CVG roadshow notes and observations
 

I went to the CVG roadshow yesterday; it was the best attended ALPA meeting I've attended since C96. Tim O at the center, flanked by the four members of the Negotiating committee, as well as the (I believe) legal counsel from ALPA national. Not really much information that hasn't been seen/ posted before, but a lot of misinformation dispelled. A lot of the background information that ACL has posted. A few notes in very random order (with my comments in parentheses):

-Cost of this contract is $420 million. This was vehemently challenged by several in the group, citing the Detroit rep's widely known assertion that this is a cost-neutral contract. Tim stated that the cost-neutral statement was mostly for Wall St., and that a cost neutral claim would have to include the added revenue from both the CRJ900s and the 717s. There would be no other way to get to that number.

-Airtran pilots with 717s? NO, says Tim O. He said we're getting the planes from Boeing; they don't have many pilots... He also said that we will get the same number of pilots with the 717s as we got with the MD90s.

-The time sensitivity of the deal is being driven by major maintenance on the CRJ200s. Once Delta puts the money into them, they'll be around for a while. They had a chart with the RJ counts, both with and without the TA.

-Re caving on the number of 76 seaters: This is seen as the only way to get rid of the 50 seaters ahead of schedule, given the contracts we have with various regional carriers. Large RJ outsourcing is a part of Smisek's proposal at UCAL, Parker's proposal to the AMR guys, and AMR's 1113 term sheet.

-As far as ALPA knows, no deals have yet been inked with any RJ manufacturers regarding a large RJ. (I can't imagine that we don't have agreements in principle, though.)

-We will not be seeing any survey results. First, we may be entering Section 6 negotiations. Second, we don't want to let management see our playbook, even after the game.

-35% of new hires from DCI? New hires have been nearly 50% of our most recent new hire classes. This item required no negotiating capital, and was thrown in there in the hopes of getting an improved hiring policy for our furloughees from regional carriers. It will also provide a means of mitigating the effects of the unemployment among regional pilots that our agreement will cause. (I'm a little fuzzy on this one still. They may need some follow-up questioning.)

-250 early outs are being targeted by the retirement program. (While they assured us that management's feet would be held to the fire if they try to shut off the program with too few retirees, I would prefer firm numbers in the TA.)

-ALV +15. This is primarily to allow greater reserve utilization in categories that have mostly long international trips. (...but will crew scheduling run with this for all categories? Of course they will.)

-Surprisingly (to me, anyway), was their contention that the new reserve rules will not translate to less pilots on reserve. Scrappy (negotiator/ former scheduling committee) explained how higher reserve flying will increase numbers of reserves required under the manning formula. (Greek to me.)

-During the Q&A, a lot of anger in the group that MD88/90 pay wasn't raised to equal A320 pay (despite an 8% pay increase to MD90 rates). Tim countered with a discussion about a line with seats vs. pay, and some aircraft sitting above or below that line (i.e. 747, 757). This one wasn't even on the negotiators' wishlist, which upset some of the crowd.

-The handout section regarding pay shows monthly pay at 87 hours. This item was noticed by the audience, and the BS flag was (rightly) raised. They assert that the average monthly credit is 87 hours. (This has got to be caused by some outliers in international categories, that are able to really run up their time. I hope they change this in future handouts.)

-The last thing on the table was more seats on the RJs (Tim said 80 seats; did he mean 82?). The company offered to give all of the projected revenue to us in the form of pay.

-A wide body aircraft order is not under discussion at this time.

-If we turn down the TA, they have no idea where things will go from there. If we enter Section 6, we can expect fairly strong headwinds. The Section 6 process is, by it's nature, more friendly to management. We will be negotiating against a backdrop where UCAL, AMR, and USAirways make less than us already. The NMB will not be sympathetic to us.

-Q&A session was very contentious, with 90% of the pilot angst focusing on the proposed pay rates. (I left after 2 hours of questioning; I'm not sure what was discussed afterward)

I'll add that after talking to my reps and Tim O., I plan to vote yes on this TA. I think the downside of a no vote (potentially extended Section 6 negotiations, with questionable gains) far outweigh the potential gains. The fairly short duration of the contract is the only thing that makes the pay rates palatable.

