Delta to Shrink Its Fleet of Small Jets, Significantly Improve Customer Experience with New Pilot Agreement

This week, Delta accomplished something incredibly rare… it came to a new tentative agreement with its pilots 7 months BEFORE the contract was amendable. How the heck did that happen? Both sides wanted something and there was time pressure for it come together. If the rank and file approve, Delta pilots will get big raises, but most importantly for travelers, the airline will shift to bigger jets with better passenger amenities.

Delta Rare Pilots Agreement

Union contracts in the airline industry are different from most others in that they never expire. Instead, at a certain point they become amendable. This is supposed to avoid disruption in service, but in reality, it’s just an awful process that draws out contracts negotiations over several years. It’s only when the stars align that things get done in a timely manner. But a timely manner would be soon after the contract is amendable, not the 6 months beforehand that we see here. So what’s the story?

There was a unique opportunity on the table for Delta to get a hold of AirTran’s fleet of 717s that Southwest has decided it no longer wants as part of its acquisition. But for Delta to get those airplanes, it had to get the pilots to agree to fly them for a rate that would make this move a smart idea. So there was some urgency for Delta to come to an agreement sooner rather than later to make this work out. Sure enough, the pilots were interested and the deal came together. Let’s talk about what this means for everyone.

Delta Pilots Fly the 717
If this is ratified, Delta will take the 88 717s in the AirTran fleet today. I don’t know the terms, but you know that they’re getting a smoking deal on these aircraft. The Delta pilots will fly the 717s at the same rate they’re paid to fly the DC-9s today. In the last quarterly report, Delta still had 21 DC-9-50 aircraft in the fleet, but those are on their way out to be retired soon. The 717s, which are just a bit shorter, will take over for those DC-9-50s with 110 seats split between First, Economy Comfort, and coach.

50-Seat Regional Jets Slashed by 65 Percent
But that’s not a one for one replacement; there are still an extra 67 airplanes if we do the math. Delta says it wants to keep capacity flat, so what else will happen? The airline will slash and burn the 50 seat regionals. Here’s how Delta lines up with 50 seaters as of the last quarter:

Operator

CRJ

ERJ

Total

Chautauqua

26

26

Comair

30

30

ExpressJet

93

93

Pinnacle

141

141

SkyWest

63

63

TOTAL

327

26

353

That’s 353 of those 50-seaters buzzing around. And you know what the new contract would allow? No more than 125.

Holy cow, that’s a massive decrease. Delta is happy about this because with oil where it is, those 50-seaters are completely uneconomical. The pilots are happy because they get rid of a ton of outsourcing. But wait, we’re still out of balance. Let’s do some math. The DC-9s have 120 passengers, so multiplied by 21 airplanes and you have 2,520 seats. The 717s have 110 seats, so multiplied by 88 airplanes and that adds 9,680 seats. The RJs have 50 seats, so multiply that by 228 airplanes that are going away and you have 11,400. So right now, we’re removing 13,920 seats and adding back only 9,680. What about the rest?

70 More Big Regional Jets
It’s the bigger regional jets that balance this out. At last check, Delta had contracted for 102 aircraft in the 65 to 70 seat range. Those are a mix of CRJ-700s and Embraer 170s. In addition, Delta had contracted for 153 of the 76-seat jets, which are a mix of CRJ-900s and Embraer 175s. As part of this deal, the pilots will allow them to contract for up to 70 more of those 76-seat jets as long as Delta adds new mainline aircraft at a rate of 1.25 to 1. It’s pretty convenient that 1.25 times 70 is … 88 (if we round up), the number of 717s that the airline would acquire.

The Final Tally = Better Customer Experience
That means Delta adds another 5,320 seats, or about a total of 1,000 more seats than it will remove from the fleet. In the end, Delta gets rid of 228 money-losing 50-seaters and the terrible, cramped, single class experience that comes with them. It gains 158 bigger jets with First Class, wifi, and just a bigger more comfortable cabin. This will give Delta a more consistent offering for customers, and it’s going to come at a pretty nice price as well. I’m sure Delta is getting a great deal on the 717s, and all Southwest has to do is push them to the other side of the Atlanta airport.

The Losers
That’s great news for both sides. Who loses? Small cities may potentially lose out. The lucky ones will see fewer flights on bigger airplanes. The unlucky might lose out, but hopefully those 125 50-seaters that remain will be able to keep service to most of those cities, if not all. The other losers here are some of the regionals. I say “some” because some stand to gain 76-seat flying while others will lose. The biggest loser in my opinion is likely to be Delta’s wholly-owned subsidiary Comair. The airline has been shrinking for years, and now it will likely lose half its fleet. (It is the only operator of the older CRJ-100 so those are most likely going away.) This could be the end of that airline entirely, with the remaining big airplanes merged into Pinnacle?

