proposed delta cuts

[On Your Six]

Nobody is SAFE... Better blame the mainline pilots for this mess!!!!

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...

 

[USCtrojan]

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...

Yes, except for one teency weency little fact......ASA and Comair are PROFITABLE entities. And, of course, as DALPA pointed out so obviously in Contract 2000, we are separate entities of the delta family. Not trying to be rude, Six, and I apologize if it seems so. It's like the saying goes, if ain't broken.......

 

[On Your Six]

USCTrojan,

No offense taken. Keep this in mind, IF DAL managment gets the chance, they will improve their margins with Comair and ASA by reducing costs there too. Under bankruptcy, all contracts will be subject to change through negotiations - not just the mainline pilots. Why would GG leave cash on the table when he could reduce EVERYONE'S wages too - that's what the bankruptcy process would provide - an opportunity to trim all labor contracts. I am not a Delta pilot, but a lot of my buddies are. They are so tired of being the sole target in this long debate. Sure, LCCs have changed everything - nothing will EVER BE THE SAME FOR EVER AND EVER AND EVER. Wages will need to come down. But wait, the pilots aren't the only labor group in Delta - right? What about everyone else contributing to the "investment" in the future?

I think most Delta pilots (except for the random good-ole-boy Southern jacka$$) believe that it's time to accept the facts that wages will need to be lower to compete BETTER. But they are tired of being blamed for everything - they won their current contract through tough negotiations (sure, back in the golden days). Leo once said "a contract is a contract." The mainliners have been ready to talk for quite some time - this is a negotiation right? Now DAL management is trying to shape public opinion and the opinions of other Delta constituencies like the FAs and the regional folks - focus the blame and your "futures" on the actions of the pilots. The pressure on the pilots is BUILDING.... GG is brilliant - it's called divide and conquer...

If Chapter 11 happens, expect everyone's wallets to get thinner because DAL management will have the ability to renegotiate every labor contract - and I doubt they will give up a chance to reduce overhead when offered. DAL management doesn't want to wait for Comair's next contract negotiations - they will act to reduce the difference between Comair/ASA and Mesa or CHQ. Tough times ahead I am afraid...

 

[General Lee]

I just got back from a long a$$ 4 day so I haven't had a lot of time to see this stuff. It is interesting that Grinstein would already ask for more when he hasn't heard the current amount we were going to increase to. That is a bad way to re-start negotiations. He is probably "managing our expectations" again---we would agree to his $800 million in cuts saying "Gosh, that would be better than $1 billion...." Those higher fuel prices are mainly managment's fault--they are the ones who sold off the fuel hedges (50% at $28 a barrel) early to pay off a pension payment (not for the pilots)--even though Congress was about to pass some relief in the form of 2 extra years for those payments in a relief package.


Medflyer,

I don't know if it would be worse in Chap 11 for the pilots---but it would for everyone else including yourself. That No furlough clause wouldn't matter much because we have had about 900 Captains retire since last September (450 since May 1st), and another 500 or more would leave before any Chap 11 filing. Even if we get a 30% pay cut or more---a lot will retire because their retirement is based off of 60% of their FAE based off of their 3 best years (not last years). The last 3 (2002-2004) will clearly be their "best three" for years to come. If they were going to take a 30% cut (leaving them with 70% of what they make now) and they could retire and make 60% instead and play golf---why would they stay? We have over 2000 pilots over age 50, and around 600 with more than 25 years at Delta and qualify for FULL retirement. Everytime one of those guys bails---about 10 people move up.

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.


USCtrojan,

Once again for you----Delta can manipulate your balance sheet by not charging you for things that mainline really pays for---like Distribution (Delta.com) and reservations, airport gate usage, and putting you on routes that used to sustain 727s or 737s--and your planes would be naturally full. 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

 

[embdrvr]

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.

 

[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