Talks to Continue Between Delta, Pilots

[FDJ2]

Talks to Continue Between Delta, Pilots
Sunday October 24, 3:17 pm ET
By Harry R. Weber, AP Business Writer Delta, Pilots Recess Without Agreement on Pay Cuts, but Talks to Continue Monday

ATLANTA (AP) -- Delta Air Lines Inc. and its pilots union recessed Sunday without reaching an agreement on pay cuts that are key to the carrier's effort to avoid bankruptcy. Union spokeswoman Karen Miller said the two sides will resume talks Monday in the Washington, D.C., area.

[size=-2]ADVERTISEMENT[/size]on error resume nextplugin=(IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.6")))The Atlanta-based airline says it needs $1 billion in concessions from its pilots -- roughly two-thirds of which would come from pay cuts -- to avoid bankruptcy. The pilots have publicly offered up to $705 million in savings.

On Oct. 8, the pilots union made a new proposal to management. It has not said if the offer includes a higher amount of concessions. However, in a regulatory filing a week later, Delta said that to date the union's "counterproposals have been for substantially less than $1 billion." The company also said in the filing that the union is seeking a stock option program for pilots that involves "substantially more equity" than management's proposal.

The company and pilots had been negotiating the last several days in south Florida.

Delta, the nation's third-largest carrier, said recently that even with the concessions it is seeking, it still may have to file for bankruptcy because of its heavy debt.

In a recent debt exchange offer in which Delta is trying to restructure some of its $20.6 billion in debt, the airline has encouraged creditors to respond before Tuesday. Some analysts believe Delta could file for bankruptcy very soon. The airline itself has said for a few weeks now that it has only weeks left to get the pilot concessions and restructure its debt to avoid bankruptcy. Delta has lost more than $6 billion since early 2001, during which time it has also cut 16,000 jobs. Delta plans to cut up to another 7,000 jobs in the next 18 months. On Wednesday, the struggling airline reported a $651 million loss in the third-quarter.

 

[Heavy Set]

In a recent debt exchange offer in which Delta is trying to restructure some of its $20.6 billion in debt, the airline has encouraged creditors to respond before Tuesday.

That statement says a lot. Clearly the airline is in trouble (with its high debt load) but it is threatening to file Chap. 11 in order to bring more creditors and the pilot group to the table sooner...

 

[~~~^~~~]

The pilots have been at the table for three years and knew ( even admitted ) that Management's numbers were correct. But, they insist on using red herrings to delay, delay and delay like tommorrow will never come. First it was forty million in executive compensation ( yes it was a bad thing to do, but 40 million is peanuts in these negotiations ). Now it is a demand that other employees take wages cuts and that other stakeholders go along with some plan that ALPA has allegedly designed. All these excuses are just senseless political tricks. Anyone with a lick of sense knows 40 million in exec. compensation and conditions on third parties are just sound bites ( that the Delta pilots gobble up ) but which do not matter if the goal is saving the airline.

If you were a banker, doing business with a Corporation, would you let a union rep ( a pilot with no expertise ) let you tell you how to structure 20 Bn in debt? Yeah sure, like I let passengers tell me how to fly my airplane. This is stalling, buying time, hoping things will get better.

Oh come on, lets be realistic. The Delta MEC is not going to agree to concessions and be held responsible for a Contract 96 backlash if Delta should ( by a miracle ) pull this out. The union will do their best to hold the line in banruptcy court and then claim "it wasn't our fault."

Guys - this is a shake out. There will be two, or three, fewer airlines 5 years from now. Pilots at the othe airlines ( even carriers in better shape than Delta ) have made the tough choices to try to save their jobs. If I were a Delta pilot, I would be drafting a recall petition tonight. Just my humble opinion.

I understand why Delta's management has tried to remain out of bankruptcy court, but the time has come. They need to take the gloves off and do what must be done.

 

[FDJ2]

The union will do their best to hold the line in banruptcy court and then claim "it wasn't our fault."

