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Nov222010

« The United and Continental Pilots Engage In MISInformational Picketing »

Today in Newark; tomorrow in Houston; and on December 1 in front of UAL Headquarters in downtown Chicago the United and Continental pilots have announced they will engage in “informational picketing” regarding the new company’s decision to redeploy certain United 70-seat regional jet flying into former Continental hubs Newark, Cleveland and Houston.  In return for that redeployment, certain Continental 50-seat jets will replace the United 70-seat jets flying out of certain former United hubs.  Note the tradeoff:  no one loses flying; no one loses a job; no mainline flying is impacted; and everyone benefits from a network made stronger by matching the right-sized aircraft to routes that either need a larger or smaller aircraft.

Yet the message from the "informational picketing" will deflect what has been going on between the United and Continental pilots of late and make the company the villain.

Seems so simple.  Just like the combined Delta and Northwest networks moved quickly to best match aircraft size to markets with commensurate demand, Continental and United are moving to do the same. 

Part of the Continental and United pilots message to the public will be that the combined company is violating their respective collective bargaining agreements, in particular the section called scope that swelblog has covered so extensively..    In a November 12, 2010 Continental pilot communiqué, the call to arms read as follows:  “It’s time to get serious and stand united against outsourcing. In response to management’s attack on our current scope provisions, and their clear leveraging of it in negotiations for a new JCBA, the CAL SPSC, in cooperation with the UAL SPSC, will jointly organize informational picketing at both Newark and Houston airports as well as United world headquarters in downtown Chicago. It is time to show the new United management and the public that ideas and plans to violate our contract and outsource our jobs to the lowest bidder will NOT be tolerated by pilots.”

OUTSOURCING

The pilots first fallacy is ‘outsourcing”.  The fact is that the pilots’ union, ALPA, has played a major role in creating the labor Ponzi scheme that survives at the legacy airlines. Over the past 15 years, how did ALPA find a way to pay mainline pilots more?  By agreeing to allow another group of pilots to fly where mainline flying is no longer economic and to be paid less to do so in order to buy “better” contracts for the mainline pilots they represent. 

What the Continental and United pilots fail to share is ALPA’s dirty little secret: that the wage rates, working conditions, training provisions and other particulars they criticize at the regional carriers were negotiated by their very own union. ALPA represents the majority of regional pilots flying in the US today.  So maybe ALPA needs to step up and take some responsibility for its contribution to building the regional sector of the industry that they now deprecate.  Only by agreeing to lower rates of pay and more flying time at the regional carriers can ALPA justify and sustain the generous pay, benefits and work rules that benefit pilots at the mainline airlines. 

Look at any significant relaxation of the scope clause at the mainline carrier that allows the airline to increase its use of jets 70 seats or less. In just about every case the mainline pilots received a significant pay boost – or were able reduce the level of concession - in return for that “concession” as they were given economic credit for allowing the deployment of regional jet flying by regional partners.

Stop calling it outsourcing.  It is not.  It is a convenient word to use given the disdain for the practice by the now lame duck Chairman of the House Transportation and Infrastructure Committee.  The practice of relaxing scope to permit regional partners to perform uneconomic flying has kept more mainline pilots on the payrolls than it has cost jobs as the network has been kept largely intact when routes would have needed to have been cut because it was not economic for 100+ seat aircraft to perform the flying.

SOME FACTS

This redeployment, or better said a swap of one-sized regional jet for another, has gone so far that an expedited grievance has been filed by the joint Continental and United pilots.  On November 15, 2010 the union filed grievance:  File 11.10.041CG.  “Pursuant to the Collective Bargaining Agreement (CBA) between Continental Airlines, Inc. and the airline pilots in its service, as represented by the Air Line Pilots Association, International, (ALPA) the undersigned hereby files this grievance, on behalf of all affected pilots, protesting the Company’s violation of Section 1 (Scope) and all related sections of the CBA by placing and planning to place the CO code on United Express flights using jet aircraft with an FAA certification of fifty-one or greater seats to and from CLE, EWR and IAH.  As a remedy, ALPA requests that the Company cease and desist advertising and placing the CO code on such flights, and all other relief that may be appropriate.”

The union’s position “is that Section 1, Part 3-A of the CBA clearly prohibits the Company action, unless it is authorized by some other Part of Section 1. No other Part of Section 1 authorizes the Company course of action, as none of the express carriers performing the work is a Company affiliate; only 50-seat and turboprop flying, not 70-seat jet flying, is permitted by Part 4; and flying to a Company hub (if not to or from a hub of the other carrier) is not permitted by Part 5.”

The union says that the Company’s position relies on Part 7, arguing that it is flying by another air carrier while participating in a Complete Transaction in accordance with Part 7. The union suggests, however, that while Part 7 specifies rules for separation and merger of mainline operations, Part 7 does not change the rules in Parts 4 or 5 for operation of Express carriers or Complementary Carriers. Nor does Part 7 license Continental to permit United Express carriers SkyWest or Shuttle America to carry the CO code without observing the limits in Parts 4 or 5, because neither of them is a "participant" in a Complete Transaction. Neither express carrier is acquiring any part of Continental, nor is it becoming a Parent of the Company. Nor is Continental acquiring Control of assets of either carrier. Further, if either of these air carriers were participating in a Complete Transaction with the Company, that participation would trigger a series of obligations that the Company has not applied.

Note to self:  Then what comprised the United network at the time the combination was contemplated?  and the transaction closed?  Mainline flying only?  I think not.

The union says the Company also argues that following the merger closing, United and Continental will each continue to operate as an air carrier, but they are not prohibited from integrating their marketing, reservations systems and livery, ultimately marketing and operating their service under a blend of the United name and Continental livery. But this argument relies on general actions associated with a merger to dissolve specific protections at the heart of the CBA, as well as mixing those actions which the Company can undertake now with those that must wait until after a JCBA (and integrated seniority list) are reached.

Note to self:  Why should the company wait to maximize revenue when it can do so today?

The union concludes, their [the company’s] actions are not an effort to transition Continental and Continental Express operations to the single UA code, but to replace 50-seat jets in Continental hubs with 70-seat jets and to connect them with Continental flights, branded as Continental flights under the CO code, strictly as a way of carrying more passengers and thus making more money.

A Paper Tiger

A paper tiger is seemingly dangerous and powerful but is in fact timid, or as Frederick Forsyth put it: "They are paper tigers, weak and indecisive."

