Grinstein Asks Pilots For $1 Billion

[FA Mikey]

Delta asks pilots for 1 Billion

Delta Air Lines Inc. chief executive Gerald Grinstein told pilots Friday the survival of the company depends on a minimum of $1 billion in concessions from them, insisting their proposal for up to $705 million in cuts is inadequate.


Delta asks pilots for 1 Billion

 

[coolflyingfool]

I know that DL wants a lot of paycuts, but with a lot of the most senior pilots calling it quits over the past couple of months, hasn't DL already started to see some cost reductions? I believe that I read that DL has lost over 600 of their most senior pilots. If 600 pilots at the top were replaced by 600 pilots making $100,000 a year less, then DL has cut cost by almost $70 MM. That is a good start. Just my thoughts......

 

[flyhigh]

...not really. Pilots don't necessarily make more just because they've been around longer like mechanics & F/A's. They make money based on a/c type. These retirements have freed up spots on the bigger planes. It's actually costing Delta significantly more in trainnig costs because this is a larger than normal level of retirements. As a result, training has to be done to fill those spots. It's kind of a double whammy. Not only is that happening, but in addition, to backfill the the bottom spots as pilots move up due to retirements, there is a huge cost in bringing people back from furlough....

 

[LiveInAHotel]

Nothing is ever good enough for upper management at any airline. If the "Grinch" thinks he will get $1 Billion out of the pilots, he needs to cutback on the Kool-Aid! The pilots are not dumb! They didn't just get off the bus yesterday.

Maybe DL should watch what they say about new uniforms and other things they want to spend money on. 😉

 

[LaBradford22]

Nothing is ever good enough for upper management at any airline. If the "Grinch" thinks he will get $1 Billion out of the pilots, he needs to cutback on the Kool-Aid! The pilots are not dumb! They didn't just get off the bus yesterday.

If the pilots think they would be better off going through a bankruptcy court and watching their pensions go "bye-bye" than giving Grinstein the $1 billion that he wants (which they could do and still have close to the highest - if not the highest - pay rates in the industry depending on what happens at NW), then it is they who have been drinking the Kool-Aid, not Grinstein.

 

[flyhigh]

Live-

Get the facts straight before you go saying things. The new F/A uniforms will actually cost very little as they will be implemented as old uniforms would be refreshed anyway. Just like your clothes don't last forever, neither do our uniforms. In addition, evenif it did cost money, is it your opinion that we should at all costs continue to pay a workforce well above market rates in an envirnment where the customer does not support that rate, yet let the product go down the tubes (something the customer would prefer not to see)? By refreshing uniforms we investing in our product and the people who deliver it everyday. Isn't that important too???

 

[luv2fly]

It's actually costing Delta significantly more in trainnig costs because this is a larger than normal level of retirements. As a result, training has to be done to fill those spots. It's kind of a double whammy. Not only is that happening, but in addition, to backfill the the bottom spots as pilots move up due to retirements, there is a huge cost in bringing people back from furlough....

According to Jerry, training is a no cost item. Training costs are supposedly fixed, but I would be the first to disagree. The training pipeline has been full since the first big displacement bid after 9-11. It is simply reversing now to due to the large number of retirements.
As far as the "huge cost in bringing people back from furlough", I would simply ask, who do you expect to fly the aircraft? Every category except for ATL 737B-200 is grossly undermanned. Most of these pilots returning from furlough represent the lowest pay on the pilot seniority list. In addition, many of these furloughed pilots require minimal training as most were already qualified on junior equipment. Many are only requiring a week or two of training as apposed to the normal 1+months of transition training.

 

[luv2fly]

If the pilots think they would be better off going through a bankruptcy court and watching their pensions go "bye-bye" than giving Grinstein the $1 billion that he wants

Currently, the pilot pension is funded adequately. That may change in the future, but as of now, DL would not be allowed to arbitrarily terminate the pension plan. If I am not mistaken, USAirways voluntarily agreed to terminate their plan. United is currently in the limelight and we will have to wait and see what happens there. In light of the scathing letter United received in regards to its pension funding requirements, I don't believe airline managements are going to be allowed to ramrod employee pensions at their own discretion. They may, however, get them by threat of Chapter 11 or 7.

