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

[southwind]

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."

As far as I know, the only two company's excluded from DL's "Industry Standard" pay and always have been are, Fed Ex and UPS..................for obvious reasons !

 

[blue collar]

As far as I know, the only two company's excluded from DL's "Industry Standard" pay and always have been are, Fed Ex and UPS..................for obvious reasons !

Because they pay more?

 

[WorldTraveler]

probably because they are in a totally different line of business.... airplanes and a common Atlanta headquarters (or the south more generally) don't equate to common business models.

 

[blue collar]

probably because they are in a totally different line of business.... airplanes and a common Atlanta headquarters (or the south more generally) don't equate to common business models.

Pilots, mechanics, and dispatchers do the same thing no matter where they work. An arbitrator just recently ruled the same way. Do Dr.s who work at a children's hospital get a drastically different compensation than Dr.s at a regular hospital?

 

[WorldTraveler]

yes, pediatricians are some of the lowest doctors.

 

[blue collar]

I guess that's too bad for them. They didn't have an arbitrator rule that their work is the same.

 

[Kev3188]

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

Indeed.

As far as I know, the only two company's excluded from DL's "Industry Standard" pay and always have been are, Fed Ex and UPS..................for obvious reasons !

That's because as far as you know, the world begins and ends at the TOC. Believe it or not, there are other workgroups besides Tech Ops.

yes, pediatricians are some of the lowest doctors.

Not to the parents of the kids they heal...

 

[WorldTraveler]

I guess that's too bad for them. They didn't have an arbitrator rule that their work is the same.

Not to the parents of the kids they heal...

obviously, my statement should have said that pediatricians are one of the lowest PAID specialties, which is not a qualitative reflection on the people or mean they have any less training or competetence but that they receive MARKET wages in a system where a great deal of pediatrics involves monitoring growth and performance (screening) rather than healing disease as is more the norm w/ other specialties such as surgery.

That's because as far as you know, the world begins and ends at the TOC. Believe it or not, there are other workgroups besides Tech Ops.

and I could add that the world doesn't begin and end with airframe maintenance despite the fact that several participants of this forum believe that is the single yardstick that should be used to determine success or failiure not only for one's personal career goals but also for an entire workgroup. It is precisely because humans are intelligent and adaptable that they can learn new skills when what their environment changes; some animals become extinct if they can't adapt while humans should be able to adapt and build systems to allow them to survive and thrive.

specific to ACS, not sure what airlines DL excludes from ACS comparisons but the DOT data I referenced shows that the DOT workgroup which includes most airport employees - and which most closely matches the group represented by the IAM minus res - is higher paid at DL than it is at any other network carrier and was higher paid at DL compared to NW, even considering that DL entered and left BK at about the same time as NW.

WN has been in existence longer than most other current network carrier employees and 7.5 happened almost 20 years ago as one of the first significant changes in how airport functions are handled by a network/legacy airline. Most DL people who have been hired since 7.5 understood the implications of DL's move on airport jobs. Others such as PMNW personnel didn't necessarily need to consider DL's actions w/ 7.5 prior to choosing to work for NW - or any other carrier - but outsourcing of certain airport operations has been underway even at legacy carriers - for decades. But Anderson repeated on the earnings conference call yesterday that DL remains committed to its historic goal of not laying off permanent full-time personnel (he didn't even use those qualifiers) in order to reduce non-fuel costs as DL is committed to doing over the next year or two.

WN doesn't operate like DL or other network carriers in the past because their business model has been highly efficient based on carrying a higher percentage of point to point passengers. Likewise, even if planes are maintained and flown by pilots and mechanics at all airlines (even though Fedex and UPS also outsource some maintenance work) there are tens of thousands of employees at passenger airlines that must work there to provide services to live passengers that are not necessary for packages. Yet, WN's business model is changing, their employees aren't seeing the increases they once did, and airport outsourcing is now a part of the way WN operates. Further, there are huge barriers of entry for a package delivery airline to overcome that do not apply to startup passenger airlines who can pick off a small segment of passengers and be successful. There are barriers to entry for package/freight airlines that insulate them from the environment that passenger airlines face. The business model and the environmental factors are different for passenger airlines, including LEGACY passenger airlines, are different than for low fare carriers and for package carriers. Employee compensation will obviously not be identical when business models are different.

Just one more note.... DL reported a solid double digit operating margin in the most recent quarter and says they are committed to continuing to expand that. It has been a VERY LONG TIME since a legacy airline has reported ANY KIND of positive double digit margins. The best job security and the best path to increased compensation comes from working for a company that is solidly profitable and has the capability to pay salaries as good as or better than the rest of the industry.

Since UA just reported its financial results, it is worth noting that DL passed UA as the largest US airline on the basis of total revenue by a small margin and DL's profitability was far stronger than UA's. DL is the largest US domestic airline by revenue and also the largest transatlantic US airline. UA's profit sharing was 2/3 of what DL employees accrued, DL has a 2.5% mainline CASM advantage over UA and UA/CO pilots continue to wait for pay raises that will bring them up to DL pilot levels, that, if provided, would significantly negatively impact UA's finances.

 

[Kev3188]

But Anderson repeated on the earnings conference call yesterday that DL remains committed to its historic goal of not laying off permanent full-time personnel (he didn't even use those qualifiers) in order to reduce non-fuel costs as DL is committed to doing over the next year or two.

