deltadude
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DL Bankruptcy Exit

Sun Sep 10, 2006 9:50 am

I've heard rumors that the pending pilot pension bailout makes the beginning of BK exit. What are you all's comments? Do you think we will see a DL operating in the black by next March or April?

Also, do you think they'll purchase new aircraft?

[Edited 2006-09-10 03:15:46]
 
bucky707
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 9:54 am

Yes, I think Delta will be operating in the black. Our current management team has done a good job turning the airline around. I think they are making the right moves with the routes. I have noticed the mood of the employees is very upbeat now. People are once again taking pride in working for Delta. I know I am.
 
Delta787
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 10:02 am

Quoting Deltadude (Thread starter):
I've heard rumors that the pending pilot pension bailout makes the beginning of BK exit. What are you all's comments? Do you think we will see a DL operating in the black by next March or April?

Delta has already been posting operating profits for several months now. Comparing this year to this time last year, Delta has really done a remarkable job turning itself around in just a year.
Fly Delta!
 
worldtraveler
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 10:18 am

DL has posted operating profits since April - just 6 months after filing for BK. They reported a 10% operating profit in June and July which should put them near the top of the industry.

They continue to say they plan to emerge by the 2nd quarter of 2007, probably in April or May.

Terminating the pilot pension plan is a major step in finaling their post-BK finances but DL also needs to rework its regional carrier contracts. They are on the final stretch but not their yet. Everything is going their way. They will begin the process of developing a plan of reorganization in the next few weeks.

Several news outlets (both industry and non-industry) have said they will feature DL's dramatic turnaround in coming months.
 
jumbojet
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:02 am

also, from what I've read, 2007 shall introduce new international flights much like 2006 had. It will be interesting to see what new destinations unfold. I'm not a betting man but if I was, I would say for sure there has to be at least two or three European flights in the mix.
 
DTWAGENT
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:43 am

Way to go DL. I need to hear some good new tonight. Keep it up folks.

Chuck
 
deputydawghere
Posts: 148
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:46 am

Without a doubt, Delta will definitely come out stronger than ever and continue to be a strong player in the global market. I believe the 787 will fit nicely into Delta's infrastructure.

[Edited 2006-09-10 04:51:28]
N/A
 
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SLCUT2777
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:47 am

I've even heard some Delta insiders point to even a possible December or January BK exit. Delta did a tremendous amount of restructuring once Jerry Grinstien had his people in place, namely Jim Whitehurst and Ed Bastian, and once they had a plan in place they went into action. Had fuel prices not been so volatile starting in 2004, it is a fairly safe assumption DL could have avoided going up the courthouse steps a year ago. As for the pilots pension, it is clearly an industry trend to go towards defined contribution plans over defined benefit plans since they are so much cheaper to fund. The U.S. Federal government started that trend back in 1984 when all federal employees hired after 12/31/1983 were hired on the FERS system rather than the old CSRS benefit program. The pilots will get a stake in the post BK company as well as a generous retirement contribution in place of the old plan.
I do believe that next year Delta will announce the direction their long-haul fleet will be going, namely placing any more 777 orders they think they wil need and they probably are already firming up plans with Boeing to get the additional 777s they want including some 200LR models they are going to need to fly to South Africa and India from ATL and JFK. With the number of people they carry between ATL/JFK and the primary European ports of entry (mainly LGW, CDG and FRA) I wouldn't be the least bit surprised to see them order a few 773ERs and place an initial order for some 787s. Finally i think they will start looking at phasing out their fleet of MD-88/90s with either some EMB-190/195s or wait for Boeing to come up with a smaller 737 successor.
As for new International routes next year, perhaps the big jaw-droppers will be one or perhaps two routes from Salt Lake City/SLC to Paris/CDG and to London/LGW. This will truly be going into uncharted waters for them or any other carrier. I think you could say the Widget is back!
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
Alitalia744
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:54 am

Quoting WorldTraveler (Reply 3):
They will begin the process of developing a plan of reorganization in the next few weeks.

The process has begun.
Some see lines, others see between the lines.
 
positiverate
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 12:16 pm

Quoting Deltadude (Thread starter):
I've heard rumors that the pending pilot pension bailout makes the beginning of BK exit.

Keep in mind, there's been no "bailout" of the pilot plan. The pilot plan was terminated by the company and given to the PBGC.

