Leeham News and Analysis
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Leeham News and Analysis
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Pontifications: Union hypocrisy over Skywest, JSX airlines
By Scott Hamilton
May 16, 2023, © Leeham News: “We are also concerned about elevated emissions and increased airspace congestion. To fit into the regulatory gap it occupies, the aircraft are reconfigured to seat no more than 30 passengers, on regional jets designed originally to hold up to 50 passengers. This model generates more intensive emissions per passenger and in busy markets with congested airspace, the model further strains the already challenged and under-staffed air traffic control system.”
So says the US Air Line Pilots Association and a bunch of other unions in a May 5 letter to the Department of Transportation, the US Department of Labor, the Federal Aviation Administration and the Transportation Security Administration.
The group wrote a three page letter pissing on plans by Skywest Airlines to launch a small charter airline under Part 135 of the FAA rules that allows pilots with fewer than 1,500 hours to carry passengers. Skywest is pursuing this because of the nationwide pilot shortage. Indeed, the shortage is global, but it’s especially acute with US regional airlines—which ALPA has been trying to diminish for decades Skywest wants to reconfigure Mitsubishi CRJ200s, a 50-passenger airplanes, into a 30-seat aircraft.
Part 135 carriers are limited to 30 passengers and provide what essentially is scheduled airline service but which are technically charter operations.
The unions spend much of their three page letter taking on JSX Airlines, which has a successful Part 135 operation using 45-seat Embraer E145s configured for 30 passengers. Its operations are migrating across the southern US.
The paragraph cited above is full of union hypocrisy, especially that of ALPA. Here’s why.
Airplane reconfiguration
United Airlines’ regional carrier, GoJet, reconfigured 70-seat CRJ-700s into 50-seat aircraft. This allowed ancient CRJ-200s to be retired while remaining with union Scope Clause provisions that cap operation of the number of passengers (by airplane count) that may be carried by a regional partner may operation for United. UAL’s ALPA signed off on this.
Yet the environmental principal outline in the opening paragraph certainly applies to a negative impact to the environment by configuring the 70-seat CRJ-700 to a 50-seat CRJ-550.
At the time, on June 25, 2022, I emailed the United ALPA chapter to see if its new contract adjusted the weight cap of airplanes that would allow the regional airline to acquire and operate the Embraer E175-E2, a somewhat heavier (though not by much) version of the original E175 (now called the E1). The E2 has the Pratt & Whitney GTF engine, which is more fuel efficient (and hence, with lower emissions) than the E1.
Here is United’s ALPA chapter’s response, from Greg Everhard, the communications chairman of the UAL ALPA chapter:
“We added weight to the CRJ-550, provided the range remains 900 nm. Our pax and jump seating pilots were being left behind due to the 550 weight restriction, especially in the winter. This change fixes that without extending the mission/range of the 550. Our goal of protecting mainline jobs from outsourcing was met as this contract does not allow any more RJs or any more seats at Express.”
Specific changes to Scope
In other words, UAL ALPA was entirely about its membership, not about the environmental impact. Everhard continued:
- No changes to number of permitted Regional Jet aircraft or seats.
- No changes to international scope.
- Allow a CRJ-550 variant with a maximum weight of 69,750 (from 65,000).
- (Note: This weight differential (though not these figures) is about what it would take to increase the weight cap for the E175 to allow E2 operations.—Editor.)
- UA pilots cannot be denied jumpseat on the higher max weight CRJ 550 variant due to weight/balance.
- The CRJ-550 variant range limited to 900 miles (ensures new added weight not used to extend range).
- CRJ-550 variant counts towards 50-seat RJ limits.
I replied to Everhard:
| “It would be helpful to explain why the weight allowance on the E175 was not increased to allow the E2 to replace the E1s. I understand the desire to protect mainline jobs, but a one-for-one replacement of the E2 for the E1, allowing a much “greener” airplane is good for the environment and the improved fuel economy is better for UAL’s bottom line as well—which, in theory, helps protect jobs. There are simply routes that do not support mainline jets. Switching to greener airplanes also reduces the ability of the Greta Thunburgs of the world to pressure commercial aviation to the detriment of jobs.”
Everhard did not respond to this follow-up question. Union intransigence blocking a weight change for the E-Jet succeeded in killing the E175-E2, which was designed as a greener airplane, reduced operating cost airliner for the US market. Embraer hasn’t officially killed the program–it’s like Mitsubishi taking two years to terminate the SpaceJet–but the airplane is dead. So much for ALPA’s “green” objections that “This model generat[ing] more intensive emissions per passenger and in busy markets with congested airspace, the model further strains the already challenged and under-staffed air traffic control system.” Union hypocrisy lives. |
Signatories
The other signatories of the letter are:
- Allied Pilots Association (American Airlines)
- Association of Flight Attendants-CWA
- Association of Professional Flight Attendants
- Coalition of Airline Pilots Associations
- International Association of Machinists and Aerospace Workers
- National Air Traffic Controllers Association
- Southwest Airlines Pilots Association
- Transportation Trades Department AFL-CIO
- Transport Workers Union of America
Scott,
Your comment about union hypocrisy ignores the history on airlines trying to displace pilots at mainline carriers with pilots at “regional” carriers.
