August 4, 2004
Dear Fellow Pilot:
On Tuesday, July 20, 2004, your union presented Delta management with a proposal worth on average between $655 and $705 million dollars per year for four years. We requested equity, profit sharing, and governance to provide some potential return to the pilots for offering up such a large portion of our contract. We stated that our proposal was contingent on a comprehensive restructuring involving all of the Company's stakeholders.
Our proposed concessions represent real wages, benefits and jobs that took decades to achieve. We made this proposal because the Delta pilots understand the seriousness of Delta's situation - one caused not just by runaway oil prices, declining yields and the "low cost" competitors, but also by management decisions in recent years.
How did management respond to the huge wage, benefit and job cuts we offered? By foisting upon us a set of demands that far exceed the economic situation the company faces. So far, management has refused to address our requirements for returns and has not provided a tie to a comprehensive restructuring that includes all other stakeholders other than a vague plea to "trust them." Additionally, management responded by completely rejecting our requests for any no-cost items and including a six-year duration clause. Management's proposal appears to have only one purpose - to exploit the current situation and attack our profession by destroying our contract.
I cannot overstate the magnitude of management's demands. Job security is gutted, there is no proposal for balance between Delta's flying and its use of Delta Connection Carriers, pay is reduced by 35%, night pay is gone, some work rules are based on FARs, sick leave is decimated, retirement is changed, reserve guarantee is set at 65 hours with a reduced number of reserve X-days, disability premiums would be paid by the pilot, vacation is down to 3 hours per day, a cap up to 85 hours is permissible with pilots on furlough, and a new "B-scale" post-retirement medical plan would start. To add insult to injury, management has demanded changes to the working agreement that have little or no bearing on the company's recovery. For example, management demands reduced protection for pilots in disciplinary situations and seeks to change use of the jumpseat. Alarmingly, management also wants to remove the requirement for the company to oppose cabotage and any limits on profit-sharing with foreign carriers, clearly signaling a willingness and desire to outsource our jobs to any foreign airline.
I have repeatedly told senior management what it will take to keep this process alive: good will. To me, this includes recognition of our good faith in placing one-third of our contract on the table. It is difficult to understand the motivation to gouge pilots who have demonstrated a willingness to participate in Delta's restructuring or why concepts of no-cost items, equity and governance are so difficult to grasp.
Until we received management's proposal, I felt that the pilots and management had a mutual interest in restructuring our contract in this negotiating process. Now, however, management's motivation is not clear. Has management decided to assault the profession because the opportunity exists - because they know the airline cannot be restructured outside of Chapter 11 and they need a scapegoat? Is management trying to fix the problem or affix the blame?
We may never know the answer to these questions. We do know this: either management will figure out what it "needs," address our equity requirements and make other stakeholders participants in a comprehensive restructuring, or we will take another path.
In the next few days you will be receiving more details concerning management's demands. Please go about your business flying jets in your normal, professional manner. If you believe management is out of line, let them know in an honest, respectful manner.
The pilot group by itself cannot save this airline. While Friday's proposal may make us all question management's motives, your union will continue to conduct negotiations in a businesslike manner, always mindful of our goal of preserving the piloting profession and the careers of all Delta pilots.
Fraternally,
Capt. John J. Malone
Chairman, Delta MEC