Delta Mulls $2.3Billion Regional-Jet Purchase
09-27-2016, 07:52 AM
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Delta Mulls $2.3Billion Regional-Jet Purchase
Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift - Bloomberg
Photographer: Andrew Harrer/Bloomberg
Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift
Michael Sasso
September 27, 2016 — 7:41 AM PDT
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Airline wants option to add larger aircraft in 70-seat range
Carrier needs pilots’ union to sign off on possible revamp
Delta Air Lines Inc. is studying a purchase of roomier regional jets with a list value of as much as $2.3 billion -- provided the company can get the pilots’ union to accept an overhaul of the small-plane fleet.
The Atlanta-based carrier told the Air Line Pilots Association it wants the option of adding as many as 50 more planes in the 70- to 76-seat range, according to a union memo sent to pilots on Sept. 10. Those aircraft, which can accommodate coach and first-class cabins, are more fuel-efficient and profitable than the all-coach 50-seaters now flying many short hops.
Delta also told the union it may eliminate the smaller planes from the fleet without giving a timeline, according to the memo, which was obtained by Bloomberg News. The potential cost of buying larger regional jets is based on list prices for aircraft in the 70-seat range made by Embraer SA and Bombardier Inc., before discounts that are customary for large orders.
The pilots’ union has objected to any additional 70- or 76-seat jets being flown by Delta’s regional affiliate airlines, ALPA Chairman John Malone said. A Delta spokesman declined to comment.
Up-Gauging
U.S. airlines have been cutting their use of 50-seat jets and switching to larger planes, a practice known as “up-gauging.” In addition to lacking a first-class cabin, the 50-seat planes have been criticized by passengers as cramped. Delta had 153 of the aircraft as of July, compared with 309 three years ago, according to regulatory filings.
The 50-seat jets are flown by Delta’s regional affiliate airlines under the Delta Connection brand. Any new 76-seat aircraft would also be flown by the affiliates.
Even so, under their union contract Delta’s own pilots have a say over which aircraft can be flown by the affiliate airlines. Such rules are spelled out in contract “scope clauses.”
Pilots for major airlines generally object to the practice of outsourcing any flights to the regional carriers and prefer that they be given all flights, said Louis Smith, president of consulting firm Future & Active Pilot Advisors. A looming shortage of people qualified to fly commercially may give them more clout, he said.
“With the bargaining power of mainline pilot unions increasing, I don’t foresee any pilot group relaxing any of the rules related to scope clauses,” Smith said.
In the long term, Delta probably will bring more flying in-house and cut down on the use of regional carriers, said Michael Boyd, president of aviation consultant Boyd Group International. Pay and costs are rising among the smaller airlines, making them less attractive, he said.
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Photographer: Andrew Harrer/Bloomberg
Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift
Michael Sasso
September 27, 2016 — 7:41 AM PDT
Share on FacebookShare on Twitter
Airline wants option to add larger aircraft in 70-seat range
Carrier needs pilots’ union to sign off on possible revamp
Delta Air Lines Inc. is studying a purchase of roomier regional jets with a list value of as much as $2.3 billion -- provided the company can get the pilots’ union to accept an overhaul of the small-plane fleet.
The Atlanta-based carrier told the Air Line Pilots Association it wants the option of adding as many as 50 more planes in the 70- to 76-seat range, according to a union memo sent to pilots on Sept. 10. Those aircraft, which can accommodate coach and first-class cabins, are more fuel-efficient and profitable than the all-coach 50-seaters now flying many short hops.
Delta also told the union it may eliminate the smaller planes from the fleet without giving a timeline, according to the memo, which was obtained by Bloomberg News. The potential cost of buying larger regional jets is based on list prices for aircraft in the 70-seat range made by Embraer SA and Bombardier Inc., before discounts that are customary for large orders.
The pilots’ union has objected to any additional 70- or 76-seat jets being flown by Delta’s regional affiliate airlines, ALPA Chairman John Malone said. A Delta spokesman declined to comment.
Up-Gauging
U.S. airlines have been cutting their use of 50-seat jets and switching to larger planes, a practice known as “up-gauging.” In addition to lacking a first-class cabin, the 50-seat planes have been criticized by passengers as cramped. Delta had 153 of the aircraft as of July, compared with 309 three years ago, according to regulatory filings.
The 50-seat jets are flown by Delta’s regional affiliate airlines under the Delta Connection brand. Any new 76-seat aircraft would also be flown by the affiliates.
Even so, under their union contract Delta’s own pilots have a say over which aircraft can be flown by the affiliate airlines. Such rules are spelled out in contract “scope clauses.”
Pilots for major airlines generally object to the practice of outsourcing any flights to the regional carriers and prefer that they be given all flights, said Louis Smith, president of consulting firm Future & Active Pilot Advisors. A looming shortage of people qualified to fly commercially may give them more clout, he said.
“With the bargaining power of mainline pilot unions increasing, I don’t foresee any pilot group relaxing any of the rules related to scope clauses,” Smith said.
In the long term, Delta probably will bring more flying in-house and cut down on the use of regional carriers, said Michael Boyd, president of aviation consultant Boyd Group International. Pay and costs are rising among the smaller airlines, making them less attractive, he said.