$3B in losses in 9 months and you want to blame that on DALPA. YGTBSM. 7,000 Delta pilots would have had to concede well over $400,000 each in just the last 9 months to account for $3B in losses. No Fins, as much as you would like to blame Delta's problems on the Delta pilots, Delta pilots are not to blame for $20B in debt ,or $3B in losses over 9 months. At this rate Delta pilots could not concede enough to offset the losses incurred through the poor busness strategies of Delta management. You'll have to find another boogey man Fins.

 

[~~~^~~~]

FDJ2: No I'm not saying that the entire loss is the pilots' fault, there is no way it could be. But the Delta MEC has failed to deal with this responsibly. Bankruptcy could have been averted, as it was at American, Northwest and Continental.

And unlike you, I don't think Delta management is so lousy. Costs have come down outside of pilot wages and fuel. Revenues have gone up, as have load factors. The creativity with financing astounds me and they are paying some bills with unsecured credit.

I don't think ALPA can run the airline better than Delta's management can.

 

[Vortilon]

[/QUOTE] If I were a Delta pilot, I would be drafting a recall petition tonight. Just my humble opinion. [/QUOTE]
And then what? Have a nifty negotiating committee election in the middle of all of this?

I think in the end, THIS negotiating committee will do what they have done 45 times since 9/11: continue to work with the company and help develop a balanced agreement that makes sense.

 

[FDJ2]

FDJ2: No I'm not saying that the entire loss is the pilots' fault, there is no way it could be. But the Delta MEC has failed to deal with this responsibly. Bankruptcy could have been averted, as it was at American, Northwest and Continental.

Actually I think the Delta MEC has dealt with this very responsibly. As you admit the losses could in no way have been the fault of, or averted by DALPA. It's obvious that Delta would eventually have to restructure in court unless there are comprehensive concessions from all Delta stake holders. That includes the debt holders, pilots, non contract employees and DCI partners that fly over 1/3 of Delta block hours. All these contracts need to be restructured. Having DALPA take the lead out of BK, just to have us slide in to BK a few months later is not the answer. If Delta can pull off a restructuring outside of BK, great, if not, well we'll all have to take that walk to see the judge. That's unfortunately the way it is.

 

[~~~^~~~]

And then what? Have a nifty negotiating committee election in the middle of all of this?

I think in the end, THIS negotiating committee will do what they have done 45 times since 9/11: continue to work with the company and help develop a balanced agreement that makes sense.

Whatever dude - they will be negotiating with a Bankruptcy Judge who is a lot less paternal than Grinstein.

They should have worried less about what "makes sense" and worry about saving their jobs.

But if it makes you feel better, you fought the good fight and lost. I'm just telling you it is the results that matter and if Delta fails, you lose. So yes, I'd recall them. The fight is to save the Company, not to save your personal slice of the pie.

 

[Vortilon]

Whatever dude - they will be negotiating with a Bankruptcy Judge who is a lot less paternal than Grinstein.

They should have worried less about what "makes sense" and worry about saving their jobs.

.

The above is why I am glad YOU are not on our negotiating team.

 

[T-Gates]

FDJ2: No I'm not saying that the entire loss is the pilots' fault, there is no way it could be. But the Delta MEC has failed to deal with this responsibly. Bankruptcy could have been averted, as it was at American, Northwest and Continental.

I don't think you can lump CO and NW into the same boat as DL on this one. Neither carrier was in such danger of filing CH11 as DL is now. And this article says that even DL conceeds that the pilots won't save the company from CH11. I don't see how DALPA is to blame...

 

[MedFlyer]

I think in the end, THIS negotiating committee will do what they have done 45 times since 9/11: continue to work with the company and help develop a balanced agreement that makes sense.

Unfortunately, the pilots haven't created a balanced agreement. They created a hodge-podge of add-on's that have done little to restructure the company, but rather prolong the misery.

It's true that for DL to survive everyone will have to give. However, like it or not, the DL pilots are the linchpin in the whole process. The creditors won't give until they are sure all the employee groups will give. But the creditors already know the non contract folks are subject to give at any time, so no need to worry about them. That leaves DALPA as the primary target.

