Furloughs at Delta and Northwest

[FDJ2]

All it means is lets work together and figure this out, instead of someone else doing it for us.

It means that and it also means that time is not on our (DALPA/NALPA) side. The longer this drags out the worse it gets. The February deal is not in the cards, we need to focus on what can be accomplished in the current environment, not what could be accomplished back in February.

If we don't get it done soon, then sometime this fall we'll (DALPA/NALPA) be wanting what was obtainable in June, but it won't be obtainable in the fall. It's call rear view negotiations, where you are constantly looking in the rear view mirror saying I want that, but the time for getting it has already past.

 

[JoeMerchant]

June 13, 2008


Dear Fellow Pilot,

This letter is an update on the status of joint collective bargaining agreement (CBA) negotiations
between the Delta and Northwest ALPA MECs and Delta management. Over the past several
weeks, the Delta and Northwest MEC Negotiating Committees have met several times with each
other and once with Delta management to establish a framework for negotiating the joint CBA.
This week, the two committees again met with Delta management to receive a financial update
from the Company, and negotiations are scheduled to begin during the week of June 16.

As you are aware, the Delta MEC administration and certain committees first met with their
Northwest MEC counterparts in January of this year in an attempt to forge a comprehensive
agreement consisting of both a joint collective bargaining agreement and a negotiated integrated
seniority list. Earlier in that month, crude oil had broken through the $100 per barrel mark for the
first time, and the “crack spread,” the differential between the price of crude oil and the jet fuel
extracted from it, was just under $15 per barrel.

Just last week, the price of crude oil approached $140 per barrel, a 40 percent increase in less than
six months, and a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July.
Additionally, the crack spread has increased at a rate exceeding that of crude oil and is now well
over $30 per barrel. Put another way, as recently as 2004, Delta could buy a whole barrel of
crude oil for less than what it costs to convert that barrel to jet fuel today.

As the economy continued to sour and the credit markets continued to tighten, we witnessed
Frontier enter Chapter 11 and a number of airlines cease operation, either voluntarily or through
Chapter 7 (Skyway, Skybus, ATA, Aloha, Champion, Eos, Maxjet, and most recently, Silverjet),
and many analysts predict that others will follow in their footsteps in the coming months.

Over the past several weeks, a number of Delta’s network competitors have announced
substantial reductions in the number of block hours flown as well as the parking of significant
portions of their fleets and associated job cuts:

• American Airlines’ parent company, AMR, announced it would slash its domestic
capacity by 11-12 percent in the fourth quarter, parking 40-45 mainline jets. With
approximately 2,000 pilots still on furlough, American is no longer recalling pilots, and
management has announced they intend to eliminate more than one thousand jobs
throughout the company. Some elected leaders of the APA have stated that they expect
additional pilot furloughs associated with the cutbacks.
• United Airlines last week announced they will retire all 94 of their Boeing 737 aircraft
if they can reach a satisfactory agreement with the lessors as well as six Boeing 747s.
Approximately 80 percent of these aircraft will be removed from the schedule by the
end of 2008 resulting in a capacity reduction of 14 percent with further cuts to come in
2009.
• On Thursday of last week, Continental announced it will shed 3,000 jobs—almost
seven percent of its workforce as it reduces capacity by 11 percent this fall.
Continental management characterized their 2008 fuel cost increase as equivalent to
over $50,000 for every employee on Continental’s payroll.
• Just yesterday, US Airways became the latest network carrier to announce cutbacks
announcing it will park an additional ten aircraft later this year and cancel two A-330s
scheduled for delivery in 2009. Domestic cutbacks are now planned to be almost twice
that previously announced. Approximately 1,700 jobs will be eliminated, 300 of which
are slated to be pilot jobs. Further fleet reductions are planned in 2009 and 2010.

In addition to these network carrier developments, Spirit Airlines management last week
announced its intent to layoff 60 percent of its flight attendants and 45 percent of its pilots in an
effort to deal with soaring fuel prices.

