Question for Delta/NWA guys on merger stock
 

the news reported that you guys split almost fifty million shares of the new company. This made me really curious, it seems like a success story (but so did the UAL ESOP back in the dark ages).

If anyone on here got some stock, how did it happen? Did you get restricted stock, stock in your retirement, just stock in your brokerage account, how did it work out?

How did ALPA come up with how to split up all the shares? Was it equal? Or seniority based?

Thestreet.com wrote a little bit about it, then it all died away, but the stock is way, way up, so I think this ended up being a good deal. But "good deal" and "airline mergers" are kind of opposite.

So don't give away any private details, but fill the rest of us in on how this went. I don't have any friends at DAL or NWA, they're all furloughed.

Who do you fly for? I'm a bit skeptical when I notice this is your first post.

The stock was placed in our 401K accounts and is immediately tradeable. I still have my shares and their value is north of $60,000 right now. (your mileage will vary depending on the shares rising and falling of course) Like any other asset in your 401K you won't be able to pay the mortgage with it unless you pay Uncle Sam some penalties.

The stock split was done half by equal shares and half by a seniority system.

Overall the entire merger has been a success for the Delta pilots. South pilots got about 20% in raises over 4 years and North pilots about 30%. We all have a better DC plan now. The stock is worth whatever you trade it at, but even if you traded it today the most junior pilot would probably net more than $45,000, which is not a bad howdy-do for pilots that were hired just months before the merger. Delta did not furlough last year and it looks like they may start hiring again before the end of the year. (economy, terrorism, etc. can ruin it all in a day)

The key for us in the merger was that we saw a way to add value to the corporation by facilitating and accelerating the merger synergies and then we got a piece of the pie for our troubles. Pilots can't stop a merger so they might as well get on board and get all you can in the process.

skeptical about what?

Welcome to APC. Introduce yourself.

He's a CAL VP looking for the next offer to their pilots. :D

Hahah, sometimes you have to wonder.

I was wondering the same thing.

What in the world is scary about such a mild question? I've been on APC for more than a year, but I never registered because it won't take my Yahoo account and I don't use my work one for stuff like this.

...But so what? If you don't want to converse about something interesting, then don't converse.

I had heard third-hand that you guys got the stock as pay (taxable) and I was scratching my head. It makes more sense in a retirement account. But wouldn't a big chunk of stock like this put you over the yearly IRS limits? I don't remember what they are, but I thought you couldn't put more than $45,000 or so away for the year.

Google IRC 415(c) for any given year. It will show you the qualified contribution limit for that year. What happens to any contributions that the company can't make because you've reached the limit is determined by what you've negotiated and the plan.

The IRS limit is a CONTRIBUTION limit. and the stock was contributed when it was about $4/share. What happens after it goes in is irrelevant for IRS purposes.

Ok, now THAT makes sense.

Seems like a home run. I bet you guys have set the model for this stuff working (versus the US Airways debacle) in the future.

Do you think UAL/CAL will follow your lead?

It was a home run.
But its the bottom of the ninth and we were down 8-1.
Now we're down 8-2.

Better than nothing though. The merger stock has grown nicely inside the 401K. No taxes is nice.

The Delta / Northwest merger was a text book merger success story. It will be referenced by business schools and airline management for many years from now. The exact opposite of the Usair / America west merger train wreck.

Many believe Anderson was the right man for this massive airline merger. The only real airline CEO in the game today. I would say 99% of the DAL employees are on board with the merger results.

The simple reason this merger worked so well was our MEC and our flight ops leadership. Getting the pilots on board, dealt with and operationally integrated forced the other departments to quickly follow suit. If the pilots were not on board, we would not be cheering for RA but jeering him.

The question, of course, is with the announcement of today's merger talks with UAL, is whether this lesson has been learned. You guys pulled it off, but are the folks at USAir and UAL up to it?

Based on LCC's current failure in integrating the UsAir guys and their AW counterparts, I wouldn't think they're up to the task. But you know what they say the definition of insanity is.

I agree and disagree... RA is the kind of CEO that can work with the unions and bring them into the process.

He's a lawyer, but he understands the overall workings of the process better than any of the other beancounter CEOs.

The MEC did a great job of coordinating with the company, and the management did the same thing with the union. It was definitely an optimum situation. I fly with guys that think we should have gone for the moon on pay on LOA19, but the union really seemed to go for what as feasable with it.

Overall.... well done. It's nice seeing over 6 figures in my fidelity account after barely 3 years with the company...

The UsAir/AWA merger is still not done... Now throw UAL into it... GoodLuck

I'm not so "skeptical" about your identity, as you're obviously an outsider fishing... but it's not a question of whether the UsAirways/United guys will pull it off. The USAPA guys are unable to go beyond their raw hatred of erveryone lese to even begin to do anything anything rational or constructive, but the fact is that the precedent has been set. They will "pull this off" with no effort because it is now the price of accomplishing a merger. More simply stated, they will get it because we got it, and they will want it.

If anything, they will get more, because the price to be paid for this will need to be high enough to buy peace for the future merger AND the preceding (unfinished) merger between UsAirways and America West. There will be such chaos trying to merge seniority lists with a third airline, and so little desire to throw in adequate wages, or to let wages snap-back, that a lot of funny money (in paper form) will need to be thrown at the front end of this thing to have any effect at all. It's going to take an unusual amount to buy any acceptable degree of "peace" in this case, so you should look at what was established in the DAL/NWA deal as a sort of low starting point, and compensate upwards, because the distance between status quo and the finish line is so much greater at LCC/UAL than it was for DAL/NWA.