Question Regarding Affiliate Costs

[diogenes]

On Monday, an affiliated RJ, scheduled CLT XXX CLT, was delayed several stations upline from XXX (names changed to protect the innocent). By the time the RJ got to CLT, a B737 had departed CLT, and arrived XXX.

The XXX agents did what any sane agents would - they reaccomodated the RJ passengers to the Boeing. After the RJ arrived XXX, it departed with ZERO passengers, and ZERO cargo (this is not an unusual occurence, either).

And if CLT E-con had been on the ball (Hah!), they could have reaccommodated the CLT XXX customers on the Boeing as well. A few savy passengers scheduled on the RJ went to the info counter and got a reroute onto the Boeing.

The sane thing to have done was cancelled the RJ CLT XXX CLT, and got it back on time, and to have reacommodated the passengers on the Boeing.

But there is NO integration between the affiliates and U. The affiliates have their own dispatch, and they do NOT coordinate flight activities with U.

Here's what I want confirmed.

I understand the affiliates get paid for the completion of the flight, regardless of whether it was grossly late, or even if there are no passengers.

What lends credence to this is you cannot get an affiliate to cancel a flight for love or money, even when it is the prudent thing to do.

So, is U paying affiliates to fly around empty seats?

 

[700UW]

For example the Mesa contract is a per fee departure capacity purchase.

US reimburses Mesa the cost of fuel, landing fees, ground handling (if necessary), lease cost, insurance cost and any other fee. Then on top of that they get a set price per departure with a built in profit no matter if the flight carries one passenger or 50.

In the calendar year 2003 US Airways paid Mesa $232,000,000 for the use of 50 RJs.

 

[TBONEJ4J]

Fee per Departure. No Flight No Fee.

Run the Flight and get paid even with no cargo or pax. The Fee is Cost plus a guaranteed margin.

No matter how bad they are, they are guaranteed profits. Just fly the flight and watch the money roll in.

 

[flyin2low]

It's all about completion factor. The operator gets paid if the flight is operated, regardless if it's ontime or not. This not only applys to affiliates, but to wholly owneds as well.

 

[the turtle]

According to Carter Leake, Mesa VP of East Coast flight Ops, if a Mesa flight for U departs over 2 hours late, they do not get paid.

Probably sent for completion factor....but who really knows?

 

[fr8tmastr]

It's all about completion factor. The operator gets paid if the flight is operated, regardless if it's ontime or not. This not only applys to affiliates, but to wholly owneds as well.

[post="248393"][/post]​

Its slightly different though, if a WO does the flight, U pays itself for the flight. Stupid, I agree if the flight is empty. But at least there is not a built in profit. Even if it is the "profit" for that flight goes back to CCY at the end of the day. No matter how you slice it, it's cheaper to fly it yourself than to pay someone else to do it.

 

[Light Years]

No matter how you slice it, it's cheaper to fly it yourself than to pay someone else to do it.

[post="248450"][/post]​

Exactly. But what they would argue is that in the big scheme of things, it's cheaper to have a large amount of scab outfits competng against each other for the lowest costs than have one big bargaining unit with leverage.

Indirectly, they also lose revenue when customers flee the poor operations and appalling service that most of these affiliates provide unchallenged, under the guise they are US Airways.

 

[the turtle]

Exactly. But what they would argue is that in the big scheme of things, it's cheaper to have a large amount of scab outfits competng against each other for the lowest costs than have one big bargaining unit with leverage.

Indirectly, they also lose revenue when customers flee the poor operations and appalling service that most of these affiliates provide unchallenged, under the guise they are US Airways.

[post="248451"][/post]​

LY, I usually just let your comments pass because they're so out there....

Please give us your definition of "Scab"

And seriously, one big bargaining unit for leverage? How did one big unit help the IAW? ALPA? or your AFA?

How is competing for lower costs at what you describe different than U's?

Didn't you feel the shaft in your pocket when you chose...yes, YOU chose, to return to MidAtlantic, a pseudo division of U. Really just a B scale wage that your mainline brothers and sisters agreed to FOR YOU....to save their jobs, I might add(which, by the way, I don't fault, I probably would have voted the same, as I know YOU would have).

Your hatred for the affilates frankly is lame. Many of these employess want to do a good job, try really hard to good a good job, and are sh!t upon by people like you. The next time you DH or non-rev on an affilate flight and it dosen't meet your expectations, come up to the cockpit and talk to me, tell me CONSTRUCTIVELY, what we can do in your opinion to deliver a first class product with the third class materials we're given to work with. I would bet dollars to donuts(I love donuts) that most of our FA's would enjoy and want advice from a most experienced FA such as yourself.

Please be a part of the solution and not more of the problem.

 

[a320av8r]

I take exception to the beatings you guys give our affiliates, both owned and leased.
I commute to work and frequently use both mainline and express.
My station is operated by PSA, the folks are great.
Inflight, the cabin service is always good and the guys up front are always professionals whom I would be proud to fly with (and have).
So if you don't like the idea of outsourcing, better get over it, this is the way business is done. Don't start throwing out that "S" label where it doesn't belong.

