Another Airline Shattered

[Fly]

Management gets paid a tremendous amount of money to KNOW how to run a business. They know they have pilots, they know the pilots have contracts, and they get to agree on the contents of those contracts BEFORE they get signed. So who's not holding up their part?

fyi - the only proposed amendment is that the senior pilots get their lump sum if they stick around for 120 days to give them a chance to train the replacements.

 

[The Ronin]

Bankruptcy court still looms
Experts: Delta pilots key even with restructuring

By James Pilcher
Enquirer staff writer

The massive restructuring and cost-cutting plan Delta Air Lines introduced Wednesday should help the financially struggling carrier reinvent itself over the long haul, experts and industry insiders say.

But the new strategy probably won't help when it comes to staving off Chapter 11 bankruptcy protection - only the company's pilot union can help at this stage, the experts say, even if the pilots say they are only part of the solution.

"The plan is a long-term step in the right direction," airline analyst Jim Higgins of Credit Suisse First Boston wrote. "But (Delta's) ability to avoid bankruptcy over a period that now appears to be weeks rather than months rests solely on its ability to obtain $1 billion in pilot concessions."

The Atlanta-based airline, which operates its second-largest hub at Cincinnati/Northern Kentucky International Airport, said Wednesday that its restructuring plan could help shave more than $2 billion more off annual costs, and coupled with a pilot agreement, that the company could save as much as $5 billion by 2006.

However, those reductions will require closing the airline's hub in Dallas, eliminating 6,000-7,000 jobs, and cutting salaries and benefits for remaining workers.

The airline also is trying to become more efficient with its planes and network, streamlining its Atlanta hub and retiring four plane types.

Delta has touted the plan as a way to reverse its fortunes - it has lost more than $5 billion in the past three years, with no end in sight.

But many of the changes in the restructuring plan won't take full effect until early next year. Meanwhile, Delta chief executive officer Gerald Grinstein said that if a retirement issue is not worked out with the pilots by the end of this month, the company will declare bankruptcy.

The company is seeking $1 billion in annual cuts from the 7,500-pilot union, which includes more than 800 locally. Grinstein said that the retirement issue could be worked out separately, but that an overall agreement was needed soon, saying his inability to get an agreement with the pilot union was "a deep personal disappointment."

Officials with Delta's branch of the Air Line Pilots Association disagree that avoiding Chapter 11 is entirely contingent upon the union agreeing to concessions.

"This needs to be a comprehensive restructuring involving all stakeholders, and employees are only a part of that," union spokesman Chris Renkel said Thursday. "And the company is working on it, but there is a long way to go."

Delta has approached some of its bond holders to renegotiate its debt, and Grinstein said Wednesday that it was in "fruitful" discussions with holders of about 25 percent of that debt.

But just the fact that such a deadline was given on a part of the deal prompted one analyst to raise the chances of a Delta bankruptcy from 50 percent to 70 percent while also raising the chances of a pilot agreement.

"While seeming paradoxical, our revised thesis assumes a fast-ticking clock and the inability to extract sufficient savings from debt holders in time," Jamie Baker of JP Morgan wrote in a research note. "Bear in mind that this change has little to do with (Wednesday's) town-hall meeting, which was not meaningfully directed towards the issue of Chapter 11 avoidance."

Other experts echoed Baker's sentiments that the plan would not be enough to keep the company from the bankruptcy courts, saying what the company is asking from its pilots dwarfs any cuts coming through jobs and salaries.

According to Delta's financial statements, it had a payroll of about $6.3 billion in 2003.

Even a 10 percent cut across the board in non-pilot labor costs would be just over half of what the company is seeking from the pilots, experts say.

As for the fate of the plan if Delta does declare Chapter 11, Grinstein acknowledged that it might not survive. "We obviously would like to keep going forward, but in bankruptcy, you're not in total control," he said.

And he said that "time is running out" when asked when the company might declare bankruptcy.

"I can't give a specific date, but our liquidity drain is continuing, and if anything alters that, the company could have no choice," Grinstein said.

Thursday on Wall Street, Delta stock lost 12 cents to close at $3.92.

