Delta to look differnt in 1 year

[InclusiveScope]

Reuters
Talks between Delta, pilots to heat up in July
Thursday June 24, 5:50 pm ET
By Meredith Grossman Dubner

CHICAGO, June 24 (Reuters) - Talks between Delta Air Lines (NYSE:DAL - News) and its pilots union are expected to move into high gear in the next few weeks as the union prepares to present the company with a new offer of concessions.

[size=-2]ADVERTISEMENT[/size]on error resume nextplugin=(IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.5"))) Delta has said it could be forced to file for bankruptcy if it cannot secure cost cuts quickly, and a pilot deal is a critical piece of the equation.

The Atlanta-based No. 3 U.S. carrier is expected to post another big loss for the second quarter. Analysts say Delta could face a liquidity crunch this fall or winter as it continues to burn through cash -- especially as soaring fuel prices amplify its woes.

"There seems to be a change in the atmospherics now, driven in large part by the discouraging fuel environment," said William Warlick, senior airline analyst at Fitch Ratings (News) .

"The message has been communicated by management -- there's no opportunity to scale back the request at this point. If anything, they may be looking at a requirement to increase the size of the concessions package."

Chief Executive Gerald Grinstein is expected to complete a strategic review he launched in January by the second or third week in August.

The pilots union said it realizes Delta is in a worse spot than it was a year ago, when its 7,700 pilots began concession talks. The talks reached a standstill in recent months.

"We understand Delta is under increased pressure due to fuel prices (and) declining yields," said Karen Miller, a spokeswoman for Delta's unit of the Air Line Pilots Association (News - Websites) . "So we're trying to step forward again and get the company back to the bargaining table. Our negotiators are trying to craft a proposal for management that more reflects the environment of today."

She said the union hopes to schedule a negotiating session with management in the next few weeks and that its next concession offer would be greater than the last. The union insists any givebacks be part of a larger restructuring plan.

Delta spokeswoman Peggy Estes said the company is eager to meet with ALPA to continue discussions.

Delta shares closed at $6.50, down 12 cents, on Thursday, a decline of 45 percent since the start of the year.

WIDE DIVIDE

Delta has said it must reduce the value of its pilot contract by 45 percent, or roughly $850 million a year, including paycuts of 34.5 percent and other contract changes.

The union has offered paycuts of 13.5 percent and other work rule changes.

Blaylock & Partners analyst Ray Neidl estimates Delta needs to cut overall costs by at least $2.1 billion a year.

"There's no way they can reach that number unless they get at least $850 million or $900 million from the pilots," Neidl said, plus work rule changes which would save another $50 million to $100 million.

Pilots at UAL Corp.'s (OTC BB:UALAQ.OB - News) United Airlines and US Airways Group (NasdaqNM:UAIR - News) took steep paycuts in bankruptcy, and US Airways pilots had their pension terminated and replaced with a cheaper one. Pilots at AMR Corp.'s (NYSE:AMR - News) American Airlines also took big paycuts to keep the airline out of bankruptcy.

"They'd rather negotiate than have it slammed down their throats (in bankruptcy)," said industry consultant Michael Boyd of the Boyd Group.

Grinstein, who turned around Western Airlines as its CEO before selling it to Delta in 1984, has a reputation for being a hard-nosed negotiator. He has said Delta will not accept a pilot deal that offers only a partial solution.

"This is not a guy who is trying to posture," Boyd said. "He's bottom line."

A deal with the pilots could be the catalyst the company needs to negotiate successfully with other stakeholders, analysts said.

"We're running out of time," Boyd said. "Something's got to happen -- fast."

 

[80drvr]

It's not competitive at all. The only 100 seater AMR had was the F-100, and those rates would not cut it in todays environment.

B6 is not taking delivery of the 190 for at least 1 year. You can bet the rates will probably be a tad better than Republic, SKW, and MAA. They will probably release the rates once there is a further shake out for the 100 seater, so as they have a good handle on where they need to be.

To answer your question on Arpey, yes I do know his thoughts. He would like the 190, but he has a mainline pilot group that does not want to give him the rates he needs to purchase it. Eagle has offered to fly the plane, but if he gave it to them, mainline would mutiny. My thoughts on what will happen is that the pilots for mainline will wait to see what happens with DL. If DL incorporates the 190 into mainline at B6 rates, then they will follow and you will see an order for the 190 from AMR mainline. Here's an article to look at:

How do you know the AA 100 seat rates "won't cut it in todays environment". AA rates are lower at 130-150 seats than SWA...is LUV not competetive? How can they make money if they don't pay their pilots rock bottom wages?

You are dead wrong about Arpey. He is not a big fan of adding additional fleet types. He is a big proponent of fleet simplification. We'll never get as simple as SWA, but in his eyes, the fewer types the better. APA has engaged him on the replacement 100 seat jet and he indicated that the company has no intentions to move in that direction at this time. And this comes from mgmt when they know that they have the APA in the most concessionary posture of all time.

And what you posted to substantiate your comments wasn't an ariticle at all. It was a propaganda letter from the Eagle MEC intended to put a stick in the eye of APA amidst all the flowback drama.

