Delta to ask pilots for $1B in cuts to halve labor costs

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Delta seeking $1B from pilots?


No. 3 carrier needs concessions to help it avoid bankruptcy as contract talks set to resume: report.
July 6, 2004: 6:48 AM EDT

NEW YORK (CNN/Money) - Delta Air Lines will ask its pilots for more than $1 billion a year in concessions when talks resume in the next few weeks between the No. 3 U.S. carrier and its pilots' union, a newspaper reported Tuesday.

The cuts, up sharply from the more than $800 million sought earlier in the year, would reduce pilot labor costs at Delta by nearly half, USA Today reported,citing a source close to management.

The airline, which is seeking to cut $2.5 billion a year in other expenses by 2006, says it could land in bankruptcy court if it can't work out a deal with its pilots, the newspaper reported.


According to USA Today, both sides are likely watching moves at No. 2 United Airlines to see how sharply pilots' wages will be cut there, and will use that amount as a benchmark for negotiations.

 

[I.P. Freley]

If they think a $1b dollar concession from the pilots will "reduce pilot labor costs at Delta by nearly half"....

Wouldn't that suggest they are asking for a paycut of "nearly half"?

 

[PCL_128]

If they think a $1b dollar concession from the pilots will "reduce pilot labor costs at Delta by nearly half"....

Wouldn't that suggest they are asking for a paycut of "nearly half"?

Not necessarily. They are probably including work rules and pension plan changes in that 1Billion figure. It probably is over a 30 percent pay cut though. Completely unaccaptable. Hold strong guys. Don't give up too much.

 

[Swede]

Delta, you guys are the last of the Legacy carriers to have the "B" word shoved down your throat. The APA caved; I hope you toe the line and fight for what's yours. Like the SWA FA raises, any elevation of any carrier's pay rates raises the industry as a whole. Good luck fellas!

 

[Tim47SIP]

Only hope!

I hope these guys get a fair contract, one benificial for both sides. But I have a bad feeling that if the pilots procrastinate to much longer, their chances of a good contract in BK will be minimal at best. It would be way over a 50% cut if the judge gives them an industry average. If they hold out to try to keep industry standards high, they could actually cause it go further south by forcing the company into BK. These guys have a big decision to make for themselves and the industry. I wish them the best of luck!

 

[Draginass]

That's only about $133k compensation from each pilot.

 

[wms]

That's only about $133k compensation from each pilot.

That's twice as much as the average RJ CA salary.

 

[AAflyer]

Swede,


We caved right, AA pilots just bringing down the industry. Take a look at the JB EMB-190 rates.

How ironic, they will spin the yearly salary, tell you what a great company it is, how fast you can make captain, how this is market reality. NOBODY will tell them they are whoring out the industry.

Leave that to AA, USAir, and UA if they take more cuts.

Well, guess what, my pathetic pay rate on on an MD-80 as an FO is still better than there 3 year captain on a 100 seat jet. (P.S. my 80 holds 129)

Who is dragging the industry down now?

AA

P.S. With those rates out, it just made it that much harder for DAL pilots to hold out.

 

[DL_Infidel]

DALPA's reply to the USA Today article

MEC Email Update – Negotiations
​

July 6, 2004

Several media outlets are reporting that Delta is seeking $1 billion in cost savings from the pilot working agreement; if so, this would be a major increase from management’s last table position in late January. As of this time, however, management has made no such proposal.

As you know, ALPA is drafting a proposal that reflects our view of Delta’s current financial position. Discussions regarding work rules began last week, and we anticipate presenting management with a comprehensive proposal in the near future. Unlike management’s apparent approach, however, ALPA’s proposed cost reductions will be contingent upon a comprehensive plan of restructuring, and we will not make press statements about our proposal until we have presented it to management.

We regret that a management source has apparently chosen to make a new proposal in the press and not at the negotiating table. If this is an indication of management’s current bargaining philosophy, we can expect, unfortunately, a more protracted and divisive negotiation than would otherwise be necessary.

We will keep you updated of any developments.
------------------------------------------------------------------------
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These guys are representing the Delta pilot group well. If indeed the $1 billion figure is management's position, then, as PCL_128 wrote: it is "Completely unacceptable." I'm willing to call GG's bluff. If he's not bluffing, then by all means let the judge sort it out. At least that will force DL to come up with a comprehensive business plan. The next few weeks will definitely be interesting.


