Did anyone go see Grinstien?

[Medeco]

Wondering if anyone attended the Peacthree city meeting or the one in Atlanta today?

The AJC.com posted a basic story saying about 400 people showed.

Anybody have first hand info?

Medeco

 

[General Lee]

From what I read on the Dalpa board about 400 did show up, but that included family members--spouses etc....

Apparently, and I wasn't there, Grinstein repeated the same types of things that he stated in DFW----the industry has changed forever, the internet has helped that change, we need pay cuts---only the pilots(hmmm, ok), our cash flow is getting smaller, our marketing sucks (true fact...), strategic review underway, etc.... The view on the forum was that our old managment team didn't handle these last couple years very well--but now we have to get out of this problem. Apparently Dalpa will get to look at the "books" again soon also. I personally hope there will be some negotiating done soon---but it still looks like Grinstein wants to "go for it all!" I don't think that will float. Hopefully there will be some sort of a compromise....

Bye Bye---General Lee

 

[chase]

Questions

General,

You've been a straight shooter in the past & appreciate your candidness in speaking about the strengths & weaknesses of Delta. I spoke to a Delta Capt who said the following to me a few days ago & would like your thoughts/comments on his comments:

1. Delta has had all financing dry up. Banks/financial institutions are no longer interested in lending money to Delta without some significant changes in the near future.

2. Cash outflow is now at a significant enough level that the "reserve" (whatever that is) that hasn't been touched up until now is now being drawn down at an entirely unacceptable rate. To continue to do so will result in an early bankruptcy entry.

3. It was said that Delta is currently 1500-2000 pilots overmanned right now & if bankruptcy is announced this would be the immediate number of furloughed folks added to the current number.

Trust me, I'm not trying to pick a fight or get into an argument. I had no reason for this guy to be painting such a bleak picture but I could understand how it may be this badly also (from an outsider's point of view). If you don't wish to confirm or deny these I also understand completely, again these are classified as "pilot lounge discussions" only & don't necessarily match up to the truth. We have them in our lounges too & the truth is many times far removed from the stories being told. Thanks for your insight.

cheers

 

[Launchpad]

Just to Clarify.... Delta has a couple hundred (200 maybe) pilots unassigned after this last recall. They will be assigned in the next fews months apparantly and shortly staffing will meet needs...(according to crew planning)

GG said if they got the work rules that they wanted (see AA) they could rid themselves of 1200 more pilots, but that may be off set by early retirements. Doubt it.

Overstaffed by 1500 currently? Nope.

Peace out.

PS, I'm not trying to paint a rosy picture over at the big D, things are getting ugly.

 

[General Lee]

No, I can answer these.

#1. The financing has not exactly dried up. Acceptable financing to Grinstein may be dried up--but as long as you have stock worth above $1---you can always attain financing using the Capital Markets. It will just cost you more. We obviously have a debt load, and he may not want to add to that (even though we will have $1.2 billion in Capital Expenditures this year alone---including $500 million on RJs and we just signed on for 25 more for ASA...Hmmmmmmm?)

#2. According to a report out today from Credit Watch (?---it was on Yahoo Aviation Finance today)--we had $2.7 billion in cash as of Dec 31st of 2003. We then placed a bond sale with Morgan Stanley valued at $325 million (an example of using the Capital Markets...). We supposedly lost $400 million this quarter. So, we have some where around $2.5 billion in cash---assuming all of the loss was real cash-and not a paper loss due to depreciation. We supposedly will lose $50-100 million a month--but that could be accelerated a bit by higher fuel prices (going down as of late)--but also abated if we have strong months--like Summer months and a good Spring break so far. But--we still are losing money due to the lower fares and we do have some debt maturities coming due also. But, the pension reform bill could help us out too.

