General Lee
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Delta pilot leaders approve labor deal for NWA merger
Agreement still needs OK from airlines' rank and file
By KELLY YAMANOUCHI
The Atlanta Journal-Constitution
06/26/08
Leaders of Delta Air Lines' pilots union voted Wednesday to approve a tentative Delta-Northwest pilot labor
agreement.
Northwest Airlines' pilots union leadership will vote on the tentative agreement during a meeting Thursday and
Friday. It also is subject to ratification by rank-and-file pilots at each airline. The vote was part of a
continuing effort to resolve differences between the two airlines' pilot groups on seniority and pay parity.
Those key issues halted negotiations between the pilots of Atlanta-based Delta and Eagan, Minn.-based Northwest in
the weeks before the airlines' mid-April merger announcement.
Seniority determines a variety of factors, including which planes pilots qualify to fly. It also can affect pay.
Delta pilots worry their existing senior status could erode depending on how they combine with the Northwest pilots,
who are older and more experienced, on average.
But the Delta pilots are better-paid than those at Northwest, and the Northwest pilots want to ensure their pay will
be bumped to Delta's level.
The tentative agreement would bring Northwest's pilot pay to that level, said Lee Moak, chairman of Delta's master
executive council.
"It's the same pay on Day One," said Moak, who plans to travel to Minnesota on Thursday to meet with Northwest pilot
union leaders.
The tentative agreement also includes 4 percent to 5 percent pay raises from 2009 through 2012 and equity in the
combined company for Delta and Northwest pilots.
On seniority integration, the pilot union leaders agreed to set up a process for reaching consensus. If the pilot
unions do not reach agreement by a set deadline, then the details will be worked out through binding arbitration
before the merger closes.
Delta's pilot union leaders voted unanimously for the tentative agreement, a longtime Delta pilot said.
"It is a great deal for Delta," the pilot said. "The Northwest pilots do indeed have pay parity, and that's what
they wanted to hear coming out of this deal."
Delta pilots won't be taking a pay cut to bring Northwest pilots up to the same pay rate, the pilot said.
The pilot said both pilot groups lost equity in the proposed new airline by not agreeing to a deal before the merger
was announced. Nevertheless, the pilot called the new agreement "an all-around good deal."
If ratified, the tentative agreement would clear a major hurdle toward the proposed merger by ensuring pilots from
both airlines operate under the same contract in a merged company.
Pilot disputes have hobbled past airline mergers, notably the 2005 combination of US Airways and America West. Those
pilots still work under separate contracts, hampering the merged airline's full operational integration.
"There's this perception that airline mergers don't work" because of labor issues, said Mike Campbell, Delta's
executive vice president for human resources, labor and communications. "We wanted to change the paradigm" by
reaching a pilots agreement before the deal closes.
The tentative joint contract is different from a labor agreement ratified by Delta's pilots in May, but it is based
on that agreement, according to the Delta pilots union.
That agreement also included annual pay raises of 4 percent to 5 percent and a 3.5 percent equity stake for Delta
pilots in the combined company.
The joint contract, if ratified, would become the pilot contract for the combined carrier.
The pilots agreement allows Delta management to speed up efficiencies in scheduling, operations and its combined
fleet of aircraft, according to a report Wednesday from CreditSuisse analyst Daniel McKenzie.
Even if the Delta and Northwest pilots agree to a joint contract, the airlines have work to do to get their proposed
deal done by the end of the year, as executives have forecast.
Regulators must give the OK. Delta and Northwest filed Tuesday for European Union regulatory approval of their
proposed combination.
The merger also is being reviewed by the U.S. Department of Justice. On Wednesday, U.S. Sen. Herb Kohl (D-Wis.)
issued a statement urging the Justice Department to "closely examine" the proposed merger's effects on Midwest
Airlines, partially owned by Northwest and based in Oak Creek, Wis.
Shareholders also must approve the merger, which has lost about half its value since first announced April 14.
Delta's proposed all-stock purchase of Northwest fell to a value of $1.74 billion Wednesday. Delta shares closed up
slightly at $5.31. Northwest gained 2.7 percent to close at $6.08.
The deal calls for each share of Northwest to be exchanged for 1.25 Delta shares
That Delta pilot says "It's a great deal for Delta." Does that mean not for the Delta pilots? Fruedian Slip?
