It’s remarkable how quickly a labor agreement can be reached when both sides want something. Even though Delta’s pilot contract doesn’t become amendable until the end of this year, both management and pilots wanted something more. Because of that we have a tentative agreement a good six months early. The pilots will now vote on this to decide if they want to accept it. If they do (and at first blush, it seems they should) then they’ll have higher wages and lower profit sharing. They’ll also begin flying smaller airplanes.
There are a lot of little things changing in this agreement, but let’s focus on the big stuff.
The Pilots Want Less Outsourcing, Delta Wants a Great Deal on Airplanes
Mainline pilots always want to see less outsourcing. And Delta’s management team always wants a great deal on airplanes. In the last pilot contract, the stars aligned to make that happen. Delta was able to acquire the former AirTran 717s for cheap and the pilots agreed to fly them in exchange for a smaller Delta Connection regional fleet.
Now this opportunity has presented itself once again. Delta has a smoking deal in the works with Boeing. See, Air Canada had 20 Embraer 190 aircraft that it didn’t want. It was also looking for a next generation replacement for its domestic Airbus A320 fleet. Boeing stepped in and got Air Canada to switch to 737MAX aircraft partially by agreeing to take those Embraer 190s off Air Canada’s hands.
Enter Delta. Boeing is sitting on these Embraers with nobody to take them. Delta, of course, is interested in anything like that if the price is right. So, Delta has now entered into an agreement to buy those Embraer 190s as well as 40 more 737-900ERs if the pilots approve this deal. The 737-900ERs will be used to replace older generation airplanes, and you can be sure that Boeing was willing to give a sweetheart deal on these. Not only does it keep the current generation 737 line going but it unloads those 20 Embraers. Everyone is happy.
Of course, the pilots like this, and they’ve agreed to fly the Embraer 190 at 16 percent less in terms of hourly wage compared to the 717. But does this shrink outsourcing? Absolutely.
Delta Connection’s fleet is currently capped at 450. It will shrink down to 425 with this agreement. Within that 425, however, Delta will be able to use bigger airplanes. For every 2 Embraer 190 (or equivalent) airplanes that Delta puts into service, it can replace a 50-seater with a 70 or 76-seater. This would allow 25 more of those 70-76 seat regional jets to be added, so that would mean Delta has incentive to add 30 more Embraer 190s over the 20 it has already agreed to.
Delta Wants Less Profit-Sharing
That’s not all that Delta wants, however. Since Delta is making big money, it wants to follow American’s lead and actually reduce profit-sharing. It thinks it’s paying out too much. To get that, however, Delta has to raise wages to make up for it.
So, on the date of signing this agreement, wages go up 8 percent. Then next January, they go up another 6 percent with 3 percent raises in both January 2017 and January 2018. The contract becomes amendable again at the end of 2018.
In other words, on January 1 of next year when the current contract would be amendable, the pilots will be paid nearly 15 percent more under this new contract.
Profit-sharing, however, will be reduced. Today, Delta pays 10 percent of profits of up to $2.5 billion on the year to pilots. (That used to be 15 percent, but it changed in the last contract.) This won’t change. But there’s another threshold where Delta pays 20 percent of profits over $2.5 billion on the year to the pilots. Now that Delta is making big money, it thinks $2.5 billion is too low. So this will move the 20 percent threshold all the way up to $6 billion in annual profit.
There are other changes as well, and if you really want to see them all, here are the full details of the tentative agreement. If you keep reading that thread, you’ll see a lot of people saying this is awful. But the reality is that this is a deal that gives both sides something they want, though it’s not a cheap deal for Delta.
When fortunes turn down again, Delta might not like these high wage rates. But that’s how this industry always works. Hopefully this time, the next downturn won’t be as bad as previous ones.
While I have no idea if it will be approved, the tentative agreement seems like a very worthy deal to consider. Now we just wait to see what happens. If it gets the thumbs up, you can look forward to flying on a Delta Embraer 190 next year.
