scotron11
Posts: 1181
Joined: Tue Feb 10, 2004 4:54 pm

Delta Pilots Union Vague Warning

Thu Aug 05, 2004 4:39 am

According to AP, John Malone, Chairman of DALPA, has threatened that they will "take another path" if Delta management persists in seeking $1BN in concessions from them.

My question is: What is the other path? And where does it lead?



 
micstatic
Posts: 604
Joined: Fri Jul 20, 2001 10:07 pm

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 4:45 am

Myopia. The path to an early retirement I'd say.

.
..
S340,DH8,AT7,CR2/7,E135/45/170/190,319,320,717,732,733,734,735,737,738,744,752,762,763,764,772,M80,M90
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 4:46 am

Ask the Eastern Airline machinist what direction the "other path" leads to.
 
User avatar
EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 4:46 am

"Take another path" ? The only thing I can think of would be DALPA attempting to buy up enough stock to take control of DL - but that won't fix their problems; it will only change the name of the guy telling them how to fix them.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
User avatar
EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 4:47 am

Ask the Eastern Airline machinist what direction the "other path" leads to.

DALPA must have brought in Charlie Bryan as their chief negotiator.  Nuts
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
Sinlock
Posts: 1631
Joined: Fri Dec 22, 2000 12:55 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 5:02 am

Ask the Eastern Airline machinist what direction the "other path" leads to.

Actualy, It was more like Lorenzo/Borman and EAL's Machinist were in a fist fight over who got to swallow the poison pill. In the last few weeks they each decided to take half.
 
SPREE34
Posts: 1561
Joined: Tue Jun 29, 2004 6:09 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 7:47 am

Self deception is a horrible thing. Strategic retreat from an unrealistic position is their only reasonable "path."
I predict a battle of wills, resulting in a post summer travel season chaotic disruption of customers plans. How about the week of September 6th. There will be a lot of unproductive aviation emotion in the air that week anyway.
I don't understand everything I don't know about this.
 
jrlander
Posts: 1025
Joined: Wed Aug 11, 1999 3:47 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 7:53 am

I see Delta moving farily quickly to file Ch. 11, and first thing to have that contract thrown out. Once that contract is thrown out, mechanics pay will follow pretty quickly, and a move to dismiss some plane leases not long after that.
 
alphascan
Posts: 795
Joined: Mon Nov 24, 2003 12:04 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 8:16 am

An excerpt from:

http://www.forbes.com/2004/08/04/0804autofacescan05.html


If management insists on the $1 billion in concessions from the cockpit mavens without asking other "stakeholders" to tighten their belts, the union may "take another path," Malone warned.

I thought I've read in this forum that most if not all other DL employee groups have already taken wage cuts as pilot pay has continued to increase. Am I misinformed? If so, who are the other "stakeholders"?
"To he who only has a hammer in his toolbelt, every problem looks like a nail."
 
sebring
Posts: 1320
Joined: Sat Jul 24, 2004 12:08 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 8:27 am

Aircraft lessors, bondholders, banks and other lenders. It can be a pretty long list
 
MontanaFL
Posts: 95
Joined: Sun Dec 14, 2003 12:01 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 8:31 am

I have commented on this topic before so here I go again. My dad retired from DL with a month shy of 31 yrs. If DL files bankruptcy and he loses most if not all his pension/medical benefits for himself and mom, DL can just sell it self off and never come back. My dad worries everyday if he will have a pension and med benefits after giving 31 yrs to that company. I will never fly DL again and will trash them every chance I get. I DO NOT want to see DL file bankruptcy. I want to see them get their s*** together and get back to being the airline they were yrs ago. C.E. Woolman is rolling over in his grave right now seeing what is taking place.
I miss those DL L-1011's
 
Lono
Posts: 1136
Joined: Sun Apr 04, 2004 5:47 pm

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:00 am

Alphascan
Employees have taken benefit cuts... but no wage cuts yet...
Stakeholder is anyone having a monetary stake in DL's future....
Wally Bird Ruled the Skys!
 
MidnightMike
Posts: 2810
Joined: Thu Mar 06, 2003 10:07 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:13 am

Options

Employee buyout or a stike are options that are open to the union.
NO URLS in signature
 
toltommy
Posts: 2482
Joined: Tue Dec 09, 2003 9:04 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:35 am

MontanaFL -

It's a tough place for your Dad to be in right now. Hopefully he didn't rely solely on DL to provide a pension for him. You didn't say what position that your Dad retired from? Do you care to share that info? Let me ask you this question. How does your threat to never fly DL again, and to trash them at every chance you get, help protect your Dad's pension and benefits? Some of his former fellow co-workers (again, you don't say what he did at DL) can't see how serious the situation is, or choose not to. How does their action excuse them from any responsibility to help protect the benefits and pensions of those who built the company before them? Don't simply place all the blame on Delta management. Yes, they have a lot of responsibility. But they don't have all of it.
 
