Delta rumors......

[General Lee]

Finally back from another 4 day. Man alive, every time I go out on a long trip something big happens in the news. As far as the "Delta may go bankrupt" headline----nothing much has changed from the share holder's meeting---except Delta filed that statement with the SEC. We still have a fairly large amount of cash on hand--$2.5 billion---and we could PROBABLY last for another year before filing....But, these recent high fuel prices haven't helped as of late, nor did the May raise.

The RUMOR I have----which I have heard a few times from different sources that do not know each other is that Dalpa MAY HAVE come up with a concession package that management MAY HAVE accepted. I have no real way of verifying this, and it could be absolutely wrong, but I have heard that we would take a certain % pay cut (not going to give it--but it is pretty big) and other pay type cuts (like per diem, vacation minimum pay per day, etc.) and raise the cap of flying hours from 75 to 80 hours per month. Normally a cap increase would NOT be good for junior pilots, but due to the large retirement coming up in June (do to the Gatt rate rise--which could mean more than a $50,000 difference in lump sum for 25 year guys)---apparently there wouldn't be a change in manning, and as far as I know they have still agreed to bring back the furlughs--- albeit at a slow pace. I don't even really know the number or rate of recall.

Remember, this could all be absolutely wrong---but it is what I have been hearing as of late. I want our furloughs to return as soon as possible, but I also want Delta to thrive again someday. If that pay cut is correct---it really wouldn't bother me much---but maybe other people.......


The news as of late has been a total roller coaster, and I hope we give some relief and go forward again. We shall see......

Bye Bye--General Lee

 

[250scp]

Drum roll, please

General,

Float the pay cut number....

 

[skykid]

Gen, wouldn't you guys have to vote on any concession package?

 

[General Lee]

I don't think I should put a % down since I really don't know if that really is true----and I don't know who really reads this board---but it was more than we offered and a little less than they wanted......How's that? But, I have been hearing this "rumor" as of late---and I honestly don't know if it is true or not. I think we should get some sort of pay cut---but we shall see if this is true or not. Sorry I didn't post the exact number, but I truely have been hearing this type of rumor down near the ATL CPO---and not from the CP himself.....




Skykid,

Yes, and I am sure some senior guys would like more hours per month to make up the difference--even though thanks to the recent and future retirements---they probably have jumped up one or two aircraft types---which cuts their overall pay cut anyways.....(compared to what they would be making on the MD-88 or 738 as a Captain had those newly retired guys NOT early out retired....now they are 767ER Capts....)



Bye Bye--General Lee

 

[rjcap]

Any idea what the June retirements will be ??


Is there any truth to the rumor that a significant number ( 30% - 50%) of the training department were let go ???

 

[storminpilot]

http://biz.yahoo.com/rc/040513/airlines_delta_pilots_1.html

Reuters -- Delta, pilots sign deal on early retirements
Thursday May 13, 8:19 pm ET


WASHINGTON, May 13 (Reuters) - Delta Air Lines (NYSEAL - News) and its pilots union signed an agreement on Thursday that should ensure enough active pilots to maintain the carrier's schedule this summer, the airline said.

The agreement with the Air Line Pilots Association (News - Websites) , prompted by the potential number of upcoming early retirements, gives Delta flexibility to keep pilots available when needed.

"We were monitoring pilot early retirements and just decided it was a good thing to discuss with ALPA," Delta spokesman John Kennedy said.

"We reached an agreement that gives us confidence that we don't feel there should be any (schedule) impact or disruptions for our customers," Kennedy added.

A Wall Street analyst raised concerns this week about potential early pilot retirements at Delta and whether they could hinder the company's ability to fly all of its mainline aircraft.

The No. 3 carrier said in a regulatory filing last week it may have to file for bankruptcy if it cannot meet its cost-cutting goals. The pilots have proposed a 9 percent pay cut, which the company has called inadequate.

Delta employs 8,800 pilots who fly more than 500 aircraft.

 

[Vortilon]

General,

Man you've posted the rumor of all rumors, thats for sure!

I think its too early yet though for a deal to be cut...I figured mid-summer. Then again it takes a good month for road shows, negotiator notepads, etc. Who knows, but I would hope you're right. We're gonna give one way or the other at this point and I think its best if we're NOT in bankruptcy trying to do it, but thats just my opinion.

