ASA: "Cost Neutral" Contract?

[Lolikoka]

Cleaned out my mailbox at the airport yesterday and found a "negotiations update" or some such in the box. Quickly discovered it to be company propoganda about management bargaining in good faith and ALPA proposing so many changes that management is in a quandry about what to do. What really chapped my hind-quarters was the extensive discussion about the necessity of a "cost-neutral" contract, whereby gains in pay or benefits must be offset by cost reductions elsewhere, or increases in productivity.

I don't live in a "cost-neutral" world. If I were a robot with no family, then maybe management would have a point; but life isn't "cost-neutral." Management doesn't get it - we are simply fungible cost units to them. I address the increasing costs of my family by re-ordering priorities, making certain spending decisions, cutting certain costs, and counting on "increasing revenue" through regular pay raises and contract negotiations. Management approaches us as if they can take our quality of life and toss it out the window. Part of running a business is overcoming the reality of rising costs.

This memo revealed that management and the pilots are in different worlds. There is simply no way to negotiate if management takes the attitude that we and our families do not deserve a life or a worthwhile career.

Pass me a strike ballot, there is no point to negotiating anymore with the current management mindset.

 

[FDJ2]

Is there any indication that ASA and the ASA pilots will be released from mediation any time soon? It seems like ASA has been in negotiations for quite some time now. When was your amendable date?

 

[asacap]

Lolikoka,

I couldn't agree more. The longer we wait, the worse things will get.

 

[Lolikoka]

Is there any indication that ASA and the ASA pilots will be released from mediation any time soon? It seems like ASA has been in negotiations for quite some time now. When was your amendable date?

Contract became amendable in September 02; no chance of release any time soon since we haven't even come to the economic parts of the contract such as pay or retirement. ALPA asked for the assistance of a mediator when we got to scheduling. Until the mediator watches us go through all the contract, I seriously doubt he will recommend release to the "cooling off" period. This is going to take a loooooonnngggg time. The sad part is that the whole exercise of "negotiating" is pointless - this company memo plainly reveals that the agenda of management is to absolutely contain pilot costs.

As a side note - this is a prime reason why the pilots of regionals don't need a separate union; we need access to ALPA's major contingency fund to be able to fight managements that will spend unlimited amounts of company money to defeat a union. The animosity toward employees has got to be some sort of pathological mental defect. It's just not rational for management to consider employees to be their most hated enemy; our lives and the well-being or our families are wrapped up in the health of the company. I want everyone to fly Delta/ASA/Comair - and I want to make a good living flying all those people. It's a ying-yang thang - and I resent management's posturing and proclamations that we pilots are jeopardizing the future of the company.

 

[Ganja60Heavy]

Ticking away.....

As days go by, the likelihood of even a "cost-neutral" contract diminishes greatly.

Why?

Summed up in one word: PORTFOLIO

That is code for WHIPSAW, and eventually, each pilot group will be completely disposable. A mere cog in the wheel.

LOOK! Delta just added Republic to its "Portfolio"

Wait till there are like 10 portfolio companies, and each "Connection" carrier hauls 10 percent........then it's time for concessions as we each beg for our lives and jobs. E-170's coming soon to C-concourse! Republic pilots in ASA's lounges. 70-seaters at Brasilia pay-rates.

 

[Old Crow]

If ASA were a company losing money then maybe I'd understand. But, we are over the 100 million profit levels in a sucky economy as stated in the Ops awareness meetings. If my paycheck said "Delta" then maybe I'd understand too, but last I checked, MD88 was not one of my bid preferences.

I don't believe that saying "we just won't do it" to a group of hard working pilots like ASA are the Key words to be using. That's not negotiating, plan and simple.

Note to our MEC. We don't even need to see a zero net gain proposal. "We just won't do it"

 

[Lolikoka]

As days go by, the likelihood of even a "cost-neutral" contract diminishes greatly.

Why?

Summed up in one word: PORTFOLIO

That is code for WHIPSAW, and eventually, each pilot group will be completely disposable. A mere cog in the wheel.