 

[Heavy Set]

Ganja60heavy,

Lame post. The mainline furloughees wouldn't start at "757 rates" if they were put back into CRJ-900s. You seem to want wage levels to decline at mainline - you should go work for Mesa and its upcoming 737 operation. That way you could earn $30/hr. flying a 737 - you're advocating the same thing here...

The idea is to give more people the "opportunity" to earn more cash. That's the point - and reducing Delta mainline won't provide those opportunities...

 

[General Lee]

We're ready to negotiate, but if they really need money fast---they know where to get it---the NON-UNION employees---they have no contracts. That may sound harsh--but it is the truth. They will get a chunk from us---but not everything they want. We won't give them everything--and then everyone else---who is also a player in this game--gets a free pass so they don't threaten to go UNION. That is the other side of the story. The creditors too, have to give some back or they will receive half in court.


Afellowaviator,

Please read the name on the side of your plane. It is "Delta Connection." We are not "Delta Connection CONNECTION." Unfortunately your side has been given a lot of our old mainline routes (727 and other) when we had to park planes, and now the pax are back and they have to fly RJs on 2 or 2 1/2 hour flights---something Grinstein said he disliked. Yes, we all carry Delta passengers--but the goal is to get them to the hub and then load them on the biggest plane possible to gain the most revenue---and fly them to far away lands--like Europe of South America---where we can make the most money. And, no--I am NOT management....


Bye Bye--General Lee

 

[lowecur]

How do you know the AA 100 seat rates "won't cut it in todays environment". AA rates are lower at 130-150 seats than SWA...is LUV not competetive? How can they make money if they don't pay their pilots rock bottom wages?

You are dead wrong about Arpey. He is not a big fan of adding additional fleet types. He is a big proponent of fleet simplification. We'll never get as simple as SWA, but in his eyes, the fewer types the better. APA has engaged him on the replacement 100 seat jet and he indicated that the company has no intentions to move in that direction at this time. And this comes from mgmt when they know that they have the APA in the most concessionary posture of all time.

And what you posted to substantiate your comments wasn't an ariticle at all. It was a propaganda letter from the Eagle MEC intended to put a stick in the eye of APA amidst all the flowback drama.

No, LUV is not competitive, they need to be lower. The only reason they made money last quarter is the fact they purchased futures. So, tell me how AMR is going to make money? What's the plan? Arpey had a meeting with the pilots back in October over the 100 seat a/c. Why would he discus it with them if he didn't think AMR needed it? Why bring it up at all? Why did APA invite Embraer proponent Michael Boyd to come talk to them about the his thoughts on the 190? Sounds like you have alot of catching up to do. Here's the blub about Boyd talking to APA, and his recommedation that AMR order 150 of these a/c from a Torbenson article on 6/6/04:

TORBENSON: American will have an interesting problem after its Fokkers are gone. It's smallest "mainline" jet - one flown by American staff - will be a 130-seat MD-80. The next smallest plane is a "regional" jet operated by its wholly owned subsidiary, American Eagle, with 70 seats.

There are dozens of good air routes out there where a 100-seat jet can be flown very economically, but where a 130-seat jet turns out to be too many seats. That's why rival JetBlue Airways Corp. has placed an order for 100 Embraer 190 planes that will have about 100 seats, and has options for 100 more of the new planes.

Many analysts believe that's the plane American will eventually end up acquiring because it's really the only plane for sale out there in the category. Consultant Mike Boyd just briefed American's pilots union on the outlook for the 100-seat planes, and he said American probably is going to end up with too many regional jets under its Eagle brand for its own good. American needs to buy about 150 of these new Embraer planes, he said.
Chairman and chief executive Gerard Arpey met with the pilots to talk about the future of smaller planes at both Eagle and at American, and pilots participating in that conversation described it as productive. American isn't flush with cash to purchase 150 new planes, but the manufacturers are typically very eager to finance the aircraft for airlines and push payments well into the future.

 

[lowecur]

80drvr

OK, lets see you refute this from APA directly?

Section 3 - Pay

PDP Editorial and Contract Comparison: The 100-seat Jet

After reviewing our notes on the recent APA Board of Director's meeting, we have serious concerns about the 100-seat jet issue.

AMR management addressed the APA Board and made it clear that they are interested in pursuing a large 100-seat aircraft order. Because of lenient financing requirements, the aircraft will likely be the 100-seat Embraer product.

AMR also stated that they would have to operate this aircraft at "competitive" rates. They defined "competitive" rates as the rates that JetBlue will pay its pilots to operate this aircraft. JetBlue recently completed a large order for the EMB-100 seat jet and will reportedly pay its EMB captains approximately 0.00 per hour. Mr. Arpey has publicly stated that AMR needs to operate these airplanes at "competitive" rates, most recently in a Dallas Morning News article.

Present APA leadership may be all too willing to deliver a sub-Greenbook pay scale for any new 100 seat aircraft. The APA Board was receptive to AMR's concept of "competitive rates." In a recent message to the LAX domicile, former Chairman and current Communications Committee member Denis Breslin suggested that AA pilots would likely have to operate this aircraft at lesser rates. At a DCA union meeting early this year, the Vice Chairman stated that F-100 pay rates are "too high." The DCA Chairman concurred with this analysis.

