DAL/NWA early out?
 

Delta may offer retirement deal to cut pilot staffing
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Friday, May 08, 2009
Delta Air Lines has proposed to cut pilot staffing by offering incentives for pilot retirements, according to a Delta pilots union memo.

Delta management proposed the retirement incentive program to the Air Line Pilots Association at Delta to address “what management perceives to be a pilot staffing overage,” according to the Friday memo. The union discussed the proposal at a meeting in New Orleans on Thursday.

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Under the terms of the proposal, pilots who are eligible would get a severance payment, retiree travel benefits and medical and dental benefits for a limited period of time. Eligibility would depend on age and length of service.

The union plans to negotiate with the company on the proposal and should they reach an agreement, it would still be subject to approval by the union’s leadership. Eligible pilots would then have the option of taking the retirement offer.

Delta pilots were not eligible to participate in company’s buyouts this year and last year, which Delta used to cut about 6,500 employees throughout other parts of the company. Those buyouts included voluntary severance and early retirement programs.

Delta has about 12,000 pilots, including those from merger partner Northwest. Delta closed its deal to acquire Northwest last October.

So we are overstaffed.

they've already said we would be overstaffed this fall and possibly short next summer. Maybe they figure that they're going to have some serious training events coming up anyway and they would be better off training new guys next year and want to get rid of some top of the list guys. I have mat alot of people that are waiting for this. If they have a decent package they may just get a bunch of guys to take it. We're still having guys retire now without a PERP so this should help tip those on the fence. We'll See

What would you consider a "decent" package?

dont know, i'm not a senior guy on the verge of retirement. Ask me again in 32-36 years ;)

Each DAL pilot donating $1 a month to me for the rest of my days.

Nu

Has their been any word on the number of pilots they are looking to reduce staffing by?
(i.e. How many pilots is management looking for to take the early out?)


As far as furloughing the other side of the list goes, the only thing I've heard is that management would not furlough pilots if they anticipated on recalling them within two years. Just a rumor I've heard don't now how accurate it is, but it would make sense as far as RQ goes.

They are targeting 300-500 pilots.

Don't know what would be decent, but here's what would work:

1. Retiree travel benefits
2. Former NWA pilots do not take the 3% per year penalty for their retirements.

Most of my over 55 buds at NWA tell me they would jump in a nanosecond if they weren't taking such a big pension hit for leaving early.

Carl

Carl, it's not a 3% "penalty". That may be how the math is calculated (I don't really know how your plan works), but its really just a stretching out of the payments.

For example, pilot "A" retires at 60 and gets $100,000 per year for 25 years (on average).

Pilot "B" retires at 55 and gets $85,000 but he gets it for 30 years.

Same pot of money, just being drawn over a longer period. That seems fair to me.

PG

That is what all they ANC guys I flew with, also said.

Pg
 

PG,
I think the actuaries data says the pilot who retires at 55 will live to an older age than the pilot who retires at 60.....much less 65.

According to my former employer's data, I have about 2 months left to live.....glad I got a little bit of that A-plan while I'm still kickin':D

It appears the elder NWA guys may have hit the lotto. Get taken over by a co, take relatively no seniority hit, get a pay raise, keep their retirement, come into a better "current" retirement system, and looked like they would/could work until 65. Now they may (we do not know the terms) get a decent check to leave early. Which as someone pointed out was already happening in small numbers. I can hear the mad scramble now to the HR dept with guys trying to pull their retirement letters. We will see no more retirements until this thing is decided. Guys that left before this are kicking themselves. The up-front money incentive I'm sure will more than make up for any retirement hit taken over the last few years. :eek:

Delta Air Lines and Northwest Airlines both hit the lotto by merging. Just a quick reminder that NWA brought more cash than DAL, more quarterly earnings than DAL, and a higher market cap than DAL. Don't get me wrong DAL was a great airline...so was NWA. The new DAL will be better than both.

If you've got another plan that will remove 500 former DAL guys from the list...I'm listening.

Carl

Swine Flu, a few 48 hour layovers in Mexico City should do the trick.

I've been putting arsenic into the food of everyone who is senior to me since I started at the company, don't think I've got to 500 though.

Seriously though, early retirements followed by an economic recovery could make for some good news in a couple years. No?

Carl you forgot Delta brought NWA management to the merger. You al... wait... what did I just say? :p

I've only seen very few retirement photos in the halls of DTW, MEM & MSP.

We need far more to sign...

