bucky707
Posts: 954
Joined: Sat Aug 19, 2000 2:01 am

Cincinnati Enquirer Article About Delta

Sun Dec 11, 2005 5:27 am

Union faults Delta



The Enquirer/Gary Landers

Captain Duane Woerth (with bullhorn), President of the Air Line Pilots Association, (ALPA), and other pilots protest outside the Delta Airline's call center.


Duane Woerth, chairman of Air Line Pilots Association International, has seen 20 airlines with pilots represented by his union go into bankruptcy, and all have reached concessionary deals with their pilots without relying on the courts.

All except Delta Air Lines.

Woerth, who was in Cincinnati Friday to meet with the Comair ALPA unit and take part in an AFL-CIO labor rally downtown, oversees the union, representing about 63,000 pilots at 60 different carriers.

The Northwest Airlines captain, in his second term as chairman, was interviewed Friday by Enquirer reporter James Pilcher about the Delta and Comair situations.

Delta filed for bankruptcy protection in September, and last month asked a judge to void its contract with its nearly 7000 pilots, including nearly 800 based locally at Delta's second-largest hub. The company wants to impose new terms that include cuts worth $325 million annually - the pilots already agreed to $1 billion in annual cuts last fall, and are offering a package they say is worth $150 million a year.

Delta subsidiary Comair, based in Erlanger, was included in that filing, and management there also is seeking concessions from its pilots and other unions. But that airline has not gone to court seeking the cuts.

Question: Will there be a settlement in the Delta talks, or will the judge have to intervene?

Answer: We have reached agreement with everyone else in 20 bankruptcies since Sept. 11, and that includes wholly owned subsidiaries and airlines in Canada ... There was not a management so foolish as to not reach consensual agreement.

If Delta management fails to reach a consensual agreement, it will be the only one with judgment so flawed as to not see the necessity of a consensual deal. That being said, we are still hopeful for a consensual agreement on the courthouse steps.

Q: Why has it gone to the brink like this?

A: The Delta management team has over the last several years largely been decimated. It is regarded as one of the weakest teams in the network carrier business.

They have frankly delegated to their financial advisers the role of strategic management. Those same financial advisers are the ones that arranged (debtor-in-possession bankruptcy) loans, and they are basically driving this negotiation.

Delta went out to the bankers and said 'we will get this,' instead of saying that this is a negotiation between management and a union. So now the bankers are saying 'we are in charge here,' and management has basically abdicated, and the long-term implications are not being thought through.

But part of the problem is that in our eyes, Delta's pilots account for about 3 percent of the costs including all the debt financing, yet they are being treated like they are 100 percent of the problem.

Q: What is ALPA's stance on the pilots' ability to strike if the contract is voided?

A: Our position is that unless they have reimposed slavery and indentured servitude with no contract, that we would be able to exercise our rights as employees and American citizens. No one can give an example of a free nation where you are told you don't have a contract but are breaking the law if you don't show up to work. There are consequences and we all would have to weigh our own risk and reward, and a court could say that it might be in bad judgment. But to say it's illegal is so anti-American and would be a violation of our freedoms way beyond the pale.

Q: Wouldn't you agree, though, that a strike would kill Delta?

A: A Job action does not have to be a total shutdown. The methodology and timing of a job action is something the Delta (pilot union leadership) is keeping close to the vest. There is a whole cornucopia of options available and they are aware of the risk. But management and vendors making money off Delta also face that risk.

Q: What advice are you giving Comair?

A: As a wholly owned subsidiary, their situation is much different than pilots at Delta. And both Delta and Comair know that the value of their jets and leases is really declined since the bottom has dropped out of the 50-seat regional jet market, and there is more cutting to do there.

Q: So that gives Comair's pilots a stronger bargaining position?

A: Yes. Contrast that threat of sending flying somewhere else and make Comair pilots agree to cuts rather than keeping control of the fleet and pay next to nothing for aircraft. They are saying they would rather pay a third-party vendor for all those costs, have cash leave the company and put profit premium on top of all of that.