Industry forecasts suggest that the majority of growth in the next ten years will be in the 70-110-seat aircraft class. We remind pilots that a 100-seat aircraft is likely to make up a substantial portion of our future fleet and has the potential to replace some S80 as well as F-100 flying. A sub-Greenbook rate on future 100 seat aircraft could have substantial ramifications on our careers going forward.

We have completed a contract analysis of industry pay rates for our competitors. This analysis shows the pay rates for 12-year Captains on aircraft in the same class as the EMB-100. We ask that you decide for yourself what a "competitive" pay rate is on this class of aircraft.

Carrier Aircraft Hourly Rate (12 year captain)AMRF-100128.96AirTranB717144.50HawaiianB717144.09ContinentalDC-9 (book rate)158.25NorthwestDC-9191.20Comair*CRJ-700108.71
To send a Soundoff to the APA leadership regarding your thoughts on what a "competitive" pay rate is, click on the link below:

Soundoff

*The hourly rate for the Comair CRJ-700 is based on 18th year Captains pay, which is the highest pay step in the Comair contract.​

How convenient they left off MAA, SkyWest, and Republic. No rates as yet for Jetblue.

 

[80drvr]

OK, lets see you refute this from APA directly?

Section 3 - Pay

PDP Editorial and Contract Comparison: The 100-seat Jet


After reviewing our notes on the recent APA Board of Director's meeting, we have serious concerns about the 100-seat jet issue.

AMR management addressed the APA Board and made it clear that they are interested in pursuing a large 100-seat aircraft order. Because of lenient financing requirements, the aircraft will likely be the 100-seat Embraer product.

AMR also stated that they would have to operate this aircraft at "competitive" rates. They defined "competitive" rates as the rates that JetBlue will pay its pilots to operate this aircraft. JetBlue recently completed a large order for the EMB-100 seat jet and will reportedly pay its EMB captains approximately 0.00 per hour. Mr. Arpey has publicly stated that AMR needs to operate these airplanes at "competitive" rates, most recently in a Dallas Morning News article.

Present APA leadership may be all too willing to deliver a sub-Greenbook pay scale for any new 100 seat aircraft. The APA Board was receptive to AMR's concept of "competitive rates." In a recent message to the LAX domicile, former Chairman and current Communications Committee member Denis Breslin suggested that AA pilots would likely have to operate this aircraft at lesser rates. At a DCA union meeting early this year, the Vice Chairman stated that F-100 pay rates are "too high." The DCA Chairman concurred with this analysis.

Industry forecasts suggest that the majority of growth in the next ten years will be in the 70-110-seat aircraft class. We remind pilots that a 100-seat aircraft is likely to make up a substantial portion of our future fleet and has the potential to replace some S80 as well as F-100 flying. A sub-Greenbook rate on future 100 seat aircraft could have substantial ramifications on our careers going forward.

We have completed a contract analysis of industry pay rates for our competitors. This analysis shows the pay rates for 12-year Captains on aircraft in the same class as the EMB-100. We ask that you decide for yourself what a "competitive" pay rate is on this class of aircraft.

Carrier Aircraft Hourly Rate (12 year captain)AMRF-100128.96AirTranB717144.50HawaiianB717144.09ContinentalDC-9 (book rate)158.25NorthwestDC-9191.20Comair*CRJ-700108.71
To send a Soundoff to the APA leadership regarding your thoughts on what a "competitive" pay rate is, click on the link below:

Soundoff

*The hourly rate for the Comair CRJ-700 is based on 18th year Captains pay, which is the highest pay step in the Comair contract.
​

How convenient they left off MAA, SkyWest, and Republic. No rates as yet for Jetblue.

That's not the APA. It's the PDP...a splinter group focused on removing the current APA regime.

 

[lowecur]

That's not the APA. It's the PDP...a splinter group focused on removing the current APA regime.

OK, so are you saying that their statements have no credibility? These are their notes from a recent APA meeting.

 

[80drvr]

No, LUV is not competitive, they need to be lower. The only reason they made money last quarter is the fact they purchased futures. So, tell me how AMR is going to make money? What's the plan? Arpey had a meeting with the pilots back in October over the 100 seat a/c. Why would he discus it with them if he didn't think AMR needed it? Why bring it up at all? Why did APA invite Embraer proponent Michael Boyd to come talk to them about the his thoughts on the 190? Sounds like you have alot of catching up to do. Here's the blub about Boyd talking to APA, and his recommedation that AMR order 150 of these a/c from a Torbenson article on 6/6/04:

TORBENSON: American will have an interesting problem after its Fokkers are gone. It's smallest "mainline" jet - one flown by American staff - will be a 130-seat MD-80. The next smallest plane is a "regional" jet operated by its wholly owned subsidiary, American Eagle, with 70 seats.

There are dozens of good air routes out there where a 100-seat jet can be flown very economically, but where a 130-seat jet turns out to be too many seats. That's why rival JetBlue Airways Corp. has placed an order for 100 Embraer 190 planes that will have about 100 seats, and has options for 100 more of the new planes.

