Yes, I saw that term in the definitions part of the contract. This term has been used for the last few years for a few other parts of the PWA. Wrt to this MBH scenario, we cutout the Domestic hrs for the ratio. A tsunami is out of the control of the company but will more than likely effect the international operations, and as a result the economy of a foreign nation state. The Euro Zone crisis has and may continue to effect international traffic and the need to fly international lift. You could argue that both of these are the economy. It comes down to a scenario that insurance companies used after Katrina. They claimed the water destroyed the house, but you claimed it was wind damage which you were protected for. They claim it was the water, which is not specifically stated in the declarations page. In the end it goes to court, and your house(our protections, flying and ratios) are still in need of repair.

My concern is the word "economy" in the definitions section is vague in nature. I ask, what economy, world, domestic, or any specific region? Does the term cover all of that. What was the intent begin the term definition? Was it to cover AD's or a grounding of jets only? What was and is the understanding of this definition by the company and the association?

The whole airline and its operation is intertwined and as a result MBH(domestic) and MBH(international) are also intertwined. The section 1 language is for domestic feed which is influenced on the need to feed international departures. A better understanding of what the word "economy" meant to the negotiators and the company at the time of conception, and now if there is a new understanding would really help.

Also, in this definition wrt to this new ratio, nor in the rest of the document, I did not see anything that would hold DAL Airlines, Holdings et al, responsible for omissions in the newly minted or modified agreements that would preclude a pull down of DCI lift due to breach of that new CPA.

Not trying to be a pain here, really, but language in the current agreement has left DALPA unable to legally remedy a few situations in the last few years.


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On another section 1 concern:

Why are we allowing the DPJ large biz jets back in that we filed a grievance over? As far as I know there was only rumor out there that DAL agreed to cease and desist using these aircraft, but there was no formal announcement of the end state of this agreement. Was there? and if so, why are we allowing them now? Did we get a barging credit for this?

One last item in section 1:

Wrt to JV's the term "profit/loss agreement is used to define the need for a production balance. The definition reads:

means an agreement or arrangement in which the Company or an Company affiliate
37 in the economic performance of one or more other carriers and/or of its or
38 their affiliate or affiliates, through incremental revenue sharing or the sharing of
39 profits or losses in connection with the Company’s and the other carrier or carriers’
40 carriage of passengers. An agreement or arrangement that constitutes an
41 industry standard interline agreement, a codeshare agreement with a carrier
42 engaged in international partner flying in which there is no sharing in the economic
43 performance of the carrier’s flying through incremental revenue sharing or the
44 sharing of profits or losses, a prorate agreement, a sales/super commission
45 agreement, the Hawaiian and Alaska marketing agreements, and an arrangement
between the Company and any Company affiliate and one or more Delta Connection
2 Carriers is not a profit/loss sharing agreement.

What concerns me here is this:
If we enter in to a JV agreement with a carrier that is foreign government owned, or is heavily influenced by a foreign government, they may not desire to enter in to a traditional JV from the revenue sharing standpoint. They may decide to seek the JV for schedule and pricing abilities but want the financial side to more mirror a interline and or code share agreement. There will be no sharing of revenue. The revenue gained would be from what each side flew, and a finders feed to the booking airline. We would coordinate schedules and pricing but still incentiveize each airline to fly their own lift. Now I know this is not the purest form of a JV where its truly metal neutral, but its a possibility with airlines like KAL, JAL and EK, China Eastern or Southern, and it may be all DAL can get. With this language, there is no trigger for a production production balance.

Now I know you are going to tell me that this scenario is very unlikely, but that is not what I am asking. What I am asking is, is this scenario protected by the definition when the last sentence in the definition basically states that these are not considered profit loss. The only reason I am hitting the definition and not the actual JV production trigger language is because it centers around this definition.

Reality is we need a JV partner in Asia, and the playing field is currently taken expect KAL. It has been continually stated that KAL undercuts our NRT hub, and because of this, I do not see them agreeing to a JV in the traditional context. I see more of a CS type revenue scheme under the moniker of a JV.

Could we be setting ourselves up? Honest question.