Quoting Deltadude (Thread starter):
Also, do you think they'll purchase new aircraft?

Like everyone else has said, I'm confident they'll be a 787 order (maybe even on the day they exit bankruptcy). I also think you'll see an order for 18 777LR's announced around that time as well  Wink. The thing I always wonder about is the follow on for the 757 and MD-88. I could see them ordering the EMB-195's, but the lack of fleet commonality with the all Boeing fleet makes me think they won't go that way. Maybe some 737-900', and -700's?
 
freedom747
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 12:33 pm

There are plenty of good airlines in this world. But, none quite like DELTA AIR LINES, INC.

[Edited 2006-09-10 05:38:44]
 
DeltaSFO
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 1:15 pm

There is still a great deal of work and restructuring left to do. I would be very surprised if Delta emerged from bankruptcy any time before May 2007. Delta executives have been playing down speculation about an early bankruptcy exit. In fact, I wouldn't be surprised if it happened sometime closer to July or August 2007.

The progress has been remarkable, but it is still too early to celebrate. DL is still, believe it or not, in the early stages of its restructuring and transformation. The Delta of 2008 will be very different from the Delta of today and yet very much like the Delta of 1984--in all the right ways.

[Edited 2006-09-10 06:15:50]
It's a new day. Every moment matters. Now, more than ever.
 
jacobin777
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 1:36 pm

Even though I don't fly on DL, I'm happy for you DL guys..keep up the good work thumbsup ....DL is a world-class carrier....

lots of work and challenges in front you guys/gals as well as the fact the economy is slowing down( and so will travel)..so there will be some bumps on the road..that being said, oil is down to $66.30/barrel...if it goes down another $10-$12..the profits will be quite sustainable...

Cheers...
"Up the Irons!"
 
DAL767400ER
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 7:39 pm

Quoting Positiverate (Reply 9):
The thing I always wonder about is the follow on for the 757 and MD-88. I could see them ordering the EMB-195's, but the lack of fleet commonality with the all Boeing fleet makes me think they won't go that way. Maybe some 737-900', and -700's?

Just my opinion, but I could imagine that DL might forego ordering any new 737NGs besides the ones they already have on order, and instead keep their 757s and MD-88s in as good a condition as possible, and try to be a launch customer. They will be behind others on the 787, but they might try to be one of the first for the 737RS.

I also doubt that DL would leave CH11 earlier than originally planned. I imagine they could perhaps actually do it, but better stay in longer and get absolutely everything work out, than going out early and perhaps overlook something.
 
aa1818
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 8:10 pm

Which US carriers still have their Pilot Pension funds in tact???? AA, CO, anyone else?????

Also what sort of debt levels do the legacies have. I've heard of AA having about 20bn, CO 8bn? Are those figures outdated?

Great news that the US aviation industry is regaining momentum and a speedy recovery to a healthy state is well underway.

AA1818
“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
 
COERJ145
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 10:21 pm

Quoting AA1818 (Reply 14):
Which US carriers still have their Pilot Pension funds in tact???? AA, CO, anyone else?????

AA, CO and NW all have theirs. US, UA and soon DL Dumped theirs. Anyone know whether US will restore theirs due to the merger by HP(still has pension)?

[Edited 2006-09-10 15:21:57]

[Edited 2006-09-10 15:22:14]
 
bucky707
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 10:42 pm

Quoting COERJ145 (Reply 15):
AA, CO and NW all have theirs. US, UA and soon DL Dumped theirs. Anyone know whether US will restore theirs due to the merger by HP(still has pension)?

NW still has their pension, but I would bet against them leaving BK with it intact. HP never had a pension, at least not a defined benefit pension.
 
Jano
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:05 pm

Quoting Bucky707 (Reply 16):
NW still has their pension, but I would bet against them leaving BK with it intact.

I believe that NWA's pilots do not have defined benefits plan anymore, rather they are on defined contribution plans now.

See http://wcco.com/business/local_story_031132603.html

The carrier, which filed for bankruptcy protection in September, and its pilots union, the Air Line Pilots Association (ALPA), agreed to the freeze of the defined benefit plan. The creditors committee also came out in support of the freeze, effective on Feb. 1, in court.