LOOK! Delta just added Republic to its "Portfolio"

Wait till there are like 10 portfolio companies, and each "Connection" carrier hauls 10 percent........then it's time for concessions as we each beg for our lives and jobs. E-170's coming soon to C-concourse! Republic pilots in ASA's lounges. 70-seaters at Brasilia pay-rates.

This is another prime reason why pilot unity is so important. The pilots at the regionals don't have enough strength to stop this portfolio nightmare; we can only do it with the help of mainline pilots and the deep pockets of ALPA - should they ever realize that this isn't good for their long-term health either. The more the regional flying is divided up, the worse it is for mainline too, especially as bigger and better RJs come along and replace mainline aircraft - it just might take longer to adversely affect them.

Comair drew a line in the sand - and their growth slowed dramatically. The latest Republic deal is a warning to ASA pilots - but we MUST draw the line and hold out for a good contract - even if it means no growth. A good quality of life for our families is the end-state we need.

We also need union leaders willing to go to jail for calling illegal strikes; when we walk, Comair should shut it down too. It's illegal - but so what. We're dealing with an inhumane management ideaology that proclaims labor to be the chief problem.

 

[michael707767]

If ASA were a company losing money then maybe I'd understand. But, we are over the 100 million profit levels in a sucky economy as stated in the Ops awareness meetings.

First of all, we don't really know how much ASA is making, if any at all. Delta does not seperate financial results on its SEC reports. They do that for a reason. But, lets say that the 100 million number is correct. Ask yourself what is the current cost of your contract? How much more would the raises and contract changes you are asking for cost the company? What would your profit level be if you got the contract you wanted? I don't know what the answers to these questions are, but you need to know before you assume that ASA can even afford to give you anything more than a small raise.

 

[FlyComAirJets]

The one kind of pie that I don't like.

"Cost neutral" sounds a lot like the "Pie Theory" that Comair management threw at us during our negotiations. Here is how it went.

The entire compensation package (pay, work rules, retirement) was likened to a finite-sized "pie" with which we could divvy up any which way we pleased but the pie was only so big. More pay meant less of the pie left for retirement, for example. I seem to recall that they even tried to tie our contract gains to other employee groups as well.

Don't buy into this. Not only are you negotiating how the pie is divided, but most importantly, the size of the pie is at issue. Remember, you have the power. With a huge presence in ATL and significant presence in CVG and SLC, you have more clout, notwithstanding this portfolio nonsense.

 

[socrates1]

ASA reports it's financial data to the Bureau of Transportaion. ASA has had an operating profit each quarter this year.

1st Q 2004 16.1 million
2nd Q 2004 14.3 million
3rd Q 2004 21.4 million.

Data came from http://www.bts.gov/programs/airline_information/airline_financial_data/press_releases/index.html

100 million a year is just a little high, but we are making money at ASA.

 

[MedFlyer]

ASA reports it's financial data to the Bureau of Transportaion. ASA has had an operating profit each quarter this year.

1st Q 2004 16.1 million
2nd Q 2004 14.3 million
3rd Q 2004 21.4 million.

Data came from http://www.bts.gov/programs/airline_information/airline_financial_data/press_releases/index.html

100 million a year is just a little high, but we are making money at ASA.

Keep in mind that these numbers are submitted by DL. DL can make up any numbers they want and submit them to the DOT. I'm not saying the numbers are wrong, but they are based on whatever fee schedule DL chooses to give to ASA. DL could decide tomorrow to cut ASA's fees and all of the sudden ASA would be a loser.

 

[michael707767]

Keep in mind that these numbers are submitted by DL. DL can make up any numbers they want and submit them to the DOT. I'm not saying the numbers are wrong, but they are based on whatever fee schedule DL chooses to give to ASA. DL could decide tomorrow to cut ASA's fees and all of the sudden ASA would be a loser.

He is right. Delta can submit any numbers it wants to DOT. Thats why I mention SEC filings. Those numbers have to be proven and can be audited, with fines for lying. Ever wonder why Delta does not break out numbers for ASA and CMR in SEC reports? I'm not saying ASA is not making money, but until Delta files a report to the SEC breaking out the numbers, we will never really know.

 

[Lolikoka]

Until Information is Disclosed...

