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Delta to buy stake in China Eastern Airlines

Old 07-27-2015, 06:30 AM
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Default Delta to buy stake in China Eastern Airlines

http://news.yahoo.com/delta-buy-stak...140643702.html

Last edited by snowdawg; 07-27-2015 at 06:34 AM. Reason: link
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Old 07-27-2015, 07:51 AM
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So perhaps this is why the company pushed so hard for an early agreement? Perhaps that JV language change was a bigger issue than most thought?
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Old 07-27-2015, 07:57 AM
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I posted this post vote. I also posted something similar pre-vote.

In a way, I think it highlights some of the dangers of non disclosure agreements. It also highlights some of what NA15 had in store for us.

Originally Posted by scambo1

The change to BHs is just a step in deltas larger plan to outsource the airline. Unfortunately, that isn't so obvious to the guys that like to go to executive birthday parties. It is pretty obvious to anyone with a business mind who sees DAL growing the network without the involvement of the pilots who used to own the scope.

The JV out of compliance was absolutely contrived and maintained by the company for the paltry fee of $30M. Why because they understand contract law. They know when the contract is up for renegotiation, it is not possible to settle on the new language without them being in compliance...

We settled on a floor in pacific flying 20% below what the NWA language had. The company's argument was that NRT was marginalized and nobody wants to drive there. I don't have the big data to back up that contention, just my observation of little data. Since removing lie flat seats, I haven't ever once seen a single business seat open to or from NRT. In fact, I may have flown one flight with more than a handful of coach seats available. No joke. Anyway, we lowered the floor in the Pacific.

Skymark has been in the news somewhat tied to Delta for at least 9 months, maybe a year. They've been struggling, the Japanese version of a LCC who's eyes were bigger than it's stomach. They have daytime haneda slots (as opposed to our midnight slot). They also have A380s on order with options for a couple more. We, the pilots who pay attention have been watching this slow motion partnership build momentum over the past year. Now, DAL is the front runner who is going to bail them out of bankruptcy. Hey, remember when we bailed Aeromexico out of bankruptcy...for. 10% stake? Yeah, they went out and immediately bought 787s. Guess where the fly them? NRT, that crappy airport no one wants to go to.

GOL partnership, same thing. DAL has already stated our South America flying growth is over. Why? Because GOL is going to grow it for us.

Shanghai is being looked at as Deltas new NRT. We are partners with china eastern and china southern. They are both big and growing. However, even with 1.3 billion Chinese as a potential market, we reduced our pacific floor by 20%. That's not very forward looking or strategically planned.

Now return to the euro JV language change from EASKs to block hours. EASKs make an A380 worth 4.7 757s. Block hours make an A380 worth 1 757. A loss of nearly 4 757s worth of capacity. In labor contract discussions, status quo is always the guiding principle...actually it more like law because it's defensible as if it were law. So now BHs are the new law. We are only somewhat protected by this law because the underlying document for the Euro JV is 50%+/-5% of EASKs. So in Europe, dal can flex down to 45%. But, don't forget status quo.

BHs as status quo is the new JV language. The boilerplate for future JVs. JVs with sky mark, china southern, china eastern, gol, aero Mexico, etc. JVs that haven't been written and agreed to yet. But, they will be written...

If you don't see Billions in there, I can't help you.

So, you advocate to use rearward looking data to project onto forward looking business plans...and somehow insanely believe the future will look like the past. I advocate the opposite.

The Delta pilots own their section 1. OWN. It's ours. We have to protect it because it has tremendous value. Sadly, right now we have to protect it from being squandered by our union because they use rearward looking data to strategically plan for the future...

Easily worth Billions.
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Old 07-27-2015, 08:28 AM
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Originally Posted by like2fly2
So perhaps this is why the company pushed so hard for an early agreement? Perhaps that JV language change was a bigger issue than most thought?
I'm not sure I follow you. Obviously the company didn't need any changes to the contract to execute on this acquisition.
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Old 07-27-2015, 08:41 AM
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Originally Posted by Falcon7
I'm not sure I follow you. Obviously the company didn't need any changes to the contract to execute on this acquisition.
They can't paint the JV planes in Delta paint, the TA allowed them to, if the chairman approved it.
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Old 07-27-2015, 08:58 AM
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Originally Posted by Falcon7
I'm not sure I follow you. Obviously the company didn't need any changes to the contract to execute on this acquisition.
They already codeshare. The issue is JV and livery.
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Old 07-27-2015, 09:06 AM
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Originally Posted by Mesabah
They can't paint the JV planes in Delta paint, the TA allowed them to, if the chairman approved it.
What in our contract prevents them from painting the Delta livery on the planes? The TA prevented Delta from unilaterally putting the Delta livery on an international partner's aircraft. Delta would have needed to get authorization from the chairman. Unless you can prove otherwise by pointing to the current contract language that would prevent it, I don't think they even need to do that now.
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Old 07-27-2015, 09:09 AM
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Originally Posted by scambo1
They already codeshare. The issue is JV and livery.
And they can have a JV and paint the livery today. What's to prevent them?
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Old 07-27-2015, 09:14 AM
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Originally Posted by Falcon7
And they can have a JV and paint the livery today. What's to prevent them?
The teamsters?
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Old 07-27-2015, 09:14 AM
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Originally Posted by Falcon7
What in our contract prevents them from painting the Delta livery on the planes? The TA prevented Delta from unilaterally putting the Delta livery on an international partner's aircraft. Delta would have needed to get authorization from the chairman. Unless you can prove otherwise by pointing to the current contract language that would prevent it, I don't think they even need to do that now.
Our current scope prevents that action because it's not listed as a permissible action by management. That's why management had to list it as a new permissible activity with MEC chairman concurrence. The TA failed, so they cannot do it now.

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