Many analysts believe that's the plane American will eventually end up acquiring because it's really the only plane for sale out there in the category. Consultant Mike Boyd just briefed American's pilots union on the outlook for the 100-seat planes, and he said American probably is going to end up with too many regional jets under its Eagle brand for its own good. American needs to buy about 150 of these new Embraer planes, he said.
Chairman and chief executive Gerard Arpey met with the pilots to talk about the future of smaller planes at both Eagle and at American, and pilots participating in that conversation described it as productive. American isn't flush with cash to purchase 150 new planes, but the manufacturers are typically very eager to finance the aircraft for airlines and push payments well into the future.

No, it sounds like you have a lot of catching up to do. Did you see the Boyd presentation to the APA BOD? Were you present for the Q&A? Or do you find the media to be a more reliable source of information about commercial aviation?

Any 100 seat order by AMR would be replacement aircraft. The APA is trying to be proactive engaging AMR and opening the door to talks in the event they pursued this. Boyd said a lot of things that day and taking a few quotes out of context doesn't tell an accurate story. Boyd talked about all the aircraft that would fit this market and discussed the tradeoffs with each. An alternative that would fit AMR's simplification plan is the 737-600. He discussed the higher operating cost vs. the efficiency of commonality. He also had praise for the efficiency of the E-190 on paper and how that played against fuel prices and fleet complexity. Boyd ultimately said that the decisions would have to be made by AA's bean counters weighing capital outlay vs fleet complexity, fuel and other market forces.

At the same BOD meeting, Gerard Arpey briefed the board on the company's recovery and plan for future flying. The APA president contributed that although the union expressed interest in the 100 seat aircraft, Arpey is not currently interested. AA has 28 MD-80s parked in short term storage along with a bunch of 767s. Their current plan is to maximize the utilization of what they own rather than outlay capital and incur additional debt that they can't afford. AMR may be out of danger, but it has a ways to go before the liabilities side of it's balance sheet slims down to a summer 2000 figure. This is conistent with AMR's turnaround plan.

 

[lowecur]

No, it sounds like you have a lot of catching up to do. Did you see the Boyd presentation to the APA BOD? Were you present for the Q&A? Or do you find the media to be a more reliable source of information about commercial aviation?

Any 100 seat order by AMR would be replacement aircraft. The APA is trying to be proactive engaging AMR and opening the door to talks in the event they pursued this. Boyd said a lot of things that day and taking a few quotes out of context doesn't tell an accurate story. Boyd talked about all the aircraft that would fit this market and discussed the tradeoffs with each. An alternative that would fit AMR's simplification plan is the 737-600. He discussed the higher operating cost vs. the efficiency of commonality. He also had praise for the efficiency of the E-190 on paper and how that played against fuel prices and fleet complexity. Boyd ultimately said that the decisions would have to be made by AA's bean counters weighing capital outlay vs fleet complexity, fuel and other market forces.

At the same BOD meeting, Gerard Arpey briefed the board on the company's recovery and plan for future flying. The APA president contributed that although the union expressed interest in the 100 seat aircraft, Arpey is not currently interested. AA has 28 MD-80s parked in short term storage along with a bunch of 767s. Their current plan is to maximize the utilization of what they own rather than outlay capital and incur additional debt that they can't afford. AMR may be out of danger, but it has a ways to go before the liabilities side of it's balance sheet slims down to a summer 2000 figure. This is conistent with AMR's turnaround plan.

What a silly answer. Are you saying that Torbenson with his journalistic license is printing things out of context, and that if Arpey had a choice that they would consider the 736? Yeah, right. If you have any comprehension you'd understand as Arpey and Boyd understand that when it comes time to order a 100 seater, that the future will be ruled by Embraer, and the rate structure will be decidely below what is being paid for the F-100. His interest will peak again when DL and B6 announce their mainline rates for the E-series. In the meantime, AMR will continue to lose money.

AMR is not out of danger. They are in the middle of protractedly high fuel pricing, an assault by LCC's on the few remaining domestic routes where they have pricing power, and if I remember correctly - the pilots have a snap back clause in their rate structure that will have to be dealt with. The liabilities won't just vanish unless more of a game plan surfaces other than adding more capacity with existing a/c.

 

[80drvr]

OK, so are you saying that their statements have no credibility? These are their notes from a recent APA meeting.

No. I'm saying these statements are not 100% credible. There are elements of that editorial that I completely agree with. There are also several statements that would be contradicted by at least several APA BOD members who were there. They are notes drawn from leaks from a BOD meeting behind closed doors (and they're not all that recent).

 

[BoilerUP]

Lowecur,

I cannot believe you say AA's pay isn't competitive "in the current environment" - they are the lowest paid major! They are paid less than SWA for similar equipment, and SWA has been profitable for how many quarters again?? You're a smart guy, so you must know the only reason the B6s and F9s of the world have such low labor costs is that they don't have any 20-30 year CAs making the big bucks, drawing down their Wall Street luster. Give JetBlue another ten or so years, and we'll see where their labor costs are. That's the cause of the preceived "problem" you see with Southwest now.

