Do DAL pilots have more to lose in a Chap 11 filing or in giving $1bil

[G4G5]

Sorry, but I have to disagree with you on this one. Remember, DL's arguement to the judge will be what's good for the viable future of DL in todays high cost oil scenerio.

G4G5

The cost of Oil is a variable. DAL mgt can argue that it will reach $50 a barrel, prove it. The Delta pilots can in turn take a 5 year average and say that oil has always come down. Or compare it to what happend during the last Gulf war. A judge will have to listen to both sides. Why hasn't Delta hedged, UAL is? Why did they sell their current hedged oil futures? This will need to be explained to a judge. DAL mgt could eaisly come out on the losing side of that argument.



The other Legacy carriers have already shown they cannot make money with existing payroll and workrules in this environment.

G4G5

This can be explained by a number of reasons outside the price of oil. Anyway you cut it DAL mgt will have to come up with an executable business plan. This is what the judge will be looking at. Like how NWA, AA and CAL all manage to stay out of his court room with their current business plans.



Before contracts can be negotiated the pension deal with UAL will have to play out. Once UAL's pension issue is settled, then the rest of legacy's and the judge will have a starting point.

G4G5

It's not going to matter because Delta pilots will argue that DAL is nowhere near the pension mess that UAL is in. Delta's current pensions liabilities are just a fraction of what UAL's are. On top of that the PBJC is not about to be left holding the bag for every single airlines pension. They have shown, with the current UAL mess that they will do everything that they can to not have this wind up in their lap. Hence they will no doubt place all the pressure they can on the BK judge and DAL mgt to not have it reach the point of USAir. THE PBGC has no choice but to play hard ball with UAL mgt. the alternative is every single legacy carrier running to Ch11 just to hand their pensions off to the PBGC. Not going to happen.

DL will argue that it needs a base 737/MD88 rate similar to B6 rates and work rules on the 320. They then will ask for equitable reductions on the larger a/c. They would actually have an arguement that rates should be below B6 because of the high cost of operating multiple a/c. Then they can argue they need a 100 seater for mainline, and will need B6 rates on that.

G4G5
They can argue all they want. Then the Delta pilots can counter with LUV 737 rates and AA 100 seat F100 wages or NWA DC9-10 wages (which are closer in comparison size and prevailing wages, then JetBlue). The problem in BK court is not a place to arbitrate. The judge either chooses you plan or he doesn't. If DAL mgt asks for something realisitic they run the chance of the BK judge choosing the Delta pilots concession offer.



/QUOTE]

Don't get me wrong, something has to be done DAl just announced that they burned through $744 mill in the first 6 months of the year. Thata a burn rate of over 4 mill per day. I am not arguing the fact that Delta pilots will have to give back somethings. What I am saying is that Greenjeans is asking for too much. He is asking for more then UAL and AA gave back and he is going to need to prove why he wants so much.

 

[lowecur]

G4G5

The cost of Oil is a variable. DAL mgt can argue that it will reach $50 a barrel, prove it. The Delta pilots can in turn take a 5 year average and say that oil has always come down. Or compare it to what happend during the last Gulf war. A judge will have to listen to both sides. Why hasn't Delta hedged, UAL is? Why did they sell their current hedged oil futures? This will need to be explained to a judge. DAL mgt could eaisly come out on the losing side of that argument.

Lowecur

I think that part of the arguement will come to a head once the pension deal with UAL has played out. That may not be until next summer. By that time the judge will have a good handle on whether these prices are here to stay.

G4G5

This can be explained by a number of reasons outside the price of oil. Anyway you cut it DAL mgt will have to come up with an executable business plan. This is what the judge will be looking at. Like how NWA, AA and CAL all manage to stay out of his court room with their current business plans.

Lowecur

I think the judge will take into account that these airlines are churning in place. DL needs a plan that will be long term viable to it's success.

G4G5

It's not going to matter because Delta pilots will argue that DAL is nowhere near the pension mess that UAL is in. Delta's current pensions liabilities are just a fraction of what UAL's are.

Lowecur

I assume you mean the pilots pension. DL's pension obligations are around $5.5B for all employees. UAL is estimated between $6-7B.