StevenUhl777
Posts: 3281
Joined: Sun Jul 08, 2001 11:02 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 2:28 pm

Re: the big-6 major airlines going into Q4: It's a staring match and the first one who "blinks", goes. They all have serious problems, some greater than others. Fuel surely isn't getting any cheaper, that's for sure.

If for some reason the DL pilots decide to strike, goodbye Delta...and in short order. If there is a strike, it would have be settled in a matter of hours, 2 days maximum. A strike is one sure way to kill DL for certain.

If they do propose a buyout, who would agree to it? The first thing anyone will point to is the last few years of the UAL ESOP and the end result. So, throw away that option right now.

MontanaFL: I understand your feeling concerning your Dad: my Dad is a retired UAL mechanic. Granted, he has other things to fall back on, but losing a large portion of his pension and medical from UAL certainly won't make things easier. I wish your Dad well. In the meantime, encourage your friends, etc. to FLY on Delta, I promote United whenever I can. Trashing them and refusing to fly on them accomplishes nothing.

In general, hope things work out for employees at all of the legacy carriers. I'm afraid this fall will bring about a major shakeup in the industry.

And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 8:07 pm

Can anyone name for me a successful employee owned airline?
 
AUAE
Posts: 292
Joined: Fri Apr 09, 2004 4:41 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:10 pm

"Can anyone name for me a successful employee owned airline?" - N6376m

****

Chirp...chirp (anyone else hear the crickets?)
Air transport is just a glorified bus operation. -Michael O'Leary, Ryanair's chief executive
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:30 pm

My point exactly.

Once again, a union's blind devotion to a theoretical position has ended up hurting it's membership. If the pilots had accepted the pay cuts when they were first asked for, the pain would have been a lot less.

Colin Powell wrote, "Never have your ego so close to your position so that if your position falls, your egos goes with it."
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:41 pm

Employee buyout or a stike are options that are open to the union.

Striking is not an option. Per the Railway Labor Act, the DL pilots cannot strike unless the NMB rules that no progress has been made and gives permission for other means (such as a strike) in the negotiations. Only the NMB can give permission to a union to strike. If the union authorizes its members to go on strike, it would be an illegal strike and the union would be slapped with countless fines plus a lawsuit. Sorry but its the law and its all there in the Railway Labor Act.

Ask the Eastern Airline machinist what direction the "other path" leads to.

My guess is pretty straight forward: Another repeat of the infamous EAL collapse which could mean the end of business for DL.

Like I said in other threads...its a do or die for the DL pilots. Take the pay cut or hit the streets and become unemployed. Its pretty simple!
A Safe Flight Begins With Quality Maintenance On The Ground.
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:48 pm

Remember, there are official strikes and then there are the work slow downs a la American's pilots from several years ago.

 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 9:52 pm

LOL! I forgot about work slowdowns. That could be a plan of action that DL pilots union might take. This happened at AS before with the CSA workgroup in SEA back in 1999. Many, many agents staged a sick-out on that one day and as a result, a few agents got fired for it. There was really no sick-out, it was an overreaction in part of management. I do remember one agent called in sick, got fired and then sued the airline over the termination and she got her job back because she had proof that she had a confirmed doctors appointment that day. She got her job back at the end. Sorry for the off-topic, just trying to make an example....
A Safe Flight Begins With Quality Maintenance On The Ground.
 
alphascan
Posts: 795
Joined: Mon Nov 24, 2003 12:04 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 10:17 pm

Work slowdowns........Great Idea. Drive away the paying passengers. UALMEC already tried that.

That's exactly what Mr. Leonard and Mr. Fornaro are praying for every day to fill all those new aircraft.
"To he who only has a hammer in his toolbelt, every problem looks like a nail."
 
phollingsworth
Posts: 635
Joined: Sat Mar 06, 2004 6:05 am

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 10:26 pm

The problem here is that if DL files for Ch 11. the pilots stand to loose almost everything (even if some get to keep their jobs). DL will probably move to eliminate the pilot pension program. While there are legal obligations to fund the program for current retirees (at least to what was guaranteed, the PBGC is probably going to go after companies that are still around and aren't meeting their obligations), any employee under a defined benefit plan stands top loose most if not all (they may be able to ask for their contributions + risk free interest back).

The pilots keep saying they want similar concessions from other groups. The problem with this statement is that other than top management the other groups are not in the position to give up stuff, they aren't under collective bargaining contracts, the company just takes away the benefit. The pilots are burning their chance to negotiate a deal. Once Ch. 11 is entered, the court takes over.

Remember under bankruptcy the main goal of the judge is to maximize return to the creditors. Ch. 7 does this by selling assets. Ch. 11 allows the company, creditors, an outside group, or a combination to come up with a plan to achieve this. If the plan the court buys into involves voiding the pilots contract, creating a new one without there buy-in, and cut their pay (retroactively even, see Taft-Hartly), the pilots have only one decision: take the deal whole or quit.

