Tim,
That was our FIRST offer---and of course it was low. We expected to NEGOTIATE----not get threatened with possible bankruptcy when even the analysts see that won't happen. Most of our guys thought around 15% (off of the current contract--and that includes the May raise) would help Delta and they would also seek some sort of cuts from everyone---"A Delta Solution to A Delta Problem." As far as how much the others would give--I don't know. But, only the pilots giving is WRONG. The 9% cut plus the 4.5% raise (you can't forget about that--because as of May 1st---we get a RAISE) was a good start. Grinstein is wasting a lot of money in the mean time. As far as being higher than the others--we are not exactly like the other groups. You are falling for Jerry's argument Tim. Yes, we have a debt problem--but we also have more cash on hand than AA or UAL had---and we also have only one union--which gives us MUCH MORE flexibility---they can do whatever they want to the other groups uncontested. We are willing to give up some pay--and I bet a little more than the 15% too---but not 30%. The analysts know the real story--because management cannot lie to them. The Delta CFO has also done some critical things just lately to ensure that we do not go Chap 11---like the $325 million bond sale, and selling future 777 orders. If you really think that higher waged pilots will cause an airline to go Chap 11---you have been listening to management too much. Don't listen to them, listen to what they tell Wall St.
Bye Bye--General Lee
PS--here it is again for you:
By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 02/11/04
A veteran Wall Street analyst says Delta and Northwest airlines' executives may be making a mistake in holding out for deep labor concessions rather than accepting more modest deals that might mean a quicker turnaround.
"Managements must compromise, in our opinion," , UBS Securities analyst Sam Buttrick said Wednesday in a note to investors. "Each month that passes without a pilot deal is costing shareholders at [Delta] and [Northwest] tens of millions of dollars. Paying above-market wages for a prolonged period to get market wages late is not a noble exercise."
Delta last spring sought a phased-in 31 percent wage cut after American, United and US Airways won steep concessions last year from union employees. The three carriers sought or nearly filed for bankruptcy protection during the negotiations.
Delta's pilots, the highest paid in the industry, have offered a 9 percent cut, plus suspension of a 4.5 percent raise scheduled for May in exchange for a three-year contract extension, to 2008, and later pay increases and job protections.
Buttrick questioned whether Delta or other carriers still can use the same threat, given the airline industry's improving prospects this year.
"Bankruptcy is no longer a credible alternative," said the long-time airline analyst. "There is no such thing as a 'threat' of bankruptcy. It has to be real. And, in our view, it's not. Smart managements won't likely play this card."