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Old 04-15-2008, 10:45 AM   #1
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Default DAL/NW Labor issues Q & A

From our union web-stie:

Scoop

Labor Issues
1. Didnít we just leave the Northwest pilots behind?

Absolutely not. For the last several months, the goal of the Delta MEC was to achieve a comprehensive agreement which would have included a transition agreement, a joint pilot contract and an integrated seniority list. Unfortunately, we were unable to reach an
agreement on seniority list integration with the Northwest MEC, which was a crucial part of the overall package.
Instead, we were able to negotiate Letter 19 which sets a "higher bar" for an eventual joint contract than would have otherwise existed without Letter 19. That is good for
all pilots of the merged corporation. We still are actively encouraging three way talks between Delta and both pilot groups to achieve many of the same goals, including harmonization of our contracts to include these critical improvements.

2. This agreement will allow for a period of time where two different pay rates will exist for the same or similar aircraft for Delta and Northwest pilots. Isnít that something we would like to avoid?
In both the Western and Pan Am mergers, the acquired pilot groups operated under their old contracts for a period of time. In each case, there was a harmonization schedule established to step each group up to our higher pay rates. Achieving this type of parity will be one of our top priorities as we move toward a joint contract and a SLI. Northwestís contract specifies that if their carrier is acquired by another carrier, then their PWA remains in full effect for them until the Northwest MEC negotiates changes. We have to respect the independence of the Northwest pilots and their MEC to establish their own strategic plan.

3. Will there be backlash from the Northwest pilots since they were not included in this agreement?
The Delta MEC considers the combined Northwest and Delta pilot groups to be one group now and our every action will reflect that belief. We chose a course of action that we felt provided the most value to ALL Delta pilots including our brothers and sisters from Northwest. We will put the full power of the Delta MEC and the Delta pilots behind our efforts to achieve contract harmonization for Northwest pilots in a short period of time, and make will every effort to achieve a mutually agreeable solution on seniority list integration.

4. Will there be lost jobs in this merger?
Northwest and Delta have very little route overlap and there is little expectation of any major cuts in most markets. The combined carrier will also create the need to "up-gauge" many markets which could result in less DCI flying and more mainline flying.
The Northwest Pacific operation is a tremendous asset, but Northwest cannot adequately capitalize on that asset due to their smaller domestic feed. Many Delta hubs, especially Atlanta, are capable of fully feeding that asset. This will create even more long range international flying opportunities for the combined pilot group. Our improved scope protections will ensure that the pilot groups do not get "whipsawed" against each other, but will share in those opportunities. Furthermore, this agreement provides merger related furlough protection for the 24 months from the Date of Corporate Closing (DCC) and merger related furlough protection during the regulatory review period prior to the
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Old 04-15-2008, 11:01 AM   #2
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where is the rest of it? Thanks for posting it gives us NWA guys a chance to see whats on the DALALPAs mind.
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Old 04-15-2008, 11:45 AM   #3
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LOA 19 Frequently Asked Questions

The Agreement

The Equity

Labor Issues

Industry Issues

What’s next?

