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Delta To Ask For 26.5% Cut In Pilot's Wages  
User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Posted (11 years 2 months 1 week 6 days 7 hours ago) and read 4299 times:

The Wall Street Journal is reporting that Leo Mullin, CEO of Delta Airlines, is looking for a 26.5% reduction in pilot's hourly wages, in addition to foregoing a 4.9% increase that was slated for this year. Further layoffs were not mentioned.

Not that this is much of a surprise, but now the process is official.

The implications for Song are also significant. If this pay cut occurs, this should set Song's costs right in line with other LCC's, thereby setting Song in a position to effectively continue nationwide expansion.

Steve

30 replies: All unread, showing first 25:
 
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 17
Reply 1, posted (11 years 2 months 1 week 6 days 7 hours ago) and read 4292 times:

Helluva way to launch Song...by pissing off all the mainline pilots as well.

User currently offlinePanamair From United States of America, joined Oct 2001, 4875 posts, RR: 25
Reply 2, posted (11 years 2 months 1 week 6 days 7 hours ago) and read 4274 times:
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This is obviously necessary given the recent concessions by UA and AA pilots. Previous news reports had indicated a 22% cut which would have left DL pilots still the best paid in the industry - I don't know where the 26.5% would leave them relative to UA or AA but the general feeling at DL with the other employee groups (all non-union) is that the pilots now need to do their bit to help DL get back on track...

User currently offlineMD88Captain From United States of America, joined Nov 2001, 1330 posts, RR: 20
Reply 3, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4255 times:

God I hate newspapers. They never get anything right. Here are the "numbers". Paycut of 22%. In addition we would not get our May 1, 2003 raise of 4.5% (yes we already got it - today in fact) and we would not get the 1 May, 2004 increase of 4.5%. That's 22% + 4.5% +4.5% or a total of 31% in straight pay. BUT WAIT... there's more. DAL wants a reduction in per deim, International override, night pay, and a reduction in 401K match. Plus there's more in DAL's proposal.

Throw in that 1200+ pilots have taken a 100% paycut and that maybe half the senority list has been bumped back to lesser paying positions. Most pilots are looking at making 40% to 50% less than before if management's proposal is accepted. And there's the rub for management. THE PILOT'S GET TO VOTE ON WHETHER THEY WANT TO BRING HOME 4o% to 50% less!

Considering that DAL is actually not on the end of bankruptcy and sitting on a pile of cash. Considering that Mischelle Burns briefed Wall Street that DAL was cash flow positive at the last stockholder's meeting. Considering that Leo Mullin et al have increased their salaries outragously and pulled the same slush fund/guarenteed/big shot only retirement plan shit that got Carty fired.
Considering that bookings are increasing and the war is over. Considering that the non-pilot employees have not taken a pay cut including Leo. Considering all I do not believe that DAL pilots will vote YES to massive pay cuts.


User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 4, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4252 times:

Considering that DAL is actually not on the end of bankruptcy and sitting on a pile of cash. Considering that Mischelle Burns briefed Wall Street that DAL was cash flow positive at the last stockholder's meeting. Considering that Leo Mullin et al have increased their salaries outragously and pulled the same slush fund/guarenteed/big shot only retirement plan shit that got Carty fired.
Considering that bookings are increasing and the war is over. Considering that the non-pilot employees have not taken a pay cut including Leo. Considering all I do not believe that DAL pilots will vote YES to massive pay cuts.


That is all secondary to the fact that DL is still losing money. Massively.

DL pilots fortunes are tied to the yields paid by the passengers carried in the back...and its time they realized this. Yields are dropping.....hence DL pilot salaries need to drop.




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineMD88Captain From United States of America, joined Nov 2001, 1330 posts, RR: 20
Reply 5, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4248 times:

Before the cries of greed erupt. Consider my belief that it is better for me to accept a 50% paycut in bankruptcy rather than now. Yes, I prefer bankruptcy. In bankruptcy, DAL will answer to a judge and not Leo the thief. All creditors will chip in. All Stockholders will chip in BIG time. And most importantly the leases can be renegotiated. Other employees will ante-up too. Everything will be up for negotiations and not just MY PAY only.

User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6578 posts, RR: 24
Reply 6, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4245 times:

Considering that DAL is actually not on the end of bankruptcy and sitting on a pile of cash.

The only reason DL is sitting on a pile of cash is because DL has taken on massive amounts of debt. It's kind of like taking out thousands of dollars of loans from your local bank and then declaring you're rich because of all the money you have. Unfortunately, all the debt DL is taking on will become a huge burden in the future and when the next downturn comes, it will unlikely that DL will be able to recover w/o bankruptcy.

Loads are starting to rebound, but they are still way off. Worst of all, yields are dramatically off and they have not rebounded. The current DL pilots pay is based on the economy of the late 90's, not on the economy of today.

