Delta pay cuts not enough ?

[flaps30]

Delta's Proposed Cuts In Pilot Wages Not Enough -Analyst
Thursday May 1, 9:56 am ET
By Ann Keeton, Of DOW JONES NEWSWIRES


CHICAGO (Dow Jones)--A proposal by Delta Air Lines Inc. (NYSEAL - News) that its union pilots take a 22% pay cut would cut the company's losses by $2 a share this year, according to one analyst's forecast, saving between $375 million and $400 million annually.

But in a report Thursday, Jamie Baker at J.P. Morgan Securities said Delta should have asked for more. "The proposed 22% pilot pay would move Delta pilots from industry-leading pay to, well, industry-leading pay," he said. The proposal didn't include changes in work rules to improve efficiency.

Baker expects the pilots, represented by the Air Line Pilots Association (News - Websites), to accept the deal "for the simple reason that it could have and should have been a lot worse," Baker wrote.

The union said Wednesday it is studying the company's proposal.

All major airlines are working to cut costs in the worst downturn in commercial aviation history.

Baker said Delta's deal is "mediocre, particularly in light of continued labor momentum at UAL."

On Wednesday, a bankruptcy judge approved labor cuts at United that will save the airline more than $2.5 billion per year over six years and help the nation's second-largest carrier emerge from bankruptcy.

American Airlines, a unit of AMR Corp. (NYSE:AMR - News) put a new cost-cutting plan in place last week, and Northwest Airlines Corp. (NasdaqNM:NWAC - News) currently is in talks with its unions.

Baker said all those airlines will get more concessions from their pilots than what's in Delta's proposal. Delta's pilot pay rates, if they are put in place across the board, would be 12.5% higher than United. For flying certain types of airplanes, Delta could be paying 22% more than American, Baker said, although unlike at United, American pilots will receive raises in subsequent years.

At Delta, pilots are the only major employee group represented by a union. Historically, Delta, the third-largest U.S. airline, has said it wants its workers to be the best paid in the industry.

Baker said Delta's management may be looking for an agreement that maintains its "industry-leading" pay packages to quickly get labor issues behind it.

For investors, the analyst wrote, "getting the right deal done ought to be more critical than simply getting any deal done sooner rather than later."

Baker, who doesn't own Delta stock, has an overweight rating on the shares. J.P. Morgan has a financial relationship with the airline.

 

[General Lee]

Flaps30,

This bonehead analyst thinks so, even though his firm was just fined part of the $1.4 billion Wall Street Fraud scandal. The key thing here is that Delta has not asked any of it's other employees for pay cuts, yet. The pilots aren't going to take all of the cuts, no way. As soon as the pilots give something up (22% doesn't count the extra 10% in raises we are due, including the 5% raise we got today) they will give everyone else a 10-15% pay cut(all 50,000 other employees) and say they have to be competitive with UAL/AA. If and only if Dalpa were to give in the ENTIRE amount Delta wants---or 32%---(22%+10% in raises), then maybe Delta would not have to go to the other employee groups. We are also hoping other employee groups would like to "share the pain"----like the ASA/Comair pilots. You want to be a part of us, right? Well, welcome aboard!!!! They will not get even close to the 32%, but they will probably get something. There was no mention of extra pilots cuts needed, which is also a good thing. Now it is time to work on getting back our current furloughs.

Bye Bye--General Lee

 

[180ToTheMarker]

If the suits at big D were so worried about money, they shouldn't have given all the executives raises and bonuses to "retain top talent." I feel that if the Delta pilots give in, then management will use that extra cash to line their greedy pockets! Good luck to the Delta pilots.

 

[g159av8tor]

General,

Is it ethical to ask the Executive Assistant I, ie secretary, who makes $21,300/YR to take a pay cut too? What about the professional, highly trained, college educated (or better)ASA/Comair FOs who make $21,300/YR? Them too?

