Originally Posted by Sink r8 (Post 1779769)

I really enjoy your input/analysis on this topic, when it comes up. Your suggestions seem logical, but I don't see the time for a consensus to develop, input to be given, and a change to be made.

I'm still looking for the Global Production Balance language. What am I doing wrong?

Originally Posted by Carl Spackler (Post 1779748)

First of all, I was allowed to see the actual numbers, and although I was specifically asked not to share them until after the reps vote YES to this TA, you're napkin math is amazingly close to reality.

Why we are agreeing to not use our current share as a baseline is a great question. The only thing I got even close to a straight answer on this was that the company wanted some "wiggle room" so compliance would be easier for them to maintain. So our MEC administration is agreeing for Delta pilots to begin at about 95% of our current share and Virgin pilots to begin at about 105% of their current share. In other words, the company feels they made a mistake with the AF/KLM joint venture by starting at the current share as it existed at the time of the agreement. It allowed them no buffer for error. Our MEC administration agrees and is specifically giving up 5% of our current flying to give the company a "buffer" in return for global share "guarantees".

Carl

Originally Posted by georgetg (Post 1779776)

As for the Global Production Balance, that's 2.a in Carl's post of the LOA

Originally Posted by Carl Spackler (Post 1779723)

Originally Posted by Carl Spackler View Post

2014.11.20 TA LOA #14-07

LETTER OF AGREEMENT

Between

DELTA AIR LINES, INC.

and the Air Line Pilots in the service of

DELTA AIR LINES, INC.

as represented by the

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL

VIRGIN ATLANTIC JOINT VENTURE AGREEMENT

This LETTER OF AGREEMENT is made in accordance with the provisions of the Railway Labor Act, as amended, between Delta Air Lines, Inc. (“Company”) and the Air Line Pilots Association, International (“Association”).

WHEREAS the Company and the Association are parties to a collective bargaining agreement setting forth the rates of pay, rules and working conditions for the Company’s pilots (“Pilot Working Agreement” or “PWA”) effective July 1, 2012, and

WHEREAS the Company has completed a transaction to acquire ownership of 49% of Virgin Atlantic Limited, parent of Virgin Atlantic Airways Limited, and

WHEREAS the Company has entered into a joint venture agreement with Virgin Atlantic Airways Limited to establish a long-term alliance between the parties, linking their route networks and enabling them to market integrated air transportation services, and

WHEREAS the Company and the Association have met pursuant to Section 1 E. 9. of the PWA and have negotiated terms, including a production balance, applicable to such new joint venture agreement.

NOW THEREFORE, it is mutually agreed

1.

Definitions

A. Add Sections 1 B. X. and 2 A. X. (new) to read:

X. “VS” or “Virgin Atlantic” means Virgin Atlantic Airways Limited.

B. Add Section 1 B. X. and 2 A. X. (new) to read:

X. “VS JV” means the business relationship between Delta and Virgin Atlantic as embodied in the Joint Venture Agreement between Delta and Virgin Atlantic as in effect on January 1, 2014.


2.

Virgin Atlantic Joint Venture

Add Section 1 R. (new) to read:

R. Virgin Atlantic Joint Venture

1. Beginning with the 12-month period ending December 31, 2014, and measured on January 1, 2015 and on each January 1 for each measurement period thereafter (each 12-month period, a “measurement period”), until December 31, 2020, the Company will schedule no fewer than 5,860 international operations of Company flying between the United States and London Heathrow (LHR).
Note: In the event the Company acquires and operates an incremental LHR slot between January 1, 2015 and December 31, 2020 and still controls and operates either such slot or an equivalent incremental slot as of the Summer 2021 IATA season, the minimum scheduled international operations of Company flying between the United States and LHR will remain 5,860. If the Company does not acquire and operate such an incremental LHR slot or equivalent incremental slot, the minimum scheduled international operations of Company flying between the United States and LHR will thereafter be 5,550.

2. Beginning with the 12-month period ending December 31, 2014, and measured on January 1, 2015 and on each January 1 for each measurement period thereafter, the Company’s minimum scheduled international twin aisle ASKs will be as follows:

a.

Scheduled DL international........... DL’s minimum % of combined
........twin aisle ASKs ...................DL and VS international twin
.................................................. .........aisle ASKs

Less than 113,919,597,035........................69.46%

Between...113,919,597,035 and
.........146,468,053,331.......................... ...68.02%

Greater than 146,468,053,331....................66.57%


Note: For purposes of Section 1 R., “international twin aisle ASKs” means:

a. for the Company, all scheduled flying in international operations on twin aisle aircraft except any domestically configured and equipped 767-300, and

b. for VS, all scheduled flying on twin aisle aircraft.

3. If the Company is not in compliance with the minimum international operation requirement (under Section 1 R. 1.) or the minimum ASK requirement (under Section 1 R. 2.) in any measurement period, the Company will cure any such breach by complying with the minimum international operation or ASK requirement, as applicable, in the subsequent measurement period.

4. The Company will be excused from compliance with the provisions of Section 1 R. 1., 2., or 3. in the event a circumstance over which the Company does not have control is the cause of such non-compliance.

5. Pursuant to Section 1 E. 9., the provisions of Section 1 E. 2. a. – d. and Section 1 E. 7. and 8. do not apply to Company flying performed under the VS JV. Moreover, the provisions of Section 1 E. 3. will not apply to the Company’s ownership level in VS.

