I may have posted some of this before, apologize if some of it is a repeat:


The changes to the AF/KLM/AZ joint venture from an EASK to block hour ratio seems like a very confusing contract language change that could erroneously be viewed as a concession. This isn’t the case.

The production balances within the JV are based on twin aisle EASK’s, currently. The language in this contract changes this to a block hour balance. Delta has never been in compliance with the minimum EASK production balance. The recent grievance and settlement addressed this shortfall outside of Section 6 proceedings.

Delta was at 46.8% of EASK’s at the end of the cure date. Using the new calculation which excludes N. America/UK traffic.

Now keep in mind this: we tried to induce greater Delta traffic via this production balance level and it failed. We ended up in a grievance and the company settled it. The goal of this JV language is to keep flying at a 50/50 ratio between DL and the JV partners, offer a tighter compliance window (12mo. v. 36mo.) and tighten the compliance band (+/-1%). This does that.

Some of you will and can argue that ‘we are just giving this up’. We settled a grievance for lack of JV compliance. Its understandable if you didn’t like it. But it is outside of this TA. The TA removes UK flying from the balance, adds single aisle flying that only DL does and is very advantageous to our side, because we fly all of Europe flying with 3 person crews, any AF under 9.5 block is 2 person crew.

The new language applies to only N. Am/EUR traffic between DL and AF/KL/AZ. It provides a 12 month look-back and a 12 month cure period. It converts from twin aisle EASK’s to total Block Hours. The new threshold is 50%+/-1%. This is less than we are currently flying. A potential loss to be sure. However, this conversion starts to include the 757 to Europe. That flying is now in Block Hours.

***professor’s own analysi***********
Something not inclusive to the TA but to think about is that AZ has publicly stated they are leaving the JV in 2017. That represents approximately 6-7% of flying that will flow back into the JV partner balances. Just something to keep in mind.
***end my own stupid opinion***

Now as far as where we are currently. The last 12 months DL had 51.5% of the total block of the JV flying. 1% of the JV flying is 4.36 round trips at an average stage of 8.9 block hours.

The EASK to Block conversion is a downside protection. Let us say that we all pull capacity out of the market. One 380 would be the equivalent to two of our 330’s. So 2 of their pilots (2man crew CDG-JFK) for six of ours.

The block hour conversion is also up gauging protection. Because all of our WB deliveries both real and notional are larger than the 767, EASK balance doesn’t help us keep jobs. As we up gauge the 767s on the JV routes, we add seats and keep 3/person crews. Keep in mind as well that using pilot block hours would hurt us because of the crew imbalances amongst the JV partners, as previously mentioned.