Delta Sells Compass and Mesaba
07-01-2010, 02:11 PM
#71
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Posts: 3,913
There is another factor. Delta wants to get of 50 seat RJ's faster than the contracts allow. A recently departed executive, his name rhymes with "Bitewurst", signed a bunch of really bad agreements with RJ carriers. These current transactions might allow Delta to early terminate some of the 50 seat jets and in exchange give the buyers 76 seaters as a consolation prize. Since we are at the limit for 76 seaters, they can't be new purchases, they have to come from existing aircraft. I have no idea if this played into these transactions, but it wouldn't surprise me.
And if the flow through folds up, then they lose the 76 seaters as well. I can't see missing an opportunity ratchet down 60 some odd large RJs as politically tolerable for the MEC.
But I am all for rejecting all of the bad RJ deals. Heck, get rid of all of them while they're at it.
Nu
07-01-2010, 02:19 PM
#72
SDQ Base Chief
Joined APC: Mar 2006
Position: 320 CA
Posts: 5,691
Im shocked that TSA(well, CPZ) is going to be flying E175s for DAL. Is there some way DAL could flow all of the CPZ guys and then TSA could dangle the E175 carrot to the current TSA pilots who are in negotiations for bottom of the barrel prices with the threat of GoJets pilots moving into the E175 slots if TSA doesnt agree to a contract? There is much more to this whole shenanigans, and its rotten.
07-01-2010, 02:26 PM
#73
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Posts: 18,563
Heyas ACL,
The airlines are worth what they are worth. I can't imagine that mama DAL was giving them away for no reason at all. Sometimes there are pending items that we don't know about.
If I own a Cessna that is nominally worth $100k, and all of a sudden, I decide to sell it to someone for $70k, you can bet there is something wrong, one way or another. So someone buys it for $70k, and the next week, POOF, something external happens, like no more 100LL. Now that $70k airplane is just worth it's weight in aluminum. (this, by the way, is currently going on if you follow GA news at all). Makes the guy who sold it look like a genius, and the guy who bought it look like a sucker.
It could be that DAL plans on making it's money back on aircraft leases. It could be that DAL so highly regards its hiring process that it's willing to sacrifice 60+ 76 seaters just to be rid of the flow.
It could also be they have read the tea leaves and decided that the regional industry is going to be so bad, that a 100 million dollar airline is only worth 20.
Time will tell.
Nu
The airlines are worth what they are worth. I can't imagine that mama DAL was giving them away for no reason at all. Sometimes there are pending items that we don't know about.
If I own a Cessna that is nominally worth $100k, and all of a sudden, I decide to sell it to someone for $70k, you can bet there is something wrong, one way or another. So someone buys it for $70k, and the next week, POOF, something external happens, like no more 100LL. Now that $70k airplane is just worth it's weight in aluminum. (this, by the way, is currently going on if you follow GA news at all). Makes the guy who sold it look like a genius, and the guy who bought it look like a sucker.
It could be that DAL plans on making it's money back on aircraft leases. It could be that DAL so highly regards its hiring process that it's willing to sacrifice 60+ 76 seaters just to be rid of the flow.
It could also be they have read the tea leaves and decided that the regional industry is going to be so bad, that a 100 million dollar airline is only worth 20.
Time will tell.
Nu
Point was that it is cheap. If they did renegotiate those asa's the savings are huge.
I just think that there is a bigger reason for this. Time will tell.
07-01-2010, 02:44 PM
#74
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Compass has the lowest costs amongst the DCI carriers (76 seat jet). Compass probably makes Delta 20 million a quarter. I am sure Compass was sold to dismantle the flow. I saw the operating numbers when we were doing proving runs with only 1-2 aircraft on property. At that time the Brazilian pilots employed by Embrear said that Compass would be making money for northwest at any flight with more than 41% of the seats filled (how they determine ticket prices, etc. is above my pay grade). Compass contract is below industry average and will be for many years to come.
I can only assume that Compass was a huge money maker for NWA/Delta as the former NWA MEC/LEC said that compass exsisted because mainline gave that up to the company in order to maintain their retirement.... that statement plus the embraer reps leads me to believe compass is a golden goose for it's size.
I can only surmise that Compass was sold for a used puck bag in order to rid Delta of the flow obligations. My 2 cents
I can only assume that Compass was a huge money maker for NWA/Delta as the former NWA MEC/LEC said that compass exsisted because mainline gave that up to the company in order to maintain their retirement.... that statement plus the embraer reps leads me to believe compass is a golden goose for it's size.
I can only surmise that Compass was sold for a used puck bag in order to rid Delta of the flow obligations. My 2 cents
07-01-2010, 02:50 PM
#75
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Doesn't make sense.
Nu
07-01-2010, 02:58 PM
#76
SDQ Base Chief
Joined APC: Mar 2006
Position: 320 CA
Posts: 5,691
Would they have to lose 76 seaters from CPZ or could they reduce them from the Republic fleet? Maybe Republic wants out of their 76seat contracts as well in order to put them on the F9/YX stuff?
07-01-2010, 03:16 PM
#77
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Posts: 13,088
I believe RAH only has 16 DCI E175's. If the flow goes allowable 76 seaters goes from 153 to 85.
07-01-2010, 03:20 PM
#78
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Joined APC: Dec 2007
Posts: 374
This industry is totally unpredictable. Just last week I had lunch with a friend of mine at Compass. He is an E-170 captain soon thought to be flowing over to DAL. I told him that he was in a very good spot at a very good time. Damm....things change around quick in the airline world...usually for worse. 
Good luck to Compass pilots.
Good luck to Compass pilots.
07-01-2010, 03:35 PM
#79
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Posts: 691
I agree that the flow was probably the downfall of both Mesaba and Compass. It is an arrogant move, no hiring process is going to weed out all the bad apples. I guess they feel otherwise. You are already trusting these pilots to fly your customers around under your name anyway. You might as well trust them to eventually fly your planes. One thing that is baffling is selling a large part of your flying to two bottom feeding organizations known for horrible performance and horrible customer service. The big push for an enhanced customer experience and the importance of High Value Customers was in the end just lip service.
Last edited by jayray2; 07-01-2010 at 06:34 PM. Reason: know -> known
07-01-2010, 04:49 PM
#80
No longer cares
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Position: 767er Captain
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