There are a couple of reasons that DL has not taken this route yet. First it has a tendency to lead towards long term animosity with the union (provided the union isn't totally broken). Second bankruptcy destroys almost all of the shareholder value. This basically pisses off the markets. The second reason is usually over arching.

One last thing, if Taft-Hartly is invoked and a slow down occurs, the company will go to the court and ask for it to be declared illegal. If this happens union leaders and individual pilots face significant fines and possible criminal sanctions.
 
FlyGuyClt
Posts: 1579
Joined: Tue Aug 02, 2005 10:23 pm

RE: Delta Pilots Union Vague Warning

Thu Aug 05, 2004 11:50 pm

WOW ! And to think that when I started flying in 1987 that "DELTA" was the one everyone wanted to work for and be like. Just shows you how times can change. Somehow, somewhere, the management and employees must get on the same page and trust and faith must be restored. Far too many employee's lives are being destroyed in this industry. Wishing all of us aviation professionals on this board a turbulence free year, soon.

Safe Flying  Smile
Florida Express, Braniff II and ......
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 12:40 am

Any time a union contract specifically provides that they are to be the highest paid in the industry - trouble is sure to follow.
 
AZjetgeek
Posts: 229
Joined: Thu Jul 22, 2004 1:53 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 12:54 am

"Remember under bankruptcy the main goal of the judge is to maximize return to the creditors."

Really? Phollingsworth, go back and read "Grounded" by Aaron Bernstein. In the eyes of the federal government, when an airline goes into Chapt. 11, the court's primary goal is to keep the airline in operation - then provide relief to creditors.

Those who made mention of Charlie Bryan and the IAM at Eastern might also want to consider that Frank Lorenzo was so certain that Bryan would call a strike, or that the mediator would rule that they were at a stalemate, that he syphoned off the assets of Eastern to keep Continental and Texas International alive. Bryan's mistakes were made years earlier (approx. 1983) when the airline was still under Frank Borman. Bryan and the IAM refused to take a paycut while the Eastern pilots, F/A's and other employee groups bit the bullet.

Lorenzo's bankruptcy of Continental in 1983 contributed to a change in the bankruptcy laws that withdrew the loophole allowing companies to void union contracts through bankruptcy. If DL decides to file Chapt. 11 because of the pilots' stance on wage concessions, management will certainly have to keep in mind that they still need pilots to fly their jets. If they lose a substantial number of pilots due to a bankruptcy filing, they'll incur additional expenses hiring new pilots and training them.

Ever hear of the phrase: "Cutting off your nose to spite your face"?
Long live the RJ!
 
User avatar
EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 12:57 am

Any time a union contract specifically provides that they are to be the highest paid in the industry - trouble is sure to follow.

Agreed. The "We want UA plus one percent" mantra was ridiculous.

Then again, so was UA's previous contract anyway.

All I can say to DL pilots is this - there are thousands of men and women with ATPs and thousands of turbine hours who would gladly step into the cockpit of your MD-88 for a fraction of your current pay.

Take the huge paycut and live to fight another day.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
wgw2707
Posts: 1110
Joined: Wed Aug 13, 2003 10:37 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 12:59 am

The Delta pilots have forced Delta to cut the wages of the non-union employees with their absurd payscales, currently "industry-leading" (or trailing, depending on your perspective).

I personally think Delta should stand up to ALPA, and if it comes down to it, lock them out, and move to a new non-ALPA workforce. It's high time someone in the industry stood up to ALPA, and if Delta can successfully force ALPA off the property, then other airlines might follow suit. An elimination of ALPA would probably be a positive occurance, based on these facts:

1. ALPA uses tactics of fear and intimidation exceeding that of most unions. If you cross an ALPA picketline, ALPA will deny you membership, effectively preventing you from seeking employment at any unionized carrier for the rest of your life, thus forcing you to accept low-wage piloting jobs. Eliminating ALPA's stranglehold would put an end to this injustice. Many pilots cannot afford to strike, and putting them on a scab list for the rest of their lifes is an unfair and despicable practise, in my opinion.

2. As we saw in the AA takeover and decimation of TWA, ALPA doesn't really give a @#!% about their members. ALPA royally screwed the TWA pilots over, the result being that most of the former TWA pilots are out of work or working for different airlines, which is a very sad occurance, considering TWA had some of the most professional flight crews in the industry. For this reason alone, that being the "over-screwing" of the TWA pilots, I would be glad to see ALPA's dominance over piloting come to an end.

3. ALPA's practise of using a special checklist to delay departures has inconvenienced hundreds of thousands of passengers over the years. In my opinion, such practises that hurt innocent passengers are truly disgusting, and if a removal of ALPA from major airlines such as Delta caused a reduction in what I would call "abusive piloting" then I would be all for it.

I would not be at all opposed to a new in-house pilot's association (like APA) being formed at Delta, or at other airlines where ALPA is eliminated.

