DL creates LAX-SFO Shuttle

[Kev3188]

Nope, MIA is outsourced. Nothing should surprise you when it comes to outsourcing at DL... IMO, the reason we're not back down to ~dozen staffed stations is that the co. is paying for labor peace by keeping the PMNW stations open. No more, no less.

Not for nothing, I had it right the first time: RDU is pushing 50, and CLT about 35... M/L & RJ's both.

P.S. it takes as much manpower to work a M/L NB as it does a large RJ...

 

[737823]

If organization efforts are successful wouldn't language from the UA T/A and AA's intention to outsource most everything besides hubs and a few larger stations be the industry standard for DL in negotiations? I am curious to hear your perspective on why the co is more willing to farm out ramp before ACS. Better cost savings potential must be part of it.

Josh

 

[WorldTraveler]

Nope, MIA is outsourced. Nothing should surprise you when it comes to outsourcing at DL... IMO, the reason we're not back down to ~dozen staffed stations is that the co. is paying for labor peace by keeping the PMNW stations open. No more, no less.

so, is it possible to accept that DL would rather keep that labor peace and not push to where AA and UA are who have basically said they don't care about labor peace in the name of cost savings?

And it is the existence of the RR program - which you and labor hate - which make it cost effective to keep current stations open.

And, Josh, the reason DL has a differing view of outsourcing above and below wing is because of the customer facing element of each job. I had dinner last night with an IT exec for a large global bank who recounted the amount of outsourcing they do in India (he is an Indian himself). Yet, that bank has a very strong reputation for customer service.

DL does have an above wing RR program as well. Flexible staffing to match peaks and valleys in demand.
Very low benefit costs in a world where benefits are becoming less and less common.

Not for nothing, I had it right the first time: RDU is pushing 50, and CLT about 35... M/L & RJ's both.

yes you did have it right... and the principle is that RDU is a more divided market and thus there is more opportunity to grow. DL's focus - if it should not be apparent - is to go into divided markets and win against its network competitors and to be able to coexist or win against LFCs which have destabilized the market for other network/legacy airlines.
It is precisely for that reason why DL has been able to significantly grow its domestic operation at JFK.

P.S. it takes as much manpower to work a M/L NB as it does a large RJ...

and that is precisely the calculus that DL is using in the 717 replacement for RJ strategy. It probably also requires a similar crew to work a CRJ, no?
Add in that DL was overstaffed with pilots post merger and has maintained it for years - perhaps again in the name of labor peace - but now wants to increase pilot productivity that the 717 deal has the potential to be so lucrative to DL - and why the pilots were amazed at how fast DL wanted to sign the pilot contract so they could do the deal with WN.

Staff RJs with existing pilots, reduce RJ contract costs which were going to include a lot of maintenance, and pick up a bunch of orphan aircraft which are still operationally cost competitive but have very low ownership costs - in part because of "subsidies" by WN and Boeing - and the 717 from DL's perspective is a win -win-win in increasing productivity, reducing costs, and giving DL an edge in small/medium sized markets.

That is why the 717 is a great step up aircraft from large RJs and we can hope that LAX-SFO will be one of those markets in the near future - along with the East Coast Shuttle. It doesn't hurt that the 717 is made for high cycle operations and doesn't have the range that the Ejets have.

Nope, MIA is outsourced.

The $64M question is whether DL has any intention of changing the staffing policies for medium sized stations.
Also remember that DL has not sustained longhaul international operations at MIA despite several attempts. PDX and SEA are examples of stations that have seen significant changes in staffing, including the addition of maintenance as longhaul flying has increased or been maintained.
Perhaps your "prayer" should be that RDU and MIA will be able to support and sustain long-haul int'l flying since that has been rumored from both stations.
From CLT, the addition of the new gates might push DL's flight level even with small RJs to current RDU levels.
The CRJ is still economically viable on point to point routes, esp. those with strong business components.

 

[737823]

WT,
I am familiar with DL RR have discussed it at length with Kevin. I think it's worth noting that a station staffed with a combination if RR, PT, and FT can make the operation economical instead of outsourcing all jobs, so in a way RR positions may secure FT positions. Isn't a station with RRs better than outsourced?

Josh

 

[WorldTraveler]

Kev and I have also discussed the RR program because it matters a lot to him... and I await his perspectives.

it has long been my contention that the RR program ensures that DL can remain cost competitive with outsourced while maintaining quality and also ensuring that what might eventually become a handful of FT benefitted people remain in the station.

