OK, So Now There Are No Rules

[roz]

So, once upon a time, there were rules about granting flying to contract carriers. Certain rules were formulated to prevent contract carriers from taking over too much of the operation.

Tran Stastes operates for AA. Their contract says they can't fly aircraft larger than 50 seats. So now they are going to form an alter-ego to get around that. So what happens to the current employees. If they cross over, do they start at the bottom? I'll bet they do since it's a "separate entity".

The industry has hit the newest low! If I were at the APA, I'd use the $500MM they are getting from AA in fines to pursue this cause. But I am not at the APA...




Memo
To: All Trans States Airlines Employees From: Rick Leach, President
Date: 10/26/2004

Re: Pilot Scope Clause Limitation

Over the past couple of months, employees have asked me about the status of TSA's pursuit of larger equipment. Some of you may have read in recent industry press articles about pilot scope clause limitations. At some major airlines these limitations affect the size of equipment that their regional partner can fly, even for an unrelated major carrier under a totally separate codeshare agreement.
One of our current partners has recently emphasized to us that our code share agreement with them prohibits Trans States Airlines from operating aircraft with more than 50 seats. The basis for that is the scope clause language between their pilots union and our partner. This far reaching ban, in effect, will keep Trans States from being able to fly any new equipment larger than 50 seats. You may be saying to yourself, "this does not seem fair!" and to this 1 say, "I agree!" but these are the facts of our codeshare agreement with this partner. We are not happy about this situation but feel we have no choice but to comply with this clause in our contract. This partner is extremely important to the success and well being of Trans States and as such, we need to do everything we can to protect that relationship because it is vital to the success of Trans States Airlines.
As much as we value our current partners, we also realize that many of the opportunities in the future will come from growth with larger equipment. We have a strong desire to participate in this anticipated growth over the next few years, As a result, the parent company of Trans States Airlines Inc., which is Trans States Holdings, Inc., has begun the process necessary to start another airline with the intent of using that airline for the purpose of flying larger aircraft than the 50 seat jets in use at Trans States Airlines today. The intent is to have two separate airlines owned by Trans States Holdings, one being the original Trans States Airlines flying our current fleet of aircraft and a second airline to be positioned to compete for larger aircraft opportunities that we believe may exist in the years to come.

Let me make my thoughts for the future of Trans States perfectly clear. We will continue to fly our current fleet of Embraer 145 jets within Trans States Airlines. We will also continue to aggressively seek more opportunities for flying within this fleet of aircraft and to place such growth within Trans States Airlines. Additionally, we will continue flying our turboprop aircraft until such time as those leases are up or we find a business model that will allow us to extend the use of those aircraft into the future. We want and expect to continue to find opportunities to grow Trans States Airlines in the years to come.
By necessity, this new airline will operate separately from Trans States with their own planes and employees. We expect there to be significant opportunities for many Trans States employees who may be asked to switch over and become employees of this new company. We are convinced that through a combination of our aggressive activities to find more growth for Trans States Airlines and opportunities presented by this new airline, many Trans States employees will benefit from the actions we are taking today.
As I stated earlier, there is still much to be decided and many questions still to be answered. I would like to answer as many questions as you may have regarding this subject and are requesting that you submit them through the Trans States Airlines web site on the company question and answer section. Those questions and answers will then be published for you and all other employees to view both on the website and in our offices throughout the system. I also suggest you check the website frequently for more information regarding these plans and encourage you to attend the Town Hall Meetings on the following schedule so that I can talk to you in person and answer any remaining questions about this or any other topic you may have.

I will keep you posted on our progress as we move forward; additionally, I will be meeting frequently with your departmental Vice Presidents so if you have questions before or after my scheduled meetings, they should be able to assist in answering your questions.
As always, thanks to all of you for the wonderful job you do each and every day. Please be assured that as we evaluate the opportunities and challenges before us, our desire to bring additional success and continued long-term stability to the entire organization will be our guide.

[lucky81698]

Roz,
I believe that is similar to the thing JO was trying to do with Mesa and Freedom Air. Of course, if you go to the "new" airline they will want it to be non-union, same payrates as current a/c, just dangling the carrot of flying a larger a/c. It's all smoke and mirrors!

By the way in CAL/CALEX's contract, CALEX cannot operate any larger a/c in/out of their hubs (IAH,EWR,CLE). This does not however prevent CALEX from getting larger a/c and flying them from LAX (example)to points beyond. One of the reasons CALEX all of a sudden got a TA was due to the fact that they had to agree to red-eye flying from LAX to a whole list of cities in Mexico. Hmmmm, wonder if something is fishy in the future!

[roz]

Actually JO is keeping Freedom alive. He's putting a plane on board to keep the certificate valid. He has plans...This business is getting so ugly!

[lucky81698]

I haven't seen anything about Freedom in a long while. I thought the courts decided it was an alter-ego carrier and they were not allowed to proceed???

[roz]

JO just wants to keep the certificate alive so he has it for future use--all he needs is one plane:

There is an ad for BE1900D FO and Captain Slots for "Freedom Airlines" in PHX on Climbto350.