Sunday, March 25, 2001

Comair strike: Winners and losers




        Here is a look at who would benefit and who would be damaged by a Comair pilots strike:
       

The winners

        • Other airlines: Comair has reciprocal agreements with six other airlines and their subsidiaries to carry their passengers if they cannot be accommodated on Delta Air Lines or another Delta subsidiary.

        These airlines are Northwest, American, TWA, Midwest Express, US Airways and Continental. The major airlines all have subsidiary regional carriers that serve many of the same cities Comair does.

        When asked whether they've seen a rise in passengers or planned to add flights to handle the extra loads, representatives of several of these airlines said no. And while these airlines might see more passengers, it would be impractical in terms of economics and operations to add flights.

        But they all will keep a tally of Comair passengers, and will bill Comair for the flights at the end of the strike.

        • Other transportation modes: Amtrak, Greyhound and even rental car companies have historically seen sales rise when air service is disrupted for any period of time. However, rental car firms could also be hurt by a loss of passenger traffic at airports.

        Officials from Amtrak and Greyhound say they have yet to notice any uptick locally or even nationwide.
       

The losers

        • The company: Erlanger-based Comair is the nation's second-largest regional airline, serving about 8 million passengers a year.

        Comair officials have said they would pay full salaries and benefits to non-pilot employees if a strike occurs, but would not disclose how much money the company would lose on a daily basis if operations shut down.

        But according to the airline's 1999 financial statement - the last public filing by Comair before being bought outright by Delta — the company had $511 million in annual operating costs, or about $1.5 million daily. Those costs would include expenses such as lease agreements on some of its fleet and payments on planes that Comair owns.

        The cost of fuel and landing fees would be subtracted from that, but Comair would also be without any revenues, which in 1999 were about $763 million pretax, or about $2.1 million daily. That included a profit of $132 million for the year.

        These cost and revenue figures are undoubtedly higher now. The airline has nearly doubled the amount of flights since then; it also has switched to larger regional jets that hold more passengers and make more money.

        What isn't known is how much working capital Comair has to cover expenses during a strike. The 1999 financial report said Comair had about $213 million in working capital.

        • The pilots: Of course, the pilots wouldn't receive salaries during a strike and would lose all benefits, including medical coverage. The Air Line Pilots Association could provide strike benefits, but the union's board won't vote on them until next month.

        Comair has about 1,350 pilots, including nearly 200 who are in their first year and are considered “apprentices.”

        Of the pilots group, 812 — or nearly two-thirds — have five years of experience or less. That means most of the pilots make no more than $40,000, according to Air Inc., an Atlanta-based pilot placement service.

        Two-year pilots are the largest section of the pilot group at 304. Those pilots generally make about $28,000 annually, or about $78 daily and $550 weekly.

        • The airport: There has never been a major work stoppage at Cincinnati/Northern Kentucky International Airport since it opened for commercial service in 1947. When Northwest pilots struck for 15 days in 1998, some service was lost - especially when Northwest also shut down its regional subsidiary Mesaba. But passengers were immediately accommodated on other carriers.

        Comair operates 323 daily departures from its local hub, bringing in about $13,000 daily in landing fees for the airport. If the airport comes up short on its annual budget, however, it will bill all of its tenant airlines for the difference at the end of the year. Yet a strike, although it wouldn't cause financial damage, could tarnish the airport's reputation as one of the most efficient in the country.

        • The passengers: Even though Comair plans to reroute travelers by other means, the loss of Comair means fewer direct routes for local fliers. And Comair serves about 25,000 passengers daily systemwide, including about 20,000 locally.

        For those connecting to smaller cities from Delta mainline flights, it means they will probably be rerouted through the parent airline's other hub in Atlanta or put on another airline, meaning yet another connection in another hub.

        Perhaps more importantly, a Comair strike could also mean seats on Delta flights will fill up even more quickly, forcing some travelers to wait a day or two before they can fly.
       

— James Pilcher

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