Delta deal could become model for scope
Delta Union Deal Could Become Model For Scope At Other U.S. Carriers
Aviation Daily Jun08, 2012 , p. 1.01
Andrew Compart
Delta Air Lines ’ tentative collective bargaining agreement with its pilots union is worded to ensure that the carrier will have to cut its regional airline services if it reduces domestic mainline capacity under a formula that could spread to union contracts at other carriers.
The tentative deal also could set other precedents. For example, the contract includes language to automatically ensure that Delta pilots retain an “appropriate percentage” of the flying in any new joint-venture agreement—an issue that the Delta Master Executive Council for the Air Line Pilots Association ( ALPA ) is referring to as “big scope” because it deals with international widebody flying, rather than “small scope” regional aircraft operations.
On small scope issues, some union contracts used to include limits on how much mainline operations could be cut, and sometimes those limits were not linked to the size of the regional operations.
The proposed deal with Delta establishes a ratio between domestic mainline and regional flying block hours that Delta must maintain. The national ALPA office says some other agreements also include ratios—based on block hours or hulls—but adds that the Delta deal is “unique” because the ratio would change if Delta revises the composition of its regional fleet to include larger aircraft.
Delta’s ALPA unit says it initiated the ratio concept.
The agreement lets Delta add 70 more 76-seat aircraft to its regional fleet, if it adds 88 mainline narrowbody aircraft and cuts its 50-seat fleet by more than 200 aircraft. But as Delta adds more 76-seat aircraft, the minimum ratio rises.
For example, when Delta adds its first 76-seat aircraft, the ratio starts out as a requirement for Delta to provide 1.1 block hours of flying for every hour of block flying outsourced to Delta Connection carriers. But the ratio increases for every 10 additional 76-seaters that Delta adds to Delta Connection service, ending at a mandate for 1.56 hours of mainline block hours for every hour at Delta Connection if the mainline operator adds at least 61 new 76-seaters to regional carrier operations. Once a new ratio is established, Delta cannot reduce it under most circumstances.
That guarantees mainline pilots at least 60.9% of the domestic block hours if Delta adds 61-70 of the 76-seaters, the Delta ALPA leadership says.
That means—unlike the big shift that U.S. airlines implemented during and after the recession in the early 2000s—Delta would not be able to move domestic services from mainline to regional. That has meaning, Delta union spokesman Buzz Hazzard says, because it would ensure “fairness through proportionality” if Delta were to downsize, and because “how we get paid and how we get employed is block hours.”
The contract includes a provision that allows Delta to go lower than the ratio for a “circumstance over which the company does not have control.” But the contract explicitly states that those allowable circumstances do not include the price of fuel or aircraft, the state of the economy, the company’s financial state or “the relative profitability or unprofitability of the company’s then-current operations .”
On the “big scope ” issue, Delta and the union will try to reach individually tailored production accords on the pilot share of flying in any future joint venture (JV), such as the one Delta already has with AirFrance-KLM and Alitalia for sharing revenue and coordinating schedules across the Atlantic. But if management and the union cannot reach consensus on any particular joint venture, Delta’s share of revenue block hours flown will be at least 75% of the airline ’s share of revenue.
“This makes sure that Delta has ‘skin in the game,’ that Delta must be an active operator in the JV, and the block hours it operates must be proportional to the revenue it derives from the JV,” says a union official.
In another notable provision, the tentative contract would require Delta to remove six seats from the 76-seat aircraft being operated by its regional partners if the carrier furloughs any mainline pilots currently on the seniority list—and forbid the carrier from reinstalling the seats until all the furloughed pilots have been offered recall. There are no “force majeure” provisions that would let Delta change this requirement, ALPA says.
Delta is declining comment on the tentative deal . The pilots union members will vote on the tentative agreement later this month.