Phil Says It All
 

Gentlemen—

I have already voiced my initial concerns with my reps and the MC in previous correspondence that is attached below over the direction of the TA. One response assured me that the negotiator’s had constructed an impenetrable Maginot Line of language intended to make the proposed concession unusable by the company. Another response cited what he perceived as lack of pilot engagement and participation at events. He concluded there was simply lack of support and enthusiasm while my take on it is the pilots are not enthusiastic about self-gutting their contract during times of record profits. It shouldn’t take much to excite the membership by extracting an up contract from the most profitable airline in the history of the USA and one that has an investment grade financial rating. Those profits and ratings are courtesy of your constituents, the pilots who made those shiny management metrics possible. Management wasted no time rewarding themselves. Now it is the Delta Pilots’ turn.

I was told the AIP language was still being written and subject to change, yet lo and behold, my inbox is filling with Negotiators’ Notepads outlining TA highlights. How is that cart arriving days before the horse? Then a bootleg copy of what appears to be the AIP in all its concessionary glory surfaces on the internet apparently written before the document was even supposed to be done. Imagine my surprise to find with only a cursory glance that the tracked changes are significant to sections that are extremely important to everyone’s long term career including but not limited to Scope, Scheduling and most of all, Profit Sharing. Most if not all have a decidedly company slant compared to what is current book.

I want to address Profit Sharing separately. Once again I was told a sad tale about a company so smart that their union was out foxed and out gunned by language concerning the construction of a pool of money to be divided and powerless to do anything about it. I find that strange because it seems pretty clear to me based on the words written down in said contract that the pool will consist of specified funds. You would think it would at least merit one of those grievance things that unions often do. I was then told a grievance couldn’t possibly win. It would be a waste of time. Forget for one moment that even the appearance of standing up for the pilots and the contract during negotiations would be a rallying point for pilot enthusiasm. So once again I am told we bought language that was supposed to protect us from nefarious action by our employer and we were simply not up to the task of constructing it on the front end or defending on the back end once approved. We need to pay a second and a third time. Then I see that the new Profit Sharing Pool language in the AIP has been changed. Why does it need to be changed if the company would win a grievance challenging the old language? This is the true waste of time if the first waste of time was a true statement. It appears it isn’t though or else the company wouldn’t have insisted on changing that pool language. As if this isn’t troubling enough, there are 2 outstanding grievances concerning actual PS implementation that haven’t been acted on. A month or two of delay is inevitable however we are approaching a year without even a System Board being convened. This reeks of another concessionary tire fire starting up. Are you really intending on letting Delta write off every single currency debacle, fuel hedging loss, and Beanie Baby gamble going forward in clear violation of the contract? How can you say with a straight face you left Profit Sharing untouched? The company is apparently going to be given the green light to bulldoze as much money as they care to out of the pool destined to the pilots. The bean counters are only limited by their creativity, deceitfulness and greed. None of those three are apparently in short supply at Fort Widget.

If you are honest with yourselves, an industry standard pay raise in the form of an extension might pass the membership. C2K/UAL plus a buck and a quarter has a nice ring to it. Subtract out all the concessions, especially Scope, Sick Leave and Scheduling, means this will never pass the pilot group. Factor in the back door and frankly offensive Profit Sharing grab the company will take full advantage of, then this AIP is an epic you fill in the blank. I am hoping that against previously dashed hopes that enough of you will wake up and realize a second pilot rejected TA in 18 months does not bode well for the association or any of you. “A good deal will sell itself” and “a TA that is strongly ratifiable by a large majority of the Delta pilots” were words I seem to recall. Make major changes or better yet stop it until you meet that operating principle. If the company wants to rush, make them pay for it. If the MEC Admin is rushing then ask them why. The pilots are willing to wait for the right deal but definitely will not support the right now deal.

Sincerely,

Capt Phil Farrell
C44/ATL

Below are my original letter to my reps and the MC as well as my original responses to responses I received. A LOT has changed since then.

Gentlemen—

I am writing this letter on the eve of a vote on a comprehensive AIP that may subsequently become a TA sent to the pilots for a ratification vote. Delta was quick to announce on the company web page that this agreement is an “Industry-leading package of pay, benefits, and work rules”. What surprised me was the parallel quote coming from our union that the agreement “achieves the goal of advancing the profession while raising the bar for all airline industry pilots.” I will delay final judgement until I have read the contract language, however given the previously released AIPs, MEMRAT passage in my opinion is in serious jeopardy. Keep in mind the previous MEC was also certain pilot polling indicated passage of their overwhelmingly rejected agreement.