G4G5
They can argue all they want. Then the Delta pilots can counter with LUV 737 rates and AA 100 seat F100 wages or NWA DC9-10 wages (which are closer in comparison size and prevailing wages, then JetBlue). The problem in BK court is not a place to arbitrate. The judge either chooses you plan or he doesn't. If DAL mgt asks for something realisitic they run the chance of the BK judge choosing the Delta pilots concession offer.

Lowecur

I'm not privy to whether a form of arbitration is not part of the hearings. It would be hard to believe that the judge would have to choose between a posturing position from either party. Realistic decisions have to take precidence, and I believe a bk judge might be able to come up with a plan somewhere in between both, that would be binding.





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[G4G5]

Lowecur

I think that part of the arguement will come to a head once the pension deal with UAL has played out. That may not be until next summer. By that time the judge will have a good handle on whether these prices are here to stay.

G4G5

Geeze it's almost like I know what I am talking about

http://news.morningstar.com/news/DJ/M08/D11/200408111720DOWJONESDJONLINE000686.html

Take a look at the time it was posted, it just came out. The article echo's my thoughts exactly.this one will be interesting to explain to a judge, while you are trying to explain to him why he should except your business plan as being visble:"Those price swings are the main reason Delta Air Lines' fuel costs will rise by around $650 million this year compared with last, the airline said in a filing with the Securities and Exchange Commission this week.At the beginning of the year, Delta, Atlanta, owned hedges covering 32% of the airline's fuel needs at prices that corresponded to 76.5 cents for a gallon of jet fuel.Delta freed up much-needed cash by selling the hedges for $83 million. But if the airline had kept the hedges, it would have saved around $150 million this year, based on calculations by Dow Jones. Delta officials declined to comment on the calculations, but the airline has said it will use 2.5 billion gallons of fuel this year, and will likely pay around $2.588 billion, including the gain on selling the hedges. And Delta said in a filing if oil prices rise by 10% to $50 a barrel, that adds $260 million to the bill.
------------

Lowecur
I think the judge will take into account that these airlines are churning in place. DL needs a plan that will be long term viable to it's success.

G4G5
Delta has no choice but to come up with a plan of long term success or it can not exit CH11, it's not an option. The judge can not discount the fact that other legacy carriers like AA, NWA and CAL have all avoided BK with their current busniess plans, to say other wise would be slander and the judge would be held liable.
-------------------

Lowecur
I assume you mean the pilots pension. DL's pension obligations are around $5.5B for all employees. UAL is estimated between $6-7B.

G4G5
Thanks for bringing it to my attention, I did not realize that the Delta plan was that under funded. What I was refering to was the fact that UAL has over $4bill due within the next 4 years. Their liability is far more cumbersome then DAL's because so much is due so quickly. The one thing that you fail to mention is the interest rates and how they play into the pension liabilities. The longer that this plays out the more adventageous to for everyone. The liabilities will no doubt fall accordingly. Which will certianly help out DAL because more of their liability is defered then UAL's
--------------

Lowecur
I'm not privy to whether a form of arbitration is not part of the hearings. It would be hard to believe that the judge would have to choose between a posturing position from either party. Realistic decisions have to take precidence, and I believe a bk judge might be able to come up with a plan somewhere in between both, that would be binding.
G4G5
I think that this is the part that you are missing out on. Their is NO arbitration. The judge is not a negotiator. He is instructuted to do what is in the best interest of the shareholders. He has no ability to offer suggestions. What I believe you are refering to is the court appointed trustie. They are the ones incharge of the company. They hear offers from all sides and then make reccomendations. These trusties in no way work for DAL mgt. , they are in place to see that best interests of the shareholders/creditors/employees are taken into considersideration.

 

[lowecur]

G4G5

Geeze it's almost like I know what I am talking about. " But if the airline had kept the hedges, it would have saved around $150 million this year, based on calculations by Dow Jones."

Lowecur

You know my feelings about hedges. It has no business being part of the operating costs on the P&L, and therefore should play no part in any decision by a bankruptcy judge. It's strictly investment income. I think CA's Kellner said it best: "Ultimately, you are going to have to live with whatever the current fuel cost is a year, year-and-a-half out. And it's important to stay in sync with the industry and make sure you've got a business plan that works with whatever the current fuel price is." In other words, hedging doesn't last forever, as the market eventually evens out.

