From LEC 66:

PQC: How do you know this is the best we could get? We can get more if we simply go back to the table.

R: Delta management has two paths. We’ll call them paths “A” and “B.” Path A includes shifting a great deal of capacity from DCI to mainline. We have been begging them to do so for years. We prefer (but are not married to) path A. Path B is to more slowly park the 50-seat jets as soon as their contracts allow, hence a much slower drawdown of DCI capacity and, therefore, a much slower corresponding increase of mainline-capacity growth.

Plan A and plan B both represent financial implications to management. They would prefer plan A because they believe it will make Delta more profitable. The trick, and the fleeting opportunity that we had, was to extract the most value possible for the Delta pilots for plan A. The rub? That number is finite. At some point, plan A becomes more expensive than plan B, and management (because they are not stupid) will almost certainly choose the less expensive option. At that point, we believe that we will lose the opportunity to extract financial gains from something that also benefits us—the shifting of capacity (jobs) from DCI to mainline.

We were recently briefed by Linda Pachula, the head of the National Mediation Board. During her brief, she discussed common mistakes that she has seen unions make. Most common was: “They didn’t listen to their experts.” We have experts working for us. Despite allegations to the contrary, we have professional negotiators—lawyers who collectively have assisted in more aviation labor negotiations for more years than perhaps anyone else in the country. We have financial analysts, accountants, and subject-matter experts on every section of the contract. And we have our Negotiating Committee, men the entire MEC trusted enough to unanimously reelect. They studied the plans and financials extensively. They negotiated fiercely (the idea from some that they just accepted management’s first offer is simply laughable). They extracted significant value. And they firmly believe two things: 1) we got every penny of value we could at this time, and 2) if we reject this deal, the company will revert to plan B and pursue traditional (and usually lengthy) Section 6 negotiations.

This is what the experts we hired told us. They saw the books and were in the room. And we trust them. The people who assert that we could do better if we send this back are basing that opinion on a hunch or a hope. We chose not to risk hundreds of millions of dollars for the Delta pilots on a hunch. We chose to heed the lessons of other unions’ failures. We chose to listen to our experts.

Actually, it wasn't a DALPA leadership position I was referring to.

There is a lot of talk about what constitutes leverage, but the fact is that the only leverage any group has is the market value of the asset they are trying to sell. This applies to the airline as well as the pilot group.

The market value has been going down for the last ten years or so. You don't need a lawyer, an accountant or a union "expert" to tell you that though.

It doesn't help when the rest of your competition can't get their own new contracts because of thier infighting. So, when you are the only one trying to raise the bar, it makes it tougher.

This is one of the dumbest threads I have read on APC. You wonder if any pilots took a single econ course in college. It may well cost 2.5 billion dollars to overhaul the 50 seaters over time. The overhauls actually span a 7 year time frame I am told which makes sense based on the purchase schedules. The problem with the logic in this tread is the 2.5 billion dollars then is paid by the revenue the aircraft generates and additional money the aircraft command when sold or lease returned. In virtually every aircraft ad you will ever see the first thing mentioned is time on the engines and airframes and time since the last overhauls. This occurs on all our aircraft. You invest money in them to get a return on that money. If you manage your business well your return exceeds your cost.
What makes the thread even stranger is that the posters imply that the cost of the overhauls is a credit against the contract but never mention the cost to acquire additional aircraft as replacement if they decide not to do the overhauls. Lets say they return the jets to the lessors with run out engines. They lease penalties will be large in that situation. Lets say the return the fleet and the cost is 1 billion for 200 aircraft. Delta gets a credit for buy more 78 seaters and only pays .5 billion. Then they have to buy 70 new aircraft at 30 million a piece. Thats 2.1 billion. And wait there is more! Delta now has to lease or purchase the 717's. Lets call that a 1.5 billion dollar deal. Now you have 4.1 billion dollars i costs to save the 2.5 for new engines. Does that mean we get credit for the extra 1.6 billion this deal costs the company and instead of the TA being valued at 1.2. billion its really 2.8 billion. Of course not. That just as inane as the original argument. Delta decided their fleet plan and how to execute it and if they do a good job it covers all the costs and produces a profit. We as a union try to take a big a piece of the profit pie as we can negotiate while handcuffed to the RLA.
Fleet makeup and fleet costs have nothing to do with the value in a contract period. Fleet profit or loss however has everything to do with the value of a contract.
The company has never stated this is a cost neutral contract. What they have stated is that having a better fleet right sized to our markets will allow them to pay the increased pilot costs which will be around 1.2 billion over the life of the contract.
If Delta management made a smart move and hedged 5 billion dollars in fuel and we were able to negotiate a raise based on that profit would you again say its no cost?
Strange Strange thread

While a NO guy, I'll agree with sailing here and say some of the figures here are suspect. Also would they really mean anything anyway given the business plan. There are other holes in this TA that could make this chump change. Hey if you're trying to justify a bigger raise though...go for it:) $$$$