Sometimes the actions of pilots and scope are like that of a paper tiger – a mighty roar but no real threat. I thought the pilots of the combined carrier were looking to share in the synergies of the combined carrier.  In this instance, they talk about the company redeploying regional lift – remember no loss of jobs – as a way of carrying more passengers and thus making more money.  If the carrier makes more money, then don’t the UA and CO pilots potentially make more money?

The pilots claim that this is about the company trying to gain leverage in negotiations.  Let’s not forget that on August 27, 2010, the United and Continental pilots made a proposal to management to end outsourcing to regional airlines.  This is the issue pure and simple.  The joint UA and CO pilots are fishing for ways to block the carrier from finding the most economic way to serve cities of all sizes all the while somehow making the case that the same network economics can be achieved at the mainline level for performing tomorrow the regional flying of today.  It cannot be done absent significant concessions at the mainline level.

Finally, the joint bargaining teams have been publicly lobbing grenades at one another over compensation proposals that might favor one group over another during the seniority list integration process.  This is a group that has said publicly that they will first negotiate a joint collective bargaining agreement before engaging in the seniority list integration process, just like the Northwest and Delta pilots did so successfully.  If memory serves me, the Delta – Northwest negotiation was not without its disagreements and wrinkles.  That said, the Delta – Northwest agreement ultimately paved the way for sufficient numbers of 70+ seat flying to be performed by a number of regional partners. 

At least in Delta’s case, the union recognized that the regional flying being performed today was critical to supporting mainline jobs.  Regional carriers were contracted to perform domestic flying in markets where the poor underlying domestic economics remain.  The Continental and United pilots should be looking at the very same thing.  The unintended consequence of undoing the regional relationships today will be a smaller mainline tomorrow.  Smaller network architecture does not produce the synergies promised by a combined United and Continental.

Less in generated synergies means less to be shared among the pilots of the combined company.  Less in generated synergies means that the collective bargaining agreement ultimately reached will have less upside and will look more like the agreements that would have been ultimately reached if the companies remained as standalone entities. Less in generated synergies means that the combined entity will likely not attain its status as the world’s best airline.

There is a financial concept lost on union leaders today:  Net Present Value or NPV.   It means simply that cash flows realized in the short term have more value to the firm (or individual) than cash flows generated years down the road.  Captain Jay Pierce, the head of the Continental ALPA unit, argues rightly that the company’s action of swapping five 70 seat jets in Continental’s hubs for five 50 seat jets is strictly a way of carrying more passengers and thus making more money.  It is what companies should be doing - maximizing the revenue earning power of the network.

The benefits to the new United’s actions in this limited case are obvious.  The risks are, well,  timid and weak as no jobs are being lost.  Energy spent during one of the most traveled weeks of the year should be spent negotiating a joint collective bargaining agreement and not preparing for an arbitration that in reality is nothing more than a desperate grab of leverage that - if the pilots prevail - will result in fewer jobs, less mainline flying, fewer synergies to be shared among pilots and a degradation of the combined carrier’s status within the STAR Alliance.

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Reader Comments (48)

Here is a Delta "Connection" chart;

Bombardier CRJ-200 364
Bombardier CRJ-700 66
Bombardier CRJ-900 101 1 orders, 36 options
Embraer ERJ-145 LR 24
Embraer 170 1
Embraer 175 52
Embraer Brasilia EMB-120 11
Saab 340B+ 32
Total Aircraft 651

Ok Bill you can now start sputtering.

11.22.2010 | Unregistered CommenterChitragupta

What is your point Chitragupta?

CR200s are getting whittled down due to Comair being dissembled for potential sale, all the Saab 340s are being sent to the desert, Delta is picking up MD-90s like they're going out of style, AND they hired 300 this year(What other mainline carrier hired? Crickets chirping?), and are projecting to hire 300-600 in 2011. Further proving Mr Swelbar's point that a strong regional network results in a strong mainline. What a concept, a company redistributing airplanes across its network to align a certain route with a certain size plane to maximize revenue. A concept that apparently mainline pilots don't understand

11.23.2010 | Unregistered CommenterRogue1

"NO JOBS LOST"!!!!!! Over 1400 United Pilots are on the the street because of these 70 seaters, please research your facts before you shoot your mouth off. No jobs lost yet, but it will be around another 1000-2000 pilots that will lose their jobs in the future if this is not stopped. 1/2 the experience for half the pay is what is all about!!!!!

11.23.2010 | Unregistered Commenterjld

Hey jld where is all the job loss at Delta? Delta allowed more regional aircraft as a result of their JCBA agreement and last time I checked hired around 300 this year and are projecting 300-600 next year. Amazing what happens to mainline jobs when markets are aligned with the right aircraft size isn't it?

As far as the 1400 pilots jobs, UAL was on the brink of bankruptcy and the 737 fleet was parked due to the fact that it was quite unprofitable. Let the companies realize the synergies of this merger and your 1400 "brothers" will be back in no time

11.23.2010 | Unregistered CommenterRogue1

Yes, those unprofitable 737's. Southwest seems to be able to operate the 737 profitably with the highest paid 737 pilots in the industry. Perhaps they need to add some 70 seat RJ's so Southwest can preserve pilot jobs as well. A nice one sided article written on behalf of UAL management. Lets see the other side of the story.

11.23.2010 | Unregistered Commenterbpapa

Don't bet the farm on it! UAL wanted to furlough more pilots up to and after the meger, the only thing that stopped them was the TA. These furloughs were going to be the result of more flying being shifted to rj's. The right aircraft for the market? DEN - SAN thats a market for mainline! LAX/SFO to PDX that's the right size for mainline!! The 737 flew that route until they were parked and given to rj's. UAL was not on verge of bankruptcy as you say, it was right sizing for this joke of a merger!!

11.23.2010 | Unregistered Commenterjld

So you're saying that United pilots benefitted from increased regional flying? try telling that to the 1400+ furloughed united pilots. You're saying that moving 70 seaters here and 50 seaters here is an even trade, which it is, but you're neglecting that it is contractually ILLEGAL. both united and continental are contractually obligated not to do that. if they want to do that, and as you said, all will benefit, they have to sign a new contract with their pilots first.

"why should the company wait to maximize revenue" as you said. because it is contractually required. revenue can be maximized once a new contract is signed. this is the pilots' leverage, and you may choose to disregard it, but a contract is a contract.