As for other DL employees not taking paycuts that is true, however they have had their pay frozen (no raises). The pilots are still getting raises.

DL may not be on the verge of BK yet....but it won't take much to get there. The DL pilots could take a reasonable cut now (the current proposal is just a negotiating start) or take a much larger one when DL is teetering on BK. Just ask your friends at AA. A year ago, they would never have imagined the cuts they would be taking now.



User currently offlineEssentialPowr From United States of America, joined Sep 2000, 1820 posts, RR: 2
Reply 7, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4242 times:

AAR substantiated the Don Carty fiasco by stating that they needed to retain good people in a competitive market...Today, MSNBC's site reports that US bankruptcies are at an all time high.

CEOs are a dime a dozen, including the "good" ones...


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6578 posts, RR: 24
Reply 8, posted (11 years 2 months 1 week 6 days 6 hours ago) and read 4240 times:

Yes, I prefer bankruptcy. In bankruptcy, DAL will answer to a judge and not Leo the thief. All creditors will chip in. All Stockholders will chip in BIG time. And most importantly the leases can be renegotiated. Other employees will ante-up too. Everything will be up for negotiations and not just MY PAY only.

Just remember, many companies that go into BK never come out. And many other companies that go BK and come out, only survive a while and just go right back in.

Also remember that a judge will likely take a much harsher stance toward labor than DL's management.

Your stance also demonstrates that you care little for your fellow employees. In BK, DL would furlough far more pilots than outside of BK....just ask your friends at USAirways where almost half of the pilots have been furloughed.


User currently offlineMD88Captain From United States of America, joined Nov 2001, 1330 posts, RR: 20
Reply 9, posted (11 years 2 months 1 week 6 days 5 hours ago) and read 4212 times:

DAL wants me to work for 50% less while Leo enjoys a large raise and bonus? And my fellow employees take no pay decrease? I'll let the judge share the pain.

User currently offlineM717 From United States of America, joined Dec 2002, 608 posts, RR: 4
Reply 10, posted (11 years 2 months 1 week 6 days 5 hours ago) and read 4191 times:

While I don't work for DAL, I find the statement by Panamair that "the general feeling at DL with the other employee groups (all non-union) is that the pilots now need to do their bit to help DL get back on track..." to be extremely offensive.

Tell me, Panamair...are the "other employee groups" willing to do the same? If not, then they should keep their "feelings" to themselves, and their mouths shut.


User currently offlineEA CO AS From United States of America, joined Nov 2001, 13510 posts, RR: 62
Reply 11, posted (11 years 2 months 1 week 6 days 5 hours ago) and read 4177 times:
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The pilots might be the best workgroup to propose a "Variable Earnings Plan" like EA did back in the late 70s.

You set the bar where you have your normal contract rates, and deviate from them based on if the company operated at a loss or a profit from month to month.

You start out where everyone is making the "standard" rates set forth in the contract. Now, if the company breaks even that month, the next month's pay is equal to the "standard" rate in the contract.

If they lost money, the next month's pay rate is a flat 20% lower than the standard contract rates. If they made money, even just one dollar, the next month's pay rate is 10% higher than the standard contract rate.

The idea is that the earnings fluctuate based on the company's financial performace. To keep the beancounters honest, THEIR pay would be tied to the same formula, and no bonuses of any kind would be given to senior management unless the company operated at a profit all year.

I'm sure the pilot group wouldn't object to a reasonable cut in pay when times are tough as long as they're rewarded with pay increases when the company is fat and happy with cash.

And yes, I know EA didn't make it work...but DL is a totally different entity, and truly capable of using such a program effectively.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
Reply 12, posted (11 years 2 months 1 week 6 days 4 hours ago) and read 4156 times:

EA CO AS, that's interesting, but there are flaws in my opinion with using that formula. First of all, senior management will always get fat bonuses, whether they deserve it or not. The Board of Directors seem like they are always scared of losing a CEO or other senior manager that they give huge retention bonuses so they don't leave, even in these tough times. That of course will cause bitterness among other employee groups.

Getting a flat rate, then 20% lower in bad times, and 10% better in good times, is interesting. However, that flat rate should be susceptible to market forces, and what we have seen in recent years is that the market rate for pilots is much lower than it was before. This means that a pilot making a "flat rate" that was established a few years ago would today be too much to be competitive, and that would again raise problems.

Another issue, with the flat rate is that if a company isn't being competitive, one of them being an unnaturally flat rate, then the company will lose money and the pilots will be seeing the 20% decrease in pay as per this hypothetical contract. A continuous pay that is 20 or 30% lower than what they could make otherwise that goes on for years will not make them too happy.

