DALPA on DAL/NWA
 

Today, the boards of Delta Air Lines and Northwest Airlines jointly announced their intent to merge the two carriers under the Delta brand.

Unlike traditional airline merger scenarios, the proposed merger is unique in that, for the first time in the history of airline mergers, the Delta pilots, through their union representatives, have participated from the formative stages of the proposed merger. This past Saturday evening, your MEC voted unanimously to conditionally approve proposed contractual modifications to the Pilot Working Agreement, codified in Letter of Agreement19. Soon, you too will play a crucial role through the membership ratification process as you decide whether to ratify these changes. If you approve Letter 19, then we will know the terms on which we will participate in the transaction, and Letter 19 will take effect on the date the corporate transaction closes.

In my letter of March 17, I described your MEC’s efforts to achieve an overall comprehensive agreement consisting of a transition agreement, a joint pilot contract and an integrated seniority list in the event of a corporate merger. Letter 19 is not that agreement. The contractual modifications and associated returns of Letter 19 will apply only to pre-merger Delta pilots. Pre-merger Northwest pilots will continue to work under their current agreement until together we negotiate a joint pilot contract for the merged airline covering both groups. What Letter 19 does do, however, is provide us with the certainty of returns instead of our having to negotiate later in the face of rising fuel costs and a declining economy.

But let’s be clear about one thing in particular: the Delta MEC welcomes the Northwest pilots as partners in the building of the new merged airline, and we look forward to working with the Northwest MEC to bring about the rapid completion of a new joint contract and a fair and equitable integrated seniority list to take effect on the effective date of the new joint agreement.

With that said, I want to provide you an update of the events that led up to today’s announcement and the reasons behind your elected representatives’ decision to unanimously ratify Letter 19 and support the merger, as proposed, between Delta and Northwest.


Over the months following Delta’s exit from Chapter 11, we carried millions of our passengers safely to their destinations as we had done before and throughout the bankruptcy process. But there was a difference. For the first time since the 9-11 attacks, our companies began to report profits.
Discouragingly, the price of oil continued its meteoric rise and with it, speculation increased that long-anticipated industry consolidation was just around the corner.

In November, the rhetoric increased when the Wall Street Journal reported that hedge fund Pardus Capital Management, LP was attempting to force a merger between Delta and United. The story was met with an immediate response from the Delta MEC establishing its position on any proposed industry consolidation. In essence, we made clear that while we do not oppose industry consolidation and that the "right" consolidation opportunity could draw our support, we would not support a transaction for transaction’s sake. Further, the Delta pilots would be critical participants from the beginning in any consolidation discussion and potential resultant event, not an afterthought to be considered at a later date.

Over the next several months, we continued to repeat this message. We soon established our relevance in a process where labor has historically been excluded. Having read the last several Chairman’s Letters, you are no doubt familiar with what has taken place since Pardus’ ill-conceived attempt to shape our future.

Since my last letter, the financial difficulties that Delta and the rest of our industry face have not gone away. In fact, they have intensified. Oil remains above $100 per barrel, having increased at a historically steep rate since Delta exited bankruptcy. The economy is suffering, and many economists assert that we are entering a recession; others argue we are already in one. The credit markets have become increasingly difficult if not impossible to access. Just this month, Aloha, ATA and Skybus ceased operations and Champion Air will shut its doors on May 31. Last week Frontier filed for Chapter 11 protection. Legitimate concerns exist about the long-term financial viability of several other carriers.

Delta is not immune to these pressures, and they must be realistically addressed in the context of our broad goal which has not changed—that the Delta pilots will work for a company that has long-term viability with pay, benefits, working conditions and retirement commensurate with the responsibility and experience required of our profession. With that goal in mind, we remained actively and aggressively engaged with Delta’s senior executives as they continued to consider consolidation options. The purpose of that engagement was to determine what courses of action, to include opposing or supporting any proposed merger, would best support our overall goal.



After careful analysis and deliberation of the facts, the Delta MEC concurred with Delta’s senior executives and our financial professionals that a merger between Delta and Northwest was financially superior to a standalone Delta. That determination led to the negotiation of Letter 19, a tentative agreement between Delta management and the Delta MEC which, if ratified, will provide certain modifications to the current Pilot Working Agreement designed to facilitate the proposed merger with Northwest and provide returns for the value our participation brings to the merger.

