transcripts. One of the post-bankruptcy 10k forms had the expiration dates but no financial data. Bucking Bar knows this little secret though ----> a whole lot of embarrassing data and other information about Delta's arrangements with the DCI carriers came out in the Mesa lawsuit testimony. Delta manages the DCI situation ""poorly". (to put it very charitably)

TheManager

I read a couple of pages back your thought on SWA and the differences they have to Delta. To paraphrase, you alleged in a response to Land Green that they can not be compared to Delta as their business model is different. You went on to make the same claim between Delta and cargo airlines.

I disagree. Remind us again how much Delta made in bag fees alone last year? Last time I checked over the weekend, those bags actually go into the cargo compartment. The same cargo compartment that Delta is aggressively seeking to fill with other cargo shipments in addition to the bags we carry at a fee now.

Before you respond, read the next two entries, then tell us again why we should lower our expectations to yours.




This is the second in a series of articles that we are putting out in an effort to elicit constructive discussion and debate on the topic of pilot compensation. The first article was on scope. This article is a discussion of pay rates.

The past decade has seen the highs in legacy pay rates and the collapse of those rates. The pain was inflicted in the courtrooms during the 1113c bankruptcy process. The financial destruction that took place affected each of us directly. The company’s reorganization plan coupled with the stroke of a judge’s pen was all that was required to inflict the financial suffering that we all experienced.

In this environment, Delta CEO Richard Anderson made the decision in late 2007 to merge with Northwest Airlines. The financial meltdown coupled with oil at $147 a barrel necessitated a survival move for both airlines. In order to sell this merger to Wall Street, promises were made of financial synergies, which when fully integrated that would add $2 BILLION to the bottom line.

We have now just passed the one-year anniversary of the receipt of our single operation certificate. While Delta has not yet achieved the full $2 billion in synergies envisioned for this merger, we have reported near-record profits. It is noteworthy that our improving profitability occurred during a time that was financially more challenging than the period following the 9/11 terrorist attacks.

Delta’s leadership team went to Wall Street with their vision of the Delta–Northwest merger: that it would deliver a profitable enterprise with double-digit rates of return. Listening to our CEO on CNBC extol the success, synergies, and benefits of this merger in the most challenging time for business since the Great Depression gives us all the opportunity for a thorough discussion of expectations prior to our upcoming contract negotiations. Our takeaway from the last 12 months is this:

·Delta was profitable in 2010 during the worst economic environment since the Great Depression.
·Delta paid down $2 billion in debt in 2010.
·Delta is looking at a future narrow-body order of between 100 and 200 airframes.
·Delta is attempting to obtain a consistent 10–12 percent profit margin on a $35 billion enterprise.
·Delta management has told Wall Street that the Air Tran–Southwest merger is “good” for Delta, since it removes a lower-cost carrier (Air Tran) from Atlanta and replaces it with a higher-cost carrier (Southwest), and Wall Street analysts agree.
·Delta wants “stability in our workforce and to take away labor disruption risk.”
·Delta wants our stock to be an outperformer in the airline group.
·The industry is expected to limit expansion preserve profits.

The Delta-Northwest merger was the ground-breaking event that would fulfill management’s vision of a consistently profitable legacy airline that would rival the margins that Southwest has shown over the last 38 years. Delta achieved this profit in the first year of the single operating certificate, while our fleet of aircraft had not yet been fully optimized. We achieved this profit during the worst recession since the Great Depression. Any comparison of pay rates with our competitors other than Southwest would appear disingenuous and counterproductive:

· American . . . Still losing money and without a successful model of profitability to draw from. Increasing debt load. Only legacy to not go through bankruptcy. Less-developed mainline network in Asia.
·US Airways . . . Not able to gain synergies from the merger in 2005. No single operating certificate. Not enough international exposure. Marginally profitable, but weak alliance.
·CAL-UAL . . . This airline shows the potential to create a global powerhouse, but the joint contract is not finished. The full projected synergies of $1.2 billion are about two and a half years behind Delta.

During the last 10 years, the pilots of Southwest Airlines have had steady pay raises in their 737 aircraft. Their rates now almost mirror the rates of our largest equipment (747 and 777) at Delta. Southwest has also enjoyed profits during this decade while growing the airline and pilot compensation. Southwest recognizes a maturating domestic market and is developing new strategies for growth by merging with Air Tran. After this merger is complete, Southwest will have a fleet of over 680 aircraft flying over 100 million passengers a year.

