Who is bringing more to merger, NWA or DAL

[DTW320]

Last but not least, what about the retirement issue. DAL voted their retirement away for better work rules and pay. NWA kept a frozen plan in exchange for worse rules and less pay. That's oil and water right there folks. Bringing NWA people up to parity without adddressing retirement for DAL people will not work.

Wouldn't DAL management assert that your B plan brings your young group up to parity with the NWA A plan? NWA guys with less than a 60% FAE A plan on date of freezing got a targeted B plan aiming for 50% FAE, very similar to yours right?

Neither one of us voted on our pensions in exchange for anything, with the exception that NWA pilots voted to freeze the plan to avoid a distress termination. DAL's was distress terminated in CH11. NWA insisted we keep the pension, albeit frozen, to avoid having the PBGC crash the post BK stock party. We both took huge % payrate cuts. DAL was starting from a higher point. On average DAL payrates are 10% higher than NWA. Labor CASM is 10% higher at DAL according to the E&FA analysis.

 

[DTW320]

Yes, but they will get our better work rules if they merge with us. I think it would be good for our management to try to buy out the top NWA guys, sure. But, we will have to be brought up to their retirement "worth", and I think they are working on that right now. I agree though--500 or so top NWA guys leaving would be good for everyone, especially junior pilots. I don't know if that would happen though.

Bye Bye--General Lee

How would they buy out the top NWA guys? Under federal pension law the only way to terminate a frozen DB plan is for it to be fully funded, which it's not, or to distress terminate it in BK. Most of our guys aren't going past 60 due to their frozen pensions.

 

[dbrownie]

Not trying to be flame bait, but the question has recently been asked around NWA.

NWA

- Good financial numbers, better than DAL
- Freighter division
- 747-400
- A330
- 68 787
- Pacific division, Tokyo hub 747-400, 747,757,a320
- less domestic delays due to more newer and efficient hubs

can't think of more right now...

Jetflier:
How about;

-Better crew bases at DAL

-Newer planes at DAL

-More wide bodies at DAL

-Better pay at DAL

- A mgt team that doesn't despise it's employees
at DAL

-A more unified pilot group at DAL?
(not sure on that one but they appear so)

Dave B

 

[General Lee]

Wouldn't DAL management assert that your B plan brings your young group up to parity with the NWA A plan? NWA guys with less than a 60% FAE A plan on date of freezing got a targeted B plan aiming for 50% FAE, very similar to yours right?

Neither one of us voted on our pensions in exchange for anything, with the exception that NWA pilots voted to freeze the plan to avoid a distress termination. DAL's was distress terminated in CH11. NWA insisted we keep the pension, albeit frozen, to avoid having the PBGC crash the post BK stock party. We both took huge % payrate cuts. DAL was starting from a higher point. On average DAL payrates are 10% higher than NWA. Labor CASM is 10% higher at DAL according to the E&FA analysis.

I would think you would want a higher labor CASM at NWA? Right? Do you like your current wages?


Bye Bye--General Lee

 

[EdTeachLives!]

DTW320

In your B plan at NWA, what is the contribution % and what is the % that the company matches on your 401k?

There are some EF&A numbers floating around, but some of their other info was pretty flawed. Go figure. I mean it is just all ALPA, you'd think the numbers would be easy to retrieve and verify. Guess I answered my own ?. It is ALPA.

Ed

 

[DTW320]

I would think you would want a higher labor CASM at NWA? Right? Do you like your current wages?


Bye Bye--General Lee

No! I'd like to get the DAL payrates vs ours. There are some things in our contract that I like better than DAL's. Just pointing out that our average 10% difference in payrates (not 40% as some have said here) doesn't explain the 50% difference in profit, not to mention the difference in operating margin/debt/cash on hand as a multiple of monthly expense, as some folks here have used as an excuse.

 

[General Lee]

No! I'd like to get the DAL payrates vs ours. There are some things in our contract that I like better than DAL's. Just pointing out that our average 10% difference in payrates (not 40% as some have said here) doesn't explain the 50% difference in profit, not to mention the difference in operating margin/debt/cash on hand as a multiple of monthly expense, as some folks here have used as an excuse.

All of that operating margin/debt/cash could be changed with a multitude of Winter storms and delays. Hey, we both just got out of BK, neither of us are financial powerhouses just yet. Goldman Sachs said we could produce an extra $850 million a year combining companies. We'll see how we do after a year being together....