Elements of Letter 19 include:

1 A three and one-half percent equity stake in the merged Company in fully tradeable stock at the close of the merger

2 Annual pay raises beginning with a five percent raise on January 1, 2009 and followed by four percent raises every January 1 through January 1, 2012. On January 1, 2011, Delta pilot pay rates will exceed the Letter 46 rates, without even considering the equity each pilot will receive.

3 A one percent increase to the DC Plan contribution rate beginning in January 2010.

4 Furlough protection—with certain exceptions, no pilot may be furloughed as a result of the merger for a period from merger announcement until 24 months after the close of the merger.

5 An increase in the full-pay sick leave bank from 240 hours to 300 hours.

6 The ability for a pilot returning from disability to refill his full pay sick leave bank once every four years instead of once in a career.

7 An increase in 737-700 pay rates to match the 737-800 pay rates.

8 In return for these improvements, we would provide various modifications to our scope clause to enable Delta to proceed with the merger. For example, we would allow the Company to place the Delta code and brand on Northwest flights on an unlimited basis after the close of the merger, provide greater flexibility on minimum block hour protections during the merger process, and permit the Company to retain Northwest’s large stake in Midwest Airlines (previously purchased by Northwest Airlines) while maintaining their separate operational status.


If you choose to ratify Letter 19, its terms will become effective at the close of the corporate transaction. We will actively support the merger through legislative and other efforts. We will join management to seek Department of Justice antitrust approval in a timely manner.


Over the next several weeks, we will provide you with the information you need to make an informed decision on Letter 19. We will send out a Negotiators’ Notepad and a special edition Widget which will provide you with in-depth information on various aspects of Letter 19, the broader Transaction Framework Agreement and other related issues. Additionally, your elected representatives will soon be in the lounges to answer your questions and address your concerns, the Delta Pilot Network will be staffed this week, and Pilot-to-Pilot volunteers will be available throughout the system to address your questions. The Delta MEC will also host road shows during the coming weeks at all pilot domiciles. The membership ratification process will follow soon after the completion of the road shows.

Anger and hope will never be effective strategies to counter the challenges we face, and change is never easy, but as we have become intimately familiar with over the years, it is one of the few constants in our industry. A key difference this time, however, is that the Delta pilots can choose to be an agent of that change rather than a bystander to it.
Your union leadership chose to craft a new and, I believe, far superior solution—one with a substantially brighter outcome for the pilots of the merged corporation than the traditional merger scenario. As your MEC recognized, we have a historic opportunity before us. I encourage you to read and understand all the information you receive. Talk to your elected representatives. Seek out answers to your questions. Make every effort to attend a pilot road show.

Then, when the ratification window opens, I join the Delta MEC in strongly encouraging you to vote in favor of ratifying Letter of Agreement 19.
Fraternally,

Lee Moak, Chairman
Delta MEC

Looks like my original 19% over 4 years estimate was way to high, now its down to 17%.

What a joke.:(

Any comments now DAL4EVER?????

deleted ;)

Looks like they're throwing NWA pilots under the bus, yikes!

I don't know how you arrived at that conclusion.
There is nothing stopping the NWA pilots from negotiating a joint contract and seniority integration. Tomorrow morning would be fine. The Delta pilots look forward to working with you guys. In fact, I think we would all get more money the sooner that happens. Lets get 'er done. Before oil goes to $200.

I believe that both pilot groups would have to negotiate, not just NWA.

Absolutely. And quickly. Its in our best interests to do so while all this hedge fund money is flowing past us like a river. We need to stick our hand in the stream NOW.

The Delta pilots want and need the NWA pilots on board.

deleted ;)

We have to be unified, it's us against management. What's this 3.5% crap for pilots, and 4% for non-pilots?

Looks like NWA ALPA doesn't think its such a great idea:



In This Hotline

NWA MEC Opposes NWA/DAL Merger Monday, April 14, 2008

Today the managements and Boards of Directors of Northwest and Delta Air Lines announced their intent to merge. In addition, a new pilot contract was agreed upon by the Delta MEC and Delta management without the participation of the Northwest pilot group. No details on this contract are available at present. The Northwest MEC strongly opposes the merger with Delta Air Lines as it stands.