The pilots will now get a defined contribution plan, the details of which are still being hashed out between ALPA and Northwest.
The Widget Air Line :)
 
bucky707
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RE: DL Bankruptcy Exit

Sun Sep 10, 2006 11:27 pm

Quoting Jano (Reply 17):
The carrier, which filed for bankruptcy protection in September, and its pilots union, the Air Line Pilots Association (ALPA), agreed to the freeze of the defined benefit plan. The creditors committee also came out in support of the freeze, effective on Feb. 1, in court.

The pilots will now get a defined contribution plan,

As this says, the defined benefit was frozen. So someone who had accrued, say 7 years toward the pension, would get 7/25s of the full pension. But no further accrual. Going forward, you get a defined contribution plan. There are many pilots at NW with more than 25 years, so they will get the full defined benefit pension. As of now, the defined benefit plan has not been terminated.
 
scaledesigns
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:05 am

Great for Delta if its true..Chapter 11 is probably better for most airlines
at this point in time to lower employment costs and return a/c and equipement the company cant afford.Not very good for the Creditors or Employees though!Wall Street and the Banks hate it.

I wonder what airline is next to enter chapter 11??
F1 Tommy
 
Woosie
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:14 am

At the expense of sounding dumb... what's the basic intent behind a "defined benefit plan" and a "defined contribution plan"? I realize the defined contribution plan costs less, as [I guess] the employee partially funds his retirement and [probably] contributions paid by the employer are a percentage of the total based on employee contributions. Anything else??
 
HunUtazo
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:16 am

Dal will be unalterably changed forever more as a result of the consolidation that will ensue relatively soon. The stage has been set, dals future is inextricably tide to the dominoing lemming like combinations that have been planned and will take place in the not too distant future...

AMR nwac

CAL ual

LCC dal frag

LUV dal frag
dude
 
positiverate
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:19 am

Quoting Bucky707 (Reply 16):
NW still has their pension, but I would bet against them leaving BK with it intact. HP never had a pension, at least not a defined benefit pension.

In orer for them to take advantage of the pension relief recently passed by Congress, they have to do one of two things:

1) If they soft freeze their pension, they are able to take advantage of the 10 year amortization period at a higher interest rate. Unfortunately for NWA, this option doesn't sufficiently address their underfunding.

2) The other option is to totally freeze accruals, and use the 17 year/7.75% amortization period. This addresses their underfunding issues sufficiently.

So you're right, they will not exit bankruptcy with their current pension plans in place.

Quoting Bucky707 (Reply 18):
As of now, the defined benefit plan has not been terminated.

See above. It will be.
 
luv2fly
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:21 am

IMHO - I would really be surprised if DL comes out of bankruptcy prior to the 4th quarter of 2007. I do not see them rushing it like US did the first time.
You can cut the irony with a knife
 
dutchjet
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:24 am

Quoting DeltaSFO (Reply 11):
There is still a great deal of work and restructuring left to do. I would be very surprised if Delta emerged from bankruptcy any time before May 2007. Delta executives have been playing down speculation about an early bankruptcy exit. In fact, I wouldn't be surprised if it happened sometime closer to July or August 2007.

The progress has been remarkable, but it is still too early to celebrate. DL is still, believe it or not, in the early stages of its restructuring and transformation. The Delta of 2008 will be very different from the Delta of today and yet very much like the Delta of 1984--in all the right ways.

[Edited 2006-09-10 06:15:50]

Interesting and well thought out post......I agree with you 100%. The progress at DL has been remarkable, but I dont think that DL is going to rush out of bankruptcy until each and every financial issue is resolved and until managment is certain that they have a business plan that will work very well...even in these difficult times with security and fuel issues affecting airline traffic and operating costs. Why should DL rush? DL certainly does not want to find itself in a situation where they would be forced to re-file a couple of years down the road ( think US) or emerge with nagging problems unresolved ( think UA).

Quoting DAL767400ER (Reply 13):
Just my opinion, but I could imagine that DL might forego ordering any new 737NGs besides the ones they already have on order, and instead keep their 757s and MD-88s in as good a condition as possible, and try to be a launch customer. They will be behind others on the 787, but they might try to be one of the first for the 737RS

Its a wild card......a lot depends upon how much flexibility Boeing will continue to offer Delta. Dont forget that DL has a lot of orders on Boeing's books that somehow must be resolved; Boeing will certainly accommodate Delta but at some point, Boeing will want to Delta to start accepting some of the new airplanes that are on order. My guess: some of the 737NG orders on the books will be converted to 777 orders with Boeing's blessing (whether its ERs or LRs remains to be seen, I am not convinced that DL needs the very expensive LR variant) as Delta desperately needs additional longhaul capacity, a reasonable number of 738s (say about 20) will be firmed up at Boeing's insistance and the balance of DL's current commitments will be re-allocated to the 787 and 737RS.