I was sitting in DFW today waiting to jumpseat to IND and heard some woman b!tching that the Candler CR2 she was supposed to ride on was a "puddlejumper" and she "didn't pay all that money to fly in such a small airplane". I'm sure it didn't help she was probably 220+ lbs, but I digress... It simply made me realize that the travelling American public has a choice to make, enjoy the scheduling flexibility of high-frequency "puddlejumper" RJs to small and mid-size cities, fly mainline aircraft at a much reduced frequency from the same cities, or make a long drive to a city served by an LCC. For a $150-$200 round trip ticket, you don't get many options, nor do you deserve them, IMO.

I have an idea for increasing the profitability of airlines, and its real simple...RAISE TICKET PRICES! As little as a $10 per ticket increase would help get companies out of that razor-thin margin they already operate in. I'm sure all the world's airlines would turn a huge profit (and your precious Embraer stock would rise) if they added to an already heavy debt load to buy a bunch of shiny new 70-110 seat taco jets and paid pilots $80/hr CA and $50/hr FO (or less) but I don't see it happening. I'm no industry analyst or accountant, but its blatantly obvious that some companies have given up on increasing REVENUE, and are hell-bent on decreasing COST.

 

[80drvr]

What a silly answer. Are you saying that Torbenson with his journalistic license is printing things out of context, and that if Arpey had a choice that they would consider the 736? Yeah, right. If you have any comprehension you'd understand as Arpey and Boyd understand that when it comes time to order a 100 seater, that the future will be ruled by Embraer, and the rate structure will be decidely below what is being paid for the F-100. His interest will peak again when DL and B6 announce their mainline rates for the E-series. In the meantime, AMR will continue to lose money.

AMR is not out of danger. They are in the middle of protractedly high fuel pricing, an assault by LCC's on the few remaining domestic routes where they have pricing power, and if I remember correctly - the pilots have a snap back clause in their rate structure that will have to be dealt with. The liabilities won't just vanish unless more of a game plan surfaces other than adding more capacity with existing a/c.

Since you express such reverence for Boyd, I would be remiss if I didn't tell what else he had to say during his address to the APA. In his analysis, mainline carriers should sell their wholly owned regional carriers immediately. He sited the successful examples at NWA and CAL. This would provide hundreds of millions in cash and reduce the parent's debt load by offloading RJs and their liability that in his opinion will soon be worthless. I suppose that AMR could do this and roll the proceeds over into 100 seat jets that will be the wave of the future.

Have you done an analysis of the 737-600 vs. the E-190 that would lead you to mock the mere mention of one over the other. Do you know what the cost of fleet complexity is to AA? How about the operating cost savings of the E-190 over the MD-80. Will the numbers that Embraer espouses on paper actually be realized in line operations? No aircraft manufacturer has failed to meet their performance and cost specifications before--right.

 

[MW44]

General,

Is there a concern among delta pilots that a pension termination at Ual would cause an eventual termination at Dal in order to stay competitive? I hope that's not the case but it seems like Ual would set the tone for the rest of the legacy carriers. Is your Mec addressing this issue yet?

 

[lowecur]

Since you express such reverence for Boyd, I would be remiss if I didn't tell what else he had to say during his address to the APA. In his analysis, mainline carriers should sell their wholly owned regional carriers immediately. He sited the successful examples at NWA and CAL. This would provide hundreds of millions in cash and reduce the parent's debt load by offloading RJs and their liability that in his opinion will soon be worthless. I suppose that AMR could do this and roll the proceeds over into 100 seat jets that will be the wave of the future.

Have you done an analysis of the 737-600 vs. the E-190 that would lead you to mock the mere mention of one over the other. Do you know what the cost of fleet complexity is to AA? How about the operating cost savings of the E-190 over the MD-80. Will the numbers that Embraer espouses on paper actually be realized in line operations? No aircraft manufacturer has failed to meet their performance and cost specifications before--right.

Gee, thanks.

And like I said to the DL guys, who the heck is going to buy Eagle for anymore than .25 on the dollar? Go ahead, name one investor. They couldn't even role an IPO until they get AMR in much better shape. Any investor with an IQ of 100, should be able to see that there is an over supply of 50 seaters and that Legacy's will be looking to replace these RJ's with mainline a/c.

Yes, there is an analysis on the Embraer Website between the two and it makes the 736 look comical. Don't even bring the MD 80 up, because it's like comparing a BMW with a model T. I've said it before and I'll say it again, pro-forma performace specs are never going to be perfect, but any aero engineer worth his salt can tell you based on the airframe weight, NG engines, design and software, that the specs will be very close to what's advertised if not better.

 

[General Lee]

MW44,


I don't really know, but I don't think they could "take away" your lump sum if your pension had one----but I don't know about the monthly pay outs. I am sure Dalpa would look into that, and I am sure Delta would try to change future pensions to look more like one large lump payment (with some company matching) instead of the monthly pay outs for the rest of your life. I forgot what that is called---but it has a name. That would be cheaper for the company---and I am sure that will be heading our way eventually---but not for the current people who just retired. Just the thought of that might cause more to retire..... I hopefully have 21 more years left (knock on wood)---and I wouldn't be hurt as bad (not saying that I would endorse that)---but others might not like that.

