jayray

Good point. I wonder if Comair had something like that in their contract? Do you know if there is any truth to the idea that come March Delta will be making decisions regarding the regional partners? As in to merge or sale one or anything?

Farva

i dont know

Lighteningspeed

Excellent post. Thanks for posting the actual contract language. I was playing the devil's advocate. Bottom line is if you wait it out and have the patience, things will turn around in 2010 for XJ.

Lighteningspeed

I don't know about March 2010 but I have heard that DAL will be making important decisions regarding DCIs flying for DAL in 2010. That seems plausible because DAL has been saying since 2008 that they have too many DCIs flying under their system and that they want to reduce the number of DCIs flying for them down from 9 to 3 or 4. Early part of 2010 is what I've heard. As far as merger or sale, I have not heard anything that can be substantiated, just business predictions by aviation analysts.

gbntpilot

I haven't heard anything about a sale. If any wholly-owned DCI carrier were to be sold, my guess would be Compass. The 175 fleet is nice and new, but it doesn't provide quite the efficiency of the CRJ-900, with the same number of seats. Comair is too expensive to be attractive to any other airline. I really doubt if any will be sold off though. Delta saw the disadvantage in the early 90s of having one regional carrier doing most of their flying when Comair shut down during their strike. I think they like having multiple regionals to play against each other, and won't make the same mistake again.

As far as mergers go, Comair's MEC has already taken additional money from the pilot group and set up a $1 Million merger fund. Basically, they've seen the writing on the wall for Comair, and they've been calling the Mesaba MEC asking for a merger, to be initiated by the pilot group. Our MEC has a merger fund of exactly $0, and isn't even entertaining the possibility. There are no benefits to a merger with Comair for us at all, especially considering the relative senority of the Comair pilot group. If we were to initiate merger talks, we would be bending over and taking it from Delta management. If there were any possibility of merger, which I seriously doubt, it would have to be initiated by Delta which gives us significantly more bargaining power in negotiating the terms of the merger and seniority list integration.

I've been trying to figure out exactly when each of the other DCI carriers' ASAs are due. I've heard quite a few different answers, so I'm not sure how accurate this is. I've been told that the only contracts that are not due next year in the DCI network are Pinnacle, SkyWest, and ASA. From what I've heard, Chautauqua, Shuttle America, and Freedom all have Delta contracts up for renewal in 2010. First of all, Republic (owning two of those three), now owns Frontier. If I was a Delta shareholder, I wouldn't be too happy that my money was being paid from Delta into Republic, which supports Frontier, who competes directly against Delta in quite a few Western markets. Secondly, I think it's all but set in stone that Freedom will be gone as soon as possible. Even if their agreement isn't up next year, the lawsuit continues. And, if Mesa declares bankruptcy, that will give Delta the perfect opportunity to cut them out (all 50-seaters, which are on the chopping block already). That's 22 ERJs, all based at CVG. Plus, I've heard rumors of large cuts in Comair's flying at both CVG and JFK. Compass is doing more at JFK, but between Freedom's demise and Comair's cuts, there might be a big hole at CVG for us to fill. Spanjers said recently that we're trying to get away from being so spread out, geographically. We won't open a base in SLC because the flying out of there changes for so much for us every month. We've already scaled back our presence at SLC for the winter to five planes versus the ten we had there in the summer. That amount of varience won't support a domicile. With that said, flying out of CVG would keep us more centralized in the area of the country we've been traditionally good at, and let SkyWest take back SLC (which is the area they know and love). As long as we don't take a net loss of flying, a shift into CVG and away from SLC works to both XJ's and SKW's advantage. I've also heard that we still own the hanger at CVG from back in the Avro days, and currently rent it out. In my mind, a lot of signs point to Cincinnati as being a place to watch in 2010.

I think so too. There will be some major shifts next year to the tune of modified or cancelled contracts with DCI carriers and reallocation of airplanes (sadly, probably away from Comair). Financially, now that Delta has other options after the merger, it makes the most sense to simply bleed Comair dry. I don't wish for that as it would be tragic for the pilot group. But, Mesaba is a more cost effective, wholly-owned company with a good track record of operating the CRJ. It would be more cost effective for Delta to shift Comair's 700 and 900 fleet to XJ. The 900 pilots could be easily dual-qualled for the 700, and our sims in Eagan can be retrofitted to be a 700 for $1 Million (chicken feed to a company the size of Delta or Mesaba). Comair's other big fleet is the 200, which they have 93 of. Everybody knows Delta wants to park 50-seaters, so Comair's like a deer in the headlights right now unless they have some kind of protection in their contract I'm not aware of.

Like I said, I'm not wishing anything bad on the Comair pilot group. They're another ALPA carrier, and one of the few regional carriers who have had the nuts to stand up against management to get a good contract. But, sadly, I think it's too good. They're too senior, and therefore too expensive in this economy now that Delta has other options. Simply put, I think we'll take away some of their flying. If anything, we might keep more jobs, but our pilots might end up being shunned for a while, kind of like Republic is right now with the Midwest deal.

crazyjaydawg

^^^^^ Excellent post.

I don't think Mesaba will be shunned the way RAH is. Mesaba was always the main regional for NWA and is a wholly owned just like Comair.

I agree Mesaba might be given some flying at the expense of Comair, but it's just the whipsaw technique that Daddy D has. The day will come when Mesaba fights to be more expensive and the flying gets shifted back to Comair. Only time will tell...

nicholasblonde

It seems like a logical move would be to combine Mesaba and Compass...but that's just IMHO..

Both are the only DCI carriers that have solid flow-through language and similar labor costs...it wouldn't have near as many problems with differential seniority and pay as a Comair + anyone move...

BlueMoon

Except he had plenty of his "facts" wrong. So excellent post other than that.

Mesabah

I don't see any reason at all to merge any of the wholly owned carriers seniority lists together. Everything else it seems is already merged or in the process of being so. Here's the reasons for not merging the seniority lists in my opinion. First off compass is as cheap as feasibly possible for an airline, I doubt there is a cheaper regional in history; It uses most of the resources that other airlines have and pay for. A comair merger would cause the most senior paid pilots to move to the 76 seat jets all making premium pay vs the relatively junior lists at mesaba and compass. Labor relations would tank in any type of SLI between any of the carriers increasing costs dramatically as crew productivity decreases with morale. Finally, and most importantly, it ends the whipsaw in lowering crew labor costs.

If you ask me, I think we will see the status quo until several years from now, they may buy a turboprop in the short term. I don't see them canceling the republic contract unless they can get out of the fact republic can stick them with the aircraft lease balances, or they can wait three more years and DAL is free and clear of them.

As far as XJ goes. I was told by a manager that deals with saab aircraft leasing company directly, he said delta got rid of the saabs because senior management believes the saab does not represent a quality DAL product...whatever that means................

Tinpusher007

Ill buy that. Prior to the merger, Delta wasn't operating any t-props in the DCI fleet. And since the merger and even just before it, DL has become much more aware of the product they offer and has taken many steps to improve it...more so than other carriers.