[Original Embraer 175 photo via Angel DiBilio / Shutterstock.com]
60 comments on “Delta’s Tentative Agreement with Pilots Could Mean Higher Wages, Lower Profit Sharing, and More Airplanes”
So the E190’s will technically become mainline aircraft flown by Delta pilots with Delta FA’s on board? I don’t quite follow you on the incentive to dump the 50 seaters if they are replaced with “regional” jets staffed by their Delta employees. Wouldn’t that mean hiring more, i.e. adding labor costs, and isn’t outsourcing done in the first place to lower costs?
Not sure how I feel about blurring the lines of mainline aircraft and regional. While the E190 is a fine plane it isn’t a 717 or 737 in terms of interior cabin comfort. And wasn’t Delta going to buy the 737-900’s anyway to replace the 757’s with 20+ years on them?
I get the plane shuffling deals to get airframes cheap but I think the bigger story here is the growth of the “mainline” fleet and the pilots needed to fly them. I hardly believe a 737 captain is going to step down to fly an E190, right?
I really doubt that a 737 pilot will be forced into flying an EMB190 (unless they want a captain slot). All of these airlines are hiring right now due to growth and part 117 rules.
Remember, Delta will always take a free airplane!
As Cranky mentioned, this agreement is for a new pay scale for these mainline pilots. It’s lower than what 737/A320 pilots make, and even less than what the 717 pilots are making. So while it may cost Delta more than if they farmed it out to a regional carrier, it’s not breaking the bank. Obviously Delta thinks they can make it work, or they wouldn’t have made the deal. Current mainline pilots won’t want to fill these jobs, but this is about growing the mainline operation and adding new mainline union pilots – pilots that are currently making even less at regional carriers.
As for the comfort on a 190, I am almost certain they have wider seats than both the 737 and the A320. Add in the fact that their is no middle seat, and it’s even better. The only thing that makes it cramped is when the airlines squeeze the seats closer together to add more rows
“While the E190 is a fine plane it isn’t a 717 or 737 in terms of interior cabin comfort.”
Absolutely true. The E190 is a dramatic step up from a 717 or 737 in terms of interior cabin comfort. It (along with the E170/175/195) is easily the most comfortable narrowbody in the skies with its full-width, 2×2 seating, ceilings high enough so a moderately tall person like me can stand with lots of headroom to spare, and overhead bins that can accommodate full-size rollaboards.
love the embraer pax eperience.
except the overhead bins can only accomodate rollerboards sideways, which makes it terrible for busy flights and people lower than sky priority.
this. would rather be on a delta E190 than a 737 any day
The incentive is to exchange 50 seaters for 76 seaters. In order to do that, Delta has to add mainline at the low end of capacity for pilots so they don’t feel they are “losing out” on potential flying and growth.
US Air flew some e190s as mainline as does JetBlue. It can be done. A 737 Captain won’t step down, but a FO might upgrade to Captain, and a new pilot has to start somewhere. Plus, the e190 rates are better than the JB rates. So overall, it seems like a win-win
US Airways/American Airlines still has the E190s.
Typically, there are unfilled E190 captain slots on each successive permanent bid at US Airways. The low pay rate makes it an unpopular upgrade.
Interesting.. How do they handle that? Bump up FOs or something?
They raise the monthly flying limit for the existing captains.
Noah mentioned this A, but here’s what happens:
1. Delta adds two E190’s to the Delta mainline fleet
2. Delta removes one 50 seat regional jet from the Delta Connection fleet.
3. Delta gets to add one 76 seat regional jet to the Delta Connection fleet.
The other thing is the E190 bid may go slightly more senior. I heard the 717 bid went senior because after training you had the summer off as the fleet ramped up.
Nick – And one more thing in here is that the total regional fleet will drop from 450 to 425. So you eliminate 25 airplanes from the cap right off the bat. Then to add those 70/76 seaters, you have to get rid of a 50 seater to keep it under the cap. So it’s definitely a cut.