Bye Bye--General Lee

 

[xdays]

General,

Is there a concern among delta pilots that a pension termination at Ual would cause an eventual termination at Dal in order to stay competitive? I hope that's not the case but it seems like Ual would set the tone for the rest of the legacy carriers. Is your Mec addressing this issue yet?

I'm not the General, but as a recent DAL early out here's my understanding of the pension. ERISA laws prohibit a company from unilaterally altering benefits accrued within a pension plan that has already been negotiated. Now, a plan can be negotiated to look differently, such as USAir, but benefits already accrued remain. This is seperate from an emergency termination of a pension plan. In that case, the company would have to petition the court for a distress termination of its pension plan. It would have to prove to the court that its plan is in default. The last figures I saw showed DAL's pension plan to be at an 82+% funding level, with 80% being optimal. Keep in mind also, that for every pilot that retires early, future obligations of the plan also decrease.

Just to qualify myself, I am not a CPA or pension expert. The above is just my personal understanding of how it works. Take it for what it is worth to you.

 

[G4G5]

AMR and DAL will not have any problem divesting themselves of a large percentage of their regionals. Let's try to keep in mind the fact that CAL was able to issue an IPO for Express in a post 9/11 economic enviroment. If people will buy express stock just after 9/11 they certianly will have no problem buying it during an economic recovery.

Never underestimate greed.

 

[DaveGriffin]

We're ready to negotiate, but if they really need money fast---they know where to get it---the NON-UNION employees---they have no contracts. That may sound harsh--but it is the truth. They will get a chunk from us---but not everything they want. We won't give them everything--and then everyone else---who is also a player in this game--gets a free pass so they don't threaten to go UNION. That is the other side of the story. The creditors too, have to give some back or they will receive half in court.

Bye Bye--General Lee

GL;

Management has already gotten all just about they can get out of the non-unionized employees, as well as the junior unionized employees, and have been getting it since Nov of 2001. It's now the senior unionized employees turn to do their part, nearly 3 years later. You've had plenty of time to put a little away to help cushion the "big sacrifices" you keep telling us you will soon have to make. I feel your pain brother.

Following is a recent quote from Mike Boyd, who you often like to cite:

"They'd rather negotiate than have it slammed down their throats (in bankruptcy)," said industry consultant Michael Boyd of the Boyd Group.

Delta’s CEO Gerald Grinstein, has a reputation for being a hard-nosed negotiator. He has said Delta will not accept a pilot deal that offers only a partial solution.

"This is not a guy who is trying to posture," Boyd said. "He's bottom line."

A deal with the pilots could be the catalyst the company needs to negotiate successfully with other stakeholders, analysts said.

"We're running out of time," Boyd said. "Something's got to happen -- fast."

 

[Ganja60Heavy]

Lame post my eye!

Heavy Set wrote:

<<The idea is to give more people the "opportunity" to earn more cash. That's the point - and reducing Delta mainline won't provide those opportunities...>>

Heavy:

You should say "The idea is to give ME the opportunity to earn more cash." Are you really fighting for anyone but yourself?

That's the same line used when justifying "Scope" clauses that restrict aircraft size. Do you actually believe what you say, or are you so conditioned to squawk the party line that the meaning of the words is irrelevant?

As far as your claimed altruism, you'd be more credible and would sound like a man with integrity, if you would just admit that you are merely trying to preserve what is or what was once YOURS without regard to anyone else. It's OK to think or want these things. But to distort reality in your mind, and ATTEMPT to persuade others with these distortions, is futile.

I agree that these clauses would work (and used to work) in an environment where legacy carriers would always CRUSH upstarts by various methods, before those little airlines reached "critical mass". Market forces have won the long battle, helped by Sept 11 and a bad economy as catalysts. It aint going back to 1997. Fuggedaboudit.

Do you think I want to fly anything other than a large airplane for alot of money, working the fewest days possible? Reality dictates that I will have the opportunity someday at an airline that SURVIVES the current climate.

 

[On Your Six]

Ganja,

Heavy has already claimed that he is not a Delta employee.

Dave Griffen,

That's BS. The non-union employees should also contribute and there is a lot of money on the table. Why is managment only targeting the sole unionized labor group? Sure, it's the largest expense, but that doesn't mean this isn't a team effort (like in most restructurings).

How much are Delta FA's paid relative to their Jet Blue or AirTran peers? Have you noticed all of the "senior mamas" who remain at Delta? Perhaps you are married to one and that's why you go ballistic when this is mentioned - that's my theory. What sorts of health care costs are created by all of the old bag FAs at Delta? Hmmmmmm. There is plenty of money still on the table - and let's not forget management's bonuses tied to reducing pilot costs.... Nobody wants to admit that changing the pilot wage structure alone will NOT completely save Delta - there's more work to be done beyond the pilots...

 

[FDJ2]

Ganja,

there's more work to be done beyond the pilots...