The notion that "ALL" including pilots will benefit from the success of the company is a myth. in reality, pilots only benefit when they negotiate improvements in their contract, and when they force the company to abide by this contract.

as for outsourcing, try telling the families of the EWR-BUF passengers that it doesn't matter whether their aircraft is flown by an experienced continental pilot, or an inexeperienced contractor, as long as revenue is maximized.

11.23.2010 | Unregistered CommenterLeviny

The writer of this blog has no idea what he/she is talking about... As a long time member and student of the airline industry scope is everything and this is a clear violation of CAL's CBA. Won't cost jobs?? Do you remember when UAL parked their 737 fleet? Take a look at Shuttle America operating EMB-170's for the UAL code in and out of THEIR hub as a replacement.

11.23.2010 | Unregistered CommenterBrad Rhodes

Absolutely excellent job describing the situation -- probably the best I have seen. Indeed the pay disparity in this industry between people who do roughly similar jobs is ridiculous, and doesn't exist in most other industries, but pilot unions created this. It's amazing to think how many more jobs -- and how much more REAL job security -- would exist in a world in which airlines could do what makes economic sense, which would mean more economically viable routes and more demand for pilots... and, in turn, market-based higher average wages rather than collective bargaining agreements that are only good until the next bankruptcy filing. In such a world, pilots with portable retirement plans would also be free to shop their services to the highest bidder rather than being handcuffed by promised pensions that might or might not exist by time they retire (and history says, more likely not). Think of a US Airways pilot in 2000 considering going to work for then-upstart JetBlue... but really it wasn't a consideration because of seniority and the pension that then existed. Of course that's now gone. Today an AA pilot is similarly stuck: he could go work for another airline, even in another part of the world, that's desperate for pilots and is offering more, but then he would give up "everything" that might or might not be there for him in a few years. This system is even worse for pilots than it is for their employers. It is simply not set up for the modern, global, mobile world.

So sick of pilots whining. I retired from UA after 34 years because i saw it going into bankruptcy, especially after the "squeezing the neck of the golden goose". Well y'all did that and what was the result?

those stinking 737's UA flew should've been parked long ago, except for "clause". Give it rest and let the company make some money so all can grow. Union yes, stupidity/selfishness no

11.23.2010 | Unregistered CommenterArt

1400 furloughs, just what you United blowhards deserved. You ruined that company for years, with your ridiculous work rules, and compensations that drained that company. Continental averages 10 pilots per aircraft, United a whopping 15, let's furlough some more of you overpaid glorified, lasy -ss busdrivers.

11.23.2010 | Unregistered CommenterQCMan

You pilots, it always about "me, me me". United Jetbutts, you had your chance and you used and abused it, your Union took advantage of the company for years, now whining is your only answer. You guys got just what you deserved. And for one fricking minute, do you think the public is going to sympathize with your cause?????????? You've got to be kidding!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

11.23.2010 | Unregistered CommenterQCMan

You pilots are full of manure. If UA didn't use regional jets on some routes, they wouldn't fly at all. The 737s were retired because UA lost money on those routes and plenty more. The RJs cut the trip cost - if only 30-40 people want to fly, a 130 seat jet is just too big.
Southwest has a much, much lower cost system. They turn their flights every 20 minutes. UA turns its flights every 45-50 minutes. LUV gets 8-10 flights out of every gate they lease. UA gets 5 flights out of every gate.
From 1988-2010, stock holders have gotten $0 from UA - no dividends, no nothing. Pilots got $120,000-250,000 per year, depending upon the year. UA took money from stock holders in order to pay pilots and FAs, promising profits and dividends to come. Stock holders haven't seen anything yet.
Guess what? I'm not a stock holder and never will be. It's a crappy business for a stock holder. Employees think that every penny a customer pays is their's. Fine. Then you employees pony up next time UA has to buy one $60 million airplane. Go ahead. Take an office pool and see who contributes. When the last plane rusts out and is grounded, what have you accomplished? Successful companies need to take care of everyone - customers, front-line employees, management, lenders, and investors. If a business doesn't work for any one of those parties, that party won't show up next time you need them. Until there is enough money to pay investors, UA will go bankrupt again - investors won't show up when the company needs money. Until there is enough money to pay employees, UA will suffer through strikes again. You guys figure out how to make it work.
Until then, my savings are invested some where else. I don't need UA at all.

11.23.2010 | Unregistered CommenterInvestor

Hmmmm....I am not sure any pilot union is arguing that regional jets need to go away, per se. They are arguing that it should be that respective union's pilots flying those jets, not "someone else." And to take that one step further, I don't even think they would be asking for a wage/benefit package that is significantly different than what is being paid by many regional airlines already. There are regional jet pilots at mature regional airlines making high five figure, low 6 figure salaries right now. Not the majority, mind you, but those wages do exist. In fact, the RAA's Cohen was quoted as saying during the post Buffalo congressional hearings as saying the average regional airline pilot earns $75,000 per year. I think if those types of salaries were offered to mainline pilots to fly regional jets, union scope issues would likely be put to rest.

The point that regional airline flying creates more jobs at the mainline airlines ring hollow with most airline pilots- and with good reason. Even the casual airline observer knows that with the relaxation of scope came huge mainline lay-offs as mainline management replaced narrow body flying with regional jets outsourced to the "lowest bidder." For the past decade or so, this supposed job creation by outsourcing has yet to manifest itself.

11.23.2010 | Unregistered CommenterJohn S.

P.S. I would also like to say that I LOVE it when consultants like Swelbar and the "color commentators" at various publications state, through implication or words even more direct, say that airline pilots are overpaid. So please keep that up. Even you guys commenting on this blog! I have a blog myself that many aspiring airline pilots read concerning the costs and educational requirements needed to become an airline pilot today. When young people read my site and e-mail me about whether or not they should invest 5 to six years or their life and a very high five figure to low six figure amount of money to become an airline pilot, I explain that they should read what management thinks about airline pilot pay. I tell them to peruse blogs like this and see the venom management-types have towards airline pilot salaries. I tell them that if airline management could, they would have regional airlines flying 777's from Chicago to London with pilots earning 20K/year. I tell them, don't believe me.....just read and you'll see what that investment in money and time will buy them 10, 20 years down the road. Many young people read blogs like this, read aviation publications, read the newspapers and choose to seek other profession besides aviation. All the better for me, I guess. With no one to fly tomorrow's jets, I guess I can expect some pretty effortless wage increases in my future.