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09-27-2016, 08:07 AM
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Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift - Bloomberg
Photographer: Andrew Harrer/Bloomberg
Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift
Michael Sasso
September 27, 2016 — 7:41 AM PDT
Share on FacebookShare on Twitter
Airline wants option to add larger aircraft in 70-seat range
Carrier needs pilots’ union to sign off on possible revamp
Delta Air Lines Inc. is studying a purchase of roomier regional jets with a list value of as much as $2.3 billion -- provided the company can get the pilots’ union to accept an overhaul of the small-plane fleet.
The Atlanta-based carrier told the Air Line Pilots Association it wants the option of adding as many as 50 more planes in the 70- to 76-seat range, according to a union memo sent to pilots on Sept. 10. Those aircraft, which can accommodate coach and first-class cabins, are more fuel-efficient and profitable than the all-coach 50-seaters now flying many short hops.
Delta also told the union it may eliminate the smaller planes from the fleet without giving a timeline, according to the memo, which was obtained by Bloomberg News. The potential cost of buying larger regional jets is based on list prices for aircraft in the 70-seat range made by Embraer SA and Bombardier Inc., before discounts that are customary for large orders.
The pilots’ union has objected to any additional 70- or 76-seat jets being flown by Delta’s regional affiliate airlines, ALPA Chairman John Malone said. A Delta spokesman declined to comment.
Up-Gauging
U.S. airlines have been cutting their use of 50-seat jets and switching to larger planes, a practice known as “up-gauging.” In addition to lacking a first-class cabin, the 50-seat planes have been criticized by passengers as cramped. Delta had 153 of the aircraft as of July, compared with 309 three years ago, according to regulatory filings.
The 50-seat jets are flown by Delta’s regional affiliate airlines under the Delta Connection brand. Any new 76-seat aircraft would also be flown by the affiliates.
Even so, under their union contract Delta’s own pilots have a say over which aircraft can be flown by the affiliate airlines. Such rules are spelled out in contract “scope clauses.”
Pilots for major airlines generally object to the practice of outsourcing any flights to the regional carriers and prefer that they be given all flights, said Louis Smith, president of consulting firm Future & Active Pilot Advisors. A looming shortage of people qualified to fly commercially may give them more clout, he said.
“With the bargaining power of mainline pilot unions increasing, I don’t foresee any pilot group relaxing any of the rules related to scope clauses,” Smith said.
In the long term, Delta probably will bring more flying in-house and cut down on the use of regional carriers, said Michael Boyd, president of aviation consultant Boyd Group International. Pay and costs are rising among the smaller airlines, making them less attractive, he said.
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Markets Delta Air Lines Inc
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Photographer: Andrew Harrer/Bloomberg
Delta Mulls $2.3 Billion Regional-Jet Purchase in Fleet Shift
Michael Sasso
September 27, 2016 — 7:41 AM PDT
Share on FacebookShare on Twitter
Airline wants option to add larger aircraft in 70-seat range
Carrier needs pilots’ union to sign off on possible revamp
Delta Air Lines Inc. is studying a purchase of roomier regional jets with a list value of as much as $2.3 billion -- provided the company can get the pilots’ union to accept an overhaul of the small-plane fleet.
The Atlanta-based carrier told the Air Line Pilots Association it wants the option of adding as many as 50 more planes in the 70- to 76-seat range, according to a union memo sent to pilots on Sept. 10. Those aircraft, which can accommodate coach and first-class cabins, are more fuel-efficient and profitable than the all-coach 50-seaters now flying many short hops.
Delta also told the union it may eliminate the smaller planes from the fleet without giving a timeline, according to the memo, which was obtained by Bloomberg News. The potential cost of buying larger regional jets is based on list prices for aircraft in the 70-seat range made by Embraer SA and Bombardier Inc., before discounts that are customary for large orders.
The pilots’ union has objected to any additional 70- or 76-seat jets being flown by Delta’s regional affiliate airlines, ALPA Chairman John Malone said. A Delta spokesman declined to comment.
Up-Gauging
U.S. airlines have been cutting their use of 50-seat jets and switching to larger planes, a practice known as “up-gauging.” In addition to lacking a first-class cabin, the 50-seat planes have been criticized by passengers as cramped. Delta had 153 of the aircraft as of July, compared with 309 three years ago, according to regulatory filings.
The 50-seat jets are flown by Delta’s regional affiliate airlines under the Delta Connection brand. Any new 76-seat aircraft would also be flown by the affiliates.
Even so, under their union contract Delta’s own pilots have a say over which aircraft can be flown by the affiliate airlines. Such rules are spelled out in contract “scope clauses.”
Pilots for major airlines generally object to the practice of outsourcing any flights to the regional carriers and prefer that they be given all flights, said Louis Smith, president of consulting firm Future & Active Pilot Advisors. A looming shortage of people qualified to fly commercially may give them more clout, he said.
“With the bargaining power of mainline pilot unions increasing, I don’t foresee any pilot group relaxing any of the rules related to scope clauses,” Smith said.
In the long term, Delta probably will bring more flying in-house and cut down on the use of regional carriers, said Michael Boyd, president of aviation consultant Boyd Group International. Pay and costs are rising among the smaller airlines, making them less attractive, he said.
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This should undoubtedly be denied by the union.
09-27-2016, 08:12 AM
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09-27-2016, 08:19 AM
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United ALPA just held the Delta PWA RJ scope line twice and the APA did also under tremendous binding arbitration duress.
09-27-2016, 08:19 AM
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But once again, I'd expect mainline DL to sell anything they can for a few more bucks...
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