Bye Bye--General Lee

 

[DTW320]

DTW320

In your B plan at NWA, what is the contribution % and what is the % that the company matches on your 401k?

There are some EF&A numbers floating around, but some of their other info was pretty flawed. Go figure. I mean it is just all ALPA, you'd think the numbers would be easy to retrieve and verify. Guess I answered my own ?. It is ALPA.

Ed

Ed,

It's complicated (like you said....it is ALPA). The official % is currently 6% and it goes to 8% later. This is what new hires get. Those hired before 9/2007 get an annual amount, derived from a complex formula factoring in age, length of service, frozen A-plan amount, and assumed pay progression, that is designed to produce a lump sum at retirement equal to an actuarial 50% FAE monthly benefit.

Translation(mine anyway): senior guys whose frozen A-plan already equals or exceeds 50% FAE get 0%. The further below 50% FAE that a pilot's frozen A plan is, the more B plan money they get. It's not expressed as a % of current earnings but works out to 20% + for some junior guys.

 

[DTW320]

All of that operating margin/debt/cash could be changed with a multitude of Winter storms and delays.

Well, 2007 numbers did include last winter.
Besides, not a factor....Pennekamp and AlGore say that global warming will stop those events. After the merger, when a NWA guy offers to take you ice fishin, take him up on it while you still can..

 

[Truckdriver]

So I guess the old guys with frozen pensions would get no defined contribution money and those without the pension would get the money to bring them up to 50% FAE. I could go for that. The percentage we are currently getting would have to go up quite a bit for me to get 50% FAE. Why don't we also have the formula work out so that we can retire at age 60 with 50% FAE. We need to keep the old guys heading out the door buying RV's, t-shirts from truck stops, and straw hats to stimulate the economy.

 

[SSDD]

Who brings more to the table??? Well, Delta of course!!!!!!!!

DL brings The General, and now his offspring, Fins :laugh:

 

[PuffDriver]

This thread is doing nobody any good. My suggestion to my fellow DAL pilots is to let it lie.

 

[another cfii]

Did anybody mention anything about company culture, morale between the 2 companies?? I'm not gonna give my 2 cents, because most of us that either work at DL/NW or commute on DL/NW would know the answer to that.

Pay, scope, job protection are all important issues, but maybe we should also think about how the culture, morale is gonna change post-merger?

All the analysts say that the merger won't be beneficial unless we (labor) are in favor of it, but so far on this cyberspace, i don't feel the luv' from both camps....

 

[737 Pylt]

I think most of us would be ok with a staple at mainline. But that isn't even acceptable to the Delta pilots. They would have to take "undesirables" with "no degree" and "10 DUIs" and then their squadron mates would have to stoop to the level of flying an RJ or a turboprop for a few years. That's what killed it in 1998.

John:
I didn't know you were a member of the rjdc as well?:laugh:
I'm just kidding. Had those clowns not ruined for the rest of the industry, the staple job might have been, but you can thank John, Dan, Jessie and the rest of the girls like N2264J for that fiasco!

737

 

[DTW320]

So I guess the old guys with frozen pensions would get no defined contribution money and those without the pension would get the money to bring them up to 50% FAE. I could go for that. The percentage we are currently getting would have to go up quite a bit for me to get 50% FAE. Why don't we also have the formula work out so that we can retire at age 60 with 50% FAE. We need to keep the old guys heading out the door buying RV's, t-shirts from truck stops, and straw hats to stimulate the economy.

Truck,
All NWA pilots have an A-plan pension, except those hired after the date of freezing. It's just a difference in how much. Like everything else, it's controversial. The senior guys have frozen pensions equal to 60% of FAE that are based on the old pre-BK W2's. The targeted 50% FAE B plan uses the post-BK W2's to calculate FAE so the discrepancy is big.

Some senior guys are even suing to get some of the B plan money. They feel that even though they have big frozen A-plans, that pension is at risk of future BK's vs the junior guys whose B plan money is theirs regardless of what happens....even though that junior guy's B plan will never equal the $ the senior frozen A-plan dude will see.

So, as usual in this biz, there is enough crap to keep us all fighting each other for years! And that's before the merger! Never a dull moment.

I'm all for getting more senior guys to head for the exits.