Have to say I agree with Doug Parker and the Delta company and pilots following his lead on profit sharing. Financial planning 101 says don’t invest heavily in your employer; it’s much better to be diversified. And this is especially true when you work in a highly volatile, cyclical industry like transportation. Front line employees have very little to do with the stock valuation of the company, and it is very much not their job to worry about that (especially since, on a short-term quarterly profits basis, doing their job by being friendly to the customers and worrying about safety may even hurt stock performance, even though it’s the right thing to do and perhaps better for the long-term profits). Therefore, tying their compensation to profits is not smart.
This is much less true for executives, whose job *is* to worry about stock performance (even though there’s only so much that even an executive has to do with the stock — airline stocks do well when oil prices are relatively low, a strengthening economy is helping demand, and consolidation has reduced competition).
So why does this seem like “deja vu all over again”? Remember the late 90’s when every airline was trying to give it’s pilots the most generous contract ever. Even before 9/11, the whole industry started to fall apart, culminating with American wishing it had never learned to spell “TWA”. I’m just sayin’ . . . .
GCAgoura – I was thinking that as well. Always makes me nervous. Looking at the rates, the big news back in 2000 was when Delta gave a huge raise to its 777 pilots. I believe the pay rate went up to $319 an hour for a captain. Adjusted for inflation, that’s $438.30 in 2015 dollars. Today, that captain makes $271.74. In this new contract, it tops out at $330.03 in 2018. So we’re still pretty far off from the complete and total insanity when adjusting for inflation, at least on this airplane. Of course, there have been work rule changes as well. Still, we’ll see how this looks during the next downturn. Nothing worse than giving a raise you end up taking back down the line.
On a side note re the Alaska airlines war, a friend who is a skywest captain told me that Delta is now going to fly to Ketchikan and Sitka, both have been long time Alaska destinations.
Cranky,
As a Delta pilot I disagree with your assessment that this is a good deal for both sides. For one, the “pay raise” will come partly from profit sharing we already have, i.e. self funding. For another there are some significant quality of life give backs in this deal. I will be voting no, and fwiw it barely made it past the MEC vote (11-8).
Pilot – Ok, let’s here more about this. What are the quality of life givebacks you don’t like? There are some gains in there as well, it would seem, but I’m curious to know what the dealbreakers are for you.
Regarding the raise coming from profit-sharing, yes, that’s the point. But you’re still getting far more value. If Delta makes $6b in a year in profit (which is highly unlikely – the good times won’t continue forever) then in theory that’s 5.74% of variable compensation being moved to fixed pay. But the hourly rates will go up by 15% by Jan 2016 so it’s still a good raise and it no longer depends on company profits as much.
Some of this stuff is just now coming out…we don’t have all the details yet.
But for me, didn’t want to give back more profit sharing…we got that in exchange for massive pay cuts during BK, which we still have not recovered from. Also, the the sick leave language requires more disclosure of medical info than I would like. Replacing 757’s with 737’s is an effective pay cut for a lot of pilots. Changes to scope, to me, potentially weaken us and outsource more wide body jobs. Changes to bidding for first officers could mean more good trips are reserved for training instead of being bid by seniority.
These are just some of the concerns I have with this contract.
Certainly there are some good aspects as well, but overall I sense a disappointment from a lot of the pilots.
We will see when it comes to a vote, though!
Pilot – So you’d rather bet on long term profits than have higher wages.
It sounds good now, but I’m guessing sentiment will turn when airline profits turn red again. It’s a big bet to think they won’t, but I’m sure some will see it that way.
As for 757s being replaced with 737s (and A321s), that’s happening no matter what. This is just a matter of how much they’ll pay you to do that flying. Even without this particular 40 737 order, it’ll happen soon enough. Those 757s aren’t going to last for much longer anyway.
I’m curious what changes to scope you think are going to weaken you. This looks to me like it gives more protection. Is it the change from EASK to block hour over the Atlantic? Is that really a concern?
Absolutely.
Why do you think the company wanted it?
The $30 million settlement on the scope violation also factors into this.