But it could work, I'm just raising a few points. I still think that a lower pay than what is given now, but add on top of that good working conditions and profit sharing is a good way to go. That way pilots and other groups would be paid prices that the company could handle in tough times, but also reward them fairly when times are good.

If what MD88captain is saying is true, then I too would not accept the proposal. But I don't know all the issues, so I'm hardly one to comment.



"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlinePapatango From United States of America, joined Dec 1999, 519 posts, RR: 0
Reply 13, posted (11 years 2 months 1 week 6 days 4 hours ago) and read 4145 times:

Just an observation but I have a real problem in believing MD88Captain is a real pilot or for that matter even works for Delta.

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13510 posts, RR: 62
Reply 14, posted (11 years 2 months 1 week 6 days 4 hours ago) and read 4143 times:
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I still think that a lower pay than what is given now, but add on top of that good working conditions and profit sharing is a good way to go.

I appreciate the input. And the suggestion is just a blueprint of what might perhaps be a viable option to across-the-board cuts. Clearly, the percentages, triggers for increase and decrease, etc would need to be refined...but it could potentially work, especially at a company like DL where employees and management have a history of working with each other rather than against each other.

One big problem with tying paycuts to profit sharing is that the profit sharing comes just once a year (taxed at 45%), where month-to-month pay increases or decreases are taxed as regular payroll, and don't impact the employee as hard.

Another problem is that management can manipulate the earnings figures to artificially decrease the actual profit the company shows if they don't feel like being too generous with the profit sharing amounts. A system that ties performance to pay, including management, would be more fairly administered.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineFlydeltasjets From United States of America, joined Sep 2001, 210 posts, RR: 0
Reply 15, posted (11 years 2 months 1 week 6 days 4 hours ago) and read 4128 times:

I'm not sure why you doubt MD88, but there are many times I have seen him post info on here that either a) only we would know about, b) a topic that is currently being discussed on the Delta ALPA forum, or c) technical info that only a pilot would know.

I would stick to discussing the issues. You'll lose if you debate his qualifications. I have no doubt he is a Delta pilot.


User currently offline2cn From United States of America, joined Aug 2001, 648 posts, RR: 0
Reply 16, posted (11 years 2 months 1 week 6 days 3 hours ago) and read 4107 times:

Posted by M717

While I don't work for DAL, I find the statement by Panamair that "the general feeling at DL with the other employee groups (all non-union) is that the pilots now need to do their bit to help DL get back on track..." to be extremely offensive.

Tell me, Panamair...are the "other employee groups" willing to do the same? If not, then they should keep their "feelings" to themselves, and their mouths shut.


Before you make such comments, heres something to educate yourself with- all employee groups except mechanics and pilots are stil working at pay rates that include the pay cuts back from the early 90s from the last downturn. They have not, and will probably not any time soon, receive a payraise to bring them back up to former levels. So the other employee groups already ARE doing their part- its time the pilots do their part as well. So they have a right to open their mouths and complain when they see the pilots get 4.whatever % payraises each year, and they have yet to see one in over 10 years, and then the pilots want to refuse to take a paycut to help insure the furture of the company when everyone else already is.

But even before the pilots take a cut,management should take a cut in pay then pilots.


User currently offlineM717 From United States of America, joined Dec 2002, 608 posts, RR: 4
Reply 17, posted (11 years 2 months 1 week 6 days 3 hours ago) and read 4103 times:

Another teenage know-it-all on A.net. Adios boys. Been fun....sometimes.

User currently offline2cn From United States of America, joined Aug 2001, 648 posts, RR: 0
Reply 18, posted (11 years 2 months 1 week 6 days 3 hours ago) and read 4094 times:

M717.. actually, I do know what I am talking about.. my dad works for Delta, with 35+ years senority, and is still working at pay levels lower then what he made before the last round of pay cuts in the early 90s. Yeah, they got the employee stock options as part of the pay back, and a very small 1% or less pay raise, but none of that brought him back up to the levels before the cuts. You yourself said you dont work for Delta, my dad does... I think I have better insight into his pay then you do.

[Edited 2003-05-15 22:56:37]

User currently offlineMxCtrlr From United States of America, joined Nov 2001, 2485 posts, RR: 35
Reply 19, posted (11 years 2 months 1 week 6 days 2 hours ago) and read 4049 times:

This is yet another classic "divide and conquer" management ploy. Leo & company must have studied at the "Ichan, Gitner, Lorenzo, & Acker School of Airline Business"! Get all the employee groups pointing fingers and in-fighting and management deflects their blunders in the process.

I think the DL pilots should reject this "offer" but not because of the cuts themselves, but because of the back-room politics that are so pervasive in their boardroom. They need to use this contract vote as a "message to management - Straighten yourselves out first before you ask me for one thin dime in givebacks!"