#3. We are NOT overmanned by that much--sheesh!! A crew planning guy said this week that we are currently overmanned by 200-250, and that could be solved by mass retirements in May or June with the vacation pay out (extra vacation not used paid out--then added to FAE) and the Gatt Rate possibly rising--causing a June 1st exodus. The current thought is 400-700 Capts may bail by June 1st. I tend to think 200-300. But, I am encouraging as many to leave as possible. Now, if we ever vote to raise the Cap (currently at 75 hours a month)--that could cause some extra furloughs---but I highly doubt Dalpa will do that, and they currently are trying to work on a partial raising of the cap--with additional raising tied in with recalls of our furloughs. If we all went to 90-95 hours a month (like UAL)---then there could be 500 or more furloughs---if the No furlough Clause was also thrown out. I don't see Dalpa voluntarily giving that up. Also, the Dalpa reps in the crew lounge shows stated that the company was willing to over look the surplus of pilots due to the projected retirements and the 8-10% mainline growth this summer---but still wanted to get rid of the No Furlough Clause--probably wanting to not bring back the 1060 out on the street if we hit the RPMs needed for recall---but that could also allow them to furlough more if that Clause was eliminated.....It really is unclear.


I am not trying to spin here--we aren't in the best shape and things could get worse. But, you also have to remember that Grinstein probably wouldn't just ask for pilot cuts without cutting other employees' pay, and then roll into Chap 11---without every stockholder and investor (like Morgan Stanley and GE Capital) trying to "rip them a new one." (why would Morgan Stanley just buy $325 million in bonds if it was all going to go into the crapper? That would be a bad investment) Going into Chap 11 would cause the stock to be close to worthless---and a lot of people might be mad--especially if the pilots had offered them some money and a possible way out. I think the Capt you were talking to is nervous, but I have to put my faith in Dalpa--because in reality I can't do anything about this situation. I can hope that they come to an agreement----but they will have to sit down and talk. We shall see.....

Bye Bye--General Lee

 

[chase]

General

Thanks. My friend's demeanor was probably rather sour in hindsight but he is not normally the type to draw bleak pictures. I thought the 1200 number was rather high but as he said only if they went to BC would that number come into play in displacing/furloughing folks (as he was told). I wish you & your fellow pilots well, good luck & thanks for answering my questions professionally.

 

[FlyBoeingJets]

The current thought is 400-700 Capts may bail by June 1st. I tend to think 200-300. But, I am encouraging as many to leave as possible. Now, if we ever vote to raise the Cap (currently at 75 hours a month)--that could cause some extra furloughs---but I highly doubt Dalpa will do that, and they currently are trying to work on a partial raising of the cap--with additional raising tied in with recalls of our furloughs. If we all went to 90-95 hours a month (like UAL)---then there could be 500 or more furloughs---if the No furlough Clause was also thrown out. I don't see Dalpa voluntarily giving that up. Also, the Dalpa reps in the crew lounge shows stated that the company was willing to over look the surplus of pilots due to the projected retirements and the 8-10% mainline growth this summer---but still wanted to get rid of the No Furlough Clause--probably wanting to not bring back the 1060 out on the street if we hit the RPMs needed for recall---but that could also allow them to furlough more if that Clause was eliminated.....It really is unclear.

Bye Bye--General Lee

At the risk of doing public math...If you were raised from 75 hours to say 85 hours that would be a 13% increase. Isn't Delta at 6500 pilots or so? That would be about 840 pilots fat. This assumes the line holders are averaging 75 hours now and average 85 under a different plan.

With at least 400 retirements that makes almost 500 pilots that could be sent packing. General, looks like you nailed it.

If the 8-10% mainline growth occurs they would need these 500. Not as bad a picture as some would like to believe.

BTW, I don't believe for a second that SWA is killing USAir. It is the growth of the survivors that is doing it. No one is mentioning the growth of the regional jet as affecting USAir. Delta mainline, Comair, ASA, and ACA will be putting a nail in the coffin too.

 

[~~~^~~~]

but I have to put my faith in Dalpa--because in reality I can't do anything about this situation.

Bye Bye--General Lee

General - DALPA is your representative and works for you. Mike Pinho explained away the lies he got caught telling by saying that he was representing his pilots, who believed those lies to be true. It is a vicious circle over there.

If you want to save the company that pays you more money than you can make anywhere else, you need to take control of your representatives.

Lets count the successes of the Delta MEC in the last 5 years.