I am not at all surprised by the unions position.
They will not give up what they have fought for easily because of the way the mainline management has tried to get around every agreement especially when there was a surplus of pilots.
Right now, pilots are in short supply but that will not always be the case.
Yes, the pilots are being more restrictive than what is now necessary, but it is a long fight that started around 1980 and will continue for a long time.
Pilots sans major wars have always been restricted. In the 50s the airlines were paying pilots to get their APR.
Vietnam changed that and a gusher of pilots came out of the services with multi engine time (Phantom was considered multi engine). Also the GI bill which allowed the airlines to sit back.
Today its swung back to the norm with various models to get people through pilot training and a career track. The 1500 hours is bad as it says nothing about the quality of the work in the 1500 hours. A lot of my time was boring holes in the air as we had reached the limits of what I needed to pass the tests (and true for most to varying degrees)
Keep in mind, pilots choose those careers. Like a Doctor, they can be lucrative.
As for displacing airline pilots I would like to see some evidence of that, the airlines have had strong unions and the fights have always been who has what seniority on mergers.
first: the Phantom (and many other fighter jets) is _actually_ multi engine. it isn’t a commercial jet derivative, but it has 2 engines. (as did the A-6, F-101, F-5, A-37, SR-71, O-2 and OV-10, never mind all the bombers and transport aircraft)
Second: the scope clause exists specifically to limit how many mainline pilots can be displaced, because it was happening, and every single round of contract negotiations the airlines try to raise the numbers, weight and seat limits.
While that is true, I don’t buy it was true multi engine on the wings. Not that it matters but there it was and no room for a career for me. The two guys I knew that made it had unusual situations that worked but starving to death was not in the cards for me (one was supported by his wife until he got into Biz jets and that was because he had a friend who let him log PIC on ferry flights..
The scope clause is in place to keep the Airlines hostage to salaries though that has gone back and forth depending on the economy.
Probably not a factor for the foreseeable future as the military end has dried up.
At some point in Union Contracts it goes from pay to egregious pay and you price yourself out of what works. So crash goes the business if it gets too expensive and airplanes like boats are great place to loose money hand over fist.
Isn’t the advent of RJ was lower cost pilots flying smaller jets?
at the time, many many many civil airliners were engines on the tail designs, such as the DC-9, 727, L1011 and F-110, basically all regional jets until the Embraer E series came along, all private jets at the time.
This should have nothing to do with JSX. It is an independent carrier, and not a wholly-owned of any of the major carriers that could potentially disrupt any scope clauses. They are simply a 135 air carrier that is bringing competition into this already dominated industry. The union should celebrate competition and encourage it due to the fact that it would ring upon more flying for them. This is just another example of pure greed. All pilots think about nowadays is money. They are never satisfied and don’t care about anybody else but themselves.
Tom,
It has ALWAYS been about greed, and that is a good thing. Corporations are about greed, and so are their investors. Why should a union celebrate anything that will potentially introduce an element that will constrain higher wages? Anything that reduces their companies profits is an excuse for management to offer lower or concessionary terms. And no it isn’tm more flying for them. Once a pilot is hired by a major, they are pretty much married to that major because of seniority and all that seniority offers including better line assignments and higher pay. And lets be clear, the only thing an airline cares about it….itself. Pilots are just an expense. Thats why unions exist.
You are totally right. Agreements are restrictive only. If you don’t restrict a Carrier from doing it, they can do it. And is has to be fairly specific.
Scott is nitpicking the letter by pointing out an environmental factor. That is but one valid point they make, even if they did allow it for their own purposes. The bigger issue is they are attacking a regulatory loophole that JSX is taking advantage of, and Skywest wants to take advantage of. They are correctly pointing out the fallacies of these business plans in an effort to protect their mainline jobs.
But what they fear is the little knat the buzzes around your ears. These business plans are hardly a competitive threat . These little charter airlines will take a fraction of traffic from the majors. They can’t handle that many passengers since the number of aircraft and seats are extremely limited. And they won’t take away any type of significant number of people simply because of price. They are not a low-cost carrier, and they don’t intend to be. At best they are the “uber” of the sky. More convenient, a little more money, but also more comfortable than a bus.
Southwest had to fight to start up back in the 70’s, and look at where they are today. But they fly 737’s and fly cheap. They expanded the affordability factor of flying verses the other airlines. The same can be said for Spirit, Frontier, and Jet blue. All of them changed the model.
But how does this loophole change the model? It really doesn’t. It offers a limited alternative at best. It is a niche between flying private and flying the major airlines. It is less expensive than flying private, but more expensive and more convenient than flying the major airlines. They can, probably do, or will fly into small airports. But the aircraft they fly are limited in number and they have bought used cheap ones to convert.