DL_Kaffir

 

[Draginass]

The JetBlue pilots have nothing to say about setting the pay rates for their 100 seat jets. They are little more than at-will employees. Their 320 pay rates are disgraceful as well, so I can't see how any of them could possible think the 100 seat payrates are any worse.

They are no better than the worst senior captain at any major airline. The guys early into JB and upgrade quickly are gonna "get theirs" and to hell with everybody else.

 

[Deltoid]

Hey AAFLYER

If you look at Spirit & Airtran I would say they are dragging down the salaries not JetBlue.. I could not find anything on USA300 yet. The Jetblue guys are going to be getting a raise real soon from what I here which would put them above most LLC's except South West. Its not just hourly rate by which you need to measure how bad or good a group is compensated. For instance how much annually do you pay for Life insurance of 100,000, Loss of license by Harvey Watt 50% of fixed line max 5k per month & Long term disability insurance 50% of W2 max 5K per month. This costs alot, I know, ALPA charges me through the rear for these benefits. This is provided free of charge as set out in their individual employment contracts. Jetblue gets 150% OT for over 70 hours with no cap. Airtran, Spirit & Southwest dont get that. Profit sharing on average 15% also needs to needs to be considered as well. Just these few tid bits puts them well above the bottom feeders.

Safe Flying

Deltoid

 

[enigma]

Hey AAFLYER

If you look at Spirit & Airtran I would say they are dragging down the salaries not JetBlue..

Deltoid, I don't speak for Spirit, nor for Spirit's ALPA group, but I will say that while Spirit pilots are underpaid, we did manage to negotiate a payraise in our last (post 9/11) contract. We are attempting to bring up the bar, and are only on our second four year contract. We fully expect to achieve more gains two years from now. Our current union leadership is strong and seems to be standing firm against managements continued attempts to unilaterally re-write our scheduling/pay rules.

So, please cut us some slack. Don't forget that the bar you are attempting to uphold wasn't set to the top in one day. As for me, I'm underpaid, but I earn a very respectable living and I expect to get more next trip to the bargaining table. Whatever we get, it will be all the market will bear, and if so, I'll be happy.

enigma

 

[Deltoid]

Hi Enigma,

It was not my intention to slam any particular pilot group. I was just showing the hole in his argument. Every one seems so concerned about hourly rate but forget there are other alot of other items in a pilots working environment that have a big monetary value and when included bring up the total compensation package to very respectable levels.


I wish Spirit and others much luck in getting theselves well compensated. Every company is different when it comes to negotiating teams, corporate situation and management.

Good Luck

Deltoid

 

[Dangerkitty]

Delta, you guys are the last of the Legacy carriers to have the "B" word shoved down your throat. The APA caved; I hope you toe the line and fight for what's yours. Like the SWA FA raises, any elevation of any carrier's pay rates raises the industry as a whole. Good luck fellas!

Hey Swede,

Why dont you read the APA contract and get a f*cking clue what you are talking about before you come on here and spout off. How is it that the APA caved? Since you are so privy to all this info why dont you line for line tell the APA where they screwed up.

BTW, there is alot more to flying for the majors than pay rates. A Fund, 11% B-Fund Contributions etc, etc

 

[SpeedBird]

I love coming to these boards and reading the witty and insigthful posts by some of America's best and brightest!

Here's a news flash for all of you who like to single out airline _______ (fill in the blank) for "bringing down the industry." Just about everybody in the business has contributed to that end, with the exception of Delta (but don't worry they will succumb soon enough and soil their hands just like every other pilot group has).

There are some big talkers on these boards about what this profession has to do to keep the bar up, yet NO ONE has followed through with any action(s) to stop the downturn; I wonder why that is? Could it be because none of us have any measurable impact on an industry that is still in a financial freefall, and the almighty process of collective bargaining is now just a fanciful concept that only has teeth in a stable business environment? Or could it be that nobody is willing to make the hard decision and fall on their own swords and take one for the team? DALPA still has the "opportunity" to stand up to the high principles espoused on this message board and tell management to FO and wait till next May to begin the TA negotiating process.

Sadly they too will fall in line with every other pilot group because in the end the painful reality is each pilot's responsibility to himself (sorry ladies) and his family(ies) is greater than losing his long-term financial A$$ for the sake of the "profession."

So all you posters who like to label everyone else as a "whore" (again sorry ladies) for not towing the line push yourself away from the computer and go take a look at yourself in the mirror and honestly ask yourself what makes you so special?

