“New” AA Management Ties RJ Buy to More Cost Concessions at Regionals

 - July 10, 2013, 3:23 PM
Retirements and lease returns threaten to shrink the size of the Embraer ERJ fleet at American Eagle to an unsustainable level, warned the head of the airline's pilot union. (Photo: Embraer)

The management of American Airlines merger partner US Airways has advised American Eagle pilot leaders that it will not place an order for 76-seat regional jets for Eagle or any other regional airline that hasn’t formulated a plan to “trend toward” the cost structure introduced at wholly owned Delta Air Lines subsidiary Pinnacle Airlines, the head of the American Eagle Air Line Pilots Association unit told membership last month. The calls for more cost cuts come some nine months after Eagle pilots ratified a new concessionary deal to help the airline emerge from bankruptcy.

“Despite the direction that Pinnacle was heading, ALPA, American Eagle and AMR agreed that the Eagle pilots had met AMR’s cost savings targets and that was sufficient for AMR’s plan of reorganization,” American Eagle Master Executive Council chairman Tony Gutierrez wrote in a July 8 “Newsblast” to members. “Although we knew at the time that Pinnacle would be less expensive than Eagle, it was believed to be an outlier and not a likely industry trend…What was not public knowledge at the time was that Delta Air Lines has clauses in its regional capacity purchase agreements that essentially allow it to reset the block hour rates that it pays its other regionals to match the second lowest of any of its regional carriers. As a result, Delta’s announcement made public its ability to drive all of its regional feed costs near Pinnacle by the end of 2017.”

Consequently, Delta regional affiliates Republic, SkyWest, ASA and ExpressJet have told their pilots that any new contract agreement must result in cost reductions.

Describing state of the regional airline industry as one of “disarray,” Gutierrez nevertheless urged members to recognize the need for union leaders to “engage” with management to look for a solution.  

Gutierrez warned of the possibility of Eagle shrinking its flight operation into “non-existence” by following the pattern established last year with the closure of Delta subsidiary Comair. By the time Comair liquidated in September, its fleet had shrunk to some 70 airplanes—too few, said Delta management, to maintain the economies of scale needed to justify its existence. Gutierrez also reminded members the retirement/return schedule for the Embraer regional jets at Eagle will continue to result in year-over-year capacity cuts unless the airline wins a fresh allocation of new jets.

 

Comments

Mightyduk's picture

What union leaders need to do is get organized. All for one and one for all so to say. The scumbag airlines will keep pitting one regional against another in a race to the bottom. They need unite and shut down for a day, or a sick out here and there. As it is those pilots already qualify for food stamps. And don't look to ALPA for help they have proved themselves worthless.

Who cares's picture

The absolute reason this industry has imploded on itself is because the pilots themselves have let it do so. In the old days to get flight training one must have been in the military or had wealth (Even thought I was neither, I was just lucky). The military pilots had a better sense of honor, desipine, and brotherhood not to spit on one another. The indusrty was dangerous. Planes were hard to fly (You had to actually fly them). So now that you have a flight school on every corner, the ability to obtain financing for flight time, airplanes that are so easy to fly a 10 yr. old can do it, and a endless supply of kids that want Mom, Dad, and Grandma to see them in that uniform even though they are not making as much as a fast food restaurant manager, then you will ALWAYS have the situation the airlines (esp. Regional airlines) are in today! Stop all of that from happening and you will go back to the good old days of glamour and high wages. And that my friends is the cold hard facts! Trust me, I have been in the industry for a long, long time and now I'm retired. Happy contrails Suckers!!!

abgasse's picture

I agree with your assessment in the first part about military pilots not spitting on ea. other and aircraft being harder to fly. However, having flight schools on every corner or the Union only doing what it's pilots let it do is wrong.

The good old days you refer to were under regulation=guaranteed profit margins.

Airlines were deregulated when it came to competition, but the Railway Labor Act which neuters union strikes, stayed in force. Airline management knows they have indentured servants under the RLA. Add to that the corruption of the bankruptcy process which allows airlines to void labor contracts while doling generous bonuses to management, 9/11, the legal allowance of stealing pilot pensions, the rise of B-scale regional airlines which now do the majority of the domestic route structure--some hiring pilots near to commercial minmums, and a lemming like need for the airlines to engage in deaths of 1000 cuts. After enough blood has been spilled, a 1500 hrs is the new experience limit and 10 hrs rest.