The unions are not being hypocritical. They are fighting for their membership on points that matter. The focus on that one point of many to justify the headline is stupid.
I will note that Monday’s paywall article on the Union letter goes into far more detail about the fallacy of the unions’ positions. I just focused on the environmental section.
WRT Southwest, note this from its 10K: “The Company’s ability to control labor costs is limited by the terms of its collective-bargaining agreements, and increased labor costs have negatively impacted the Company’s low-cost competitive position.”
Wages and benefits at Southwest represent 41% of expenses, one of the highest if not the highest in the US airline industry. (Fuel is only 26% of expenses.) Yet the unions are crying for more. Southwest is one of only two legacy airlines (Alaska is the other) that didn’t go through bankruptcy, slash wages and benefits or pension costs, and it pays profit sharing–yet the unions are crying for more. There’s something cockeyed about this position.
Hamilton
Personally I wouldn’t use the word Hypocrisy; I’d use the word Greed.
Greedy management or greedy pilots? I don’t think it’s the exclusive domain of the unions…
Given the way relations have developed between unions and management in pretty much every industry – everything has become a tradeoff.
If pilots want something, they had better be prepared to give something up, and vice versa.
Its the airlines wanting something. The market determines the pay rates for new hires
Its a stalking horse as the idea of a 50 seat RJ with only 30 seats and flying to ‘towns’ is absurd.
They really really want to get rid of the 1100 min hours rule for new pilots and this is the ‘wedge’
The unions want to see the regionals gone, because they see how high in demand the regional product is. This is an attempt to accelerate their demise. The unions are waiting for the day they can say “Look, you want to cut costs? Instead of flying a 76-seat 175 that burns 3,000lbs/hr why not fly the NEO/MAX that can carry more than double and burn 5,000lbs/hr.” If they give the regionals the option to fly the E2 they will continue to be a viable option to operate at lower costs.
This will be entertaining to watch. Smaller towns and cities that have had service for decades are loosing air service due to a shortage of pilots. Kudos for Skywest for thinking out of the box. Politicians won’t touch this with a 10ft pole. Then again, if a city is in their district is about to loose air service they might.
Single pilot ops should include up to 19 seaters.
Pilot union should enjoy their riches but not forget the past. Greediness earned them a couple of trips to Chap 11. And if you want to fast forward autonomous flying or single pilot flying, keeping asking for lottery wages. The pax behind are flying on $250 fares because that all they can afford. The Y fares pax that helped pay for the previous high wages are at home on Zoom.
$250 fares!
Compare that to 1980 fares adjusted for inflation – it is almost nothing to worry about.
This is just a 40-year battle that goes towards the pilots and then goes towards the companies and will continue for the foreseeable future.
Yes, the unions had their experiment to run an airline and we know how that turned out. The UAL buyout, remember?
The union will see a penny of profit and want the penny. The unions are right to negotiate a nice pay pay and benefit package. To a point. Like I stated before innovation happens because of a profit motive. Keep squeezing the profit and someone will innovate a way to reduce the cost. Be it autonomous or single pilot flying. Its happening as we speak.
Over 40 years, Deregulation happened, and the yo yo pay with unions have not stopped since. It started when the noted CEO Robert Crandall of AA started the two tier wage system in the early 80s that led to AA becoming a dominant and innovative airline.
I lay 40 percent blame on the unions but 60 percent on management. Going back to Crandall he preached cost containment yield management while his competitors were only concerned about market share making stupid decisions that imperiled their companies. Its only now with four monopolies airlines that management is now concerned about yields and could care less about market share.
The unions are right to be wary of management but in this case they look petty.
Buyout (plus part share for British Airways) of United majority stake just under 60% didnt go through.- Pilots and senior managers loved it , maintenance workers didnt.
So the union ‘running’ the airline didnt happen.
30 years ago it was a different time
They were majority owners, they even made TV commercials about it. It was going to be Utopia. Didn’t last long as the FAs and Mechs stated they were getting short changed.
The union buyout DIDNT happen
They never became majority owner and didnt have management control- which would have stayed with ‘management side of buyout’
The financiers who would have provided the money never came through
Notice the word DEAL
‘host of Wall Street advisers and bankers, like Citibank, that tried unsuccessfully to put the deal together, no one emerged with an intact reputation.
The collapse of the $6.75 billion deal has ramifications far beyond the company itself or even the airline industry. ‘
https://www.nytimes.com/1989/10/25/business/united-airline-deal-a-costly-fiasco.html
How to explain why MBO is rampant last couple decades and favored by WS guys??
Current and previous company buyouts arent involving Unions as a partner are they.
GM was the closest and that was a Government- Wall St- Union arrangement for a quickie bankruptcy
To lump everything on the doorstep of unions is unfair, no?