Had the post rejection reengagement proposal been floated then embraced by the company during the summer of 2015, I think we all can agree it would have passed overwhelmingly. Unfortunately, the world changed and price of real estate went up. Many of the major airlines have negotiated substantial raises, all without significant concessions since last summer. The Delta pilots took notice. Delta management has only demonstrated that they want an agreement on the cheap, laden with toxic concessions. The most profitable airline in the history of aviation (thanks to our previous sacrifices) has needs so numerous and far reaching that it is impossible to enumerate them all.

As far as affordability, Delta has spent more money buying other airlines than restoring their pilots. Delta has made more money since bankruptcy than it did in its first 7 decades it flew combined. The reissued bankruptcy stock is now investment grade, again a goal attained thanks to our cooperation. It is our turn now. Delta can certainly afford a restorative contract without any more concessions. Thanks to “me-too” clauses our competitors were clever enough to negotiate, Delta cannot logically argue that Delta pilot pay rates will prevent them from competing. AMR and UAL pilots will automatically get a raise if we leapfrog their rates.

I directly supported 5 of you. After reviewing your campaign letters and statements, 3 of you have seriously disappointed me. Leverage takes Leadership and it also takes Patience. The company has been trained for over a decade that the Delta pilots will never stand firm during negotiations. They will continually offer either unilateral concessions to entice management to the table or lower their own counter if the company negotiators refuse to budge. I am glad a few particularly toxic AIPs were tossed and someone is finally saying no to any more 76-seat RJs at the connection carriers. Far too many concessions remain however or have yet to be revealed. More negative SL changes, fitness review boards and immediate forgiveness of the JV Atlantic production imbalance by lowering the minimum Delta flying level unfortunately continues this negative pattern. This time instead of FO trip pulls, we are proposing to change the entire open time process to allow the company to pull both Captain and FO trips that could go to more senior pilots. There is a very good reason no other major carrier has Virtual Bases. Delta is unable to coherently staff the current bases. VB will affect every single pilot in every category that has a VB because time will be robbed from the current bases to staff them. I take no comfort that this will be a so-called experiment. The company has so many camels with their noses already under our tent there is no room for even a single additional one. Are the numerous concessions truly “legitimate operational needs” or simply greedy grabs from a company making over $8 BILLION annually?

I want to acknowledge the AIP pay rate finally surpassing the 2004 Delta rates as well as lining up with the rest of the industry. We have achieved essentially the 2016 Industry Standard rates. Is there any data to support the Delta pilots in 2016 would support anything less than industry standard? Let us hypothetically consider 2016 a contract extension for a moment. Call it status quo everything for an industry standard pay rate and a 4 not 3-year contract extension. Would the Delta pilots embrace that? Now add in all the remaining major concessions balanced only by marginal plusses on the periphery. Do you see why I am concerned about ratification? This does not look anything like an agreement ratifiable by a large percentage of Delta pilots, the stated goal. Everyone wants a pay raise however letting Delta management roll another shopping cart through the middle of our contract in this positive negotiating environment is unacceptable and risks Rejection Number Two. Rushing to meet an artificially short timeline has not served us well in the past. We paid dearly to place a floor on the trans-Atlantic flying in return for signing on to the original JV program. The company thumbed their nose at us for years then paid a parking ticket for years of speeding and reckless driving. Is this MEC seriously thinking of rewarding them for previous bad acts by lowering the floor further? Legitimate operational need my Surface 2.

If you think the pilots weren’t engaged or motivated to take this the distance, please think again. I wasn’t at the Marietta Pub to express my concerns because I had to get up at 0400 to organize a picketing event the next morning at the HQ. The pilots I speak with at these events and on the line are full of enthusiasm. They will go to the mat with the company, only not for a concession-laden, rushed deal on a false timeline. After over a decade of retreats, there is no reason to not get it right this time. Fix the remaining concessions or tell the company this deal is not a deal that will pass the pilot group. The pilots still have gateway issues unaddressed while the company only has unresolved greedway. SWA is already pressing for improvements to their current TA. It is not too late to pattern up. Don’t raise unity as a false banner to send a defective TA to the membership as the last MEC did. For once worry about not what the NMB or Richard would think. Rather, concern yourself with what the pilot group thinks. Ed certainly doesn’t lose any sleep over the NMB, but he does over a motivated pilot group. Thank you in advance for fixing the AIPs. Make this a TA ratifiable by an overwhelming majority of the Delta pilots.

