Delta VS Delta Connection carriers...

Any one know the latest between the tensions between mainline Delta pilots, and Connection pilots (Comair and ASA)... have either sides agreed to pay cuts??? Will both end up having to take pay cuts, etc...
anything to fill in on what's happening would be appreciated, thanks!
Oh... sorry!

I just wasn't sure as to what's going/coming ahead in the near future...

DATE: November 30, 2003

TO: All Comair Pilots

FROM: Captain J.C. Lawson
Chairman, Comair Master Executive Council

SUBJECT: A Snapshot In Turbulent Times

As most of us know well, mainline Delta management has enjoined Delta pilots at the mid-contract negotiating table. It’s “old news” that Delta mainline faces financial challenges, both immediate and long term. Delta management believes they can only overcome their financial shortfalls if mainline Delta pilots willingly contribute, by way of concessions, and particularly, pay cuts. Sensing a target of opportunity, Delta Connection, Inc. (DCI) (dba Comair) has invited Comair pilots to offer “relief” from our own Contract, specifically citing reduced pay rates, among other things.

Comair management has characterized their “need” for contractual relief as an “Opportunity for Growth”, and bases their need on their claim that it’s not about financial “survival”, (i.e., we’re not in danger of bankruptcy - we’re profitable), but rather that Comair is not competitive when compared to other airlines within, and outside of DCI. While they have never offered guarantees of growth, they have claimed that forty-five airframes “might” become available if we “cut (crew) costs”.

Due diligence dictated that we solicit data that expresses Comair’s financial performance and justifies their alleged needs. Comair provided, and we retained the economic experts at ALPA’s Economic and Financial Analysis (E&FA) to assist us in analyzing that data. The analyses revealed that Comair is, in fact, profitable, i.e., we’re making money today within our current crew cost structure, and that, based upon standard industry financial performance indicators, Comair is also competitive, today, without taking concessions from our employees, specifically Comair pilots.

Having established all of that, and setting it aside momentarily, still, we view virtually every page of our Contract as “legal tender”. Since Delta (dba Comair) management wants something we possess, we may be able to find some common interests to support mutually beneficial discussions. Therefore, we view our management’s need as a potential investment opportunity for Comair pilots. In the event our management is willing to pay a “reasonable price” for whatever we have that they want, we may be previewing an opportunity to improve our future beyond what we have today.

Our position is enviable. We are under absolutely no obligation to negotiate any changes to our current working agreement. Should we discover, at any time, that the return on any investment we may consider is less than worthwhile, we could withdraw immediately, without penalty, from all negotiations.

Another foreboding piece to this complex puzzle now rises: The Request for Proposal (RFP). Delta (dba Delta Connection, Inc.) has solicited an RFP that entices the eight selected participants (CMR, ASA, CHQ, SKW, CALEX, PCL, MSA, and MAG) to “bid” on the offering, with the award going, ostensibly, to the lowest bidder. DCI has expanded its “portfolio” to non-DCI carriers within the Delta-Continental-Northwest Alliance, and we have expanded our communications and coordination to accommodate the new and expanded DCI RFP participant pilot groups. Isn’t it interesting that management calls the Delta-Continental-Northwest relationship an “alliance” while, simultaneously, they openly encourage internal, cutthroat competition specifically designed to reduce employee pay and benefits, and they refer to that as “capitalism at its best”.

To date, the offering appears to be forty-five 50-seat jets to be delivered during 2005 and 2006. This launches a “bidding war” that formally introduces a treacherous “race to the bottom”. DCI is finally transmitting their concessionary aspirations “in the clear”. One can only guess where that “graveyard spin” could end. If all goes per management’s design, somebody could conceivably fly those jets for free!

Sound ominous? There is a bright side. We are ALPA. We have many allies. There’s us, and then there are more of us at ASA. The Comair and ASA MEC’s have been in direct communications constantly, meeting jointly, routinely, for years, and we’re meeting again on December 4th. We have good friends flying ASA airplanes. They trust us, and we trust them. There will be no bidding war. We will not “low ball” one another. Our intra-MEC communications has been continuous, frank, and candid. Our relationship is strong, built on honesty and trust.

Comair MEC members have been in the Comair pilots’ lounge, face-to-face with most of our pilots since early in September. Since early spring, we’ve been expecting our management to seek concessions and we’ve planned accordingly; we’ve been ahead of the wave, and intend to keep you out in front.

Delta may send 50-seat jets to any of the other “competitors” within the RFP to prove that they can; to suggest that they’re willing to allow Comair to “wither on the vine” unless we agree to take reductions in our current Contract. Well, OK, maybe they can, but that is akin to “cutting off your nose to spite your face”. We wonder just how long Delta’s stockholders would tolerate such obstinate behavior while we are generating the profits and slowing the hemorrhaging that threatens Delta’s long-term health and survival.