‘U.S. Airlines Spent 96% of Free Cash Flow on Buybacks’
https://www.bloomberg.com/news/articles/2020-03-16/u-s-airlines-spent-96-of-free-cash-flow-on-buybacks-chart#xj4y7vzkg
‘Why Labor Unions Were Right On Share Buybacks’
https://www.forbes.com/sites/tedreed/2020/03/18/lets-end-stock-buybacks-but-lets-remember-airlines-did-not-invent-stock-buybacks/?sh=49e20c5a296b
‘When Is Enough Enough?: How COVID-19 Exposed the Airline Industry’s Obsession with Stock Buybacks’
http://www.cpreview.org/blog/2021/8/when-is-enough-enough-how-covid-19-exposed-the-airline-industrys-obsession-with-stock-buybacks
‘According to Business Insider, American Airlines spent more on buybacks ($12.9 billion) from 2014 to 2020 than on employee salaries and benefits in 2019 ($12.6 billion). ‘
***Even at the individual level, wages for the median pilot decreased by almost 10% from 2000 to 2012, while stock buybacks were steadily on the rise.***
How does that square?
Median pilot salaries decreased 10% from 2000 to 2012. Buybacks increased.
buybacks should be illegal. they are pure and simple stock market manipulation. the money just plain disappears into the great lotto machine.
they are all about well timed stock price bumps to ensure the exec’s get their bonuses and are bad long term for the company and its employees.
And paying dividends instead that boosts the share price is what then ?
Companies reward the shareholder , its how the system works. Increasing the price of the stock is what all listed businesses want.
Ask Warren Buffet
dividends at least go 100% to the shareholder without artificially manipulating the stock price as they are defined amounts on defined schedules, which investors can use or invest as they see fit.
stock buybacks provide a temporary and less than 100% of money spent stock price bump that companies tend to announce when they need a short term price bump to get the C-Suite bonuses, and the money just disappears.
stock buybacks are the last bad idea of management that has run out of ideas to actually make their business better.
Its Wall St that wants large scale buybacks not the management.
The financial system is like democracy, feels like a shambles until you consider the harsh alternatives…. consider that the takeover brigade will plunder and breakup any companies that dont try hard enough to push up stock prices.
You have quite a few half truths about stock buybacks
“Its Wall St that wants large scale buybacks not the management.”
Tell me why the management listen to WS? Shouldn’t they work for the best interest of shareholders?? 🤔
The shareholders ARE the shareholders who sell or buy . If more buy than sell the price goes up, if more sell then the price goes down
Its like explaining how a watch works to you when you have no need to know the time
How else do you think ‘listening’ happens for massive companies ? Boeings shareholders loved the previous managements profits and buybacks and share price rises but because of cumulative bad management those shareholders paid a steep price as those previous results werent sustainable
“The shareholders ARE the shareholders who sell or buy .” 🤣
Wow. A new definition unheard of? Where does it come from?
Your idea of ‘listening to shareholders’ when you mean people like you who arent shareholders is the ludicrous one..
Shareholders who dont like the management sell. thats the only choice they have , unless you have say a 25% stake and a board seat.
Selling shares consistently pushes down the price, thats a message the management gets loud and clear.
Ask Warren Buffett what his share holders do that tells him they like his business style ?
“Your idea of ‘listening to shareholders’ when you mean people like you who arent shareholders is the ludicrous one..”
Pretty poor strawman argument 😅
Williams,
Greed didn’t earn anyone a trip to Chapter 11. Poor management did. The inability to change the business model for decades after deregulation along with the unwillingness to think out of the box to increase revenue is what led them to chapter 11. I know, I saw it when I worked for a couple of the majors and went through a couple of chapter 11’s. Every chapter 11 I have ever seen can be blamed on incompetent management.
And let’s not forget–half of all aviation CO2 emissions from from private jets. Complaining about the regional emissions is really tinkering at the edges.
https://ips-dc.org/report-high-flyers-2023/
Interesting, Schipol considers banning private jets….
https://www.popsci.com/technology/airport-private-plane-ban/
Speaking as someone who lived at a place that lost all aviation services, I’m in favor of anything that brings service back to the hinterlands
Half of all aviation emissions ARENT from private jets
Thats the numbers ( half of all aviation emissions) from what they arbitrary decided were 1% of the world population (79 mill people) who were ‘frequent fliers’
It was a factoid inserted into the private jets story to mislead people like your self. Dont try and mislead everyone else who dont read in full
Theres other factoids like using the word private jet as a catch phrase for all private/business flying when the vast majority is in smaller prop planes
To put the ‘frequent fliers’ in context, in 2019 there were 4.5 bill passengers in total on all flights (1.9 billion international passengers and 2.6 billion domestic passengers).
You are right! I saw that number in a past article here and commented that it was (and is) implausible. I’m interested to read what that 50% did come from and that makes sense.
Its a factoid , a semi plausible claim thats impossible to refute.
in this case its mixed in with other factoids about private/business flying which they focus on business jets only.
That was an example of the new genre of literary journalism where *fiction story telling techniques* are used in ( mostly) factual storys -or ‘verticals’ as they are called now.