I agree, share the pain, but be fair and honest. Look in the mirror and try to empathize with those who don't drive a foreign car, or live in Peach Tree City, have 2 ex-wives and their children in private schools. Believe me, I want nothing more than to someday fly for DAL and make easy money (hell, I almost steal money now, just not as much). I'm also for protecting the profession, our QOL, blah, blah, blah.

But listen, until somebody figures out how to run an airline and gets rid of today's incompetent airline management, we're all pretty screwed. We all know how the industry got to this new low after making record profits in the late 1990s, but no rising star has figured out how to pull it out of the downward spiral.

On another note, I'm also sick to death of the "Us vs. Them" attitude among "regional" and "major" airline pilots (aka ALPA members) when it should be ALPA vs. Management. The General should know you can't win a war with a divided front.

We're all too **CENSORED****CENSORED****CENSORED****CENSORED** fickle with one eye in the mirror; one eye behind looking behind our back (I do realize that you can see someone sneaking up behind you in the mirror, but the ANALogy is personal vanity); one hand counting our cash; and the other in the pockets of our brother.

Tailwinds...

 

[embdrvr]

We are also hoping other employee groups would like to "share the pain"----like the ASA/Comair pilots.

I think the pain sharing should be limited solely to those with a mainline Delta seniority number. When the lowest paid mainline FO makes more than practically every RJ Captain in the industry you don't get a whole lot of sympathy from your regional brethren, some of whom qualify for food stamps. Any of the mainline pilots qualify for public assistance lately?
Time to wake up and smell the (Jet) Blue juice.

Regards,
Troller

 

[BlackCoffee]

Gen Lee,

There is no reason for ASA to share in your pain. Im sure they want to join the team, but they are not on "the" team now. They are already underpaid. If there was some sort of incentive for a DCI pilot to take a pay cut to help you out that would make sense. But you guys could care less about the prosperity of ASA or CMR. I use to enjoy your post but you seem to be slowly turning against the little guys. Take your pay cut like a man and hope those underpaid regional guys get a raise in their next contract. When you guys got your incredible new contract there was not a Regional pilot out there that was not happy as a clam for you. I wish you the best and hope to god you don't take a cut, no one should, especially the regionals. You should be fighting FOR each other NOT against each other!

 

[embdrvr]

Gen Lee,

There is no reason for ASA to share in your pain. Im sure they want to join the team, but they are not on "the" team now.

Exactly!
Here is a verbatim quote from the self appointed DAL pilot spokesman, General Lee:

First of all, we do not have to give them anything, nada, zip. Even Leo stated that we have a contract until 2005. After saying this, we will probably give them something, but our MEC chair has stated it would be a "loan." We understand that times are tough, and we are sure that Delta would like some extra money. But, when times get good again, and they will, we want it back.

You can bet your last dime that if ASA or CMR guys took a hit they would not see any payback. Frankly the possibility of job at mainline "maybe someday" is not worth a plugged nickel right now.
I'll pay for the 37 type and a shot at SWA before taking a pay cut so a mainline guy doesn't have to give up his Porsche or the yacht.

 

[NYRANGERS]

I agree with coffe, we are not on the same team, some were hired by ASA or comair and some by Delta. That being said, I don't not think a pay cut for comair or ASA is appropriate.

I think the point that has to made though is ........If Delta is so close to BK then I would expect them to approach ALL employees regarding concessions, just as United, AMR, Us Airways and most recently Northwest. Now I don't want to see anyone take a pay cut, but the argument that only the pilots should because "we are the highest paid" is not one worthy of concessions.

The point I am trying to make is, as Delta pilots we should not make the argument that if we have to take a pay cut then everyone should. I think a better argument is, if pay cuts are necessary, why would you only ask us pilots. Cutting the pay of 8000 pilots will not "help" Delta as much as cutting the pay of 65,000 employees.

