Right on Scambo! the MD90 analogy is better than you think...
The crack speed is where its at... Huge increase from just a few years ago and a significant component of our fuel cost. There is a disconnect between the crude price and the price of the refined distillates. Most of the delta is attributable to speculative markets where simultaneously buying and selling futures of crude and finished distillates, typically heating oil and gasoline.



Traditionally the crack spread was a hedging tool used by refineries to control raw product price and maximize yield by producing the the optimal quantities of gasoline and oil. With the widespread increase of speculators from outside the supply chain, many smaller refineries have found themselves unable to participate from a capital standpoint and as ironic as it seems fallen on hard times with the record high fuel cost...
The large fully integrated refineries owned by the multinationals have had no such capital conturing putting further pressure on the independents.

In town, a local refinery recently was modernized, upgraded and capacity increased 30-40%. The owner was unable to participate on the necessary scale in the capital markets to control the crack spread, so the refinery was sold to an Israeli company for $20M about a year and a half ago. MD90 indeed Scambo Ironically production was halted in Jan 2012 because of the inability of the current owners to adequately participate in the financial markets...

So guess who comes to the rescue? Goldman Sachs.
The refinery will now buy crude oil at market price from a unit of Goldman Sachs and also sell refined products to the same unit of Goldman at market price. So now Goldman Sachs controls the crack spread directly...

The crack spread and the financial markets controlling it is why fuel prices currently are high and exactly why Delta is getting in the refinery game. By controlling raw materials, refining and refinery output, Delta can massage yields at every step using the revenue to offset fuel price fluctuations. The cost for entry is low and the financial benefits of running a refinery are realized before and after refining operations...

Cheers
George

 

So would you rather your airline be run by a bunch of greedy idiots that used to be pilots? You know what the lineage is for some very important people at DAL who are doing at least a good job. They would likely claim you to be barking up the wrong tree.

When you begin to follow the money you may begin to realize a few things.

1) CRM and TEM has all but extinguished the pilot error accident. Airlines can get by attracting less qualified applicants to work in their policy constructed bubbles. Therefore your compensation is sapped away as the company manages your expectations and functions at ever improving safety levels. Wonder how Pinnacle got an "industry leading" contract? And you see how quickly the people that pay PNCL for their services forget a cold winters night in Buffalo.
2) The high historical earnings of pilots created a pilot surplus when there was no demand for major airline pilots (2003-2007). The regionals attracted the lowest bidder with a promise of providing experience which would be the golden ticket to the big money. All the while investors compared safety rates at major and regional and couldn't see a difference. Therefore the boards were compelled to drive wages lower. Supply and demand right? Think about how many of your friends this concept left as a low seniority RJ Captain.
3) On the cusp of a massive shortage of pilots almost all of you look aft, knowing what was, but not looking forward, knowing that your next contract must be good enough today to buy pilots away from UAL, SWA, FDX, UPS, Emirates, Cathay, and basically every airline on the planet in 2018. When you wait around for revenue generation to be hampered by pilot staffing it's too late. You've lost the fight, and by then it'll be practically too late for 5000 of you just at DAL. 5 years is a reasonable amount of time to fill your pool with steelhead. The deal should only be 3-4 years though.

So basically what I'm saying is that asking for your old contract back makes you look foolish and entitled. Selling the idea that all of your friends will be directed to the highest paying airline by you come crunch time will do more than claiming if you aren't paid more you'll make a bad decision and crash an airplane is a much better business strategy. Besides, you had better odds of winning the lottery.

So don't think for a second that I don't fully support parity plus 5% with SWA. If we want our friends in waiting to have long and fruitful careers we need to sell the idea that we'll send them elsewhere unless we're certain that's what they'll have at the helm of their MD-88.

Demand that Delta keep the bar high to ensure the money continues to flow like the salmon of Capistrano.

So I'm not managing your expectations, and I've done my Section 10 time, and run my own committee for ALPA. I'm just saying you all need to look forward. And not compare yourselves to NWA 1992 and $20/barrel oil. You're making an apples and oranges comparison.

 

Absolutely correct.

 

You're right. They will "get by". Until they don't.

 

Me either...guess I'll have to step up my game.

 

I found that list to be shallow and pedantic.

Indeed.

 

I think why he said that was because every time the pilots of an airline make any gains, every other labor group rushes in to management's offices in a mad dash demanding bolshevik "me too's" even when completely out of context.

For example, if we got 30-45% "raises" across the board, every other labor group would squeal about "me too" and "OMG! did you see how much the pilots got!!" yet it would take that amount to bring pilots up to pre-bankruptcy pay rates while most other labor groups are already within 10% or less and some are already back anyway. Think about that. The pilots have given far disportionately more than any other work groups and we're not even asking for all of it back. Just some, yet we *will* be accused of "demanding too much" just watch.

If pilots get more of a 401(k) increase than other groups, will that be "unfair"? The pensions that the pilots gave up to "save the company" in bankruptcy was pretty huge and now its gone. If we need more of a percentage increase to continue to close the gap of what was once had, is that really us getting more than others or is viewing it like that just a bit out of context?

Pilots have unique medical circumstances and criteria that no other work group has, but if we got "better medical" there would be cries to the high heavens about how unfair it is. Same for work rules and the regulations of flight and duty time.

The company constantly threatens us with that kind of stuff too. "Well if we gave you XYZ then every other group would want it" etc. Constantly. From pay to work rules to jumpseating (which I'm glad you guy's have now, is a benefit pilots singlehandedly created, fought for and paid dearly over decades to get...suddenly gets given away instantly to an entier industry of other work groups while management says "see what you guys did!") every "gain" we aim for, even if it isn't a gain at all but rather only a partial restoration of what was had previously, is "costed out" by the company as applying to the entire company, which of course usually makes almost any gain too costly to get and we are supposed to play within that little fenced off area of so called fairness to calm the masses.

The biggest thing I wish other work groups would concentrate on is scope. Forget "me too-ing" ours...go out and negotiate your own. "Every aircraft in the Delta holding company and/or that flies DL code in any fashion over 49 seats shall be flown by Delta seniority list FA's and crewed above and below the wing by Delta gate and ground agents, worked on by DL mechanics, dispatched by DL dispatchers, etc" or something like that.

Instead we spend the most negoating capital on trying to stem the mass outsourcing of our jobs (and yet still sometimes we blow it) while no other group does nearly the heavy lifting we do yet all take for granite that whatever "Delta" flies will be crewed by their work group's seniority list after the pilot group locks in the scope of their contract. We've already let the company outsource thousands of your jobs to SkyWest, ASA, the Republic "air group" and many others. That was 100% us. Whatever we decide to allow them to outsource is gone from you as well. That's what you should be marching into their offices about.

Again, don't take offense to what he said or how he said it. He's just trying to pre-empt one of the oldest and most tired moves in management's labor busting playbook. The company will likely, as companies always do, especially airlines, use internal and external lines of communication to rile everyone up against us as one more pressure point in the court of public opinion. They always pull that play. I don't think I've ever seen it not happen. Same old move, and a move that, justifiably, gets under our skin a bit.

 

With lots of little asterisks that say it "depends on what the definition of what stuff is".

 

question; if we buy an oil refinery to offset fuel costs, and if we buy fuel for dci, doesnt that mean that pesky high fuel costs for 50 seaters is about to drop?

and havent we be told the 50 seaters we're about to disappear on their own because of their fuel casm so need to scope them?

but what again is our scope limits on 50 seaters?

 

Correct me if I'm wrong but are not every other employee group near/close to their pre-bk wages? Did any other group take the 40+% whopper we did? Why don't we claim "Me too!"