Delta Air Lines to Build Heavy Maintenance Facility in Queretaro, Mexico

[blue collar]

I have a feeling that once everyone else doesn't get the same raises the pilots get %-wise, you'll see a change in attitude towards organizing.

 

[WorldTraveler]

DL and other carriers haven't given the same amount of raises to non-pilot personnel - percentage or absolute - for years.

Look at the amount of retirement that pilots get compared to other personnel at nearly all carriers .... check out airlinepilotcentral.com.

DL's pilots have helped the company several times since BK adapt to the changing airline industry in ways that has impacted the pilots far more than other workgroups- thus, their increase has been larger than other workgroups.

It's a marketplace of labor - not socialism. DL people understand it and also understand that unions haven't been able to and won't be able to change it.

Trying to argue that DL people are oppressed and poorly treated by the company will actually sound incredibly foolish when anyone looks at the increases in comensation they have obtained in the best few years.

DL and UA both report earnings this week..... let's see how well the two airlines' employees fare on profit sharing year to date and then what their execs say about earnings in the 4th quarter and then we'll see how oppressed DL employees are.

The chances of convincing DL employees to unionize when the company continues to add jobs - as they will with the arrival of the 717s - and with fat profit sharing checks - are slim to none.

 

[Kev3188]

I have a feeling that once everyone else doesn't get the same raises the pilots get %-wise

Already happened.

you'll see a change in attitude towards organizing.

Already happening...

 

[WorldTraveler]

BTW, Kev, have a good at data from the MIT airline data project.
It shows that in the DOT group that your job falls in, Passenger, Cargo and Aircraft Handling, DL employees are the highest paid among network carriers.

 

[Kev3188]

Lovely. In the charts it distributes to employees, the company shows us in 2nd behind WN*.

*Yes, I know WN isn't a "network carrier," but DL does count them as peers...

 

[WorldTraveler]

Given that WN's employees are some of the highest paid in the industry on average, they shouldn't be included and DL is right to include them.
I have also noted the difference in the amount of profit sharing DL employees can expect compared to WN's employees as well.

 

[blue collar]

Profit sharing funds need to make it through 4th quarter, when companies will buy all new equipment/tooling and help 'dilute' the profit sharing payout.

 

[WorldTraveler]

Double check but I believe that DL's 4th quarter last year was one of its best. DL has said already it expects to be profitable in 4Q2012.

DL employees will not lose the profit sharing they have accumulated YTD regardless of what happens in the 4th quarter.

 

[Kev3188]

Given that WN's employees are some of the highest paid in the industry on average, they shouldn't be included and DL is right to include them.

Wait, what?

That sentence contradicts itself.

 

[WorldTraveler]

yes, you are right....
I meant to say
"Given that WN's employees are some of the highest paid in the industry on average, they should be included and DL is right to include them."

I hope you and your colleagues keep pushing to the top of industry scales and I am fine w/ whatever method you use to get there.

 

[737823]

yes, you are right....
I meant to say
"Given that WN's employees are some of the highest paid in the industry on average, they should be included and DL is right to include them."

I hope you and your colleagues keep pushing to the top of industry scales and I am fine w/ whatever method you use to get there.

WT, hasn't DL said repeatedly that they are committed to providing market competitive (or something to that effect) pay? They haven't been striving to provide industry leading pay, and no manager should willfully strive to provide above market compensation. I appreciate Kev's interest in seeing DL have industry leading pay AND benefits but that is NOT DL's stated goal.

Josh

 

[WorldTraveler]

yep... but I don't work for DL, don't represent them, manage nothing of theirs, and can wish Kev whatever I want.

I hope he receives industry leading pay - plus all those other things that matter to him.

 

[Kev3188]

WT, hasn't DL said repeatedly that they are committed to providing market competitive (or something to that effect) pay? They haven't been striving to provide industry leading pay, and no manager should willfully strive to provide above market compensation. I appreciate Kev's interest in seeing DL have industry leading pay AND benefits but that is NOT DL's stated goal.

Josh

The term they use is "industry standard."

I understand their attempts to manage expectations. Where it gets interesting is when/how they decide what carriers they draw their average from. When it suits them, a carrier is included. When it would skew the average upward for a workgroup, suddenly, they're no longer in DL's "competitive set."

 

[737823]

The term they use is "industry standard."

I understand their attempts to manage expectations. Where it gets interesting is when/how they decide what carriers they draw their average from. When it suits them, a carrier is included. When it would skew the average upward for a workgroup, suddenly, they're no longer in DL's "competitive set."

Kev, you're a smart guy you know it's easy to prove anything with numbers and statistics, you just tailor which assumptions and statistics are needed to support the desired conclusion. It's like in M&A transactions how its easy (and advantageous) for advisors to overstate the synergies and understate the integration costs. When a particular contract or workgroup serves DLs agenda it's included, if not its deemed incomparable.

