DELTA CUTS JOBS

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Let's make sure I have this right: Delta has created a new business plan and is saying to the pilots either they will provide the cuts outlined in the business plan, or they'll force the courts to enforce those same (or worse) cuts.

Is that legal? It sounds like going into bankruptcy specifically to get pay cuts outta the pilot group, circumventing the union in the process.

Or am I off base here?

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Delta is bankrupt now for all practical purposes. They must either reorganize like AMR did, getting concessions from creditors and employees out of bankruptcy court, or they must do it in bankruptcy court. There is no other option.

Now the big decision for all the "stakeholders" is whether they want what the company is offering now, or do they want to take their chances in bk court.

As someone else mentioned, the difference is bk court wipes out the stockholders, which Delta management does not want to do. But some creditors may prefer that if the medicine Delta offers is too bitter.

There are no eassy answers.
 
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Okay, I read this one and had a "HUH?" moment.....

Reduce the congestion at ATL, but add flights.

The ONLY way I can see them doing this is to blow the whole hub and spoke pulse operation. SWA at MCO is up to about ten flights per GATE now. We can head over to United and set our watch by when the ramp guys are all sitting down. It's about every hour or every 45 minutes. A hub network is designed to have all of their flights on the ground at pretty much the same time so the pax can connect. I noticed they're adding like 19 non-stops to destinations, so those are always good to see. What I wasn't happen to see is that they are adding a/c to Song. Is it actually gonna come out of Song's budget now, or is it still gonna leach off of mainline?

[/ QUOTE ]sounds to me like it's leaching off the mainline, but that's IMO...

they didn't say much about the regionals or delta shuttle though which is strange - wonder what will come up with that!

also agree with your ATL statement... ATL is already way congested and making it into "Redesigning Delta's primary hub in Atlanta to add more flights than any airline has ever flown from any one city while at the same time reducing congestion" doesn't sound healthy from a time efficient standpoint....

If they retire the MD series, I wonder why they'd start bringing out MD's with leather seats and upgraded interiors... so i'm thinking they'd probably keep the MD's around.. but it does sound as though they're making the system into a LCC type system with int'l addon...

based on today's new, a lot of the early retiree's may opt out in which case means that DL will have to bring in more of the furloughee's and go thru training etc.. I didn't see any of that converstion in there at all, just the talk about early retirements. I'd expect that to hit the fan pretty quickly here!
 
I always thought that an airline closed when it filed bankruptcy until it started happening to the airlines. When does an airline close?
 
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I always thought that an airline closed when it filed bankruptcy until it started happening to the airlines. When does an airline close?

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After deregulation Braniff was one of the first airlines to declare bankrutcy. They just shut it down, as the conventional wisdom back then was that the public would not fly on a bankrupt airline.

Frank Lorenzo changed all that with Continental. Declared bk and just kept flying. When it worked the thinking was forever changed.

After Continental the bankrutcy laws were changed to make it much harder to use bk for other agendas besides debt.

Now airlines typically try to enter bk with enough cash to keep operating and reorganize. The public seems oblivious to whether their airline of choice is bankrupt or not.
 
So, the pilots want to retire so as to get their pension benefits?

I don't quite get this...Do the pilots get a choice to take their pension as a reduced lump sum if they retire early? Thus depleting the pension fund prematurely? Is the pilot's retirement based off of some sort of percentage of the highest average of their earnings? I'm speculating here...

What is the pilot retirement crisis?

Also, I didn't really hear anything about all of the 'regional' Delta connection carriers. If it's not broke, don't fix it?

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So, the pilots want to retire so as to get their pension benefits?

I don't quite get this...Do the pilots get a choice to take their pension as a reduced lump sum if they retire early? Thus depleting the pension fund prematurely? Is the pilot's retirement based off of some sort of percentage of the highest average of their earnings? I'm speculating here...

What is the pilot retirement crisis?

Also, I didn't really hear anything about all of the 'regional' Delta connection carriers. If it's not broke, don't fix it?