I'd like to wish Delta the best of luck should they decide to lock out ALPA and hopefully they'll be successful. Again, if Delta can "bust" ALPA, and keep them off the premises, that will be a monumental step forward for the entire industry.

Don't get me wrong here though...I am not in favor of industry wide reductions in pay and benefits for pilots. If anything, pilots in the industry are grossly underpaid, and were it up to me they'd make at least 50% more than what they're currently making. The sad situation is the low fares demanded by the consumer and enforced by the LCCs are paid for by the pilots and other employees.

-WGW2707
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:02 am

"Work slowdowns" At a legacy carrier? Who could tell? Big grin

Everyone needs to chill out. DALPA has a LONG list of examples of pilot groups that bought the chicken little line from management only to see their "contributions to the future success of the airline" squandered or in Ch. 11 anyway.

The UAL pilots rolled over and gave the company everything they wanted--and they're still going to lose their pensions. Are there not ex-EAL people here? The EAL employees had nowhere to turn when they struck. Night after night, trucks rolled out of ATL with new parts from Eastern aircraft only to have the trucks roll back in the next day with run-out engines and bald tires from Continental. That airline was being stripped and left on the side of the road. Eastern was dead from the moment Frank Lorenzo stepped on the property. Concessions would have only put more money into Frank's pockets.

Airline employees have been consistently lied to by management. I was witness to Don Carty's empassioned speech to the APA BOD in March of 2003 when he nearly shed tears about the impending bankruptcy. 'All will have to contribute to the cause'. All except senior management who had already secured their retirement... Bull$!!t! He conveniently omitted that bit of information.

The Delta pilots are wise to drive a hard bargain with the company. My guess is they will have to file Ch. 11 regardless of the depth of the cuts by the pilot group. Too many people made that call when Grinstein took over. He's near retirement and it doesn't matter if his resume has a Ch. 11 stain on it. And, I guarantee his retirement is secured already.

So, DAL Pilots, get the best deal you can and prepare for the worst--that's usually what you end up with in these situations.TC
FL450, M.85
 
User avatar
EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:11 am

WGW -

While I agree with you on most points, TW's pilots were screwed long before ALPA's agreement with AA regarding the integration (or lack thereof) of seniority lists.

AA was under no obligation to integrate seniority lists since they didn't actually buy TW, but bought substantially all of TW's assets after they'd filed for bankruptcy. Merging TW's list would have been unfair to AA's pilots, some of which had actually started with TW but left for AA years earlier when they "saw the writing on the wall" and knew TW was not long for this world.

Lest we forget, TW was floundering for years and would have failed as a going concern without AA's intervention - they'd filed long before 19 Arab men decimated the industry in general, an event that CERTAINLY would have killed TW off entirely.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
aa777jr
Posts: 2269
Joined: Tue Feb 17, 2004 12:03 pm

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:14 am

DL will be the next major airline to go bankrupt, look for CO and NWA to take over DL's fleet, like AA did to TWA and CO did to Eastern.
A liberal is a man who is right most of the time, but he's right too soon.
 
AZjetgeek
Posts: 229
Joined: Thu Jul 22, 2004 1:53 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:18 am

WGW2707 -
"I personally think Delta should stand up to ALPA, and if it comes down to it, lock them out, and move to a new non-ALPA workforce."

You're kidding, right? Again, we go back to the lesson of Continental and the infamous Frank Lorenzo. Lorenzo succeeded in driving ALPA away through a Chapt. 11 bankruptcy. Where did it get him? Over the next 10 years, that airline's reputation went into the toilet and they wound up filing for Chapt. 11 in 1993. So, then, what do you really think DL would accomplish by standing up to ALPA and locking out the pilots if necessary?

It seems that the only ALPA pilots you have a problem with are the ones at DL. Saying you believe that most pilots are underpaid and deserve to earn 50 percent more than their current salaries contradicts your position. For many years, DL pilots have been among the best paid in the industry. When DL decided to put Song in the air, they did so with 757's. Airlines won't pay a 757 captain the same as they would of a CRJ or ERJ and DL's ALPA members know that.

I still believe that DL's billion-dollar plus loss in 2Q is not the sole result of its pilots union. This airline is doing something wrong to mount such a massive loss. It's easy for some to make the pilots out to be the scapegoats. But airlines have what resembles a "marriage" between management and labor. It takes two to make a marriage and two to break one.

Long live the RJ!
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:31 am

EA CO AS--TWA filed Ch. 11 in 2001 as a contrivance to get rid of debt and Carl Icahn. The filing was specifically designed(ie. the section of the bankruptcy code under which it was filed) to deprive Icahn of certain protections AND to strip the unions of their SCOPE protections.

It was an asset acquisition for the same reason. Creditors have less room to dispute the distribution of assets.

