ALPA Response to Sr. VP-Operations August 4 Letter to Chief Pilots
August 5, 2004
Yesterday, Joe Kolshak, Senior VP—Operations, sent a letter to management pilots (and selected reporters) responding to MEC Chairman John Malone’s August 4 letter to all Delta pilots. Since it is important that you know the facts, the MEC Communications Committee would like to respond to a few points in Captain Kolshak’s letter. Below we will identify the reference in Captain Kolshak’s letter and then correctly state the ALPA position and the facts pertinent to that point.
· “This is not a take it or leave it process...There were no demands made.”
This is incorrect. The Chairman of management’s Negotiating Team, in his opening statement, declared that the figure of $1 billion was “non-negotiable.” Delta’s CEO, in his letter of July 30, 2004, also stated, “The $1 billion in annual savings represents the minimum amount … So, unlike traditional talks where a company’s opening proposal represents a ceiling from which it can afford to lower its target, this level of savings must be achieved.”
“Jumpseats: For heightened security reasons post 9/11, federal law has been changed and supercedes our contractual language. …. No change to the current jumpseat policy has been recommended.”
ALPA is not aware if any change in federal law regarding use of airline jump seats. We are aware of TSA regulations that limit OAL pilots from occupying the jumpseat. The industry has adapted to this, however, by allowing OAL pilots to book the jumpseat and actually occupy an unused passenger seat. Despite this fact, management proposed to eliminate OAL pilots from the contractual language. If this proposal became effective, Delta pilots would lose this reciprocal benefit for commuting and for other travel.
· “The Company also stated its desire to discuss these issues based on ALPA's request for jumpseat enhancements while mindful of the new security environment.”
The company has stated its willingness to discuss a flow back jumpseat. However, since it has been clearly explained at the table that the flow back jumpseat is intended for use by OAL pilots to occupy available passenger seats (so that DL pilot could enjoy a reciprocal privilege), then to agree to discuss this concept, while eliminating OAL pilot from the jumpseat language, seems a moot point at best.
· “Because the very rare bad actors adversely affect other pilots and ALPA as well as the company, we thought it was in our mutual best interest to revert to the prior contract’s language on the lookback period [3-5 years] for discipline.”
ALPA does not see the connection between the economic survival of the company and a change in discipline procedures. We also do not understand how a subject such as this is proposed for consideration given the “limited amount of time we have to do this . . . ,” mentioned in the CEO’s July 30th letter.
· “There was and is no intent to be punitive.”
Management is proposing to eliminate a long-established portion of the contract (24J) that provides company-paid trip drops when ALPA volunteers are performing union business, which often solves the company’s problems. For instance, since Contract 2000, ALPA has signed 43 side letters of agreement with management.
· “Limitations on profit sharing with foreign carriers and code-sharing with other carriers, regional jet employment, and anything else that limits our ability to become viable must be on the table for consideration.”
These proposed changes would make it possible for management to farm out many Delta pilot jobs to other U.S. and foreign carriers. Further, these proposed changes to our contract would make possible the generation of $100s of millions in additional revenue. While the company recognizes this cannot be done without changing our contract, none of the potential revenue gains are to be included in valuing our concessions.
· “The Company proposal for a flexible cap to 85 hours is to enable pilots to make up some of the pay loss from the pay rate reduction, and likewise other changes would allow reserves to fly beyond the 65-hour guarantee.”
Captain Malone did not specifically object to the idea of an 85-hour cap. What he objected to was an unrestricted 85-hour cap with pilots on furlough. Captain Kolshak does not mention how a pilot, who has just absorbed a huge pay reduction, would be able to “make up some of the pay loss” if the company sets the cap at the lower end of the proposed 70-85 hour range.
We note that that lowering the reserve guarantee to 65 hours on the premise that it will be easier to attain is a hollow gesture indeed. Ironically, certain of the changes both sides have proposed recognize the fact that it is rare for a reserve to exceed the guarantee.
· “The Company’s proposed changes to post-retirement medical benefits are not a ‘B-scale.’ They simply conform to benefit plans that non-pilot employees have.”
Regardless of what the proposed plan may conform to, the facts are that the proposal provides less than the current plan and will not apply to all retired pilots. In that sense, it fits the definition of “B-Scale” exactly.
· ““We are working on a combination of equity, profit sharing and some type of incentive tied to productivity.” The Company gave ALPA a profit sharing proposal in January, and last Friday told ALPA it was developing a new profit sharing plan and an equity plan and would have the new profit sharing plan to them shortly. The Company reiterated to ALPA its commitment to both.”
Because of management’s previous history in these negotiations (i.e. presenting a counter-offer that ignores ALPA’s proposals on our return on investment), ALPA clearly stated with our July 20th proposal that management should not counter without addressing such concerns. We do not believe that, “We’re working on it,” is a viable counter.
· “Because of the comprehensiveness of the plans being considered, some components of the equity plan cannot be finalized without Board and shareholder approval.”
In past negotiations, the parties have tentatively agreed to such proposals that were contingent upon subsequent approval by the board and shareholders. Despite Captain Kolshak’s comment that this “has been communicated to ALPA,” such communication has not occurred at the table or, to our knowledge, through any other channel.
· “We agree the pilot group alone cannot save Delta. Again, as Jerry assured in his letter: ‘Other stakeholders will be a part of the solution.’”
That our concessions were contingent upon other stakeholder participation was a part of our formal proposal. We do not believe assurances in a letter are an adequate counter-proposal.
· “We are working hard to restructure debt, renegotiate aircraft leases, and reconstruct our relationships with vendors and suppliers. Disclosing particulars at this sensitive stage could have real and profound negative repercussions—it simply would not be prudent to do it”
Delta has shared its most sensitive financial information and strategic data with ALPA in these and previous negotiations. We do not see that this information is any different or more sensitive.
· “Management’s motivation has always been and remains to avoid bankruptcy and rebuild a viable airline. We are working hard for an out-of-court solution.
ALPA wholeheartedly agrees. We do not, however, believe management’s proposal helps achieve this goal. The inclusion of the many and varied non-economic items and the elimination of most job security provisions, while demanding $1 billion per year, is inappropriate and counter-productive.
What you see above are the facts. To be clear, in ALPA’s July 20 proposal, the union requested several no-cost items (such as flowback jumpseat and PS travel to training on ASA and CMR). However, when this pilot group is offering approximately $700 million in annual cost savings, such minor quality of life issues are appropriate. We believe we will best be able to assist in the solution if our entire pilot group remains well informed. With that in mind, we will continue to communicate developments to you as they occur.