This puts floor on the race to the bottom. No more getting lower and lower time pilots. 1500 hours means 2-3 yrs slaving your butt off at slave wages just to get to regional 3rd world wages? The potential candidate list is thinning out.

Bobo's picture

The pilots of the golden era created this. B scales, concessions in pay, work rules, scope. Now it's effecting them but its never hard to point the finger at yourself.

Regional new hire classes are empty. Flight schools are empty. Sooner or later they will realize this model is unsustainable.

Who cares's picture

I would not hold my breath on the industry to change any time soon! As far as the B scales, concessions in pay, well that was the begining of the fall. Some of those things had to happen to salvage the industry from external reasons such as bad management, economics and terriorism. Out of the control of the pilots at the time. Had these compromises not taken place, then the future aviation want-a-be's would still be dreaming of an aviation career as more airlines would have dissolved sooner and the competition increased.

As far as work rules and scope are concerned, if the ground work for these elements had not been established in the past then they surely would not materialized now days! These were good things for the industry at the time. Scope now means nothing and as far as work rules, well the FAA can't even get proposed safety mandates implemented that are years behind the need.

And yes blame me for being a part of it all if you want, I accept that and agree with you. However, I also touched a hot object a few times in my life and got burned. Now I am not the type of person that will sit back and watch you do it to just to get a thrill and make my point.

Take my advice. Aviation in America is a "sweat shop". Its a joke. Go fly overseas and get paid for what you are worth or do something real with your life and quit being a slave to the high paid CEO's that are peeling the dollars off of your back!

Turbineguy's picture

Curious to see what effect the 1,500hr minimum and ATP requirement will have on the situation.

abgasse's picture

In mgmt world, no effect at all. The regional airlines want more paycuts from pilots as they staff the operation with GED achievers, imbeciles and incompetents while relying on the pilots to do the job of all the above-for less pay and QOL than the already concession contracts!

Pinnacle, TSA, Go are the new standard (until they are too expensive)

American Eagle, ASA/Expressjet, Skywest mgmts: all demanding pay cuts to win more flying.

In reality world: Eagle is offering $5,000 signing bonus, ASA/Expressjet classes are not filling, and Skywest is hawking a free sim ride and interview at Oshkosh AirVenture this yr.

Asiana stalled and crashed in CAVU VFR weather do to incompetence, Regional pilots fly 4,5,6,7 legs a day, w/o auto throttles in the busiest and most challenging airports in the US and outside. Often get min rest in dung heap hotels, and have crap benefits compared to major airline pilots. Yet, we should do it for the same pay as the dropout drug addicts who seem to be the one's driving the hotel van.

All regional pilots: draw that line in the sand now! Eagle is doing it, I hope the rest of us wake the-fik up and realize it truly is united we MUST stand. The end.

Rick's picture

It's time to draw the line is right you guys. Theyre trying to get one more bite off the apple before reality strikes. Reality is that there are np mre airline pilot candidates coming down the pike. There just aren't!
They will all be cancelling flying by the ton shortly and begging for pilots to come to work for them and the one with the best compensation package will get the pilots and the B scale operations won't. It's that simple.
Don't fall for it. They are bluffing if they tell you they aren't going to do things until the pilots take pay cuts to pay for them. It's crazy. In times of a pilot glut they can get away with this. Now they cannot
If your operation wont support bigger better planes then dont get them. But dont ask us as pilots to pay for them so you can increase your bonus next year

Brian's picture

Pinnacle represents the bottom of this downward spiral. Eagle fired the first salvo in the long battle to claw back to reasonable compensation for regional pilots when they told the company they were not interested in a "B scale". Now management is fishing for a new bottom feeder. Well they can take their stink bait elsewhere. I hope the pilots and their union representation recognize the fact that no amount of givebacks will ever be enough for these people to reappropriate to their bonuses. ExpressJet management is seeking "significant concessions" from their pilot group, claiming they have to compete with Pinnacle. Meanwhile, they have seen fit to give themselves bonuses to the tune of over 60 percent from last year. Enough is enough! The market has spoken. Classrooms sit empty. No one is biting anymore. I will stand proudly alongside Eagle pilots in saying no to concessions of any kind. All regional pilots need to take a stand now! If we cave now, we will never see another opportunity like this, and should hang our heads in shame. This is no longer a stepping stone to the legacy carriers. We fly jet aircraft on routes that not long ago were only flown by the legacys. We fly more legs per day for far less pay. There are pilots in the regionals who thought they would have been long gone by now. There are no guarantees. Demand to be compensated like the professional you are! The concession stand is closed!

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