DAL BK worst option for recovery

[InclusiveScope]

Inclusivescope,

As far as the underfunded pensions------it is all tied in with the stock market. Since the stock market is up---the pension shortfalls are down. And, to top that off--we have had pension relief from Congress--which enables a company an extra two years to delay required pension payments----and in reality we still paid our first large payment this last quarter anyways.....

Both you and Sleepy are looking for problems, and I have seen nothing mentioned about the pension problems in a long while. Thanks for caring---but no dice--again.

General,
I'm not looking for problems - rather the problems have been thrown at us. Some of us are anticipating these problems and some of us are sticking our heads in the sand wishing they would go away. We will all be better off if you are right General. However I am not putting my eggs in that basket.

As for the pension short fall, this was just released. Before you get too excited, the problem is still dire for two industries - the airline industry and the steel industry (read it carefully). The similiarities to Social Security are scary. I for one am not the least bit interested in subsidizing your retirement. That is what poorly funded defined contribution plans do - the current generation subsidizes the retired generation. I am funding my own retirement and will not fund yours.


Reuters
UPDATE - Severe U.S. pension shortfalls ease in 2003
Thursday June 17, 12:30 pm ET
By Susan Cornwell

(Adds quote, background)

WASHINGTON, June 17 (Reuters) - Underfunding at U.S. companies with severe pension shortfalls fell slightly last year to $278.6 billion, but was still much worse than five years ago, the U.S. pension agency said on Thursday.

[size=-2]ADVERTISEMENT[/size]on error resume nextplugin=(IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.5"))) The Pension Benefit Guaranty Corporation, which insures the private pensions of about 44 million Americans, said aggregate underfunding at companies with pension shortfalls of over $50 million, was down in 2003 from $305.9 billion a year earlier.

However, the number was up dramatically from just $18.4 billion reported in 1999, before an economic recession and stock market declines hurt many companies.

A big chunk of pension underfunding persisted in two of the hardest-hit industries, the airline and steel industries, the agency said. They have made more than 70 percent of the claims against the PBGC's insurance program since it was created in 1974.

U.S. companies with pension underfunding of more than $50 million at the end of 2003 were required to file special reports to the agency by April 15, giving details of the shortfalls. While the reports are confidential, the agency is allowed to release the aggregated data to the public.

Usually the agency waits months to release the information, but its new director Brad Belt decided it should go out now, while Congress and the Bush administration are discussing possible reforms to the pension system.

"Workers and investors have a right to know the financial status of pension plans," Belt said in a statement.

The number released on Thursday does not embrace all underfunding at companies with traditional pensions, because some pension plans are underfunded by less than $50 million.

If underfunding in all companies with traditional "defined benefit" pension plans were included, the total shortfall would be "significantly higher," the agency said. This total was estimated at about $400 billion at the end of last year.

Defined benefit pension plans (News - Websites) pay a fixed payout at retirement. Apart from the airline and steel industries, underfunding in these plans was fairly rare in the 1990s bull market, when companies got good returns on their investments.

But more recently low interest rates and lower returns on stocks have made underfunding more common.

The severely underfunded pensions, about 1,050 plans covering millions of workers and retirees, had $641.8 billion in assets to cover $920.3 billion in liabilities, and were on average less than 70 percent funded last year, the PBGC said.

Companies clamoring for help with struggling pension plans spurred Congress to approve a temporary fix in April, approving $80 billion in relief for companies over two years by changing the way contributions to plans are calculated. The new law also included extra aid for airlines and steel companies.

With some experts arguing that structural flaws in the pension system need to be addressed, lawmakers are also examining long-term reforms to the funding challenge.

The PBGC takes over bankrupt pension plans and pays benefits to retirees, although not always at the level they would have otherwise received. It finances operations with insurance premiums paid by companies and investment returns.

 

[XRMEFLYER]

X-ream-me,


What? You sound ridiculous. So, you're calling me a "turd", right? Ummm, ok. Riiiiight....

Bye Bye--General Lee

... and a smart one too!

 

[satpak77]

DAL stock DOWN HARD

if General's comments that DAL is really in better shape than management claims, why is DAL stock at all time lows, while the overall market is UP?

If this was a bad stock market, yes, I would understand, but its not.

What the he11 is going on with DAL?

 

[FDJ2]

There should be a provision that those regional pilots will someday migrate to the mainline carrier.

I thought you RJDC folks didn't want a flow through like Babbitt is suggesting.

 

[FDJ2]

BINGO!

Hold on to your knickers, the overwhelming majority of pension funding is for non contract employee pensions. There is no need to eliminate those through BK.

 

[FDJ2]

Inclusivescope,


We will finally get rid of that lame first offer of 14%---which management harps on--even though we have been open to negotiate all along.