The Rest
So is that everything here? Not quite. The pilots are also getting big pay raises out of this. Over the three-year term, rates will increase by 20 percent, sometime more depending upon the aircraft. Is Delta insane? How the heck is going to pay for that?

Well, buried in the contract somewhere are productivity gains. I don’t know the details on exactly what Delta gets, because those rules are pretty tough to get through. But Delta is going to get better production out of its pilots, and that will help to offset the hourly rate increase. Another offset is a reduction in profit-sharing. As we’ve seen many times before, variable compensation starts to shrink as unions fight for more in base pay.

Wrap Up
In the end, I like this deal as a passenger because the customer experience will dramatically improve. And I like this as someone who watches the industry as well. While I start to hyperventilate when I see such big pay increases, Delta is really getting a lot out of this deal in return. It helps when both sides have goals that align and are motivated to strike a deal. It sure paints a stark contrast to what’s been happening over at United lately. Now, we just have to wait to see if the pilots vote to take it or not.

[If you’d like to read the entire mind-numbing 400+ pages of the agreement, I’ve got an updated version attachedit right here thanks to Holly Hegeman over at PlaneBusiness.]

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

67 Comments on "Delta to Shrink Its Fleet of Small Jets, Significantly Improve Customer Experience with New Pilot Agreement"

avatar
Sort by:   newest | oldest | most voted
Danie
Member

What this agreement would seem to preclude is the introduction of turboprops as a replacement for RJs, ala United, Alaska and Air Canada.

Carl S
Guest

That’s a large chunk of the “future” Southwest fleet. Any Idea if they are going to try and offset it with more 737s? I know they pushed back the delivery of some, didn’t know if this deal will change that.

qmwolfe
Member

Gary Kelly said that if they could not get rid of the 717s that Southwest would retire some of the 737 Classics to keep the fleet flat. If they were able to move the 717s, which looks it will happen, they would keep those Classics longer.

qmwolfe
Member

Gary Kelly said that if Southwest was unable to move the 717s, they would retire some of the 737 Classics to keep the fleet number flat. If they are able to move the 717s, which looks it will happen, they will keep the Classics longer.

Rohit Rao
Member

Fantastic graphic Cranky! One of the best I’ve seen you put out in a while.

BrianKal
Guest

Thank you Cranky, makes this news make sense for all, love the blog

Jon
Guest

Glad that the 717s will still have a home here in Atlanta.

Ironic that Delta will take the remnants of AirTran, as it’s roots trace back to Delta’s old DC-9 fleet in the 90s.

…and it seems to be a shrewd business move, too. Sharp mangement there in Hapeville.

Bill from DC
Guest

Did DL have DC9s? I know the 90s fleet had a ton of MD80s, MD88s and MD90s? Granted, all in the same family but I didn’t think DL had DC9s in the 90s.

Bob Beeman
Guest

The acquisition of Northwest Airlines reintroduced DC-9’s from NWA to DAL.

SEAN
Guest

Curious – how will this effect hub opperations in MEM, CVG & MSP if at all? After all, the former pair have been shrinking for years & the latter is hanging around based on the merger agreement with Northwest.

Ironic that those 717’s are just being shifted across ATL & yet boeing hasn’t produced one in quite some time.

Hunter
Guest

Not sure I get the irony about ATL and Boeing production of 717? Line production ended (I believe) in 2006 with the last aircraft delivered to FL (incidentally they took the first delivery in 1999, as well).

Fred
Guest

My guess would be that things have already settled down and won’t change – CVG and MEM have both seen large cuts, and the remaining 50 seat RJs will stay there (and a few larger ones). MSP will probably get more 717s (or MD88, MD90s) and some larger RJs, as it is in more of a ‘unique’ location than CVG and MEM, where the cities that are served are already served by DTW, ATL and New York.

Also, do 717s have the range for MSP-west coast? That could add some flexibility if so.

David SF eastbay
Member

I bet when DL gets those 717’s they will have the faster paint jobs ever done on 88 planes. People will just think they are Southwest/AirTran flights so DL can’t have that so will speed up the paint process.

qmwolfe
Member

They are only going to transfer 3 717s a month, spread out over 3 years.

Bill from DC
Guest
Great deal! This is what SHOULD HAVE BEEN HAPPENING over the past 5-10 years throughout the US airline industry, which is to say replacing the nonsense of having 10 flights per day on 40-50 seat aircraft with 5-6 flights per day on larger aircraft. The effect of DL adding 1,000 seats while eliminating 70 planes is as follows: average seats per aircraft from ATL will increase sharply, total seats available increases slightly and total departures will decrease, perhaps significantly. CF can do this math far better than but, if most of these additions/deletions pertain to ATL, is it too much… Read more »
Bill from DC
Guest

Hey Brett, sorry to bug you but do you have any thoughts on how this might affect totals departures and ops, specifically in ATL? Am I crazy or will there really have a trickle down effect to reduce departures and (therefore) help ops?