Quoting Positiverate (Reply 9):
Like everyone else has said, I'm confident they'll be a 787 order (maybe even on the day they exit bankruptcy). I also think you'll see an order for 18 777LR's announced around that time as well . The thing I always wonder about is the follow on for the 757 and MD-88. I could see them ordering the EMB-195's, but the lack of fleet commonality with the all Boeing fleet makes me think they won't go that way. Maybe some 737-900', and -700's

Eighteen 772LRs in one order, I think, is a bit optimistic.....you are talking about some very expensive airplanes!!! I do think that there will be a 772 order (ER or LR.....I an going with additional ERs) just as soon as DL can arrange for financing......and the exact number will depend upon how willing the institutions are willing to lend to the ""NEW"" Delta.....if I had to guess, I would say between 6 and 12 772s will be ordered by DL. As mentioned above, DL will take some 738s due to issues with Boeing......but I dont expect a large narrowbody order in the nearterm future from Delta, the 752s and MD80/90s plus the 738s are serving the airline just fine.
 
bucky707
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:26 am

Quoting Positiverate (Reply 22):
See above. It will be.

I agree. I was simply pointing out it has not been terminated yet.
 
positiverate
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:26 am

Quoting HunUtazo (Reply 21):
Dal will be unalterably changed forever more as a result of the consolidation that will ensue relatively soon. The stage has been set, dals future is inextricably tide to the dominoing lemming like combinations that have been planned and will take place in the not too distant future...

AMR nwac

CAL ual

LCC dal frag

LUV dal frag

"Have been planned"? And you're basing this post on what information?
 
jumbojet
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:31 am

What DL needs to accomplish is a stronger alliance network that allows for travel to more far east countries and Australia, something that is impossible to do via delta's web site. As a sky team member, I can book on NW and get sky miles credit but would much rather book something like that via Delta.

[Edited 2006-09-10 17:32:41]
 
F9Animal
Posts: 3652
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:35 am

And I remember reading the doom and gloom of DL.

I have to admit though, I was kind of worried. DL is a fine airline, and I look forward to seeing it pull through these rough times. The employees of DL deserve all of the credit, as they gave up alot.

DL ROCKS! BUT THE EMPLOYEES OF DL ROCK HARDER!

On a side note though. The pension deal is going to be a sour one. I could not imagine having my pension cut like that. If it is going to provide job security, I guess the sacrafice is worth it. Don't know all the details on it, but I do feel sympathy for the pilots. Kind of makes you wonder about the morale levels this will create.

[Edited 2006-09-10 17:41:12]
I Am A Different Animal!!
 
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SLCUT2777
Posts: 3407
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:55 am

Quoting Dutchjet (Reply 24):
but I dont expect a large narrowbody order in the nearterm future from Delta, the 752s and MD80/90s plus the 738s are serving the airline just fine.

While I likewise don't expect a new narrow-body order for at least 2 perhaps three years, I do see DL putting the MD-88/90 group on the chopping block next. The 752s DL just can't have enough of, and they realize they needed more of thees airframe during this round of restructuring, hence the acquiring of the old TWA 752s from AA. The 738 has been splendid for them and they will continue to acquire some of them from their rolling order. If DL converts any 738s, more than likely it will be for the 739ER since they have a lack of 752s (even with all the ex-TWA birds joining by next year). If DL does go for any 737-700s, this in my opinion tells everyone there will be no EMB-190/195 order and further that this will be the replacement for the MD-88/90 line-up.
As for wide-body orders, DL will no doubt continue to firm up their 777 order list including at least 6 772LR's to better enhance their international route capability made possible by their 763ER orders back in the 1990s. Despite the prince, the 772LR is worth it to any airline these days since they are capable of flying virtually any route at a highly economical rate.