Sincerely,

Capt Phil Farrell

C44 ATL



Response A:

[Name Deleted]—

The numbers of pilots don’t tell the whole story. When you announce an event on short notice many don’t even have the day off or already have plans. Many are not on a war footing where they read their emails every 15 minutes and clear their schedules. I don’t consider that an excuse but it goes back to a more important issue. You imply that shows lack of support so the more basic question is why? We talked after the first event at the airport in ATL and the support couldn’t have been better.

The apathy you detect is for the lackluster position the MEC was taking. Instead of fighting for something truly restorative, we were rushing to settle for industry standard rates and a slew of concessions. We were asked to write to the company that we want a contract now yet the contract that was being negotiated kept going backwards from where we are at as far as work rules, Scope, and benefits. I know you disagree but I am telling you what the overall perception is. Settling for less drives the participation down. A show of resolve will gather a lot of support. The two are interlocked.

I was writing because I still think there is a chance to snatch victory from possible defeat. Forgiving years of JV violations sticks in everyone’s craw. Saying PS is untouched when we are not having our PS grievances settled in our favor means we could lose PS from current book. VB with restrictions is still VB. SL modifications is the same banner as in 2015. You obviously see where I am going with this. If this was a contract extension people would vote for the pay aspect and the duration but it is not. All of the shiny things given to management mean a lot. Delta says we are industry leading. OK, then make them put their money where their mouth is. Why don’t we have a true me too clause? Likely because they know there are still other properties that will go even higher, hence the rush.

All I am asking is to put aside the politics for a moment and leverage this into the type of agreement it will likely be sold as.

Cheers,

Phil

Response B:

[Name Deleted]--

If VB is unusable as you say then please take it out of the agreement. That will save everyone a lot of heartburn.

Also most importantly, PS was stated as being kept “unchanged”. There has already been an agreement between the Chairman and the company that we would not dispute the pool language interpretation when the other employees were yanked from the pool. I think this was a tactical error. We likely would not have won the grievance however it could have been used for leverage with the other grievances on PS. Which brings me to the second part of my point. There are 2 outstanding grievances concerning previous PS and one time charges. NOTHING has been done for almost a year. These grievances are in risk of timing out. Have they been settled in our favor as part of this AIP? If not, we are rolling the dice that someone won’t drop the ball making our PTIX calculation a joke.

The PS language is clear. The company should concede this point and settle as part of a TA. If not, then PS is not unchanged from current book. In fact it could be reduced tremendously going forward as every manner of one-time charges reduce our pool.

Phil

Pay attention to this part:

"Are you really intending on letting Delta write off every single currency debacle, fuel hedging loss, and Beanie Baby gamble going forward in clear violation of the contract? How can you say with a straight face you left Profit Sharing untouched? The company is apparently going to be given the green light to bulldoze as much money as they care to out of the pool destined to the pilots. The bean counters are only limited by their creativity, deceitfulness and greed. None of those three are apparently in short supply at Fort Widget."

Remember management's counter offer, where they wanted to take their bonuses out of the PTIX calculation?

This TA does just about the same thing, allows them to change the way they calculate PTIX, which of course affects our PS calculation, in the downward direction.

Now look at the changes to the JV scope, another downward direction for our share of International flying.

This is shaping up to be another Cost Neutral TA where we pay for the 18% with concessions everywhere else!

Hypnotoad has a lot of influence and is very eloquent. The MEC would do well to listen.

This is a really good thread.

Phil is very smart.

He would also make a terrible negotiator.

I can't see post because Jerry is on my ignore list. He has cried wolf too many times. If someone else posts it I'll read it.

Phil says a lot, but I'm not sure why his opinion has more value than any other pilot's. Is there something about Phil's opinion that is more compelling because it's Phil's?

My American friends were thrilled to find they have a snap up to our pay rates. Another big raise on the way for them and APA never even told them!

What did they give up for that?

My American friend said the snap up went away with their jcba.

Not according to Phil!

As an afficionado of long posts, I enjoyed Phil's missive. Nice writing style. I mean that sincerely.

Phil is a super guy (I mean that sincerely) and a great authority on beer and brewing. I'd trust him with my family's life.