Jason H
Guest
This is so Delta. They already fly or have recently flown just about every passenger airframe made, but they were missing the 717 to complete the near sweep of Boeing products. Now they just need to get a couple used A340s and A300s and I think they would be the poster child for the “mongrel fleet.” Seriously though, I love this move. While the DC-9 is a very robust and capable airframe it is getting a bit long in the tooth. I can’t imagine that spare parts are all that easy to find for some areas of the plane and… Read more »
DesertGhost
Guest
This isn’t done yet. The contract hasn’t been ratified. But I hope it is. It looks like a win-win for both sides. To me, this is the wave of the future. It has to be if airlines are going to survive in a higher fuel price environment. The regional airline industry is beginning the process the legacies are ending (with the possible (likely?) merger of US Airways and American. There are simply too many regional carriers and 50 seat regional jets. If the stories of an upcoming pilot shortage are accurate, the overall reduction of frames is one solution to… Read more »
Rlj
Guest

Interesting to see the possibility of what goes around, comes around. It seems like it wasn’t that long ago that regionals were running away from their turboprops and into the arms of the CRJ 100s & 200s to improve air service and the customer experience. Now, the reality and possibility of them returning to the props in the form of the Q400s and new Saabs on smaller routes.

JM
Guest

Delta founder and good Douglas Aircraft customer C.E. Woolman would be happy.

Long live the planes from Long Beach (and Santa Monica before that)!

JM

jboekhoud
Member

“Delta gets rid of 228 money-losing 50-seaters and the terrible, cramped, single class experience that comes with them”

I believe the CRJ-700 and CRJ-900 are just stretched versions of the base CRJ-100 model with a similar cabin cross-section, meaning the same cramped experience in Y but for more passengers.

Of course, the lucky few getting free domestic upgrades to J will be happy with the larger planes.

Mike
Guest

new 700/900s currently produced are actually “Next Generation” – its not groundbreaking but they did lower cabin floor a bit so should be more spacious and windows at better height.
the 200 was initially included in the NG makeover but never happened.

Phil
Guest

The 700s and 900s are definitely roomier than the 100 in coach. Not necessarily super wide, but definitely roomier. In fact, the 700 and 900 are more comfortable than the MD, as there is more legroom and the seats are slightly wider.

George McCary
Guest
Cranky, Great Article! The thing I find interesting is not how many of the 50 seaters are leaving, but the 125 that are staying. Didn’t Delta make an agreement with Pinnacle to fly the 50 seat CRJ’s until 2022. As I recall, Delta said up to 150 of those puppies, with the flexibilty to adjust the numbers. Delta did this to help Pinnacle get out of bankrupcy. Tie this to an article several weeks ago in the “Memphis Biz Journal” which predicts Delta will buy Pinnacle, plus the fact no one, not Delta, not Pinnacle, has said what will happen… Read more »
XJT DX
Guest

I believe the Q’s are all going to Republic to continue to fly for UA. they should all be gone by the end of this year. The last thing Delta wants is to help subsidize a competitor, it seems.

KH
Guest

If you dig through the bankruptcy filings, you will see that Delta has agreed to take over Pinnacle’s fleet of 16 CRJ-900’s. They will be placed with a different contract carrier. The turboprops are definitely gone from Pinnacle. Delta and Delta Connection will remain 100% jet powered.

James K
Guest

One thing I’ve never understood about Delta is how prop-phobic they are. For all the fumphering about fuel savings, they don’t want anything to do with fuel-efficient aircraft on short hops. ASA’s ATR-72s worked well in markets like ATL-AVL and ATL-VPS, but whenever DL has a chance, they retire them in the name of being an “All Jet Airline”. The only exception at this point is the SkyWest Brasilia fleet, which TMK are used for prorated flying, not the usual capacity purchase.

noahkimmel
Member

I think its a great thing for all involved.

I don’t want to start a fight about WN, but what does it say about Garry Kelley who touted the 717 while hoping for the acquisition of Airtran, then,from the moment of apporval, does everything he can to get those planes off property. Was there new information? Or was this another ploy to reduce competition in the Domestic market?

Ron
Guest

Gary has said that WN found out about the specific economics of flying the 717 only after the completion of the aquisition, when they finally had access to the FL books. That, plus the increased fuel costs of late 2011 and early 2012, caused WN to decide that the plane simply wasn’t worth the extra costs involved in operating a second fleet type.

Mike
Guest

@ CF –
thank you, thats a pretty good summary.

some people have mentioned turboprobs/Horizon.
these are covered under the new agreement, so theoretically those additional 76 seat planes could be a newly desgined large turboprob.