That being said (and I do not work for DL), I think the mentality shown by MD88 is that of a dying breed - "I'm an airline captain/sky-God - They can't replace me"! The cold truth is, they CAN replace you and very easily too! Remember there are thousands of guys on the street that would love to have your job, and take it in a cold heartbeat, at 3/4th's what you make!

All I can say in the end is, Good Luck guys - You're gonna need it!

MxCtrlr  Smile/happy/getting dizzy
Freight Dogs Anonymous - O.O.T.S.K.  Smokin cool



DAMN! This SUCKS! I just had to go to the next higher age bracket in my profile! :-(
User currently offlineNonrevman From United States of America, joined Nov 2001, 1291 posts, RR: 1
Reply 20, posted (11 years 2 months 1 week 6 days 2 hours ago) and read 4032 times:

Before you make such comments, heres something to educate yourself with- all employee groups except mechanics and pilots are stil working at pay rates that include the pay cuts back from the early 90s from the last downturn. They have not, and will probably not any time soon, receive a payraise to bring them back up to former levels. So the other employee groups already ARE doing their part- its time the pilots do their part as well. So they have a right to open their mouths and complain when they see the pilots get 4.whatever % payraises each year, and they have yet to see one in over 10 years, and then the pilots want to refuse to take a paycut to help insure the furture of the company when everyone else already is.

In addition to this, I am surprised how no one has mentioned the beating that rank and file employees have taken to their benefits. Medical costs have increased and more importantly, this cash balance retirement plan will really hit hard. It is not simply a big pay cut, it is a MASSIVE pay cut. I am tired of some, note some, of these pilots who complain that rank and file has not sacrificed. Think again. We took a pay cut all right, just not in the way that you think.

Also, for anyone who thinks that bankruptcy is the way to go, I encourage my peers from US and UA to talk some sense into them. If you think that the current pay cut proposal is big, wait until you get a load of bankrupty. The stockholders are not going to appreciate this either.



User currently offlineLuv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 21, posted (11 years 2 months 1 week 6 days 2 hours ago) and read 4021 times:

My take on all of this is, way if they are coming for these pay cuts to save/make money. Why did they spend all the money to start up Song! Money to promote, repaint, interview employees as not every Delta employees is a fit for Song, uniforms, terminal renovation. I think they would have gotten there financial house in order before starting an airline with in an airline.


You can cut the irony with a knife
User currently offlineMD88Captain From United States of America, joined Nov 2001, 1330 posts, RR: 20
Reply 22, posted (11 years 2 months 1 week 6 days ago) and read 3979 times:

MxCtrlr. Without rolling in the mud with you, let me ask how DAL will replace me? We are not striking. There is no self-help scenario. We have a valid contract, so how is DAL going to replace me if we don't give in. How? In Chapter 11? No. No one has been replaced at USAirways or UAL. So what's your point other than other people want my job? It is a stupid point since DAL cannot, as you say, "replace you and very easily too"." If they could they would have a long time ago. Now go pencil-whip some inspection. Ooh, I guess I did get a bit dirty.

User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5002 posts, RR: 21
Reply 23, posted (11 years 2 months 1 week 5 days 22 hours ago) and read 3942 times:

Simply stated: Welcome to the Bush years...we all suffer...


Next Up: STL-LGA-RIC-ATL-STL
User currently offlineDeltaBoy777 From United States of America, joined Jun 2001, 411 posts, RR: 1
Reply 24, posted (11 years 2 months 1 week 5 days 22 hours ago) and read 3934 times:

Ozark--
I believe President Bush has done quite a lot for this country. Think if you had his job, starting from Day 1 he's under pressure from the terrorist attacks.

As for the main topic, I believe the pilots should take a small paycut, but I believe it should be spread around and the main beef should come from the execs. But I'm not Leo, and I can't make the decisions.

~DeltaBoy777~



Thanks and Gig Em!
25 DCA-ROCguy : This move seems surprisingly clumsy for Mullin. At UA, management showed (for once) some sense of fairness and political smarts by asking all the unio
26 Tu154m : MD88 Capt.......... I was OK until I saw you telling MxCtrlr to "pencil whip some inspection". Why don't you shove the pencil up your overpaid button
27 Flashmeister : MxCtrlr. Without rolling in the mud with you, let me ask how DAL will replace me? We are not striking. There is no self-help scenario. We have a valid
28 2cn : political smarts by asking all the unions to talk, together, about sharing cost reductions. Tilton didn't just go up to one union and say, "take a big
29 Frostbite : Before the airline industry took a shit/was shat upon, DL pilots commanded industry-leading pay & benefits. Since then the margin has only increased,
30 Bucky707 : "Is DALPA rejecting the 22% figure or the whole idea of voluntary concessions? If the latter, well, they're in Wally World (or was that Wallet World?)
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