Reroute

No, not at all. With the exception of PBGC payments everything was the result of ALPA delivering for the Delta pilots after bankruptcy and through the worst economic downturn in our lifetime.

ALPA delivered

• a $650 million note.
• a $2.1 billion claim
• a MPP payout that did not offset PBGC payouts
• a DC plan and 401k contribution (not match) of 15% as of JAN
• Merger stock in 2007 worth $1.6B today
• Pay rate improvements of ~50% since bankruptcy
• changes to federal tax laws that sheltered bankruptcy related claims/notes

There was no entitlement to any of that, it was either negotiated or the work of ALPA government affairs.

Mesabah

Arguing with you is a PITA, while what you say is 100% true, it's not the whole story. For instance, yes the bill took 3 years to get out of committee, but it was the entire bill, not just the tax provision. Yes, ALPA negotiated all those items, but they were entitled under bankruptcy law to negotiate those settlements. These things aren't unique to ALPA, nor to a union for that matter. Yeah, it's great that ALPA got that for you, but they used what was available like any union would, nothing more, it's not like they invented it.

benzoate

^^^^^^^^^^^^^^

sailingfun

The tax provision was introduced and stripped from several bills. It was a long hard fight. The other items were in fact somewhat unique and not normally achieved in chapter 11. The merger stock was the first time labor was able to extract company ownership out of a merger. It was at the time a unique idea that labor should share in the benefits of a merger not just shareholders and management. It has since been widely copied.

expectholding

Just out of curiosity...if there was an entitlement to negotiate those things even without a union or ALPA, who would negotiate on your behalf and how much would it cost you?

Mesabah

In bankruptcy when your contract is cut, you become an unsecured creditor. You can handle it on an individual basis, or join a committee, which can be anything from a group of employees, union, etc. There is no guarantee you will get anywhere close to 100 cents on the dollar, DALPA got very lucky.

Note that in the case of NWA, the pilots took massive concessions before the bankruptcy even began. This was a mistake by ALPA, because usually concessions made prior to bankruptcy are not able to be recouped in any meaningful way.

CaptCoolHand

Luck and preparedness... Often mis construed.

Luck favors the prepared.

rvr1800

And who do you think would have more success negotiating? Us as individual creditors or the union made up of thousands of people and lawyers with experience in these matters?

sailingfun

Better yet can he give any examples of that happening?

Reroute

A couple of points.

"In bankruptcy when your contract is cut, you become an unsecured creditor."

The non-union/non-contract employees make up twice as much of the payroll as the pilots, they took cuts too and received $0 in claims.

As for the $2.1B claim. Luck had nothing to do with it. ALPA was on the committee of unsecured creditors (non union employees were not), but the claim was negotiated with Delta management and was made a part of the pilot contract. The non-union employees received no claim, management was able to unilaterally cut their pay and change their terms of employment.

The ultimate value of the $2.1 billion was exceedingly good, but here again it wasn't a matter of luck. ALPA/the Delta MEC made the strategic decision to hire an investment firm to sell the claim. The firm did a very good job for the pilots making strategic decisions on when and how much to sell at any given time. Had the claim been sold individually or haphazardly, $100 millions in value for the pilots would have been gone.

The NWA pilots received a claim as well and they did very well with it, because they also had ALPA on the property and a collective bargaining agreement. They were able to save their pension from termination, they had ALPA representation during the merger and received pay parity on day one of corporate closure. As of January they have their frozen pension plus 15% 401k contribution (no need to match) and they had representation during the seniority list integration. They also received a proportional share of equity in the new company. The value of the pilot equity is $1.6 billion today.