June 18, 2015
Chairman’s Update
Pilots of [...]

C1 Chair: Good/Bad/Ugly

June 18, 2015

Chairman’s Update

Pilots of Council 1:

After a large amount of feedback, we have attempted to get as much information out to you as quickly as possible. While writing this over the last two weeks, there have been many specifics and issues that have been difficult to verify, which has delayed this update. The feedback we have received indicates that a large amount of information from the DALPA administration via PowerPoints, slides, P2P social media responses, and road shows seem to be perceived as only highlighting the positive aspects of this tentative agreement (TA).

It is important you understand the not-so-positive aspects as well; we each must look at this TA as though anything we agree to will be in this PWA forever. Then ask yourself is there anything in it that will cause harm to a single pilot if we allow it?

Before we begin to dissect the TA, we would like to clarify some rumors, comments, and communications from the MEC chairman and Negotiating Committee. We have heard from pilots that the negotiators are laying the blame of the TA on the MEC. Yes, we provide direction to the Negotiating Committee and, yes, we hold the ultimate power of accepting or rejecting the TA. That said, 100 percent of the information, data, and analysis that we use to base those decisions upon comes from the negotiators, the MEC chairman, and the Strategic Planning chairman. To believe that they have no opinions and that those opinions are not strongly reflected both in their recommendations but also in their data analysis and presentation would be naïve. In the end, both the direction we gave and the ultimate decision to send this TA to you for membership ratification (MEMRAT) were the results of a tremendous amount of urging and pressure from those parties.

This TA was not approved by the MEC, or even sent to you with a recommendation. Rather, a resolution was passed 11–8 to put the burden of voting this up or down squarely on the shoulders of the pilots. The MEC as a whole was that uncomfortable with the TA.

In the most recent letter from our MEC chairman, he pledges “No sales job.” I thank him for that pledge, but find it odd that he doesn’t include your reps as a source to “get your questions answered.” Instead, he steers you to a P2P volunteer for answers. While I am quite sure our hardworking P2P volunteers will give you an answer, I am not positive it will contain all of the information you seek. The P2P volunteers have only had limited briefings and have not been present for anything more than a fraction of the process, and not involved in executive or closed meetings where much of our work took place.

Even more interesting is that your CA and F/O rep asked three prior ALPA volunteers in Council 1 to be P2P volunteers. All three of them have extensive knowledge of the current process and the TA, and are well respected amongst Council 1 pilots. All three actively participated in a vast majority of the process. Even though we asked for them, and all three have agreed to serve, the administration has refused to permit them to participate at any level. If the administration wanted a truly factual presentation without spin, deflection, or a sales job, why would they care who answers your questions as a P2P volunteer for your council? That aside, since this burden to vote has been unduly laid upon your shoulders, we ask that each and every one of you ask questions and get the facts!

Section 1: Scope

Improvement in “control” and “foreign base” and “foreign partner” language
Nine prorate RJs no longer allowed
All current pilots now covered by furlough-mitigation language
Stronger requirement for DCI to hire furloughed pilots
Deletion of flight length and route restrictions on DCI—removes one advantage to having mainline fly 76-seaters. This also allows the DCI to fly hub to hub. This could make it more difficult for commuting pilots, e.g., MSP–ATL.
New production balance for AF/KL/AZ now 50% on a block-hour basis. This lowered the amount of required Delta flying and gave the company a 2–5% BH.
The measurement is changed from EASKs to block hour, which primarily benefits the company by converting to a 50% share metric that the company is already above rather than the current 50-50 EASK (equivalent available seat kilometers) metric that they have been below for this past four years
The one-year measurement period is not structured to our advantage, as it allows the Company to be in compliance every other year with no penalty. Basically this language allows the Company to maintain the current level of flying, which is in violation of the current language and gives them a 2.5% buffer. The Company was never in compliance with the original language and all we did was reduce the level to where they are at now. A concession.
· Additional 70-/76-seat jets. This clearly goes against what the pilots have said they wanted. What this language does is reduce the number of 50-seat RJs, while increasing the number of allowed 70-/76-seat RJs. I would suggest that the reduction of 50-seat RJs has nothing to do with PWA language (they can do this now and probably would), but rather economics. The 50-seat RJ business model is clearly no longer viable. This language will allow the company to receive “credit” for making a sound business decision, while reducing one of the incentives to ever allowing mainline pilots to fly the 76-seat RJ. These changes are similar in structure and intent to C2012.