E-mail [email protected]

 

[WorldTraveler]

Fly,
you're right. DL did sign a contract and they are RENEGOTIATING it. They didn't go into bankruptcy and abrogate it like some other airlines.

We'll see this endless barrage of doomsday about Delta for about another three weeks, or until the pilots sign a contract, which ever comes first. And when the dooms day prophets are through with DL, it will be time for UA to announce their next moves and then UA will be the focus of failure.

Let's get past the media hype and move to the long-term viability of each carrier. Until DL files for bankruptcy, they are still in considerably better shape than UA. UA's problem is rebuilding a viable balance sheet and that clearly means cutting major liabilities like pensions. Problem is that such a move will alienate the employees and give them no reason to see that United survives (just look at US for evidence of that). UAL may very well successfully restructure and emerge from bankruptcy but they will be the EXCEPTION in an industry where bankruptcy is a nearly fatal disease. That, my friends, is the reality that UAL faces today. DL is in an entirely different, although no less challenging league.

 

[Fly]

There's no place like home.....click, click.....there's no place like home.....click, click



I am absolutely amazed at your ability to keep them peepers slammed shut so tight. Delta IS going into BK. Ask the employees. Wow, you must really love this BUSINESS and COMPANY (and that, my dear, is exactly what it is) Think about it, is it really worth your love honey?

 

[UAL_TECH]

Hey High Iron, I'm just playing with Ronin. You and I both know the reality that exists at Delta, United, and US Air and the reasons they are where they are. Ronin doesn't. And I certainly don't fault the IAM at US Air for not negotiating considering the flagrant violation of their contract concerning the Airbus overhauls, among other things. Just like I can understand Delta ALPA being extremely hesitant to agree to large, unilateral give backs to a management team that they don't trust (remember the secret Delta management retirement plans while their management was cutting everyone else's benefits?) Unfortunately, Ronin likes to post inflammatory inaccuracies that blame ALPA and/or pilots for everything evil on earth, so sometimes I get bored and respond to his posts to show how out of touch with reality he is. Please take no offense!

ualdriver

Hey Ronin, it's all ALPA's fault!

[post="177382"][/post]​

ualdriver,

If I had to work 65 hours a month to make $300K a year, I might be bored also.

Is this an ‘inflammatory inaccuracy’?

Please take no offense…………

Respectfully,
:mf_boff: UT

 

[The Ronin]

Ya, I might be "out of touch with reality" but YOU GUYS SURE KNOW HOW TO CHOKE A CHICKEN....OR IS THAT SQUEEZE A GOOSE...OR SOMETHING WITH A DUCK???...
What do you guys have against foul anyways????

 

[ZMAN777]

Yes, Ronin, it's all ALPA's fault. You talk about ALPA's actions over at Delta but you fail to mention the mechanic's actions currently over at US Air (they won't even negotiate) and they're on the verge of liquidation without concessions from their mechanics! But that selective memory, unfortunately, is typical for you. Yes, Ronin. It's all ALPA's fault.....


http://www.iamdl142.org/TransformationPlan...Final_8-311.pdf

[post="177355"][/post]​

UALDRIVER,

Good post for sure. Hey, just figure we have a guy here (Ronin) on our forum with about as much a clue as A320 Pilot over on the U.S. Airways site. Great, now we've got our own butthead. Lucky us!!!!

Cheers,
Z B)

 

[The Ronin]

UALDRIVER,

Good post for sure. Hey, just figure we have a guy here (Ronin) on our forum with about as much a clue as A320 Pilot over on the U.S. Airways site. Great, now we've got our own butthead. Lucky us!!!!

Cheers,
Z B)

[post="178524"][/post]​

Gee Z.....I guess I'll just take that as a compliment then. To elevate me to the elite status of "Pilot" justs makes me blush all over....you guys

 

[alexander66]

Yes, Ronin, it's all ALPA's fault. You talk about ALPA's actions over at Delta but you fail to mention the mechanic's actions currently over at US Air (they won't even negotiate) and they're on the verge of liquidation without concessions from their mechanics! But that selective memory, unfortunately, is typical for you. Yes, Ronin. It's all ALPA's fault.....