The Agreement
1.
What exactly will we be asked to vote on?
You will be asked to ratify Letter of Agreement 19, a tentative agreement between the Delta MEC and Delta management. The agreement will provide for modifications to the Delta Pilot Working Agreement designed to facilitate a successful merger between Delta Air Lines and Northwest Airlines. Letter 19 also contains contractual improvements and monetary returns for the value we provide to the transaction. Please see Negotiators’ Notepad 08-01 for more information.
2.
What relief are we providing to the Company if Letter 19 is ratified?
The most important relief is the continued and expanded code sharing with Northwest until we achieve full operational integration. Our current code sharing agreement with Delta provides the MEC with many controls over the scope of code sharing and even allows the MEC to discontinue all code sharing under certain conditions. Obviously, it would be difficult for Delta to initially achieve many of the benefits of the merger without this code sharing.
We also have to modify the limits on 71-76 seat jets since Northwest and its feeder carriers will now be owned by Delta. We combined the separate contractual limits for both carriers.
3.
What contractual improvements and financial returns will we receive if Letter 19 is ratified?
Letter 19 contains a number of returns for the Delta pilots if Letter 19 is ratified. These include pay rate increases, improvements in sick leave, increased DC Plan contributions, increased per diem, increased international pay, and pay parity for 737-700 to 737-800.
We also enhanced our Scope Protections as they relate to any merger, during the time that Delta is operating each carrier separately. This will prevent whipsawing pilot groups against one another and provide important job protections for Delta pilots.
Finally, we achieved a full voting seat on the Board of Directors which has been one our goals for many years.
4.
How is Letter 19 different from the agreement I previously heard about?
Letter 19 is a tentative agreement between the Delta MEC and Delta management. The terms of Letter 19 will only apply to pre-merger Delta pilots.
Prior to Letter 19, the Delta and Northwest MECs attempted to reach a comprehensive overall agreement which would have included a transition agreement, a joint pilot contract and an integrated seniority list. Unfortunately, we were unable to reach an agreement on seniority list integration with the Northwest MEC, which was a crucial part of the overall package.
Letter 19 is neither a joint contract nor does it include an integrated seniority list. We look forward to working with the NWA MEC leadership to craft a joint contract and a fair seniority list.
5.
Why are we “cooperating” with management on this merger?
The position of the Delta MEC has been clear and consistent. We do not oppose consolidation and have always held that we could support the “right” merger. Given the turmoil in the industry and the staggering effects of record oil prices, the MEC feels that this merger will generate additional flying for Delta pilots and additional profits for the merged company. Your MEC believes this merger is the fastest most sure path to increased compensation through profit sharing and contract improvements along with the advancement opportunities that network growth will provide.
6.
Why should we extend our contract now? Can’t we achieve better returns in Section 6 since the current amendable date is less than two years away?
If we wait until Section 6, we will have passed up the chance to obtain our equity grant which is an extremely valuable portion of this deal. We could not obtain the contractual improvements, including the equity without providing for some period of stability required to consummate the deal. Section 6 negotiations can often extend well beyond the amendable date which would further delay our contract restoration attempts. The MEC had to consider all factors, including the time value of money, in deciding on their course of action.
While there is a possibility that waiting for Section 6 could have provided greater benefits to the pilot group, that was considered a remote possibility, and the more likely outcome would have been less value. Negotiating in Section 6 does not insulate us from the fall out of a shrinking economy, $112/BBL oil, rapidly rising “crack spread”, and reduced demand for air travel.
7.
Does this agreement provide for even more RJs?
The total will not be any higher than the current total of combined limits in Delta and Northwest PWA’s. In fact, the ratio of RJ to mainline aircraft will be lower in the merged company than the existing ratio at Delta today. Consolidation will lead to less market fragmentation, which in the long run will create a need to up-gauge many domestic markets, lessening the need for many RJ’s. Currently, high fuel prices make it difficult to achieve profits using 50-seat RJ’s and we see a continued drive by Delta to reduce the use of those aircraft in the future.
The Equity
1.
What is the “equity stake?”
In accordance with the terms of Letter 19, the pre-merger Delta pilots will receive three and one-half percent equity stake in the merged corporation. The equity will be provided to ALPA on or about the date of corporate closing of the merger.
2.
How will the equity be allocated?
The equity will be allocated in two equal parts 50 per cent of the equity via a “per capita” distribution and the remaining 50 per cent via seniority-based distribution. The net effect is that the equity will be linearly allocated with the most senior pre-merger pilot on the seniority list receiving an allocation 1.4 times that of the most junior pre-merger Delta pilot on the seniority list, and all other pre-merger Delta pilots receiving an allocation based on their seniority position on the 1.4:1 sloped line.
3.
How much will my equity allocation be worth?
The value of the equity allocation will be determined by the market.
4.
Is there a provision to tax-defer any of the equity as we were able to do with the ALPA Claim and ALPA Notes?
The TFA requires that ALPA and Delta work together to develop a program that allows all or a portion of the Pilot Shares to be made, to the maximum extent permitted by law, in the form of a contribution to the Delta Pilots Defined Contribution Plan or the Delta Pilots Savings Plan and treated as an “employer” contribution for U.S. federal income tax purposes.
Labor Issues
1.
Didn’t we just leave the Northwest pilots behind?
Absolutely not. For the last several months, the goal of the Delta MEC was to achieve a comprehensive agreement which would have included a transition agreement, a joint pilot contract and an integrated seniority list. Unfortunately, we were unable to reach an
agreement on seniority list integration with the Northwest MEC, which was a crucial part of the overall package.
Instead, we were able to negotiate Letter 19 which sets a “higher bar” for an eventual joint contract than would have otherwise existed without Letter 19. That is good for all pilots of the merged corporation. We still are actively encouraging three way talks between Delta and both pilot groups to achieve many of the same goals, including harmonization of our contracts to include these critical improvements.
2.
This agreement will allow for a period of time where two different pay rates will exist for the same or similar aircraft for Delta and Northwest pilots. Isn’t that something we would like to avoid?
In both the Western and Pan Am mergers, the acquired pilot groups operated under their old contracts for a period of time. In each case, there was a harmonization schedule established to step each group up to our higher pay rates. Achieving this type of parity will be one of our top priorities as we move toward a joint contract and a SLI. Northwest’s contract specifies that if their carrier is acquired by another carrier, then their PWA remains in full effect for them until the Northwest MEC negotiates changes. We have to respect the independence of the Northwest pilots and their MEC to establish their own strategic plan.
3.
Will there be backlash from the Northwest pilots since they were not included in this agreement?
The Delta MEC considers the combined Northwest and Delta pilot groups to be one group now and our every action will reflect that belief. We chose a course of action that we felt provided the most value to ALL Delta pilots including our brothers and sisters from Northwest. We will put the full power of the Delta MEC and the Delta pilots behind our efforts to achieve contract harmonization for Northwest pilots in a short period of time, and make will every effort to achieve a mutually agreeable solution on seniority list integration.
4.
Will there be lost jobs in this merger?
Northwest and Delta have very little route overlap and there is little expectation of any major cuts in most markets. The combined carrier will also create the need to “up-gauge” many markets which could result in less DCI flying and more mainline flying.
The Northwest Pacific operation is a tremendous asset, but Northwest cannot adequately capitalize on that asset due to their smaller domestic feed. Many Delta hubs, especially Atlanta, are capable of fully feeding that asset. This will create even more long range international flying opportunities for the combined pilot group. Our improved scope protections will ensure that the pilot groups do not get “whipsawed” against each other, but will share in those opportunities. Furthermore, this agreement provides merger related furlough protection for the 24 months from the Date of Corporate Closing (DCC) and merger related furlough protection during the regulatory review period prior to the DCC.