Bye Bye---General Lee
Agreement still needs OK from airlines' rank and file
By KELLY YAMANOUCHI
The Atlanta Journal-Constitution
06/26/08
Leaders of Delta Air Lines' pilots union voted Wednesday to approve a tentative Delta-Northwest pilot labor
agreement.
Northwest Airlines' pilots union leadership will vote on the tentative agreement during a meeting Thursday and
Friday. It also is subject to ratification by rank-and-file pilots at each airline. The vote was part of a
continuing effort to resolve differences between the two airlines' pilot groups on seniority and pay parity.
Those key issues halted negotiations between the pilots of Atlanta-based Delta and Eagan, Minn.-based Northwest in
the weeks before the airlines' mid-April merger announcement.
Seniority determines a variety of factors, including which planes pilots qualify to fly. It also can affect pay.
Delta pilots worry their existing senior status could erode depending on how they combine with the Northwest pilots,
who are older and more experienced, on average.
But the Delta pilots are better-paid than those at Northwest, and the Northwest pilots want to ensure their pay will
be bumped to Delta's level.
The tentative agreement would bring Northwest's pilot pay to that level, said Lee Moak, chairman of Delta's master
executive council.
"It's the same pay on Day One," said Moak, who plans to travel to Minnesota on Thursday to meet with Northwest pilot
union leaders.
The tentative agreement also includes 4 percent to 5 percent pay raises from 2009 through 2012 and equity in the
combined company for Delta and Northwest pilots.
On seniority integration, the pilot union leaders agreed to set up a process for reaching consensus. If the pilot
unions do not reach agreement by a set deadline, then the details will be worked out through binding arbitration
before the merger closes.
Delta's pilot union leaders voted unanimously for the tentative agreement, a longtime Delta pilot said.
"It is a great deal for Delta," the pilot said. "The Northwest pilots do indeed have pay parity, and that's what
they wanted to hear coming out of this deal."
Delta pilots won't be taking a pay cut to bring Northwest pilots up to the same pay rate, the pilot said.
The pilot said both pilot groups lost equity in the proposed new airline by not agreeing to a deal before the merger
was announced. Nevertheless, the pilot called the new agreement "an all-around good deal."
If ratified, the tentative agreement would clear a major hurdle toward the proposed merger by ensuring pilots from
both airlines operate under the same contract in a merged company.
Pilot disputes have hobbled past airline mergers, notably the 2005 combination of US Airways and America West. Those
pilots still work under separate contracts, hampering the merged airline's full operational integration.
"There's this perception that airline mergers don't work" because of labor issues, said Mike Campbell, Delta's
executive vice president for human resources, labor and communications. "We wanted to change the paradigm" by
reaching a pilots agreement before the deal closes.
The tentative joint contract is different from a labor agreement ratified by Delta's pilots in May, but it is based
on that agreement, according to the Delta pilots union.
That agreement also included annual pay raises of 4 percent to 5 percent and a 3.5 percent equity stake for Delta
pilots in the combined company.
The joint contract, if ratified, would become the pilot contract for the combined carrier.
The pilots agreement allows Delta management to speed up efficiencies in scheduling, operations and its combined
fleet of aircraft, according to a report Wednesday from CreditSuisse analyst Daniel McKenzie.
Even if the Delta and Northwest pilots agree to a joint contract, the airlines have work to do to get their proposed
deal done by the end of the year, as executives have forecast.
Regulators must give the OK. Delta and Northwest filed Tuesday for European Union regulatory approval of their
proposed combination.
The merger also is being reviewed by the U.S. Department of Justice. On Wednesday, U.S. Sen. Herb Kohl (D-Wis.)
issued a statement urging the Justice Department to "closely examine" the proposed merger's effects on Midwest
Airlines, partially owned by Northwest and based in Oak Creek, Wis.
Shareholders also must approve the merger, which has lost about half its value since first announced April 14.
Delta's proposed all-stock purchase of Northwest fell to a value of $1.74 billion Wednesday. Delta shares closed up
slightly at $5.31. Northwest gained 2.7 percent to close at $6.08.
The deal calls for each share of Northwest to be exchanged for 1.25 Delta shares
That Delta pilot says "It's a great deal for Delta." Does that mean not for the Delta pilots? Fruedian Slip?
Bye Bye---General Lee
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