I didn’t say the 757 replacement wasn’t going to happen, I just said I wasn’t excited by even more 737-900’s.
I certainly have real concern over the makeup of the wide body fleet. Compared to our competitors I think we have fewer high paying wide body jobs. When we park the 747’s even less. It remains to be seen if the A330/350’s will be for growth or replacement,
I think the company would rather grow by JV…our scope is our protection I hope.
In downturns I have seen the company come after us numerous times for wage givebacks, I’m under no illusion that converting profit sharing to pay is “permanent”.
Look at this deal…the 1/1/16 pay increase is the conversion from profit sharing, the next 2 years 3/3 raises barely cover inflation.This at a time of record setting profits and massive share buybacks? Should I be excited about that? It beats BK any day, but at the end of the day my real wages are far below what I made pre BK, with a frozen pension and greatly increased health care payouts.
So overall, I’m disappointed in this TA.
Pilot – Thanks for the back and forth here. The only thing I’d say is that the 1/1/16 raise is far more than the loss in profit sharing. But it is most certainly front-loaded. It will be interesting to see how this turns out.
Does the 737 pay vary with the specific model? Given that many of the 757s are being replaced with 737-900ERs one would think the pilots would push for parity on an plane length basis. (Or seats… But thats something the company can fiddle with.)
Sent from my computer that moonlights as a phone. Please forgive any misspellings or terseness.
Nick – Yes, the 737-900 and A321 pay more but not as much as the 757. The 757 is common-rated with the 767 for pay.
Just a quick question and a comment:
1) What is EASK?
2) I always remember one early piece of career advice is to always go for the largest salary as it’s the only thing that you can count on. Bonuses, stock options, and profit sharing are great, but they are very variable. Plus, with DL and the other 3 major airlines sending out a warning of falling PRASM, is profit sharing going to be as good? On the other hand, I really don’t know the details and it really doesn’t affect me.
southbay flier – On #1, my guess is that it’s estimated or expected available seat kilometers? So it’s a measure of seat capacity whereas block hours would be agnostic of number of seats on the airplane.
OK. Since AF and KL have a lot more jumbo planes than DL, how would this figure into the contract? Would DL have to add frequency or upgauge?
southbay flier – I’d assume this would work the other way. If it was based on available seat kilometers but now it’s based on block hours, then that would take away the benefit of operating larger airplanes. But this is really beyond my full scope of understanding so someone with greater details of the contract would have to explain more.
As long as the Widget is making money hand over fist, raising the wages and lowering profit sharing makes more business sense. The moment this cyclical industry goes back to bust mode, this move will start inflicting corporate pain.
There seems to be rumbling, though I don’t know how serious, about a breakaway independent union. Honestly, considering the arbitration rules that apply to transport workers its likely in the best interest of the pilots to vote this down and go for broke.
Interesting comment, Sean S. Please elaborate on the last sentence (about which I understand the basics).
Cranky.. it doesn’t matter what the pay raises are, what the work rules are, there will always be pilots who will complain. There will always be references to the past pre-bankruptcy days when pay was high and unsustainable for airline profits.
For example, the switch from B757s to B739s will push some pilots to lower rates than they’d otherwise have received as a 757 pilot, but the fact that the 739 makes the airline more profitable is immaterial. And the fact that the new B739 rate is 4% better than the old B757 rate doesn’t matter.
You’re right, we should just always take what the company offers. I’m glad you know so much more about an airline career than me! :)
BTW, nice hearing from you on NPR last night…..
Robert, thanks. As always, I had a ton more to say and never enough time to say it.
Did you miss your calling as a Rabbi?
Sent from my computer that moonlights as a phone. Please forgive any misspellings or terseness.
Once again the pilots call the shots (profit sharing)…..not a care about the rank and file (ground staff, etc.). Raising wages doesn’t come close to the profit sharing amounts, especially if you’re part-time (ground staff). One might have made $1200 in profit sharing for the year. Now raising the wage will be the equivalent of 1/2 that or less. Once again, higher wage…..the only ones benefiting are the pilots, like nobody else in the company is worth a damn.
