DALPA retirement TA

[InclusiveScope]

This is Chris Renkel, MEC Communications Committee Chairman, on Monday, September 20, with a special update. Please note that this hotline is lengthy. It has been emailed to all pilots and is also available on the MEC website.

As you know, your Negotiating Committee met with management throughout the last several days to negotiate limited exceptions to the Pilot Working Agreement to permit the possible use of early-retired pilots returning to active status for a limited period of time. The major goals of these talks were to attain some protections for the Delta Pilots Retirement Plan and the operation. Early this morning, the Negotiating Committee and management reached a tentative agreement, which your MEC subsequently ratified this afternoon and will now send to the membership for your approval. Following is a brief overview of the tentative agreement. Much more information will be forthcoming.

Delta management has agreed it will not file to terminate the pilots’ pension plan before February 1, 2005, even if the company files for bankruptcy prior to this date.
Pilots “eligible” to be employed for a limited timeframe will have a retirement date of October 1, 2004, or later.
Eligible pilots must be Captain-qualified and current in the 777, 767-400ER, 767-300ER, 767-300, 767-200 or 757-200.
Management can access “Post-retirement Pilots,” or PRP, if the manning is at or less than 110% of the number of regular lines in a captain position on one of these aircraft models.
There will be a “random selection process” for the selection of Post-retirement Pilots.
ALPA can determine any time after January 2005 that no additional pilots can be employed as post-retirement pilots. Existing post-retirement pilots could serve until December 31, 2005 but only if they are serving in a position that would be staffed below the 110% level without them.
A Post-retirement Pilot will hold his relative seniority among other PRPs but be placed below all active and furloughed pilots for bidding and other purposes. He will be paid at the 12-year rate of pay for his position but will not accrue further benefits under the Delta Pilots Retirement Plan. He will be a pilot under the PWA subject to the specific provisions of the Letter of Agreement.
The recall of furloughees will not be slowed by the employment of Post-retirement Pilots. If it is employing PRPs, the Company cannot place pilots on furlough, subject to an exception if approved by a bankruptcy court.
Post-retirement Pilots will be able to collect their retirement benefits.
Over the next several days, you will be receiving a copy of the 23-page tentative agreement, a Chairman’s letter, Negotiators’ Notepad and questions-and answers. You will also have access to a webcast beginning Thursday that discusses the tentative agreement. Due to the compressed ratification timeline, we will be relying heavily on electronic communications. Additionally, your elected representatives will be in pilot lounges this week to answer your questions.

We strongly encourage you to check your email and the website frequently. Information on the ratification process is being mailed to you from ALPA National, and will be conducted in accordance with ALPA’s Telephone/Internet voting procedures. Ballots open Tuesday, September 21, at noon will close at noon on Tuesday, September 28.

That’s it for now. Thanks for calling.

 

[General Lee]

WOW. That is amazing.


September 20, 2004

Dear Fellow Pilot:

Today, your MEC ratified Letter of Agreement #45 subject to
membership ratification. If the Letter of Agreement is ratified, it
would allow Delta to employ newly-retired pilots if operationally
necessary. The agreement also includes written assurance from
management that the company will not file to terminate the
pilots’ pension plan prior to February 1, 2005, even if the
Company files for bankruptcy protection before that date, thus
providing us with some retirement protection. As your
representatives deliberated this issue and gave direction to your
negotiators, emphasis was placed on this near-term protection
of our retirement plan. Hopefully, this will reduce the likelihood
that pilots will hastily retire and will thereby reduce the need for
retired pilots to maintain the flying schedule. You will be
receiving detailed information on the tentative agreement to help
you make an informed decision during the membership
ratification process. In the meantime, I want to offer my personal
perspective on this difficult issue.