(1) Signed the richest contract in aviation history - Delta never made one penny in profit since the contract's effective date.
(2) Lied to the ALPA Board of Directors and threatened to leave ALPA if the National Union properly applied the Constitution and Bylaws of the union to effect a merger of the two airlines purchased by Delta.
(2a) By doing so, triggered the largest Duty of Fair Representation lawsuit in the history of ALPA.
(3) Scope restricted Delta's feed, moving the line from 105 seats to 50 seats. In doing so made it economically unattractive for Delta to add a 70 to 130 seat aircraft at either mainline, or Connection.
(4) Continued to fight ALPA merger protocol, while watching nearly 21% of their seniority list get furloughed, or leave Delta.
(5) They were partners in taking Delta from the most financially successful major carrier, to the least successful major carrier not currently in bankruptcy. Unencumbered assets are currently a negative $600,000,000 or more - yikes!

Just about all of this was forecast by the RJDC and it was not rocket science, it is simple economics.

I think the effort we will see in the future is an mainline MEC push for ALPA to set up more alter ego airlines (that compete with current express carriers) with pilots from defunct major carriers and furloughees. Clearly there is a market for RJ's, lots of them, and their frequency requires a lot of pilots. Enough pilots for the "connection" guys to vote out the current ALPA power structure.

The only way ALPA has to achieve this is price ( a dollar is a dollar, airline managements don't care who flies an RJ ) and ALPA is not alone. Examples include the American pilots who are trying to get CRJ700's and E145's from Eagle luring management with "cost neutral" flight operations and US Air pilots flying E170's for way less money than I make.

Listen folks, because ALPA ( at the direction of the Delta MEC ) has refused to abide by the Constitution and Bylaws, this is devolving into a job grab with the lowest bidder getting the job. This is not about furlough protection, it about those in power wanting to remain in power, although they have made a total mess of things.

The solution is simple. Scope that focuses on pilots, not equipment.

ALPA should stop alter ego air carriers, but watch. My bet is that we will see more "Mid Atlantic" type operations so the preferred pilots can take RJ jobs and the mainline MEC's still get the benefit of their votes....

General, I think your faith is misplaced. Believe in yourself instead and make your union work for you.

~~~^~~~

 

[General Lee]

Fins,

Your hatred towards Dalpa is very apparent. To you---they seem to be the "Dark Side." I think they have done some good, too:


1. They fought for that richer C2K contract--raising the bar for everyone. Even Comair was helped by that bar.

2. They fought for scope that actually saved many many jobs after 9-11. If it were up to Fred Reid---we would have had 1000 RJs by now--large and small---and many more would have been out of work. That scope restriction kept people at mainline. The finances that put us in trouble right now are not because of that. (Can you say $2.3 billion stock buy back pre-911?) (What about Comair strike that cost us $1 billion?)

3. We are partners in bringing this airline down? You give us way too much credit. We are a fixed cost---the contract spells out exactly how much we cost. They knew that from the beginning---and Leo signed it. They could have come to us early on and tried to work with Dalpa--saying we could give up some cash now--in return for the same amount back when profitable. If they would have apporached it like that--I am sure we would have played along. But NOoooooooooo. It has always been--"You WILL TAKE A CUT AND LIKE IT!" That is how they can treat the other groups---they don't have unions or a contract. But, instead, they try that on us---and it doesn't work.

As far as what will happen with future 100 seaters (even though Grinstein didn't put much faith in them---stating instead the need for more larger aircraft to bring down the CASM)---I am sure that at the last second Dalpa will agree to some sort of a "Delta Express" style provison---or MDA as you put it--that will have our junior guys flying the smaller planes for a lot less--while the senior guys still fly at a good wage on the INTL wide bodies. They will save some jobs in the process, and still help the senior guys with retirement.

I aprreiciate your pep talk---"believe in yourself"---but really FINS, there is not much I can do. I fill out surveys, and I attend local LEC meetings---and I do voice my opinions when needed. But, mostly--like later today--I will get into my airplane---fly to FLA, then do a couple days worth of Song up and down the East Coast, and then go home---turn on this computer---and see what is going on. Take care.

Bye Bye--General Lee

PS: Grinstein likes to say that everyone else is getting paid "Industry Standard"---Well, here is something straight from the Deltanet about FA payrates (we have 14,000):

A Delta FA makes: (according to Delta)

14.3 % more than an American FA
21% more than a United FA
23% more than a US airways FA

But hey---we are the only problem here---and there is no need for any more unions......

 

[BlackCoffee]

Sounds like it's time to dock the "isle donkeys" if you ask me.