 

[800Dog]

No! I'd like to get the DAL payrates vs ours. There are some things in our contract that I like better than DAL's. Just pointing out that our average 10% difference in payrates (not 40% as some have said here) doesn't explain the 50% difference in profit, not to mention the difference in operating margin/debt/cash on hand as a multiple of monthly expense, as some folks here have used as an excuse.

What in the NWA contract do you like better than Deltas? Unfamiliar with your contract but would like to see the best in both comprise the new contract if this goes forward.

 

[Sedona16]

Truck,
All NWA pilots have an A-plan pension, except those hired after the date of freezing. It's just a difference in how much. Like everything else, it's controversial. The senior guys have frozen pensions equal to 60% of FAE that are based on the old pre-BK W2's. The targeted 50% FAE B plan uses the post-BK W2's to calculate FAE so the discrepancy is big.

Some senior guys are even suing to get some of the B plan money. They feel that even though they have big frozen A-plans, that pension is at risk of future BK's vs the junior guys whose B plan money is theirs regardless of what happens....even though that junior guy's B plan will never equal the $ the senior frozen A-plan dude will see.

So, as usual in this biz, there is enough crap to keep us all fighting each other for years! And that's before the merger! Never a dull moment.

I'm all for getting more senior guys to head for the exits.

Would senior NWA guys potentialy be hurt (lower percent FAE to be paid) by staying until age 65? If the pay rates go back up on the NWA side will this enable the pilots to make more on the retirement percent with higher wages and therefore be inclined to stay until age 65?

 

[DTW320]

Would senior NWA guys potentialy be hurt (lower percent FAE to be paid) by staying until age 65? If the pay rates go back up on the NWA side will this enable the pilots to make more on the retirement percent with higher wages and therefore be inclined to stay until age 65?

No, the A plan is frozen so future earnings have no effect on FAE. The FAE snapshot was taken at the time of freezing. The incentive for them to leave at 60 is because the difference between their frozen A plan, which was calculated at the old higher rates, and what they are making now on the line, at the post BK pay rates, is smaller. Some tax implications make it even smaller. Also, being retired for 3 (or is it 5?) years ups your standing with the PBGC if there is a plan termination.

Some also believe that going to 65 will decrease their life expectancy....IMHO only participation on FI does that...

 

[DTW320]

What in the NWA contract do you like better than Deltas? Unfamiliar with your contract but would like to see the best in both comprise the new contract if this goes forward.

Well don't get me wrong...it's not a long list.

Obviously I like having an A-plan, I think our sick leave is better, at the high end of longevity our vacation is a little better, some aspects of our scope are better(1 for 1 76seaters/mainline ac vs 3 for 1), our LTD plan has slightly better terms(no offset for other income). I'm not sure how DAL's works but I have heard that our trip pay protection is better when pattern is disrupted/cancelled etc.

Oh....and while our CA and FO's get slightly higher Intl override than yours, our S/O's get 100% more than yours do!

Combining the best of both, with some additional step-up across the board would be a win-win.

 

[Capt. Caucasian]

Oh....and while our CA and FO's get slightly higher Intl override than yours, our S/O's get 100% more than yours do!

And this is why I am glad that if there has to be a merger it is with you guys. That's funny right there. When I came to Delta I was actually hoping to sit sideways for a little while just to say I did it. Put some of those 747's in ATL and maybe I still will! NWA is a good bunch of folks. Tied a few on with yall on overnights. Used to know a few of the former ATL Mechs.

 

[Sedona16]

One item I like better at NWA is a 75 hour reserve guarantee instead of 70 at DAL. I hope the 75 hour would be included with a combined company.

 

[macdu]

Well said! I nominate this as the comment of the month! So true.

When a merger happens, the employees fight like dogs at Michael Vick's crib, and management and Wall Street laugh all the way to the bank. Yet here we are saying "my airline is better than yours" (DAL737FO). Pilots are soooo stooooopid sometimes.

Ditto; Also as someone else mentioned a possible quote from G4G5/aa717, that this merger will happen if the powers that be with the money on the line want to make it happen. Stop your pissing matches about who has the better airline and get to work hammering out how the two pilot groups are going to live together. You guy's can make this a little painful or very painful for your pilots. Do what's right.

 

[jke406]

You guy's can make this a little painful or very painful for your pilots. Do what's right.

Well, I'm sure they weren't going to, but since you ordered them to, that should change their minds.

 

[800Dog]

Well don't get me wrong...it's not a long list.