So in conclusion, please SCREAM from the rooftops how airline pilots are overpaid and they deserve the loss of their pensions, their pay cuts, and everything else that has happened to them over the next decade. SCREAM from the rooftops about how they are still overpaid and further degradation in airline pilot pay and benefits is needed in this industry......because there are many teenagers and young adults reading those statements and I'm going to use your words as an example of what they can expect from their high five figure, six figure investment.

11.23.2010 | Unregistered CommenterJohn S.

"The joint UA and CO pilots are fishing for ways to block the carrier from finding the most economic way to serve cities of all sizes all the while somehow making the case that the same network economics can be achieved at the mainline level for performing tomorrow the regional flying of today."

I think you, and some of the follow up posters miss the point entirely, perhaps deliberately since it seems to serve your point. Only the truly out of touch believe that the problem is an RJ flying a certain route instead of a 737. What seems to be lost on you is that pilots at the majors would gladly fly a 70 seat, 50 seat, or a 10 seat plane, even at the rates regional pilots are paid, rather than lose their jobs. The objection is that when the decision is made that an RJ would be more economical on a route than a 737, the job of flying the route is transferred from an employee of the major airline to an employee of the regional, "outsourced" if you will. The pilots of Continental/United don't object to an RJ flying from Houston to Bakersfield instead of 737, they object to the fact that it's not a Continental/United pilot flying the plane. Regardless of how profitable the route is for United, if its flown by a regional airline, the pilots don't see a dime.

"If the carrier makes more money, then don’t the UA and CO pilots potentially make more money?"

Clearly, in this case, no.

The real issue here goes beyond wages and benefits or even who is flying the plane, but the model that is used at the major level vs the regional level. For the moment, a major pilot can count on a certain level of stability in his life as all the flying is conducted by the same group of pilots. Stability in this case means he can expect to remain based in a particular city, and not expect major changes in his pay and benefits, except in periods of crisis or major upheaval. For a regional pilot upheaval and change is a way of life. As I'm sure you know, there is never just one regional flying for a major airline. In the case of the new United, there are at least 6 I can think of off the top of my head. As I'm sure you're also aware, flying is transferred between regional airlines quite frequently. I won't bother discussing why flying is often taken from one regional carrier and assigned to another, but suffice to say it plays havoc on the employee's lives. Pilot bases are opened and closed, jobs are created and lost, and there is constant pressure to do it all for as little as possible, lest your flying be taken and shifted to a different employee group. In all cases whatever improvements that are made to the airline's bottom line by these changes are NEVER passed on to the employees.

The whole idea of the scope fight is to arrest the degradation of a pilots lifestyle that this causes and ensure that whatever changes are made to the schedule, ones colleagues benefit and do the flying, not ones competitors.

As far as the accusations that ALPA helped create the mess that they are now fighting, its true but only to a point. You leave out that much of the concessions in scope were forced on the pilot unions in bankruptcy after 9/11. The pay and working conditions at the regional's that you hold ALPA responsible were again in many cases forced through bankruptcy and concessions given after 9/11, or are relics from before a union was brought on property.

Finally to respond in advance to any comments on the seniority system that traps pilots in their positions and drives so much conflict and controversy, I will say that I support any effort to find a better way that would allow pilots more flexibility to switch carriers and have more flexibility in their careers. This has been a pipe dream literally since the dawn of commercial aviation, however, so I hold little hope. For the foreseeable future at least, the seniority system is what it is.

11.23.2010 | Unregistered CommenterSC

Is your doctor overpaid? no one complains about that!

11.23.2010 | Unregistered CommenterLazy buss driver

How can UAL justify the fact that it replaced multiple 757's per day SEA-LAX and vice with RJ's only? Is this REALLY what you consultants consider a "regional" market? Why are ALL the other airlines i.e. Alaska, Jet Blue, Virgin America ... flying 100+ seat jets in this market? Your arguments don't hold water .... the previous post is so true! If management could, they would use drones without pilots to fly these routes! But, with new Pilot experience requirements around the corner ... and very few wanting to invest in this dying career ... airlines will be FORCED to reduce service, as there won't be any qualified pilots to fill the seats. Then, and only then, will managements and consultants wish they hadn't killed the eggs the golden geese would have laid!

11.24.2010 | Unregistered CommenterJ Mont G

In reading through the articles posted by this blogger, I can not find one article that is critical of management. I have also noticed this author gets publicity from the ATA, an airline lobbyist organization. It would appear this author is a propoganda minister for management.

11.24.2010 | Unregistered Commentertg

SC and others that are worried about job loss. I STILL have not gotten a straight answer from any of you on why there were no jobs lost at Delta when they allowed more 70+ flying(especially 76 seaters) in their JCBA. Jay Pierce and Wendy Morse(When they are not too busy throwing punches at each other) need to have a come to Jesus meeting with Lee Moak about how to get a merger done.

You guys keep screaming job losses when not one single mainline aircraft is being replaced by the 70 seaters. ONLY 50 SEAT JETS ARE BEING REPLACED!!! The pilots WILL see a dime if they allow scope to be raised to 70 seats for REPLACEMENT aircraft only as they would get a pay raise in return(SWA type wages perhaps?)

Look at the contract CAL just signed with Atlantic Southeast(combined ASA/XJET) It allows for up to 75 of the 50 seaters to be SWAPPED for larger aircraft pending scope negotiations. If you guys are going to allow a certain amount of aircraft to be outsourced at least let your company make as much money of those aircraft as they can. Its absolutely not reasonable for pilots that agreed to outsource a certain amount of flying to come back and demand it all back while those regional aircraft are still locked in long term contracts.