This company says that they will add 20 E190s if the TA is ratified. The 190 has more range than the M-88 and more lift than the DC-9-30. The argument is that this is a regional jet flying on the Delta mainline, which is great, but warrants oversight as it is not clear if this will be new flying or replacement flying. Will Delta park MD-88s once these aircraft arrive? Are we substituting a lower-paying aircraft for a higher-paying aircraft? The latest announcement of more 737s (most certainly replacement aircraft) during a MEMRAT vote brings back memories of the similar situation with the 717 in Contract 2012. Are we actually seeing growth or the shell game of rearranging the deck chairs with shiny new airplanes that again may be substituting lower-paying aircraft for higher-paying aircraft?

Section 3: Compensation

8% on 7/1/2015
6% on 1/1/2016
3% on 1/1/2017
3% on 1/1/2018


· 8% increase in pay rates six months early

· A350 rate equal to 777 pay

· E190 pay tables increased to E195 pay rates

· Per diem increases of $0.05/hr. on 7/1/15, 1/1/16, and again on 1/1/17


· A339 equal to A333/A332 pay

· A321 split from A320, A321 rate equal to 737-900; even though the 757 is a more direct comparison.

· “Me too” clause weakened by now including profit sharing in comparison—we have more PS than UAL, and AA has none. Now it will be virtually impossible to achieve any mid-contract pay rate increase similar to what we had this year because of the change. Our profit sharing (reduced) will be included in any pay rate comparison.

· Overall increase in rates just breaks even with AA


· The overall pay rate increases are indicative of the gap between expectations and results. 6% on 1/1/16 utilizes 5.74 of PS (at $6B PTIX-which is greater than pretax income). Without the profit-sharing conversion, we would not exceed AMR pay rates for the term of the agreement.

· Profit sharing, again, is clearly against anecdotal and empirical pilot direction. It was very clear that pilots did not want to adjust the profit-sharing formula to fund a raise.

o The 20% trigger has been raised from $2.5 billion to $6 billion PTIX (not the same as pretax income)

§ Profits $0–6 billion now paid at 10%

§ Profits above $6 billion paid at 20%

o Fixed in form of hourly rates

o Changed PTIX definition—pretax income to adjust for:

§ Above $6 billion reduce cash payout to all employees by $396 million

§ Pilot portion $152.1 million based on pilot payout in 2015

§ PTIX now includes gains and losses with respect to employee equity securities which had not been included before. Managements securities (stock options and grants etc.) will be taken out of the pretax income before the profit sharing is calculated which further reduces the share of the profit-sharing pie.

o The computational changes to profit sharing will be effective 1/1/16. The first payout where the employees will notice a profit-sharing reduction will be in February 2017 (for 2016’s profit sharing).

o Because the actual reduced payout won’t occur until after the 1/1/17 raise, the spin on this is that “pilots won’t see a profit-sharing reduction until their pay rates approximate the high point of 2004” (not inflation adjusted of course). 17.9 % increase from now (including the profit-sharing trade).

· Received very little to no soft dollars from company, e.g., per diem, CQ, vacation, health-care premiums.

A pay rate of 8,6,3,3 may have been acceptable, but these rates are after profit-sharing conversions. This was highly debated as many feel we are merely funding our raise to industry standard by utilizing our profit sharing. Your Council 1 reps (CA & F/O), along with a number of other reps, argued strongly for “clean” pay raises but were unsuccessful. During Contract 2012, many reps were disappointed about the theory of taking money from the left pocket and putting it in the right. Do not be surprised to hear the new sales pitch at a road show near you, “you have a whole lot of money in one pocket with a hole in it. You are trying to move the money to the other pocket before it runs out. The size of the hole is profitability.” Your CA & F/O reps had a problem with funding our raises and adjusting other aspects of the profit-sharing plan and again ignoring the direction of the pilots. This also triggers a reduction for all other employee groups on the property. How much will this reduction in profit sharing for all employees save the company?