I find the concept of employing retirees – even our own – a
difficult issue to tackle. However, there are rare times when
firmly held beliefs are overcome by circumstances beyond our
control. This is one of those extraordinary events. Despite the
union’s significant efforts to date – including multiple waivers to
the contract via Letters of Agreement #43 and #44 – the
company still faces a real crisis. A large number of early
retirements, occurring as soon as October, could cause
operational problems resulting in the grounding of aircraft with
associated loss of revenue. CEO Gerald Grinstein has publicly
stated that, if faced with this situation, Delta would file for
bankruptcy by month’s end. The CEO’s threat was deemed
credible based on the Company’s precarious financial condition.
Your elected representatives took a broader view of the threat to
our careers and attempted to secure as much pension plan
protection as possible as part of any agreement addressing
staffing concessions.

To aid in our deliberations, the union enlisted the expertise of
legal, retirement and financial experts. The advice was
consistent: reaching an agreement on the retired pilot issue
now was by far preferable to having a solution imposed on us in
bankruptcy. An out-of-court settlement offered the union a
chance to shape the agreement and attain protections. We used
the crisis to provide some security to the retirement plan, control
who flies our jets (post retirement Delta pilots) and provide a
mechanism to pay protect other pilots. In bankruptcy, a judge
could decide our fate on this issue and many others.

I do not see this agreement as a “win-win.” I do view it as a
concession by the Delta pilots that is operationally necessary to
buy Delta additional time to restructure its debt, hopefully
outside of the courts. Your MEC’s willingness to even consider,
and ultimately ratify, such an agreement underscores the
seriousness of our situation.

Do not let this issue divide us. The unity this pilot group
displayed during the 2000 contract negotiations, and is proving
again in the present crisis, yielded the working agreement we
have now, and will serve us well as we go forward. We will
have far more difficult hills to climb in the coming weeks and
months. I hope that once you have carefully reviewed this
agreement, you will vote to ratify it. Let’s put the immediate
staffing crisis behind us and focus on the future. We still need a
comprehensive solution to Delta’s restructuring efforts that
involves all of Delta’s stakeholders. The tentative agreement is
now in your hands.

As always, thank you for your unwavering support.

Fraternally,

Capt. John J. Malone

Chairman, Delta MEC




Bye Bye--General Lee

 

[TonyC]

WOW. That is amazing.


Do we get to vote on that? I guess not.



Bye Bye--General Lee

Ummm, the last paragraph, General:

Information on the ratification process is being mailed to you from ALPA National, and will be conducted in accordance with ALPA’s Telephone/Internet voting procedures. Ballots open Tuesday, September 21, at noon will close at noon on Tuesday, September 28.

EDIT: Well, now I look silly since you changed your entire post while I was responding. Oh, well.

 

[General Lee]

Tony C,


Notice I edited it with Malone's message. I figured it out eventually.


Bye Bye--General Lee

 

[TonyC]

Tony C,


Notice I edited it with Malone's message. I figured it out eventually.


Bye Bye--General Lee

I noticed that you noticed that I noticed while you were noticing that I noticed you noticing - - I wonder if anybody else would have noticed....

 

[General Lee]

Probably not.


Bye Bye--General Lee

 

[MedFlyer]

Amazing how the threat of an imminent CH11 filiing gets things done. Nonetheless, congrats to DALPA on negotiating what looks like a pretty good package.

 

[TonyC]

Amazing how the threat of an imminent CH11 filiing gets things done. Nonetheless, congrats to DALPA on negotiating what looks like a pretty good package.

Good package in that it guarantees retirements for a short period. After that, it will allow Delta to furlough while employing "Post Retirement Pilots" that have their secure retirement.

Why did DALPA have to concede furlough protection?

It looks rotten from here.