Between Capt Pierce saying replacing an uneconomical already outsourced 50 seat jet with a 70 seat jet is just the way for the company to make more money, the public mud-slinging between Morse and Pierce, and the pilot picketing misinformation, the pilot union is looking less and less like a group of dedicated professionals, and more and more like a clown show

11.24.2010 | Unregistered CommenterRogue1

I think that John S. is the only one that hit the nail on the head. The pilots unions aren't wanting to get rid of 50/70/90 seat jets. The pilots want those jobs under the mainline name. The same amount of labor would be paid at roughly the same amounts. Management can still reap the benefits from this smaller aircraft. What management wants is to have several bidders to continually compete for work. This creates problems for established regional pilots because as soon as thier company gets too expensive, the mainline carrier will start a new airline and call it Go Jets or Compass and have extremely lower costs thus putting the established carrier out of business. This leaves no job security. If the mainline pilots succeed than i know there will be more job security at a mainline carrier with a long career instead of worrying about my job every 4 years. The mainline carriers will be forced to hire people permanently and re-shape the way they use regional carriers. Regional carriers (that fly well over 1000NM out of a region.) are great to expand and contract demand with short notice. They have a purpose but they fly more than half of the domestic lift, which is not what they should be used for.

11.24.2010 | Unregistered CommenterMatt

Hey J Mont G

Here's a mini airline economics lesson for you. You see, UAL operates a hub and spoke operation. Jetblue, Virgin America, Alaska etc operate more or less point to point. But anyhow UAL has not only a LAX base in Cali but also a wait for it...SFO base that is right between LAX and SEA. It is much more efficient and economical for UAL operations for funnel LAX-SEA passengers through SFO. Those that are willing to pay the extra cost for a direct flight (not many based on the size of the plane) get the privilege of flying on the CRJ-700. Hope you enjoyed today's lesson.

I highly suggest you and other pilots stick to what your field of expertise is, flying the airplane(and fighting over whether 747 pilots should be paid more than 777 pilots). Let the people who have all the passenger data, market trends, and other important information along with years of business school training run the airline.

11.24.2010 | Unregistered CommenterRogue1

Matt

The ship has sailed on that one! The union already negotiated that flying away and the airlines are locked in the midst of long term regional contracts. Too late to come back and say you want the flying back!

BTW I wouldn't worry too much about regionals dominating domestic flying much longer. Regionals were a great way for Mainline to cut costs when they got blasted by the effects on 9-11 and bankruptcy. Those RJs are now becoming obsolete due to fuel prices. That's why the pilots are getting worked up over nothing.

One of the reasons Delta is hiring is due to management replacing regional lift with A319s and MD-90s. Wake up people and stop living 3 years in the past!

11.24.2010 | Unregistered CommenterRogue1

Hey Rogue1,

Way to sound like a business-school management snob! If airline management bean-counters are so skilled, then please explain the billions of dollars lost in the industry over the past few years.

My perspective? I'm a former regional airline pilot. but I recently quit my job to pursue an MBA. After school, I'd like to return to the industry in a management capacity, but unlike most other arrogant MBA-types, I'd like to improve the industry with not only a business school education but an operational perspective from several years with a 30k salary.

Pilots aren't gods, but airline management in the U.S. doesn't have an impressive record either. And for those who complain about overpaid pilots, do you think the passengers of US1549 were singing the same tune after their splash landing?

I'm tired of the inherent disconnect between airline management and labor. After I finish business school, I'm committed to embracing both perspectives and making balanced decisions. Who knows how much I can accomplish with that mentality, but I'll at least try! That's better than most others...

11.24.2010 | Unregistered CommenterJC

Rouge1, here is your straight answer as to why there were no jobs lost to the regional's after the Delta/Northwest merger: They were already gone.

Scope clauses at Delta and Northwest were already very similar, so there were no big changes to scope after the merger. United has a much more relaxed scope clause than Continental, so if United scope is used in the Continental system, job losses at the new airline are a very real possibility. Even if jobs aren't lost, the crappy and unstable regional lifestyle I spoke of will be expanded instead of the more desirable life for pilots at majors. Again, no one objects to the use of 50-90 seat jets. The pilots are only interested in ensuring that if a plane says United on the side, a United pilot is flying it.

As far as the hiring going on at Delta right now, I think that has more to do with Delta aggressively moving to capitalize on the other advantages the merger has brought them. Regional flying doesn't have anything to do with it one way or the other.

11.24.2010 | Unregistered CommenterSC

Rogue1 ~ I understand your point, however if that is true ... running LA pax through SFO with bigger planes ... than why are the last two flights of the eve before Thanksgiving ... SEA-SFO .. 2 very oversold RJ's ??????? Your the expert ... tell me !

11.24.2010 | Unregistered CommenterJ Mont G

Hey JC,

You're in business school and you need to ask why airlines have lost billions? Well, you got 9-11 that started the whole mess. Then there was the huge increase in fuel prices when most airline's business model was based on oil being around $50-$60 a barrel at the worst. Then there was the issue of overcapacity, so many seats in the market that ticket prices could not be raised high enough to make a profit. I don't care how good you are in business, the airline business has been a very very difficult environment to make a profit in.

SC,

The jobs are already gone at CAL too. Continental Express flies 62% of the daily schedule for CAL, HIGHEST among all mainline carriers.You guys sold out scope a long time ago. Fuel prices have changed. Let management make the most money they can from the scope you guys willingly sold by swapping 50 seaters for 70-76 seaters. The pilots seriously think that management will give away millions and millions of dollars by paying all the regional carriers locked in long term contracts for breach of contract, then turn around and have to spend more money to jump start a 70 seat regional jet training program at mainline for pilots, FAs, and mechanics. What kind of economic sense does that make? Have you guys lost your minds? Do you guys ever think before making ridiculous demands? At least some of you do(Lee Moak and crew)

Be reasonable. Relax the scope only on an regional for regional aircraft swap basis, get your SWA payrates and work rules, get your no-furlough clause(don't be silly and fall for a force majure clause again, and for goodness sakes get some insurance benefits for new hires during the 1st 6 months.

I don't think pilots are overpaid. They are just grumpy and way too short sighted. That's why you guys are in situation in the first place. Had you not sold out your young pilots and kept the regional jet flying in house years ago, it would be a different story. But you sold it, and you can't come screaming that you want it back when that flying is locked into long term contracts.

Hey J Mont G

It could be for a bunch of reasons. I'd have to work for United to know. But some possibilities are:

Not enough mainline aircraft to cover the route just for that one day
The route at that specific time is not normally that busy outside of holidays
Just a few business travelers normally fly that route during normal travel periods
Overall, basing the economic viability of a route based on it being oversold one day is not a very bright idea...