Reasons for Opposition:

Northwest pilots will be disadvantaged in obtaining a joint contract and potentially in the seniority list integration process.
The current process is highly likely to recreate the USAirways-America West merger environment.
Northwest pilots are not brought to immediate parity with Delta pilots, potentially putting Northwest pilots on a B-Scale for years.


This merger announcement has come after months of negotiations which had resolved all joint pilot contract issues except for the differing views on the integration of pilot seniority. The NWA MEC, on numerous occasions, stated our willingness to resolve seniority integration by expedited arbitration. The Delta pilot leadership rejected arbitration as a means of resolving the seniority list issue at that time, but has now reversed its position. The Delta pilot leadership also abandoned the joint pilot contract approach and agreed to a new Delta pilot contract that increased the pay and benefits for their pilots only. Any previous value and synergy created by the merger is likely to be lost due to this one-sided agreement.



More information is available in a Ziplines from MEC Chairman Dave Stevens which will be published shortly.



This marks the end of today's Hotline.



Your MEC remains committed to protecting your jobs, your seniority and your future

Can you explain that in any logical terms? What has DALPA done to throw NWA under the bus? In fact we have now through LOA 19 set a floor on the joint contract we will be negotiating. Hopefully that joint contract will take effect before LOA 19 does and contain more improvements. A friend at NWA I just got of the phone with was hoping we would do even better! He is smart enough to understand that this sets the floor on the new joint contract for all of us. We had no legal or other ability to negotiate for NWA. DALPA made no attempt to have separate opertions as you posted several times. DALPA is making no attempt to force a seniority list. What more did you want???????

First of all, welcome aboard, my fellow NWA brothers and sisters! It's a very exciting time in our career, especially in the next year or so. We all share the same pain when we went thru BK, furloughs, ups and downs. I think it's important to think of one company from now, call DELTA AIR LINES. No more segregations within the pilot group, i.e. blue, green, red book, or whatever NWA pilots want to call us DAL guys (perhaps purple, because blue+red is purple:) We are now joined at the hip, fellas, either we like it or not.

It is a vast difference in corporate culture that most of us will have to accustom to. I hope for the next year or so, keep an open mind, try to work in the best interest of both our families, and our company. It is something that as a newbie at DAL i'm very proud and impressed with, is the ability of our pilot group to work with our corporate leadership to work out our issues instead of doing things that would hurt our career and our company as a whole.

Again, welcome aboard!

3.5% is for 7000 pilots. 4% is for about 100,000 employees at Delta and NWA. The NWA pilots will have to negotiate for a percentage also. I would strongly suspect it will be about 2.8% which will be about the same dollar amount as each Delta pilot gets.

Thanks, my head is spinning. That and I suck at math.:D

That's the fourth or fifth time I've heard that phrase coined on these boards from a NWA forumite - how you've come to this conclusion so soon, and how the conspiracy theories seemingly are already in full bloom, is beyond me. Your MEC made their intentions clear from the onset that they had no intention to cooperate on a reasonable, rational SLI (that didn't involve a windfall for you, and a stapler for me). Instead, NWALPA picks up the ball and goes home. Now, they've gotten what they've asked for, yet are still being "thrown under the bus".

For the record, we've got you down as the first one who got "screwed in the merger".

what does "pre-merger pilots" mean for the guys/gals that are starting class at DAL on Monday. Are we included or not?

7500 pilots. 40,000 non-pilots. Do the math.

Somebody did it earlier for me, Thanks!:D

None of this takes place until the merger is executed (epected to be six to eight months from now).... So you should be included.

Well here are my thoughts. it's time for the bickering to end and the work to begin! We are all going to be DALPA at some point and personally I welcome the change in leadership from our current NWA management team. I have a lot of friends at Delta and look forward to working with all of them and everyone else at Delta.

Hopefully the two unions will be able to work out a SLI that all parties feel is fair. I fully understand that virtually everyone on both sides of the fence has a different view on what fair entails. But now that we are all going to be standing on the same side of the fence we need to figure out how to make it work.

I have been at NWA for 13 years and I have enjoyed almost every minute. Personally I am looking forward to the next 12 years wearing a Delta uniform. Now the biggest sticking point I can see is how to have my leather coat altered to be double breasted. :D

Sorry for the duplicate post - won't let me delete.