6. Labor Disputes

a. There will be no increased use of the Delta code (i.e., an increase over and above that which was loaded in Deltamatic in the 90-day period prior to the commencement of the cooling off period) by VS during a cooling off period (under Section 5, 6, or 10 of the Railway Labor Act) applicable to Delta pilots. In the event of a lawful primary strike against Delta by the Delta pilots, the Delta code will not be used by VS at any time during such strike.

b. There will be no payments other than those payments occurring during the ordinary course of business to Delta from VS during a cooling off period (under Section 5, 6, or 10 of the Railway Labor Act) applicable to Delta pilots or a lawful strike by Delta pilots.

c. No airman trained by VS in the prior 12 months will be hired to serve as a Delta pilot during a cooling off period (under Section 5, 6, or 10 of the Railway Labor Act) applicable to Delta pilots or a lawful strike by Delta pilots.

d. There will be no increased use of the VS code (i.e., an increase over and above that which was loaded in Deltamatic in the 90-day period prior to the commencement of the strike) by Delta during a lawful strike by the VS airmen.

e. Without the consent of the Delta MEC Chairman, there will be no increase of gauge on any Delta route which carries the VS code (i.e., an increase over and above that which was loaded in Deltamatic in the 90-day period prior to the commencement of the strike) during a lawful strike by the VS airmen.

3.

Duration of Section 1 R. 6. a., b., and c.

Amend Section 28 B. to read:

B. Delta Waiver

Delta waives its right under the Railway Labor Act to make unilateral changes to the termination and labor disputes provisions of Section 1 O. 14. and 16., Section 1 P. 8., Section 1 Q. 8. and 10., and Section 1 R. 6. a. – c. during periods of lawful self-help by pilots. The termination and labor disputes provisions of Section 1 O. 14. and 16., Section 1 P. 8., Section 1 Q. 8. and 10., and Section 1 R. 6. a. – c. will remain in full force and effect unless and until revised in a future written agreement between the Company and the Association, irrespective of whether the pilots are engaged in a lawful strike under the Railway Labor Act.

4.

Duration of this Letter of Agreement

This Letter of Agreement will become effective on this ___ day of ____________, 2014 and, except as provided in paragraph 3. of this Letter of Agreement, will remain in effect concurrent with the PWA.


- - - - - - - - - - - - - -


Carl.

Originally Posted by georgetg (Post 1779700)

Originally Posted by georgetg (Post 1779700)

Here is how the Global production Balance language of this LOA could be improved:

At the end of FY 2013 Delta flew 75% of the combined Global Annual ASK (OAG CAPA & DAL MEC provided data)
At the end of FY 2013 Virgin Atlantic flew 25% of the combined Global Annual ASK (OAG CAPA provided data)

Originally Posted by georgetg (Post 1779700)

Should the Delta share of the combined Global Annual ASKs in any year fall below 70%, the combined Global Annual ASK in the subsequent “cure” year will be increased to 80% in order to achieve a 75% share at the end of the cure period. (Bandwidth 5%, for comparison in PWA 1.P.4 the AFKLM/AZ bandwidth is just 1.5%)

For any year the Delta share of the combined Global Annual ASK exceeds 75% the subsequent year will have no less than a 5% lower share than the previous year.
Should Delta’s share of the combined Global Annual ASK drop below 65%, Delta will forfeit the ability to place DAL booked passengers on flights operated by Virgin Atlantic.

Originally Posted by georgetg (Post 1779700)

My Takeaway:
From what has been revealed about the LOA to date (I have yet to see the actual LOA language) I find it difficult to believe that months of negotiations were necessary to create an agreement that sets the bar so low. I highly doubt the methodology employed to measure current levels and then set the bar for subsequent levels as employed by this LOA would be palatable to any Delta pilot if similar language found it’s way into the pay section.

In comparison, the AFKLM/AZ agreement in PWA 1.P.4 was infinitely harder to achieve, involved far more parties and yet manages to capture equitable flying shares for the 4 pilot groups and 3 management teams involved. It also has much tighter limits (1.5%) in terms of how much deviation from the agreed upon share of flying is acceptable. Even with all of these agreements, and a 3 year window, the company has failed to meet the limits of 1.P.4.

What makes you think the company will meet the terms of the proposed LOA compared to the AFKLM/AZ agreement. Or, as it seems, have the limits and benchmarks of the new LOA been set so low, that for all practical purposes the company won’t ever find itself out of compliance?
What then exactly is the purpose of such an agreement?

Originally Posted by georgetg (Post 1779700)

I have written my reps but heard all but crickets so far...

Originally Posted by georgetg (Post 1779780)

So if your account is accurate, that would mean this entire LOA was specifically written so that for all practical purposes the company won’t ever find itself out of compliance.

Originally Posted by georgetg (Post 1779780)

It then would appear this entire LOA is a sham to fool the membership into thinking we actually achieved a global production balance, no?

Originally Posted by Sink r8 (Post 1779798)

Maybe there is a point, but it's not the global production balance, at least not as far as I can read. Right now we're guaranteed 75% of 49% of the flying, or ~37.5%, correct? And we're guaranteed that we don't do less block hours as well, right?

If the company wants to grow VS exclusively... and leave us at current levels... nothing to stop it, as long as we have 37.5% of the total, right?

So I guess what would matter is how much growth potential there is?

Originally Posted by newKnow (Post 1779802)

After reading this, I have to ask. When Delta purchased 49% of VA, did that money come out of our yearly profits, and thus our profit sharing?