Section 4: Minimum Pay and Credit Guarantees

· One-hour pay against guarantee for pilot not used on short call; it’s a good first step in reducing unnecessary short calls. It is important to understand, however, that this will hardly ever come into play.

· This one hour only counts toward the reserve guarantee.

· If a pilot is not being used on short call, the chances of flying over the guarantee are pretty slim.

· This will likely not affect the Company in any way when assigning short call.

· Two hours’ pay, no credit for having to come in to the CPO or to ATL on a day off. This could be a double-edged sword. Past experience has been if the CPO wanted a pilot to come in, and that pilot could not come in on a day off, the CPO would buy the pilot’s trip or, at least part of it, to have the meeting, or wait until the pilot was scheduled to be on duty and have the meeting prior or after the assignment. With the new language it is anyone’s guess how this will be interpreted.

Section 5: Lodging and Expenses

· Int’l per diem for training outside 48 states

· 30-minute decrease in trigger for crew meals

· 50% reimbursement for NYC-based pilot travel on short-call assignment.

o This could also have unintended consequences. Right now, if a pilot is called out on short call and is needed for a departure in the next couple of hours, the pilot can tell the scheduler that they could get there a lot quicker if a cab is approved.

o It is our understanding that Scheduling usually authorizes this (similar to short term parking at other bases). Now, why would a scheduler ever authorize that when it clearly states in the PWA 50% up to $50.

· Hotel for ATL-based pilot undergoing recency (living > 50 miles from the training center)

· Minor increase in per diem. We have already been asked, why bother? A nickel increase in per diem?

Section 7 Vacations

· Vacation pay increased to 3:30 but value remains at 3:15 for bidding in PBS

· Posting of vacation move-ups

· Vacation bank payout at retirement contributed to the DPSP to the maximum extent possible.

· IVDs—a pilot can take up to four days of vacation in no more than two groups to be used as a sort of “paid” APD. The rules are the same for APDs regarding the ability to drop days.

· Vacation credit is not increased. Do pilots want more time off with vacation? This language will not give a pilot any additional time off with vacation, since there is no credit increase associated. In fact, there is a good chance that a pilot will work more with vacation under this TA, since the TLV has been increased.

Section 8: Deadhead

· 2x increase in surface DH pay. A little hesitant adding this to the “Good” section, because it seems totally inadequate. Why is surface DH paid any differently than regular DH? This only affects pilots who travel from one airport to another in the same duty period. This will not affect pilots who land in one airport and drive to another for a departure the next day.

· No more loss of per diem when deviating from DH: paid with front- and back-end deviations.

Section 11: Training

· CQ and other misc. training pay increased by 15 minutes 3:45 to 4:00/day

· Pay after failing a check ride increased to ALV (from 65 hours)

· Minimum pay increased to ALV for pilots in training

· SLI now needs 60 days’ notice from the Company before they return him to the line (formerly none)

· LCP/AQFO gets 15% for entire FDP in which he teaches, not just the block time of the leg(s)

· Improved SLI sick and cancellation provisions

· Improved “curriculum day” language after training failure: LOE or MV rechecks not counted as curriculum day.

· SLI must now give 90 days’ notice to the Company before he may return to the line (formerly 60)

· No Ab-Initio language

· Incorporation of automated runtime testing into PWA

Section 12: Hours of Service

· 1 for 1½ duty credit on backside of clock (up from 1 for 1.75)

· Rest after canceled FRMS FPD reduced to 10 hours

Section 13: Leaves of Absence

· FAA leave—fills in a crack in sick leave and disability by giving a pilot paid time off if the FAA is holding up his medical for administrative reasons; this paid time off does not count as sick leave.

(continued below)


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C1 Chair: Good/Bad/Ugly

June 18, 2015
Chairman’s Update
Pilots of [...]

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June 18, 2015
Chairman’s Update
Pilots of [...]

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