Figured I would share this:

Council 44 Slot Swap Perspective

Like many of you, we are very disappointed with the flight allocation associated with the initial phase of the Delta/USAirways Slot Swap. We had expected that the LGA hub would generate the need for pilot hiring; new captain positions, and provide a foundation for much needed contract improvements, including scope improvements. While the economics of the slot swap and strategic importance of a domestic hub in LGA may still provide a foundation for much needed contract improvements in scope, pay and working conditions, unfortunately the initial announcement does not contain the pilot jobs we were led to believe it would create, at least not yet. As your elected representatives, we feel it’s important to provide you with our perspective on the history and the importance of this transaction.

Just over 2 years ago, Delta Air Lines entered into an agreement with USAirways to swap landing and departure slots between DCA and LGA. The agreement immediately drew attention from politicians, the FAA, and the DOJ over concerns about competition in the affected markets. The government tentatively proposed an arrangement that would have negatively impacted the agreement to such an extent that if accepted, many of the financial benefits would have been lost.

Prior to your C44 reps taking office, the corporation had already approached ALPA to ask for help and support for this transaction. After we assumed our elected positions, we were asked to intensify our efforts, as there appeared to be little progress being made in the corporation’s favor. Although we all want to work for a strong, profitable company, and no doubt the transaction would assist in that, we also wanted to know the impact this would have on Delta pilots directly. In other words, would this mean more flying for mainline pilots? The answer then was yes.

During the Spring 2010 MEC meeting, we were again briefed on plans to support the transaction going forward. Before approval was granted by the MEC, we asked for specifics on how this transaction, if approved “as is”, would affect the Delta pilots. We were presented information that this could create “hundreds” of jobs for MAINLINE pilots. With that information in hand, we asked you to support the transaction through an employee call to action through a DeltaNet campaign. Many of you participated, and with Delta pilot support, Delta was ultimately successful in completing the complex transaction.

At the end of last week, two years from the time we first started lending support for the slot swap, the flight schedule was released for LGA. Needless to say, like many of you, we are disappointed with the number of mainline flights that have initially been allocated to these new slots. Although the transaction is not as originally proposed, and the economic environment is different than when the plan was first conceived, one has to wonder if these differences are so great that the transaction only produced a handful of mainline flights.

While we are justifiably disappointed in the lack of mainline flying that has been announced to date; there are other factors, which we recognize when evaluating the value of the slot swap transaction. The Delta/USAirways slot swap also included the USAirways terminal in LGA, which is a significant asset essential for future growth and development of a hub in LGA. In last week’s code-a-phone, management stated that they intend to initiate service into these new markets in LGA with smaller gauge aircraft in order to build the market and then up gauge to mainline aircraft as demand and the markets mature. The allocation of aircraft for the remaining slots has not been announced yet, it is possible that marketing will decide that the demand will support using mainline jets, however there is no guarantee that will be the case. Unquestionably, building a hub in LGA, in the largest O&D airline market in the world, is in the best interest of Delta Air Lines and Delta pilots. This is strategically important to Delta Air Lines if we are going to continue to build an industry-leading airline. How important is this to the corporation? According to Delta management’s comments in the Wall Street it is quite important:

By simply getting a “fair share” of NewYork revenue

Delta’s revenue would increase by more than $200 million.

Although we are certainly disappointed in the way this has been presented and communicated by management to the pilots thus far, we want to express our support for the overall strategy, as we see this as additional revenue to support our new contract, and good for the long term growth of Delta and potentially, growth for Delta pilot jobs.

To summarize, the initial allocation of flying as a result of this slot swap is not what we envisioned two years ago. The long-term expectations of Delta pilots remains the same. We expect the Slot Swap to be good for Delta pilots and for Delta, and that formed the basis for our support for this transaction. While the slot swap will not initially generate the jobs we were lead to believe, that doesn’t take away from the strategic importance of this transaction and the additional revenue it will generate, which we were all instrumental in obtaining, revenue which should support significant improvements in our new contract and potentially provide mainline growth opportunities in the future. It’s also important to recognize the real estate component of the transaction. It is as important as the slots and will take time to develop. Finally, the value of the Delta pilot’s participation in this process should not be lost on anyone.

The entire corporate executive team knew of our involvement on the political side of getting the slot swap approved. From the Board of Directors, to senior leadership, corporate communications, and Flight Operations leadership, there was little if any mention of the role we played in assisting on the political side of the transaction. Delta’s senior executive team could have, and should have, better communicated in advance how the slot swap was going to be implemented.

Respectfully,

It was signed by the four reps in ATL