I'm not sure Kev is willing to accept that the RR program is what it takes to keep DL jobs in some cities that otherwise would be outsourced. It also might be the only way that some cities like MIA, RDU, and CLT eventually do have DL FT people below wing, esp. if some of those cities support int'l flights. There clearly is a line at which DL says it is worth staffing a station with its own people vs contractors but I suspect that calculation is driven much more by customer service and issues around the complexity of the operation.
It also is worth asking why DL is willing to keep jobs in some cities even with RRs while other airlines are outsourcing cities of similar size. I believe the answer has a lot more to do with labor-mgmt. relations at those airlines than some would admit.
It is also worth noting that UA has a much higher percentage of its mainline fleet concentrated at a far fewer number of stations which means the economics of having mainline staff is different than it is for DL which has a much larger mainline operation throughout the US - and it will grow as the 717s come online.
AA/US is somewhere inbetween currently closer to DL but with no current plans for growth of a 100 seat mainline aircraft.

But it also doesn't mean that DL has any incentive to undo what the IAM negotiated with NW, esp. since many of the cities where NW had its own people are key strategic cities for DL and/or cities that have strong financial performance and where DL has shown it will fight to protect its market share because they are so close to the large hubs.

I honestly don't see any current DL mainline staffed cities where DL is at risk of throwing in the towel on the size of its current operation or succumbing to competitive pressures.

There are plenty of DL pilots who believe they were taken by mgmt. for agreeing to the 717 deal which also included more large RJs even though the total number of RJs (and pilots - a key factor in the face of a looming pilot shortage) was going to happen anyway.
Many also do not like the increased workload they are seeing, esp. this summer where staffing is being stretched - but a whole lot of pilots will see bigger paychecks than they have seen in a long time, even if it is at the expense of growth in the number of pilots.

BTW,
New AA/US will have about 50 flights/day in ATL based on current schedules with a higher percentage of mainline aircraft than DL has in CLT or RDU. DL has about 45 flights/day in DFW with about half on large RJs and about 60 flights/day at ORD. DL has about 35 flights/day at PHL.

DL's "defense" of the AA/US merger - is to find markets where DL can grow in key strategic markets like RDU and in other carrier hubs.

 

[737823]

At the time of the merger, didn't Air Wisconsin handle close to 30 former NWA stations that were formerly mainline? Kev correct me if I'm wrong.

Josh

 

[robbedagain]

i wonder if after DL gets the 717 if they would swap the E-175s on the LAX-SFO and convert the plane to the 717s down the road would that make more sense to use the 717 on the shuttle or no

 

[WorldTraveler]

The intention is indeed that CR7s will replace CRJs, CR9s will replace 7s while Ejets will be put in higher profile and more competitive markets, 717s will be upgauge aircraft for CR9 and Ejet markets,......

There are undoubtedly far more routes for which the 717 could be used than there will be aircraft available.

As with the M90s, DL will control the majority of the fleet that was built and will likely continue to look for a few additional copies should they be able to acquire them but both the 717 and M90 will be good solid performers on relatively short routes compared to their peer aircraft; the 320 and 738/9/757 will get to do longer routes and have more onboard amenities while the 717s will be the aircraft that will allow DL to offer the only mainline service among network carriers than many airports will see, with the potential for market share shifts and revenue premiums that are associated with mainline service for the dominant carrier in a market.

 

[Kev3188]

If organization efforts are successful wouldn't language from the UA T/A and AA's intention to outsource most everything besides hubs and a few larger stations be the industry standard for DL in negotiations? I am curious to hear your perspective on why the co is more willing to farm out ramp before ACS. Better cost savings potential must be part of it.

Josh

They might try to follow what UA/AA are attempting, but I don't necessarily think that's a given. I would, however, be willing to bet that they have a "nuclear option" lying in wait.

They are much more willing to farm out the ramp because we aren't customer facing. RA himself is on record as saying he wants "our people" in every station, and that the ramp will be looked at on a station-by-station basis. And before anyone asks, no, I don't have the link handy, but it's out there...

At the time of the merger, didn't Air Wisconsin handle close to 30 former NWA stations that were formerly mainline? Kev correct me if I'm wrong.

Josh

I don't think it was that high, but maybe? For some reason I wanna say there were 17 of them that cutover to ZW, but don;t hold me to it...

