Republic Cannot Afford New Contract
11-07-2015, 09:05 AM
#61
Gets Weekends Off
Joined APC: Feb 2008
Position: FIRE ALPA
Posts: 3,097
"This is all orchestrated folks. If you happend to listen to the earnings call yesterday it was evident. BB has a plan. Fleet reductions, severing FFD agreements, shrinking RAH yes; BK NO.
The OP might as well have put the link to the Bloomberg story that the sun rises in the East.
Nothing to see here."
...
If you paid attention to BB's actions you'd realize he has No plan... He strung out contract negotiations for 8 years, he saw the problem coming, and his solution was not to raise wages to attract/retain pilots. His plan was to be the spokesman for the RAA and spearhead a campaign to get FTDT and ATP requirements overturned. That was his plan. It failed. Now he is at the mercy of DElta/United/AAG. Deltas already suing. Basically all there of the majors have to cooperate to save republic, do they even want to do that?
You can't just sever FFD contracts without huge penalties, penalties that would most likely force you into BK. they are at the mercy of either a massive compromise between delta/aa/united to each have their contracts equally unfulfilled, or being forced into BK.
BB has no clue what he's doing. Even if they can pay the raises, I'm not sure anyone is actually jumping to go to republic. If it's all about first year pay I'm pretty sure endeavor is still a better choice.
The OP might as well have put the link to the Bloomberg story that the sun rises in the East.
Nothing to see here."
...
If you paid attention to BB's actions you'd realize he has No plan... He strung out contract negotiations for 8 years, he saw the problem coming, and his solution was not to raise wages to attract/retain pilots. His plan was to be the spokesman for the RAA and spearhead a campaign to get FTDT and ATP requirements overturned. That was his plan. It failed. Now he is at the mercy of DElta/United/AAG. Deltas already suing. Basically all there of the majors have to cooperate to save republic, do they even want to do that?
You can't just sever FFD contracts without huge penalties, penalties that would most likely force you into BK. they are at the mercy of either a massive compromise between delta/aa/united to each have their contracts equally unfulfilled, or being forced into BK.
BB has no clue what he's doing. Even if they can pay the raises, I'm not sure anyone is actually jumping to go to republic. If it's all about first year pay I'm pretty sure endeavor is still a better choice.
11-07-2015, 10:27 AM
#62
Underpaid...
Joined APC: Nov 2010
Position: French-Canadian
Posts: 2,101
Dallas Texas. Sometime in the future
Bryan Bedford (BB). Hello Doug. Thank you for seeing me.
Doug Parker (DP). No Problem. What could I help you with today?
(BB) Well as you know our pilot group ratified a new collective bargaining agreement that has significant increases in pay.
(DP) Yes, I do know. How unfortunate.
(BB) Well, thats what we need to talk about today.
(DP) Ok.
(BB) I’ll get straight to the point. We need to renegotiate all the current CPA’s we have with American Airlines. The current CPA’s are not profitable. My quarterly profits are already down 73% year-over-year and this new agreement with the pilots is going to cost me $150,000,000. It’s killing my operating margin.
(DP) Sorry About that.
(BB) I need to make money for my shareholders.
(DP) So do I.
(BB) Can you help?
(DP) Look. I spent a lot of time and effort whipsawing the entire regional industry against my three wholly owned carriers in order to extract the lowest possible costs. And I got it. But now you want American to pay you more for the same service I can get in-house for less?
(BB) Yes.
(DP) Plus I don’t have to pay your profit margin. I get to keep it.
(BB) Let’s talk.
(DP) No.
(BB) But I'll have to file chapter 11 if I do not get better terms on my CPA's
(DP) I'll Take my chances. Thank you for stopping by.
Bryan Bedford (BB). Hello Doug. Thank you for seeing me.
Doug Parker (DP). No Problem. What could I help you with today?
(BB) Well as you know our pilot group ratified a new collective bargaining agreement that has significant increases in pay.
(DP) Yes, I do know. How unfortunate.
(BB) Well, thats what we need to talk about today.
(DP) Ok.
(BB) I’ll get straight to the point. We need to renegotiate all the current CPA’s we have with American Airlines. The current CPA’s are not profitable. My quarterly profits are already down 73% year-over-year and this new agreement with the pilots is going to cost me $150,000,000. It’s killing my operating margin.
(DP) Sorry About that.
(BB) I need to make money for my shareholders.
(DP) So do I.
(BB) Can you help?
(DP) Look. I spent a lot of time and effort whipsawing the entire regional industry against my three wholly owned carriers in order to extract the lowest possible costs. And I got it. But now you want American to pay you more for the same service I can get in-house for less?
(BB) Yes.
(DP) Plus I don’t have to pay your profit margin. I get to keep it.
(BB) Let’s talk.
(DP) No.
(BB) But I'll have to file chapter 11 if I do not get better terms on my CPA's
(DP) I'll Take my chances. Thank you for stopping by.
11-07-2015, 02:33 PM
#64
Gets Weekends Off
Joined APC: Dec 2012
Posts: 610
Well then the thread title should read RAH can't afford its own mgmt. If your counting labor beans vs. contract revenue, it doesn't matter what the name of the company is.
11-07-2015, 06:23 PM
#65
Gets Weekends Off
Joined APC: Jul 2014
Position: Feito no Brasil, CA
Posts: 833
Sounds like the exact same setup the majors used prior to 9/11. Grant contracts that were "unaffordable", complain about the unprofitability due to said contract, then proceed to file bankruptcy.
11-08-2015, 07:38 AM
#66
Gets Weekends Off
Joined APC: Jun 2010
Position: Just another RJ guy
Posts: 906
Here's an interesting site. Republic is consistently in the top 3 of most canceled flights in the WORLD according to this site. It's updated all day long and you can go back and search to see for yourself.
Live Airline Flight Cancellations Info & Statistics ? FlightAware
Live Airline Flight Cancellations Info & Statistics ? FlightAware
11-08-2015, 11:59 AM
#67
Gets Weekends Off
Joined APC: Aug 2010
Posts: 248
This says a lot:
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
11-08-2015, 12:16 PM
#68
Gets Weekends Off
Joined APC: Dec 2012
Posts: 610
This says a lot:
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
11-08-2015, 12:23 PM
#69
Gets Weekends Off
Joined APC: Dec 2012
Posts: 610
Based on reading between the lines from Endeavor management, the answer is a resounding no. They seem to be counting on someone (Republic) shutting down and flooding the market with pilots to keep the new hire classes full of people that they can get through training quickly to replace everyone leaving.
The reality is there is no real problem.
Cheap oil is keeping the 50 seat market artificially high, it can be limped along or the pilot shortage can force them to head the direction they were already heading in 2013.
11-08-2015, 12:36 PM
#70
Gets Weekends Off
Joined APC: Aug 2007
Position: I pilot
Posts: 2,049
This says a lot:
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
Total cancellations within, into, or out of the United States today: 102
Total cancellations of Republic Airlines (most in the world): 71
Total cancellations of next closest airline in the world (Transaero): 37
Total cancellations of next closest US based airline, and regional (GoJets): 9
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