I think the math will look something like this:

If it costs x to train 500 downgrading pilots in the wake of a furlough, Delta will offer a package equalling x-y to the 500 pilots it hopes to take an early retirement. Y = savings the company + cost to upgrade pilots to take empty captain's seats.

Yeah, it's kind of depressing to see the bare walls when I check in. A few dozen new retirement posters would certainly brighten my day!

A few years back I recall popping off the rudder-trim cap on a bunch of -9s and reading "Retire you Old Fart!" written on the underside. I would, of course, hand it to the Captain and say "I think this is for you!"

Who knows? Maybe an early retirement package will keep some of our junior pilots off the street. I hope so...

When it comes down to it, there are more people than there are jobs in the United States. It is not just the airline industry having this problem. Our country has just about outsourced everything there is to outsource at the workers' expense while CEO's have pocketed millions. Our country is in trouble. We are now almost bankrupt and the solution is to raise taxes more. We are taxed more than almost any country in the world as is. Somewhere down the line something has to give, or our country will collapse. I am not sure capitalism works anymore. There is too much dishonesty and greed at all levels.

Of course that early retirement (monthly annuity) will be in great shape until the next BK if gas goes up to where it was a year ago. Analysts say possibly even 300/bl. And you know how DAL loves to honor and not try and terminate pilot pension plans. Remember, it was ONLY the pilots who had their plans terminated in DAL's BK. They offer an early out in a lump sum, then go for it. Buyer beware in a traditional defined benefit plan. Ask close to 2000 pilots that retired in 04/05 how that defined benny thing is working out for them.:mad: Oh and if that happens to be the case, don't ask YOUR union for any help at all. "Hey, you're retired, we don't have to represent you. Hit the street pal." Just my two cents. But wait, I don't get two cents a month from my former employee.

Jim VanSickle (Spelling?) Came to the ANC LEC meeting in Mar and said Mgmt has stated we would be overstaffed this fall, but even or short next summer and that break even on furlough is 18 months and that if they furloughed they would have to recall next spring for summer, so they are not going to furlough. This is summary, not exact quote...but DAL Mgmt can always change their minds. FWIW

If oil goes up to 300/bl, the US airline industry will shrink by half, permanently. I don't even worry about this scenario anymore, because even though I think the long term prognosis for airlines in the US is a shrinking trend, there's really not much point getting all tied up about it. It's totally out of the control of labor groups and airline management . . . a rational national energy policy is the prerogative of the US government. After watching for 40+ years, it's pretty clear that ain't gonna happen.

FWIW . . . I don't see any significant takers for an early out. For what the boys at the top are going to want, it will be much cheaper just to furlough and retrain. No judging here . . I'd probably feel the same way if I were the one at the top with the most to lose by an early out (great salary, seat, and schedule vs. a marginal "buyout").

I don't think capitalism was ever intended to be used the way it has been in recent years. It was supposed to be about free market competition and opportunity. Traditionally, companies that are run well are the winners. In recent years it seems the focus has been taken off of running a good business and put more on structuring things so that executives and Wall Street types can make a quick buck (actually, a lot of quick bucks!), often at the expense of employees and ultimately the consumer. This is just my opinion, but I think what we have been experiencing is a business fad. Twenty years from now, I'll bet college level business text books will talk about the failure of this period in American business history and the consensus will be, "what the heck were they thinking?!".

I don't think capitalism is dead. It's just a matter of how long it takes to get back to real capitalism instead of this bizarre distortion of it that we see today.

I just can't believe it has come down to this. The AGE 65 rule has predictably caused overstaffing situation after the merger. If the age 60 rule was still intact, I seriously doubt DAL would even think about furloughing pilots because hundreds of senior pilots at all major airlines would be retiring year after year and DAL would have to start hiring instead of making announcements that they are overstaffed.

I agree with you. I hope you are right about the business fad for our sake and our kids' sake.

In regards to your better "current" retirement system are you talking about company match? Because retiree health care is over twice as much as the former NWA plan, & those who may take the early out aren't really going to benefit from a higher match if they leave less then 1 year after the CBAID.

Truly not trying to flame ya, just curious. :)

I'm not sure what the difference is between the cos medical plans are. I do not use DAL's. I was just pointing out that overall the NWA side did not have the flush from the top that DAL had during the BK. The co is now trying to even out the two pilot sides before the SOC. It is good (and rightfully so) that this occurs prior to SOC and the NWA side can take advantage of their retirements. DAL already had their opportunity and that is why we have guys in their forties holding wide-body captain. I do not see many DAL guys taking this opportunity as they have no defined pension to fall back on we are now a younger pilot group.

