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Thread: Delta Updates

  1. #21
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    Early-Out Program to Mitigate Displacements - #1
    On February 14, a record Profit Sharing payout made possible by record-setting corporate revenue was celebrated with fanfare by Delta management. Costs were not a problem for Delta on that day. At the same time, a virus, a thousandth of the width of a human hair, was silently spreading across America, ultimately becoming a pandemic and triggering an economic downturn. Presently, Delta's challenge is the instant evaporation of revenue, which is forecasted to be down 90% for this quarter and has spurred management to store over half of its jets. In early March, your MEC engaged with the Company and provided cost-saving solutions contained in LOA 20-01 via the April bid package re-do and SILs. Shortly after agreeing to LOA 20-01, your Negotiating Committee approached Delta to discuss an additional cost-savings measure – a voluntary pilot early-out program. The Company declined even to meet and hear the proposal. This program would have provided limited pay and benefits to pilots if they took a voluntary buyout package and retired early. By offering pilot early-outs in categories that the Company intends to reduce the size of, downline displacements are curtailed, providing substantial savings – savings impactful enough that United and American offered similar programs to their pilots months ago.
    Early-Outs: They Save Real Money
    Before discussing potential voluntary pilot early-outs, displacements and furloughs need to be addressed. These options hinge upon the fleet plan Delta is formulating for summer 2021, and the network plan that will reflect the needs of the fleet plan. All pandemics have a lifecycle. This one, and the recession that has come in its wake, will end. Notwithstanding, both are currently making planning a difficult task for the Company. At its core, Delta has publicly indicated that it will be a smaller airline than it was earlier this year and that it will seek flexibility to scale up in the eventual recovery. With a fleet plan in hand, Crew Resources can derive the manning requirements needed to staff the trimmed down airline in the short and medium time frame. Through ALPA's analysis, we have concluded that there are three primary methods to most efficiently reduce the staffing required for the smaller airline.

    • Voluntary Early-outs
    • Displacements
    • Furloughs, if necessary

    If management decides to negotiate a viable early-out for pilots, these can be surgically used to reduce manning and curtail expensive waterfall training. Typically, displacements before early-outs negate much, if not all, of the cost savings advantage. On the upside, Delta is facing a historical wave of retirements. Below are the upcoming age-65 retirements.

    Looking ahead, from May 1 to the end of 2024, 3,369 pilots will reach age 65. That represents nearly 23% of today's seniority list. The retirement numbers will most likely be higher as pilots decide to retire early or leave with a medical issue. When distilling fleet specific retirements just to the end of 2022, over half of the B777 and nearly half of the A350 captains will retire. This is not an insignificant number of pilots that can be incentivized to retire early that would otherwise be subject to displacement and the source of waterfall training events.

    Displacements High Price Tag: The Financial and Personnel Costs The cost of initial qualification, not including a pilot's salary, is $40-50,000 per pilot. This number varies by the length of training, whether it is off-site, and who is instructing. Further adding to the costs are:

    • There is no seat lock for displaced pilots; they can bid in the first available AE, thus negating some of the previous displacements.
    • Mandatory displacements carry moving expenses to include lease cancellations, packing, motor vehicle transportation and insurance costs if pilots elect to relocate to a Delta base.
    • Displacements from senior categories can cause a waterfall of training events.

    As an example, we will look at the displacement of a junior A350 Captain:

    1. The A350 Captain displaces to the A330 A seat.
    2. An A330 Captain gets displaced to the B7ER A seat.
    3. A B7ER Captain gets displaced to the B73N A seat.
    4. A B73N Captain gets displaced to the A220 A seat.
    5. An A220 Captain gets displaced to the A330 B seat.
    6. An A330 F/O gets displaced to the B7ER B seat.
    7. A B7ER F/O gets displaced to the B73N B seat.
    8. A B73N F/O gets displaced to the A220 B seat.

    This one displacement causes seven additional training events, making the cost of displacing the A350 Captain approximately $280-350,000 by conservative estimates – and that is without the potential associated moving expenses. A worst-case scenario, as described by management during an Investor Day presentation, a B777 Captain displacement can potentially trigger 17 training events, representing a staggering sum of up to $850,000 for just that one senior Captain.

    Displacements, and the disruption that comes with them, can also bring high personal costs to pilots and their dependents. Budgets are reworked as income is reduced, and families suffer when pilots find themselves forced to commute across the country to new domiciles causing them to spend significant time away from their homes. Even if a pilot and his or her family can move, it still represents an erosion of quality of life to uproot and relocate.
    What About Training Capacity?

    Logistically, some severe constraints would make mass displacements difficult for Delta. Currently, maximum simulator capacity allows for the training of 288 pilots a month. Once a pilot has been retrained, the question of OE and TOE becomes an issue.