Obviously I like having an A-plan, I think our sick leave is better, at the high end of longevity our vacation is a little better, some aspects of our scope are better(1 for 1 76seaters/mainline ac vs 3 for 1), our LTD plan has slightly better terms(no offset for other income). I'm not sure how DAL's works but I have heard that our trip pay protection is better when pattern is disrupted/cancelled etc.

Oh....and while our CA and FO's get slightly higher Intl override than yours, our S/O's get 100% more than yours do!

Combining the best of both, with some additional step-up across the board would be a win-win.

Thanks.

 

[FDJ2]

Wouldn't DAL management assert that your B plan brings your young group up to parity with the NWA A plan? NWA guys with less than a 60% FAE A plan on date of freezing got a targeted B plan aiming for 50% FAE, very similar to yours right?

After DAL's pension was terminated all DAL pilots got their DC plan set at 9% along with a 2% 401k contribution (not match). Additionally, DAL pilots received a$650m from DAL. This cash was distributed and covered at least 100% of DAL pilot qualified accrued benefits from the terminated plan. Junior pilots received more than their accrued benefit. Senior pilots with non qualified earnings based $250k/year received 60 cents on the dollar for all benefits above $205K/year

Essentially, the DAL pilots already have their DB plan in their own name. Additionally, DAL pilots recieved over $1.2B in cash value from the bankruptcy claim. This money has already been distributed with the most junior pilots on the seniority list at the time reeiving approximately $100K cash lump payment.

 

[FDJ2]

What in the NWA contract do you like better than Deltas?

I think hats are optional. That might be important to some guys.

 

[Draginass]

Who cares who brings most to the table. That's EXACTLY how the execs want you guys to think. They WANT you guys to start in-fighting about the small slice of the pie they're going to give you.

SCREW THAT. Don't bite on that hook. Take your demands that benefit both pilot groups, roll 'em up, and shove 'em down Steenland and Anderson's throat . . . . and don't be gentle about it. These guys are your enemies and are out to screw you. Don't forget it.

 

[ExAF]

No Hats

I think hats are optional. That might be important to some guys.

Ya, sure, you betcha...you can keep dem hats dont' ya know!

 

[whymeworry?]

One thing that gets me about all this merger talk. Virtually everyone involved, from the pilots to mgmt to the other emp groups to the financial reporters to the Wall St I-Bankers, seems to think this new "mega-carrier" concept will work out.

Nobody seems to have truly thought through the negatives.

I could come up with over a 1,000 mistakes my airline has made in the past few years and I'm sure each of you could as well. Each mistake is followed by a retrenchment on the route, issue or business process associated with that mistake, only to leave us employees standing back to watch mgmt come up with the next train wreck.

I don't think mgmt has really thought through the long-term negative ramifications of a merger. Rather, they only seem to be focusing on the positive.

 

[IronCityBlue]

As the overpaid consultants would say, this merger brings "synergistic" benefits in which 1+1=3. When you add NWA's Asian routes to Delta's European, Latin American and nacent African routes, you get a truly global carrier than no other airline can compete with effectively. The domestic routes are very complementary too with few hubs overlapping (CVG/MEM/DTW are questionable but you probably won't see many mainline reductions - regionals may take the brunt of cuts). Growth will be in international markets going forward where you have less competition and better control of your margins - the domestic market is too cut-throat.

Strategically it sounds like a good match. Integration, on the other hand, may not be so smooth. Fortunately, the management teams are trying to structure as much as possible before the merger is officially announced. Time will tell...

Good analysis overall, but I think a UAL/CAL combo, if done right, and (MUCH bigger if) if aprooved, would be a force to reckon with. CAL matched DAL over the atlantic, and its not hard to get 1 Russian city, and if Africa works out a UAL/CAL would have so many widebodies to throw around they could swarm any market that was doing well. Over the pacific UAL/CAL would be bigger with more direct flights versus the Tokyo hub, but in any case bigger over the Pacific.

CAL is the best "dance partner" for anyone in the entire picture, since they are lean, no hub overlap (except their little CLE focus city) and only have 3 very common fleet types. NWA's fleet is the albatross of the industry. They would still bring value to the right partner, but it will be a painful transition with their abomination of a fleet.

In any case, I hope CAL scope holds. 50 seats should be the line in stone, not some lame brained 70/76/86/90+ seat line in the dust.