We believe that Delta Air Lines should be compared to the airlines that have shown that they have a proven, successful business model. Until now, the only airline in this industry that had a track record of consistent profitability was Southwest. Delta now has a proven, recession-tested, profitable business model by virtue of a $1.4 billion profit in 2010.

Are Southwest pay rates the new industry standard for the 737? Should Delta pay the same for our 737s? No, not in our opinion, based on the difference in number of seats, average stage length, and different mission.

Southwest’s 737 rates have historically been below all those of the legacy airlines. Legacy Chapter 11 filings reset the 737 pay rate far below Southwest. It is apparent to each pilot at Delta that the pendulum was heavily weighted in management’s favor during bankruptcy. The economic analysis indicates that Delta pilots are lagging the new industry model of profitability. Southwest has a proven business model that works in both good economic times and bad. It just reported its 38th consecutive year of profitability. It is now time for us, as pilots, to look at the economic realities of the new airline business model in the 21st century.

Why not match the rate? Same plane, same rate, right? Again, no, this comparison requires a more complex analysis. We know that the 737s that Delta operates do not fly the same mission that Southwest uses their 737s for. Therefore, examine the chart to better understand our concern that the Delta pilots would be selling ourselves short if we compared our 737rate to the SWA 737 rate. We believe a comparison between our MD-88 and the SWA 737s is more appropriate (12-year captain pay at DL and SW):





The 2011 pay rates for Delta pilots compared to Southwest rates are approximately 31.478% under the Southwest 737 rate when you compare the MD-88, its most equivalent competitor.

As you can see in the chart, the aircraft that most matches up to Southwest’s 737s is the MD-88. Both aircraft seat a similar number of passengers and fly a similar stage length. Delta, however, has a first-class product that allows a revenue premium mix compared to the straight coach-class product of Southwest. Some might think that we should compare Delta’s 737-700s to Southwest’s 737-700s. The fallacy of that argument is that a comparison of 10 aircraft is not a statically significant sample size. A 31.5% increase would restore the legacy rate of the Delta 737 versus Southwest’s rate with a 7.5% premium.


This article and the pay rates and examples shown are just for your information and discussion purposes only. We are not speaking for the MEC or staking out a negotiating position. However, we find ourselves compelled in the current environment to deliver our observations and analysis directly to our membership. The clear message from us to you is that raises for our pilots are warranted and economically justified now.

• <LI style="COLOR: black; mso-margin-top-alt: auto; mso-list: l2 level1 lfo3; mso-margin-bottom-alt: auto" class=MsoNormal>Proven Delta Business Plan <LI style="COLOR: black; mso-margin-top-alt: auto; mso-list: l2 level1 lfo3; mso-margin-bottom-alt: auto" class=MsoNormal>Profitable during the Great Recession
• $2 billion in debt retired in 2010

Delta pilots are still living under a post-bankruptcy contract in many if not all areas. After listening to our CEO speaking to the business plan on CNBC, ponder Delta Air Lines - a $35 billion enterprise - obtaining a 10% profit margin. How does a $3 billion profit look to you, as unemployment shrinks and the economy improves?

As always, we look forward to your comments.

Fly Safe,

Capt. Jim Stuart
Chairman
(425) 985-0095
[email protected]
[email protected]
F/O Jeff Panioto
Vice Chairman
(253) 219-6834
[email protected]
[email protected]
F/O Art Aaron
Secretary-Treasurer
(425) 677-5096
[email protected]
[email protected]

TheManager

Here is part two.