I don't want to encourage anyone to vote my way. What I would encourage is that you go to the road show, listen to what they have to say (Yes, they will be blowing some sunshine up your skirt.) Ask the hard questions, and demand answers.

Fire away!

Thanks for the update CVG. Good info.

He he he. The more we can get out of a single reserve.. the more reserves we need!

http://farm1.static.flickr.com/150/4...21d3228490.jpg

No plan B if the TA is rejected? AND THEY ADMITTED THIS IN AN OPEN MEETING?

What an abject failure of leadership. What's the point of having MEMRAT, then?

If this is really the case, then the meetings are pure FUD, and must be put in that context.

Even if your "strategic planning" is really that poor, why would you advertise it to management?

The reason their average line value is skewed is because they don't include any lines under 70 hours in their calculations. So with %50 of the airline getting 68 hour lines from PBS the last 8 months, yea, that's a funny number.

Wow...I mean just wow.

Nu

CVG thanks for the update.

Here is my biggest problem with what you posted:

First there is no way to know or believe that the company would pass on the savings from outsourcing to the us.

Second, I am fundamentally opposed to supplementing my income off the back of other pilots by supporting a whipsaw system with multiple carriers (including other ALPA carriers) fighting for our scraps. I'm actually a little surprised TO admitted publicly that this is what we are doing.

We aren't.

There are a lot of positive changes for Delta pilots inside Section 1. Scope for scope....substantial downside protections for Delta pilot jobs and limitations on management flexibility to not use Delta pilots throughout that section. There is a cost to that, and that cost depends on your point of view. How much do the furlough protections cost #1 CF?

Section 3 is another part of the contract.

I think that was the whole reason that DALAPA said no to increased seats on RJ's. We wanted scope capture and we did get it. Not as much as I wanted but we changed it for the positive. I am not sure i follow you here, but we feel bad about taking those jobs back and being proactive about being sure DCI alpa carries get a look at first for hire?

Vip I am just sure I did not follow your line of thought.

Fiig

Yeah, I know... pretzel logic. It seems counter intuitive to me, as well, but I accepted it, given that Scrappy has been the MEC Schedule Committee guy for so long. I've have to admit that I didn't ask any clarifying questions on this item. This would be a good one to question at upcoming road shows.

Exactly!!!

Carl

That's not exactly what I said. I said that they don't know what course this thing will take if we vote it down. While DALPA might have a Plan B, you can be sure Delta Air Lines does, too. We are not privy to Delta's plan B, therefore we don't know what will happen after a no vote.

.............deleted............

Thanks for the info....
 

I appreciate you taking the time to post this info.

My initial inclination is still NO.

It seems the MEC is plying the adage "A bird in hand is worth 2 in the bush" with this TA being the bird and the unknown of a rejected TA being the bush.

Why is it a foregone conclusion that IF this TA is rejected that a protracted section 6 process will then unfold. Isn't that just ONE of many possibilities? If MGT was so eager to complete this 7 months early isn't it also feasible that a rejected TA could be tweaked and completed ahead of schedule as well?

I've heard it said that in business, you never accept a first offer and that if you're not willing to say "NO", then you're not really negotiating.

I guess we're at the point in the new car negotiation where the salesman says "I gotta talk to my manager." and we say the same thing and turn to our wife. ha ha.

I spoke with 1 of our LEC reps so far regarding this and he states the negotiating committee HAS said NO several times and walked away and that this was as far as they could get given that, in general, other pilot groups are not helping us gain any leverage (FedEx, UPS, UAL, AMR... forgot to ask about SWA) and that any leverage we have has been played as far MGT is concerned. The only leverage we may have remaining is a strike and that would take years of meditation to reach.

So we really are dealing with an unknown if we reject this TA and what is each of our levels of comfort facing that unknown. It is possible that a protracted section 6 may unfold. It is also possible that the current agreement may be massaged and sweetened a bit.

http://www.cartoonstock.com/newscart...s/pknn542l.jpg

If you read the LAX LEC note, it almost seems like they DO know what may happen next, but can't say anything. Read it again.