[Edited 2006-09-10 18:00:33]
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
Alitalia744
Posts: 3777
Joined: Thu Mar 30, 2000 8:22 am

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 12:57 am

Quoting Positiverate (Reply 26):
Quoting HunUtazo (Reply 21):
Dal will be unalterably changed forever more as a result of the consolidation that will ensue relatively soon. The stage has been set, dals future is inextricably tide to the dominoing lemming like combinations that have been planned and will take place in the not too distant future...

AMR nwac

CAL ual

LCC dal frag

LUV dal frag

"Have been planned"? And you're basing this post on what information?

Positiverate - He posts this in every thread where DL is concerned. I wouldn't put much stock into his posts.
Some see lines, others see between the lines.
 
floridaflyboy
Posts: 1500
Joined: Sat Jun 03, 2006 3:26 pm

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 1:43 am

Quoting Delta787 (Reply 2):
Delta has already been posting operating profits for several months now. Comparing this year to this time last year, Delta has really done a remarkable job turning itself around in just a year.

Delta's doing a heck of a lot better than United did. Don't get me wrong. I understand that United was going through bankruptcy in much worse times, making it much harder to exit quickly, but I am proud of Delta for the quick progress they've made.
Good goes around!
 
DAL767400ER
Posts: 5084
Joined: Wed Feb 09, 2005 2:47 am

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 3:32 am

Quoting Alitalia744 (Reply 30):
Positiverate - He posts this in every thread where DL is concerned. I wouldn't put much stock into his posts.

Especially considering that most of the time this BS will be deleted anyway  Wink .
 
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fxramper
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 3:37 am

It's disgusting what DL and the US Government have done to employee pensions just so they can survive. If they can't pay out and survive, let them die.  no 
 
panamair
Posts: 3767
Joined: Fri Oct 12, 2001 2:24 am

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 3:48 am

Quoting FXramper (Reply 33):
It's disgusting what DL and the US Government have done to employee pensions just so they can survive. If they can't pay out and survive, let them die.

Use your head a little before posting next time...if DL were to be liquidated, there wouldn't be enough to fully fund all of the underfunded pension plans anyway. ALL employees would have ended up with the PBGC minimums as the assets would have been used to pay off many of the other creditors first (before the PBGC). At least in the current situation, only one group is getting the PBGC minimums; the extension of the pension funding to 17 years for the other employee plans will help save the other employees' defined benefit plans.
 
dz09
Posts: 360
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 3:55 am

What does cancelling the pilots pension plan exactly mean? Are the pilots getting screwed in the process? is the airline surviving at the expense of the pilots?

Cheers.
 
Otter79
Posts: 6
Joined: Thu Jan 26, 2006 1:17 pm

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:03 am

Quoting FXramper (Reply 33):
It's disgusting what DL and the US Government have done to employee pensions just so they can survive. If they can't pay out and survive, let them die.

I agree it's outrageous and disgusting... but don't blame only Delta. It started with USAir and United.

FYI, Delta's CEO said publicly (pre-bancruptcy), that if UAL was allowed to dump the pensions, he would have to also for competitive reasons. They did and he did.
 
dl1011
Posts: 315
Joined: Tue May 18, 1999 6:42 am

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:13 am

Bucky707 wrote "I have noticed the mood of the employees is very upbeat now. People are once again taking pride in working for Delta. I know I am."

I'm glad that you see an upbeat mood, I wish I did.

Tech Ops continues to lose people at a high rate. A lot of high quality people are bailing out and the mood is very bad. I know a bunch of people that have left, have another job lined up and will leave or are looking to leave. I also know a bunch of people that have already left and so far, none regret leaving.

There are Lead AMT and Manager jobs open that they can't fill, nobody want's these jobs. People used to line up in droves for these jobs but now they have to BEG people to take them and they still can't fill them.

DL will survive but Tech Ops has been wrecked. That may very well be the plan and if so, they are doing well!
 
panamair
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:15 am

Quoting Otter79 (Reply 36):
FYI, Delta's CEO said publicly (pre-bancruptcy), that if UAL was allowed to dump the pensions, he would have to also for competitive reasons. They did and he did

FYI, both UA and US dumped ALL of their employee pension plans. Not saying that dumping even one plan is a good thing but DL and NW lobbied hard on Capitol Hill for the 17 year funding exception so that most of their other pension plans could be saved! As a result of the passage of the law, it looks like DL will be able to continue with the other employees' defined benefit plans. The main reason why DL had to treat the pilot plan differently was because of a lump sum provision for retiring pilots (a provision not in the other employees' plans). With the number of potential pilot retirements, DL would have been facing billions of dollars in cash outlay under the existing defined benefit plan as each retiring pilot could (and would) have taken the lump sum payments - cash that DL simply could not afford.
 