G4G5

Delta has no choice but to come up with a plan of long term success or it can not exit CH11, it's not an option. The judge can not discount the fact that other legacy carriers like AA, NWA and CAL have all avoided BK with their current busniess plans, to say other wise would be slander and the judge would be held liable.

Lowecur

This is not about avoiding bk, it's about having a viable long term plan. These three carriers fortunately have the cash to sit on the sidelines and watch how this plays out for the next 12 months. None of them has a static long term business plan in place, so they will have to change in the next 24 to 36 months or die a slow death. If it is truly the judge's decision to just place DL on par with these three, then DL won't last but another 3 to 5 years.

G4G5

I think that this is the part that you are missing out on. Their is NO arbitration. The judge is not a negotiator. He is instructuted to do what is in the best interest of the shareholders. He has no ability to offer suggestions. What I believe you are refering to is the court appointed trustie. They are the ones incharge of the company. They hear offers from all sides and then make reccomendations. These trusties in no way work for DAL mgt. , they are in place to see that best interests of the shareholders/creditors/employees are taken into considersideration.

Lowecur

Thanx for the info. In doing what is in the best interest of the shareholders, I would think the Judge is going to listen very carefully to what is presented to him by the Trustee. This should include the comparison of similar business models to DL's including but not limited to: payroll rates, work rules, pensions, and outside credit obligations. How could the judge in all good conscience tell the shareholders he is going to try and match the best features of these three carriers. I offer that none of these carriers will be able to maintain a 10-15% profit margin per year following the trashing of their individual pension plans providing oil stays above $35 per barrel. In the end, only a 10-15% profit margin will pay all the bills as they come due and give you enough surplus to survive the inevitable downturns in this industry.

 

[jtf]

How many Delta pilots are eligible for early retirement? If the majority of them do start an even more massive exodus, how quickly would that zap the cash on hand enough to force chapter 11 much more quickly? Would their early retirements be taken out of the current cash at hand or from money already in the fund- therefore not hastening chapter 11? How much notice do pilots need to give to get early retirement? I think I would be thinking long and hard about getting something out of my retirement savings before they are gone, but then again maybe they may be able to make more even at the cut rates and without the A fund if they finished at age 60 than by taking the early retirement. Crappy situation all around!

 

[General Lee]

JTF,


I read somewhere that we have over 1500 pilots over 50 years old, all of them eligible to retire. We supposedly have 500 or more that have more than 25 years of service and are over 50--which means they are eligible for FULL retirement. They need to give 24 hours notice to retire.


Bye Bye--General Lee

 

[DL_Infidel]

How many Delta pilots are eligible for early retirement? If the majority of them do start an even more massive exodus, how quickly would that zap the cash on hand enough to force chapter 11 much more quickly? Would their early retirements be taken out of the current cash at hand or from money already in the fund- therefore not hastening chapter 11? How much notice do pilots need to give to get early retirement? I think I would be thinking long and hard about getting something out of my retirement savings before they are gone, but then again maybe they may be able to make more even at the cut rates and without the A fund if they finished at age 60 than by taking the early retirement. Crappy situation all around!

I concur with General's info. Pilots only need to give DL 1 day's notice. So if 500+ leave Sep/Oct 1st, we're talking the grounding of 777,767-400 and a majority of the 757/767 fleet. There's not enough pilots in the training pipeline to cover this. The only thing that would bail DL out of this situation would be for the retirees to comeback as contract pilots for 60-90 days. I don't see DALPA approving another side letter to bail mismanagement out..yet again...of their self-induced predicament. But I have been wrong before.


DL_Infidel

 

[General Lee]

DL infidel,


I can see Dalpa doing that. They helped them with the NW/CO codeshare....wasn't that supposed to bring back up to 1000 furloughs?


Bye Bye--General Lee

 

[ATR-DRIVR]

General,
I think DL_Infidel has it pretty good on this one. I would think it would cause even more problems to have all these guys hit the street within a week or so of each other and then try to come up with some kind of contract deal. I would think also that (mis) management has thought of ALL of the downfalls of the mass exit...then again, maybe not! If the training dept is not already going full bore 24/7 now, they better. Got your bid in??

