Negotiators: more cost data please
 

Bottom line: the pilot group would benefit from cost estimates for our various contract requests.

Most of us have thought about the contract negotiations and have an idea what we would like to see from a tentative agreement. It is a common topic of conversation at top of cruise, where the captain and I can typically articulate what we think the TA should contain. Unfortunately, we have zero ability to talk intelligently about compromise or trades between the two positions because we have little knowledge of what each of our positions would cost Delta Air Lines. . So I propose that the DALPA negotiating committee publish their estimates of the additional CASM (cost per available seat mile) of the top 50 requests they have for contract improvements.

ALPA's contract education products included a contract history document. That document contains "pilot CASM" for each contract, which was interesting to me as a way to track the relative value of the contracts over time while controlling for the size of the pilot group and the underlying airline operation.

If these estimates were published, at cruise the two of us could pose some total increase in pilot CASM that we think the company would stomach, then figure out (or argue about) a compromise position between our personal positions. This would have the positive effect of moving away from a discussion based on what we deserve to one based on what is achievable in the business called Delta Air Lines. If we thought that the company would be willing to take a $1.00 CASM increase to Wall Street, then we might agree that my domestic lobster thermidor meals could be served Fridays only to keep the additional pilot CASM to $0.25 so we could accommodate the captain's request for replacing all of the pilot seats with magic fingers massage chairs (pilot CASM increase of $0.75).

I think these data would not only foster more informed discussion at cruise but would improve the quality of input and demand that our union receives from the pilot group. Rather than sounding like Spaulding's lunch order, we could offer our reps some more informed positions and potential compromises. I've emailed my rep and had a good discussion with him on this topic, but the workload this will generate means that we won't see this based on one guy's good idea. Many of us will have to ask for this. Hence this post.

Some responses to criticisms that I haven't yet heard:

• Cost data are proprietary. They can't publish that. ALPA has access to Delta proprietary data and would have to generate these estimates using publicly available estimates. This will reduce the quality of the estimates but imperfect data are better than no data.
• This will give away our negotiating position. I don't think so. The key secret in this negotiation is what the negotiating committee will accept in a TA. No estimate of this should be published and we users of these data would have to come up with a total value (increased pilot CASM) that we would accept. Those of us talking about this at cruise will have to start with, "I think the company will sign a contract that increases CASM $X.XX." The MEC's opinion on that topic is the big secret and we wont know that. As long as the MEC publishes a large list of potential TA menu items here, it also will not shed useful light on their priorities; the opener was very broad as this menu should be.
• Some of our priorities don't affect CASM. True; it would still be useful to understand the cost of the ones that do.
• Some of our priorities could vary in cost True; many would have to be valued in $X.XX per hour of value increase in vacation day, for example.
• This will be a lot of work for the negotiators. True; I think the value to the membership makes it worthwhile.

If you, too, want to see a TA menu with associated CASM increases for each item, then email your reps. Addresses can be found at the Delta MEC website.

Management can afford 100% of our opener.

20% of their buybacks at most.

Don’t play their game.

Mr. Bastain’s compensation was up over 13% last year and if you look annually the numbers are staggering.

Since the 70s, pilots have given up compensation and CASM has dropped. Anything other than a continuation of this trend is unacceptable to the company. This is why all you Boy Scouts need to grow some stones and get serious about protecting YOUR interests.

I'm not sure how publishing the CASM data or our targets (or DL's) helps anything. Pilot CASM is also influenced by the company operating a wildly diverse fleet and a hub/spoke system. Anything proprietary isn't going to be released anyway. BTW, what was the CASM for the stock buybacks.. dividends... purchasing 787s for other airlines to fly? One foot out the door. OFG

Amen.

Management ploy. First of many to come.

Next we will hear about the “pie” theory.

It’s our turn. They took 10 times what they needed in Chapter 11.

Unfortunately, the union's purpose is not improve the quality of our conversations about the contract in cruise.

Discussing what YOU want in the contract in cruise wan't accomplish anything. Your time to influence the negotiations was over the last few years during the polling.