DeltaSFO
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:21 am

Quoting Panamair (Reply 38):
As a result of the passage of the law, it looks like DL will be able to continue with the other employees' defined benefit plans.

I'm pretty sure you're aware of this, Panamair, but I just wanted to clarify. Defined benefit plans for non-contract employees were frozen as of the bankruptcy filing and will not be unfrozen at any point in the future. The legislation only preserves already earned benefits. At some point shortly after emergence from bankruptcy, Delta will roll out some type of new defined contribution pension plan.
It's a new day. Every moment matters. Now, more than ever.
 
panamair
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Joined: Fri Oct 12, 2001 2:24 am

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:28 am

Quoting DeltaSFO (Reply 39):
I'm pretty sure you're aware of this, Panamair, but I just wanted to clarify. Defined benefit plans for non-contract employees were frozen as of the bankruptcy filing and will not be unfrozen at any point in the future. The legislation only preserves already earned benefits. At some point shortly after emergence from bankruptcy, Delta will roll out some type of new defined contribution pension plan.

Thanks for the clarification. Yes, I was aware of it- in fact, I thought that quite a few FAs told me that their switch to the defined contribution plan had already been made earlier (even prior to Ch.11)
 
Otter79
Posts: 6
Joined: Thu Jan 26, 2006 1:17 pm

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:33 am

Quoting Panamair (Reply 38):
Quoting Otter79 (Reply 36):
FYI, Delta's CEO said publicly (pre-bancruptcy), that if UAL was allowed to dump the pensions, he would have to also for competitive reasons. They did and he did

FYI, both UA and US dumped ALL of their employee pension plans.

I was referring to the pilot's pension plan although I didn't indicate that in my post. Grinstein made that statement at a pilot meeting in the fall of 2004.

Thanks for catching the omission!
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:34 am

Quoting FXramper (Reply 33):
It's disgusting what DL and the US Government have done to employee pensions just so they can survive. If they can't pay out and survive, let them die.

You're right. It's absolutely outrageous that DL and NW joined with their employees and worked so hard on Capitol Hill to pass legislation to preserve the earned benefits some of the remaining defined benefit plans. It's disgusting that they didn't just go ahead and dump them on the PBGC, so their employees could only get 10 cents on the dollar. Also, its appalling that the pilots got a $600 million note on their plan. They ought to be taken out back and beaten!  sarcastic 

Quoting Otter79 (Reply 36):
I agree it's outrageous and disgusting... but don't blame only Delta. It started with USAir and United.

FYI, Delta's CEO said publicly (pre-bancruptcy), that if UAL was allowed to dump the pensions, he would have to also for competitive reasons. They did and he did.

Right, but the difference is Grinstein and the employees worked together to come up with a plan to preserve the alrrady earned benefits of the non pilot plan, then took that to Congress. UA did no such thing, and dumped ALL their plans on the PBGC.

Quoting DeltaSFO (Reply 39):


I'm pretty sure you're aware of this, Panamair, but I just wanted to clarify. Defined benefit plans for non-contract employees were frozen as of the bankruptcy filing and will not be unfrozen at any point in the future. The legislation only preserves already earned benefits. At some point shortly after emergence from bankruptcy, Delta will roll out some type of new defined contribution pension plan.

 checkmark  But, again, unlike UA and US, DL's nonpilot employees will NOT have their plans turned over to the PBGC.
 
DeltaSFO
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:50 am

Quoting Panamair (Reply 40):
Yes, I was aware of it- in fact, I thought that quite a few FAs told me that their switch to the defined contribution plan had already been made earlier (even prior to Ch.11)

I don't remember the specifics, but when DL went from the defined benefit plan to the cash balance plan, I think any employee with more than 10 years at the time was grandfathered into the defined benefit plan. I guess now, after the bankruptcy, you get whatever you had as of 9/14/05--if you were retirement eligible on that date--and there will be an entirely new plan next year.
It's a new day. Every moment matters. Now, more than ever.
 