Some news websites are endemic with creative writing headlines and storys
eg ‘Grace successfully negotiated her rental increase down — here’s how she did it’
Schiphol’s (half-baked) plan to ban private jets was driven by noise considerations rather than emissions issues (all of the airport’s flight paths lie over densely-populated areas).
Experts generally agree that the plan has no chance of actually being implemented, in view of various international treaties.
Link is in Dutch:
https://nos.nl/l/2471908
I’ve said it before and I’ll say it again. All this discussion about 65k pounds vs. 69k pounds is just rearranging the deck chairs on the Titanic. There are much bigger issues at hand here.
Neither American nor United nor Alaska has shown any interest in a plane smaller than a 737-800 going forward. DL has the A220’s only because of the unique deal it got from Bombardier.
Those 3 airlines have something around 250 125-ish seat A319’s and 737-700’s with no indication that they have any interest in replacing them.
At the same time, with the exception of many of the EMB-175’s, the vast majority of RJ’s in operation today are close to, or even older than, 20 years old.
And most importantly, there is no replacement in existence. The only plane offered for sale besides the EMB-175 that would meet scope clauses is the 1980’s technology ATR 42/72.
And seeing as how all the EMB-175 operators are at their maximum number 70/76 seat RJ’s allowed without substantially expanding their mainline fleets, there is a serious reckoning coming for dozens of EAS routes, as well as non-subsidized, but tertiary markets.
‘Neither American nor United nor Alaska has shown any interest in a plane smaller than a 737-800 going forward. DL has the A220’s only because of the unique deal it got from Bombardier.
Those 3 airlines have something around 250 125-ish seat A319’s and 737-700’s with no indication that they have any interest in replacing them.’
The biggest US operator of the 737-700 is SWA and they have just started their replacement cycle with orders for 250 of the Max 7, which is the -700 replacement.
DL flies the A220, as does Jetblue and Breeze, which is not being used as an RJ – it flies in mainline fleets. Typically, you don’t use an RJ to fly coast to coast.
Scope is also 86k MTOW.
Historically, shrinks never seem to sell as well as their larger siblings and given pilot shortages – everyone seems to be up gauging lately.
Frank:
Clearly wrong on DL. They flew smaller aircraft in the 100 seat size before the A220. While DL is unique or close to it (US) in that regard, they did not suddenly start to fly under 150 passenger aircraft. They have done it for some time (variants of the 717, aka DC-9).
Southwests new max 7 are the enlarged version of the 737-700 with 149 seats ( one class) , just under the 150 plus where an extra cabin crew member is required
As mentioned United etc have 128 seats on the A319 econ, econ plus, first
Delta has 124 seats on its 737-700
A 30 seater regional jet is even more bizarre than a 76 seater , these should be turbo props and flying to *real * smaller cities of 50k to 300k. This is the case where I live
What happens in practice is the RJ are used as high frequency to large cities- those with regional population ( not just central core) of 500k-1.5 mill plus
Move the RJ limit up to 90 seats their natural starting point and leave the smaller planes to more efficient turbo props their natural
In a way, the competitive greed issue (pilots versus management and investors) is a symptom of the larger problem set created by the combination of inadequate corporate chartering and governance rigor, and a flaw in basic accounting principles. If there was more of a profit sharing approach to compensation, the tension on topics like this would likely be reduced.
Pilots are a great example of critical assets that are beyond the scope of the balance sheet. Consistent with Pacioli’s equation (A = L + E) for every asset (debits) there are credits that recognize its source and ownership, which in the case of human assets is an equity by definition (I’m avoiding the complexity of RSUs and whether or not they are real liabilities). Accountants have known about this conundrum since the whole double entry system was developed in the late 14th century, but there has never been an adequate principle articulated which could lead to consistent valuation and recognition, so it stays off the books. That some serious tensions would result from this limitation in accounting is to be expected. I’m not sure I would blame either the pilots or management for having strong feelings that are in opposition about this topic. That said, a good accounting theory approach would suggest a move toward salary reduction and more of a profit sharing method for sharing the value created through flight operations. Giovani di Bicci de Medici struggled with this same issue in trying to figure out how to properly compensate the people he put in charge of branches of his bank. It should not be surprising that we have the same struggles in the airline industry 600 years later.
Perceptions around compensation and fairness have a huge impact on trust, which is perhaps the single most important cultural attribute inside any business.
The corporate chartering and governance factor that has long shadows into this and many other areas is more complicated, and probably not appropriate for this particular thread.
@RTF
Now there is a conversation.
Just to put it all in perspective, we want to turn over the safety of hundred of lives to people we pay 40k a year to start, in multi-million dollar machines and have them work far from home, sometimes on little rest.
What can go wrong?
I have a friend who’s daughter just got promoted at Costco to assistant manager after about 3 years there and she makes 96k a year. Plus benefits. High school grad.
Every investor wants the cheapest available workforce contributing as much as possible in productivity, until something goes wrong.
Then they wonder why…
Until you price yourself out of the equation. Didn’t know paying someone $250K a year guarantees a good pilot.