"AA was under no obligation to integrate the seniority lists..." Then why did they? I assume you're not losing any sleep over the fact that AA is still operating 118 former TWA aircraft while an equal number of former AA planes have gone to the desert since the "merger"? (Here's a hint: 2,300 more Natives would be on the street if AA hadn't "merged" with TWA)

GO LCC's! Big grin

Oh, btw, ALPA never agreed to anything in the TWA merger. This was a three-party agreement--AMR/APA/TWA. ALPA was in secret talks at the time to bring AA's pilots into ALPA. Those talks were not disclosed to the TWA MEC during integration talks. ALPA is facing a huge DFR lawsuit. Maybe I'll get some of my dues back--finally!

Now, back to our regularly scheduled topic...TC
FL450, M.85
 
slider
Posts: 6806
Joined: Wed Feb 25, 2004 11:42 pm

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 1:40 am

And so the saber-rattling begins under nebulous loaded comments such as "take another path."

I feel for the good folks at DL, because methinks a rocky road is ahead.
 
StearmanNut
Posts: 344
Joined: Tue Apr 27, 2004 9:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 2:50 am

This is really sad. I hate to see the demise of a darn good airline. Delta pilots (like all other airline pilots) deserve the rate of pay they get. They hold many lives in their hands for doing the job right. This is not to mention the long hard road they rode to get there where they are.
If wishes were horses, a Tail Dragger I would fly...
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 2:53 am

Again I ask, can someone name a successful airline which is owned by it's unions?
 
User avatar
EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 3:02 am

EA CO AS--TWA filed Ch. 11 in 2001 as a contrivance to get rid of debt and Carl Icahn. The filing was specifically designed(ie. the section of the bankruptcy code under which it was filed) to deprive Icahn of certain protections AND to strip the unions of their SCOPE protections.


I appreciate your input AA717driver, and you're correct - AA wanted the Karabu agreement gone and scope clauses gone as well before taking TW's assets - but it doesn't change the fact that AA was never under any obligation to provide TW's employees with work.

It simply made sense to offer to hire them, since they had a ready-trained workforce at their disposal (one that wouldn't mind getting wage increases to AA pay levels), and it would be a nice buffer to any negative spin associated with taking over TW's operations.

But for TW's assets to be attractive, AA needed the protection of a TW bankruptcy so they could get what they wanted without those added nuisances.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
phollingsworth
Posts: 635
Joined: Sat Mar 06, 2004 6:05 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 3:42 am

"Remember under bankruptcy the main goal of the judge is to maximize return to the creditors."

Really? Phollingsworth, go back and read "Grounded" by Aaron Bernstein. In the eyes of the federal government, when an airline goes into Chapt. 11, the court's primary goal is to keep the airline in operation - then provide relief to creditors and borrower.



The statement above is from one of several attorneys I have spoken to who have dealt with bankruptcies. Because of the unique nature of transportation providers the Federal government has the interest mentioned by Bernstein in mind. However, the primary legal charge for the court is to provide relief to the creditors.

While the change in law made it harder to void the contract it is still possible. If the majority of parties involved in the proceedings want it, it will happen, the court still has a lot of leeway. If you want to argue otherwise be-careful which Federal Judge you do it in front of (these people determine what is a Fact and what is not).

As I mentioned UALs decision to stop funding the pension program may get them in a lot of legal hot water. They had a chance to change the game back when they entered Ch. 11 and neglected to do so. If UAL were to collapse now a large portion of there pension obligations would be assumed by the PBGC, though it may collapse in the near future.

As for DL being in trouble if they piss their pilots off, my guess is that the worse case scenario won't come to pass. The reason why is many of these pilots would have a damn hard time finding another job. Mechanics on the other hand are a lot harder to find, interesting isn't it? Also if DL does declare they will probably shrink their route structure significantly, up to 50% has been batted around (totally unsubstantiated info).

This is really sad. I hate to see the demise of a darn good airline. Delta pilots (like all other airline pilots) deserve the rate of pay they get. They hold many lives in their hands for doing the job right. This is not to mention the long hard road they rode to get there where they are.

The problem that many airlines have is that they and many of their employees are being payed what are termed as "rents". Basically, they are paid substantially more than the amount of benefit they create. These rents would have probably been eliminated a long time ago if the airline market wasn't so regulated (FARs and the like) and had lower barriers to entry or exit.

As for how many lives they hold in there hands. Why is it that the inherently less safe aircraft (older generation) are often the ones flown by pilots on lower pay scales. Pilots also don't have nearly the implicit inseparable liability that other highly paid professions have. The same can be said for executive management.

I still believe that DL's billion-dollar plus loss in 2Q is not the sole result of its pilots union. This airline is doing something wrong to mount such a massive loss. It's easy for some to make the pilots out to be the scapegoats...