/ubbthreads/images/graemlins/confused.gif

[/ QUOTE ]typically, an early retirement is retiring with a "lump sum" pension amount.. they're essentially going into retirement and yes, it could deplete the fund prematurely but not completely...some see it as a "oh sh*t, get out before you lose it" and it's usually those over 50 that take early retirement because they want to try and save as much of their accumulated pension as possible.

in a good way, it allows for the seniority list to move upwards in which case, pilots can be hired (or furloughs brought back).

the problem with too MANY early retirements is that if they all happen at once, you can't hire and train enough pilots quick enough to be able to compensate the pilotless routes in which case, the company loses money. it takes 6 weeks to train a brand new pilot (groundschool/sim/testing)... for a pilot to move to a new base, it's usually a 3 day training.. and for a pilot to move spaceships (ie: aircraft), it takes about 3-4 weeks depending on if they also are switching bases...figure 10 in a class and you can really only train 10 pilots within a monthly period, if that....that's one of the reasons the furloughs are being brought back as we speak. I think almost all of the furloughees are back, I know Joey (Doug's friend) has an anticipated class date in october (but isn't sure if he's going to take it yet cuz he's doing good on the corporate side right now).

in this case, 100 or more pilots could easily go early retiree because DL has that many pilots that are within retirement limits. you can't hire & train all 100 pilots all at once and that's where it becomes r e a l l y sticky!

If i have my facts straight on the whole early retirement thing...

I'm not sure how pilot pensions are calc'd.
 
From what I think I understand, it wouldn't make sense to stick with the airline if, being eligible to retire, I knew that it would cut my retirement. I wouldn't blame the pilots who decided to retire.

It seems highly illogical to put the pilots in a position where their best interests are to retire early, therefore leaving the airline in a labor/capacity crisis.
 
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I don't quite get this...Do the pilots get a choice to take their pension as a reduced lump sum if they retire early? Thus depleting the pension fund prematurely? Is the pilot's retirement based off of some sort of percentage of the highest average of their earnings? I'm speculating here...

What is the pilot retirement crisis?

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It is partly what Kristie said, training replacement pilots. But it is more about cash reserves. The pilots can take part of their retirement as a lump sum. This amount is enough that it threatens the airlines cash reserve.

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Also, I didn't really hear anything about all of the 'regional' Delta connection carriers. If it's not broke, don't fix it?

/ubbthreads/images/graemlins/confused.gif

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I believe Grinstein was talking about Delta as a whole. There is no doubt that any scheduling/hub decisions directly effect the regional divisions. It's all one big (fill in the blank)________ family.
 
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So, the pilots want to retire so as to get their pension benefits?

I don't quite get this...Do the pilots get a choice to take their pension as a reduced lump sum if they retire early? Thus depleting the pension fund prematurely? Is the pilot's retirement based off of some sort of percentage of the highest average of their earnings? I'm speculating here...

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I can't overemphasize how complicated this is, but here is my shot at an explanation.

Can an employee/retiree demand a lump sum? This depends to a large extent upon the type and nature of the plan itself; however, generally speaking, a pension plan allows a retiring employee to choose between an annuity (paying a certain amount per month or year for life) and a lump sum payout (or some variation thereof). There are formulas set out in the plan documents that dictate the amount of money the employee would get under the various options. There are about a million factors an employee must consider in deciding which to take (and when to take it). For present purposes, the most important factor is the employee's faith that the pension fund will remain solvent. Because there appears a reasonable likely that Delta's pension fund may become insolvent, some of those who can are electing to get themselves and their money out of the plan before insolvency occurs (in other words, retire and cash out before bad things happen).

Why would the fund become insolvent? Most pension plans are set up as independent funds, which are held in trust for the plan beneficiaires (employees, retirees, etc.). Such funds are separate from the employer and must be run for the benefit of the beneficiaries. Federal law supplies some fairly complicated formulas for how an employer must go about funding a pension plan. The amount of money which must go into (and be in) a pension fund is determined by the expected plan liabilities and the timing of those liabilities (how much do we owe retirees and when do we have to pay it). Because of the way these rules works it is entirely possible for a plan to be lawfully funded, yet be underfunded for future liabilities. In fact, right now, most pension plans probably are underfunded.

