More Bacon

Coincidentally, that's my dream for Sheri, too.

firstmob

Let's face it guys the new contract and new aircraft orders are tied together sooo tight it would take 12 Carls to untie them!

forgot to bid

Who are they?

acl65pilot

He did and was replaced by a 40 y/o. Hank has been quiet and short at the last few investor calls. Him leaving does not surprise me. I wondered why there was a change in his level of involvement in the investor calls. On a side note, it is hard to be CEO here when the former CEO is your boss and the one that has all the pull, connections and expertise of the airline and industry.

That Comair CEO left yesterday too.

I bet there are a few more that will retire or leave to spend more time with their families.

Listen to the comments from a few of our top leaders who genrally comment during the investor calls. Go back and listen to their comments and level of input in 2009, 2010, and 2011. I suspect a marked change in the way our leadership is running this airline. (Just my take based on what I have seen/heard from these leaders and the changes I have seen over the last few years) I made a mental note of it a few months ago. Be interesting to see if any thing else pans out.

acl65pilot

More Bacon;
I just got a copy of the C54 update. Art's comments on Hank leaving are on the mark imo. He also mentions a new addition that I was going to touch on in my post, but he does such a great job of it, that I will just leave you with Art's words. Again, dead on and great dot connecting, imo.

Copy below.



Delta Council 54

March 2, 2012

Council Update





Pat and Ron attended the two-day MEC special meeting in Atlanta on February 16 and 17, 2012. Art was absent from the meeting and gave his proxy to Ron Morrell. The purpose of this special meeting was to incorporate the subject-matter experts’ (committee chairmen) input from the data generated by the pilot survey. With that input, the MEC began the process of crafting the language for the opener. We will continue this work at the MEC regular meeting scheduled for March 6–9, 2012, in Atlanta next week.



Your reps will be in the SEA pilot lounge during March. Captain rep Pat Harney will be in the SEA pilot crew lounge on Monday, March 5, from 8 to 10 a.m. before he heads off to the MEC meeting in ATL. First officer rep Art Aaron will be in the SEA crew lounge after the MEC meeting on March 11–15, starting at 9:30. We will assume that the contract opener will be a top discussion point, along with the pilots’ exclusion from the early retirement program.



Ever since the Delta and NWA MEC merged on January 17, 2009, there has been a long-standing MEC chairman’s request that LECs send the updates to the MEC for editing before publishing. Council 54 has, for the most part, complied with this request. There were times when noncontroversial updates were sent out without this process. Last week, we received an update from the former NWA trip/duty rig team. On Friday, we sent this update to National for distribution to Council 54 membership. The update from that team was held up and delayed by the MEC administration. There was no notification from the MEC administration to any Council 54 officer until Monday, February 27, at 2:45 p.m. Due to this breach of trust, Council 54 has decided to suspend the forwarding of our communications to the MEC for editing. Until further notice, all updates will be sent directly to National for editing and transmission to membership.



The Trip/Duty Rig Grievance will now be arbitrated during May 31–June 1, 2012, barring any other delays.

On March 1, Delta CFO Hank Halter announced his sudden and unexpected retirement. Senior VP and Treasurer Paul Jacobson was appointed to fill the position. Mr. Halter is 46 and had spent 13 years with Delta. We find these developments interesting in light of the hiring of Mr. Gary Chase. Mr. Chase was hired away from Barclays PLC’s Barclays Capital affiliate. Mr. Chase has been an airline analyst and is well regarded on Wall Street for his industry perspective. Mr. Chase’s new title as he joins Delta is senior vice president, financial planning/analysis and investor relations. Welcome to Delta, Mr. Chase.



By the volume of mail and phone calls we have received, many of you are upset about the early out program that does not involve the pilot group. On Thursday afternoon, the MEC received a message from the MEC vice chairman. Flight Ops’ reasoning is that it is not economically justified. We have seen plenty of reports about the upcoming AE in early March and the potential displacements that might occur due to overstaffing on the wide-body fleet. These aircraft are usually flown by an older demographic, so you would expect that Flight Operations would want to offer the early out program to the pilot group before we displace from those aircraft. Does the cost of the early out program not make financial cents, or will dollars be wasted posturing for the upcoming Section 6 contract talks? What this means for Delta pilots is more stagnation and frustration. We will know more after the upcoming MEC meeting. It is our opinion that if we are overstaffed on wide-body aircraft, and the next AE will displace from those positions, pilots should be included in the early retirement program.



Rumors of mergers, acquisitions, and asset transfers are just that, rumors. Although we do not know of any imminent deals concerning Delta Air Lines at this time, your MEC has discussed such things should anything occur. If you hear of any rumors, please e-mail or call use before you forward them. By doing this, it helps cut down on our workload and keep focused on obtaining the contract improvements you have requested via the contract survey.