Hoping for 200 earlies by June 30.....

If you're right, better buy that stock now at $5 cuz Wall Street would love it....

 

[General Lee]

Vortilon,

Well, if they go June 30th they will miss out on $38,000 (compared to July 1st) and probably twice that if they go Aug 1st. (assuming they are a 25 year Delta pilot). The current number is near 175 (I believe) for June 1st, but some people have said a lot more. I do know that there are 22 777 Capts Good bye Cards in the INTL crew lounge in ATL for June 1st.

As far as the "rumor" I posted----it has NOT been verified, but I have heard that same one more than once from several people that do not know each other. Does that mean it may be true? I have no idea---but I would not doubt that Dalpa will come up with something, and hopefully management too.


RJCap,

Some people have stated that as many as 500-600 pilots may eventually leave by the time we get our % pay cut---due to the fact that some are just riding the FAE wave---since some of the senior guys can get green slips and increase their monthly intake. As soon as we take a % pay cut---the remainder would leave them with a certain amount (can you see I am dancing around the % number?)---and that may be just a little more than the 60% they would be getting anyways on retirement. So, why come to work for just a small percentage extra compared to what you would get sitting on the beach or roaming the golf course? Supposedly there are 500-700 pilots that have over 25 years at Delta that are elligible.

As far as the the whacking of the training department, they were ground school instructors (46 I believe) and they were replaced with ground school CDs---so all you have to do now is get a CD and review it at home prior to school, and then take a test once you get to Mecca and you are "ready" for the oral. Welcome to the future. And, not all of the ground school people were let go---so people can still ask for personal training if needed.

Dalpa also just signed a side letter (see Storminpilot's article) to raise the cap on specific aircraft only that really need the coverage. There will also be a new forward bid out tomorrow for new positions---like 777 Capt etc, and maybe another bid in June. Remember, with the current cap in place--one movement from 777 Capt to retiring golfer causes 10 or so people to move up one seat.......That in itself will offset some of the potential pay cut....

Bye Bye--General Lee

 

[doh]

I sure hope this keeps the mother ship out of bk. I would love to be wrong on my previous predictions!!

 

[General Lee]

doh,

We still need to negotiate some pay cuts. I hope that happens too----but this does show that Dalpa and the company are working to try to keep this ship a float in the meantime. If those darn fuel prices weren't so high, we probably could have made an large operating profit this Summer.

Bye Bye--General Lee

 

[General Lee]

Something I found on DowJones--an article:


That doesn't leave Delta much time to avoid the worst - especially since it's still completing an overhaul of its corporate strategy, and talks with the pilots won't resume until August."Absent a deal with their pilots, mid-to-late 2005 could well be crunch time,"said Philip Baggaley, a Standard&Poor's analyst.

In fact, Baggaley said, even before that, it might be seen as"unacceptably risky"for Delta if the airline were to fall to $1 billion in cash from its current $2.18 billion. That looks like it could be possible as soon as early 2005.

Delta spokesman Anthony Black said the airline"wouldn't comment on speculation."Chris Renkel, a Delta pilot and spokesman for the pilots' union, said he was"100% optimistic"that the union and Delta could come to an agreement that would help the airline to avoid Chapter 11."No one wants to let a (bankruptcy) judge run the company,"Renkel said.



That last paragraph kind of says it all-----Dalpa does want to negotiate this out. I think they will---but there will be some negotiations----if there hasn't been already....???? Maybe my original rumor was off base---but I did hear it from different people that didn't know each other.......Oh well....

Bye Bye---General Lee


PS---Of course this is from that guy from "The Street.com" Eric Gillin who I don't like very much---but very interesting here:

"As for the second part, about the cash position of the company.
Yes, they did absolutely make a voluntary payment to make
their situation seem worse, but as I said on CNBC last night --
and as I said in a different story yesterday -- Delta is using the
fear of bankruptcy to make a stronger case to unions to cut their
pay -- i.e. It's a negotiating ploy."

And, we only have one union.....

 

[Heavy Set]

Hopefully the negotiations will get serious soon and furloughee recalls will begin in earnest... However, it would be great to actually see a PLAN from Delta management at some point...

