Freighter Captain

The following exchanges (paraphrased closely) took place between the
judge and the company's hired gun, Jack Gallagher, this week in NYC.

They should NOT be interpreted as a sign that the judge favors ALPA's
position, but they certainly warmed the heart of the ALPA attendees.


*****************

Upon numerous mentions of pay/benefit levels at other bankrupt airlines:


"I don't care what other airlines have done. No one else's finances
are the same as yours. I don't care what others pay. Delta will pay
what it can afford to pay."

*****************

Upon mention of "management flexibility in small a/c (scope relief)


"Scope relief .... in other words, get rid of Delta pilots. I know
what you want to do."

*****************

Upon mention that certain changes would make the company stronger:

"You spent 2.5 Billion buying back your own stock"

But your honor, that was before Sept 11:

"It was still a real money loser."

******************

The Judge said, "An across the board pay cut (like the one proposed)
is particularly unfair to the lowest paid pilots."

But all the other 44,000 employees took a pay cut .....

(interrupting him) "I don't find that persuasive. All those folks
can move to another job. Pilots cannot. They have one skill set and
are stuck with you."

Not necessarily, your honor.

"Well, you fired 6000 a few years ago and they are not lined up
outside your door are they?"

******************

"I don't understand why Delta is throwing darts at its pilots.
You think they are smaller than you, so you can stomp them."

*****************
Upon yet another mention of other airline pay, and of a DL witness who
will testify that, based upon market economics, many other professions
should be paid more than pilots (optometrists, pharmacists, judges,
lawyers)

"You keep telling me about other airlines and other pay. Your expert's
list is meaningless to me."

******************

Gallagher attempts to read excerpt from Duane Woerth spring speech to
show that ALPA is unnecessarily militant and coordinated in fighting
management.

(interrupting him) "So what? You carry a big stick. Let them carry
a big stick. Besides, I don't even know that DL pilots listened to that
letter."

*****************

The judge repeatedly brought up, and would not let go of, the fact that
DL included 6 or so "non-negotiable" items that must be in any final
agreement. These included relief in scope, code share restrictions,
minimum block hours, etc. She first asked where the dollar value of
such items was to be found.

Your honor, these are not cost issues, they are intended to strengthen
our company. They can't be quantified.

"(shouting) Don't tell me these aren't economic items. You better
figure out how to quantify them. This is $ that will come from the pilots'
side of the ledger. "

"If you code share on AF from JFK to Paris, that is taking money
out of DL pilots' pockets."

"If you reduce required minimum block hours, you are taking money
from DL pilots."

"If you remove restrictions on small jets, you are taking money
from DL pilots. Why can't DL pilots fly these 79 seat jets? "

Your honor, that would not be economically feasible in view of their
benefits package.

(shouting him down) "You see? Its money. These are certainly economic
issues."

Jack makes one last attempt to make his point: your honor, these items
are to strengthen the company, and the pilots will have more security
in a stronger company.

"Don't tell me this is to strengthen DL. A stronger DL means DL
gets more money .... and the pilots will get credit for that."

**************
As part of the discussion of these items, the judge did suggest that
one could be non-economic .... the "poison pill" clause in the PWA that
gives ALPA the right to extend or take a pay raise in the event of a
change in control. Attorney explained that an issuance of new stock
upon emergence from Chapt 11 could equate to a change in control and
trigger this provision.

The judge suggests that the parties simply add language exempting such
stock issuance from the items that might trigger the clause, as UsAirways
did. Then you could leave the rest of the language alone.

Your honor, that is a fine suggestion and certainly something that Delta
is willing to consider in negotiations.

Whereupon, the ALPA lead attorney, Bruce Simon, stood and announced,
"Your honor, ALPA has recently made that exact proposal and it has been
rejected by the company".

Much shuffling of feet on the company's side of the room.

**************

DL attorney led CFO Bastian through recitation of finances to illustrate
how desperately DL needed the full $335M from the pilots. Bastian maintained
that ALPA's analysis that DL had not yet taken full advantage of the
Letter 46 was flawed .... because "the airline is smaller now, and we
cannot save all that was intended in that section of Letter 46.

"They gave you the money. Its not the pilots' fault that DL just
didn't spend it. The pilots will get credit for that money."

**************

Finally, the last note that I made prior to recess on Thursday:

Your honor, DL must have the total amount we are seeking ....

"Well, I am not at all sure such an amount is appropriate in light
of the billion dollars the pilots have already given you."

mike734

Is this the same judge that declared DAL pilots way over paid last week? Did she find some sense or is she positioning for some "extra incentive" from DAL?

Vroll

If memory serves me correctly, judge was quoted in USA Today as saying pilot salaries were "hideously high".

Kill Bill

i've seen this before. the judge will zing delta... and give them everything they want.

AASuper80

Delta will be out of business by April of '06. The bond holders in Canada who hold all of the bonds are going to liquidate them at that time, I heard.

Kill Bill

how much does boeing and ge own? that's the ONLY thing that's kept UA going, the "too big to be allowed to fail" syndrome.

fireman0174

If I had $10 for every rumor like that I've heard over the years, I wouldn't need a retirement plan.