Fair; I allowed my example to merge with the discussion. I disagree that our time to influence the process has passed. The union still works for us. We can influence them now and we can vote on a TA. Our involvement continues to the extent that we want to influence the process (I hope).

I agree it would be nice to have some sense of what value certain contractual changes likely hold. I don't even require very accurate info because many of us might be off by a factor of 10 or 20 trying to simply guess on some of these items. Even a very rough estimate, stripped of proprietary data, would be useful.

Is improved DH language equivalent to expanded crew meals...or is it ten times as costly? Or could I turn back my buddy passes for 2 PS tickets a year? Is going to 20% DC equivalent to paying training at 5:15? Is an extra week of vacation equivalent to SC paying 1hr above guarantee? Does a 3 year seat lock with exceptions offset paying vacation at 5:15?

Lets start out by getting rid of pilot negotiators. Hire professional negotiators....even better.....hire some former company negotiators. Im pretty sure Dalpa could afford it. Take a look at what the Delta Pilots pay in dues annually to the Alpa bureaucracy. That is staggering.

There is a critical flaw with trying to find a cost of a contract. Airlines (even Delta) are not able to accurately predict the cost of each section of a contract.

It is like an owner of a grocery store trying to see what their 5 year profits will be if they increase the price of crackers. Once the price changes, the market changes. People may start to find cheaper alternatives such as chips.

Airline costs and profits are much harder to predict than most businesses. There are too many variables. Not only do they have to make wild guesses about future loads and route structures (that change weekly), they have to predict how the pilots will respond. Maybe improved deadhead language will make deadheads cost more to the company. They may respond by taking a 3 day trip that ended with a deadhead and adding another day in order to make the crew operate a flight rather than deadhead. That may then cause commuters who liked to deviate to bid off that aircraft. That will cause an increase in training costs that may be greater than the deadhead.

The cost of a contract is dynamic. Language that may start out expensive on day one might be cheap by the end of the first year. Other language that started out cheap might end up costing the most by the end of the contract.

All reasonable but both sides do it anyway. Forecasts are hard and uncertain. That doesn't mean that we don't use them or that they aren't useful.

Good point: dividend per average seat mile over the last decade (including buybacks) are good data too. Add that to my request.

Um they do use professional negotiators. All ALPA groups do. ALPA has a gaggle of them. Why does this bad info come up time and time again?

Precisely why we should articulate CASM for the contract items we press for. This contract should reclaim the CASM lost since C2k or before. In my view CASM should be the unit of measurement for contract discussion. Find another unit if you like, but until we can compare apples to apples we are just talking past each other.

Perfect is the enemy of good. Have you told our negotiators and the company's that costing any item is futile and methodology used the last several decades is worthless? Have you suggested to Wall Street that they stop projecting earnings, growth, and profits?

A realtor doesn't know what the final sale price will be on any given house. But they know not to show me houses that will go over 10 million or under $100,000. Without a best guest on some of our contractual items, we don't even have enough knowledge window shop various proposals with that decidedly low level of precision.

Estimating the cost of contractual language does have its uses, but settling debates in the cockpit aren't one of them. The idea that ALPA can determine that improved DH language is 3 cents more than a increased vacation is laughable. If ALAP were to publish the "costs" of our demands, those numbers would be meaningless within a few weeks. As the negotiations continue, the formula changes and therefore the costs change. If they published their guess at the cost of contractual language today pilots would be using that out of date info for the next 30 years.

Yes.

But what the OP wants IS the realtor to predict the final sale price of a house. The OP wants to add up the individual components of all the houses so they can determine if the newer light fixtures in one house are better than the nicer windows in another. We already told the realtor (the union) what we want. Their job is to find us a house (TA) that meets out standards and we get to decide (vote) on if we like it.

I beg to differ....not the same at all. Hopefully a realtor doesn’t show you just one house and expect you to make a decision, at least when I buy a house or a car I have several options to choose from.....not just 1 take it or leave it offer with no alternate scenarios. Much, much different than membership ratification on a contract.