Oy! Are you really going to tell me that the skills of the ground staff are as critical and important to an airline as that of the pilots?
I honestly don’t think so.
Airlines are a cylindrical operation. Without ground crew, the pilots can’t go anywhere but a brick wall in front of them.
Pilots deserve a higher wage because their job comes with more risk, however, the ground crew should also have a comparable wage because without proper procedures and a well-trained ground crew (which is lacking in some stations), the pilots can’t take off… and worse-case scenario — crash.
Ramper. I agree that every airline employee is valuable an important to the operation.
But it is also a matter of training and time invested. How long does it take to take someone not knowledgable of the airline business and bring them upto competent on the ramp? Six months? A year? Someone could probably be considered quite an expert after four or five years.
How long does it take a pilot to do the same thing? Competent is probably one to two years. Expert is likely a decade or more.
This is one of the reasons everyone should start at a crappy regional instead of an employee friendly Delta, JetBlue, etc. It teaches you one of the airline industry’s most sobering lessons:
Just because you’re necessary doesn’t mean you’re important… or equal.
If Delta takes profit sharing from the non-pilot workers, then blame Delta management.
As a pilot I don’t want profit sharing touched. That was paid for with big concessions prior and during bankruptcy.
Also, ALL EMPLOYEES should keep profit sharing. They made concessions too.
How many seats will a Delta E190 have?
And if the 190s are considered mainline while the 170/175s are regional, wouldn’t this negate some of the cost advantages that could be achieved by the commonalities of the two types (maintenance, training)?
From what I’ve heard elsewhere is that Delta TechOps already supports the CF34 which is the engine on the E190.
TechOps also lists that they do line maintenance for CRJ/ERJs as well, so it might not be a stretch.
Also one of the things that happens pretty commonly in the airline business for airlines to sell or lease parts between each other, even competitors. Cranky mentions this at the end of an old blog entry: http://crankyflier.com/2007/10/01/adios-america-west/
Given that Delta’s Connection carriers Compass (a former Delta subsidary) and Shuttle America have E170/E175s in the fleet the parts are in Delta’s network, and I’d expect that one of those carriers would gladly transfer a part given the working relationship that the airlines have already.
Most people here only see what the media puts out. The media gets their info from either the company or the union leaders. This info is always their slant on the facts. For a long time now the union has had a major disconnect with its members. That is why there is another group out there (Delta Pilot Assoc. DPA) who has currently almost 5900+ pilots signed up for a contest between ALPA and DPA to see who will represent the pilot group in the future.
Overall the way this contract would work is that the average pilot on whatever equipment will come away with about an extra $500 per year overall based on some analysis that several people in the know and have all the facts have put together. We as pilots don’t care about the small planes for they only help the most junior pilots advance. Big wide bodies help everyone. This is a tactic by the company to get people like new hires and the bottom of a senority list to vote for a contract. Delta doesn’t need us to get these, they will do it anyway. It’s a carrot. Get real.
The pay raise amounts to 8,.25 (take away profile sharing),0,0 after inflation. We are self funding our own contract.
Is this a good TA. NO!!!
BOTTOM LINE. Vote no
If there was a box that says F No. It would be checked by many many pilots.
Oh those 737 900’s are not such a hot airplane. Alaska n Delta both know this but alas the 757 line was not brought back by Boeing and the option is that or an Airbus. I have flown both n I rather fly a Boeing.
So for all u that think u are in the know about this business. Sorry. As a pilot who has been around for many many years. This TA is a joke and it is Richard Andersons last hurrah before he leaves the airline.
Good luck. I gotta go haul a bunch of people to JFK.
Oh, foot to tell Ellen that we pilots do care about our fellow employees. I am telling everyone I meet to tell the pilots they meet to vote NO. The reason behind this is if it goes thru, then Delta will also cut everyone else’s (except Management’s ) profit sharing. This is because of the “me too” clause that is out there.