Pat Harney—Chairman’s Perspective:

With the exchange of openers now one month away, we shift gears from the data collection and prioritization modes and shift to negotiating for the changes you desire and compensation commensurate with the value you bring to Delta Air Lines. Improvements in pay, work rules, and benefits in the contract are needed not only for the duties you perform on a daily basis, but for the unprecedented sacrifices you made during bankruptcy and the unmatched speed and professionalism with which we completed the merger into one airline that we are proud to call ours. We are firing on all cylinders and the financials prove that. We are in a good position at a good time, and it is important that we capitalize on opportunities as they come available.



Some confusion has been expressed with respect to what an opener will look like. Openers are typically general in nature. It will likely not spell out every desire you have expressed in detail. Yes, we know what you want—we have the data and have heard you loud and clear. It is more like a poker game. You keep your cards close to your chest and keep the poker face. As I said, it is the negotiating phase of the process. The objective is to get what you want, not show your cards too early in the process. You will see the winning hand at the end of the game—then you will have the final say of how strong the hand was with a ratification vote when we have a tentative agreement.



Art Aaron—Vice Chairman’s Perspective:

People run organizations, and we (as well as our passengers) are told that Delta people are the reason behind our company’s success. Yesterday, CFO Mr. Hank Halter suddenly announced his decision to “retire” at age 46 with 13 years at Delta. Certainly Mr. Halter will find employment elsewhere, but I would like to know if his opportunity for advancing the corporate ladder was going to take longer than he wanted. Welcome to the pilots’ world post-consolidation, Mr. Halter. We are seeing continued stagnation as Delta decides to “right size” the airline for profitability. Our CEO positions (captain seats) are dwindling due to DC-9s leaving and other captain seats in smaller jets being occupied. Career progression has been halted and, in many instances, reversed. Let’s not forget those at the bottom of the bid lists on each jet (both captain and F/O). Those affected experience reduced personal and household income at each displacement AE.



Many Delta pilots are experiencing just what Mr. Halter possibly encountered and made the choice to “retire.” Fortunately for him, his experience gives him career portability—something our seniority system stymies. Many pilots now consider future consolidation a threat, not an opportunity for advancement. Unless you are a 1 percent-er in your category, another merger is not going to bring opportunity. Pilots are tired of stagnation at a profitable corporation.



March 1 was an interesting day to see who became a Delta employee. Mr. Gary Chase, a Wall Street expert in analyzing airlines, decided to join our world. This might be a very intriguing development. Mr. Chase has never worked for an airline and, up until now, why would he want to? Airline managements are not usually found in the high compensation levels of other industries’ managers. So why would he want to leave Wall Street? Well, if you have been paying attention, the business model of airlines as money-losing enterprises is changing. Consolidation has made it happen. Now, a well-respected and highly regarded Wall Street analyst with connections to bankers has joined Delta. CEO Richard Anderson has stated that consolidation will continue. AMR is in bankruptcy court and has a March 29 deadline with the court for a restructuring plan to be presented or to ask for more time. Other Wall Street analysts give AMR a 20 to 30 percent chance to emerge intact. Is Mr. Chase’s arrival the signal that Delta will be an aggressive player in consolidation? Delta might need to access capital markets to pay for any acquisitions or asset purchases. Mr. Chase has those connections and the analytical skill of evaluating the airlines and the industry—quite a handy talent if you are looking at parts of airlines or whole pieces.



Mr. Chase has never worked for an airline, so why the job change? Does he expect this next round of consolidation to bring the returns that management needs to boost the stock to investment grade? Making the jump from industry observer to industry-employed insider tells me that he must see something intriguing enough to make a career switch. So what is the better career choice? Remain at Barclays or go to an airline where a $1 change in oil could be millions of additional costs on top of razor-thin profit margins? Remember, even during the government bailout of big Wall Street banks, the bonus checks never bounced. So Mr. Chase, why Delta? Why now?



We may never get a clear answer, but as I start my fifth year as your elected representative, this event was important to address. It occurs right before our Section 6 openers and with AMR in bankruptcy court. Is Mr. Chase here to evaluate the acquisitions and assets needed to make Delta a consolidation winner? If so, Delta could become an investment-grade stock that institutional investors will want. It signals that sustained and continued profitability (at least at Delta) is on the horizon. Profitability is good for us, very good. If that is the case, is his compensation package structured with stock? Maybe he understands that a fundamental shift has occurred in our industry, and Delta is poised to be the best-performing stock in the airline sector? That might be a major reason Mr. Chase decided to make a career change now. Investors profit handsomely by spotting a trend or fundamental change in an industry before everyone else. Surely Mr. Chase knows that; it used to be his job. He could have invested and stayed where he was, but something changed. Do you think he needs employment at Delta on his resume?