    • First, Line Check Pilots (LCPs) are not immune to displacements, which will leave their ranks depleted. Replacing a displaced LCP takes time as it involves simulator training and line experience.
    • Second, with reduced flying, the opportunities to get OE and TOE become scarce, which will lead to pilots sitting idle while getting paid. During the 9/11 displacements, it was not uncommon for pilots to sit unqualified for months waiting for training between displacements.

    Moreover, If Delta decides to furlough pilots, another layer of complexity is introduced. Pilots cannot be cut without consideration given to the fleet and bases they hold. Letting a disproportionately large number of pilots go at once is likely unrealistic as it can leave whole categories excessively drained and uncovered. When considering that the B717 and A220 B are the two most junior seats and that there are only five simulators in-house to meet those fleets training demand, Delta can only furlough as fast as it can train pilots. As a result, before these First Officers can be furloughed, their replacement needs to be trained to fill the soon-to-be-vacated position. To summarize, Delta is shackled by numerous constraints that are amplified by going from hiring and training at max capacity to reversing course with displacements. Those constraints will limit the Company's throughput for years.
    Closing

    ALPA has identified an undeniably elegant way management could selectively target top-of-the-category and seniority list reductions that vastly eliminate cascading displacements. Curtailing displacements lessens unneeded disruption to pilots and their families' lives and will help moderate any future furloughs and the high costs they entail.

    For the early-outs to be fully effective, and to capture the most considerable savings, they should be implemented before displacements. The window for seizing this dynamic logistical and cost saving opportunity is fleeting. Swift action by management will ensure that the Company can avail itself of the savings and the flexibility that our direct competitors - United, JetBlue and American Airlines – have already secured.

    The next piece in this series will examine the different early-out programs at JetBlue and American.

    __________________________________________________ __

  2. #22
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    Thanks Cujo. My Delta MD-88 "A Seat" aka CA, believes he will not fly again til 2021. Late 2021 to start long course on NB aircraft with MD-88 fleet retired.

  3. #23
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    Quote Originally Posted by SlowHand View Post
    Thanks Cujo. My Delta MD-88 "A Seat" aka CA, believes he will not fly again til 2021. Late 2021 to start long course on NB aircraft with MD-88 fleet retired.
    I think the recovery will be quicker than the talking heads are predicting.
    __________________________________________________ __

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  6. #26
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    Delta Town Hall 5-13-20

    - Flights averaging 30% full
    - 6000 flights normally in the summer, 1500 this summer
    - Masks required for all employees and passengers
    - First class capped at 50% and main cabin at 60% for social distancing
    - Predicting economic and health crisis to last 2-3 years
    - Plexiglass shields will be installed at ticket counters and gates by end of this month domestically.
    - Pay protection for individuals at high risk of contracting COVID has increased to 75% pay. They are considering an extension of that beyond 90 days. Delta will announce update by end of the month.
    - Protecting cash and jobs are the highest priorities for Delta right now.
    - Short term leaves will continue to be available.
    - Early out retirement package info will be announced by the end of the month. There will be 2 options: an enhanced early retirement package (calculated based on age and years of service) and a severance package which will be available to all employees.
    - The majority of travel right now is leisure/essential travel. Many businesses have restricted employee travel.
    - Some 777s are currently being used strictly for cargo.
    - We’re moving essential medical supplies such as masks, gowns, etc.
    - We’re offering corporate charters to companies such as Ford, IBM, and GM.
    - Telecommuting will become more common around the world coming out of this. This may have a residual effect on business travel.
    - The first day of success will be when we eliminate cash burn (first day that we aren’t losing money). We plan to eliminate cash burn by the end of the year.
    - Flying reduction will likely continue for another year.
    - Our debt levels have tripled over the last 2 months. We can’t think we’re out of the crisis once we start to make profits again. The second phase of recovery will be paying down debts.
    - Heppa filters used on our aircraft are the same high quality filters used in hospitals, schools, and restaurants.
    - Aircraft is safe to enter immediately after fogging agents are sprayed. There is not a timeframe that the aircraft has to be unoccupied post fogging.
    - Many international airlines have lost all of their revenues due to travel restrictions. Many governments are not able or willing to provide aid to the airline industry...the UK in particular.
    - Delta is looking into creating videos/media to show customers what to expect with new procedures due to covid19 so that they know how we’re keeping them safe. Ex) capping capacity, disinfectant fogging procedures, social distancing in jetway, required masks, etc.
    - 25,000 Delta T-shirts have been sold, and black shirts are available for friends and family.
    - We’ve lost 8 Delta employees to the virus so far.