In the spring of 2001, Delta (dba Comair) managed to squander many hundreds of millions of dollars to sustain a strike on Comair property that former Delta CEO, Mr. Leo Mullin, later characterized as “unfortunate”. In a recent article for Commuter/Regional Airline News entitled “Regional Jets ‘Critical’ In U.S. Airlines’ return to Profitability”, Mr. Doug Abbey, Executive Director of the Regional Air Service Initiative (RASI) wrote:

"As the legacy majors restructure, regional carriers continue to expand the choice of air service available to American cities, focusing on adding new market-pairs, the majority of which were never served nonstop before. Not surprisingly, the number of routes where RJs replaced major carrier jets accounted for only a small portion (4%) of all new service. This confirms that small capacity jets are critical if the U.S. airline industry is ever to return to profitable growth."

The world is watching, yet again, to judge Delta’s financial wisdom should they threaten now to “bite the hand that feeds them”. By all indications, Delta needs every seat and every airframe it can fly, and more, to remain competitive. Sitting any of its assets “on the bench” is not likely a prudent or “competitive” choice.

As we step back for a clearer view, we believe this is not about forty-five 50-seat jets that are due for delivery in 2005 and 2006. It’s definitely not about bankruptcy or our profitability. It’s not even about our competitiveness. This is about “potential” growth beyond ’05 and ’06, to ’08, ’10, ’12, and so on. It is about cutting Comair crew costs to drive Comair’s operating costs below what the market will bear to improve Delta’s “bottom line”. It’s about plundering employee pay and benefits to enhance Delta’s profit margins. It’s about reviving a “B” scale pay rate, this time within the small jet structure, and establishing a foothold to perpetuate its use in the future. This is about forcing the industry “pendulum” to swing past market equilibrium to an artificial imbalance that, this time, favors management. Sadly, an imbalance in any environment is temporary, harmful over time, and still an imbalance, no matter whom it favors. It invites turmoil and unrest, and if imposed, is destined to suffer another violent and costly recoil.

Finally, before competing airlines can operate at “cut rates”, they must first negotiate those sub-standard rates with their respective pilot groups. Herein lays our front line of defense. We are already communicating regularly with all carrier pilot groups within the DCI RFP to encourage them to resist this “race to the bottom”, fueled by an RFP “bidding war”, and ignited by suggestions of potential future growth. Additionally, we are communicating and coordinating with the Leadership of the Delta pilot group. Our communications with these carriers have been productive, and universally recognized as a unified determination to resist this classic, regressive whipsaw tactic.

We will soon know where this “potential investment opportunity” will lead, and we will communicate further as new information becomes available.
They more or less want to combine seniority lists to gain some leverage. However, with the status quo of having six or seven different connection airlines vying for the same routes, management is able to 'whipsaw' or play one against another to keep wages and costs down.

Combining the two connection carriers would make economic and common sense, but airline managment would lose big time leverage and would no longer be able to drive down and keep low wages, costs, etc.
It's all due to the scope clause in the Delta pilot's contract. They (the regionals) can fly aircraft up to 70 seats (in numbers based again on the DAL contract) but anything above that is "scoped out". In point of fact, airplanes over 70 seats probably belong at the major rather than regional level anyway. (In my opinion that is.)

That letter illustrates the classic danger of the so-called "Good Contract."

Comair went on strike to get all these concessions and work rules and whaddya know, Mainline is going to give all the work to the cheaper carriers. Well, duh!

I hope all you "Strong Contract" guys out there wake up and see that there is a trade-off of good contracts .vs. job security.
Actually, I can't agree with you on that at all.

You can't trade pay and benefits for job security. It hasn't worked in 80 years of commercial aviation, it surely wouldn't work now. Ask any TWA pilot.

If you replace the word scope with subcontract, you can probably get a clearer picture of such.

Comair struck for a good reason because there's no way on earth that a CRJ captain with responsibility for 50 to 70 passengers should earn less than a Scottsdale garbage collector.

Also, management would have you believe if you 'low ball' first officer pay rates in order to 'purchase growth' and how you shouldn't worry about the low scale because upgrade times will be fast has never worked either. The trickle down theory does not work long term in the aviation business. Ask some of the FO's at American Eagle about trading rates for advancement.

This is a demanding profession and requires great personal sacrifice on many fronts and should be compensated accordingly. But you're not paid what you're worth, you're paid what you negotiate.
[Street Fighter 2 Turbo background music plays]

Round Two, FIGHT !!!!!!!!!!!!!!!!!!!!!