Why do you think future cockpits will be designed for single pilot certification?
Single pilot certification is a long long way away.
At the moment its *looking* at the 2 pilots for takeoff and landing with single pilot for long range cruise in uncongested airspace. ( with good weather ?)
I hate the whole setup. Management greed but then should a union be able to paralyze good chunks of the country?
Flip is employees getting run over.
I never found an answer.
the problem that you are ignoring is that “profit” is easily and consistently manipulated.
it is manipulated down to avoid taxes, it is manipulated down by claiming writeoffs, it is manipulated down by stock buybacks which are accounted as an expense.
from a pure game theory perspective, any line worker would be idiotic to tie their compensation to profit. even CEOs don’t do that, they tie their compensation to stock price.
Its not accounted for as an ‘expense’
https://www.investopedia.com/articles/investing/112013/impact-share-repurchases.asp
Neither are dividends, they are paid out of after tax profits. Interest is an expense which reduces the after tax cost cost of debt service.
Some companies have taken on large amounts of debt , as their share buybacks and dividend payouts exceeded the cash flow. I think its the airlines who went down that pathway
“Some companies have taken on large amounts of debt , as their share buybacks and dividend payouts exceeded the cash flow. I think its the airlines who went down that pathway”
BA certainly went down that pathway.
CNBC revealed this week that ca. 14% of publicly-listed companies in the US are now so-called “zombie companies” — i.e. companies whose profits are so low that they can’t use earnings to pay the interest on their debts. Boeing is on the list.
https://jacobin.com/2022/05/zombie-firms-neoliberalism-debt-productivity-crisis
To use the Green thing is the most absurd part. Of course the Pilots union are going to push it, that is classic union (and yes I was a member of 3, two of which were totally corrupt).
Stop on 777-300ER from a flight that uses how much fuel and creates thousands of times more pollutants dong so.
That green aspect is a pile of manure (which has at least some up side in being fertilizer)
No disagreement management is as bad, but its a case of the pot calling the kettle black (from the days of cast iron cooking (devices?)
@Transworld
Bingo! You are spot on and over the target.
Thank you. Unions had the good aspect of a large negotiating base but the politics truly are horrid.
Auto workers priced themselves out of competition. So bankrupt most of them went and it all started over.
The economics will bite back at the next downturn.
Everyone uses the Green garbage now when its all about money and the Green part is lip service though that was reserved for management until now.
no, Autoworkers were sold out buy their own congressional representatives in the name of “free trade” with third world economies (i.e. ship all the jobs to Mexico where they pay $4 a day)
Absolutely. Capital seeks profits no matter how, when and where. Boeing outsourced so much of the 787 to LCC (LOW COST COUNTRIES) and US States, that quality became Job 2.
And back to autos, Japan subsidized engineering and it’s national health care plan took over a $1000 off the price of manufacturing a car / truck.
Wonder would this move by Skywest allow it to serve more EAS cities, that it has recently let go.
I wonder why the air traffic controllers association signed on to this? Seems to me some might lose jobs at regional airports if flights are curtailed by such actions; thus, it would be endemic to their interests.
As far as I can see the unions are doing their job – which is to protect the interests of its members. That is their job and they are utterly entitled to use whatever legal means exist to do so. To whine about them citing reasons, no matter how far-fetched, as justifications is absurd – especially in a culture where management cares about little but stock-price.
Manure is manure no matter where it comes from.
They just make themselves look as stupid as management not to mention a laughingstock.
I don’t see any Wine (sp intended) in this. The same lack of credibility as management, yes.
Granted I voted in two unions for the purpose of salary. Worked well but the politics was stunning as was the corruption in two of the three.
Much like management unions need changes but those won’t happen.
Legal means, sure. But calling someone unsafe is libel if you haven’t got any facts or data to back that up, and they don’t.
The CRJ-550 used by United also have maybe a dozen or so High Buck 1st Class and Business Class seats. So they maybe only carrying 50 mooches, but they are generating more revenue than the CRJ-200s.
Isnt that a 70 seater down sized to 50 seats , this is the 50 seater downsized to 30 seats.
Yes, the 550 is a 700 with 50 seats. I was referring to that part of the report. It was a way to generate more money.
And the Union is being a little too cautious worrying about the E2. Reports today speculated, Delta may want to outright own and operate their regional airlines.
AFAIK United’s scope clause has caps on RJs larger than 50 seats. The CRJ-550 is a clever get around, with higher revenue from premium seats to offset higher unit cost.
-> Southwest CEO Bob Jordan tells shareholders Boeing’s current 737-7 timeline has FAA certification in Aug, but given the uncertainty to date, the carrier is penciling in early 2024. EIS would be Q3
https://twitter.com/AvWeekSean/status/1658890797612244995
Neither are dividends, they are paid out of after tax profits. Interest is an expense which reduces the after tax cost cost of debt service.
There is a strong and strange 6 point increase out there.
What is going on ?
BA (NYSE) 206,87 $US +6,00 (+2,99 %)
Wow… Wait !
