Sunday, March 7, 2004

Comair not a 'give-up' airline

By James Pilcher
The Cincinnati Enquirer

Starting as a financial director at Comair 19 years ago and working his way up to president, Randy Rademacher has known only growth.

Until now.

Last Tuesday, Comair's parent, Delta Air Lines, announced its growth plan for 2005 and, for the first time, the Erlanger-based regional carrier was not scheduled to get additional planes. Delta assigned 45 new aircraft to three other carriers.

The decision marks the end of a phenomenal expansion that continued despite the crippling strike of 2001. Comair's fleet grew 85 percent over the last four years, giving Greater Cincinnati's only locally based airline a work force of 6,000, including 4,000 at Cincinnati/Northern Kentucky International Airport. If the decision stands, it will also be the first time in the company's 26-year history that it has not added new planes.

Comair's high costs, driven in part by the regional airline industry's costliest pilot and flight attendant contracts, were listed as the main reason for not getting any new planes for 2005. Delta's decision came after Comair management went to flight crews, asking them to take a pay cut. The pilots union, still remembering their 89-day strike, wouldn't negotiate.

Despite this, Rademacher said, Comair will continue to seek new opportunities to grow its business.

Question: So what's your reaction to not growing in 2005 in terms of fleet size, the first time that the airline will not add to its fleet in 26 years?

Answer: Are we not going to get airplanes? That's assuming that everything is done for 2005. There is a lot going on in this industry, and this could still change. We are certainly disappointed that we are not a piece of this particular program ... but we absolutely have to keep working. We may not have won, but there are going to be other battles.

I'm not a "give-up" guy, and this is not a "give-up" company. And this is not a hang your head thing, but a get-back-to-work-and-try-harder thing.

Q: How does this affect Comair's possible growth and new hiring?

A: Obviously, this makes it more difficult. Anytime you are not taking in new airplanes, to me, puts you at a big disadvantage against those who are. And that means that you might not be bringing in new folks and new pay scales, and that is something we'll be dealing with for the first time. This is clearly slowing our growth rate, but there are other opportunities.

Q: How many of the 45 planes had you hoped to get?

A: The Delta folks were pretty open and out front about what our big disadvantage was, and that was the labor costs. They told us what we needed to do to win, and while we tried, we couldn't do it. And when they say "do this and you win," and you don't, you are walking on thin ice. So once we were unable to renegotiate the contracts, we pretty much knew what would happen, so this was no surprise.

Q: How does this affect future relations with the pilot union?

A: I want to make it perfectly clear that I'm not blaming anyone for anything. We all knew we had some issues there, and our pilots and flight attendants know how they are paid comparatively. We were hoping to offset that with efficiencies elsewhere, and we made great strides there, but obviously we weren't able to completely do that. These are agreements that were signed by the company and by me, and we will honor them. But at the same time, we're going to keep talking to people about making ourselves more competitive, although that includes hundreds of things.

To focus strictly on the pay rates of pilots is in a lot of ways winning and losing them, and we need to work on all the things to make ourselves a better, more efficient airline.

Q: What are some other opportunities for growth in 2005 with no new planes coming in?

A: We will certainly bid on the ground work for the carriers who do come in here or expand here, and we will do so aggressively. We are looking to expand our maintenance for other carriers, and get approved to do even more of that kind of work. These are all ways to help us get our cost structure in hand and get a battle plan to go forward.

As Mark Twain said, the reports of our death have been greatly exaggerated. This is a setback, not the end of the road, and we have to try our best to take advantage of every opportunity we can get.


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