Until recently, DALPA refused to negotiate seriously and spent most of the past three years in complete denial. DALPA's behavior sent a clear message to the creditors. So the creditors haven't helped out, DALPA is still haggling and playing games and now DL is teetering on BK.

And while you can't fault DALPA for all of DL's debt, they are responsible for some of it. It's funny to hear DL pilots crying about all the debt now. Where were you 3 years ago when DL started piling on the debt just so you could keep your industry leading pay? I didn't hear any DL pilots crying about debt then. In fact, DALPA cited DL's ability to gain access to the capital markets as one of the reasons for not offering concessions.

 

[Vortilon]

Where were you 3 years ago when DL started piling on the debt just so you could keep your industry leading pay?

Well that one's pretty easy actually. I was reading my furlough notice and looking for a job.

 

[FDJ2]

Where were you 3 years ago when DL started piling on the debt just so you could keep your industry leading pay? I didn't hear any DL pilots crying about debt then.

Delta started piling on debt before 9-11, but since 9-11 the majority of Delta debt has been in the form of approximately $3B in RJ orders in 2002,2003,2004 and soon to be 2005. Delta has invested approximately $8B in RJ lift in the last 5 years, which accounts for a sizeable chunk of Delta's overall debt increase. Delta hasn't incurred any debt for mainline aircraft in the last 3 years and Delta operations have been relatively cash flow neutral for operations throughout. When looking at the last 9 months in which Delta has lost $3B we see an increase in contract carrier expenses of 23.8%, aircraft fuel of 42%, contract services of 12.1% an increase in salaries of only .4% and a reduction in fuel neutral mainline CASM of 3.7% for the quarter. Obviously this is DALPA's fault.

 

[ASADFW7]

Something smells of ....

 

[CMonBoard]

Has Delta ever filed for Ch. 11 before?

 

[79%N1]

Without the RJ's (Which are LEASED!!!!!!!!!!!!!!!!!!!!!!) who would be getting on the Delta mainline jets???????????????????????? We never remember that, though! I know, now I remember.......ASA and Comair are to blame for Deltas woes and their having to take a paycut!! Our fault!

 

[FDJ2]

Without the RJ's (Which are LEASED!!!!!!!!!!!!!!!!!!!!!!)

79%, you really need to engage your brain. Delta owns a total of 158 RJs and climbing and leases a total of 123. The majority of RJs are owned, not leased and even those 123 leased RJs contribute to Delta's long term debt and lease figure of over $20B. Next time try to get your facts straight. As for who would get on Delta planes without ASA/CMR, who knows? Currently the entire DCI portfolio only flies 21% of all system traffic, and I believe a good 82% of DCI passengers connect onto a mainline aircraft. The better question is if it weren't for DAL mainline, who would fly in your RJ?

 

[79%N1]

OK FDJ2,

I have been put in my place once again by another all powerful and knowing Delta pilot. I should have known better. Call it a temporary leave of my senses not to bow down to the much mightier, higher class individual such as yourself and the rest of you godlike Delta pilots. I am back in my lowly place!!

 

[ASADFW7]

I read the stuff about who's fault it is and no one takes responsibility. I just want it to start getting sorted out. It makes be sick. What makes Delta indifferent to the rest of the industry?


I work for ASA, and it could be a lot better place to be, but there are worse places. I am however, tired of the few pilots on both sides that throw stones at the other side of the fence. Mainline pilots who try to blame us for UAL plus 1, and regional pilots who blame DALPA for the RJDC.

 

[Tomct]

Here we go again......blah blah blah blah......ASA/CMR's fault!!!!!
Get a new soap box! Mngmt loves the fact that our pilot groups fight like this...Only none of us are smart enough to see it!
Just remember who is paying your retirement....did I say that out loud?
Sorry, end of thread!!
Peace out Dog!!

....Alright, give me ham on five and hold the Mayo...