Another way to look at this TA is to pan out and see it from 85,000 and Mach 3. In other words, what is the economic risk of forgoing this choice or opportunity cost of locking into a contract which is below market ?
This chart may be a bit confusing, but to the left it shows the decrease in Gross Domestic Product created by a Greek exit from the Euro. The mechanism for this happening is unfolding as Greeks (and Spanish) depositors take their Euro denominated money out of Greek banks and the European Central Bank comes in to recapitalize the banks. Eventually Germans will tire of pumping money into Greek banks when even the Greeks themselves do not have confidence in their system.
When the Greek institutions run out of Euros they will be forced to issue IOU's then issue their own currency. The creation of a currency takes time and will be highly unstable. Real value depreciation of 50% (100% inflation) is expected.
If Greeks manage to remain sane through this process it might be time for the rest of Europe and the US to plan a nice cheap vacation to the Greek Islands. There will be a "flight to quality" as people and institutions seek a safe place for their money (US and to some extent the Middle East). This will increase the value of the dollar causing deflation, which is good for consumers (us) but bad for producers (Delta & our employers).
Spain will be the problem ... this just looks at a "Gr-exit" a "Spain-xit" would have about a 5 times greater impact.
Further, to the extent that this causes price deflation in the United States, Delta would hope to deflate our pay in a similar fashion to remain value neutral. Or in other words, by locking in gains now, we pilots are effectively hedged against economic uncertainty. While that may be stating the obvious ... we really are in an uncertain time. The US government has had the accelerator floored for a while with near zero cost financing from the Fed. Not only is the Fed out of bullets, their policies could cause hyperinflation coming out of the back side (which is when we would NEED a new contract pronto).
The way I see it, June is going to be an exciting month in Euro politics. The first of several votes begins on June 7th. Rapid action to either Federalize, or break up, will be needed. Can Brussels and the rest of Europe act quickly? I doubt it.
So what does any of this mean to us other than the additional 5% decline in European capacity planned by Delta this fall?
If you review the history of Delta agreements, we have not made it to an amendable date since 1999 / 2000. In every case our contract has been modified in response to ongoing events. Statistically, it is likely this contract will be modified before it's amenable date.
I am not trying to scare people. Could be good news like lots of people traveling to cheap European vacations or bad news, like we had in 2008 (but with governmental paralysis making things much worse).
Bottom line, would you rather negotiate your next contract with TA2012 as a basis, or using our current contract as the starting point?
If it is good news, we are already up roughly 20% from current book. If it is bad news, we are already up roughly 20% from current book. If the "news" is a merger, would you rather start from where we are now, or enjoy the benefits of being better paid with a hard number on the DCI fleet as we enter negotiations?
Just putting a different perspective on this question and I am curious your thoughts.