Seems to me the U-turn at the big D started during the P A admistration followed up with the L M debacle, thanks boys, 'preicate that, (slap) thanks for stopping by.
Thoughts?

 

[michael707767]

Lowecur,


He said he would not shrink Delta to profitability, and that he wanted more flying out West and INTL. We shall see.....

I once told a date that I respected her and would love her forever. That changed after the deal was done!

 

[Networ-King]

Been toolin around the Delta system for the last couple of days and the magic day seems to be August 26th for the "BIG" announcment. Dunno who to believe anymore..... just gotta wait it out.

 

[General Lee]

True dat Networ-King.


ATR-drvr,

You're right. It will be interesting. Dalpa will always be there to bail them out. What other bad choice do we have? Yeah, I have a bid in for INTL...(don't know what plane---777, Cargo Md11(?), 767ER)


Bye Bye--General Lee

 

[G4G5]

I guess I was a bit confused. I had a jumpseater the other day with an Eagle ID who said he was a furloughed AA pilot now flying left seat in an ERJ. I asked him if he had flown at Eagle prior to AA and he said he had not. So what's the real deal then? Did AA pilots "flow down" to Eagle and displace Eagle captains back to the right seat or was there enough growth at Eagle to accomodate the flowdowns and all the existing Eagle captains? Are the Eagle FO's condemned to the right seat indefinitely because of the "flowdowns?" Is Eagle hiring more furloughed AA pilots if they're hurting so bad for new talent that the minimums are down to a mere 1000/100? Or do the furloughed AA guys prefer collecting unemployment benefits which probably pay about the same as first year pay at Eagle?

Don't quote me but somehwere between 245-290 AA mainline furloughed pilots were able to flowback onto eternal bottom feeder reserve as an Eagle ERJ capt. The ruling went to an arbitrator who determined that whatever number of Eagle pilots flowed up to AA, the same number had the right to flow back to Eagle. No Eagle Captains lost seats from what I understand. The Flow back are required to be on reserve until the junior most Eagle off the street fo(as of the flowback date)has upgraded to captain. The Eagle fo's move up and upgrade as planned. Many of the furloughed AA fo's chose to by pass the flowback because of the required reserve ( estimates place it at 7+ years), the AA fo's from what I understand are not allowed to switch bases either, which for many folks ment commuting to reserve with no end in site, for a job that typically requires 18 days on.

Since there were only a limited number of of slots the pilot on your jump seat may have elected to apply through traditional metholds. I heard that they were giving preference to furloughed AA guys but this is not something I know for sure, since not too many AA fo's that I know of have tried to get on with Eagle. Considering the fact that Eagle just lowerd their mins from 1200/200 to 1000/100 I would venture to guess that just about all the furloughed AApilots would meet the Eagle hiring requirements.

 

[Draginass]

An experienced AA pilot apply to Eagle as a new hire copilot?? YGBSM. One statistic says it all. When Eagle recalled their furloughed copilots, only 9 of 98 accepted recall. What does that tell you? I think words alone fail to describe the morale, working conditions, and corporate ethos at American Eagle.

 

[satpak77]

is it true that....

Some furloughed AA guys were given the option to flow back to Eagle, but in an effort to save $$$ on the RJ training (only to see the AA guys flow back to AA at some point), they were given the option to "sit home" on full Eagle Captain pay?

I heard this, but you know the pilot rumor-vine

 

[G4G5]

Some furloughed AA guys were given the option to flow back to Eagle, but in an effort to save $$$ on the RJ training (only to see the AA guys flow back to AA at some point), they were given the option to "sit home" on full Eagle Captain pay?

I heard this, but you know the pilot rumor-vine

Some of the AA fo's did manage to sit home and get paid but this was due to politics. The APA and ALPA were busy fighting as to where and which seat the initial batch of flowbaks would go to. It eventually wound up inarbitration.

If you elected to flowback AA required a 24 month lock in at Eagle. This eliminated any possibility of what you are refering to.

Another reason the flow back was unpopular was because of the recall rate AA mgt set up. Their wasn't one. Once off the street recalls happen, if you elected the flowback you can be bypassed out of seniority. AA mgt has not set up a recall rate, they could elect to flowup just one AA fo a month/class/year, whatever they want. According to the APA rep I spoke with their is nothing in the wording of the contract that requires them to take you back right away. You could also wind up getting stuck at Eagle while someone jr to you is recalled off the street.