Altogether, by the end on this year, almost 500 aircraft will have been removed from the domestic
marketplace along with many of the pilot jobs associated with those aircraft. Our industry is in
peril, and neither Delta nor Northwest is immune from these pressures.

In the past three years, the Delta pilots have seen our company enter bankruptcy, our Pilot
Working Agreement attacked under the Section 1113 process, and our pension terminated as the
result of severe underfunding. We then fought off a hostile takeover attempt by US Airways
prior to Delta’s exit from Chapter 11. While it would have been nice to mark Delta’s exit from
Chapter 11 protection just one year ago as the beginning of the end of the challenges we face, that
has not been the case.

During each of our MEC’s past challenges, your elected leadership faced a basic choice—should
we follow the traditional labor approach of reacting to the environment we were in (and hope for
a different outcome) or proactively engage to drive toward a more successful end result? In each
case, your MEC chose the bold proactive approach, abandoning “business as usual,” refusing to
act as victims of the unfair world and refusing to tell you what you might like to hear over what
you needed to hear.

Your MEC has approached and will continue to approach the merger between Delta and
Northwest in a similar manner. The fact of the matter is that without the active engagement of
the Delta and Northwest pilot leadership, our history will be written for us—just as it is being
written at almost every other company in our industry. The Delta pilots need the Northwest
pilots, and the Northwest pilots need the Delta pilots. Without each other, the market forces that
we see throughout our industry will not discriminate. The standalone future of either carrier will
almost certainly require the downsizing of our two great airlines. Planes will likely be parked (in
addition to those already announced) and pilots furloughed. That is the reality of our current
environment, and it does not matter that we wish it were something different.

Delta needs a path to Asian growth that Northwest provides, and Northwest needs the superior
domestic feed of Delta’s system coupled with our European, African and Latin-American route
network. While the proposed merger will not cause the price of fuel to fall or serve as a panacea
for the many challenges our companies face, it will change the status quo, providing for real and
measurable market strengths through an end-to-end merger that creates our nation’s first truly
global airline.

A crucial part of the proposed merger is the integration of the two pilot groups through both the
completion of a joint collective bargaining agreement and seniority list integration. The
immediate task before us is the negotiation of the joint collective bargaining agreement, and the
fact is that the financial environment has already changed since our attempt at a joint agreement
this past winter.

If the MECs are unable to reach a joint agreement in the face of a rapidly changing financial
environment, the pilots of both carriers will lose. The MECs will have failed to properly
represent the pilots we were elected to serve.

Now, more than ever, it is imperative that the leadership of both pilot groups redouble our efforts
to complete a joint contract followed by seniority list integration in a timely manner. For our
part, your elected representatives will pursue a fair and rational solution with the same aggressive,
proactive approach we have used during past major challenges. To that end:

• The Northwest MEC leadership has addressed our MEC previously and we are again
inviting them to address the Delta MEC at our upcoming MEC meeting later this
month.
• We will propose a joint MEC meeting to discuss our differences and how we can best
serve the interests of all pilots we represent.
• We will pursue an aggressive negotiating schedule with Delta management.

If parochial issues again prevent us from achieving a joint agreement in a timely manner and the
industry’s financial condition continues to worsen, we may lose the opportunity that is now
before us. The Delta and Northwest MECs must not let that happen.

Fraternally,

Capt. Lee Moak, Chairman
Delta Master Executive Council

 

[General Lee]

Thanks Joe, from all of us, for your concern....... Anyway, Moak's letter is a warning to everyone, we need to work together and get a Joint Contract and start on the SLI. He has a point when it comes to legacies that are "standing alone"---their plans consist of parking planes and furloughing. Same will happen if we stand alone, which is NOT the plan right now. Apparently the MECs will be working together soon to get that Joint Contract done ASAP, and that is a good thing....

Bye Bye--General Lee

 

[generaltso]

I don't think the joint contract will see any better raises then LOA19 provided. Getting the NWA pilots up to our pay scale is important, but so is protecting the pilot group on each side. I don't want to see our guys (including me) lose jobs if DC-9's are parked, and the likewise for NWA guys if our planes are parked.