So Delta is going to outsource Comair's flying because ... why?

[/ QUOTE ]

Gotta look just a wee bit higher upstream to see where the outsourcing started, but primarily it's negotiations leverage.

If you have one pool guy in Mayberry, but then another pool guy shows up, you give a little business to the new pool guy.

When the first pool guy says, "Hey, I've got to raise my rates", you say "ah ah ah! The other pool guy only wants a small (or no) increase"

Then you've got two pool guys. But then you figured that if you can get a third pool guy into the mix, the first two guys aren't going to have much leverage to negotiate better terms, thus keeping costs low.

It's not the contract, it's Corporate America's bloodthirst to pay the average employee as LITTLE AS POSSIBLE for a better balance sheet and the negotiating leverage to do so.
Doug I agree with everything you say. Still doesn't change the reality that a "superior contract" for a commuter may spell a death sentence.

Just look at the USAir wholly owneds.
So therein lies the rub.

Work under a crappy contract for little pay in a physically and personally demanding career with the faint promise of stability (which hasn't existed in this field in history); or get a liveable contract requisite with your level of skill and dedication while management spouts gloom and doom and demands that you work more for less...

Decisions, decisions!

I do, however, think the root of Comair's problems with their contract are other regionals that are giving up the farm in promises of growth and career advancement. I can't tell you how many times I've heard $18,000/year FO's saying "Yeah, but the new contract brings the rates down enough for my airline to buy more airplanes and they say I'll make captain sooner. So even though I'm working for megalow wages, I'll probably make captain sooner".

Meanwhile, a few years later, they're still $18,000/year FO's.

Pilots kill me!

Believe me, if my job became a $35,000/year job for the rest of my career, I'd probably rather quit, find a $35,000/year job in PHX and spend more time with my wife.
Doug I agree with everything you say. Still doesn't change the reality that a "superior contract" for a commuter may spell a death sentence.

[/ QUOTE ]

PMFJI, but that is true only if your work can than be outsourced to others. In other words, without any scope, your dead. With scope, you've got a fighting chance, because they have to deal with you.

The unfortunate reality is that most "commuters" don't fly their own code (flying that falls under their scope protection), they fly whatever is allowed to be outsourced by a mainline carrier and therefore they must "compete" for that flying. That really wasn't so bad when the RJ market was experiencing double digit growth recently, but that growth is now coming to an end as the marketplace reaches RJ saturation. Mainline carriers now have the luxury of picking and choosing among a growing portfolio of small jet providers, and management will inevitably choose the cheaper option.
Exactly what Swabby said.

Basically, if say United wants a lower cost LAX to BOS flight, they're stuck with UAL pilots and their cost structure. But if they want to reduce costs on LAX to FAT, they can take bids from Mesa, Skywest, American Eagle, Horizon, Chautauqua, etc. The lowest cost carrier will perhaps win with all things being equal.

The difference is 'scope' or the decreased ability to subcontract work.
"Scope" LOL! Scope is a mouthwash. Ask American Eagle about Scope. Then look at all the TSA and Chautauqua (and Biz Ex before they were "absorbed") doing Eagle routes. Ask the USAir wholly owneds about scope and they STILL don't have jets (I believe PSA takes delivery on their first CRJ next month.) Ask Comair if their company would take flying that was "scoped." In a heartbeat!

Don't tell me you've never heard the words "grieve it" when the contract was violated! Even Delta ALPA has taken concessions before. Don't forget, that we're talking about commuter to commuter scope. If Comair loses some flying to Chautauqua for example, what protection do they have other than a bunch of lengthy and expensive lawsuits?

Most "connectors" have mutual 30 day clauses in the contract where either side can reopen negotiations with 30 days notice.

Not to be a grinch here, but look at it from the CEOs point of view - here's carrier A that is charging X dollars for departure (or seat mile, whatever you want to use) and along comes carrier A offering a significant discount. It eats them up that they have to pay more, and it makes the bean counters mad, too! And when the bean counters get mad, it's only a matter of time before directors and shareholders get in the act.

I agree that you don't put your eggs in one basket, but you put the most eggs in the basket that offers the best return on the dollar.

My point? Sometimes it pays to do some "give and take" in contract negotiations. There are plusses and minuses to having the "strong contract" with high pay and expensive work rules.
See any wholly-owned USAir subsidiaries flying RJ-90's, 737's or 757's flying around?

What was that you were saying about Listerene again?

The CEO's primary job is to glean the most output per worker for the least amount of money for the corporation.

My job, as worker, is to do the least amount of work to glean the most amount of money for my family.

Anything else beyond that is pie-in-the-sky/touchie-feelie hubris.

Don't sound so angry, JT!