You are right that the $2 billion is not the sole result of the pilots. However the vast majority of that is actually paper. The real, recurring, loss is down around $375 million, of which a substantial amount can be attributed to the pilots (around 50-67%, based on the pay cuts that the pilots claim they will take and what DL wants). Outside of everything else airlines need to get used to the idea of $50 a barrel oil. They must completely change their cost structure. I am not inherently against unions, they have done a large amount of good for society; however, like many other large organizations they can loose sight of the real goal and path. In this case DL and ALPA seem to have missed the mark. The problem is that for now the passengers, FAs, CSAs, MTC people, shareholders, etc. are the ones suffering.
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 4:02 am

Part of the problem is that DL already entered the "death spiral." Poor financial results make it increasingly more difficult to obtain financing/working capital at reasonable rates. As your cost of capital in a capital intensive industry goes up, your losses grow thereby compounding the problem and creating a self perpetuating cycle of losses - higher costs - more losses - higher costs . . . .

Poor performance also makes more people edgy about extending you credit at any price, thereby tapping your working capital reserves. Many small and mid-size suppliers to DL carry credit insurance to protect their receivables against a default by DL. As the credit insurer begins to worry about DL's financial health, they'll cancel coverage on the airline (assuming they've not already done so) and the small and mid-size suppliers won't be able to obtain financing from their banks because their receivables are uninsured.

This repeats itself over and over again.

When things go bad, quick decisive action is the best hope at fixing the situation. Prolonged negotiations with a key labor group does not help this.

If you want to see what the market thinks about DL's long-term prospects of staying out of bankruptcy are, go to the Chicago Board of Trade and see what options on DL's stock are trading at for a January exercise date.

 
ifly2eat
Posts: 190
Joined: Tue Apr 29, 2008 12:18 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 4:11 am

WGW2707,

Your post shows your limited knowledge of airline labor contracts and The Railway Labor Act. Stick to topics that you know more about.
Fly the friendly skys and stay out of mine.
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 11:26 am

N6376m--To answer your question, no. There aren't any.

EA CO AS--I don't disagree with anything in your last post. Well put.TC
FL450, M.85
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 8:35 pm

As we saw in the AA takeover and decimation of TWA, ALPA doesn't really give a @#!% about their members.

Ive been saying this on EVERY union thread: Does your union really care about you?? I mean...really?? Do they?! Think about it!!

You're kidding, right? Again, we go back to the lesson of Continental and the infamous Frank Lorenzo. Lorenzo succeeded in driving ALPA away through a Chapt. 11 bankruptcy. Where did it get him? Over the next 10 years, that airline's reputation went into the toilet and they wound up filing for Chapt. 11 in 1993. So, then, what do you really think DL would accomplish by standing up to ALPA and locking out the pilots if necessary?

I think the A.netter in post #27 ment to lock out the UNION itself, but not the pilots.

So if DL does indeed file for chapter 11 protection after the members 'reject' the latest company proposal, you can be sure after the filing is done that all union contracts would probably become null and void and everyone would be paid 'entry level' wages after that.

A Safe Flight Begins With Quality Maintenance On The Ground.
 
Tarantine
Posts: 207
Joined: Tue Sep 19, 2000 12:53 pm

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 8:47 pm

Just curious, IF DL was liquidated to the future, would airtran be the major airline at ATL or would others step in?
 
isitsafenow
Posts: 3413
Joined: Sun Feb 01, 2004 9:22 am

RE: Delta Pilots Union Vague Warning

Fri Aug 06, 2004 9:58 pm

Hey DL pilots...After that comment the other day, I sold my few shares of stock in DL and bought some in AirTran....Good luck to all DL employees in the long run. After that crack and its repercussions, you may need it.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
DeltaSFO
Posts: 2407
Joined: Fri Nov 03, 2000 11:22 am

RE: Delta Pilots Union Vague Warning

Sat Aug 07, 2004 4:39 am

Well, it's nice to see some things haven't changed here. Plenty of "expert opinions" here at airliners.

The DALPA warning is entertaining, to say the least. But the reality is that with the restructuring plan due to be unveiled shortly, everybody is going to have to make sacrifices. Jerry Grinstein has already made that abundantly clear.

So the pilots won't be the only ones expected to contribute.
It's a new day. Every moment matters. Now, more than ever.
 
Jumpseat70
Posts: 359
Joined: Sun Jan 25, 2004 12:52 am

RE: Delta Pilots Union Vague Warning

Sat Aug 07, 2004 1:37 pm

But the PILOTS are the only ones who HAVEN'T contributed...
"Up, Up and away with TWA"
 
Av8trxx
Posts: 632
Joined: Sun Nov 11, 2001 7:08 am

"Delta Goes To Bankruptcy Court"- A Fictional Tale

Sat Aug 07, 2004 4:00 pm

[This article appeared in the last issue of the DFW Round Up, before Delta's pilots offered their latest concession package.]

Judge: Ok, let’s get these proceedings started. I understand you are the attorney representing Delta Air Lines, and that Delta Air Lines is seeking protection under the chapter 11 of the federal bankruptcy code. Is this correct sir?

Delta's attorney: Yes your honor. Here are the required documents and evidence.

JUDGE: As you are aware, in order to grant bankruptcy protection, the law requires that your company must have done everything reasonable in its power to prevent a declaration of bankruptcy. Furthermore, this court must be presented with a viable business plan to ensure this situation does not happen again. I must now review actions by Delta Air Lines leading up to this situation. Please state your case.