 

[WorldTraveler]

Thanks for sticking with the conversation, Kev, despite the truckload of dirt that you perceived was thrown at you. Thank you also for acknowledging that AA and UA are making significant cuts to their ramp personnel. All I have asked is that there be balance in the perspectives that are presented; if DL is reducing FT ramp jobs thru attrition, then note that other carriers are doing it thru much more active methods, for example.

I will validate that DL execs have said they have a priority in keeping their own people in public contact positions; that is also a factor in the RJ swapout for 717s. The IT exec for a major global bank validated that they use a similar strategy for keeping customer facing personnel in-house while contracting out back office staff.

But that also doesn't mean that other areas of the company have been given a pass on efficiency or that DL is singularly focused on cutting ramp jobs. Remember that DL has tested automated boarding gates, has enhanced software and processes to allow fewer gate agents to handle more passengers, has installed software in Res to handle calls faster and eliminate as much agent downtime as possible, increase FA responsibilities and revenue generation in-flight with onboard sales, plus the previously noted increases in pilot efficiency.

Help me understand why you think DL would choose to use a nuclear option or what they would gain by doing so. As you have noted, the RR program allows in-house personnel to be added for similar costs as if they were outsourced. Yes, there are still FT benefitted personnel DL could target but what is the trigger that would force them to do so and what is the real benefit that would be gained?

 

[Airlinelifer]

so, is it possible to accept that DL would rather keep that labor peace and not push to where AA and UA are who have basically said they don't care about labor peace in the name of cost savings?

And it is the existence of the RR program - which you and labor hate - which make it cost effective to keep current stations open.

And, Josh, the reason DL has a differing view of outsourcing above and below wing is because of the customer facing element of each job. I had dinner last night with an IT exec for a large global bank who recounted the amount of outsourcing they do in India (he is an Indian himself). Yet, that bank has a very strong reputation for customer service.

DL does have an above wing RR program as well. Flexible staffing to match peaks and valleys in demand.
Very low benefit costs in a world where benefits are becoming less and less common.


yes you did have it right... and the principle is that RDU is a more divided market and thus there is more opportunity to grow. DL's focus - if it should not be apparent - is to go into divided markets and win against its network competitors and to be able to coexist or win against LFCs which have destabilized the market for other network/legacy airlines.
It is precisely for that reason why DL has been able to significantly grow its domestic operation at JFK.


and that is precisely the calculus that DL is using in the 717 replacement for RJ strategy. It probably also requires a similar crew to work a CRJ, no?
Add in that DL was overstaffed with pilots post merger and has maintained it for years - perhaps again in the name of labor peace - but now wants to increase pilot productivity that the 717 deal has the potential to be so lucrative to DL - and why the pilots were amazed at how fast DL wanted to sign the pilot contract so they could do the deal with WN.

Staff RJs with existing pilots, reduce RJ contract costs which were going to include a lot of maintenance, and pick up a bunch of orphan aircraft which are still operationally cost competitive but have very low ownership costs - in part because of "subsidies" by WN and Boeing - and the 717 from DL's perspective is a win -win-win in increasing productivity, reducing costs, and giving DL an edge in small/medium sized markets.

That is why the 717 is a great step up aircraft from large RJs and we can hope that LAX-SFO will be one of those markets in the near future - along with the East Coast Shuttle. It doesn't hurt that the 717 is made for high cycle operations and doesn't have the range that the Ejets have.




The $64M question is whether DL has any intention of changing the staffing policies for medium sized stations.
Also remember that DL has not sustained longhaul international operations at MIA despite several attempts. PDX and SEA are examples of stations that have seen significant changes in staffing, including the addition of maintenance as longhaul flying has increased or been maintained.
Perhaps your "prayer" should be that RDU and MIA will be able to support and sustain long-haul int'l flying since that has been rumored from both stations.
From CLT, the addition of the new gates might push DL's flight level even with small RJs to current RDU levels.
The CRJ is still economically viable on point to point routes, esp. those with strong business components.

I didn't know that the new prerequisite for mainline personnel to be staffed on the ramp is an international flight.

Its funny how the company rationalizes that the ramp is too expensive for MIA. It's not to expensive for above wing, or stores or MX, not even with RR's at their beck and call.

Yea it's getting kind of old, but when your dealing with DL coworkers that didn't say a peep when they had a total of 15 stations, what can you really expect.

