Petters Aviation to take over DLH hangar.

[Kev3188]

The article is here.

From the article: "Petters Aviation, a unit of Minnetonka-based Petters Group Worldwide, plans to use the facility to outfit corporate jets, said Jay Salmen, president of Petters Aviation, in a phone interview Monday. The move should add up to 150 new jobs to Duluth, he said.


Petters also has an agreement with aircraft manufacturer Airbus to complete business jets at the facility. Salmen said there is a worldwide shortage of such completion centers, which provide finishing touches and customization for business jets after the major construction is done. "

Wow. Imagine that. A revenue opportunity squandered by NWA.

Another blurb of interest: "Petters Group, which also owns co-owns Sun Country Airlines, has hinted at plans to begin jet outfitting services for about a year. Such services would include installing in-flight entertainment centers and other features. Most of Petters Aviation's customers will be corporations and high-net-worth individuals, Salmen said. "

 

[finman]

Wow. Imagine that. A revenue opportunity squandered by NWA.

Huh? NWA should be in the business of outfitting corporate jets? Maybe NWA should get involved in building jets as well. Boeing seems to be making good money at it. We have hangers, so I don't see why we couldn't do it.

Oh yeah, it's a little something called sticking to your core business, because you make a greater return when you're in the business of doing something that you're really good at. The maintenance of commercial jets is another issue, where you at least can make the case that commercial airlines can add a revenue stream by picking up external business. But the maintenance of commercial aircraft is part of the core business of running an airline. Outfitting corparate jets is about as relavent to running a commercial airline as running a restaurant chain (I.E., we have 8,000 waitresses, so why not leverage their skills and add another revenue stream) I think you get my point.

 

[groundcontrol]

I think you missed Kev's point.

 

[jenny@nw]

Ditto. Let the anger go... :unsure:

 

[Kev3188]

I think you missed Kev's point.

He did.









P.S. Finman--

Quit being such a condescending f**k when you respond to something I post. I liked it when your replies were merely "snarky."

Frankly, I miss the intelligent debate.

 

[NewHampshire Black Bears]

He did.
P.S. Finman--

Quit being such a condescending f**k when you respond to something I post. I liked it when your replies were merely "snarky."

Frankly, I miss the intelligent debate.

///////////////////////////////////////////////////////////

You just got "BITCHED SLAPPED" finman, and you DESERVED IT!


Good for you ..KEV !!!!!!!!!!!!!!!!!

NH/BB's

 

[finman]

He did.
P.S. Finman--

Quit being such a condescending f**k when you respond to something I post. I liked it when your replies were merely "snarky."

Frankly, I miss the intelligent debate.

Then you should write more clearly. When there is a paragraph that says:

"Petters also has an agreement with aircraft manufacturer Airbus to complete business jets at the facility. Salmen said there is a worldwide shortage of such completion centers, which provide finishing touches and customization for business jets after the major construction is done. "

and you follow that by inserting:

"Wow. Imagine that. A revenue opportunity squandered by NWA."

Hard for me to not assume that you mean that the missed revenue opportunity is in relation to the paragraph preceeding that insertion.

It's hard to have intelligent debate if there is not clarity from the beginning. If you meant something entirely different by your insertion, I'm not sure how I would know that, as I'm not a mind reader.

By the way, it's not condescension, it's disappointment. You've posted nothing by cynical garbage for the last month. Every issue that comes up, all there is some some one-liner on how NWA screwed this or that up, even when it's entirely off-the-wall stuff like this that doesn't even make any sense. It just seems like such a waste of talent for you to be in a job that you hate, working for people you despise. It seems like you could do better, and you'd be much happier.

 

[jenny@nw]

Then you should write more clearly. When there is a paragraph that says:

"Petters also has an agreement with aircraft manufacturer Airbus to complete business jets at the facility. Salmen said there is a worldwide shortage of such completion centers, which provide finishing touches and customization for business jets after the major construction is done. "

and you follow that by inserting:

"Wow. Imagine that. A revenue opportunity squandered by NWA."

Hard for me to not assume that you mean that the missed revenue opportunity is in relation to the paragraph preceeding that insertion.

It's hard to have intelligent debate if there is not clarity from the beginning. If you meant something entirely different by your insertion, I'm not sure how I would know that, as I'm not a mind reader.

By the way, it's not condescension, it's disappointment. You've posted nothing by cynical garbage for the last month. Every issue that comes up, all there is some some one-liner on how NWA screwed this or that up, even when it's entirely off-the-wall stuff like this that doesn't even make any sense. It just seems like such a waste of talent for you to be in a job that you hate, working for people you despise. It seems like you could do better, and you'd be much happier.

Don't blame him for your shortcommings...

its clear to us but not you.

 

[Kev3188]

Then you should write more clearly. When there is a paragraph that says:

"Petters also has an agreement with aircraft manufacturer Airbus to complete business jets at the facility. Salmen said there is a worldwide shortage of such completion centers, which provide finishing touches and customization for business jets after the major construction is done. "

and you follow that by inserting:

"Wow. Imagine that. A revenue opportunity squandered by NWA."