11.24.2010 | Unregistered CommenterRogue1

Mr. Swelbar and most of his supporters leaving comments seem to be basing their entire position on straw man arguments. No, the pilots are not saying that a 737 or A320 ought to be flying from San Francisco to Modesto, and no, the pilots aren't saying the airline needs to break its long term contracts with regional carriers and immediately jump start an in house RJ training program. The pilots are defending the line that's been drawn to protect against further degradation or our careers. Short sighted and narrow minded though we may be at times, we can read between the lines beyond the issue at hand. This isn't about a few new routes being flow by 70 seat jets out of IAH, this is about the halting the creeping change in what defines a "regional jet" before we have "regional" C-Series Canadairs carrying 130 people from Houston to L.A. How is Houston to Bakersfield regional? How is Chicago to Albuquerque? Where exactly IS the line between a regional jet and full size one? The pilots are defending one of the few bargaining chips we have. If management wants to fly 70 seaters out of IAH, whats wrong with creating a road map, together with management, that would bring regional flying back under one roof over time as contracts expire, and shifting the pilots flying those regional jets over to main line jobs that they would surely prefer? Its an ugly and unfortunate way to bargain, but we have to defend what little leverage we have.

You love to blame mainline pilots and their union for creating the current situation but while much was given away, much more was taken, in bankruptcy court and by government intervention. Remember the very brief American Airlines strike in 1997 that was about, among other things, the plan to have regional airlines fly 50 seat jets? The one that was halted by executive order from President Clinton? Mistakes may have been made in the past, but no matter how far down the wrong road you are, turn back.

11.24.2010 | Unregistered CommenterSC

Yes, it's been a difficult and competitive environment, and airline management hasn't done much to help its cause. I understand the effects of 9/11 and high oil prices, but the airlines were not positioned in any way to respond to ANY unexpected events. Anyone who works in the industry knows that the airlines must have provisions in response to the industry's inherent volatility. Southwest bucked the trend and maintained profitability. While their low-cost model does not resemble that of the legacy carriers, they skillfully demonstrated the potential of a well-run airline. Great corporate culture, well-paid employees, and satisfied customers. Other airlines need to adjust their models and cultures accordingly.

In response to the LAX-SEA example, sure - route the passengers via SFO. And lose customers who aren't willing to waste their time with a connection on what should be a 2.5 hour flight. If AS and VX are operating non-stops, screw the SFO connection. You better be ready to offer non-stop service to compete anywhere, especially along the West Coast.

11.25.2010 | Unregistered CommenterJC

Why is this article devoid of CASM? Is it because cockpit costs are a straw man? The RJ is a loser. The bigger it gets the better chance it has of equalizing RASM and CASM. Yes there are some markets where the RJ can go in and get the RASM to meet or exceed the CASM, there are some that will be losers, but mainlines use 7 RJ's a day to try and compete with LUV's 4 flights (that are making money) or to count on the conection to a larger, much lower CASM mainline flight, even better international flight. Pilots don't make flight schedules or design and allow multiple layers of management. Nothing that I am aware of prohibits CAL/UAL from scheduling 25min turns.. why would a pilot not want to get 7hrs of work (pay) in a 10hr (or less duty period).. silly straw-man. Back to that pesky RJ CASM. The Boyd group has been raising this flag for a while. ACMI arrangements, or whatever, all require covering the costs, and guaranteeing a profit, per hour, with a whole additional separate companies cost structure involved. The economics of the RJ get much much better (read lower CASM) by doing the flying in house (ala JBLU). Cockpit costs the reason to outsource.. laughable!

This is about honoring an employment contract (CBA in this case.) This is about union busting, dumbing down, outsourcing. They fear the leverage of eggs all in one basket. They will lose this arbitration, and have to honor CAL pilots CBA until a JCBA is reached, and then they will be governed by the JCBA. Airline, even mainline pilot labor, is a steal. The sooner pilots join the ranks of fixed costs at all airlines (read national pay-scales) pilots will be just like a tire, or any part, on the plane. You pay the part cost, or you don't fly the plane.... or do you think that SWA pays more for their tires too?

11.26.2010 | Unregistered Commenterhuh

For those who advocate bringing the regional flying back to Mainline, the problem with that idea is two-fold. One, the [higher] Mainline cost structure goes far beyond just pilot costs. Even if the Mainline pilots agreed to operate the RJs at competitive wages and benefits, it would be nowhere near enough to compensate for the remainder of the uncompetitive Mainline cost structure and it will also affect the cost of all the other Mainline flying by driving up average longevity of the pilots of the other aircraft (i.e. if it takes an average of three years of flying the RJ before a pilot has sufficient seniority to fly current Mainline aircraft, then the average longevity of the pilots operating the current Mainline fleet would become three years higher -- meaning higher wages and more time off and lowered productivity. This dynamic is only exacerbated when applied to all other work groups (Flight Attendants, Mechanics, etc.). This leads to the second part of the problem; even if a management was willing to consider accepting the remaining higher costs to operate the RJs at Mainline based upon the pilots accepting industry standard terms, history suggests that the pilots would not tolerate the disparity in wages and benefits for the long term and would seek to undo the agreement as soon as presented with sufficient leverage to do so (think B-scale).

11.27.2010 | Unregistered CommenterROK

ROK,

By your logic airlines would never furloguh. That drives up the average longevity significantly. At United right now, almost every pilot is on the maximum longevity pay in their respective fleet and seat due to furloughs.

Conversely, bringing in RJs to the mainline would eliminate paying for another management structure at the regionals and would also bring economies of scale. Additionally, it would have the positive effect of lowering average labor cost through growth via new (think 1st year pay) employees to staff those planes. For years hasn't that been a tennet of Southwest? Keeping labor costs low via measured growth that allows new employees to be added at the bottom of the payroll has worked for them for years.

11.27.2010 | Unregistered Commentertg

tg,

Airlines furlough when they have manpower in excess of the work to be performed. Typically, this is brought about by a change in the economic conditions in the industry that requires cutting flying. If the excess manpower is small, often times they will not furlough because as you point out it does increase the average longevity. The displacements also create additional training.

The Southwest model you refer to is not applicable at the Legacy carriers because Southwest only operates 737s, so when they hire, they hire into the 737 which does lower the average longevity. If a Legacy carrier were to bring the RJs in house, it would become the entry level aircraft, thus the average longevity in all of the aircraft currently in their fleet would increase.