A
Guest
I’m always a fan of more mainline metal and less of those horrid CRJ’s. It also seems to make sense to me to reduce frequency and increase the size of the plane. Delta will save on fuel burn for sure if that’s their plan. It wasn’t all that long ago that small cities were served maybe once or twice daily with a 727. I consider it going backwards to be served 5x with a 50 seat regional. As for the 717’s the oldest are already 13 years old. I would think a good replacement age is 25 years, or another… Read more »
Scott
Member

The new bombardier CSeries enters commercial service at the end of next year, around the same size as a 717

Tp
Guest

Brett,
With all due respect this is not a smokin raise for the Delta pilots. It is a partial restoration to their pay rates. In 2015 Delta pilots will still be earning 20% less than 2000, not adjusted for inflation! and their pension is still gone. The public is woefully unaware of how pilot labor took an enormous pay cut since 9-11.

Jason H
Guest

That may be true, but when compared to their counterparts at other major airlines they appear to be better off. Internal comparison is one thing, but external comparison is also important. I’m not saying I know for sure they are better off, but they certainly appear to be overall.

DesertGhost
Guest

This isn’t 2000. This is 2012. The current airline marketplace can’t support pre-2001 pay levels. We all have to live in the real world, not on Fantasy Island.

Nick Barnard
Member

I’m curious if the refinery purchase had any bearing on this, since the refining and subsequent swap of fuel only only covered fuel for DL owned planes and not regional providers does this ultimately make the 717’s cheaper to operate?

trackback

[…] regional carriers on the way out? The Cranky Flier blog dissects Delta Air Lines’ (DAL) deal to buy 88 717s from Southwest Airlines to draw the conclusion […]

SAN Greg
Guest

You’re one smart grasshopper Delta! Although the 717’s may not be the most fuel efficient bird around, the issue is mitigated by you refining your own. Brilliant!!!

Dale
Guest
Very interesting article from the DL perspective. These moves might just put DL head and shoulders above the competitoin in the domestic markets. And *if* the remaining CRJ/ERJ are used for small communities and not wasted elsewhere, it might not be as much of a bloodbath for places like Erie, Montgomery, and Moline. The other side of the coin — what this means for (and about) Southwest — seems to be largely absent from most of the discussions, blogs, press items and chat boards. Unless something unforseen happens…which is possible of course…Southwest’s combined WN+FL fleet will shrink by several frames.… Read more »
Nick Barnard
Member

The other question is if the purchase of AirTran was also about the elimination of a competitor… This probably was one of the major drivers for this.

XJT DX
Guest

I know Southwest gets LOTS of utilization from it’s frames. Could eliminating slack (if any) in the AirTran system partially make up for the exiting aircraft?

Gary
Guest

Hard to imagine Delta “Customer Service” sitting by idly while conditions actually get more comfortable and convenient for their customers – I’m sure they’ll find a way to make this worse for all involved.

dave c
Guest

Looks like Delta is way ahead of the crowd, good for them.

Eric
Guest
It’ll be the end of 2015, possibly early 2016 before all the 717s are on property. The CRJ-100/200s are old, the eldest are starting to hit their cycle limits. If the CRJs are being phased out over the same time frame than this isn’t all that astonishing – half the affected planes would have retired by age regardless, the other half will have been accelerated perhaps 4 or 5 years. But in exchange for retiring airplanes that would have retired soon anyway Delta gets a bunch of new large RJs. I expect American and United to play this strategy too… Read more »
trackback

[…] Milwaukee, Omaha and Pittsburgh won’t support flights. This may actually happen anyway as Delta moves to eliminate 50-seat regional jets and upgauge flights. Memphis has a lot of 50-seaters today, and when those go away, some of the remaining routes will […]

trackback

[…] insourcing of flying as well as an upgauging of existing regional airplanes. As I wrote before, this is great for travelers. But if you’re a regional airline, whoa, it’s going to get ugly. The Great Regional […]

trackback

[…] Delta to Shrink Its Fleet of Small Jets, Significantly Improve Customer Experience with New Pilot Ag… (crankyflier.com) […]

trackback

[…] wasn’t long ago that I was writing about how it was going to get a lot more comfortable to fly on Delta thanks to the retirement of small regional jets in favor of larger airplanes. Now, we’re […]

trackback

[…] Delta first announced plans to completely remake its regional fleet, I figured it would take a fair amount of time for it to happen. After all, the airline needed to […]

trackback

[…] Delta is dropping a couple hundred over the next few years from its regional fleet and United is set up to do the same. Clearly, nobody wants these airplanes. But when it comes to costs, it’s important to remember that there are two pieces to the equation. There are operating costs, which only vary if things like fuel prices vary, and then there are ownership costs. The latter is where the opportunity will present itself. […]

wpDiscuz