I'll try to explain it better (this is not one of my strong suits ;))

What I read was that Delta wanted 82 seat aircraft at DCI and in exchange they would give us all the revenue that produced. I find it very hard to believe that RA would just give us all that extra money. Why add the seats if it doesn't help Delta's bottom line? And, How would we know that we were getting all the extra revenue? This would be impossible to figure. For the record I'm very glad we said NO. The point is Delta was admitting they supplement our income via outsourcing, meaning there is a lot or revenue available from these aircraft maybe enough to bring these aircraft up to mainline.

Secondly, we are funding the contract, according to CVGs notes from TO, at a cost of 420 million and that it is cost-neutral due to the added revenue from the new CRJ-900s and 717s. I'm not sure what the brake out of the % for each aircraft is but based on the DOT numbers most of the revenue will be coming on the backs of the new CRJ-900s.

Again, the company and ALPA are basically admitting that our pay raise is being funded by larger aircraft being outsourced. It's great we are possibly accelerating parking of 50 seats but we should not be increasing the larger RJs just to make that happen a few years faster.

From the LAX LEC letter:

The business model proposal by our management team remains confidential. At some point they may release more of their concepts. It is not the intent here to divulge any confidential information, so for now we will just refer to this as their “business plan.” Whenever one side has a significant need at negotiations, there is leverage for the other party. Delta’s business plan did provide us with leverage for these negotiations. The exact nature of the leverage may never really be known. What we do know is that this leverage was real - but perishable. Given enough delay, the leverage would evaporate and the opportunity would be lost. You may wish to read those two sentences again as they did play an important role in our final decision.

The safe, conservative bet is to vote 'yes'. The risky bet of voting 'no' has the potential to achieve the most benefit, however, in scope, pay and work rules (thinking of ALV+15).

My impression from the road show is that management's next move in the event of a no vote is an unknown to us and to DALPA. Anyone saying they "know" management's next move is kidding themselves. Section 6 negotiations is a worst case scenario; obviously, a brief additional negotiation for a better TA would be a best case scenario. The pilot in me prefers to hope for the best case, but assume the worst case.

.

70 extra 76 seaters are giving us $420 million per year? After parking 150 50 seaters? Really? And how is mainline getting 717s outsourcing? We would be flying those. Parking 150 50 seaters mean 80 less total RJs after adding 70 76 seaters. Less overall is better.

To me, it sounds like that refers to their business plan which is reflected in the scope changes in this TA. I'm sure that there is also a business plan without this TA. I would be surprised if management has shared that with DALPA.

In 2 or more years according to the NMB. That's what was said. It's a definite possibility.

The board of directors probably knows, and ALPA has a guy on there, along with confidentiality agreements. Just sayin... Maybe?

Ask CVG. Those are from his notes from TO's mouth. They are from the first post of the thread.

Less overall is not always better. The company doesn't want 50 seats they do want 76 seaters.

I'll grant you that. They might know. That might be a good question for the road show.

That's not what I said. This is: "Cost of this contract is $420 million. This was vehemently challenged by several in the group, citing the Detroit rep's widely known assertion that this is a cost-neutral contract. Tim stated that the cost-neutral statement was mostly for Wall St., and that a cost neutral claim would have to include the added revenue from both the CRJ900s and the 717s. There would be no other way to get to that number."

If it were just less 50s, I would agree with what I just bolded in your comment. Seeing as how we are giving them 70 more 70+ RJs (direct mainline replacement jets), I have to disagree. 325 large RJs under the TA vs. the 255 hard cap we have now is actually more .....not less. Funny how so many guys keep repeating this falsehood.

But using the less is more argument for a moment, we could justify giving them 777s. Hey, it would only be a few airframes. Maybe we could get a few more coins in our pocket and surely we would not have to go through Sec. 6!