 

[LaBradford22]

Currently, the pilot pension is funded adequately. That may change in the future, but as of now, DL would not be allowed to arbitrarily terminate the pension plan. If I am not mistaken, USAirways voluntarily agreed to terminate their plan. United is currently in the limelight and we will have to wait and see what happens there. In light of the scathing letter United received in regards to its pension funding requirements, I don't believe airline managements are going to be allowed to ramrod employee pensions at their own discretion. They may, however, get them by threat of Chapter 11 or 7.

luv - you may be right, but I can guarantee you that, in the event that DL files chapter 11, the creditors of a reorganized DL would be very, very concerned about that pension liability. Hard to say exactly what would transpire, but the pilot pension would most definitely be in play.

 

[WorldTraveler]

I too have to disagree that training is a no-cost item. If it's not, then what's the incentive for fleet simplification or for ALPA to agree to things like dual type qualification (if that's the right term).

As for the pensions, the media is reporting that Delta has no intentions of dumping pension obligations but wants to change Delta's future obligations. I do not think airlines will be successful at dumping pensions on the PBGC unless the companies actually fold. Not sure what leverage the PBGC has, but I don't expect them to roll over for the airlines. As for funding, based on what I've read, Delta's non-pilot pension is not as well-funded as the pilot pension but that may have changed since DL made a ~$300 contribution to the former earlier this year; also, it seems to me the pilot pension plan should have much less activity in the next couple years because so many pilots have taken early retirement.

 

[LiveInAHotel]

Live-

Get the facts straight before you go saying things. The new F/A uniforms will actually cost very little as they will be implemented as old uniforms would be refreshed anyway. By refreshing uniforms we investing in our product and the people who deliver it everyday. Isn't that important too???

My facts are straight! Hiring a well known top clothing designer to create a whole new uniform for all front line employees is not to smart. Richard Taylor is not your everyday affordable kind of guy. He ranks with the likes of Armani, Hugo and the like. Delta just gave all of you new uniforms back in 2000. These uniforms are only 4 years old and hardly old. Are those 1960's looking uniforms starting to make customers fly other carriers? No, they're not. Uniforms don't make a passenger decide who they will fly. They look at price and schedules.

The Grinch's time is coming to and end at DL. He is only temporary until December 31, 2004. Then you will have a new permanent CEO. Can you guess who that might be? Just remember who was seen in ATL many, many times over the past year or so. Just look at who is leaving CO!

The Grinch better start looking at taking pay and benefits from the non-union employees. He doesn't have to worry about a vote on concessions, he can just take what he needs to make DL survive!

 

[LaBradford22]

Uniforms don't make a passenger decide who they will fly. They look at price and schedules.

They also look at Flight Attendant pay.

The Grinch better start looking at taking pay and benefits from the non-union employees.

Yeah, he should really stick it to those non-Union employees, while he continues to pay his ALPA pilots 60% to 70% more than his competitors.

 

[LiveInAHotel]

Yeah, he should really stick it to those non-Union employees, while he continues to pay his ALPA pilots 60% to 70% more than his competitors.

That's what a contract is all about. Protecting your pay, benefits, work rules and retirement!

 

[mweiss]

That's what a contract is all about. Protecting your pay, benefits, work rules and retirement!

And screwing the nonunion employees...just because you can. <_<

 

[Fly]

I do not think airlines will be successful at dumping pensions on the PBGC unless the companies actually fold. Not sure what leverage the PBGC has, but I don't expect them to roll over for the airlines.

This from Jane Allen: There were a number of inaccurate news reports this week, suggesting that our decision not to make our pension contributions in 2004 is
illegal. The Pension Benefit Guaranty Corporation, or PBGC, a federal
government agency that insures private defined-benefit pension plans,
said that our decision is "inconsistent" with ERISA, the federal
regulations that govern pensions, and that is true. The fact is that
much of what any company does while in Chapter 11 is inconsistent with
normal business practices, but that does not mean the company's actions
are illegal. In this instance, we believe that our status as a debtor
in bankruptcy allows us to not make our pension contributions while we
study all possible options regarding our pending funding obligations.