Josh

 

[WorldTraveler]

Kev, you're a smart guy you know it's easy to prove anything with numbers and statistics, you just tailor which assumptions and statistics are needed to support the desired conclusion. It's like in M&A transactions how its easy (and advantageous) for advisors to overstate the synergies and understate the integration costs. When a particular contract or workgroup serves DLs agenda it's included, if not its deemed incomparable.

Josh

Yes, Kev is a smart guy.

Data can indeed be used to show one side of an argument to the exclusion of other POVs. But that is precisely why I have challenged people here over and over and over to look at the data and cite other data sources or present whatever sources they want to ensure that there is no bias.
If the numbers are publicly available, then it behooves ALL parties to study it, understand what is saying, and craft their own arguments based on that data.
It is precisely because the data being used - either by me or by Delta - is public that whatever bias that might be present should be quickly identified by the other side and brought to the front.

Kev has identified that he is capable of looking at data and crafting his own arguments intelligently and not allow anyone to pull the wool over his eyes.


but when multiple statistics all say the same thing and none support the position which you support, then you have no choice to accept that either there is abundant reason to believe that your position is not correct or else you must turn the discussion subjective and ignore all data.
Problem is that payroll data is not subjective. DL people know EXACTLY what the ECONOMIC benefits of their decisions regarding unionization or not are... and they aren't going to make a decision that harms them economically, no matter how many other subjective considerations might be at play.


I hope anyone here who is interested in knowing what drives compensation in the airline industry looks at the data available in the MIT airline data project - which is sourced from DOT data provided by the airlines.

The most recent data is for 2011 and is here
http://web.mit.edu/a...ww/default.html

Note that the numbers are for DOT functional groupings and not specific job titles so some groupings include job titles which are considered separate in other compensation comparisons.. but it is one of the best sources of public data available.

Note also that the biggest reason why WN employees are highly compensated is because they are far more productive than other airline employees, measured in both ASMs per employee but also revenue produced per employee. The legacy/network airlines have built hub and spoke systems which are efficient at connecting large parts of the world but are not near as efficient at maximizing total revenue thru the system.

Part of the reason why the network airlines are trying to carefully manage connecting traffic thru their hubs if there is any chance of taking higher value local traffic is because connecting traffic often does not deliver the same revenue value - and costs increase since connecting passengers have to be "touched" twice as many times by employees.

People hear me harp about NYC and why it is so important for DL - but it is precisely because the local travel component is so large that DL is counting on increasing the amount of local passengers - which are generally higher yielding in NYC because of the limited airport space - by increasing the total size of DL's operation; hub dynamics have long validated that the largest carrier in a market gets a disproportionate share of the higher yielding local revenue. DL is also playing on LGA and JFK's preferred airport status in the NYC area for short and long haul traffic, respectively, to help move share better than it could do with a hub at any other airport. Indications are that DL is doing very well w/ its NYC growth plan, which added more capacity to one city than any other airline has added to any other city in its network in a very long time. It was critically important that DL obtain the financial benefits of its ramp out quickly and the financials which will be released this weekend appear poised to do that, given that analysts are already estimating that DL will beat its peers in system revenue performance.

Specific to total system costs, it should be apparent by now that outsourcing is a part of the way airlines operate in the US, as much as any of us would like to return to previous days in the industry. Airlines operated flight kitchens and res systems for travel agents at one time, but those functions have been sold or outsourced. Some airlines such as WN and B6 never included some of these functions in their business model and thus had advantages over their legacy peers.

The true measure of how effective a company is doing under the "new norms" of the airline industry, which are seeing an increasing blurring of legacy/low fare carrier lines, is how well carriers take care of their existing employees.

Southwest just announced the conversion of several former small FL cities to WN, with parts of the operation outsourced. WN is just now having to deal w/ the issue that DL and other legacy carriers dealt w/ years ago which is whether they want to expand into smaller cities where economics do not justify their traditional all in-house staffing model or whether they want to add smaller cities and use a different staffing model - not unlike what the legacy carriers did w/ outsoucing of various parts of their operation, including RJ flying.

WN has decided to add to its outsourced maintenance operation with outsourced airport operations.

The question for WN in the years to come will be the same as it has been for legacy carriers: how well do they protect the jobs of existing employees and grow their ranks along with how well do they continue to increase the pay and benefits of their mainline employees. Chances are very high that WN will strike a good balance of adding new stations, including int'l cities, w/o negatively impacing their current employees. But new employees and new stations will operate under a different set of "rules" not unlike what DL has done.

There is abundant data to show that DL has done a better job of protecting the jobs of existing employees than other network/legacy carriers, is adding to the ranks of its mainline employees including via insourcing, and is also increasing the salaries of its mainline employees faster than other airlines, in part because DL is increasing revenue better than most of its peers - which is part of what they are doing w/ the NYC expansion - increase higher value revenue while decreasing costs and bringing more work back to DL employees which increases efficiency of the total DL operation.

While DL says that its goal is industry standard, many DL employees have compensation that is above average for their peers at other airlines.

If DL is able to continue to execute against its business plans and deliver results better than its peers, it is very possible that DL's stated goal may change to becoming above average for its peer group - however that might be defined.