Anyway enough, NO CONCESSIONS, not for comair, ASA or Delta. If an airline cannot afford to pay a new hire pilot a descent wage, they don't deserve to be in business.

NYR

 

[rjcap]

Anyway enough, NO CONCESSIONS, not for comair, ASA or Delta. If an airline cannot afford to pay a new hire pilot a descent wage, they don't deserve to be in business.

I can agree with that 100 %.

 

[General Lee]

g159av8tor,

I know that you probably aren't one of those people that think that ALL Delta pilots make $350,000 a year, have 3 foreign cars, and a bevy of babes. Come on, not all of us live like that. Plenty of us have taken cuts due to this downsizing. I know a guy that was a 767 FO, he was bumped twice, to MD88 FO and now 737-200 Fo in ATL. He just took at $35,000 a year pay cut. But, he is still flying. Only the senior pilots have retained their seats, and more have fallen backwards, losing pay. A lot of the pilots here have paid their dues, with a lot coming from the regionals and the associated lower pay scales. We understand your pain, but a 22% paycut for us would hurt a lot more than a 5% paycut for you. You guys can't give anything, even a small gesture? If not, well I guess I could understand. I know you don't believe that everyone over here lives like a pompous a$$, driving 3 cars and a golf cart in Peachtree City. A lot of us have families (not plural for each of us), with kids in college (Not Harvard), and do live within our means. I feel fortunate to be here, but I do not think that we should be the ONLY ones to give.

Blackcoffee,

I am not turning against the "little guys." I don't think you guys are little, in fact. I think you are an important member of this "Delta Family." (believe it or not) I just don't think we should be the only ones to give. Yes, we are paid more than other employee groups, but we actually have a union (and pay lots of dues) and that union got us the rates. Times are tough now, but we shouldn't be the only ones giving up, especially since others do not have a contract. Delta just doesn't want to ask them in fear that they might go for a union. That isn't our fault. I am not against any of you, well maybe against the Comair MEC and his cronies---but I won't go there.

Embdrvr,

I don't remember appointing myself "DAL Pilot Spokesman", I just have opinions and I think I am allowed (If you would allow me) to voice them, right? When someone posts something or asks a question, if I am not flying, I will opine. Yes, it might be awhile until Delta hires again (4-5 years), and once we get back every furlough we will, but it will be worth it. Why? Ever hear of retirement? Southwest I believe has a 401K, and besides the options it gave to the pilots (back during the 10 year contract negotiations) and the other options it gave recently to extend the contract, that is about it. I know our current pension is underfunded, but that will vanish if the stock market goes up, which it is. I know a 777 Capt that is retiring in one month, and his take home retirement is $1.5 million, and then he gets $8,000 a month for the rest of his life. Not bad, but he has worked here over 30 years. You won't see that anywhere else. Even after these pay cuts, the retirement will still be there. UPS also doesn't have a very good retirement, and I just talked to a soon to be retiring UPS 767 Capt flying on our jumpseat to TPA (in the back, really) that said he would need to find another job after he retires. He has been there since the beginning (I think he flew at Orion before UPS). So, you can go to Southwest, and enjoy the security and the fun (naked) flying conditions. I think they are a great company. I also think Delta will come out of this slump and survive, and eventually thrive. Enjoy it over there.

Bye Bye----General Lee

PS--By the way, we did have over 175 retirements today---92 of which were Capts leaving early (before age 60), and 61 of them were ROPES or over age 60 FE's. Unfortunately we also had 143 furloughs that were scheduled today (War Emergency furloughs announced a month ago) which should come back soon after we file a grievance--since the war is over. But, the retirements are huge.

 

[Ninja]

Quote:

PS--By the way, we did have over 175 retirements today---92 of which were Capts leaving early (before age 60), and 61 of them were ROPES or over age 60 FE's. Unfortunately we also had 143 furloughs that were scheduled today (War Emergency furloughs announced a month ago) which should come back soon after we file a grievance--since the war is over. But, the retirements are huge.