Hard for me to not assume that you mean that the missed revenue opportunity is in relation to the paragraph preceeding that insertion.

Okay, fair enough.

I would have thought that as much as you're on here, you would have "recognized" that as me giving one last comment askance bemoaning NWA's complete wasting of the DLH facility.

It's hard to have intelligent debate if there is not clarity from the beginning. If you meant something entirely different by your insertion, I'm not sure how I would know that, as I'm not a mind reader.

I'm not clairvoyant either, but I "know" enough about what people post (and how to infer from the same) to see where they're coming from...After all, GroundControl and Jenny knew exactly what I was driving at.

Nevertheless, in the interest of fairness, here's what I meant by that one sentence:

Can we not agree that profit is the ultimate "core strategy" for NWA? At the end of the day, is return on investment for shareholders not the ultimate goal?

I posit that DLH was *never* utilized to it's fullest potential. When it was "ours" it should have been running full throttle 24/7 (IIRC, it wasn;t even a 3 shift/ 7 day a week option until just a few years before it closed. Someone will correct me if I'm wrong.).

Any excess capacity-either gained through efficiencies or during the peaks & valleys between heavy checks- should have been seen as golden opportunities to bring in ancillary revenue. Period.

Outfitting corporate jets? Maybe, maybe not. A more logical/solid/consistent option would have been bringing in 3rd party work from other carriers, Airbus itself, or the engine manufacturers. I believe both Airbus and B6 approached NWA about taking on some work, and were rebuffed.

As you well know, this is something that AA and to a lesser extent UA does. If I was running the show, no option would have been left off the table.

As a finance guy, you also know there are ways to make this work to have it be a finacially appealing option to potential customers.

DLH had the potential to be a cash cow. Instead it was squandered away from day one.

By the way, it's not condescension, it's disappointment. You've posted nothing by cynical garbage for the last month.

My cynicism should be seen as grave disappointment in the way this company is run.

What might seem like garbage to you probaly seems quite relevant to someone else.

Every issue that comes up, all there is some some one-liner on how NWA screwed this or that up, even when it's entirely off-the-wall stuff like this that doesn't even make any sense.

When NWA does something right, I'm usually one of the first to post; it just doesn't happen that often. Here's a couple in case you missed them:

1. Fuel savings programs.

2. Holiday attendance program (not a core strategy, but a nice idea, nonetheless)

3. More point-to-point flying to capture traffic in certain markets.

4. Turn cleaning initiative

The problem comes when everything that's implemented somehow gets botched.

With regards to the above examples:

1. A lot of cities' jetways still have interlocks on them. This means we can't plug in ground power until the jetway is all the way up to the A/C. This also means we can't start "turning" the plane until the engines stop. Besides the commodity of fuel, we're wasting the commodity of time. Furthermore, in the heat of the summer/cold of the winter, crews leave the APU running anyway. So now we're burning Jet A *and* the diesel it takes to run an aircart.

3. A lot of these flights start to thrive, then are cut before they can fully mature. We had a LAS red-eye out of here (and, yes, I know how notoriously low-yield that market is), that was literally oversold with people being paid off at least 3 of 5 days a week. The other 2 days saw healthy load factors.

They then decided that it wasn;t working and moved to a Weds./Sat. operation. Who in the world goes to LAS on a Weds.?! When that came to it's obvious conclusion, they axed the flight. Why fix something that's not broken? If LAS isn't working, why not try somewhere that is. I know there's an entire department right down the hall from you that crunches this data for a living. If I know where there markets are, why don't they?

I digress....

Anyway, I would think that there's enough elasticity in that specific market to adjust the fares to make it worthwhile while still keeping demand up. Barring that, there a *plenty* of markets (judging from the traffic numbers on the BTS and other sites, historical data, etc) from the midwest that make fiscal sense, and I'm not even taking into account the extra efficiency of keeping a plane in the air that would otherwise sit, keeping the ground/flight crews moving, utilizing fixed assets (gates, etc) more.

4. Another great idea...except it's one those of us on the ground have been trying to get put back into place for several years now.

Along with that, the company wants 2 people in the jetway on every arrival. No problem, but why not have them come through the back using airstairs (WN does this)? How wasteful it is to have 2 people sit in the jetway while 140 people come off!

(as an aside, I think the DC9 could be done using the ventral stairs on those that have them)

I know I'm in "thread drift" territory, but do you see where I'm going with this? Everytime the company tries to do something, rather than listen to those that do it day in/day out, they find a way to mess it up.

...And these are just a few day to day examples from the Ground Ops world. I'm not even touching on labor relations, outsourcing, sh*tty pass travel, etc.

It just seems like such a waste of talent for you to be in a job that you hate, working for people you despise. It seems like you could do better, and you'd be much happier.

I never said I hate the job itself...In fact, I still actually enjoy it, and I like working outside. The flexibility that it affords me is also a key reason to stay, but we've discussed that before. I also enjoy the people I work with. It's the incompetent clowns at the helm that I can't stand.