Sorry spell checker changed it. Meant forgot. …
757 Capt is right on with his comments. JoEllen, that was the first thing that crossed my mind. If we give up our profit sharing to fund a pay raise that is just a tiny bit more than inflation, we will also allow the company to cut everyone else’s profit sharing. I recognize that you make less money than most pilots, and as such that loss would be of a greater impact to you, and in my opinion, the unions job should be to protect that value for ALL of Delta’s employees… not just for ourselves. There are many issues in the T/A that are concessionary in a time of unparalleled success by the company. Wall Street is already applauding the T/A as a win for management because they will save money starting in 2016 over the contract that we currently have. While I would be lying to say that I have no emotional connection with this, my vote is clearly a NO simply from the perspective that I think that the big picture is negative for me as a Delta pilot, and as such it would be a poor business decision to support it.
737 F/O – I’m still not following the math here, so if you or anyone else can help me understand, I’m all ears. Forgetting about the nice increase you’ll get this year before your contract is even amendable, you get what’s effectively a 15% raise from what you get today starting next January.
Your profit-sharing isn’t touched for the 2016 payout, but it would be for the 2017 payout. So by the time that changes, you’ll have an 18% pay raise under your belt. You’ll get another 3% in 2018 and then it’ll be amendable again. That kind of pay raise more than makes up for the profit sharing that goes away.
Let’s see if I have this right on profit-sharing. Today you get 10% of anything up to $2.5 billion in annual company profit. That doesn’t change. But that went up to 20% for anything over $2.5 billion. What this contract does is move that goalpost to $6 billion. So that means you give up 10% of $3.5 billion assuming Delta actually makes that much. Is that right?
So that means you give up the potential for $350 million a year. You have 12,500 pilots, I think, so that means it’s about $2300 a month… IF you make that much profit which I still think is unlikely on a sustainable basis.
According to ALPA, this new contract will result in $3,500 a month more than what you get today once the last raise goes into effect. So that means the average pilot will make about $15,000 a year more than he/she would if Delta managed to make $6 billion a year in profit.
That seems like a pretty good deal to me.
True, it does seem nice. And I would consider a T/A with similar pay raises that didn’t touch the profit sharing. It would still not pass my filter due to the change from EASK to block hours. That equates a Virgin Atlantic 747 or KLM A380 to a Delta 757… (I don’t think the 737-900ER has the legs to compete on those flights, but if it could, that is what we would be talking about…) It stifles long term job progression, eliminates any chance that I all ever get one of the high paying wide body Captain slots. Back to our original issue… My original retirement was taken away in bankruptcy. Lump sum at retirement and annuity payments thereafter. Instead I will get from the PBGC is $245 a month. The profit sharing was given to us to try and make up in a small way for that loss. And that is where 100% of my profit sharing goes. Directly into my retirement. Honestly, I don’t believe for a second that the com pay ever in a million years believed they would be making this much profit, but they are and now they want out of the good deal they gave to the employees. Jamie Baker at JP Morgan has already run the numbers and stated that the company starts getting a positive return on investment from this contract in 2016. That is next year. So, starting next year, the company will be paying me less money than they are under the current contract. This is a business deal. I don’t think it is good for my end of the business. The way I look at the pay raise it that it is ONLY a 5% raise with an annual COLA raise of 3%. The other 6% equates to the loss of profit sharing, so it is a wash. If that was your big pay raise… would you be jumping up and down for joy? Is this going to help give my family financial security going forward? I don’t think so. Also, why is the company threatening me? Are they trying to scare me? I suppose that is a viable business tactic, but one that can be seen thru with objective reasoning. What am I talking about? Why is the new 737-900/Embraer deal contingent on this contract? The company is making money hand over fist… if they need those planes to replace older planes, which is what they are for, to replace the 757, then they will make a business decision and do so. At lest I hope that they are smart enough to do so. I am sure that the deal that Delta is getting on the Embraers is a screaming good one, because I personally know Boeing doesn’t want them… and that deal isn’t going away. Boeing doesn’t want them. So why is the company threatening me? And OBTW, those new jets are at the very bottom of the pay scale, or replacing a jet that pays higher wages. Again, stifling job growth and pay, that to me is a concession. I support a good working relationship with the company, I definitely don’t want to kill the goose that lays the golden eggs, but it seems to me that the company is taking advantage of the good relationship that the pilots have maintained with them simply to appease Wall Street pundits. And I only went into a few of my issues with the T/A here. I have many others. I’ll try to make an analogy out of it…. if you were going to re-fi your house to a lower rate, would you do so by signing a contract that gives the bank 10 new ways to re-possess your house AND one that requires you to pay more in interest over the life of the loan just for lower payments over the next three years?