DeltaSFO
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 4:57 am

Quoting Positiverate (Reply 42):
But, again, unlike UA and US, DL's nonpilot employees will NOT have their plans turned over to the PBGC.

Yes, and I agree that this is a great thing.
It's a new day. Every moment matters. Now, more than ever.
 
burnsie28
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 5:30 am

Quoting Bucky707 (Reply 16):

NW still has their pension, but I would bet against them leaving BK with it intact.

According to NW the new pension plan passed by congress, NW announced with the passing that it would allow them to keep the pension plans intact.
 
jacobin777
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 6:17 am

Quoting Otter79 (Reply 36):
FYI, Delta's CEO said publicly (pre-bancruptcy), that if UAL was allowed to dump the pensions, he would have to also for competitive reasons. They did and he did.

which is not competitive (nor fair really) to other carriers such as AA which hasn't filed for bankruptcy
"Up the Irons!"
 
positiverate
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 6:38 am

Quoting Jacobin777 (Reply 46):


which is not competitive (nor fair really) to other carriers such as AA which hasn't filed for bankruptcy

Which is why the Congress passed the provisions included in the pension bill to allow airlines that still have DB plans such as CO, AA, DL, or NW to take either one option or another to amortize that debt.
 
worldtraveler
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 6:54 am

only airlines in bankruptcy only had the 17 year option. that provision was necessary because DL and NW both said they couldn't have retained an pension plans if they didn't have 20 years to catch up funding on their pension plans. Congress gambled that 17 years would be enough and they were apparently right. Given the very high likelihood of a termination without the 17 year provision, it is very realistic.

The DL pilot pension plan was (is being) terminated solely because of the lump sum distribution provision. ALPA fought to have the provision and as the thread of bankruptcy grew at DL, pilots headed for the doors and took their lump sums with them. That caused the underfunding to grow which made it all the more likely the plan would be terminated. Because lump sum distributions had to stop given the level of DL's underfunding, the exodus of pilots stopped also but the pilot pension plan is too far underfunded to be salvageable since it is not possible to remove the lump sum distribution provision. In other words, as soon as the underfunding is corrected, lum sum distributions can begin again and the cycle starts all over again. The irony is that the PBGC recognizes lump sum distributions as part of their obligations so many of the pilots that took a lump sum distribution will get no more benefits from either DL or the PBGC.

Visions of DL dumping over a hundred MD80s and 90s anytime in the near term are delusional. DL will buy enough ultralong haul aircraft to allow it to grow into Asia, something it can't do with an international fleet that is 90% made up of 767s. There will be limited aircraft acquisitions in the near term just because DL's creditors are not interested in overstretching DL's balance sheet until DL becomes much stronger and its position relative to the industry is much more solid Given that DL would be a likely acquirer when the industry consolidates, it makes little sense to buy a bunch of new planes when that could weaken the balance sheet to the point of no longer being able to have whatever assets become available when they do.

No one should be surprised at the strength or speed of DL's turnaround. During the pre-deregulation era, DL was consistently the most profitable and most repected airline in the industry. DL "flew right" during the 80s but lost its focus in the 90s. Going into 2001, DL had lost the values that made it great. It should be no surprise that the DL leaders that are succeeding at turning the company are returning to the winning formula that made DL great: conservative finances, leading customer service, and team driven employee relations. DL's restructuring will not be complete when it emerges from bankruptcy next spring but it is well on the way to becoming an industry leader once again, although this time on a much larger global scale.
 
positiverate
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RE: DL Bankruptcy Exit

Mon Sep 11, 2006 6:57 am

Quoting WorldTraveler (Reply 48):
only airlines in bankruptcy only had the 17 year option. that provision was necessary because DL and NW both said they couldn't have retained an pension plans if they didn't have 20 years to catch up funding on their pension plans. Congress gambled that 17 years would be enough and they were apparently right. Given the very high likelihood of a termination without the 17 year provision, it is very realistic.

Show me where in the legislation it says that? You can't, because that isn't true. In fact, CO is getting the best of both worlds. They are taking the 17 year option for their pilot plan, and the 10 year option for their non pilot plan. The only requirement to take more years was the stipulation that you had to freeze accruals on the plan. There is absolutely NO requirement that you have to be in bankruptcy to take the 17 year provision. In fact, AA and CO could take the 17 year option for all their plans if they chose to.