Wrong. Overall, there will be less total RJs. There will be more "larger" RJs, but what people are not understanding is that the loss of the 150 50 seaters will create routes for those 102 70 seaters. They will cover a lot of the same routes that the 50s that are being parked are flying now. 150 small RJs hit a lot of important city pairs, but some of them can't make money apparently. That is where the 70 seaters will come in most likely. Where do you think 88 717s will fly to? Places where current 76 seaters are flying? Yeah.... Maybe LGA slot swap RJ routes? Probably.

And your less is more argument is weak. Give 777s? Really? Give a plausible outcome. If you don't think a longer section 6 via the NMB isn't possible, then you need to make some phone calls.

:confused:

This point was reached weeks ago - by the NC.

Go to a road show. Email/call reps and ask hard questions. . Focus on facts that can be verified then vote - yes or no.

One of the FOs I flew with last week said the same thing, more or less. The difference is that our bargaining agent went back and forth over 300 times with that shady car dealer. Now, our agent is bringing us what they say is the best deal they can get. Is it? That's what we all need to decide.

If you edit, please say what and why. By the time I hit reply, your message has changed and there is no record of your edit. Regarding your previous post, my point is you are telling half the story. It is the 1 liner our association is putting out. Less overall is not more, plain and simple (re 777 analogy). We are getting something they don't want (50s), for something they want (70+) = concession. That something is mainline flying, not feed! These airplanes are much more capable than 50 seat jets. You don't know what flying it will do, but I'm confident it is much more likely to eventually replace our routes than feed them. And this whole early TA fiasco was hurried just to make this concession.

The argument you have been making is we can't do it profitably. How do you know? Continental has done it profitably for years with little RJ outsourcing, SWA etc..even as we lead the outsourcing. If this TA passes, we will soon be at a tipping point on mainline domestic flying. We will have wasted a golden opportunity. We are giving MGT a pass with this TA. They are not having to pay for their outsourcing ways because many of us are willing to give them 70 more large RJs. The only way to change their behavior is to allow them to reap what they sow. If they want to outsource our jobs and minimize our leverage, the result of these bad decisions go with the territory.

Scope is relative to what everyone else is doing. If we don't hold the line (an unreasonable line already), other groups lose leverage. What if the next group gives more and on and on it goes....325 large RJs are on the table in this TA. That is almost half our entire mainline fleet, made-up of aircraft capable of replacing our flying. When does it stop? UCAL management is giddy about this agreement! This is in the A4A playbook.

Either you believe our jobs are for sale in exchange for money (insulting money at that), or you don't. I just wish guys making this argument would own up to what is really going on here and not rationalize the outsourcing.

If I read slow's posts correctly, we are adding enough airplanes to trigger 3 to 1 language to get the 76 seat fleet to the same point we are in this contract TA. Same either way.

So then the play is the management of the 50 and 70 seat fleet which has some older airplanes which are coming off capital leases, operating leases and capacity purchase agreements. Some have big maintenance bills coming. ALPA and management have published that those airplanes start to go away in 2015. However, with this TA, some 50 seaters go away sooner and it is likely the 70 seaters will go away or be modified when their contracts expire.

The 70 seater is still economically relevant. Mostly it is being flown in a 66 seat capacity and it typically makes 40% more revenue on a 15% or so operating cost premium to the CRj200. However, the sector costs (gate leases, ground servicing, etc) work out better for a 76 seater or 717. I am not particularly fearful of the maintenance of the 70 seat fleet.

A no vote probably means management gets to the same point in their fleet management plan, just two and a half years later, with a slightly higher and less efficient DCI fleet mix.

The gray area is how much money management possibly can avoid paying by trading in the CRJ200's and flipping new aircraft as an inducement to modify capacity purchase agreements? How much money can Delta save by getting the contracts re-written to make the operators the Lessee's of the airplanes? The goal is clearly stated. Management wants Delta's debt below 10 Billion.

Seems like a good idea to me. Debt is risk. As a Delta employee I prefer my employer reduce its debt level.

I remain unsure why those who do not support this agreement don't. It is an improvement from current book. In some ways it is a very big improvement.