The capacity cuts throughout the majors will all help each other. Less seats, less supply, ticket prices are raised. This would be a lot easier if it wasn't for SWA ready to pounce on whatever domestic capacity the legacies will cut. However there time will come. They are a great company, but to think they are immune to what is happening right now with fuel and the economy is crazy.

I hope for an SLI that will keep things relatively separate for the next 5 years... basically fences (the NWA guys are well aware of these). I think 20 years is a little extreme, though.

Picked a great time to pass the age 65 rule, though!

 

[General Lee]

I don't think the joint contract will see any better raises then LOA19 provided. Getting the NWA pilots up to our pay scale is important, but so is protecting the pilot group on each side. I don't want to see our guys (including me) lose jobs if DC-9's are parked, and the likewise for NWA guys if our planes are parked.

The capacity cuts throughout the majors will all help each other. Less seats, less supply, ticket prices are raised. This would be a lot easier if it wasn't for SWA ready to pounce on whatever domestic capacity the legacies will cut. However there time will come. They are a great company, but to think they are immune to what is happening right now with fuel and the economy is crazy.

I hope for an SLI that will keep things relatively separate for the next 5 years... basically fences (the NWA guys are well aware of these). I think 20 years is a little extreme, though.

Picked a great time to pass the age 65 rule, though!

I think you are right about the joint contract, mainly pulling the NWA guys UP to our wages. We may get a 5% raise etc, but not much more. As far as the SLI goes, I would think fences on large equipment (744s---you know the NWA guys will be pushing for that) along with small equipment (DC9s---hey a 5 year fence on those seems fair too) will be the way to go. I would be very surprised if that didn't happen. Also, any furlough protections would need to be hammered out by BOTH MECs. No more blaming everything on Dalpa. It will be a JOINT contract.


Bye Bye--General Lee

 

[Draginass]

Furlough protection? We all know what that's worth. ZIPPO.

 

[NuGuy]

Heyas,

They've already been down this highway. It will be familiar territory for all sides. Just the numbers will be tweaked.

My prediction:

Agreement by COB Friday. Announcement for the business press in NY on Friday afternoon.

LOA19ish rates plus change. Parity for NWA at DCC. No/low cost QoL items cherry picked from both sides.

Both pilot groups take 30 days to ratify. Both sides accept. There will be rabble rousers on both sides (like any ratification), but in the end, both will pass by at least 60/40 on both sides.

Nu

 

[regionalcap]

Heyas,

They've already been down this highway. It will be familiar territory for all sides. Just the numbers will be tweaked.

My prediction:

Agreement by COB Friday. Announcement for the business press in NY on Friday afternoon.

LOA19ish rates plus change. Parity for NWA at DCC. No/low cost QoL items cherry picked from both sides.

Both pilot groups take 30 days to ratify. Both sides accept. There will be rabble rousers on both sides (like any ratification), but in the end, both will pass by at least 60/40 on both sides.

Nu

I thought it was said that we will not vote on the Joint PWA but on the SLI.

 

[Bob_Sacamano]

I hope the Northwest guys don't get screwed. When I was on strike at Comair, the Northwest guys treated us like gold. Unlike the Delta guys who would show up at our picket line and heckle guys who were trying to get off food stamps...

 

[General Lee]

I hope the Northwest guys don't get screwed. When I was on strike at Comair, the Northwest guys treated us like gold. Unlike the Delta guys who would show up at our picket line and heckle guys who were trying to get off food stamps...

You guys lost us $1 billion and we paid (along with everyone else) for your benefits during the strike. It was a failure, and then you didn't want to help our furloughed pilots unless you got more 70 seaters. Your sense of history is really screwed up.

And, can you tell me how a group of pilots who are about to get a 15% pay raise and are bringing old DC9s and 742s to the table are going to get screwed? Oh yeah, they have a chunk of retirements just before our own large chunk of retirements......Is that what you mean? You need to do some better research.


Bye Bye--General Lee