Anything that foolish would be a blunder of tremendous proportions and we would ask a trustee to take the over company.

Q: Several Delta pilots have questioned your credibility in this situation seeing as pilots at your airline Northwest voted quickly for concessions there that are deeper than what Delta is asking for. How did you vote for that, and what is your impressions of that case?

A: I did not vote because I was not eligible. The situation at Northwest has to be viewed differently, however.

And Northwest's aggressiveness in destroying job security provisions made the case much more dire. Because everything was already collateralized and Northwest had no borrowing power, the risk was immediate and infinite.

Essentially, Northwest pilots were buying time, hoping fuel prices would continue their decline and in January they would be in a better position than they were month ago.

E-mail jpilcher@enquirer.com
 
panamair
Posts: 3761
Joined: Fri Oct 12, 2001 2:24 am

RE: Cincinnati Enquirer Article About Delta

Sun Dec 11, 2005 6:25 am

I am somewhat perplexed, puzzled, confused (whatever) about the last answer regarding the comparison between DL and NW. So basically DL is not collateralized enough? the risk at DL is not immediate and infinite? Basically, isn't he saying that because NW management were being such absolute bullies ("destroying job security provisions") that the pilots gave in? And yet, DL pilots should put up a good fight even at the risk of Ch.7 because management and creditors are also being bullies???

Sounds to me like: well my job at NW was on the line so I caved. But I can use Delta as an example to shore up ALPA's overall bravado (since I don't work for the airline)..never mind that such a demonstration of "mine is bigger" will destroy jobs not only of the 55,000 DL people but many associated businesses around the ATL,CVG, SLC areas...
 
OOer
Posts: 923
Joined: Thu Oct 13, 2005 2:10 pm

RE: Cincinnati Enquirer Article About Delta

Sun Dec 11, 2005 5:57 pm

The article says that the DL pilots account for only 3% of the cost. However I believe that is wrong. Labor usually consists between 30-35% of the cost to operate an airline. In the case of DL airlines the pilots make up about 10% of the workforce, however they are rewarded with about 40-45% of the budget!!! That tells me that DL pilots are not 3% of the cost...but between 12% and 15% of the total operational cost!!!!!
 
ikramerica
Posts: 13764
Joined: Mon May 23, 2005 9:33 am

RE: Cincinnati Enquirer Article About Delta

Mon Dec 12, 2005 1:33 am

Quoting Bucky707 (Thread starter):
Duane Woerth, chairman of Air Line Pilots Association International, has seen 20 airlines with pilots represented by his union go into bankruptcy, and all have reached concessionary deals with their pilots without relying on the courts.

Hmm, 20 of the airlines driven into BK, and I would assume each and every one was entirely the fault of the management...

And the way it is written, it sounds like every airline needed to go into BK before the pilots would work with them enough not to go under. And people wonder why some of us don't think Unions are good for the country anymore, even though they once were.

Quoting OOer (Reply 2):
However I believe that is wrong. Labor usually consists between 30-35% of the cost to operate an airline.

With the rising cost of benefits in the late 90s that figure ballooned to 40-45% for many majors. But the benefits like health care did not escalate with pay scales, so a pilot didn't cost more in that regard. Still 3% is false, which is part of the problem. Lying Union bosses.
Of all the things to worry about... the Wookie has no pants.
 
bucky707
Posts: 954
Joined: Sat Aug 19, 2000 2:01 am

RE: Cincinnati Enquirer Article About Delta

Mon Dec 12, 2005 1:46 am

Quoting Ikramerica (Reply 3):
Still 3% is false, which is part of the problem. Lying Union bosses.

I wondered about that myself. I think 3% is false. But, figures lie and liers figure. The actual statement "Delta's pilots account for about 3 percent of the costs including all the debt financing" makes me wonder. I mean, what does it mean so say 3% of all costs including debt financing? Anyway, even if you play funny with the facts to be able to come up with that number, I admit its misleading at best......and an outright lie at worst.