TED......agree whit what you said but, I think I can offer some insight to this one question. Buddy passes are a revenue generator for the company......they unload excess inventory and shed “spoiled fruit” with ancilliary income(while a lot of times frustrating the buddy pass rider). So in your example, it would be a double loss for the company....loss of income for the company on the buddy pass combined with a loss of income on the PS pass.

Even though I just said it, it would be nice to know the costs for the said items......I would encourage the MEC/negotiators to include those costing data(even if just rudimentary) into the surveys in the future. As it is it’s commensurate to asking individuals who pay no taxes if they want more free stuff(as if there is no limit/cost)to be born.

I realize you didn’t say this, but...it has been said here today that there is no “pie” to be divvied up. I whole heartedly disagree with this sentiment, there is a pie(the size may grow or shrink) but how we divvy it up falls to the negotiators. To “ass”ume that it is unlimited, or reflects something from the past is.........hmmm.......naive?

+1 They DO use professional negotiators.

We already have and our using professional negotiators. We have always done that. We have even used professional negotiators hired from outside the ALPA network. They were found to be of little value. Talk to your reps about how negotiations work and how we integrate the professionals into the process.

I never thought of it this way. So I guess I'll advocate that we each get 30 additional buddy passes a year to earn some more negotiator bucks! :-)

I'm not sure that's what the OP wants, but it isn't anywhere close to what I want. I want information for my own decision making, not to win any debate and not for post-negotiation valuation purposes.

I think we told the realtor (the union) that we prefer blue houses over green houses and green houses over yellow houses. While that may still hold true, learning that I could get 4 green houses for the price of a blue house, or 12 yellow houses for less than half of that could influence the house(s) on which I write an offer. I may still prefer blue, but understanding the rough price to get one may (or may not) alter my direction to the realtor (negotiator).

As our input to reps currently stands - completely agnostic of contractual value because we don't know the relative value/cost, negotiators are left doing the cost-benefit analysis alone. Maybe their decisions mirror my preferences and maybe they don't. There were at least some level of effort weighting questions in the polling. I think more information is better, and am quite sure that even rough valuation estimates would improve the quality and relevance of my own input and likely that of others.

Good one....that’s what I call thinking outside of the box....a win for the home team....we give them all that additional revenue in exchange for PS passes....I like where this is going:D....might work......if we only had some numbers!!!....At least the concept is sound(at least in my feeble brain)

Every item in the contract is costed out. It can as you mention be difficult to attach a value to a item. That is why the EFA people are one of the most important parts of the negotiations team. In general we usually manage to reach a agreement on almost all costing with management because the team we use is very respected and has shown the ability to produce better costing data than management. So much so that airline managements have hired ALPA’s team to produce costing data for them in mergers ect..

The recent huge stock repurchase with BORROWED money was a bit of an eye opener.

The book “Tailspin” by Stephen Brill goes into excellent detail on some less-than-altruistic reasons companies repurchase stock not mentioned in a recent company missive.

Is this one of them? Dunno. But there does seem to be plenty o’cash In the company kitty.

I like how in the past couple of weekly flight ops updates they've had sections justifying the stock repurchase program...

Well lets hope we arent still using the professional negotiators that thought monetizing ps for a single digit raise was a good idea.

Just read an article that puts him in the top 100 in CEO compensation. 84th if recall correctly. It isn't and hasn't been about affordability in some time. 2 contract cycles at least. Now we are borrowing money to buy back stock and our rating went up.

https://www.moodys.com/research/Mood...nes--PR_395248

Then we could compare the final product to a scorecard and the "XXX millions gained" claim would have some credibility. Or we could just do what we have always done and trust but not verify. :rolleyes:

You articulated the OP's desires better than the OP. You not only know what I want, you wrote it down pretty well here. No, I'm not focused on cockpit debates; I want to intelligently contribute to our contract both now and via ballot. Thanks for your editorial skills, TED.

So he’s 84th highest paid and runs the 75th biggest company on Fortune 500?

Yup and the co CEOs at Oracle make $108M each on a company that generates less revenue than Delta. They are all out of touch with their employees, but that is not what their job is. It is shareholder returns.