737 F/O – Ok, from the looks of your other comment I assumed this was a money issue. I think we’ll continue to disagree on that piece, so instead let’s talk about the other points.
To think about the EASK to block hour issue, I guess I don’t have enough info. First, how is an EASK calculated vs a regular ASK? And what was the split before? Now under block hours, what does the split become? I’m not sure I agree that this will stifle career progression, but I just don’t know enough about the numbers to say one way or the other.
Regarding the company threatening you, that’s not what I see happening here. What happened is Delta agreed that if you take this deal, it will take those 20 orphaned Embraers and add them to the fleet. Considering the language in the deal, I’d expect another 30 to follow eventually from some other source. But Boeing has wanted to get rid of those Embraers for awhile so you know Delta could get a sweet deal. And I can only assume Delta is using that as leverage to get an even better deal on the 737-900ERs than it could get otherwise. And of course, the Embraer deal has to be contingent on this contract because without known pay rates, it’s not smart for the company to commit. If Delta is trying to wave the 737-900ERs as a carrot, that’s silly. After all, they will just replace 757s in the long run. But the Embraer thing is a big deal. Pilots have time and again talked about the importance of scope and this will bring more flying into the mainline airline at the lower end where scope is a real issue.
There are pay rates for the EMB-190 in the current contract (2012). This is a threat and noting more, and demonstrates the value that management holds for Delta pilots (and all of their other employees) as a whole. The company is making 5 times what it made in 2012 when it signed the current contract yet wants concessions in this one? Who in their right mind would agree to that? EASK issue is very complex, but it removes any upside protection for our pilot group. If a JV career adds an A380 flight, Delta will only need to add a 757 to be in compliance. In the current contract, Delta would have to ADD FIVE 757 FLIGHTS to remain in compliance. That is a massive concession. Especially since air travel is only slated to grow. Additionally, Delta, who had been out of compliance with the current JV agreement for 3 years, would magically become in compliance going forward. With the loss of profit sharing, which is reduced in many clever ways, Delta management gets more money, all Delta employees get less, and Delta pilots and flight attendants get less jobs because the company is able to outsource those jobs across the ocean as part of a JV agreement that allows them to profit without expense. Look into what Delta wants to do with Skymark Airlines if you need any convincing here. A great deal for management, lousy for employees.
737F/O – Oops, my mistake. That was the E95 which didn’t have a pay rate before.
C/F… Unfortunately, when you look at the “raise”, SUBTRACT the loss in P.S., you end up up with .5% raise next year, your “public math” doesn’t work… Add that with inflation and we LOSS money with this deal… Ricjan=rd Anderson, took a 27% pay raise this year, AND additional stock or “At Risk” money, while not GIVING UP anything. This “deal” is a slap in the face of EVERY pilot at Delta, along withALL 80,000 employees who will LOSE MONEY with the cuts in P.S.
E-190 195 are nice to fly have a more updated FMS, great range, performance. 2 -2 seating is a plus. But if you look at history seems the plane is a dud…at least finnancially. USAir, JetBLUE, Republic-frontier, Air Canada all want to get rid of them. delta has 9 categorys (with the A350) the e190 will be #10 , and the 787 will be # 11…way more subfleets than any other airline.