DL: Your honor, for the past three years, Delta has suffered major financial losses and a dramatic increase in debt. We are now in a position whereby we cannot pay the debt service given our current revenue and costs. We feel, the primary culprit of our financial situation is pilot salary costs and we seek relief from the pilot contract.

JUDGE: That's it? Just the pilots?

DL: Uh, yes your honor.

JUDGE: Well looking at your quarterly financial reports for the past 7 years, it appears you have let your debt level to swell up to around 20 billion dollars, which causes roughly an annual debt service of a billion dollars per year. So I'd like to see where all this debt came from. First, I see that your company engaged in a 2.5 billion dollar stock buyback program. How much is this worth now?

DL: Um, virtually nothing.

JUDGE: You also spent over 2.5 billion dollars purchasing Comair and ASA?

DL: Yes. Both these companies were subcontractors of ours previously. In the case of ASA, there was quality control issues we felt could be better managed if we owned them. As for Comair, by outsourcing to them so much work, we allowed to become a monopoly in our Cincinnati hub. We were afraid they could become a competitor, or be purchased by one of our competitors.

JUDGE: OK, I also see that your management then went on an aircraft spending spree, buying hundreds of regional jets for your Comair and ASA Delta Connection division at a cost of an additional few billion dollars. I hope these planes are a wise investment. Are they are cheaper to operate?

DL: Well not exactly. These regional jets have a seat cost of around 16 to19 cents per seat mile whereas our existing mainline jets cost about 9.5cents.

JUDGE: So then I hope they attract more passengers. They are more comfortable, right?

DL: No, they are smaller, offer no first class, no overhead storage, and you have to be a contortionist to use the lavatory. But they sure beat flying a turboprop. We believe we can we create greater demand due to higher frequency when we replace mainline flying with these jets.

JUDGE: So you offer more of a product your customer doesn’t truly prefer?

DL: Yes, but they are profitable.

JUDGE: Well how can that be when they cost almost twice as much to operate?

DL: Oh that's easy. Delta mainline subsidizes them by purchasing their airplanes, paying for their facilities, providing marketing, as well as reservations, distribution, etc. etc. Basically, we pay all their fixed costs.

JUDGE: Well how would Delta mainline be doing if Delta Connection was actually paying their own expenses?

DL: Well it doesn’t matter, we are all one big company and all the money goes into one big pot, so to speak.

JUDGE: Then how do you know if the regional jets are truly profitable?

DL: Um, I'll have to get back to you in about four to six weeks on that one.

JUDGE: And if all your money goes into one big pot, how is it you figure that your mainline pilot costs are your problem?

DL: Look, we need to get our costs down and this is the easiest expense to go after, OK!

JUDGE: That is your plan? I did mention you have to have a viable business plan, right? How is your Song operation doing?

DL: Great! It is profitable, customers love it, and it has received great reviews from the press.

JUDGE: Because you have gotten lower cost pilots at Song?

DL: Well your honor, that is not exactly correct. Song uses the same mainline pilots at the same pay rates.

JUDGE: Bailiff, can you get me some aspirin? I am getting a headache.

Bailiff: Here you go sir.

JUDGE: All right, what about these charges of over a billion dollars for terminal improvements in Boston and New York?

DL: Well, our old terminals looked "yucky."

JUDGE: "Yucky?" How about the 600 million you lost due to the Comair strike? I hope it was worth it.

DL: Well, we settled at our last offer, so we didn't really save anything. We figure the difference between what the Comair pilots wanted and what we gave them will have been worth it in about 20 years.

JUDGE: And I see a few hundred million dollars spend for stock equity in a South American airline?

DL: That airline unfortunately went out of business, your honor.
JUDGE: I see. I mentioned that Delta needed a viable business plan. You do understand this would presume a management team capable of competent execution and decision making. It appears as though your management has exercised all the financial restraint, responsibility and competence of a spoiled sorority girl with her father's Neiman Marcus charge card. Were they penalized?

DL: Um no. Actually we gave them bonuses. And a separate "bankruptcy proof" retirement trust fund. You have to pay top dollar to keep top talent!

JUDGE: And have been able to keep top talent?

DL: Well, the funny thing is.............um.......they kind of...........left.

JUDGE: All of them?

DL: Just about.

JUDGE: Well that is the first good news I've seen regarding this case so far. From what I have seen so far, I am very concerned about the debt accumulation which has been allowed. It appears Delta would be profitable now if there were not such huge debt service. Do you seek a restructuring of your debt? I see about half of it is unsecured. Your requests so far have been unusual in that with most bankruptcy proceedings, debt reduction and restructuring is the main priority.

DL: Uh, can we have our pilot pay cut now please? JUDGE: Enough about operating costs and debt service. How about revenue? DL: Well, demand is down so we have no pricing power.