Dave,. wannabe UDT, will be squealing like a pig when GG announces deep wage cuts for the non unionized work force, which represents 82% of DAL employees, in order to get them more in line with JBLU and AirTran. We're not talking just the work rule changes and increased medical premiums, we're talking actual deep cuts in take home pay. GG recently acknowledged that pilot pay cuts will not solve the DAL's long term cost problem, something we have been saying all along. Once GG gets a negotiated concession from the pilots, he'll announce more belt tightening for the rest.

 

[surplus1]

I have some questions.

IF the Delta pilots should make significant concessions in their work rules, how will that affect the number of pilots required to operate the fleet?

IF the Delta pilots do NOT make concessions in work rules that impove productivity substantially, how much BIGGER will the cuts in basic book rates have to be in order to retain the current pilot force and recall the 1060?

Will Delta's current pilots be willing to absorb the cost of lower productivity that permits the recall of furloughed pilots or prevents furloughing even more?

If Delta (mainline) is to expand via the purchase of larger RJs, e.g., the EMB 170/190 series or CRJ 900 or more CRJ 700s (operated by Delta pilots), how much lower than "book rates" at carriers like CMR, CHQ, MAA, SKW, etc., have to be in order to be "competitive", given the costs of Delta's "benefits", i.e., the pension plan and the medical?

Carriers like JB and AirTran and IND, etc., do not have costly DB retirement plans. They also have pilots with relatively low seniority. Can airlines like AA and DL offset the added costs of the retirement programs by lowering their pay rates (below those of the competition) to encourage their company to buy such aircraft? Will the unions as AA and DL maybe agree to a different pension plan for the pilots of these "new" aircraft that they want?

When all is said and done and the compensation package for these "new" rejional jets operate by mainline is "competitive", what will be the advantage of a current regional pilot "moving up" to the mainline?

 

[jarhead]

When all is said and done and the compensation package for these "new" rejional jets operate by mainline is "competitive", what will be the advantage of a current regional pilot "moving up" to the mainline?

The advantage is obvious to me. They could then be called "real" airline pilots, and not the pond scum sucking whores they are now.

 

[Vortilon]

Surplus,

I haven't the knowledge or foresight to answer your $$$ questions, maybe somebody else will take a whack at it.

But I still think even if, collectively, the entire mainline/legacy/whatever carriers take 10-year step back in pay and working conditions it will still be a step forward for pilots coming from regional/feeder/jet national/watever carriers.

I came from a decent regional (now known as Expressjet). I was a Captain on the ERJ. When I went to Delta there were numerous intangibles that made just being an employee there great and made it a good career job. I'll try to highlight my experiences...and these are really the things I think about when I think of getting recalled some day. The pay is certainly something to look forward to, but there's so much more to it than that...

For one thing, I really enjoyed flying with Captains that had all sorts of different experiences...I felt like I learned a lot from them. They had a relaxed, professional manner when it came to problem solving that I think we all strive for. At COEX we all had about the same experience, similar backgrounds, etc. We were generally the same age, had never flown a jet before, went to the same colleges, etc.

Being at a major was better because as a pilot you benefitted from procedures and being developed for 70+ years. Most everything that was done had a reason it was done that way, and most things ran so much smoother than at my regional. They had a great emphasis on safety...it was truly imbedded into your brain. There was never a pressure to "be cool & laid back". You were expected to do a professional job all the time. It was really liberating. No cocky 25 year old attitudes to deal with. Things that would have labeled me as a "hard ass" or "nitpicker" or "uncool" at COEX were simply the way things were done at Delta. Of course you use the checklist for everything, Of COURSE you identify navaids, Of COURSE you had charts out even though its a glass airplane, of COURSE you try to nail the airspeeds. I never had someone say "I've flown this airplane for 7 years and I don't need a checklist" (got that from some 3-year RJ FOs at COEX). It was just a comfortable, professional atmosphere to work in with mutual respect between crewmembers.

The training was outstanding. Nobody at the training department was there to prove anything...they were there to help you get through the training and make sure you were prepared for the line. The training center itself was amazing with all the resources at your disposal 24-7. I never feared training, even while on probation.

Plus lets not forget that flying bigger aircraft has its rewards. Generally, they are more capable operationally...not many headaches with weight restrictions, climb performance, range, etc. Things don't break as much because the company has mechanics with tons of experience. The radar works....which was a big plus over the ERJ! The dispatchers actually knew what they were doing. Delta has their own meteorologists at your disposal. Its fun to have a big crew and get to know other crewmembers at the overnight.

For pilots, everything related to day-to-day schedule was pretty computerized. Between checking your schedule on the computer and getting messages from scheduling over ACARs, you rarely spoke with an actual scheduler. Wanna drop a day off? Put in the request on the computer and check back in 12 hours. Wanna pick up a trip, do the same. The computer knew the contract and if it was permitted, viola....no asking for "favors" or dreading talking to a particular scheduler like I did at COEX.

The attitudes in the Chief Pilot's office and management were 180 from what we had at COEX. In particular, they did not micromanage pilots. Their philosophy was that we were experienced enough and paid to make the tough decisions...if they start nitpicking, you can develop a culture where people sometimes avoid making the tough, although right, decision because they don't want to defend themselves in front of the Chief Pilot. The motto was "you make the tough call, and we'll back you up." And it wasn't just a motto...they did back you up.

