proposed delta cuts

[wms]

DAL is just using the ole "every month this drags out the worse shape we're in and the more concessions we need, so give now before it gets worse for everyone" tactic. Eventually there will be an agreement, hopefully before BK.

As far as other employee groups, I believe they have already had their pay cut. They are non-union so the company could go after them early. ASA/CA are already at concessionary pay.

 

[General Lee]

WMS,


The other employee groups have mainly had small tinkerings with their schedules, and healthcare increases(read the last paragraph of the article below). If you don't think we (the mainline pilots) will also have healthcare increases AND 30% pay cuts---then you don't know what is going on. In reality, the pay wages at the non-union level haven't changed much at all. Everyone will have changes in healthcare costs--except management..... Grinstein is trying to make sure that the other groups don't try to bring in unions---and vilifying us in the process---and it seems to be working--especially in the press.... It's a classic negotiations move.

Bye Bye--General Lee


Associated Press
Delta Pilots Retire As Wage Cuts Planned
Tuesday July 6, 5:03 pm ET
By Harry R. Weber, AP Business Writer Pilot Retirements Hit Delta Air Lines As Company, Union Prepare New Wage Cut Proposals


ATLANTA (AP) -- Delta Air Lines' pilots union has been hit with another wave of retirements -- about 300 in June -- as its rank-and-file are expected to be asked by the struggling carrier to dig even deeper for concessions.

The pilot retirements -- many among those under the required retirement age of 60 -- leave the airline with about 7,500 active pilots, union spokeswoman Karen Miller said. About 250 pilots retired in September 2003, she said.

The voluntary retirements come as Delta prepares to ask its pilots for more in wage, benefits and other job-related concessions as the airline works to avoid bankruptcy amid higher fuel costs and continued pressure from low-cost competitors.

The Atlanta-based airline had previously asked its pilots to take a 30 percent wage reduction and forgo a 4.5 percent raise they received in May. That, along with work-rule and benefit changes, would result in $850 million in annual savings, the company has told the union.

In a memo Tuesday to employees, chief executive Gerald Grinstein reiterated a statement he made last week that those savings are "no longer valid" and that the airline's financial "hole has deepened." Delta is expected to post another heavy loss when it reports its second-quarter earnings July 19.

Delta and its pilots union are preparing new wage concession proposals and are expected to submit them in the next few weeks. Neither side would say Tuesday what their proposal will be, nor would they comment on a USA Today report that the company will ask for $1 billion in savings. The union's most recent offer was a 9 percent pay cut and to forgo the May raise. The union has not said how much that would save.

Some pilots aren't waiting around for the conclusion -- 218 of the retirements in September were early while 266 of the retirements in June were early, the union said.

Miller reiterated the union's willingness to negotiate wage concessions and indicated that the union's new proposal will reflect the airline's worsening financial situation. But, she said the airline needs to do more to avoid bankruptcy.

"Delta's problems are not going to be solved on the backs of labor," Miller said. "It's got to be part of an overall restructuring plan."

The company has said it will complete a restructuring plan by August.

Delta, the nation's third-largest air carrier behind American Airlines and United Airlines, has warned that it may have to file for bankruptcy if it doesn't get the concessions it needs. Its pilots, among the highest paid in the industry, earn between $100,000 and $300,000 a year, Delta has said.

An increase in the concessions the company requests from pilots could make it tough to get an agreement quickly, but the airline may not have a choice, said Ray Neidl, an analyst with Blaylock & Partners in New York.

"If it hurts, it hurts, but that's the way it's got to be," Neidl said. "That's the only way they're probably going to be able to avoid bankruptcy." Delta's other work groups, including flight attendants and maintenance crews, are not unionized. Delta spokeswoman Peggy Estes said there have been concessions in some areas by other employees. For instance, she said nonunion employees now pay a higher amount toward their health insurance.

 

[wms]

I think Grinstein secretly wants bankruptcy. That's why he's playing hardball. Remember the old saying about BK being the "health spa for poorly run airlines?" Everything is on the table in bankruptcy. Now it's just pilot pay. Or perhaps GG figures if he can get a billion out of the pilots, he'll collect a bonus and they can still declare Chap 11 later on. Remember if pilots agree to the cuts there is no guarantee of staying out of the court. All they can do is hope it doesn't come to that.

For decades airline management hasn't had to manage. The scope of their job was contract negotiations, buying planes, new markets, fuel hedging, etc. If a bad decision was made there was enough revenue to make up for it.

Now that they actually have to do some real managing and decision making they're terrified like deer in the head lights. DALPA and the creditors have joined forces and are honkin' the horn saying "do something!" They have to go one way or the other. Will they let the courts run the company or will they let this panel of creditors, or will they be motivated to do something of their own to move the company?

GG was on the board for years, and after he was named CEO was shocked to find out DAL's greatest threat was competition in the north east from the LCCs. During board meetings was he in the corner drinking coffee and eating Krispy Kremes like a pilot at recurrent, or was he paying attention to what was happening?