Cranky,
There is much more that calculates into pilot pay. There are many ways in the proposed contract that pilot pay is cut.
One such example is when a flight is needed for training, the company will remove the pilot from that trip with pay. The agreement eliminates most all of that. Delta is hiring 1000+/- pilots a year. Each new pilot takes 35+/- hours of training. That is about half a month salary for pilots for each training event. Also, you have to remember training happens every time a pilot switches airplanes. There is training running non-stop with our diverse fleet at Delta.
You mention the profit sharing reduction. You failed to mention that they redefined how profit sharing will be calculated. Payout to execs will now deducted from the profit before determining employee payout. That reduces our profit sharing even further.
Much of this TA is all about staffing levels. The company is trying to run the company lean on employees.
Staffing is a huge part of our complex pay. Lets say you need 50 B777 Captains. If you were to able to get the work done with 45 captains, you just eliminated 5 positions. These 5 B777 pilots would probably be able to go to A330 (at a paycut). Well now the A330 is overstaffed maybe by 10. Well now those 10 pilots take a paycut to the next paying aircraft and so on.
There are provisions on our sick leave policy, making it harder to use. Another provision also eliminates the opportunity to pick up premium flying (overtime flying) if you were to call in sick that month. They are trying to get pilots to call in sick less, and flying at single pay.
The proposed contract increases the average flying time each pilot is awarded each month. (Less pilots required)
These are just some of the many nuggets in the proposed contract that will offset pay. There are many others in there as well. A 15% increase in hourly rates does not equate to a 15% raise in the W2. In certain positions in the company (mainly First officers), this is a paycut.
el gringo – This is great information. Thanks for sharing it all with me and the readers who aren’t familiar with this.
No problem. I enjoy your work! Airlines are a strange thing, and sometimes hard to understand. I appreciate you taking issues and trying to explain them to readers that are outside of aviation.
There are many other things that I could add to this piece.
One thing that t want to add that this agreement also has nothing to do with airplanes either. Yes, some of the contract language is tied into scope (large and small), but that is mainly for job protections. Basically we don’t want Air France/KLM and codeshares to fly all of our international, and DCI to fly all of our domestic.
The tie in with aircraft orders based on contract ratification is something that airline management does to influence pilot votes. The announcement came the day after the TA, The same thing happened with the B717s on our 2012 contract. If Delta were to order 190s, they would have to be flown at mainline regardless. Right now Delta is in an interesting position. The MD88 fleet is not nextgen compliant, and they couldn’t upgrade them either. (The MD88 nextgen mod is a whole different convo.) Basically this means that they have to replace all 118 of these aircraft anyways unless they want to decimate the domestic flying.
If you take into all of the consideration of the efficiencies that Delta management has put into this agreement, the loss of profit sharing, etc, it starts to look like a better and better deal for management. As a voting pilot, the only upside I see in this pilot agreement is the hourly rates. There are 4 items that are complete deal breakers for me, and about a dozen others I am not a fan of. I’ve ran my own numbers estimates (many variables), and I am at best break even on year 2 of this contract and my quality of life (bidding power, for days off, etc.) goes down. So obviously I am a no voter. The only saving grace for me is the retirements coming up for upward movement. This however has nothing to do with the contract.
I think the source of information also has a huge factor on how you look at this. I am trying to be as objective as possible. As an ALPA member, I can tell you our union leadership is playing politics. They will tout the gains, but not mention the losses. They are in elected positions. If they were to present something to the membership that is completely useless in their eyes, their job security would diminish. Its just like running for POTUS…. you aren’t going to mention your own negatives.
As a delta pilot, i an highly disappointed in this tentative agreement. First off: pay. We trade 5.7% in profit sharing, so in essence, we get a measly 8,0,3,3 raise. What about cost of living adjustment? Sick leave: borderline illegal. We will be forced to sign waivers to release our medical record to both the company and a third party that handles verification, and the icing is that the FAA could also have access to my ailment. How am i protected under HIPAA laws? I could go on and on. Just goto Tafacts.com