What may be happening at Delta? If Delta files for bankruptcy, it can be expected that pension plan contributions will cease, and the plans themselves probably will be closed and liquidated. If that happens, the employees and retirees will be entitled to a cash out (lump sum payment) of their current stake in the pension fund. There are two basic reasons, however, why this is undesirable. First, pension plans usually are set up to be "back-weighted," meaning that the bulk of the value of the retirement benefits is built up in the last years of employment. If an employee is forced to cash-out early (because of plan termination), then he/she is likely to miss out on these later "rich" years and end up entitled to a much smaller amount. Second, if the plan is underfunded, there won't be enough money in the fund to pay out everything that employees and retirees otherwise would be entitled to. Further, because Delta would be bankrupt, the plan could not look to Delta to make up the difference (or, at most, would receive pennies on the dollar). As a result, all plan beneficiaries would receive less money than even the plan formulas would call for.

With all of these considerations, there are some pilots who stand to lose enough money in a bankruptcy to make it worthwhile to get out now. Those pilots presumably have been filing for retirement and taking whatever lump sum options may be available to them.

I hope this makes sense.

MF
 
I really appreciate the effort. It was a great explanation.

I'm a newbie, and I have a strong feeling that pensions will be only a pleasant memory by the time I get to the point where I could benefit from one.

Kinda like Social Security.

G
 
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K,

What's little Joey doing these days?

[/ QUOTE ]flying corporate... doug talks to him more often now that he's been given a class date (if he chooses to take it).. but apparently, he's flying corporate domestically quite a bit and is really enjoying the job.. so it's quite a quandry for him to stick with the corporate job or go back to DL.
 
that was a very good explaination Minnesota_flyer!!

as it stands right now, the pension plan is very underfunded.
 
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I really appreciate the effort. It was a great explanation.

I'm a newbie, and I have a strong feeling that pensions will be only a pleasant memory by the time I get to the point where I could benefit from one.

Kinda like Social Security.

G

[/ QUOTE ]in most fields, pensions have been gone for a long time now. Airlines is one of a few that are left....
 
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Okay, I read this one and had a "HUH?" moment.....

they didn't say much about the regionals or delta shuttle though which is strange - wonder what will come up with that!


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I too was interested to see more about customer-driven enhancements at DCI to fall in line with the 'new' Delta product.

As far as cost cuts....You didn't think DCI was going to get off with a pass did you? Mr Fred told us in person today that Delta was going to significantly cut the departure fees it pays connection carriers to operate. That translates into reduced revenue for them, and in turn, associated cost-cutting measures. I can take a hint; BOHICA!!
 
Considering ASA/CMR/SKY/CHQ will no longer serve DFW, there's a bevvy of jobs evaporated right there. We only had like 50 mainline departures and most of those frequencies went to SLC and ATL and a couple at CVG.

Having a hub requires an enormous support network. Even though we were 'small fries' in DFW, I think we employed about 3,000 people there that really haven't any other place to go.

After we shifted to a smaller gauge aircraft in the DFW market, even our CEO surprisingly admitted that American cleaned our clocks. I only know about the PHX/DFW city pair where I'd see a lot of the people I'd see that regularly flew Delta over in the AA concourse or in line with me at America west when we 'down gauged' a lot of our markets. Getting to work started to suck royally so I 'bunted' and bid ATL.
 
Brian, United is still in Chapter 11. Seems like they are operating lots of flights.

Does that answer your question?
 
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Okay, I read this one and had a "HUH?" moment.....

they didn't say much about the regionals or delta shuttle though which is strange - wonder what will come up with that!


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I too was interested to see more about customer-driven enhancements at DCI to fall in line with the 'new' Delta product.

As far as cost cuts....You didn't think DCI was going to get off with a pass did you? Mr Fred told us in person today that Delta was going to significantly cut the departure fees it pays connection carriers to operate. That translates into reduced revenue for them, and in turn, associated cost-cutting measures. I can take a hint; BOHICA!!

[/ QUOTE ]well, you lost me on that one...can you try explaining again what Mr Fred said??? /ubbthreads/images/graemlins/tongue.gif
 
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Brian, United is still in Chapter 11. Seems like they are operating lots of flights.

Does that answer your question?

[/ QUOTE ]I think he's asking when is the end of the line... and I think that's when they file for Chapter 13 right?
 
Chapter 7, actually. That's liquidation. I believe that Midway did it in October of 2003. Not sure if TWA did it, or if they just sold themselves to American.
 
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