 

[General Lee]

Ummmm yeah.

Bye bye--General Lee

 

[DenverDude2002]

Any rumors as to whether Song is canned or not? Also, how much longer do you think the 732s will stay in service for?

 

[General Lee]

Denverdude2002,

I talked with Salvaggio personally two weeks ago in FLL and he said things were going great and that Grinstein was impressed with the Song numbers. I think Grinstein will look it over in the strategic review, and I bet they will keep it, maybe even grow it out West. The pax really like the IFE and Song in general.

As far as the 732's---I think a lot of them still have a few years left on their leases, and right now they are our 100 seater (really 105 seats). They do guzzle gas, though....

Bye Bye--General Lee

 

[DenverDude2002]

Thats good to hear about Song. I actually flew on the first Song 757 back when it was in mainline DL colors in 2001. Maybe Denver will luck out someday and get a Song flight. Also, hows thwt test meal service going? Any chance it'll pick up and start being more redaily available on more flights?

 

[General Lee]

Denverdude,

The meal "purchase plan" has done well. First of all, Delta pays a small amount for the food and then sells it for a lot more, and it has done well---and actually tastes good. They are offering it on Song flights and even some mainline flights. If they continue to profit on it, it will expand to more mainline flights also.

I hope DEN gets some Song flights. I am really surprised at the reaction of the Pax---they really like that IFE and always tell me good things deplaning. We will learn more about where Song may go after Grinstein's "grand plan review" is done in AUG.

Bye Bye--General Lee

PS---Here is a brief summary of some articles about Song...:

"With lower-paid flight attendants and 9% more seats
on each Song plane, for instance, Delta figures that
Song's unit cost -- or the cost of flying one seat for a
mile -- is 23% less than for a Boeing 757 in the
parent operation."

Delta's Song Unit Has 'Positive' 1Q Results
Thursday, April 15, 2004 10:28 AM ET

NEW YORK (Dow Jones)-- "Delta Air Lines Inc. (DAL,
news)'s (DAL, news) low-cost airline unit, Song, had
"positive" results in the first quarter, with operating
costs 20% below that of similar operations at Delta's
main airline."

 

[Pez D. Spencer]

Hopefully the negotiations will get serious soon and furloughee recalls will begin in earnest... However, it would be great to actually see a PLAN from Delta management at some point...

Well, gee, there buddy... open your eyes. The plan has been laid. Let's see... prefund the pension so that it doesn't drag down your recovery from bankruptcy, meanwhile draining some capital, and avoiding those pesky unsecured debt payments -- cause, after Chap 11, those go to the bottom of the "to-do" pile. Announce the recall of 1060 furloughed pilots (great news guys, although, yes, this is a sarcastic post,honestly, I am happy for you) -- more payroll. And, let's see, we'll just hold off on negotiating until, say, August--let it draw out to September... yeah, that will work, then we decalare bankruptcy, get the ball rolling -- forget paying those creditors for a while -- hey, as a matter of fact, they're gonna want to give us more money because if they do it in chapter 11 atleast they know they will get "first payment rights." Cut half -- at least -- of the pilot force, and guess what????? REORGANIZE (get it, Chap 11???) Delta ain't gonna be Delta anymore. So, HeavySet -- get a **CENSORED****CENSORED****CENSORED****CENSORED** job now before you have to compete with all of the Delta furoughs to come!

Do you honestly think Grinstein is pulling the reins now?? Try the LAWYERS.

Too late... this path was laid when Leo quit. Grinstein has meant to go this way all along.

 

[Nindiri]

So Grinstein is intentionally maneuvering Delta into bankruptcy?

That might be a good strategy for him, if it wasn't for that pesky little problem of going to prison for that kind of stuff.

 

[Pez D. Spencer]

1. yeah, duh...
2. riiiiiight... that will be your little secret.

Intentionally -- what - have you seen a press release that says so?? Do you honestly think he would ever admit to that?? Are your eyes open? Look at what they are doing -- driving it to bk -- but saying, oh no , we'll fight like hell to avoid it. Really, man, wake up. Honestly -- do you think this is the first time something like this has happened. Lawyers decide that it's better to go bk (they make more money that way) and the company gets to reorganize, management gets to keep their jobs, with a judge signing off on every move.