When I'm no longer happy or it's no longer feasible for me, I'll be gone. Untl then, I'll keep fighting for the direction I think NWA needs to take.

 

[finman]

When I'm no longer happy or it's no longer feasible for me, I'll be gone. Untl then, I'll keep fighting for the direction I think NWA needs to take.

fair enough. Good post.

 

[Kev3188]

(bump)

The sage continues...

Petters out/Cirrus in?

(note: Link may require signing in...)

 

[North by Northwest]

I'm not the sharpest tool in the shed and I got it...before reading the whole article. Finman, you got what you where looking for out of it, the joke is on you, as it doesn't take a genius to decipher the content.

We all got the bigger picture. NW could have made loads of money from expert maintenance, but they chose to demonstrate by example to other unions what they can do to hurt. THAT is what shall NEVER be forgotten...not now, not in 5 years, not in 50!

 

[PurduePete]

To update the DLH hangar situation...

http://wcco.com/local/cirrus.move.nwa.2.619542.html

Cirrus Moves Into Former NWA Maintenance Base

DULUTH, Minn. (AP) ― Aircraft maker Cirrus Design Corp. is already loading moving trucks to take over a maintenance hangar abandoned by Northwest Airlines during its bankruptcy.

The city's Economic Development Authority this week passed a resolution of intent to lease the facility to Cirrus for 25 years. The facility was built so Northwest Airlines Corp. could service Airbus jets, but it was abandoned during Northwest's bankruptcy.

Leasing it to Cirrus will get allow the Economic Development Authority to avoid $300,000 to $400,000 per year in upkeep costs, said DEDA Executive Director Tom Cotruvo. The body is expected to cast a final vote on the lease on Jan. 3.

However, Cirrus has been given the green light to begin moving equipment into the 189,000-square-foot facility. Cirrus vice president Bill King said moving trucks were being loaded Thursday in anticipation of final approval of the lease.

Cirrus will pay $25,000 per month for the facility during 2008, or $300,000 for the year. By year seven of the lease, Cirrus will pay full market rate for the facility -- $96,833 per month or $1.16 million annually.

Cirrus plans to use the former maintenance base to house research and development efforts, as it prepares to introduce a new personal jet expected to sell for about $1 million.

Initially, Cirrus is expected to occupy only about one-third of the former Northwest base. However, the 80,000-square-foot hangar on the south side of the building was built to service commercial Airbus jets and is vastly oversized for Cirrus' operations. King called the facility "a bit of an albatross." But he also said his company is in desperate need of floor space.

Cirrus' current jet development team is cramped for space and must vacate a different hangar at the airport soon. On Tuesday, a U.S. Army cold weather testing team is scheduled to begin using the hangar to evaluate helicopter de-icing systems.

As part of the lease agreement, Cirrus also pledges to create 100 new jobs by 2011 and an additional 100 new jobs by year six of its lease.

Northwest Airlines once employed 350 people at the facility, but the base has sat idle since a mechanic's strike that began in August 2005. Northwest later filed for bankruptcy, closed the taxpayer-financed facility and ultimately turned it back to the city.

 

[Don Smith]

I hope they can make it work for them. After nwa pulled out and left Duluth holding the bag the community could really use it. After reading all of the posts on this thread I must say that nwa did indeed blow a good opportunity to make this facility and its other maintenance facilities profit centers.
It started with Atlanta where a perfectly good engine overhaul facility was scrapped. One of the few places in the world where the still popular JT8 engine could have been overhauled for profit. Instead, it did not have the profit margin numbers they needed so they closed it instead.
Maybe Beanie can tell us how much is not enough when it comes to profit for nwa? Is it 25% before they will keep something open?
How about letting the nwa 145 certificate go? All of the shops in Minnie abandoned when they could have turned it into a profit center for all types of repairs on equipment for other airlines. Now all the airlines have to go out of the country to get it done and suffer the long turn around times when they could have had it done here. Albeit the profit would have been less but it would still have been a positive number.
Then theres Duluth. When it opened it was a shining example of state-of-the-art everything. I visited it in the early days and it was clean and organized and full of promise. I also visited toward the end when it looked more like Hangar One in DTW. nwa let it go on the decline so they could point a finger and say, "look...not profitable". The same as they did with Atlanta, pointed the same finger and wouldn't take on any new business.
Theres a ton of overhaul business out here. MROs are stretched to the limit to the point of overload. They need people and hangar space. And guess what?...they are making money at it.

 

[PurduePete]

Don, to add to your comments...

Remember when NWA used to have a contract with the USPS to carry mail? It was very profitable for the company, but was discontinued...

In the early to mid '90s, we had a contract to overhaul North American Airlines 757s at MSP . I would imagine that was also a money maker for the airline, but that too was discontinued...

Both of those revenue streams were scrapped prior to our strike - and NWA declared bankruptcy soon after (it made it easier for them to justify the BK without having the extra money coming in).

I could see why they relinquished their 145 certificate - they just don't have the talent there (SCABS) to make it work...plus they probably didn't want to have any liability issues if it was proved that one of their overhauled components caused a crash with loss of life.