Denny Crane

I’ll take a stab at it. All of this is my opinion only of course.

I think the Company is trying to achieve a couple things. The first of which is cost savings. If the participation level is high enough there could be significant cost savings from less training, moving expenses etc. Second, from an optics point of view, if the participation level is high, it could seriously reduce the potential number of furloughs. Bottom line, the company is looking to save money. If that wasn’t possible then it would never agree to an ERP.

The Union? First, anything it can do to potentially reduce furloughs with voluntary programs, of which the ERP is one, would be a win. Second, with an ERP and associated lower training footprint, there is a big potential for the company to cancel “awards” from the MOAD and for more pilots to retain a higher paying position or remain in their current category.

This all depends on the participation level. To have this high participation level any ERP needs to be at least as good as AA’s and/or SWA’s.

Denny

iaflyer

Welll... here's my summary. I don't have any inside information.

The company wants to cut payroll. We don't want them to do that involuntarily.

The union has suggested SILs, a good early-out package, personal leaves, and that the company can lower ALV to the current contractual minimums, while maintaining the TLV. SWA, AA and others have offered their employees good early out plans that people are taking.

The company seems to want to accomplish their payroll cuts by an ALV reduction for everyone, in addition to their massive displacement bid. They would also like us to take unpaid personal leaves like the FAs took.

(Even though the FAs are getting the same or higher pay to take a leave (via unemployment and CARES act) while we would make MAYBE 25% of our pay on unemployment.)

Just my guesses based on what each side has published.

FangsF15

The company has to know we can't replace income on unpaid leaves like most every other employee, Any representations to that effect have to be for some bizarre optic, but I don't see that as a major driver anyway.

In this weeks's Flt Ops town hall, JL said (let slip?) they had split out the EO program. This might jive with earlier reports/rumors of a 'tied' propsal, maybe now OBE. But to Denny's point, I think they need an EO. I think this whole MOAD was playing hardball from the start. Not exactly a bluff, but designed to inflict maximum pressure toward some other deal. The major part of that need is an ALV cut, but in the short term, the nearest alligator to the boat is the cascading training avalanche. They need relief from that. It's one thing to have a carrot and stick approach. It's another thing to go straight for the jugular from the start.

Buck Rogers

Denny and iaflyer(oops)...thank you for the reply.

Iaflyer, while I agree with everything you said, there is something left unsaid that Denny had. It is the crux of what I am trying to understand.... namely furlough elimination/reduction.

Is furlough mitigation a huuuge want, moderate want, or mehhh ....a byproduct of the other things?


edit...had wrong attribution to another poster on original post( my bad)

Vincent Chase

I'd argue that to the degree it saves money, it's probably huuuuge. To the degree that it really doesn't, it could be mehhh. I don't know the numbers, but I'm sure someone on the 4th floor has a sweet PowerPoint brief about it.
Not really helpful, I know, but unless we knew the financials behind the options, we'll likely not know which option/options the company is pursuing.

Buck Rogers

Vincent...agreed. Makes it kinda tough to discuss things without the real numbers.

FangsF15

I don't think it's a huge want, personally. I think they would like to be able to say they didn't furlough anyone, and are willing to discuss options to 'work share' by lowering ALV/TLV for now. But they also won't hesitate to furlough if we don't agree. It's all about the Benjamins, and is just business for them. We can pick our poison, it's the same dollar amount either way to them.

The EO is the one thing they need though - training. An SLI buddy said on his fleet they had 300 open instructor holes in this month's sim schedule alone. That's 10 a day. All the SLI's have been 'rehired' as of next week. Training is their LIMFAC.

Funk

The company has two intangible variables in play. The first is the Delta brand and the mix of perception and reality that the brand drives higher revenue through premium demand and ultimately higher profits. They want to protect the brand and its future financial upside. The other is the perception and reality that a furlough of pilots, will damage the brand, especially now that other peer airlines (AA/SWA) have taken steps to avoid pilot furloughs. How much damage might be done to the brand if Delta is the first, or even worse, only, major to furlough pilots?

There isn’t any real way to accurately quantify that scenario without going through it, so it’s natural that the company is having a hard time reconciling what the monetary value is for EO and the consequent reduced training churn and furlough avoidance. They instinctively really, really, really want to cut costs as far as possible and as soon as possible so that they staunch the cash burn and put themselves in a position to start paying down/off debt (and the consequent interest) in order to return to profitability. They also know there is a real risk to the brand of they furlough pilots, especially if our peers don’t, but they don’t know how to cost that out.

Funk

Which fleet? When I did bounces yesterday, my SLI said they didn’t have any of the DGS or SLI instructors back yet. It’s the 73, so maybe the company forecasts that they can play the shell game with existing qualified pilots while they train others, but my gut feeling is that they’re behind on getting the motors to spool up before experiencing a really hard bounced landing.

Denny Crane

My answer to this is................yes!

I actually think it is both. Furlough mitigation should be a by product of an early out. Not saying it would be one for one but it should definitely help. I believe the optics of not having to furlough/furloughing as few as possible is in the company’s best interest so, yes, I think it’s moderate plus side.

Denny