 

[General Lee]

Tony C,


The No Furlough Clause probably would not have been kept in a negotiation because it really hasn't worked as well as it should have anyway. But, this agreement has now made early retiring a good thing, since the lump sums will be protected until Feb 05, and that means a lot more will be looking at going around DEC 31st, since it takes 4 weeks to actually get your lump sum (and it would be guaranteed until Feb 1st). And, it allows some of the pilots to stick around until DEC 31st of next year at the longest---probably let go before that when their replacement is trained. If Delta did anything that seemed punative or did that in a Chap 11 situation, a lot more people would leave. That would ensure a steady recall I believe. All this did was put a "drop dead date" on your GUARANTEED lump sum. If you decide to stay after Feb 1st, 05---then you may loose your right to 50% of your retirement in a lump sum, and then all bets are off to what you may or may not get in a Chap 11 senario. This agreement actually may make more people look at that DEC 31st date---even guys in their early 50s who could use that lump sum and still go off to Jetblue. (a lot know Dave Bushy---their new VP of flt ops and our old one)


Bye Bye--General Lee

 

[FDJ2]

it will allow Delta to furlough while employing "Post Retirement Pilots" that have their secure retirement.

Why did DALPA have to concede furlough protection?

It looks rotten from here.

Not having read the actual TA yet, if what you say is correct, that this agreement will allow DAL to furlough pilots while employing "post Retirement Pilots" (PRP), then I will have to vote NO.

The press release does suggest that a BK judge could impose furloughs, while DAL utilizes PRP. My guess is that this is exactly what DAL plans to do.

 

[General Lee]

I don't think they know what they are going to do two weeks from now. Also, there will be plenty of guys bailing out if things continue to get dicey, and there may be 500 early outs by DEC 31st, and not all of them get to stick around. Grinstein has not proposed shrinking this airline at all, and in fact has stated that we need to grow it (thru a rolling hub and a turn time initiative) 12-15% to combat the LCCs. An extra 60 flights a day in ATL alone in FEB adds up to over 1500 extra flights a month. Take 500 senior Captains on Widebodies (only 777, 764, and 757/767 Capts get this offer) out of the equation, and a lot of people still move up. Most of the senior DFW MD-90 Capts will leave for sure anyway since they do not want to commute anywhere. I doubt they will furlough anymore, but who knows? I think we will be short for a while...


Bye Bye--General Lee

 

[180ToTheMarker]

Off the subject here but I wonder if InclusiveScope ever actually goes to work. It seems he sits around waiting for news to happen so he can run to this board and be the first to post it. Anyone else notice this?

 

[formerdal]

Not having read the actual TA yet, if what you say is correct, that this agreement will allow DAL to furlough pilots while employing "post Retirement Pilots" (PRP), then I will have to vote NO.

The press release does suggest that a BK judge could impose furloughs, while DAL utilizes PRP. My guess is that this is exactly what DAL plans to do.

Here is the statement from the union.

"* The recall of furloughees will not be slowed by the employment of Post-retirement Pilots. If it is employing PRPs, the Company cannot place pilots on furlough, subject to an exception if approved by a bankruptcy court."

 

[av8n]

FDJ2 stated

"Not having read the actual TA yet, if what you say is
correct, that this agreement will allow DAL to furlough pilots
while employing "post Retirement Pilots" (PRP), then I will
have to vote NO.

The press release does suggest that a BK judge could impose
furloughs, while DAL utilizes PRP. My guess is that this is
exactly what DAL plans to do.


Unfortunately you are correct FDJ2. This TA sets a very dangerous precident for future bankruptcy procedings. This is the just the beginning. Talk about allowing the camel's head under the tent!

This TA also shows how liitle regard DALPA has for the furloughees in getting them back on the property quickly. Currently, DAL is only recalling 30 a month. DALPA could have easily tied in a quicker recall schedule for the furloughees into this TA.

My vote will be NO.

 

[General Lee]

A resounding NO vote will park planes and send us into Chap 11 quickly, and then there will be no lump sums for any Captain. A YES vote will make more look at early retirement and probably take it, allowing them to have that lump sum payment. Not everyone will stay, and planned expansion of mainline is currently in the Delta reservations computer. Any more shifty moves will send more packing. But, I would like Dalpa to explain their position on new furloughs a little better. I guess everything is up for grabs in a Chap 11 anyway.... This whole thing delays that possibility for a while.....