If the issues between DAL and DALPA get solved I think DAL will be in a great position, but they have to move fast. And they have to move beyond pay cuts to operational enhancements such as faster turns, better crew utilization, rolling hubs and a DCI merger. DAL has also made good use of out-sourcing; in the right direction by providing contract maintenance to other operators and as a result TOC is one of the few profit centers at DAL. It is much better to provide service than to hire it.

 

[amcnd]

Whats going to happen with scope? They just got all the pilots recalled, and now you would think they would need less pilots wiht all the work rule changes to come. Do you think DALPA will go after a J4J with the Conection folks? I know this question will get alot of Comair and ASA pilots hot!!

 

[General Lee]

amcnd,


You're right---and with the recalls designed to last through negotations---any new airplanes will likely have the furloughed pilots flying them--at lower negotiated pay rates.

Bye Bye--General Lee

 

[wms]

amcnd,


You're right---and with the recalls designed to last through negotations---any new airplanes will likely have the furloughed pilots flying them--at lower negotiated pay rates.

Bye Bye--General Lee

Hopefully at the ML. NO J4J.

 

[MedFlyer]

Medflyer,

Sure, there could be some productivity increases, but Malone has said that he will not bargain away jobs--and that should worry YOU. That might mean that Dalpa intends to go after new aircraft with lower pay rates---both of which will hurt your chances at Comair. First, no new aircraft might stall your upgrades, and then lower pay rates will force you to eventually negotiate. Why? Because Delta will squeeze you by not giving you any growth, and maybe parking some of your planes eventually---which would put pressure on your MEC and they would then use a carrot of expansion to coax you to lower rates. I am not making fun of you here---just noting that it seems this Delta management team is hellbent on taking pay away from ALL OF US. That is NOT good. Look at Northwests MEC saying that they will fly all of the new planes 70 seats and up. Expect that for any NEW aircraft--and the RJDC can't do anything about Delta and Dalpa possibly negotiating for new aircraft and their uses. Dalpa lowered the bar in '96 and created Delta Express to bring back furloughs. They will do that again unfortunately---and probably with some new 70 seaters and/or 100 seaters.

Notice how Coex has developed a whole bunch of new city pairings to Mexico (I think they go to 25 or 30 cities from IAH) and a bunch of new routes from IAH to Boise, Bakersfield, and Palm Springs.... DCI mainly flies on routes that were once flown by MD-88s or MD-90s from DFW. Besides a few new cities from our main hubs (New Haven, Binghampton, etc form CVG and Freeport and Key West from ATL)---DCI has covered old routes flown by Mainline. Now the passengers are supposedly back---and more and more have to fly on cramped RJs for longer and longer flights. Debate that please.

Bye Bye--General Lee

I'm sure BK will be worse for Comair/ASA pilots, but not necessarily as bad as you think. If CMR/ASA take cuts and the DL scope clause goes away, what's to stop management from putting the 100 seaters at CMR/ASA? See General, you aren't thinking these things through. In BK management will have NO incentive to give the 100 seaters to you. They'll just give them to whoever is cheaper and after cuts, CMR/ASA will be cheaper than DL mainline.

On a personal note, I think the 100 seaters should be flown by mainline. Just as I thought the 70 seaters should have been flown by mainline. But I have no control over the stupid moves made by your union and management.

Your union has botched these negotiations in the past, what makes you think they'll get it right now? They screwed up on the 777 flying, they screwed up on the 70 seaters, they screwed up and gave DL almost an unlimited number of 50 seaters, so how do you know they'll get it right now?

As for RJ's replacing MD88's, sure it has happened in DFW. But that's mainly because DFW is a big money loser for DL. Why should DL fly half emty MD88's out of DFW just to make YOU happy? DCI has added tons of new routes that were not mainline replacements in the past few years....ATL-EYW, ATL-ATW, ATL-FNT, ATL-FPO, CVG-ERI, CVG-MLI, CVG-CMI, CVG-BIL, CVG-BGM, CVG-HVN, CVG-ACY, CVG-SHV, CVG-XNA, SLC-EUG, SLC-STL, CVG-SGF, CVG-DAB, CVG-FSD, BOS-YFC, BOS-GSO, JFK-STL, JFK-BNA, JFK-CMH, JFK-IND, JFK-GSO, JFK-SAV, DFW-BPT, DFW-VPS, DFW-TYS, DFW-LEX, DFW-GUC, DFW-CRP, DFW-TLH, MCO-MOB, MCO-CAE, MCO-HSV, MCO-RIC, FLL-BNA, DCA-CMH, DCA-LEX, DCA-CHS, DCA-JAX, DCA-HSV, CMH-FLL, CMH-RSW......I think you get the point (although it's hard to tell with you).

 

[On Your Six]

Wow, that list of RJ routes is impressive. RJs belong on secondary routes that don't compete with LCCs. DCA-CMH and JFK-GSO are fine - however, DCA-ATL and JFK-ATL just don't make much sense with LCC competition and the resulting pricing pressure...

 

[General Lee]

Medflyer,


Man, I think I am getting to you. You seem a little "on edge." This must be stressing you out, and for good reason. As Jetblue just posted their 100 seat rates, your 70 seat rates may be in jeopardy eventually. I can understand your angst---we are getting slammed too.