The way it was explained to me from supposed "guys in the know" is that normally airline staffing looks like a triangle with more jr guys in the co AND more guys on narrowbodies at the bottom of the triangle. Our merged co staffing looks like an inverted triangle with the majority of guys both at the top of the payscale and flying WB's. Call it a product of DAL's intl push. Now in a economic downturn we are pulling back WB flying and replacing them with NB's. So we are overstaffed on the WB side and understaffed on the NB side. The last DAL (and probably NWA's if they had one) displacement bid in JAN tried to address the crew manning needs but we are still overmanned at the top. The training costs and time to train associated with turning our triangle around would not only be prohibitive, but by the time it was over the economy would most likely be turning around and now another entitlement would come out and guys would be put right back into training as the mando displacement guys bid back to their prior seats.

Also, MAYBE we could give our union some credit for the furlough protection. Mgmt may be holding to it........................for now. We will know it is coming when they start to negotiate for reduced lines and vol leave.

Think the flush was the result of the ability to take a lump sum, and the possibility of an inpending BK. The company is not trying to even out the sides but rather buy off the more costly employees...they don't care where it comes from, but I would imagine it will be targeted to the higher wage earners.

The people in the know, usually don't; they parrot talking points.

They could care less about the triangle, they have too many pilots at this point...some one has run the numbers, which is cheaper...buy outs or furlough...I would think if they do not get the buys outs, they will select another option...think the economy is still 2.5 3 years from a full turn.

Come on Carl, not the "my dad can beat up your dad" argument, AGAIN! Like it or not we are one company. So PLEASE take that early out. Damn I'm gonna look good in that Whale.

But back to reality, besides the non-common fleet, lack of a real West Coast presence, and that either or both of two hubs being ousted, it is a good merger (or acquisition :)).

So we go from being well-staffed for next summer to an early-out program and the "F" word being thrown around. I don't get it, the knowledge that this program was in the works was known long before all of the recent statements from the suits/meetings that our staffing was looking good going into next summer. Is this all just junior guy fear or do they just want to trim mostly DAL N guys due to the 747-2 being canned this December?

Any company wants to get rid of their highest paid employees for doing the same work, but I think that if the Compass deal wasn't hanging around their necks I'd already be gone.

My guess, the package is underwhelming to the vast majority of senior guys and we see a substantial furlough. Age 65, in one lump, couldn't have come at a worse time.

I haven't heard the F word from the company, or DALPA.

I knew I should have been a garbage man.

Management has to have decided that offering an early out is cheaper than furloughing. They also have to have decided that most, if not all, positions vacated at the top of the list will not be replaced. :mad: There may be training going on because of an early out but it wont be much.

One of the reasons that pilots are never offered an early out is that someone has to fly the widebody airplanes and whomever does is going to be paid the same thing since we are on a twelve year payscale. So whether they are 60 or 48, the same cost is still there. Now, if the positions just disappear, the company can see the advantage to offering an early out vs a furlough. The advantage to us at the moment is, hopefully, no displacements and in the future, if we ever start expanding again, faster upgrades. Hopefully this will happen but I'm not holding my breath.

Either way, if the company is offering this with no strings attached, I say go for it and see how many will take it!!!! What have we got to loose? :)

Denny

Yep. I think that combined with the fact a whole bunch of older pilots(747-200) will burn their sick time just before training(displacement) and then leave is also a factor. Cheaper to pay them off then have them use up sick time and do nothing.

Neither the company or ALPA has mentioned anything about furloughs. This program is not a furlough mitigation concept. It is designed to reduce training costs to the company and get pilots who will go many months or even a year without any revenue production. We will be overmanned next winter. Manning for the following summer is about right. If the program goes through and a substantial number of pilots take the program the company will have to hire if marketing does not make a change in the block hour program.

They don't come out and say it in so many words. Two direct quotes from MGMT...

1) Delta said in a statement that it "continues to take every step possible to avoid involuntary reductions of frontline employees as a result of current economic conditions."
...i.e., they're already planting the "this is due to the economy, not the merger" seed.

2) Delta said that in addition to those programs previously offered, it is working cooperatively with the Air Line Pilots Association "to ensure we have any flexibility needed as we adjust capacity to demand."
...lots of things this could mean, none good.

I understand nobody's said the word, but when have they ever done so.

You clearly don't comprehend a post before you respond to it.

Carl

That's exactly right Denny.

Carl