Furthermore, the duplication of management at regional airlines is a somewhat flawed argument because it assumes that all of the RJ flying would be incremental from a management standpoint -- this is not the case as mainline management and administrative personnel would have to increase to account for the additional workload. Just like all the other workgroups, they too will be less cost effective than their regional counterparts.

It's really quite simple, if it's cost effective to not furlough, they won't; if it becomes cost effective to fly the RJs at mainline, they will. There is no conspiracy against mainline pilots, it's not personal -- it's just the economic realities of a brutally competitive business.

For the record, I'm a mainline pilot.

11.27.2010 | Unregistered CommenterROK

Include whatever you want in the soup. The CASM on the RJ is the highest in the industry. The plane is a loser. FACT, the CASM of the RJ is still a loser at mainline (still the highest, but gets get lower as number of seats increase, thus why it should be a niche aircraft.) The amount of (almost fixed) mainline costs to operate another fleet type is minimal, compared to outsourcing, supporting and employing a whole additional entity... which also may ACTUALLY be supporting a competitor. Great idea (see Republic Airways Holdings, owns Chautauqua Airlines, Frontier Airlines, Lynx Aviation, Midwest Airlines, Republic Airlines and Shuttle America)

Again, get away from airline management thinking. All that mumbo jumbo management teams are supposed to get paid for. CASM is CASM and the CBA is the CBA. How management uses its tools to make a buck, pilots don't care, just follow the CBA. By management's logic, if they wanted to roll out planes CAL was flying 15 yrs ago, they would now want to argue they are "regional" not mainline aircraft, to be flown in the same old CAL system, just by a contractor. The pilots are contracting their licences to CAL so they can operate planes and make money. Notice I said planes.. not jets, or jets with 50+ seats... even though that ship has sailed in the current contract.. that IS the contract. The pilots know they are only as loyal to them, the customers, etc. as to the minimum contractually required. To say a CAL tail should have a CAL pilot isn't extortion, protectionism, whatever... it is business, even though it sounds like common sense. To not be yesterdays news, they contractually require loyalty, and employment for the parts (i.e. pilot licenses) it takes for CAL to be an airline... whatever plane THEY decide THEY want CAL pilots to fly, and make sure it stays an investment. They don't allow the pilots to outsource with their licenses, under any circumstances... They want to own it, own them... that is why the pilots have and require "scope".

11.28.2010 | Unregistered Commenterhuh

it is the Comair, DAL model. It is not about the money. CASM shows that. Not having all the eggs in one basket makes the RJ the lowest cost pawn to use as a "cost (union) control" at mainline. Sadly they are willing to pawn safety, experience, and quality control in the same transactions with these cost plus, loosing, contracts for so labeled "regional" feed.

Look no further than CAL wiping its hand of the Colgan crash, saying "Colgan Airlines" thousands of times. Yet that was a Continental product, used interchangeably with mainline flights, sold on/by CAL, boarded at CAL gates, marketed by CAL, that provided a burning globe on every tv set, at every congressional hearing, and lawsuit, with absolutely minimal responsibility. You bet that affected the employees of the real mainline CAL. sorry for the drift. "To know the cost of everything and the value of very little." Short term- maybe slightly higher, long term return for the better product? yes

11.28.2010 | Unregistered Commenteryep

It's funny to see Swelbar offended by the term "outsourcing".

Yet he enjoys referring to "comprehensive network carriers" as "legacy carriers" despite the fact that there is nothing "legacy" about them, after 3 decades of deregulation and over half the industry's capacity having gone through the bankruptcy "car wash". And we also continue to hear his industry cronies continually referring to non-existent "regional jets". There is nothing "regional" about today's RJs.

It's obvious that the long range plan of industry executives is to relentlessly attack pilot scope clauses. And the RJs play an important role in this attack. The propaganda spewed by industry think tanks is that pay improvements can only come via scope concessions. Outsource more jobs in exchange for inflation. What a deal! This may have played well against a previous generation of stupid pilots, but you're unlikely to convince this generation that scope and code sharing is good for us. We know from personal experience this is a bold-faced lie.

The stark reality for executives is that scope concessions can only come from pilots willingly surrendering it.

Since this is not likely to happen during this contract cycle, executives are seeking to hold on to the scope concessions already achieved in the face of what is a "counter-offensive" being launched against scope concessions.

The RJs in their current size and configuration are uneconomical, yet executives are willing to hold these aircraft and continue to eat these uneconomical costs because they are the beach head for the next contract cycle's scope attack. Thus the only real these uneconomical RJ aircraft posses is a device to extract more scope concessions.

Also consider that I am not unique. I have 15 years left to go. I will give you no concessions on scope. In fact, you can expect me to support any counter-offensives on scope like the one being launched at UAL-CAL. 15 years. That's a long time to eat uneconomical those RJ costs.

Bon Appetite!

11.28.2010 | Unregistered CommenterV

It's funny to see Swelbar offended by the term "outsourcing".

Yet he enjoys referring to "comprehensive network carriers" as "legacy carriers" despite the fact that there is nothing "legacy" about them, after 3 decades of deregulation and over half the industry's capacity having gone through the bankruptcy "car wash". And we also continue to hear his industry cronies continually referring to non-existent "regional jets". There is nothing "regional" about today's RJs.

It's obvious that the long range plan of industry executives is to relentlessly attack pilot scope clauses. And the RJs play an important role in this attack. The propaganda spewed by industry think tanks is that pay improvements can only come via scope concessions. Outsource more jobs in exchange for inflation. What a deal! This may have played well against a previous generation of stupid pilots, but you're unlikely to convince this generation that scope and code sharing is good for us. We know from personal experience this is a bold-faced lie.

The stark reality for executives is that scope concessions can only come from pilots willingly surrendering it.

Since this is not likely to happen during this contract cycle, executives are seeking to hold on to the scope concessions already achieved in the face of what is a "counter-offensive" being launched against scope concessions.

The RJs in their current size and configuration are uneconomical, yet executives are willing to hold these aircraft and continue to eat these uneconomical costs because they are the beach head for the next contract cycle's scope attack. Thus the only real value these uneconomical RJ aircraft posses is a device to extract more scope concessions.

Also consider that I am not unique. I have 15 years left to go. I will give you no concessions on scope. In fact, you can expect me to support any counter-offensives on scope like the one being launched at UAL-CAL. 15 years. That's a long time to eat those RJ uneconomical costs.

Bon Appetite!