(More to come...)
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Old 04-15-2008, 11:46 AM   #4
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(The rest...)




What’s next?
1.
How will the Northwest pilots and the Delta pilots achieve a joint contract?
The two MECs have the option to form a joint negotiating committee at any time and ask the company to negotiate a joint contract. We have already worked through many of the items necessary to bring the Northwest pilots over to our working agreement, so we anticipate that much of the negotiation will focus on the economics of the deal. Both our PWA and the Northwest pilot’s PWA, stipulate that there can not be an integrated seniority list and full operational integration until we have a new joint contract. The economic benefits of this integration is are an incentive to Delta to achieve a joint contract.
2.
Since we were unable to achieve a seniority list integration, what happens next?
We will aggressively pursue an SLI and this can be achieved at any time. As we have said, there are economic benefits to Delta and both pilot groups to have this happen as soon as possible. Our desire is to work together with the Northwest pilots to achieve these benefits as soon as possible.
If we are unable to achieve a consensual SLI, the ALPA Executive Council may declare a Policy Initiation Date (PID) which will start the clock on the ALPA Merger Policy. There will be a more detailed discussion of the mechanics of this policy in the future, but the basic process is Seniority List Verification, Negotiation, Mediated Negotiation, and finally, Arbitration.
3.
When will the membership ratification vote take place?
The ratification window will be announced soon.
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Old 04-15-2008, 12:49 PM   #5
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Quote:
Originally Posted by Superpilot92 View Post
Thanks for posting it gives us NWA guys a chance to see whats on the DALALPAs mind.
I speak for no one but here's my strictly unofficial view of what's on DALPA's mind:

Like it or not, we are one pilot group now. DALPA is taking that fact very seriously.
Every action taken has been and will be designed to maximize the economic gains available to ALL the pilots of the new Delta. We have a long future ahead of us as one pilot group. There is strong motivation to quickly negotiate a combined seniority list in good faith with our NWA brothers and then proceed to a new joint contract in an expedited fashion. Management wants it, and they're willing to pay for it. We MUST take advantage of that.

We understand that the initial reaction of many Northwest pilots to the "seperate agreement" that DALPA has signed may be very negative. Look for significant overtures and communication efforts from the Delta pilots to explain our reasoning and motivation for that agreement. We regret that there was not time or opportunity to fully explain it in advance but management's timetable simply didn't allow for it.
The short, oversimplified explanation is - We see the agreement as a PLUS for the NW pilots and are confident that you will eventually see it that way as well. It is designed to benefit all of us. It establishes an economic floor and for the first time in history formally codifies the value of airline labor participation in corporate mergers. Our upfront participation has significant value to the enterprise and we should be compensated accordingly. Establishing that principle was crucial in our view.