Bye Bye--General Lee

 

[vc10]

You'd rather be in Ch 11 than take care of the early retirement issue? You realize that Ch 11 is the most dangerous place in the world for a defined benefit pension plan. DB plans cannot be distressed terminated (which is what happened to the US Airways plan) except in Ch 11. You really want to stay away from there.

FDJ2 stated

"Not having read the actual TA yet, if what you say is
correct, that this agreement will allow DAL to furlough pilots
while employing "post Retirement Pilots" (PRP), then I will
have to vote NO.

The press release does suggest that a BK judge could impose
furloughs, while DAL utilizes PRP. My guess is that this is
exactly what DAL plans to do.


Unfortunately you are correct FDJ2. This TA sets a very dangerous precident for future bankruptcy procedings. This is the just the beginning. Talk about allowing the camel's head under the tent!

This TA also shows how liitle regard DALPA has for the furloughees in getting them back on the property quickly. Currently, DAL is only recalling 30 a month. DALPA could have easily tied in a quicker recall schedule for the furloughees into this TA.

My vote will be NO.

 

[General Lee]

It is best to TRY to keep this thing out of court if possible. I don't really know if it is possible, but on the outside it looks like this agreement would push more people to look at early retirement to keep their lump sums. There was a date given--a drop dead date---of Feb 1st, 05 for guaranteed lump sums, and if guys who are eligible don't take it, then it is there fault if they lose it eventually. Many will look at this and see that there is a possibility that they can stay on for 6 months or so and still get paid, while watching their lump sum accrue interest in a bank somewhere. At the same time, more guys will leave and allow for the recalls to continue. Remember, Malone and Wycoff (the lead negotiator) made this recall schedule to try to last even through a Chap 11 senario. I would love it if all of our furloughs came back now, but it won't happen that way. If we lost 500 senior Capts at once, the majority of the furloughs would still be out for awhile, and our company would have a bunch of heavies parked. The more planes we have flying and the more senior Capts we have signing up to save their lumps sums, the faster we will get back our furloughed brothers and sisters. We have to keep those planes flying.


Bye Bye--General Lee

 

[av8n]

General Lee states:
"A resounding NO vote will park planes and send us into Chap 11 quickly, and then there will be no lump sums for any Captain. A YES vote will make more look at early retirement and probably take it, allowing them to have that lump sum payment. Not everyone will stay, and planned expansion of mainline is currently in the Delta reservations computer. Any more shifty moves will send more packing. But, I would like Dalpa to explain their position on new furloughs a little better. I guess everything is up for grabs in a Chap 11 anyway.... This whole thing delays that possibility for a while....."


We have NOT had 1 cancelled flight due to the 300 pilots retireing in July. NOT ONE CANCELLATION! We also passed Side Letter of Agreement #43 which allows the company to increase the cap for certain aircraft categories. Now all of a sudden, CEO Jerry Grinstein, publically states in the press that the company will go under because of pilot retirements. What excuse will he use next for Managements lack of ability in running an airline?

Let us not forget -- Management can declare bankruptcy at ANY time. Just look at USAir. The pilot group was negotiating with the company when management decided to just declare Bankruptcy on a Sunday.

This TA will set a terrible precident. And once this precident is set -- the possibility of it going into effect for other airlines in/out of bankruptcy is very real.

I will vote NO.

 

[General Lee]

What is the precident? There is a starting point and an ending point to this agreement, ending in DEC 05. (even though the ending point is a ways off) There is an ending point for protection of your lump sum, and guys will look at that and probably bail out. Sure, the no furlough protection is really not there, but would NOT be there anyway in a Chap 11 senario. It delays the forced Chap 11 if we vote YES on the TA. You are, though, allowed to vote any way you choose.