I see that you have come up with some good examples of NEW RJ routes---like Moline and Flint---but the overwhelming majority of RJ flights are flights covering old Mainline routes. Look at SLC and all of the Montana routes---they were always packed during the Summer especially. Revenue lost for this Summer on those fairly uncontested routes. And, check out DFW----we used to fly to most of those cities--and now we don't and have lost probably many of our loyal DFW customers. Sad but true. DFW is a big money loser? Tell that to American. We have a lackluster Marketing department--and Leo and Fred Greed screwed that one up too. We had all of the facilities--all of the gates---even new construction with that terminal train that was going to make that terminal a first class place---all to waste. The routes out of DCA and LGA were smart---and that is one area where we should continue to use them--on choice point to point cities with little or no LCC competition. Alas, we still have most of them flying on routes that could use larger airplanes---with none to be found. Everything over 2 hours on RJs, as Grinstein says, is painful for passengers.

As far as Dalpa and their negotiating---as I see it they negotiated the highest paying contract ever in C2K. We raised the bar for even you guys. Thanks for your support and gratitiude. That is better than your Comair MEC did. When we negotiated our contract---times were good--and since then times have gone down the toilet---and we have offered smaller pay cuts for over a year that would have help the company a bit--and kept our rates still high. But, the company wants it all--and we have tried to negoitiate with no response for months. When our rates go down and we negotiate for any NEW 70 seaters and the 100 seaters---your pay rates unfortunately will be under the gun. As for Delta not giving the 100 seaters to us---that didn't happen in the USAir talks--and they still have to do some negotiating even in a Chap 11 case. Don't worry---Dalpa will negotiate a pi$$ poor rate for our furloughs to fly the 100 seaters and maybe some 70 seaters---they have done it before---it was called Delta Express. (History tends to repeat itself unfortunately)

Bye Bye--General Lee

 

[amcnd]

I was just thinking how APA tried to take the CRJ from Eagle and fly it. What will stop DALPA from trying to take them from ASA/Comair? this could be a real long road for everyone in the delta colors except ACA as there days are almost over. (its proboly a good thing). the only reason APA didnt get the CRJ's from Eagle is the FA/MX groups wouldnt take a pay cut. But DALPA is the only unionized group on the property. If I was Comair/ASA and we were having to take a hit like this ,I would demand all flying be done by the owend airlines. I have seen how this has hurt Eagle. and the APA.

 

[On Your Six]

In this cost-cutting LCC environment, there's no way Delta would discontinue contracts with CHQ, Skywest and maybe Skyway - they're cheaper than ASA and Comair and yet provide the same product/service... If Chapter 11 happens, I bet the party's over for the Comair and ASA folks and their pay rates - you're industry-leading regional wages will be subject to change... If JetBlue's low EMB-190 rates are confirmed, that might be the nail in the coffin for the high regional wages... Isn't this a great industry?

 

[AAflyer]

amcnd,

Curious about the word "take", APA tried to take that flying from Eagle? If we did , why would the FAs and MXs have anything to do with it? The parent company that buys our planes also buys yours. They offered it in that pathetic agreement we signed. We were allowed to negotiate to bring the jet over at a cost nuetral price. It couldn't be done, which is something many of us knew from the start.

Everything else you said seemed to be accurate.

regards,

AA

 

[MedFlyer]

In this cost-cutting LCC environment, there's no way Delta would discontinue contracts with CHQ, Skywest and maybe Skyway - they're cheaper than ASA and Comair and yet provide the same product/service...

Please provide us with the link that shows CHQ and SkyWest are cheaper than ASA/CMR?

 

[vc10]

There are no other "labor groups"---there's no other unions at Delta. Delta will haircut the rest as deep as they want, but not before the pilots take theirs, because to haircut non-union labor before union labor would give flight attendant and mechanics unions one of the best arguments for unionization there is. Don't worry, there's enough pain for everyone.

I am not a Delta employee. But at least the PAIN will be spread around more fairly in bankruptcy than the current path where only the mainline pilots are targeted - suddenly all labor group contracts are up for review (compared to peer averages). DAL flight attendant wages will be compared to those at AirTran and Jet Blue. Comair and ASA pilots will be compared to CHQ (don't they also operate under the Delta banner and provide basically the same product/service for a lot less?) and Mesa. Yeah, I think all labor groups within Delta should "invest" in Delta's future. I say bring on Chapter 11! Let the shareholders rot in he!l and screw the creditors... Funny how people become a little defensive when the gun is also pointing at them...

 

[On Your Six]

Medflyer,

What are the differences in pay rates between ASA/Comair and Skywest/CHQ? I bet a pretty good gap - especially when you consider Skywests CRJ-700 rates. What about financing charges on the CRJs, etc.? Delta doesn't cover anything for CHQ and Skywest. I have flown on both Comair and CHQ recently for repositioning, and service levels were identical... If Comair and ASA remain expensive vs. Skywest and CHQ, I'll bet a lot of future growth is outsourced to the cheaper alternatives. There will be a lot of pressure to close that expense gap if you want any growth going forward...