However being a great guy with a clever and humorous writing style still doesn't exempt him from the facts.

I don't know him personally, but he's certainly articulate. I read the PS part twice. I think that's the latest crisis/drama Jerry was trying to promote, but Phil lays it out in a clearer manner.

Essentially, you have to believe that the old language would let us capture the other employees' PS, and that a long-shot grievance would have succeeded. Admittedly, the other language was not written for dual PS pools.

So IF you first make abstraction of the fact we were able to maintain our PS intact (AND the fact you have an overall deal), THEN you can complain that the long-shot payout didn't come through.

So you have Jerry cherry-picking other contracts, and Phil elegantly cherry-picking alternative outcomes.

Here's the Cliff Notes version of Phil's letter posted by Jerry:

1 - Management rewarded themselves first. Now it's our turn.
2 - He doesn't like Scope, Scheduling, and mostly Profit Sharing language.
3 - He mostly does not like the fact that we will drop our PS grievance.

My opinion: the overall deal is a negotiation. We kept PS intact and unchanged which puts us 5.74% better than the last TA. Also, our share of the employee profit sharing pie increases from 36% to 40% thus increasing our PS payout from where it currently stands. It decreased after the other employees got a raise last December.

In return we allowed language that made clear that our PS plan payout is distinct from the other employees because ours is now better. We have a grievance which says due to the technical language of our contract we should get more PS than we were. It may or not pay (I don't think it would) at some time much later in the future for an undetermined amount. The question: Do you turn down this TA now with a guaranteed payout of 30.2%, the same PS formula as before, with other improvements in the TA, all for an unknown amount that may in fact never pay off at all in the future.

That's for everyone to decide hopefully.

And in fairness to Phil's clever metaphors (and they are clever) he implied management's fuel hedging and currency trades were "Beanie Baby gambles". I do agree with Phil there.

Essentially, you have to believe that the old language would let us capture the other employees' PS, and that a long-shot grievance would have succeeded. Admittedly, the other language was not written for dual PS pools.


While this would be nice it was never going to happen-ever - even if we did win the grievance.

Even if DAL lost the grievance what would stop them from just giving the money back to the non-contracts? If it appeared that DAL was going to provide the Pilots a windfall and actually pay the same amount of total PS before the non-contracts had their PS reduced the company would simply give that money back to the non-contracts.

That is the flexibility of dealing with non-contract employees. If they knew they had to pay it anyway does anyone really think they would reward the Pilots? Especially if the non-contracts were to see their PS reduction go directly into our pockets.

Scoop

Good point, Scoop. I just didn't want to get into how unrealistic the payout scenario is. There will always be a conspiracy theory, and always be something of dubious value we clean-up that will be viewed as giving away the farm. There always has to be one for Jerry to float or re-broadcast, otherwise DPA is revealed as making no sense, and legal bills are still due.

Never forget the day we caved on RJ's!

Scoop,
That is a a very good point.

So will the $762 million Bastian has already lost on fuel hedging come off PTIX and lower our profit sharing?

Were not those hedges purchased on RA's watch?

With regard to the profit sharing:

People are saying it in various ways, but it seems pretty clear that the negotiating committee is not being entirely truthful when they make the statement that there has been no change to profit sharing.

It sure looks like the plan has been changed. There's been a backdoor alteration to the definition of pre-tax income via the settlement of outstanding grievances. By allowing expenses that were previously classified as "extra-ordinary, one-time or non-recurring" to now be counted as ordinary expenses the company is able to reduce the PTIX and thus reduce the profit sharing.

The real problem is where will it end now that we have opened that door? There are all kinds of expenses they could use to reduce our profit sharing payout. Looking at management's past behavior we can be sure they will exploit this new loophole we are providing to the maximum extent possible.
We should be tightening those definitions instead of broadening them.

10 years or so, give or take.

Yes, they were.

I flew with the Hypno-Toad not too long ago. Good guy, has good taste in beer too. He does enjoy his Bud light.

If one wonders what it's like to swing gear for the toad just watch this.



O.K. so it wasn't exactly like that. He does however make great points when it comes to all things contractual, he does have a big picture outlook on things.

Just look at the guys that swarm a topic about his post, and it is obvious what they are afraid of. Shift the topic from his on-the-money points to beer. Just sad.

Exactly. Facts are getting in the way of the NN spin.

