What you are seeing right now is "negotiation".
The 95% strike vote is a tool, like any other negotiating tactic.
The basis is this: the company and the union have gone to arbitration over the
second round of pay cuts.
The pilots already previously agreed to $1billion in annual concessions, including a
32.5 per cent wage cut, in a five-year deal in 2004.
They have offered to take another 14 per cent temporary pay cut aimed at saving Delta $143m per year.
The company (suprise!) wants more than that. They want 18 percent and they don't want it temporary. That's a big point for the pilots because dear old DAL has hosed them more than once in the last 30 years getting them to take cuts and then giving everyone else in the company raises. So, the pilots now link cuts to "temporary" times that "snap back" when the rest of the company starts getting raises again.
The arbitration panel wrote both sides a letter telling them that BOTH sides were being unrealistic. They castigated both the pilots and the management and told BOTH sides that neither side would be happy with the arbitration ruling. The arbitrators suggested the company and pilots make a serious effort to settle before a ruling was handed down. Wise advice, I think.
Here's a few excerpts from a financial analyst on the situation:
There are two very distinct and different shows playing on stage right now at Delta Air Lines.
One is external - on the road -- in Washington, DC.
The other is internal - at home -- in Atlanta.
One is being played before a 3-man arbitration board.
The other is playing out before 50,000 loyal, active employees and another 40,000 retirees - all watching and waiting - to see if Delta Air Lines goes out of business - as the company continues to warn unless they get the maximum additional demands and concessions from the pilots.
The playwrights themselves -- Delta management -- wonder why there is little trust among the audience - an audience of faithful workers -- from every department -- generally regarded as smarter viewers than the average bear - and not easily fooled.
One must then ask, how can two very different simultaneous stage shows be a truthful and fair representation -- when they are vastly different in both script and content.
Observe and draw your own conclusions:
Two weeks ago (2/28) -- COO Jim Whitehurst told a packed house of 700+ employees at the GICC that in 2005, if Delta had just been an average legacy carrier -- we would have brought in another $2.5 billion in additional revenue.
In other words, if Delta had the same relative RASM numbers (revenue per available seat mile) as our competitors -- AMR, United, Northwest, USAir and Continental -- we would have been not only the most profitable - but the only profitable legacy carrier among the majors in 2005.
Jim told the standing room only crowd -- of mostly non-contract employees -- that we had a very good chance the airline would be "in the black" operationally in the next 12-18 months. I was in the audience. I did not mistake what Jim said or what I heard spoken on stage.
One then asks: How much is just being average worth to Delta? Again, Jim says it would yield an additional $2.5 billion in revenue if we just catch up - and be on par with the other guys - who pay for the same fuel and have competitors of their own.
Next observation:
On Delta's website -- is a copy of the most current interview from the December NewsDigest with Glen Hauenstein, Delta's new Executive VP of Network and Revenue Management - whom we hired away from Continental in 2005, along with Bob Cortelyou - also from Continental.
Both gentlemen came to Delta because they saw an extensive opportunity to shine -- not suffer defeat. In fact, listening to and watching Glen Hauenstein, there is a certain "glee" in his optimism about the potential he feels certain we can and should achieve and thus, surpass the competition.
Jim, Glen, and Bob each project a "fight's on" attitude. They appear motivated to not rest until we succeed. Their mantra? We will not tolerate or accept any more excuses about our past failure to produce better results. We have the routes and the assets. We will do better.
From the December 5th interview with Glen, he clearly states that during the first nine months of 2005, Delta only achieved 85% of the RASM realized by the other network/legacy carriers. That additional 15% "shortfall" is worth -- in his estimate -- the same $2.5 billion in additional revenue to Delta - that Jim spoke of two weeks ago on stage at the GICC in Atlanta.
Jim and Glen - both agree on the numbers and the potential already being realized with the latest changes to our scheduling and increased route efficiencies - day to day.
Closing the gap on that 15% shortfall and additional $2.5 billion is what Glen and Bob Cortelyou were hired to do. Thus far, they appear to be making positive strides toward achieving parity with our competitors and "getting it done".
In January, Delta's year over year revenue jumped by 14% from the preceding year. By chance? By luck? No. By being smarter.
As Jim pointed out two weeks ago at the GICC, Delta had built the best route structure in the industry..for the last century. A large fleet of RJs were a good feeder mechanism to the hubs - until everyone else started getting them too.
The parallel focus on increasing our International flying from 20% to 35% of the total will also significantly help close the gap with respect to increased RASM. The moves at JFK, designed to feed our newly proclaimed International "hub" with more passengers is the kind of productivity and increased efficiency that wasn't being done prior to the arrival of these newly hired, motivated thinkers - who've joined the team.
Continued