While we may never know the reason, I for one think that puts the people I represent (you) in an excellent position for our Section 6 opener. I hope you share in this good news, good fortune, and timing of this hiring. Management tells us that what is good for Delta is good for Delta pilots. Delta pilots say “prove it.”



Ron Morrell—Secretary-Treasurer’s Perspective:

The Delta MEC special meeting held in February was focused on our contract openers with management. We had numerous discussions about process, content, and language that we should include when we go the Company and ask them for well-deserved improvements to our pilot working agreement. Most of these discussions were held in closed session for obvious reasons, and I will omit any of those but will only give you my perceptions and philosophy about how to create an opening position for such an important negotiation. One of the most important statements I hear from fellow pilots while flying the line or in casual discussions during visits to our crew rooms and lounges is that our opener needs to have a minimum of XX percent for pay raises. Any number you insert is applicable. I completely understand this sentiment and my gut reaction is to agree and make sure that number and the many other issues are clear and unambiguous, but, I then fall back on my previous training, education, and experience with respect to negotiating contracts (albeit not limited to pilot contracts). Unlike other types of negotiations, a pilot contract has thousands of moving parts and, although a very important aspect, pay is not the only important issue to negotiate. Just to be clear, I do think that pay is very important, but hundreds of other negotiating points have an impact on the pay aspect in the final version that we end up agreeing to.



I am under the impression that most of our pilots expect to see hard numbers and very specific positions in the “opener” that we hand to the Company next month. I do not expect that to be our best strategy and I also don’t think that is the best tactic for us to get to the best possible contract for our pilots. None of us plays poker with a fixed betting strategy and with our cards all face up on the table. That is my interpretation of saying publically, on day one of a negotiation, that we want XX percent pay increase and Y, Z, and W specific improvements. If we were negotiating for a product or service, that may work due to the fact that we would not need to limit ourselves to one vendor and we could just walk away and approach someone else who could offer the same product or service. An opening position for a pilot contract needs to have flexibility to ensure we can continue to “move the bar” when it becomes moveable in the course of negotiating. As pilots, we all like black-and-white checklists; we don’t want concepts and philosophies when it comes to getting our passengers from point A to point B. But that is what lawyers and negotiators happen to enjoy—the ability to draw lines in the sand today and then move the sand tomorrow. This does not fit with my “black-and-white” philosophy, but it is the way contracts get done and it is the model that creates the most opportunity for improvement. Pilot contract negotiating is a double-edged sword, and the sharp edge facing us is the Railway Labor Act with all its restrictions keeping us from using our ultimate leverage.



Just to be transparent, I also don’t expect that the MEC will send our negotiators to the Company with an opener that is extremely specific but the negotiators will have very specific goals and requirements that the MEC has discussed and concluded to be the minimum acceptable numbers and issues to be agreed to. The negotiators then will have the tools to do their job to the best of their ability and if they cannot influence the other side of the table to meet our “back-pocket” minimums, the MEC will do what it needs to and create that pressure accordingly (given the limitations of the Railway Labor Act). A negotiating strategy also needs to be flexible enough to change over the course of the process. If today we want quiet talks and measured discussions, but tomorrow that strategy needs to change and become louder and more public, we have that option unless we start out by being very specific or by taking issues off the table too early in the process. I am confident that the meetings and discussions we are having at the MEC level can and will create an opener that will give us a definite path and the required flexibility to meet our pilots’ goals and get us the well-deserved improvements we all want. This is our job as your representatives—to ensure the MEC makes these hard decisions and fully supports what you have asked us to do.



If you don’t see the numbers or specifics you expect in our contract openers, do not assume that those numbers and specifics have not been discussed and boiled down to a set of minimums and requirements for our negotiators to use as their goals.

Seaslap8

Possibly me, sorry...I was attempting to explain to Carl how he was misinterpreting the scope of the use of CASM as a metric...

Bill Lumberg

So Gary Chase maybe wants "bonus" potential coming from Barclays to Delta? If it were up to Sailing, it would be at 4% a year, because THAT is what is good for the company.......

TheManager

Art Aaron is really impressive. After hearing him converse with other pilots and from reading his updates, he has proven to be a strategic thinker, very intelligent and creative as well.

He really should be our MEC Chairman.


Side note: On the note of "investment grade stock," how do you all feel about being given stock grants (not options) every year as added compensation? This is being kicked around again. There are some obvious flaws (diluting the shares, etc.) and some benefits.

CVG767A

I assume you're arguing in favor of pay banding. I've had to gloss over the last ten or so pages.

Pay banding is great for guys at the junior end of the band (i.e. a junior 767 captain-- nudge, nudge). They get a pay raise, which comes at the expense of the guys at the top of the pay band, who would get a smaller raise.

Barring a pay raise, the 747/777/330/765 guys would actually need to take a pay cut to bump up the pay of the 757/767 guys.

Bad idea.

CVG767A

Holy ****! I agree with Carl!