 

[Swede]

AA guys, lighten up... I'm one of you. Yes we caved. How else can you spin it? The company asked, we delivered. I lost 40% due to pay cuts and MOAB displacements. We'll never know if the Bankruptcy threat was hollow. I root for any pilot's group which can halt the decay in our careers. If Delta can hang on, it'll elevate everyone the next time contracts are negotiated.

"Kitty" - You don't know me or how much I know. Face it, the concessions vote was not unanimous.

AAFlyer - Sure there's lots of pilot groups with pathetic salaries. I want ALL pilot's pay, industry-wide, to be commensurate with the skills required. Regional pay is criminal. Don't forget "divide and conquer"... that's exactly what we do to ourselves anytime we wish ill on any pilot group. We must stop compartmentalizing among the airline "brands" and look upon the industry as a whole. The only pilots I wish ill of are scabs.

 

[AAflyer]

Speedbird,

I voted NO to our last contract, that by the way would have according to most guranteed my furlough. If we had gone BK it would have cost another couple thousand jobs, I would be gone. SO what is thisbullsh1t about people not willing to fall on the sword?

NWA has still told their managment to screw off, and if and when DAL folds NWA will be the highest paid. While 69% of the AA pilots voted in this vomit of an agreement 31% said no thanks. So now 3000+ pilots here are labeled as a whore for lowering the bar.

Many people in the business over the past decades have lost jobs, marriages, and families to better this profession. I try to engage fellow workers and others about his industry and problems we face, as well as the problems that have been dumped in our lap.What left is there for me to do? What would you propose we do?

You just critized many for speaking their mind, what do you suggest we change, how do we go about it, unless you have an idea your finger pointing and criticism is no better than some calling someone a whore.


AA

 

[SpeedBird]

AAflyer:

You appear to be holding on too tight to this issue. I am not critizing you for speaking your mind, or for not doing your "duty" to the profession, but even despite your gallant effort what has it done to stop or even slow the unrelenting change that is taking place? BTW I guess its okay for you to criticize everyone else around here but god forbid if the boomerang hits you in the head, huh!

The sword I'm talking about deals with the kind that you don't recover from, not the one you describe for yourself where you live to fight another day...your effort doesn't meet the criteria. But then again your actions help to prove my point. The drastic action I put forward in my last post while fun to debate doesn't fit into the reality of the situation we all face. Tell me where else are you or I going to go to if the industry goes to hell in a handbasket (are we there yet?)? What other industry or profession is going to reward us so handsomely even at today's depressed rates?

If your actions at arguably the world's most powerful airline pilot union cannot turn turn this figurative ship around what will? I certainly don't blame you for trying what you think is best, but save us your own bull$hit about how every other pilot group at every other airline is not doing enough. Until you are ready to walk away from this profession because your principles have been irreparably trampled upon you don't maintain the moral high ground in this debate...so take your finger out of everyone else's chest and put it to better use.

In the meantime go take a vacation since absolutely none of this is worth running your own good health into the ground over....cause I sense you are one stressed out SOB.

 

[Publishers]

change

The fact is that this is a market driven business and becoming more and more a niche business. It is also the fallacy of the hold the bar concept.

It is one thing when you have 7 or 8 major carriers all in the same markets with the goal of becoming big international carriers using hub and spoke systems. Not so anymore.

In the old days, maybe one company would set a standard and the rest would follow. Not so anymore. Now the situation in the different companies are exactly that different, some barley able to survive. The further shrinkage by loss of another Legacy or two will not alleviate the problem. Into any abyss, they will come from somewhere. Just look at all the unemployed aircraft sitting around./

Look at American, they are far short of their goals. US barely able to defend a market let alone stay alive. United still struggles to make any meaningful headway.

In the end, who is going to pay the higher wages at Delta? The same people who have flocked to SWA and AirTran and Jetblue.

 

[AAflyer]

Speedbird,

The boomerang has hit me in the head, for the last year. We at AA have been regarded as the joke, we are out screwing the industry again. I have sat and taken it, so excuse me for venting a little.

It just gets a little old, while other airlines are out paying less, but making money life is grand. Why do the LCCs get to live in a different bubble? Why is it that my counterparts at JB and Airtran are paid less yet the are flocking to work over there, and in the mean time shame on me for letting our pay slip. How funny is that?

As for pointing my finger in peoples chest, where the he11 did you get that from. The boys in blue have no say what gets given to them. I am pissed at Dave for not rewarding the loyalty that employee group has shown, and deserves.

While we are still well paid, when does the decline end? When does it finally bottom out. As we let management slowly drive our wages down, when does it not become a handsome reward anymore?