Ronin, after you're done with that airline pilot pay website, you can cut and paste the link below and see how a bunch of overpaid mechanics are about to drag their carrier into liquidation. OH wait. I forgot. That's ALPA's fault too. What was I thinking?

http://www.iamdl142.org/TransformationPlan...Final_8-311.pdf

[post="177355"][/post]​

ualdriver you dont know wrong u are.
ALPA is a huge reason Ual is in the precarious situation it is in right now.
Dirt bag Dubinski and the UAL mec sanctioned the bleeding of UAL during the summer of 2000.is a large reason ual is where is.
Dont you remember Dubinskis comment about killing the goose that laid the golden egg?
If you really want to go way back, the ill advised strike in 85 , called by the brilliant R Hall started the whole ball rolling

 

[bigJ]

ualdriver,

If I had to work 65 hours a month to make $300K a year, I might be bored also.

Is this an ‘inflammatory inaccuracy’?

Please take no offense…………

Respectfully,
:mf_boff: UT

[post="178368"][/post]​

I'm just curious who it is that makes $300K a year for working 65 hours a month.

 

[bigJ]

ualdriver you dont know wrong u are.
ALPA is a huge reason Ual is in the precarious situation it is in right now.
Dirt bag Dubinski and the UAL mec sanctioned the bleeding of UAL during the summer of 2000.is a large reason ual is where is.
Dont you remember Dubinskis comment about killing the goose that laid the golden egg?
If you really want to go way back, the ill advised strike in 85 , called by the brilliant R Hall started the whole ball rolling

[post="179091"][/post]​

Wow, it must be nice to live in a world where you create history and forge your own personal reality.

 

[The Ronin]

I'm just curious who it is that makes $300K a year for working 65 hours a month.

[post="179298"][/post]​

You're right, we should put this into perspective. 12yr Capt 747/777 GUARANTEED
$160,000/yr based on 708hrs...whether flown or not. This doesn't cover the "other" nickle and dime stuff for maincures and piano tuning. Now if he actually decides to fly a whole 1000 hrs well then, now we're talking about $203,000/yr. Given that the average worker in America works a minimum 2080hr/yr....sounds like a good gig to me...kudos

 

[Fly]

Ok, that takes the "misinformed" award of the year. If you have been around the airline for any amount of time (and paid ANY attention), you know that we work a LOT MORE than those measly hours we get paid. You (Ronin) are trying to make it sound like we actually only work a few hours a month. UNTRUE A three day trip gets paid about 15 hours if it's international, about 10 if it's domestic.......but we are GONE for 3 full days. Get it? WE GET PAID ONLY WHEN THE PLANE IS MOVING!!!!!!!!! So, if the airline schedules horribly (if?! LOL) then we spend a lot of time sitting around, in uniform, answering questions, serving drinks, being nice, not allowed on cell phones, etc, etc, etc for FREE. I love this job! :elvis:

 

[goingboeing]

Yes, Ronin, it's all ALPA's fault. You talk about ALPA's actions over at Delta but you fail to mention the mechanic's actions currently over at US Air (they won't even negotiate) and they're on the verge of liquidation without concessions from their mechanics! But that selective memory, unfortunately, is typical for you. Yes, Ronin. It's all ALPA's fault.....

Ronin, after you're done with that airline pilot pay website, you can cut and paste the link below and see how a bunch of overpaid mechanics are about to drag their carrier into liquidation. OH wait. I forgot. That's ALPA's fault too. What was I thinking?

http://www.iamdl142.org/TransformationPlan...Final_8-311.pdf

[post="177355"][/post]​

Hey,the USAir mecahanics have already made 2 rounds of concessions in the past and it did not fix the airline.

How many more times is management going to ask the employee groups for concessions to compensate for their failed business plan?

I do not think the problems at the major US carriers are the primary fault of the unionized employee groups.

The answer for AA management to correct the problems at AA is to hire more management when they are already extremely TOP HEAVY!
We've got supervisors supervising the supervisors.It is nuts!