PS: You know that if DL would not have merged with NW they would still be at 15 ramp stations.

 

[WorldTraveler]

I didn't say it was a prerequisite... I said it seemed to be a step that has helped push some stations back to mainline staffing.
The bigger issue is probably that DL comes to the conclusion that if a station is large enough to support a transoceanic flight, DL's position in the station is stable enough.
That can't be the only reason because stations like RDU are very strong stations that are like IND which the IAM protected for IAM members.

While you wish to charge that DL people sat by idly while the company outsourced, you also omit that DL long treated above wing and below wing as similar job functions and there are many ACS employees with 20 plus years who have worked in both areas. Transferring back and forth is much less common but there were many, may people on the ramp during 7.5 (when DL dramatically outsourced many stations) that ended up in passenger service positions while lower seniority passenger service people were furloughed if they chose not to go elsewhere in the company, which often meant Res.
There are plenty of DL people who did go to res, stayed for a couple years, and came back to the airport. Some of the highest level stations mgmt. at DL today took that path and it might also explain why there are people who have followed the path DL set out despite cutbacks and who ended up doing quite well. Even apart from those who rapidly ascended, there are plenty who finished their careers in ACS.

I am all for seeing more FT permanent jobs created throughout the industry and at DL but there are way too many people who have tried to argue that DL's system disadvantages one group when the evidence is overwhelming that DL has not played favorites with one group over another and even people whose positions were cut managed to survive and thrive.

And once again, please tell me how well the people at other carriers have fared in light of the cutbacks those carriers have done - and they have given their below wing people far fewer real choices than DL.

 

[737823]

I didn't know that the new prerequisite for mainline personnel to be staffed on the ramp is an international flight.

Its funny how the company rationalizes that the ramp is too expensive for MIA. It's not to expensive for above wing, or stores or MX, not even with RR's at their beck and call.

Yea it's getting kind of old, but when your dealing with DL coworkers that didn't say a peep when they had a total of 15 stations, what can you really expect.

PS: You know that if DL would not have merged with NW they would still be at 15 ramp stations.

I don't know why everyone is so hung up about DL at MIA, but sUA side has been UAX for several years sCO side is all mainline. Dosa DL have mainline ramp at FLL or PBI? Not sure what the fixation with MIA is all about.

Josh

 

[Airlinelifer]

I didn't say it was a prerequisite... I said it seemed to be a step that has helped push some stations back to mainline staffing.
The bigger issue is probably that DL comes to the conclusion that if a station is large enough to support a transoceanic flight, DL's position in the station is stable enough.
That can't be the only reason because stations like RDU are very strong stations that are like IND which the IAM protected for IAM members.

While you wish to charge that DL people sat by idly while the company outsourced, you also omit that DL long treated above wing and below wing as similar job functions and there are many ACS employees with 20 plus years who have worked in both areas. Transferring back and forth is much less common but there were many, may people on the ramp during 7.5 (when DL dramatically outsourced many stations) that ended up in passenger service positions while lower seniority passenger service people were furloughed if they chose not to go elsewhere in the company, which often meant Res.
There are plenty of DL people who did go to res, stayed for a couple years, and came back to the airport. Some of the highest level stations mgmt. at DL today took that path and it might also explain why there are people who have followed the path DL set out despite cutbacks and who ended up doing quite well. Even apart from those who rapidly ascended, there are plenty who finished their careers in ACS.

I am all for seeing more FT permanent jobs created throughout the industry and at DL but there are way too many people who have tried to argue that DL's system disadvantages one group when the evidence is overwhelming that DL has not played favorites with one group over another and even people whose positions were cut managed to survive and thrive.

And once again, please tell me how well the people at other carriers have fared in light of the cutbacks those carriers have done - and they have given their below wing people far fewer real choices than DL.

D E L T A is unique, D E L T A is for open communication, and all the "positive things" that come down from Corporate, I like working at D E L T A and it seems that you did too, thats why I can give two sh*ts about what the other airlines are doing. If D E L T A mainline ramp can do the work, we should be doing it. You want loyalty, open up the stations that should be open and stop looking at the other guys

 

[Airlinelifer]

I don't know why everyone is so hung up about DL at MIA, but sUA side has been UAX for several years sCO side is all mainline. Dosa DL have mainline ramp at FLL or PBI? Not sure what the fixation with MIA is all about.

Josh

Its jobs Josh, plain and simple, MIA and PBI are farmed out.