Agreed, will enjoy working with people with your attitude.

Sorry, I am a hypocrite by not following my own advice. I have taken several deep breaths, and will now sit back and watch what happens.:cool: I'm glad DALPA got what is hopefully a base contract. I also hope that the two MEC's continue to negotiate a SLI, and come to an agreement. Sometimes it's hard for me to see both sides of the coin.

Change is stressful for everyone involved...


I hope both sides get together and settle SLI, then we can go out and kick a$$ together!


Kevin

Thanks - completely agree...good luck to us all.

The only reason the DALPA had this type of clout was because we bargained for it in our last contract. As we all know when bargaining with management, nothing is free - we had to give up something for this clout management did not just give it to us out of generosity.
NW pilots choose other priorities in their negotiations, one that jumps out is keeping pensions intact. DAL pilots will not receive any benefit from NW pilot negotiated pensions and whatever else you guys decided to prioritize but you guys expect to reap all the benefits of our contract.
You guys said repeatedly you didn't care about a piddly pay raise and a DC increase and that your seniority was not for sale - you got what you asked for - your senority will increase 1 for 1 with each NW pilot retirement, congratulations. And don't feel too bad either - you will soon capture every benefit increase that the DAL MEC had the foresight to plan for while you guys were arguing over blue, red, and green books. As a matter of fact I bet the two MEC will reach an agreement soon - but don't hold your breath for the seniority steal that your MEC tried to pull off.
Scoop

You want to know a better joke -whats 3 1/2 per cent of 17 billion.

Scoop

Not for public consumption

There is in fact one thing stopping NWA pilots from negotiating a deal. Their own over inflated "all about me ego." I love getting the NWA ALPA e-mails that tell me they are going to bat for "every NWA pilots future". I guess they think trickle down economics still works. Maybe if they look out for the top 5% of the list it will trickle down to the rest of us. Thanks for ruining a lot of potential careers guys! Appreciate it. I can only hope I'm around long enough to enjoy what should be a great airline if we can manage to get along with anybody long enough to not derail the whole thing.

"
A three and one-half percent equity stake in the merged Company in fully tradeable stock at the close of the merger"

To be sold the very day I receive it. In addition, I don't think I'll take a lecture on labor concessions from someone who's MEC and pilot group voluntarily agreed to a contract far worse than the one we made under bankruptcy duress days from liquidation.

Have fun at United.

Trust me, I was running through our hubs with my hair on fire fighting our last pile o' sheet contract so perhaps I have a small bit of credibility.

We've basically gained the bottom 1/3 of our list in the last 5 years and they are screaming for blood from our management. The new CAL doesn't even resemble the old Scabbie CAL and I think you're in for a pleasant surprise when it comes time for a merger agreement.

Good luck with that.... You got some stiff competition now...

http://www.newglobalairline.com/

http://cm.multicastmedia.com/delta/

It doesn't sound like our NWA ALPA thinks this is the case..... :confused:

I truly hope your right.

Amen.

Tell your newhires like superpilot92 to get a new catch phrase......that bus he is talking about must need new tires with all the pilots it's run over in the past week. We need to all be on one team for this.

Reference my recent post on the majors forum for my current opinion and thoughts. Thanks ;)

http://www.airlinepilotforums.com/sh...ad.php?t=25175

"After thinking about this for a while and letting the whole idea soak in i have gathered my thoughts. Here they are,

I think that now that its official we should start working together. It looks like its going to happen either way and the sooner we start working together the better this will turn out. I hope this gets figured out quickly and we can become a solid pilot group.

My earlier comments were based on the appearance that the NWA pilots were being left behind by DALALPA and they were content with throwing our pilot group to the wolves. I have gotten some different perspectives from some of my friends at DAL and i hope they are accurate and we get this squared away.

Either way I hope the best for both of our pilot groups and that we become a powerhouse pilot group when its all said and done."

Agreed. Strength through unity as the ALPA phrase goes. As Pink Floyd put so eloquently in The Worms, "Together we stand, divided we fall". I use Pink Floyd instead of the Foo Fighters as the Captains on this forum who were hired in the 70s will know what I'm talking about. ;)

The Foo who now?!?:D

Agreed, lets get this brady bunch harmony thing started and work together. If we succeed in being the dominant global carrier then we can command some very nice contracts in the future.