Of course he didn't mention laying anyone off. DL doesn't do that; they "transition" people.

Did he also note that the company has "retained" ~ 3100 less FTE's YoY?

Just one more note.... DL reported a solid double digit operating margin in the most recent quarter and says they are committed to continuing to expand that.

In the memo we got, 4Q guidance projects an operating margin of 4-6%...

 

[WorldTraveler]

good morning, Kev.
Yep, as I have noted, DL hasn't committed to retaining FT jobs... it has committed to protecting jobs of EXISTING FT employees, including offering them positions elsewhere in the company SHOULD the need arise to no longer keep FT jobs where they are presently located. I'm not sure of any remaining initiatives that would eliminate the ability of existing FT employees to stay where they are currently located since all of the changes since the merger were related to merger integration and that appears to be completed. If you know of plans that could start the process all over again, let us know.

Yes, DL said they expect single digit margins for the 4th quarter... but the reference wasn't made to striving for double digit margins every quarter, let alone the next while key initiatives continue to ramp up.

But also note that the airline industry remains seasonal even if DL tries to flatten that out by pulling out summer only European flying where the aircraft cannot be redeployed elsewhere profitability for the rest of the year.
DL's goal is to have a long-term annualized double digit margin... w/ one or two quarters in the single digits, they aren't there yet.

But note again where their competitors are, and DL is at the front of the pack among its peers - and that does impact its ability to pay its people well.

If UA had financials comparable to DL's right now, they would probably not have to think too long about bringing their pilots up to DL pay levels.... IF

Congrats to you and your DL peers on your well-earned profit sharing. Hope you're thinking about plans to use that passport and show your family the world thanks to your well-deserved earnings.

 

[Kev3188]

Yep, as I have noted, DL hasn't committed to retaining FT jobs... it has committed to protecting jobs of EXISTING FT employees, including offering them positions elsewhere in the company SHOULD the need arise to no longer keep FT jobs where they are presently located.

"Transitioned," in the DL parlance = "Furloughed" for the rest of the world. let's also remember that the company dictates where tose postions may (or may not) be. "Elsewhere" may not be palatable-or even possible- for many affected, and off the payroll they go. the company knows this, and I'm willing to bet banks on it to a degree. Still it makes for nice messaging that they were gracious enough to offer spots to affected people.

If you know of plans that could start the process all over again, let us know.

I'll get right on that...

Yes, DL said they expect single digit margins for the 4th quarter... but the reference wasn't made to striving for double digit margins every quarter, let alone the next while key initiatives continue to ramp up.

I only responded to these words by you:

DL reported a solid double digit operating margin in the most recent quarter and says they are committed to continuing to expand that.

But also note that the airline industry remains seasonal even if DL tries to flatten that out by pulling out summer only European flying where the aircraft cannot be redeployed elsewhere profitability for the rest of the year.

I know all about seasonality/the cyclical nature of flying & how it relates to an airline's network, thanks.

Congrats to you and your DL peers on your well-earned profit sharing. Hope you're thinking about plans to use that passport and show your family the world thanks to your well-deserved earnings.

A. What my family may or may not do is none of your concern.

B. Even if I wanted to plan a trip, I certaily wouldn't do it banking on that $$. Who knows what the per employee payout will ultimately be? Guess it depends on what type of fuzzy math Kight uses this year.

C. I rarely- if ever- nonrev anymore. Not worth the hassle...

 

[WorldTraveler]

looks like the arctic chill has already reached you.

DL's plans should very much lead to higher profit margins in the 3rd quarter of coming years when we SHOULD expect that performance should be in even further into double digits. And on annual basis, DL could still generate double digit margins if the 1st and 4th quarters were in UPPER SINGLE digits. No one said that DL expects to generate double digit margins EVERY quarter... nor did I say that buidling on their performance in the 3rd quarter of this year requires that they generate the same margins in the 4th quarter of this or any other year. You made that connection which I did not make, nor did DL.

As for "transition" perhaps you can show us the words that DL used for employees in MSP who were being given the opportunity to either move to ATL, change jobs and stay in MSP, or accept a severance package.

While you are at it, let us know the words and options that UA used for former CO employees who could no longer stay in Houston.

While you are working on that, I do know that DL didn't threaten the cities of MSP w/ pulling down service if the city supported a competitor, nor have the cuts that DL has made in MSP been any worse than what DL has done elsewhere on the system post merger. Houston should have been so lucky.

And, as you know, you probably aren't an "average" compensated DL employee which is how the $4000 per employee I (not DL) noted. Profit sharing is calculated based on the percent of each employees' total part of the company's salary expenses... and unlike in years past there will not be two sets of numbers since there is only one set of employees for each workgroup now that representation issues have been resolved and PMDL and PMNW employees had different profit sharing formulae.
There probably isn't an "average" employee since pilot salaries are disproportionately above most other employees although they do not make

happy day...

 

[Airlinelifer]

Hmmmm, how many years did you work in the airline industry?

 

[WorldTraveler]

nearly a quarter of a century in 3 different cities, several mergers, survived multiple rounds of restructuring only to leave on my terms.. and the relevance is...?

other than to point out that this isn't an academic exercise for me... I've been exactly where many airline employees walk today.

 

[blue collar]

So DL not 'retaining' FT positions is part of the 'superior experience'? An army of PT college kids sounds like a formula for success....