Bye Bye--General Lee

 

[FDJ2]

The entire TA is 23 pages long, but I have now had an opportunity read it. I have not seen anything in this TA that authorizes the company to either furlough pilots or not proceed with the recall of FM1 furloughed pilots. That being said, I'll reserve final judgement on this TA until I can more thouroughly study it and hear the pros and cons. Here are some excerpts that some might find interesting.

3.Non-precedential

Neither the Company nor the Association will cite this Letter of Agreement as a precedent in connection with any discussion or negotiation with the Association or the Company, respectively, current or future, or in connection with any grievance or other legal proceeding, other than a grievance or other legal proceeding to enforce one or more terms of this Letter of Agreement.

7.b. Upon no less than seven days written notice to the Company’s Vice President of Flight Operations, the Association may terminate, at its discretion, the Company’s authority to offer employment, to post-retirement pilots (including eligible LCPs), and such termination will be effective on the first day of any bid period after the January 2005 bid period. Once terminated, such authority may not be reinstated, and any remaining eligible Captains will remain as retired pilots, but the cessation of the post-retirement employment will be governed by paragraph 8.

8. Cessation of Employment of Post-Retirement Pilots

a. If in a bid period the number of currently qualified pilots in a qualifying position, including post-retirement pilots other than those serving as LCPs, exceeds 110% of the number of regular lines in that qualifying position, the Company will terminate the post-retirement employment, in inverse order of seniority, of that number of post-retirement pilots (rounding upward, as specified in paragraph 7. a. 2), to the next higher integer) sufficient to reduce the number of currently qualified pilots in that qualifying position to the 110% level. Such cessation of employment will take effect on the first day of the next bid period.

9.

No Negative Effect on Staffing and Recalls

a. The Company will not permit the employment of a post-retirement pilot to delay or limit the Company’s actions necessary to staff that position at levels adequate to fulfill the marketing schedule for the applicable equipment model. For example,

1) The Company will post and award bids for vacancies (including contingent vacancies), and will train pilots at no lesser rate than if there were no post-retirement pilots.

2) The Company will train pilots to perform the functions of LCPs at no lesser rate than if there were no post-retirement pilots serving as LCPs.

b. The recall rate of furloughed pilots will not be reduced by the employment of post-retirement pilots.

10.

Compensation of Post-Retirement Pilots and Pay Protection of Other Pilots

b. If, during a bid period in which the Company employs a post-retirement pilot, there is a lesser number of pilots (pre-retirement) in a position than mandated by CMPS total pilots required (without giving effect to cancelled vacations), the Company will identify and pay protect, in accordance with the differential pay formula in paragraph 10. d., the number of pilots holding an award to that position equal to the shortfall below the CMPS total pilots required.

11.

Representation, Scope, Seniority, Bidding, Training, and Furlough

a. A post-retirement pilot is a pilot within the craft or class of pilots represented by the Association pursuant to the Railway Labor Act, as amended, and Section 1 of the PWA.

d. A post-retirement pilot will hold a position on the seniority list effective on the date he commences employment as a post-retirement pilot and will remain on the seniority list until his post-retirement employment ceases. Notwithstanding Section 20 B. 1., however, his position on the seniority list will be adjusted to place him below the most junior pilot on the seniority list who is not a post-retirement pilot, while maintaining the relative seniority among post-retirement pilots as reflected on the September 1, 2004, seniority list.

g. No pilot will be placed on furlough during the employment of a post-retirement pilot.

19.

Duration

This Letter of Agreement will become effective upon its date of signing and remain in effect until the earlier of a) December 31, 2005 and b) termination of the employment of the final postretirement pilot, and is not subject to renewal or extension under the Railway Labor Act, as amended, or otherwise. If, however, as of March 3, 2005, the Company has employed no post retirement pilots, this Letter of Agreement will terminate effective that date. Paragraphs 7 c., 17, and 18, and Attachment A will, however, continue without change in accordance with their terms notwithstanding the termination of this Letter of Agreement under either the first or second sentence of this paragraph.