I was always treated with the utmost respect by fellow employees. Something that we all know does NOT happen at the regionals. Everyone from the crew scheduler (when you spoke to them) to the dispatcher, mechanics, ramp guys, etc. respected your position and were super friendly. Perhaps it was because they were treated with respect as well?! (Imagine that!) Most all the mainline employees were there for a career too and treated their jobs as seriously as we do. They always tried to do a great job and generally were provided the tools to do so. When I was hired, spouses and family members were invited down for the first two days of indoc. It was great that they included spouses on the benefits packages, how our schedules worked, etc. We were all given a big tour of Delta HQ and the Delta Heritage Museum, then they threw a dinner for us where we were given our first set of wings by the director of flight ops in a big ceremony...they gave our spouses roses I think. Talk about a warm welcome.

Anyway, I could go on and on. No matter what has happened since, Delta people made you feel pretty great to be a Delta pilot from day 1. I know the same thing used to happen at UAL. Not sure about the other majors but I'm sure it all carries over.

And if you want to talk about pay...even if a "regional
had 70,90, or even 100 seat airplanes some day...they will never pay the same as a 150, 200, or 250 seat airplane. There will always be more money at the mainline carriers with a focus on retirement.

But economics aside, I just loved being a part of the mainline experience for so many other reasons. No matter what happens I know I reached my goal of being a big-airplane airline pilot....and it was great...even if it may have been short-lived.

ps...Oh yeah, and I forgot one more point that makes being at a major mo-better. When there are "pilot shortages" our low-time hires have 3000 hours....not 500. Makes for a much less stressful Captain!

 

[General Lee]

Surplus1,


Vortilon is correct in many ways. Another thing a Major gives you is "choice." You can choose to live in different cities--and be based in different cities--as long as your seniority can hold it. You can choose to fly more than one or two different aircraft. You can choose to fly a different seat that suits your needs--an example being a senior 777 FO can hold Capt on something else--but he can still be the FO on something that doesn't really penalize him monetarily (still good pay as widebody FO) and he can have a better schedule for home life.

I am sure we will be taking a big pay hit soon, but overall it will still be good pay and the benefits--which may take a hit also---will still be good. With the FO rates lowering here, I wouldn't doubt that Dalpa will also be negotiating for a 100 seater possible pay rate and maybe lower like the CR9. Dalpa will be looking at protecting our junior people--no doubt.

Bye Bye--General Lee

 

[Vortilon]

Oh yeah, and I was actually able to say where I worked at parties and people knew what I was talking about. Nor would I have to say "Continental" and thn mumble "Express"

Plus no more insipid comments from people like, "so when are you going to fly the big jets?"

Morons....

 

[DaveGriffin]

Surplus1,
I am sure we will be taking a big pay hit soon.

You keep reminding us of the "hit" you will be taking soon more than John Kerry reminds us of his Vietnam service. What's the deal? Looks like you're pretty defensive about the fact that the seniors haven't done much more than hem and haw and stall stall over the last 3 years.

Dalpa will be looking at protecting our junior people--no doubt.

Just as you've protected juniors since Nov 2001.
hahahah
Good one GL. Serve up more of your MEC kool aid to keep all the troops in line.

 

[On Your Six]

"Just as you've protected juniors since Nov 2001."

Dave,

In case you have been living in a bomb shelter and you are completely oblivious to what's been said on this board over the last year or two, General Lee has been one of the FEW outspoken advocates on this board in favor of protecting the Delta furloughees..... He has been trying to protect the people who have pretty much been "forgotten" and left to drift. When Comair pretty much denied the furloughees opportunities to occupy low-seniority FO seats without giving up their seniority numbers (unlike ASA which was very generous), GL was very outspoken about his disgust. Sure, you might be speaking in generalities (Dalpa), but make sure you are not accusing GL of not caring for the welfare of the junior people - he has been a strong advocate many, many times.

I wish I had someone like that at least vocalizing support at my crappy major... I'm sure you would appreciate having an advocate like GL if you were a Delta furloughee now.

 

[General Lee]

Dave,


Man alive, you are pi$$ed. You must be a furlough, and if you are I can sort of understand that. (maybe I can't exactly) Here's the deal. We needed the creditors to help also--not just the pilot pay--which would have resulted in just a "bandaid" for our problems. If we would have given in sooner---the creditors would not have looked into helping also. We need long term creditor relief.

As far as the "senior guy" and their pay, you are right--they haven't taken ANY pay hit since 9-11. They have enjoyed three uninnerrupted years of the C2K contract--even though everyone else in the industry (major wise--AA and UAL primarily) has taken huge cuts. So, they have all "earned" their "best" three years for their retirement already---and therefore Malone will see this and see that it is now time to help the junior people more---since the senior guys have already had their best three years. Malone will risk a revolt if he $crews the junior guys and favors only the senior pilots. The senior guys got their pay for as long as they did--and that will help them in retirement. That is the way I see it.

Bye Bye--General Lee