 

[BigRed1]

You're right, we should put this into perspective. 12yr Capt 747/777 GUARANTEED
$160,000/yr based on 708hrs...whether flown or not. This doesn't cover the "other" nickle and dime stuff for maincures and piano tuning. Now if he actually decides to fly a whole 1000 hrs well then, now we're talking about $203,000/yr. Given that the average worker in America works a minimum 2080hr/yr....sounds like a good gig to me...kudos

[post="179603"][/post]​

Ronin:

This is a serious question, because I really don't know the answer. What is the highest paid position a "rank and file" mechanic holds at UAL? For an average work month, what is the total compensation per year? Thanks.

We all know your above quote is a tongue-in-cheek exageration, but just in case you truly believe that a pilot only works 780 hours a year for 160K a year, can I add some realistic perspective from the pilot's side of the fence?

You always quote the salaries of the very very top of the pilot food chain. FYI...There are 2,005 pilots on the September seniority list in ORD. Of those 2,005, only 64 pilots are B747 Captains and 109 are B777 Captains. That is 8%. That 8% of the pilot group has a "good gig," as you put it. But it took them 25 years to get there, and they do have a tremendous amount of responsibility.

Now this 780 hours per year subject. You do know pilots only get paid when the brakes are released, right? Pilots have to be at operations 1 to 1.5 hours prior to each flight for planning, preflighting etc. 90 percent of the pilot's duty days are scheduled for 8 to 14 hours.

This is how I figure my "average American worker" pilot salary. I took the first 50 lines of flying on the Airbus fleet. There were 174 lines, but I thought 50 was enough to bring the point home. Besides, I've got time, but not that much time. I added up the TAFB, "Time Away From Base," of each line and divided by the 50 lines. The total came to an average of 335 hours per month away from base.

Now, Since you love to throw those completely unbiased and accurate earnings figures our way, let me throw a few back. The above average would equate to working EVERY DAY of the month for 11 hours 10 minutes.

Ya don't want to count the time we are trying to sleep in a hotel at the Newark International Airport field layover in the middle of slumsville missing our kid's soccer game or school play? OK...Take out 153 hours (17 days x 9 hrs/night) of away time. (I used 17 days of work because that was the average of reserve and line-holder days of work) That leaves 182 hours of "work." Divide that by an 8 hour work day, and that results in 22.75 days of work per month, 8 hours a day. I didn't include your lunch break each day, because you aren't actually working right? Can't count that. That is why I used 8, instead of 9 hours. 182 hours of work per month equals 2,184 per year. Oops, just blew the aveage out of the water. People need to stop focusing on the way pilot pay is calculated. It results in a warped view of actual work vs. pay. I think most guys would be fine with cutting the pay rate to one third the current pay rate, and just receive pay for time on duty with UAL.

Don't forget the training days every 9 months. In 320 initial training, I had 80 hours in a Fixed based and full motion Simulator, 40 hours of classroom, and another 12 hours of evac/ditching/ept. This is why they "guarantee" you 65 hours of pay a month. There is more to the pay than flying the aircraft.

Ronin, I know you are with your wife and kids more than double the time the average aircrew spends with theirs. You may take it for granted, maybe not. But when you tell me I make too much for doing too little, I respectfully disagree. I don't see the B747 Captain pay, and won't for 20 more years. I see 20 days away from my family every month. My salary? A guarantee of $70,200 a year as a 6 year A320 co-pilot. Too much? Maybe for some. Fair? I think so. Can I make more? If I work more. Pilot's do make an above average salary. The most senior pilots flying the biggest equipment with the most responsibility make a great salary. Most guys and gals became pilots because it is a "good gig." Compare your salary to the "average American mechanic," and I bet you find yourself with a "good gig." Positions in any career that demand more responsibility and qualifications and training and experience, etc., will always pay above average wages. This applies to both you and me.

Do I make 160K a year for 780 hours? Come on, Ronin. You are a smart man. Please stop the inflamatory exagerations. Your rhetoric is a cancer that pulls at the very fabric of our company.

I've wasted about an hour of my time writing this. But, I wanted to write a little something in reply, just in case those folks who aren't in the business read your crap and actually believe half of it.