The EASK metric and the 1.5% bandwith from 50% were put in our PWA to protect our downside as well as capture upside.
The concept is valid and works.
Because of our fleet makeup compared to the Europeans, the EASK metric hurts us when JV flying is pulled down and benefits us when JV flying is increased.
- The Europeans smallest gauge on the Altantic is the 330.
- Their biggest gauge is the A380.
- Our biggest gauge is the 747.
- Our smallest gauge is the 757.
Even if Delta switches to all 330 flying across the Atlantic we have an advantage using EASK because every A380 is worth two A330s.
Unless Delta buys A380 or 777-300s to replace our 747s on Transatlantic routes the current EASK measurement will gain us more than the block hour measurement.
Over the past few years, capacity has been increased across the Atlantic by all players, but once again Delta is lagging 2-4 times behing the rest of the industry when it comes to capacity growth.
With our current agreement this approach of flat to tepid growth becomes untenable. Every year going forward Delta will be out of compliance, not just because our growth laggs the European JV partners, but because we have accumulated a 3-year EASK deficit. Switching to Block hours now, negates the protection our current agreement provides and discards this accumulated EASK debt.
We just finished a 3-year lookback and 1-year cure period on March 31 2015. Going forward every March 31 is where our current PWA language finally pays off. We have an annual look-back. And every April 1 we look-back 3 years to see where we're at.
We just had to wait 4 years to make use of our PWA language the company ignored. If we switch the language now, and allow a new 2-year window to open, (1 year look-back, followed by 1-year cure) we will have to wait until 2017 before we can use the new language. With the company's track record and the grievance settled for $30M it would be legally and financially imprudent to change the agreement now. The $30M alone is the equivalent of a 1.2% pay increase and we even have the past precedent to show when it comes to future grievances. If you're really counting, that 1.2% also needs to be backed out of our 2016 and beyond C2015 pay rate increases.
Switching to the new TAJV block-hours metric and measurement will:
- Discard our accumulated past EASK flying debt
- Locks in our disproportionate block-hour downside from the EASK metric
- Fails to capture our disproportionate block-hour upside from EASK
- Opens a new 2-year compliance window
- Prevents future annual grievances and the associated financial benefit for Delta pilots
If you need any more evidence to see that this is a bad deal, take a look at what category the instructor LEC rep puts this in when it comes to pros and cons. Then look up what function he held prior to being LEC rep (hint codeshare).
Last thought:
The current EASK language in our contract was hard fought for. We had to give some things up to get it. If we don't let it work as intended we lose both the upside from our current language and the quids that got us the language.
Cheers
George
P.S. As for Alitalia, tht's just a distractor. Delta is on record saying Alitalia stays in the TAJV with a 2022 expiration date. The 2017 pull out is for the European JV Alitalia has with AirFrance on inter European routes.