Air Canada will order another 787 Dreamliner jets for 6 billion USD!
So that’s the reason out there.
Just an intuition about BA’s share price observed,
I was right to seek out what was behind it and I found it…
https://www.zonebourse.com/amp/cours/action/BOEING-4816/actualite/Boeing-vise-une-command-de-6-milliards -dollars-for-Air-Canada-787-Dreamliners-43882124/
https://www.zonebourse.com/amp/cours/action/BOEING-4816/actualite/Boeing-vise-une-commande-de-6-milliards-de-dollars-pour-les-787-Dreamliners-d-Air-Canada-43882124/
What stops any major airline from buying the “greener” jets you speak of?…
Nothing stops them. Im sure the unions would welcone it. What stops JSX or Skywest from flying these “greener” jets?…..nothing Not all of Skywest’s flying is for the major carriers.
@Conwillbe: you don’t know what you are talking about.
That’s not a reply to legitimate points
What stops the airlines from buying the 175-E2 is union intransigence for altering Scope for the small increase in weight. It’s in the post. It was a nonsensical comment–and his pseudo screen name, which I changed, was insulting.
I bet the airlines arent just wanting a small increase in weight… full stop
Could it be a whole package of airlines ‘wants’ including growing the small RJ fleet size as well ?
“United Airlines management has publicly stated their desire to grow the 76 seat fleet “Our growth really does need more 76-seaters”
Who knew ?
https://pilotjobcentral.com/why-united-airlines-pilots-are-opposing-scope-relief/
There is a[existing] provision allowing United Airlines to add more large regional jets above the 255 limit if the airline adds a small narrow body airplane type to the mainline fleet. This could either be the Embraer E190/E195 or the Airbus A220.
So whos being intransigent by not adding a new 110-130 seater
Actual test run in test cell, not the separate component bench testing one person claimed as ‘engine running’ for an *airbus electric engine* LOL
‘Rolls-Royce has run the UltraFan demonstrator for the first time, marking the start of an extensive test program for the world’s largest geared turbofan’
https://aviationweek.com/aerospace/aircraft-propulsion/rolls-royce-rolls-out-worlds-biggest-commercial-engine
Im sure TW is thrilled with the actual testing news .
You are incorrect, sir.
JetBlue, Delta, American, Southwest, United, Spirit and Frontier can go and buy 175-E2s and fly them.
You are correct that that unions and management both agree to not fly 175-E2s on a regional carrier, but these large carriers can fly these aircraft themselves with no restrictions.
Nothing stops JSX from flying 175-E2s. They don’t fly for the major carriers. There’s no “intransigence” stopping them or flying the 175-E2s on at will flight routes that aren’t for the major carriers.
Lighten up and have a great day
Now, yours is a reasoned, well-thought-out point to make. Interesting yours is the same ISP as the other guy, though.
Boeing’s “Cascade” is finally operational.
https://sustainabilitytogether.aero/
https://boeing.mediaroom.com/2023-05-17-Boeing-Publicly-Launches-Cascade-to-Support-Aviations-Net-Zero-Goal#assets_20295_131260-117
And here’s what we wrote last December: https://leehamnews.com/2022/12/05/regulators-need-to-understand-realities-complexities-of-achieving-ecoaviation-goals/
And on the subject of realism in eco-aviation:
HydrogenInsight: “Future global demand for hydrogen fuel in aviation could require more than half of all power produced in EU today”
“An extra 500-1,500TWh of renewable electricity would be needed to meet demand from a relatively small fleet of H2 planes by 2050, in a net-zero scenario, says McKinsey report”
“McKinsey has calculated that if 17% of the world’s aircraft use hydrogen as a direct fuel, 583TWh of renewable energy would be needed annually, while the more optimistic 33% figure would require 1,497TWh — the equivalent to 57% of all 2,641TWh of electricity produced in the EU in 2022 (just under 40% of which came from renewable sources).”
Interestingly:
“MPP concluded in its net-zero scenarios, H2-powered fuel-cell electric planes could make up 16-27% of the world’s aircraft by 2050, with those directly combusting hydrogen accounting for 1-6%.”
https://www.hydrogeninsight.com/transport/future-global-demand-for-hydrogen-fuel-in-aviation-could-require-more-than-half-of-all-power-produced-in-eu-today/2-1-1453472
Why all of this talk of single pilot operation? Hmm, its almost like the airline management is trying to cut costs or something.
https://www.reuters.com/business/aerospace-defense/exclusive-cathay-working-with-airbus-single-pilot-system-long-haul-2021-06-16/
EXCLUSIVE Cathay working with Airbus on single-pilot system for long-haul
https://www.aerotime.aero/articles/easa-says-single-pilot-ops-by-2030-might-not-be-realistic
EASA says single-pilot ops by 2030 might not be realistic
@Williams
Absolutely
Too risky and you never know what fool you’re flying with.
The best is ZERO pilot, who will actually be in an airline pilot center as military drones have proven.