Oh and lets not forget pay, reserve gurantee is 72 hrs a month, with very little opportunity to make anything beyond that. The flowbacks were awarded longevity so in most cases they started out at 3rd year ERj ca pay, which is approx $57 an hour. 72x$57x12=$49,248

http://airlinepilotpay.com/eagle/eagle.htm

 

[satpak77]

ok thanks

that clears it up

as an aside, a buddy of mine (on furlough by the way) was an Eagle FO on the SAAB who applied to AA "externally" and got hired, and all the Eagle Captains who were waiting for the Eagle-->AA flow-thru were pretty pissed at him

thats what he told me anyway

later

 

[Skyboss]

Here's the deal. DAL management won't stop at $1 billion for the pilots. Once the pilots give in, DAL management will say that's not enough and say that $1.3 billion is the minimum (knowing that this negotiating window will be open for just a little while - take advantage of the situation and get more). Under Chapter 11, negotiations will be structured better and OTHER stakeholders will be asked to contribute as well - not solely the one union on the property. Notice that it's a classic negotiating move that they now put more issues on the negotiating table (jumpseats, etc.) so that they can "take more away" in order to get what they want.

How can you trust a management who has made so many blunders in the past and now has sought to make the pilots union the scapegoat for all of its problems? Sure, pilot costs need to come down - the LCC environment forces the issue. No argument there. But DAL management will likely try to take advantage of the situation (super negative "sky is falling" public relations campaign) to get as much as they can from the pilots union as possible right now...

So when Delta folds, you'll know why right? Just checking. Take your pay cut or lose your job, your choice.

Proof is in the pudding and you're employer is dying, do your flippin' part:

http://www.airlinepilotpay.com/

BTW: You have new management, or did you miss that? Also look at your CEO's history with Western. He'll unload DL in a heartbeat if things start going south (creepy irony). Then you won't have an income to whine about, or you'll have a new employer who sticks it to you with no seniority. Either way, you come out the back end of a donkey all covered in it.

 

[Skyboss]

Been toolin around the Delta system for the last couple of days and the magic day seems to be August 26th for the "BIG" announcment. Dunno who to believe anymore..... just gotta wait it out.

777 sold off, 737-800 to 36" pitch shuttle with no FC - limit of 750 nms for flight. CRJ-700/900 order to replace short hop (450 NM MD A/C). MD-90's gone. 757's all coach 36" pitch with FC. Depeak of hubs. All the bad stuff the Bible talks about.

 

[G4G5]

When I was at DAL they only had 6 or so 777's.

How many 777's are they currently operating and on which routes. Unfortunatly I can see this coming if all of the over 25 year senior folks decide to pull the plug with minimal notice.

 

[DL_Infidel]

Please

So when Delta folds, you'll know why right? Just checking. Take your pay cut or lose your job, your choice.

Delta folding...YGTBSM. And we already know why, don't you: inept management. You've been reading too much graffiti in the employee bathroom. There are a lot more variables involved in "take your pay cut or lose your job". You could substitue "and" for "or". My choice is to trust John Malone, not mismanagement.

Proof is in the pudding and you're employer is dying, do your flippin' part:

http://www.airlinepilotpay.com/

http://www.airlinepilotpay.com/[QUOTE=Skyboss

Beautiful pay scale isn't it? I think we'll hold onto it for as long as we can.

BTW: You have new management, or did you miss that? Also look at your CEO's history with Western. He'll unload DL in a heartbeat if things start going south (creepy irony). Then you won't have an income to whine about, or you'll have a new employer who sticks it to you with no seniority. Either way, you come out the back end of a donkey all covered in it.

New management...now that's funny. GG's been on the board 17+ years and he shuffled the deck a little...same old gaurd, same old tactics...that's why we're in trouble. We can't control GG's actions, we're just along for the ride.

Believe it or not, many of us will still continue to have an income with or without DL. BTW, how did the donkey get mixed up in all this? It appears that you're very unhappy, and you have other issues aside from your hostility towards DL pilots. Take care of them, you'll live longer.


DL_Infidel