11.28.2010 | Unregistered CommenterV

It seems ironic that no where in the conversation does anyone mention this will all be a moot point when customer day one occurs in the March - Jun 2011 time frame. The current CBA dispute involves placing the CO code on a flight flown by a non-owend United regional carrier from a CO hub - clearly a violation of the CBA. But once customer day one occurs there will no longer be a CO code on any flight thus eliminating the problem. After that point they can fly all the 70+ seat aircraft they want with no CBA prohibition.

So once again management chooses to poke labor in the eye for 90 days of "revenue enhancement" rather than simply honoring the contract. As usual it's all about whatever management wants to do, rather than developing "goodwill" with the employees.

11.29.2010 | Unregistered Commenterlostntranslatn

Having observed Continental for many years, I've noticed that Continental does not use its regional jets to extend their reach into markets that cannot support mainline jets. Rather, they fly the 50-seaters multiple times a day in larger markets (IAH-CLT, IAH-BNA and until recently IAH-MTY, until VivaAerobus forced their hand) where a mainline jet would make more sense. Their regional jets are a money-losing proposition that the airline has willingly endured because they did not want to employ more mainline pilots. Their arguments about the efficiencies of the RJ's would hold more water if they still owned and operated ExpressJet. Instead, they have chosen to operate their smaller jets in a very inefficient manner, solely to improve their negotiating position relative to the employee groups. Their strategy towards IAH would most certainly change if Southwest were to resume service there as a serious competitor. Then you would see the mainline jets replace the RJ's with a vengeance.

11.29.2010 | Unregistered CommenterGSB

Bill Swelbar says...
"Over the past 15 years, how did ALPA find a way to pay mainline pilots more?  By agreeing to allow another group of pilots to fly where mainline flying is no longer economic and to be paid less to do so in order to buy “better” contracts for the mainline pilots they represent." 


Psst Bill....

Over the last 15 years mainline pilots have seen their pay and working conditions cut...while regional airline pilots pay has improved. AA pilots saw their pay cut 23% to "save the company" while Eagle pilots actually enjoyed payraises.

If, in fact, mainline pilots "exchanged" scope for payraises.....WHERE IS IT?! You're argument is that we got pay increases in exchange for scope ....WHERE IS THE PAY??! Shouldn't mainline pilot pay be higher than it was 15 years ago? You're full of pooh-pooh like always.

As for paper tigers....let the NMB release the mainline pilots and the we'll see how real their roar actually is. If you truly feel pilots are a bunch of paper tigers...you should be eager to call their bluff. The fact that you don't do it...except in words...simply shows how weak your hand is.

Why don't you and the other managment advocates work towards an NMB release instead of hiding behind the skirt of government protection?

11.30.2010 | Unregistered CommenterLow Hanging Fruit

Continental ALPA has bragged that they were joined in picketing by "pilots from other ALPA carriers and other pilot unions".

Wouldn't that be considered outsourcing?

12.1.2010 | Unregistered CommenterArt

That would be mutual support against outsourcing. Isn't outsourcing putting your name on someone else's work?

12.2.2010 | Unregistered Commenterrg

No, that's plagiarism. Outsourcing is the transfer of a business function to an outside provider.

ALPA should have demanded that the picketing only be conducted by pilots on the CO or UA pilot seniority lists - like they want for the flying of the RJ itself. But the (attendance) numbers wouldn't have been as big if they kept it completely in-house - which is what management says about the revenue numbers.

12.3.2010 | Unregistered CommenterArt

Really like Bill Swelbar as he's one of the very few consultants with a genuine understanding of ALPA dynamics. However, this time he's mistaken.

There is a genuine contractual dispute over the reallocation of small jets into a system where their operation is a breach of contract.

The union has finally gotten wise in the realization their power and relevance is directly tied to the pilots they represent. ALPA is waking up to the concept that pilot jobs have value, even those formerly considered not to be mainline jobs. If scope is a negotiation and members' jobs are for sale, then what has more value? The view that every member is priceless and job security is sacrosanct? Or, Delta's view that "flying beneath your seniority does not matter, so hey, what will you give us for it ?"

The other variable some of those who replied to this thread have not fully considered if the effect on staffing all of Delta's incentive retirement programs have had. Delta management has done some sharp bean counting and figured out if a $209 an hour Captain can be enticed to leave, making room for a $54 an hour First Officer, that's good business. Hiring 300 does not cover attrition and is a very slim (but appreciated) margin from furlough.

12.15.2010 | Unregistered CommenterType Rating Whore

Correctly, the arbitrator ruled in CAL ALPA favor. Maybe we should consider outsourcing airline management. That would save lots of $$$ and provide for a more efficient airline operation.

12.31.2010 | Unregistered CommenterMain line pilot

Main Line Pilot, thanks for posting and bringing a wise final word to this article. The Arbitrator has ruled and Continental Pilots were correct to bring their grievance.

12.31.2010 | Unregistered CommenterType Rating Whore

It can't be explained any better:

http://www.youtube.com/watch?v=vkAKAheQIAA&feature=player_embedded

01.14.2011 | Unregistered CommenterMain Line Pilot

You make a good point about ALPA criticizing some of the very same conditions that they themselves approved at regional carriers. I do not see how they can represent both main line and regional carrier without there being at the very least a conflict of interest. To be completely fair though, I think part of the criticism applies to the fact that some of these contracts still apply long after their amendable date and long after the economical environment that saw their approval.

I believe however that you engage in a little misrepresentation yourself when you blame the pilots for what you call their “major role in creating the labor Ponzi scheme”.

Let’s say that Continental pilots agreed to fly 50 or 70 seat RJs for the same wages and benefits as the express carrier’s pilots and that the flights were operated by mainline employees. In this situation would it not still be cheaper for the company to outsource that flying because of the higher costs of all the other mainline staff? You calculate the cost and impact of 5,000 employees but do not mention the other 39,000.

How is it that you are not coming to the same “Ponzi scheme” conclusion when you compare the difference in the compensation between the other work groups or the two CEOs?

You indirectly (directly?) claim the head of Continental ALPA is “against maximizing the revenue earning power of the network.” I’m guessing you are spinning the facts and misinforming the reader, but I don’t know that for sure. Is it possible that he is against management changing parts of the contract without changing the sections that the pilot group he represents wants changed?

04.9.2011 | Unregistered CommenterRJ

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