General, there is nothing lame in our original offer. Had the Company accepted it last year, when it was offered, they would have already saved $300M. But then again never underestimate management's ability to make poor decisions. Some of our other management whoppers include the selling of our fuel hedge contract for $83M will now cost us an additional $750M in fuel at todays rate, management squadered $2.5B in stock buy backs, $3B in acquiring the full equity in two regional feeders, when regional feed can be obtained without owning the equity and $700M in lost revenue due to a strike by the regional pilots we just acquired. That's roughly $7B gone with nothing to show for it but a couple of regional airlines we probably couldn't spinoff for more than a dime on the dollar for what was spent to acquire their equity.

 

[~~~^~~~]

General, there is nothing lame in our original offer. Had the Company accepted it last year, when it was offered, they would have already saved $300M. But then again never underestimate management's ability to make poor decisions. Some of our other management whoppers include the selling of our fuel hedge contract for $83M will now cost us an additional $750M in fuel at todays rate, management squadered $2.5B in stock buy backs, $3B in acquiring the full equity in two regional feeders, when regional feed can be obtained without owning the equity and $700M in lost revenue due to a strike by the regional pilots we just acquired. That's roughly $7B gone with nothing to show for it but a couple of regional airlines we probably couldn't spinoff for more than a dime on the dollar for what was spent to acquire their equity.

FD2:

Do you really not know that the fuel hedging requires good credit ratings, which Delta did not have when it came time to execute the contracts?

 

[lowecur]

General, there is nothing lame in our original offer. Had the Company accepted it last year, when it was offered, they would have already saved $300M.

FDJ2, I have always regarded your posts as rational, but trust me the 14% was lame. Saving $300M is a drop in the bucket in trade for a long term contract that would still have put the company at deaths door in a few years. Mgt screwed up big time with the other decisions, but it's time to move on and start fresh.

 

[General Lee]

FDJ2,


I actually agree with Lowecur (for once!). I think we should give a larger portion, but not one that totally takes advantage of our position. We should also have some participation from creditors, like Boeing, and restructure some of our debt. We won't get the higher bond rating without giving more than the 14%, and the higher bond rating will help us get better refinancing. I am not giving in here---I still want it to be fair--and Dalpa will have to find that spot. I think they will......

Bye Bye--General Lee

 

[InclusiveScope]

There should be a provision that those regional pilots will someday migrate to the mainline carrier.

I thought you RJDC folks didn't want a flow through like Babbitt is suggesting.

Ahhh yes, pick the part of the interview that you like. The reason I posted this interview was to show that even the previous ALPA President admits that ALPA made a mistake. You ignored the mistake part and went the part of the interview that shows that while many now know that mistakes were made, they still don't understand how to fix the problem.

If solving this problem in your eyes means that the half of us that work in the "regional" side of the house must "flow through" to the other half of the house, then you still don't get it. If I simply "flow through" to mainline what has that accomplished. There would still me multiple groups competing for the jobs. I would simply be starting over at the same company I currently work for - only it will be 5 or 6 years from now.

Why do you mainline pilots keep pushing this ponzi scheme idea like a crack dealer? Show me one flowthrough that has benefitted the "regional" side of the house.

 

[General Lee]

Inclusivescope,


Remember, nobody saw 9-11 coming. If you did, why didn't you say anything? 9-11 really screwed things up for a lot of pilots---and that includes the flowthrough guys at AA and CAL. Before 9-11, a lot of those guys had a pretty good deal---probably 400 COEX guys (I may be wrong about the exact number) moved up from the ERJ to a 737 or better. Some AA Eagle guys also moved up. Not a bad deal---but 9-11 did wreck a lot of peoples lives--and unfortuately killed a bunch too.

Bye Bye--General Lee

 

[InclusiveScope]

Hold on to your knickers, the overwhelming majority of pension funding is for non contract employee pensions. There is no need to eliminate those through BK.

Not at Delta FDJ2. The only group at Delta with a Defined Benefits plan is the Delta pilots. If you are talking about current funding (this year) then you are comparing apples to oranges. The DC plans require a pay as you go approach. DB plan underfunding gets worse as you look ahead. Like Social Security, we are playing games with the numbers and pushing the problem downstream rather than fixing it.

 

[InclusiveScope]

Inclusivescope,


Remember, nobody saw 9-11 coming. If you did, why didn't you say anything? 9-11 really screwed things up for a lot of pilots---and that includes the flowthrough guys at AA and CAL. Before 9-11, a lot of those guys had a pretty good deal---probably 400 COEX guys (I may be wrong about the exact number) moved up from the ERJ to a 737 or better. Some AA Eagle guys also moved up. Not a bad deal---but 9-11 did wreck a lot of peoples lives--and unfortuately killed a bunch too.

Bye Bye--General Lee

General,
911 did not cause this. The Deregulation Act of 1978 combined with poor planning on ALPA's part caused this mess. 911 simply accelerated the train wreck. Amway and other multi-level marketing schemes work well for those at the top of the pyramid - but they do little for those at the base of the pyramid. Let's look at your 2 examples - CAL EXP and EGL. There are currently about 5000 Eagle and Coex pilots. There are currently almost 3000 AA and CAL pilots on furlough. That totals 8000 pilots. You do the math General. How does that stack up to your 400 COEX and "some Eagle guys" who moved up? You guys toss these ideas out without doing the math - they don't add up!