Delta Airlines Targets $2 Billion in `Free Money' From Repairs, Freight






Delta Air Lines Inc. is taking on more maintenance work for other carriers in-house and working to expand its cargo business in a bid to boost revenue from those services to $2 billion within three years.
The world's second-largest airline plans to reach $1 billion in revenue from aircraft repairs, almost doubling 2009's total, and the same amount in cargo sales, a 27 percent increase, two executives said in interviews.
Delta is taking advantage of the broader network created by its 2008 purchase of Northwest Airlines Corp., which allowed it to charge more for cargo. The deal also gave Delta expertise in working on Airbus SAS jets, not just Boeing Co. planes, to help it expand in its maintenance business as U.S. rivals pull back.
"It's free money, and a smart way for Delta to take advantage of its natural strengths after the merger," said Michael Derchin, a CRT Capital Group LLC analyst in Stamford, Connecticut, who recommends buying the shares.
Adding cargo and maintenance sales would help Chief Executive Officer Richard Anderson narrow the gap with United Continental Holdings Inc., the company that displaced Delta as the world's largest carrier by traffic after the Oct. 1 merger of UAL Corp.'s United Airlines and Continental Airlines Inc.
Delta posted $28.06 billion in 2009 revenue, compared with $28.9 billion for Continental and UAL combined. Their cargo total together would have been $902 million. Atlanta-based Delta led North American carriers in maintenance revenue in 2009 and had the U.S. industry's biggest freight business, at $788 million, based on data compiled by Bloomberg.
Freight Forecast
Freight revenue will be $850 million to $875 million this year, said Neel Shah, the vice president in charge of Delta Cargo, who outlined the $1 billion revenue target. Anderson and President Ed Bastian view cargo as a pillar of their efforts to end two straight annual losses, Shah said.
"Whether that profitability comes from cargo or passenger, they're indifferent about that," he said.
Shah said that even as Delta cut capacity by parking the last 10 of Northwest's Boeing 747 freighters, which averaged about 30 years old, the airline was able to more than double its cargo profit margins to "well north of 50 percent" because a bigger network and improving economy helped pump up rates.
A Tokyo hub acquired through the Northwest purchase lets Delta ship auto parts and electronic components by Motorola Inc. and Intel Corp. between Asia and Latin America on routes neither airline had on its own, Shah said.
'Tremendous Amount'
"I don't only have to talk about trans-Atlantic, one lane in the Pacific and Latin America," he said. "We talk the world, and that really gives you a tremendous amount of leverage."
That hasn't helped the shares this year. Delta has risen 4 percent in 2010, closing at $11.83 yesterday in New York Stock Exchange composite trading, to trail the 17 percent gain for the 11-carrier Bloomberg U.S. Airlines Index. The carrier also may face more competition for passengers from Southwest Airlines Co., which agreed on Sept. 27 to buy AirTran Holdings Inc. Atlanta is home to AirTran's biggest operations.
Anderson's strategy for expanding the maintenance, repair and overhaul business, known as MRO, diverges with steps by rivals including Continental, Southwest and US Airways Group Inc. to use contractors for much of that work.
U.S. airlines outsourced about 43 percent of maintenance expenses last year, up from 31 percent a decade earlier, government data show.
Repair Revenue
Delta took in $508 million in MRO revenue in 2009, up from about $200 million just a decade earlier, said Tony Charaf, president of Delta's TechOps unit. The business has been profitable each year since 2005, with margins now in the "high single digits to low double digits," Charaf said.
That compares with a profit margin last year of 8.3 percent for the largest airline-owned maintenance operation, Deutsche Lufthansa AG's Technik, according to the carrier's annual report. Technik posted 3.96 billion euros ($5.22 billion) in 2009 revenue.
The global MRO market was about $42 billion last year, according to industry publication AviTrader. Delta's competitors include maintenance specialists such as AAR Corp. and Timco Aviation Services Inc.; planemakers Boeing and Airbus; and engine manufacturers such as General Electric Co.
Charaf said Delta has won business because of its expertise, parts inventory and quick turnarounds, with overhaul time on some engines cut to as few as 20 days, less than half as long as required several years ago. Delta also performs routine maintenance and projects done while jets are parked at airport gates, such as replacing burned-out lights.
Gol, Hawaiian
Customers include Brazil's Gol Linhas Aereas Inteligentes SA and Hawaiian Holdings Inc.'s Hawaiian Airlines, which put a $500 million value on a multiyear contract awarded to Delta in 2009 to service Boeing and Airbus jets.
"For Delta, taking that MRO work in lets them equalize their workloads instead of having peaks and valleys" around its own maintenance needs, said Marc Wilson, a former maintenance executive at AMR Corp.'s American Eagle unit.
Outsourcing maintenance and repairs typically costs about 15 percent more than doing the job in-house, said Wilson, who is director of safety, quality and asset management at consultant Morten Beyer & Agnew in Arlington, Virginia. The catch is that companies can only achieve the savings by investing in equipment and people, he said. Delta's TechOps has 9,200 employees.
"It's a wave of the future for a number of airlines that have already a substantial maintenance infrastructure," said Hawaiian CEO Mark Dunkerley. "They are all looking for ways to better use the infrastructure that they have."

tsquare

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