He is right. Delta can submit any numbers it wants to DOT. Thats why I mention SEC filings. Those numbers have to be proven and can be audited, with fines for lying. Ever wonder why Delta does not break out numbers for ASA and CMR in SEC reports? I'm not saying ASA is not making money, but until Delta files a report to the SEC breaking out the numbers, we will never really know.

You're both right - we do not know how Delta allocates costs and revenues between mainline and the subsidiaries, or with Delta Technology for their computer services to both mainline and the subsidiaries. So-called free markets only work at their theoretical best when information flows freely. Unless and until Delta/ASA/Comair disclose the true financial picture to show otherwise, we pilots can and must operate on the assumption that the company can pay us more than they are. Without a full, open, honest disclosure of the true financial picture, I will not take their word for it.

For those who haven't thought fully about allocation of costs and revenues - I offer the following. A passenger is flying from Shreveport to Atlanta (ASA), then on to Boston or Paris (Delta). Delta eats the costs of making the reservation, either on the 1-800-221-1212 reservations line, or by paying a commission to a travel agent. What if the person makes an on-line reservation? What is the role of allocating costs or revenue to Delta Technology - another subsidiary? We don't know. When the passenger gets to the airport - they check in with an agent. At some stations that is an ASA agent, at some stations it's a Delta agent, with the respective airline eating that cost, with probably no attribution of revenue or benefit to the other even though a portion of the trip is on the other carrier. What about the airfare - how is it allocated to ASA and Delta? Nobody knows. Some mainlines pay a fee to the regional partner and collect all revenue. Some share revenue. Does anyone know for certain what the arrangement is between Delta/ASA/Comair, and how this contrasts with Skywest or Chatauqua? Everyone has an opinion - I'd like to know what the truth is. I can hear it now - "you can't handle the truth!"

If management won't be honest with us - then we must keep demanding what we want until the company proves, through open dialogue and honest revelation of information, that they can't do it. Until they show some integrity, keep demanding a real contract for a real career.

 

[Tomct]

They don't ever want us to know how much we are really making, due to the fact that it would possibly cost them more in a contract. I agree that until they PROVE we are not making money (Yeah Right!) I want a much better contract! Plus, if we were not making money, why would Skip get a $855,000.00 bonus? Keep the faith brothers and fight for a better contract!

 

[FL990]

Mike,

I follow what you are trying to say and somewhat agree with the overall position you are trying to drive home....HOWEVER, If Delta wanted to make up numbers, I would think that they would make up numbers that would reflect COMAIR's expenses per mile being HIGHER than ASA and there total quarterly profits LESS that ASA. This is not the case with these numbers. I understand the value of collecting data from the SEC filings and yes, you are correct, they are more dependable.

BUT, If we get anything out of these numbers, we should realize and understand that the profitability of a company is not dependant soley on the wages of the pilots!! Comair pilots make more and they are more profitable.

So why isn't ASA making more money than Comair on a per mile basis (I understand that they are larger and therefore will have higher overall profits so i am limiting my discusion to a unit basis). The answer is they must be more efficient in other ways. Where?? I'm glad you asked(for arguments sake, lets exclude the latest scheduling computer fiasco by comair in this discussion)......how 'bout rampers. When's the last time you have gone to CVG and waited on a spot to park. I never have...or waited on someone to park you...I never have...paperwork...its there...boarding...they're ready....hustle.....yep, they do...oh its cold....yet they are still running....yep...they're there...etc etc etc. That not all, there employees in general are more efficient...all of them, there ops are run better.

Now, why??? part of this could be because there is far far less traffic at CVG than there is in ATL. I know that DFW was a much smoother op than ATL (B4 the ANNOUNCEMENT that is) It was smaller, less traffic and its on time % was better....

But look, the bottom line is that the profitability of a company is not soley dependant upon the pilots wages....comair proves this...but with respect to ASA's claims that they cannot "afford" to give us more money....well, that is a different argument....if our costs are higher...giving the pilots more money definitely isn't going to help matters for them. BUT, IS THIS OUR FAULT...NOOO!! its not. But we don't live in a perfect world and it is something we may have to live with.....because they are right about one thing....WE NEED GROWTH. Without it, the company stagnates and EVERYONE LOSES...FROM THE TOP DOWN!!!

Its a real perdicament.....what to do??