 

[InclusiveScope]

$700M in lost revenue due to a strike by the regional pilots we just acquired. That's roughly $7B gone with nothing to show for it but a couple of regional airlines we probably couldn't spinoff for more than a dime on the dollar for what was spent to acquire their equity.

The truth comes out FDJ2. For the record, you did not acquire me. You and DALPA may think you own me and my fellow ASA and CMR pilots - but you will soon learn the truth.

 

[wms]

Here's what former ALPA president Randy Babbitt said in 1997 in Air Line Pilot Career magazine:

ALPC: Scope seems to be becoming a hot topic during airline contract negations. Would you share some of your views on the scope issue?

Babbitt: The difficulty arose probably from some shortsightedness during the early days of deregulation. I say shortsightedness — I blame us, ALPA, as much as anybody, myself included. I was a member of a negotiating team at the time and the carriers came to us and said, "Look, you know we're deregulated and we are going to sell those Convairs, those Electras, DC-7s or whatever, simply because they are not profitable anymore. We're not going to fly into small cities anymore, but you wouldn't mind if PBA or some other commuter did it, would you?" We said, "No, as long as you respect our scope clause, we'll give you permission." In retrospect, with the incredible clarity that 20 years of hindsight will bring, we should have said, "Yes, we care, it's our plan. If the company wants to buy some Beech 99s or F-27s, we'll fly them. We'll put a section in our contract. Set up a division and have a system similar to a farm team. But, one seniority list." Sure, we might have had to change some work rules, but that's been going on for a long time, too. We have international rules and now we have shuttle rules with some carriers. We could have had regional rules. That's where the problem was hatched. The solution in my view would be that we need to acknowledge that this is airline system flying. In other words, if you fly for USAir, the flying done by all of USAir and its code-sharing partners should be USAir system flying. There should be a provision that those regional pilots will someday migrate to the mainline carrier. They are already flying the colors; they have the corporate loyalty. This is just a convenient bypass mechanism the carriers have instituted to keep us somewhat apart.

ALPC: So if a pilot is flying a regional jet, then they should be on the mainline seniority list?

Babbitt: Sure.

What Babbit suggested was One List. And that is the only acceptable means, with a staple of the regional partner ( I did say staple, GL). Flow throughs like those being used now, with complicated formulas don't work and are unacceptable. They were only a ML solution to patronize the regional pilots. Either put up a real one-list plan or forget it.

 

[satpak77]

timeline on yes/no Pilot concessions?

do we have a timeframe when the final "yes" or "no" will be given on pilot concessions?

we may be seeing a AMR scenario circa Feb 2003 when the stock was in severe decline, an almost-Ch.11, and then concessions. Stock then went from $2 to 17 months later.

I think you can replace AMR with "DAL" and we are seeing the same thing

 

[FDJ2]

FD2:

Do you really not know that the fuel hedging requires good credit ratings, which Delta did not have when it came time to execute the contracts?

Did you not know that DAL already had the contract and sold it for $83M earlier this year?

 

[General Lee]

Fins,


That is correct. We had a 50% hedge at $28 a barrel, and then they sold it to fund pensions that really did not have to be funded for an extra 2 years due to pension relief from Congress. It looks like you, Fins, don't know everything also....

Bye Bye--General Lee

 

[sleepy]

Sleepy,

Let me guess....Lav dumper? Chicks love those blue hands! Make sure you wear the full face mask.

Bye Bye--General Lee[/QUOTE]


Well General, for what they are going to pay me, I'll be glad to dump the lav too.

As for looking for negatives, I think I am just looking a reality, something that seems to be lacking on your side of the property. Anyway, I do whish you guys luck, as you will need it.

 

[FDJ2]

Ahhh yes, pick the part of the interview that you like. The reason I posted this interview was to show that even the previous ALPA President admits that ALPA made a mistake. You ignored the mistake part and went the part of the interview that shows that while many now know that mistakes were made, they still don't understand how to fix the problem.

If solving this problem in your eyes means that the half of us that work in the "regional" side of the house must "flow through" to the other half of the house, then you still don't get it. If I simply "flow through" to mainline what has that accomplished. There would still me multiple groups competing for the jobs. I would simply be starting over at the same company I currently work for - only it will be 5 or 6 years from now.QUOTE]

Ahhh yes, the old competing for the flying argument. News flash, there is always competition for the flying, that's why scope clauses were invented, and that's why the RJDC, despite their rhetoric, aims to eliminate scope, so that more jobs could be outsourced to cheaper labor.

I'm not disputing the first half of Babbitt's opinion, I'm just pointing out the second half, which you seem to have a problem with. You seem all to happy to go along with the first half of what he says, but then you attempt to ignore the second half which argues for flow through provisions.