General,

From an outsider looking in, it looks a lot like rats jumping off a sinking ship. The exec's don't need to bail because they spent $25 mil of company funds to protect their pensions.

Best wishes to all Delta employees,

Ninja

 

[Heavy Set]

The General is Correct - Don't Assume...

I do not understand why people assume all Delta pilots are well-to-do. ALL OF THEM? Bad assumption. A senior Comair pilot makes a lot more than a very junior Delta FO - and a lot more than a FURLOUGHED Delta pilot. I know Comair captains who make more than $100K annually - they aren't hurting as a result of Delta's supposed crap performance.... Shouldn't they contribute to the effort as well?

To just ask the Delta pilots to accept wage cuts (and 22% is a large pay cut for anyone) is ridiculous and discriminatory. It is - think about it... Everyone should be focused on the same goals - increasing revenue and beating the competition. If you focus on one group to take the burden (and it should definitely include the fat cat executives as well....), then you are implicitly telling the other labor groups that they are not accountable for their actions. ASA and Comair are both owned by Delta. There should be some "fair" contribution from ALL segments of the company - it is only fair. You could do a weighted percentage, but everyone should contribute.

If Southwest were ever in trouble (unlikely...), would you expect its pilots to be the only targets for cost cuts? Nope. Why should Delta be different? The pilots are the only union-represented group in Delta - so, I guess they should be the only target? Huh?

When will you people take a rationale look at this situation? It surprises me how so many envious/jealous people target the Delta pilots... So, you didn't get your Delta interview and now you need to poke and prod them every time someone talks about their wages...

Don't be naive. Delta pilots might make more money on a relative basis than other pilots, but they don't deserve to be the only source of cost cuts - that is ridiculous. The General has done a good job of presenting the case - and I doubt he has 3 foreign cars. Lame assumption that ALL DELTA PILOTS ARE WEALTHY...

I would expect Delta pilots to either take a smaller cut (maybe 5-8%) or offer a "loan" until better times (say 2-3 years out) IN RETURN FOR SOMETHING - maybe control of the 70-90 seaters for the furloughees. The war appears to be over (let's pray) and it is time to address the furlough problem. The Delta pilots have a firm contract (don't need to negotiate ANYTHING if they want) and Delta's management is running out of excuses (war, etc). After the management pension/bonus debacle, the pilots have a little more leverage...

Good Luck

 

[embdrvr]

General Lee,
I agree with you 100% that Delta pilots should not be the ones asked for concessions. All employees at Delta should be sharing the sacrifice if it's truly needed. Frankly when the ba$tards in ATL are lining their pockets with gold I have to wonder how much is really needed. The Delta pilot group is a ripe, plump, target of opportunity for management. Don't expect those boys in ATL to come after the non-union employee groups. If they did that the whole place would likely unionize.

As far as DCI RJ CA's making well in excess of 100K I'll only say this. The ones that are making that kind of coin work a lot more than a regular lineholder. They are an exception to the rule. The vast majority of DCI pilots are making an average far less than 100K. So I'd appreciate it if some of you mainline fellows would nod your heads in agreement with my previous statement that the most junior mainline FO makes far more money than all but a handful of DCI RJ captains.

Oh and General Lee. If you think that retirement is going to be there in 15-20 years why is it that so many of your pilots are retiring early? The ones I've talked to in the vans tell me they're doing it because that retirement may get raided just like it has at other carriers.

That's why I'd rather take my chances at SWA where at least the 401K can't be stolen and the stock bonuses are actually worth something.

 

[tbkane]

I will argue with your statment. I for one was a Delta FO, and I never made squat at Delta. I made more at ASA than Delta. I would be in a better financial position at ASA. So when you start blasting Delta pilots on this board remember at least you have a job which is more than I can say for 1,309 of my fellow pilots!!!!!!!