JUDGE: Really? What are your load factors?

DL: In the 80% range.

JUDGE: That seems kind of high.

DL: Actually it is an all time record.

JUDGE: Shouldn't you raise ticket prices?

DL: I'll have to get back to you on that one as well, your honor. You see, a funny thing happened. We tried to save money by cutting out travel agent middle men by forcing our customers to the internet. And we kind of lost control of our product distribution. (Heh, heh!) We believe the customer always goes with the lowest price.

JUDGE: So a low cost carrier like JetBlue has cheaper tickets than Delta and therefore is profitable?

DL: Well no. Actually, Jet Blue tickets cost more than Delta on average.

JUDGE: So then why don't the passengers choose Delta of over JetBlue?

DL: They will when they find out. For some strange reason, passengers think JetBlue is a better value. We need to convince them otherwise. Unfortunately we spent our advertising dollars on retaining top executive talent instead.

JUDGE: Not that again.

DL: Look, our marketing department is very busy at the moment managing all aspects of our airline, they do not have time for marketing.

JUDGE: Regarding your pilot contract. You want me to allow you to basically throw it out?

DL: We want our pilot costs down where American, United and US Airways are.

JUDGE: But looking at your total operating costs compared to the airlines that have gotten employee concessions, you are presently cheaper than US Airways, about the same as United, and only slightly above American. In fact, you are also about the same as Northwest and Continental who turned a profit last quarter. Perhaps we should be addressing the revenue side of this equation.

DL: Yes but, we'd rather take it out of our pilots. Come on, most of all the other airlines got to do it. PLEASE!?

JUDGE: "Because everyone else is doing it" is not an acceptable business strategy in the opinion of this court. Besides, haven't your pilots been offering you over $300 million annually in concessions?

DL: Yes but this would require a two year extension to the pilot contract, and should we need further relief, we would have to open negotiations with the pilots.

JUDGE: But isn't that what you are doing now?

DL: Yes, but we prefer not to negotiate. We find we can get more leverage with legal or political proceedings.

JUDGE: Have you tried to cut costs in any other areas? How are your other employee groups' wages compared to the industry average?

DL: Above average, like the pilots. You see your honor; our competitors used bankruptcy, or the threat thereof, lower employee wages across the board. That is why our wages are relatively higher. We were hoping you could, you know, help us out.

JUDGE: You feel it is important to lower your workers' wages to the match the industry's reduced average. Since you are not contractually bound to pay these other employee groups certain wages, and since you claim Delta is in such dire straits as to need bankruptcy protection, why have you not lowered their costs to align them with the rest of the industry?

DL: We cut some of their benefits but left their wages intact. Overall, we feel that only the pilots should be paid less. Besides, we need a competitive salary to attract the best people.

JUDGE: God forbid you should want to attract the best pilots. Counselor, the purpose of this bankruptcy proceeding is to serve as a last resort to help your company after all other possibilities have been exhausted. This court is not a tool for you to use in the management of your company, especially with regards to contract negotiation. That is what consultants, whom your company seems all too fond of, are for. At this time, I find no cause for action to allow you to move forward with bankruptcy proceedings. I would recommend that you negotiate in good faith with your pilots, and get back to the task of running your airline. This court is adjourned.
 
N6376M
Posts: 2310
Joined: Tue Aug 12, 2003 12:54 am

RE: Delta Pilots Union Vague Warning

Sun Aug 08, 2004 4:57 am

The article begins with a false premise - the bankruptcy code does not require that you do everything in your power to prevent bankruptcy. As for the rest, let's just say a house built on a sand foundation . . . .
 
isitsafenow
Posts: 3413
Joined: Sun Feb 01, 2004 9:22 am

RE: Delta Pilots Union Vague Warning

Sun Aug 08, 2004 10:51 am

Nice try on the "day in court" but bankruptcy court usually does NOT deny a bankruptcy request. It does happen but not often. It takes usually about 5 to 15 minutes to get things approved. Case in point ....Braniff One in May of 83. Bankruptcies have been known to be approved on Saturday nights. Think about it.....Saturday night? Court in session? Judges working?
Not a usual scenario is it?
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
User avatar
airportugal310
Posts: 3217
Joined: Sun Apr 11, 2004 12:49 pm

RE: Delta Pilots Union Vague Warning

Sun Aug 08, 2004 11:38 am

Can anyone name for me a successful employee owned airline?

Gladly....Cape Air (9K)

And before you retort with "thats not a real airline blah blah blah", I will have you know that it is currently this country's largest independent regional airline and we recently received our FAR Part 121 certification for our operation in Guam using ATR-42s! Big grin

latah!
I sell airplanes and airplane accessories

Who is online

Users browsing this forum: Baidu [Spider], Bing [Bot], Google [Bot], IslandRob, jpetekyxmd80, leftyboarder, Luxair747SP, PanAm_DC10, speedygonzales, StTim, Sydscott, UAL777UK, User001, wawaman and 252 guests