Damn it! Who released the TA before we could lie about it?!??!?

Now that we have the TA to compare to the NN documents, can you point out the portions of the contract that conflict with the notepads. I am not having much luck finding them.

Check,

I am not sure that you are correct on this. According to what guys are posting on FB and Chit Chat - the guys who have said the above have since retracted that, and admitted also that they were in error. They apparently misread the leaked TA.

I believe the contractual wording of there PS section is identical and has not changed from C-2012.

This issue is however complex - some are saying that by withdrawing our grievance we are in fact making it easier for the company to monkey with PTIX in the future. Since we withdrew our grievance and it was never adjudicated I have no idea if this sets a precedent on future grievances.

I am fairly certain that the contractual PTIX definition has not changed. I will try to verify this but hopefully one of these social media FPL loss guys can research it and post it.

Scoop

The contract language has not changed.
I'm saying the grievance settlement makes that language mean something different than it did last year.

I hope the MEC will spell out exactly what they agreed to with management as far as whether Venezuelan currency losses and all the other one time charges can be used as ordinary expenses to reduce PTIX.

If management is now free to decide for themselves what is an ordinary expense and what is a one time charge then we have opened Pandora's box.

I'll tell you what's next - they are going to recognize a bunch of losses related to their investments in GOL and Brazil. Either a write down or a bailout in some form. And they are going to call it an ordinary expense and take it right out of our profit sharing.

There are a few folks here still waiting for you to present the "facts" that are getting in the way of the NN spin.

.
Yes. So what? If the Company loses money on hedges, the IRS allows those losses as a legitimate business expense.
.
So are you somehow trying to opine that the Company pre-plans hedging losses so as to cut profits and thus employee profit sharing payouts?
.
So WHAT IS YOUR POINT IN THE ABOVE, QUOTED POST?
.

I don't understand what you're saying. Did the language change, or not? And if so, did it change with the old grievance settlement, or the TA?

Check,

Absolutely nothing has changed in regards to PS. The PWA language is the same. The grievance was withdrawn without prejudice so absolutely no change to what our contractual language means.

Scoop

Lost on hedges but paid MUCH LESS for fuel and hence, was a winner. hedging is insurance. If you lose money on hedges, that means the price of gas is lower than expected. About a year ago, I caught some of J Graham's talk in the ATL pilot lounge. Re: fuel, he said that every penny change in fuel prices is 40 million a year difference. he said we were paying a little over a dollar less for fuel than same time, previous year. Over 4 Billion in savings. Now I now it would be great if we didn't hedge and just "rolled the dice" on spot prices, but you guys would crucify mgmt. if that backfired. And be honest, NO ONE could have predicted Oils massive drop 2 years ago or even it continued low prices.

Again, it's insurance for volatility and negative geopolitical events. Let it go.

Important thing to remember is the economy is slowing. This is talked about in a recent IMF report. If the TA gets voted down the environment for further negotiations can detroriate and then we will be lucky to keep what we have. I think management will keep to their positions of no full retro if this negotiation continues. There are concessions in the new TA but they are minor and I don't think they sour the whole deal. Nothing in the laungage for scope points to a scale back of wide body flying just a clarification of the current JV stance.

When you say NO ONE, are you excluding those on the other side of our hedges? I'm just not ready to "let it go" when we're talking $Billions in profit losses. That kind of money justifies some deep-dive inquiries, whether you think you already have the answers or not.

Where did the company announce its position on retro? You realize that their decrees don't determine what we will ratify, right?

The guy who purchased those hedges just resigned from Delta completely yesterday. Happy?

Over all our fuel costs were lower for the year however they would have been much lower had we not hedged. We paid considerably more then our competition not to mention around a billion we dumped into the refinery.

A third-world Marxist dictator confiscated Delta's bank account.

That is pretty much the textbook definition of a "loss due to an extra-ordinary event".

Management told ALPA to stick our contract language where the sun don't shine and called that event an "ordinary expense".

ALPA would have won that grievance easily. Management pulled that accounting trick for the sole purpose of screwing the pilots out of some money. The same reason they gave all the non-contract employees raises in December 2015 instead of the traditional January 1st.

I would like to know the effect of dropping that grievance. In the future there will certainly be other accounting charges that all other corporations have traditionally recognized as non-recurring, one time or extra-ordinary. Is management now free to deduct all of those from the pilot's profit sharing?
If so, I'd call that a change to our profit sharing program.