 

[Heavy Set]

It's about averages of final few years

embdvr,

To answer your question, the senior guys who make a lot of cash (much more than 70% of the other pilots - and a heck of a lot more than the furloughees) are getting out now because their retirement is based on the AVERAGE of their last 2-3 years (I am not sure which).

So, if you knew that a pay cut was coming (regardless of the size), wouldn't you be incented to get out early if you were making a lot now and could expect a little less in the coming years - your average would DECLINE. So, you would bail now. Get it? It has NOTHING to do with Delta's overall potential for success or future retirement - it is a monetary decision based on averages.... That is precisely why you are seeing senior guys jumping now - so they keep their high "average" for their retirements - before any salary adjustments are made... That is my understanding - and it makes sense.... I wish I had that option myself.

 

[g159av8tor]

I know a guy that was a 767 FO, he was bumped twice, to MD88 FO and now 737-200 Fo in ATL. He just took at $35,000 a year pay cut. But, he is still flying.

If I took a $35K/YR paycut I'd make a negative salary. And still the IRS would get me for something! But I'd be flying!!!

Tailwinds...

 

[g159av8tor]

Anyway enough, NO CONCESSIONS, not for comair, ASA or Delta. If an airline cannot afford to pay a new hire pilot a descent wage, they don't deserve to be in business.

NYR

I agree 100,000,000,000,000.00%

Tailwinds...

 

[B1900DFO]

Are you sure that it is the average of their last 3 years? I know at UAL it is the average of your HIGHEST 3 years, meaning your last year or two might not even be in the equation.

As for paycuts I imagine Mullin is asking for them becuase this is a golden opportunity given UAL, AMR, and US Air givebacks. He would be an idiot not to ask for anything after the public, the administration, and even fellow pilots seem to think that we are dutybound to try and save this industry through concessions. Mullin is probably just doing his duty and I imagine DAL pilots will do thiers by telling him to forget about it. Years of mismanagement, ridiculous taxation, stock buy-backs, etc and now analysts will have you believe that the industry's woes are due to bloated contracts. I still haven't broken 30k but I've been told I make too much relative to the competition (mesa) and soon after was forced to take a pay cut.

If Dal gets to the point that they need concessions to stay out of bankruptcy then I"m sure every other major out there will be in Ch11 and pay cuts won't do a **CENSORED****CENSORED****CENSORED****CENSORED** thing to save the ship.

 

[g159av8tor]

I for one was a Delta FO, and I never made squat at Delta. I made more at ASA than Delta. I would be in a better financial position at ASA.

Heavy Set,

I'm not going to research the ASA and DAL contracts, but I know after YR 2 and definately by YR 3 you'd make more at DAL than you'd ever dream of at ASA on any equipment. You weren't there long enough after you took the 2 steps back to take the 3 steps forward in minimal time.

I know that may sound scathing, but it's reality and you know it. Also, it's also a reality you're furloughed. I don't know your personal perdicament, but I empathize your situation. I've got two friends furloughed from DAL (and other majors as well). One DAL pilot I've lost track of recently and the other just bought a house in MLB, had a baby, wife took a leave from DAL as a FA (single income)...he's installing swimming pools and hoping to get his old Lear job back.

Tailwinds...

 

[Heavy Set]

I may have mispoken - I think the annual pension is a % of your last 3 years worth of salary... Regardless, your annual pension would decline if you stayed on and accepted a lower wage per year - that is one reason for the recent jump in retirements. Yeah, I don't know the exact details, but that is the jist of it....

I have never flown for Delta - I wish I had the opportunity. I do know a bunch of Delta pilots, though. Regardless, I am trying to instill some logic into these sometimes emotional posts....

Sure, Delta pilots make more than most other pilots on a relative basis, but that doesn't mean they should bare all of the cost-cutting burden - that's all I am saying... All Delta employees should share at least SOME of the cost-cutting pain - including the guys and gals at Comair and ASA - maybe a weighted percentage - it's only fair............................