However, it is the sincere hope of the Delta pilots that the LOA 19 "seperate agreement" will NEVER go into effect. We fully expect to join with the NWA pilot group in a much richer "joint agreement" well prior to the closing of the corporate transaction.

This new Delta Air Lines has the long term potential to richly reward its pilots. ALL its pilots. The Delta MEC is doing everything in its power to see that come to fruition as quickly as possible.
We urge the Northwest pilots not to react too quickly or harshly to the events of yesterday. First impressions are often wrong. It is the belief of the Delta pilots that upon reflection the Northwest pilots will see the value of this agreement and join with the Delta pilots over the coming days in efforts to enhance and expand upon the existing framework. Together, we will craft a far superior agreement that includes all of us.

Give DALPA a chance. They're pretty sharp guys. Think about what we're arguing about here. DALPA worked their butts off to lay the groundwork for any of this "upfront labor participation" to be possible at all. Normally management would just inform us we've been merged.
And I genuinely believe DALPA has absolutely no intention of "throwing anyone under the bus". Especially not a future co-worker. I hope you will come to believe that as well.

Last edited by Check Essential; 04-15-2008 at 12:56 PM.
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Old 04-15-2008, 01:21 PM   #6
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Quote:
Originally Posted by Check Essential View Post
Together, we will craft a far superior agreement that includes all of us.

Give DALPA a chance. They're pretty sharp guys. Think about what we're arguing about here. DALPA worked their butts off to lay the groundwork for any of this "upfront labor participation" to be possible at all. Normally management would just inform us we've been merged.

And I genuinely believe DALPA has absolutely no intention of "throwing anyone under the bus". Especially not a future co-worker. I hope you will come to believe that as well.
Excellent post, Check Essential.

For what it's worth to the NWA guys... Delta has a crazy pilot hiring process, and while I was going through it, I couldn't entirely identify what exactly it was that caused them to hire one person, and not another.

During Indoc, a lot of managers came to talk to our class, and several explained why they hire who they hire - because they all have integrity. That seems to be such a huge running theme throughout this company, and every new hire in my class as well as every employee I have come in contact with, certainly shares that trait. The phrase that kept coming up was, "We hire people who do the right thing, SIMPLY because it's the right thing to do."

If the NWA pilots are truly concerned they are going to get thrown under the bus, I sincerely believe that the DAL pilots in the bus are simply coming to pick you guys up and bring you over here with us - not run you down. Hopefully in time, you guys will see that.
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Old 04-15-2008, 01:48 PM   #7
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Originally Posted by E1Out View Post
Excellent post, Check Essential.


If the NWA pilots are truly concerned they are going to get thrown under the bus, I sincerely believe that the DAL pilots in the bus are simply coming to pick you guys up and bring you over here with us - not run you down. Hopefully in time, you guys will see that.
Good line my friend. Wish i would have thought of that one sooner.
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Old 04-15-2008, 01:54 PM   #8
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[QUOTE=Scoop;364495]From our union web-stie:

Scoop

Labor Issues
1. Didnít we just leave the Northwest pilots behind?

[FONT=Times New Roman,Times New Roman][SIZE=3][LEFT]Absolutely not. For the last several months, the goal of the Delta MEC was to achieve a comprehensive agreement which would have included a transition agreement, a joint pilot contract and an integrated seniority list. Unfortunately, we were unable to reach an
agreement on seniority list integration with the Northwest MEC, which was a crucial part of the overall package........................

Now, AV8ER will still find a way to think he's screwed.

757Driver, will be upset that there is no clause to make sure CAL pilots are paid $400/hour even though this is between DAL and NWA. It will come to be known as the Cletus Clause.
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Old 04-15-2008, 03:02 PM   #9
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the nwa mec is going to oppose the proposed merger by all legal means possible. as a 12 year line pilot, i support their decision, up to an including a strike. nwa has the most cash in the industry. the bottom line is dal is running out of cash....
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Old 04-15-2008, 03:55 PM   #10
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the nwa mec is going to oppose the proposed merger by all legal means possible. as a 12 year line pilot, i support their decision, up to an including a strike. nwa has the most cash in the industry. the bottom line is dal is running out of cash....

The airlines have not merged yet, you will only be hurting yourselves. NWA is losing money too with these fuel prices.
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