 

[RowUnderDCA]

All that being said, I'll alter my cautiously optimistic tone, to an it's just a matter of time tone if U does not reduce its payments to affiliate RJs so much that at least one of them walks away. My understanding is that U can reject all agreements and offer new take it or leave it terms. They need to do this aggressively enough that they risk losing one.

 

[NuGuy]

Fee per Departure. No Flight No Fee.

Run the Flight and get paid even with no cargo or pax. The Fee is Cost plus a guaranteed margin.

No matter how bad they are, they are guaranteed profits. Just fly the flight and watch the money roll in.

[post="248389"][/post]​

Not only that, but often times when the crew scheduling of the affiliate knows of this, they pull the flight attendant off to cover some other shortage in their system.

OTOH, there are times express flights are simply "delayed" until no pax are left, and then flown empty because there IS no flight attendant available, but the mainline carrier gets charged anyway. There is no one watching this stuff at all.

This is exactly the same as how the essential air system was run. Run the flight, no matter how late, even if it's the next day.

Nu

 

[Light Years]

LY, I usually just let your comments pass because they're so out there....

Please give us your definition of "Scab"

And seriously, one big bargaining unit for leverage? How did one big unit help the IAW? ALPA? or your AFA?

How is competing for lower costs at what you describe different than U's?

Didn't you feel the shaft in your pocket when you chose...yes, YOU chose, to return to MidAtlantic, a pseudo division of U. Really just a B scale wage that your mainline brothers and sisters agreed to FOR YOU....to save their jobs, I might add(which, by the way, I don't fault, I probably would have voted the same, as I know YOU would have).

Your hatred for the affilates frankly is lame. Many of these employess want to do a good job, try really hard to good a good job, and are sh!t upon by people like you. The next time you DH or non-rev on an affilate flight and it dosen't meet your expectations, come up to the cockpit and talk to me, tell me CONSTRUCTIVELY, what we can do in your opinion to deliver a first class product with the third class materials we're given to work with. I would bet dollars to donuts(I love donuts) that most of our FA's would enjoy and want advice from a most experienced FA such as yourself.

Please be a part of the solution and not more of the problem.

[post="248489"][/post]​

I don't work at MidAtlantic hon, I'm furloughed. And yes, the junior employees were shafted by the senior folks, but why? Who started this, selling themselves out and flying larger and larger aircraft for peanuts as "commuters"? The affiliate carriers, most notably Mesa.

A scab is someone who crosses a picket line, so they aren't literally scabs. But gleefully taking someone else's job as a cheaper, outsourced replacement is pretty scabby. US had a large mainline and no less than three commuter carriers that could fly the jets for thier own airline, but instead uses any old outfit.

They are indeed afraid of one large bargaining unit and that's why they continue to divide and conquer. Two wholly-owned commuters? A division of the airline with a pretend name? They want all the different contracts. They don't want any one "entity" to get too big for thier boots and shut the airline down, or worse flight for decent contracts. Ever since Comair struck Delta and virtually shut down CVG, you no longer even see one carrier per hub. Would it really affect US that much if say, Trans States or Colgan air struck or shut down? No. But if US Airways Express was one airline like American Eagle or Continental Express, it certainly would.

 

[Light Years]

I take exception to the beatings you guys give our affiliates, both owned and leased.
I commute to work and frequently use both mainline and express.
My station is operated by PSA, the folks are great.
Inflight, the cabin service is always good and the guys up front are always professionals whom I would be proud to fly with (and have).
So if you don't like the idea of outsourcing, better get over it, this is the way business is done. Don't start throwing out that "S" label where it doesn't belong.

[post="248492"][/post]​

PSA is a sub of US Airways Group, so not technically outsourcing.

So should the A320s be outsourced next? British Airways has affiliates that fly as BA using A320s. I'm sure US could sniff up a handful of airlines to take over that flying, and compete with each other for who can do it the cheapest. We've already given permission for airplanes with 100 seats to not be flown by US, why noy 120 seat planes? Why have an airline at all when you can have a franchise? No need to buy planes or worry about employees, just finding companies with very low bids to do your work.

That's whats wrong here. What's good for some apparently isn't good for others. Outsourcing is fine if it's not your job.

 

[a320av8r]

I didn't say I am for it, I said it is what it is. So get used to it.
Next election maybe the unionized workers will vote for American workers right instead of big oil. Until then...

 

[diogenes]

Thanks for the answers. it confirms my info that affiliates get paid per completion, regardless of whether it benefits U.

Consider the implications.

The $$$ paid to the affiliates is absorbed by mainline, thus increasing mainline CASM.

The affiliate makes a profit on a money-losing flight; U absorbs the costs.

This is where Light Years is spot on.

If all flights were operated by, or as, one carrier, rational decisions such as cancelling the flight in my opening post would be made - we see mainline make these decisions, with regards to mainline metal, EVERY DAY.

Such decisions would greatly lower significant non-labor costs.

With U in BKII, why have such costs not been wrung out of the equation?

Why are such costs still in place after all of the employee sacrifices?

With that in mind, the advice to "forget and forgive, get over it and move on" is premature, because with such non-labors costs still in place, additional concessions are probably in the offing.