No, I am not ruining my health over it, nor am I as stressed as you think, however our industry and profession have been under attack for awhile, there is no sign to it ending, and that worries me.

AA

 

[SpeedBird]

AAflyer:

I sincerely share your same concerns about where this is all heading. Perhaps you're the optimist and I'm the pessimist when it comes to looking at the big picture. I believe there is very little that we as pilots can do to stop this other than to perform a mass industry-wide walkout. That is the drastic action I was alluding to but I am old enough to know that would never happen and it probably wouldn't create the desired effect in the end anyway. I have therefore resigned myself to the fact that I'll have to change my long-held belief that an airline pilot career was somthing more than a job and accept it for what it now is and plan accordingly. Good luck to you and everyone else who has slog forward with what lies ahead, and may we accept the fact that this problem is much bigger than anything the professional community of pilots can fully control...IMHO of course.

 

[AAflyer]

It is bad, and a walk out could never be formed that large. We as group do not have the UNITY we all brag about to pull it off. I will agree with you on one thing, the results may not be what we like.

I am still too young to have enough F%$# You money saved up. Hope I can put enough way so when the sh!t hits the fan I can eject.

See Ya,

AA

 

[FlyFlyFly]

I guess it would be too much to ask pilots and management to act like they are in the same boat. I have lost any desire to fly Part 121 due to the contentious relationships between pilots and their employers and the fact that the airline goes under, you start at the bottom of the heap all over again. I would rather go where I can compete on the basis of my skills and knowledge than on longevity and union negotiating prowess.

 

[Draginass]

A wise choice FlyFlyFly.

 

[FlyingSig]

BTW, there is alot more to flying for the majors than pay rates. A Fund, 11% B-Fund Contributions etc, etc

Giving up that much money, that many workrules...which led to that many jobs... all for the promise of an A fund (that's all an A fund is, is a promise to pay) which still may or may not be around in 20-30 years after the next several rounds of ups and downs in the industry.... if it wasn't caving then it was one heck of a gamble.

 

[Publishers]

Great pay

You still need income to pay regardless of whether or not you want to. You want exceptional pay, then there needs to be exceptional yields and profits through income.

 

[FDJ2]

Atlanta Journal and Constitution

Opinion/Editorial – Delta Pilots’ Viewpoint
July 7, 2004

Over one year ago, the Delta pilots offered to give up pay, benefits and work rules to help our company survive through the massive losses of the airline after terrorist attacks and years of the worst economy in recent memory. Our efforts to help, unfortunately, bore no fruit. Even as managers lined their pockets with bonuses and left Delta for greener pastures, and even as our company continued to hemorrhage cash, management showed little interest in engaging in negotiations.

Now, many months and hundreds of millions in losses later, pilots’ paychecks alone continue to be singled out as the crux of Delta’s crisis. Management’s statements regarding the increasing urgency for pilot givebacks are contrasted with the almost glacial pace of a nine-month “strategic review,” which, to date, has not yielded even a hint of what the airline will look like once restructuring has occurred. As the airline continues to bleed and the possibility of bankruptcy looms larger, the only obvious element of management’s strategy has been to focus on pilot costs. We’ve said this before: simply slashing workers’ pay and benefits will not solve this company’s problems. A broader solution is necessary.

It is with this broader view in mind that the Delta pilots’ union is attempting to reengage in negotiations with Delta management to agree on a restructured pilot contract. However, the pilots cannot turn Delta around on our own. Management must be successful in gaining cost reductions from all of Delta’s stakeholders. Only then will Delta be able to return to profitability. We are participating on an ad hoc committee of Delta’s creditors with the hope of making this possible.

The Delta pilots stand ready to participate in Delta’s recovery contingent upon a comprehensive restructuring plan in which all of the company’s costs are addressed. Management’s task is formidable, and our collective futures as employees are in their hands. We will hold them to a high standard. For now, we’ll keep flying the record numbers of Delta customers safely around the world everyday, delivering the service that made Delta great.

Capt. John J. Malone
Chairman, Delta Master Executive Council
Air Line Pilots Association, Int’l.

 

[AAflyer]

Flying Sig,

You are so right, and that is one thing I have been worried about from the start.

Taking a huge paycut, to keep the A fund. . That is the first thing that will go next, UAL is after their pilots' A fund as we speak.

Kinda like SS, I have to pay for it now, but will never get it. Raise my payrates, keep the B fund and let me self direct. Let me take the difference in a higher pay rate and invest. Let me control my own retirement.

AA