If you are frustrated by the lack of scope recapture, I share your disappointment. But, taken in isolation, does this agreement get us closer to our goal? More Delta flying performed by Delta pilots.

It is not the same either way. You leave out the fact that our current contact requires them to get rid of the 70 seater in order to obtain another 76 seater. The number of large RJs stays the same. They want to trade 50 seaters. Do they want to swap crj700s that already have been modified for first class? Big assumption that they would be able to get out of that many 70 seater leases or that they would want to.

Even after the game - now that's rich!

LOA 19 Frequently Asked Questions

9. Does LOA 19 permit more 76-seat RJs?7. Does this agreement provide for even more RJs?Merge, cap, 50 seat RJ's reduced.

Now, increase cap and we'll let those 50 seaters go away.

To those of you (apparently including our union) willing to bite and swallow hook, line and sinker at any fancy leather bound accounting books "Get a Yes Vote on C2012" management marketing group put together.....try to think back at least one or more years (see article below).

If you haven't learned anything yet, please know this:

Management will tell you virtually anything it needs to tell you to get what it wants. They know later they can simply say "things didn't work out as planned so we didn't end up growing and had no choice but to (fill in the blank)". We understand your frustration but that's just the way the cookie crumbles. I fully expect Slowplay and the management/ALPA sales group to unapologetically say the same thing.... probably with disdain in their tone for you not seeing how the economy later on changed the course of promises made.

To illustrate my point further, do you remember how the new flight time duty time rules were going to bankrupt the airlines and cause huge job layoffs according to ATA (now A4A), Delta Airlines and the consulting groups they paid large sums of money to produce?

Now that the FTDT rules are passed what are we hearing from management? "They won't appreciably effect our staffing or operation". Gee, now how could that be so when they were crying uncle less than a year ago? I will tell you the answer....THEY DON'T TELL THE TRUTH WHEN THEY ARE CHASING SOMETHING THEY WANT!

You are a class A1 sucker if you believe anything/everything coming from the management/ALPA marketing group. Even basic common sense will tell you some of the things you are hearing now don't add up. Go with your instinct, not the fairytale words of those selling you of "bigger exciting things" if we pass this (they will never materialize) and "it's best to always take the first offer and not complain".

Vote no and take a little pride in yourself and your career, not just lap up the scraps lying under the table. Good luck to all of us and the profession if we continue to give away our flying (large RJ's is our flying before someone trys to tell me again it is a victory to trade 50 seaters that are already headed for the desert for DC9 size airplanes that will never be flown by a Delta pilots and be around for many decades to come.).

PS- Remember this? Was it accurate in the end?

ATA: Airlines would cut 26,700 jobs if FAA implements new pilot rest regulations | ATWOnline

I don't agree. They would have 70 fewer large RJs.

As I have stated in previous post, I don't trust MGT to follow the intent of our contract as it relates to ratios and I don't believe our union will challenge MGT when they violate the intent. When the ratios go out the window, as I believe they will eventually during the life of this contract, we shrink....DCI grows. 1 event deemed beyond their control and the ratios are toast. Any protections you think we have, will be renegotiated by our union in tough times (no memrat...LOA). Trust and history being the issues that that they are, there is no other way to defend our flying other than to insist we do it. Having said that, I will not vote to outsource any jobs. We need to hold the line on big RJs. They are a direct replacement of mainline flying in this circumstance. I will not vote to make the same mistake others made previously. Hope for the best, but prepare for the worst outcome or circumstance.

Agreed...wow! They say they wont release the survey results because they don't want to share our playbook, but then admit that there is no plan B??? Talk about setting us up for failure either way.

Very astute you are young padiwan

http://www.empireonline.com/images/f.../photos/25.jpg

The dysfunction of this union combined with it's disdain for its constituents, overreaching secrecy and flippant attitude is unbelievable. Sickening really.

How many of you would keep an attorney, stock broker or consultant employed to work for you if they routinely kept secrets, didn't do what you asked of them, disrespected you and gave you the proverbial bird when you pleaded with them to do a better job representing YOU? Not I!