As it is said in civil aeronautics
“Mature and proven”…
The ‘single pilot’ is only referring to one *in the cockpit* during cruise flight. They will still takeoff and land with 2 pilots – even then its for cargo flights.
The actual context is being garbled in the popular media headlines
Flights of 11-12 hours plus already have 2 sets of flight crew as delays and duty times before takeoff could cancel the flight without a full rest period during flight. ( some airlines use a low hours ‘2nd officer’ to spell one the primaries during cruise)
Shortages of pilots anyone ?
@Dukeofrurl
Don’t know what UAL buyout you are referring but I am talking about the 1995 ESOP that ended around 2000.
https://www.chicagotribune.com/news/ct-xpm-2003-07-04-0307040233-story.html
https://www.latimes.com/archives/la-xpm-2002-dec-04-fi-flan4-story.html
https://www.proquest.com/docview/227012277?pq-origsite=gscholar&fromopenview=true
The point I was making, employees (unions) running the company is not always the best thing. And while it could be argued the employees did not pick the management, they had board seats.
You sound like a former employee of United. Management is beholden to Wall Street. It just the way it is. The Allegis concept was brilliant and ahead of its time but Wall Street has no patience or vision at times.
Interesting story but a long long way from the union run company after a large scale buyout of the existing stockholders is it. Even that was really an
existing management buyout partnered with bring in British Airways as a large minority shareholder along with unions and loading the company up with debt
Employee share grants exist in many forms and could be many reasons it didnt work and doesnt really matter any more as the airline soon went ‘under’ anyway (2002)
The good news is that united is far more stable than 20 yrs back, which is better for employees and stockholders
Strange phenomenon
–> Renewed interest in the 737MAX-9 since the success of the MAX-10.
Earlier this year Greater Bay of Hong Kong ordered 15 MAX-9’s
“Air Algerie finalizes order for 8 MAX-9’s”
The MAX-9 has an earlier delivery window than the MAX-10. Is this a reason for this order in favor of the MAX-9? Possible, the MAX-10 is more advantageous in terms of income but less available than the MAX-9. If it allows more MAX-9 orders then maybe good news
It will be interesting to observe this in the longer term.
Then wrap the MAX-9/MAX-10 orders which are actually very close to each other
Finally the order came at the same time as Air Canada’s order for more 787’s as Boeing climbed 5 points higher on the stock market to hit $207 yesterday.
https://www.aviacionline.com/2023/05/air-algerie-finalises-order-for-eight-boeing-737-max-9/
Yes. Many make the mistake of thinking the Max 10 is the only competitor to the A321. The orders of -9 and -10 should be combined as the A320 is even smaller capacity to the -8
Tandancy
How the 787 Dreamliner hit the market and established new standards,
Go ask Lufthansa, Air Tahiti Nui or even Hawaian why they don’t want to hear about the A330neo anymore
Times are changing and it’s the 787 Dreamliner time…
https://youtu.be/2imM2hLYyL4
Lufthansa is the name of an airline *group*- lets call it LAG !
Its subsidiary airlines are Lufthansa, Austrian, SWISS, Brussels Air and Eurowings as well as logistics and maintenance businesses.
It operates and orders a range of Boeing *and* Airbus planes
Not sure if it was posted before.
-> ARJ21 makes low-key … service entry
https://twitter.com/FlightGlobal/status/1648582278090506240
Soon a passage to the act of a big order announced for Boeing and Airbus?…
https://twitter.com/BoeingAirplanes/status/1659816369460838401?t=C90zROPCpfES_ELTI8b4vQ&s=19
https://twitter.com/60Minutes/status/1659654547621421057
On the subject of small(er) aircraft, we now have this unexpected announcement:
“Fokker To Make A Comeback With Hydrogen Aircraft Program”
“Dutch aircraft manufacturer Fokker is throwing its hat in the ring, looking to develop its own next-generation aircraft that aims to fly over 2,500km (1,550 miles) without any carbon emissions, introducing a new realm of ‘Green Flying.'”
https://simpleflying.com/fokker-hydrogen-aircraft-program/
It should be noted that Fokker is already part of a large Dutch consortium to convert an ATR72 to LH2 fuel-cell propulsion by 2028:
https://simpleflying.com/netherlands-london-hydrogen-flight/
Is that the GKN controlled Fokker Technologies or the ‘Stork Aerospace’ remnants of the original business ?
Three quarters of the way through May and the delivery figures from Planespotters seem to be showing normalization toward each OEM’s current target production rates:
MAX: 23
787: 4
A321 neo: 20
A320 neo: 17
A220: 2
A350: 2
A330 neo: 1
-> In 2015, Army negotiators discovered that Lockheed Martin and Boeing overcharged the Pentagon and U.S. allies by hundreds of millions of dollars.
“Is it really any different than not giving a Marine enough bullets to put in his clip?” said Shay Assad. https://cbsn.ws/42WqpDc 1:52
https://twitter.com/60Minutes/status/1660423003119788032