Pilotfo64

Before any analyzing is done of this TA, it’s imperative to understand the fact that we are currently working in an industry which is experiencing unprecedented revenues and profits thought never to be possible at the turn of the century by most everyone. We also find ourselves in uncharted territory with respect to airline consolidation and new business models moving forward. It should be clear to all of us that this is “our time.”

Over the last few decades we have given a little, given a lot and then given more all in an effort to “help management” under threats of liquidation and fear of “losing everything” in a skewed bankruptcy process. All done while airline leaders filled their bank accounts from your pockets citing“ shared sacrifice, shared rewards.”It should be very clear to everyone that the concession stand is closed and it’s high time we start restoring our career and stop allowing management and the A4A to devalue the major airline pilot into extinction.

Sadly, this DAL TA continues a downward spiral of pattern bargaining which makes no sense whatsoever. The DAL MEC voted 11-8 to approve this deal and it’s now out to the members for a vote. How this deal garnered 11 votes is unclear, because no rational thinking pilot who has been around this industry for the past few decades could vote FOR this with a straight face. Attached to this update you’ll find the DAL TA highlights sent to all DAL pilots. You’ll also find the full contractual language and a Barons financial article that does the costing of pilot pay raises vs lost profit sharing.·

Pay rates:
the TA proposes an 8% raise on DOS and a 6% raise January 2016 and 3% per year for 2017 & 2018. According to the Barons Article, Wall Street sees and increase cost to the company of $552 million for pilot pay rates but sees a savings of$600 million in profit sharing for the company in 2016 alone based on the agreed to reduction of profit sharing in this deal. There may be an argument that exists which some pilots would be willing to trade profit sharing for increased hourly rates for a more predictable and stable source of income, even at a net loss which is proposed here for the 2016 (2017 pay out) profit sharing. The flip side to this is that we are experiencing record profits and are on pace to keep making money due to market consolidation, so we risk not just the $600 million in 2016 but for years beyond as well. Also, we don’t have to travel too far back in time when pilot pay rates were under great scrutiny and it’s sure to happen again in the near future. However, profit sharing doesn’t seem to rise to the same level of scrutiny: something to keep in mind.·

Profit sharing:
this deal proposes a significant reduction in profit sharing. Currently it’s paid out at 10% of pretax profits up to $2.5 Billion and then 20% for all profit above $2.5 Billion. The UAL agreement is similar but our step to 20% is at 6.9%profit margin which can be attained before reaching $2.5 Billion. The DAL TA raises the 20% step to $6.0 Billion effectively removing the 20% benefit all together and reducing the PS significantly if profits continue as expected. Last year the DAL pilots received roughly 17% of w2 earnings in PS.·

Scope and the Atlantic Joint Venture:
DAL ALPA has allowed the company to “carveout” a joint venture from their scope section (a concession by itself) to allow them to “bundle” three partner airlines as one: Air France, KLM and Alitalia.This was done in April 2010. The terms of this agreement required DAL to fly a minimum of 48.5% of EASKs (Equivalent Available Seat Kilometers) as measured against the total ASKs of this JV. Believe it or not, the compliance “look back”period was 3 years, and if out of compliance the company was given another year to come into compliance. As you might imagine, management took full advantage of this deal and was out of compliance for 3 years only flying 47% of the ASKs: this is equivalent to 9 daily A330 DTW-AMS round trips: how many jobs is that ?Airplanes? Upgrades? QOL schedules? What’s important to understand about joint ventures is that they are not code share arrangements even though they may include code share partners, rather an agreement to split total revenue from all operations at pre-determined amounts, many times regardless of who does the flying.

Remember the Air Lingus/United deal? In that case United did zero flying but was entitled to a certain share of revenue and maybe as much as 50% or more from that operation. Our scope sections are the only protections we have against managements turning us into ticket brokers and DAL ALPA is giving away the house. This DAL TA proposes additional concessions for this JV: they want to change the measuring stick from EASKs to Block Hours for starters. In other words an Air France A380 holds quite a bit more available seat kilometers than aDAL 767 or 757 but they each account for equal aircraft block hours. If management is receiving their money from this JV regardless of the amount of seats they fly, then of course they’d like to change the measuring stick and have one of the three Joint Venture partners put the seats in the market. Not only has this been championed by the DAL negotiators, but they also allowed management to carve out any flights to and from the UK allowing all flights to/from the UK flown by all partners in this JV to be excluded from the minimum block hour measurement matrix. A carve out from a carve out?·

Scope and the 76 seat outsourcing:
First it’s important to understand that manufacturers are building a 90-100 seat jet (Mitsubishi, Embraer, CRJ) and airline managements will be putting these into service because there is a gap in this market of aircraft between 76 and 100 seats that they are anxious to fill.There is no provision from any of the three major airlines to allow out sourcing of these jets (with the exception of AA that has grandfathered some 90 seat aircraft which USAirways had allowed). This TA allows the outsourcing of an additional 25 76-seat aircraft tied to delivery of 100 seat aircraft that are coming anyway?. This simply appears to be a give-away to management for no good reason: the union has never been able to control what type aircraft management decides to order as long as it complies with our scope section. It’s time to start recapturing our company’s flying and this is not the way to do it.·

Sick Leave:
this TA brings the entire sick leave section to 10 pages vs 3 pages in the United Pilot Agreement. There is a very onerous sick leave verification process currently after a pilot uses 100 hours per year of sick time that must be completed through the CPO. This deal brings down the verification threshold from 100 hours to 15 days missed and then shifts the verification process to an even more onerous process and a third party contractor! The requirements to avoid the verification process are verbose, confusing and read like a plan summary description of an Aetna insurance plan. The degradation to this sick leave policy is an embarrassment to trade unionism and nothing more than pilot pushing to fly while sick.·

LOA 15-01 Excise Tax on Employer-Sponsored Health Coverage:
this is a significant give-away but not talked about much. In short DAL ALPA has agreed to lower the pilot’s health care benefit to an amount equal to the company’s excise tax exposure on health care plans which hasn’t been determined yet. In return management has agreed to reimburse the tax savings to the pilots elsewhere in the contract. Example: you currently pay$500/month for a family health plan, but now could be paying $1,000/month for the same plan to help the company with their tax situation however this will be returned to you in other areas of the contract like longer downtown layovers and an extra bottle of water. If this happens, not only will the United Pilots suffer the same fate, but all airline employees will suffer as well. While we’re on the health care thing; this TA also eliminates “co-insurance” (the ability to be covered by two separate company plans). United pilots had this as a benefit and lost it in BK.You will find some incremental increases in scheduling, per diem, vacation etc. but when compared to the significant concessionary approach to this deal, they seem mostly insignificant.

There has never been a better negotiating environment for our union and never a more appropriate time to start the reclamation process of our careers. If we can’t stand up for our careers now; when should we?

You may view/download the full language to the TA HERE

Respectfully submitted,
Andy CollinsUnited
Council 11 Chairman
Washington DC