July 29, 2012 Newsletter

Comair to Shutdown, “A Sad Day for our Industry,” says Division Director

The announcement on Wednesday by Comair CEO Ryan Gumm that Delta Airlines had decided that the airline would cease all operations effective September 29, 2012 has shocked the employees and communities it serves. The airline was once the shining star of the regional industry, starting over 35 years ago with piston powered twin engine aircraft and rapidly growing to turboprops and then regional jets by Delta Airlines several years ago. The recent new contract with Delta’s mainline pilots, limiting the number of smaller regional jets Delta would operate in their regional fleet reduced the number of aircraft operated by Comair to a level that could not sustain the airline financially.

“This is truly a devastating loss for the employees, their families and the community,” said Airline Division Director David Bourne. “The airlines decision several weeks ago to eliminate their 50 seat jets was difficult enough for our flight attendant’s who are members of Local 518; now to find out that instead of retrenching and revitalizing a key part of the airline, Delta’s actions have made it impossible for the airline to survive,”  he continued.

“I have directed International Representative Rick Dubinsky to work with the leadership of Local 518 to secure the best possible severance packages for our flight attendants. We assume and hope that other union represented groups at Comair will have the same support from their unions.

While severance packages help with a painful transition, the reality is that the best transition is to a new job that recognizes the experience of the employee,” he went on to say. “It is my hope that the other unions at Delta will join us in calling upon Delta management to immediately acknowledge the consequences their actions will have on these loyal employees, their families and the community. I call upon Delta and urge them to offer immediate employment to the Comair flight attendants and other employees affected by this shutdown,” he concluded.

Airline Industry News

Governmental and Regulatory

Republican lawmakers are pushing to privatize air traffic control towers…The Transportation Security Administration and the union representing 45,000 security officers are close to reaching a contract, the union says. The American Federation of Government Employees represents the employees…The pilots of UAL want to know where both President Obama and Mitt Romney stand on the issue of outsourcing…

Airline and Industry

Questions are being raised about  funding cuts for FFDO’s…AMR bonds have risen to 66 cents on the dollar, pointing to investor support for a possible merger between American Airlines and US Airways…AMR has offered its pilots union an equity stake in the carrier as part of contract negotiations. The Allied Pilots Association would receive 13.5% equity in American Airlines once it emerges from bankruptcy.

United Parcel Service has reported second-quarter net income of $1.15 a share, missing analysts' estimates of $1.17 a share. The shipping giant also lowered its full-year forecast for 2012 by 25 cents a share.

Delta Air Lines has announced plans to shut down operations of subsidiary Comair on Sept. 29. In a letter to employees, Comair President Ryan Gumm said the decision was "an unfortunate necessity due to the economic limitations of our aging aircraft, cost structure, the long-term outlook for 50-seat aircraft, and our challenging industry and economy."

American Airlines CEO Tom Horton says he approached US Airways CEO Doug Parker first about a possible merger, not vice versa.