    OCC Update International Edition
    ✈️❤️✈️❤️✈️❤️✈️❤️✈️❤️✈️❤️✈️❤️
    Morning Update for Wednesday, May 13

    *indicates new information

    .
    *16 countries had updates to travel restrictions in the last 24 hours; we currently have active service to 4 of them.

    .

    *ATL camp creek employee lot is closing. All cars must be out by May 31.

    *If you are not woke, this is a huge red flag*

    .

    *The company has temporarily suspended flying to the following cities. This is done under the new FAA "close to" exemption. There may be 9 more cities added next month.

    MDW, OAK, BUR, LGB, PVD, HPN, SWF, CAK, MHT, PHF)

    .

    Planned starts for May and partial for June and July. Highly Subject to change as individual countries update their travel restrictions.

    .

    Trans-Atlantic

    ATL-CDG -Operating

    ATL-FRA -21May

    ATL-LOS -2Jun

    ATL-LHR -3Jun

    DTW-AMS -Operating

    DTW-LHR -21MAY

    JFK-TLV -3Jun

    JFK-AMS -3Jun

    JFK-CDG -4Jun

    JFK-LHR -2JUL

    .

    Tupac

    ATL-PVG - 2JUN

    DTW-HND -Operating

    DTW-ICN -Operating

    DTW-PVG 1-Jun

    LAX-PVG 2-Jun

    LAX-HND 3-Jun

    LAX-SYD 3-Jun

    SEA-HND -Operating

    SEA-ICN -Operating

    SEA-PVG 4-Jun

    .

    Latin and South

    ATL-EZE *indefinitely removed from schedule

    ATL-GRU -7 JUN

    ATL-LIM *possible restart is now July

    ATL-SCL -3JUN

    ATL-BOG -4JUN

    ATL- UIO -2JUN

    .

    ATL-SAL -21 May (new restart date)

    ATL-SAP -21 May (new restart date)

    ATL-GUA -24MAY (new restart date possible move to June)

    ATL-LIR -15JUN

    ATL-SJO -15JUN

    .

    ATL-CUN - 2JUN

    ATL-PVR -2JUL

    ATL-MTY -2JUL

    SLC-MEX -2JUN

    .

    ATL-AUA -6JUN

    ATL-NAS -2JUN

    ATL-PLS -2JUN

    ATL-SXM -2JUN

    JFK-SDQ -3JUN

    ATL-STT operating

    ATL-STX operating

    ATL-SJU operating

    .

    *LHR operations will be temporarily located in T-2 vs. the current T-3. Due to the continued lack of demand all operators except BA will be in T-2.

    LHR has issued guidance for the crews and pilots there will be updates in the green pages.

    .

    Cape Verde Islands now have travel restrictions in place until June 30. We do not fly there but this is an indicator of how Island nations may go forward.

    .

    *Hawaii extended travel restrictions until May 28 and new restrictions are now in place. New crew requirements quarantine is relaxed a little bit.

    .

    .

    Argentina has extended travel restrictions until September 1

    .

    Brazil: travel restrictions for foreigners until 31 May.

    .

    Peruvain Government has extended the travel restrictions until May 10.

    .

    Ecuador: Travel restrictions extended until 31 May

    Belize: Travel restrictions extended until 25 May

    .

    Guatemalan government extended travel restrictions until May 15

    .

    Honduaran government has extended the travel restrictions until May 16.

    El Salvador travel restrictions have been extended until 16 May

    Nicaragua: Travel restrictions extended until 31 May

    .

    .

    Aruba AUA, and Grand Cayman GCM, extended the country's travel restrictions to May 31.

    Trinidad & Tobago: Travel restrictions have been extended until 15 May

    .

    Jamaica will be extending to May 31 with the exception of allowing in Jamaican citizens.

    .

    St.Kitts/Nevis SKB, extended the country's travel restrictions to June 15.

    .

    Bahamas has extended the curfew to May 30. The borders remain closed to inbound passengers.

    .

    .

    Nigeria has extended the country's no travel restrictions to May 7th.

    .

    India had extended travel restrictions to May 18

    LATAM Airlines Group and Mamma D have signed a trans-American Joint Venture Agreement that, once regulatory approvals granted, will combine our highly complementary route networks between North and South America, providing customers with a seamless travel experience and industry-leading connectivity.

    This will include codeshare agreements between Delta and LATAM's affiliates in Peru, Ecuador, Colombia and Brazil that allow customers to purchase flights and access onward cities in their respective networks and will be expanded to cover long-haul flights between the United States/Canada and South America, as well as regional flights.

    .

    .

    If you see flights that are heavily booked or have a high load factor please keep in mind we are currently booking to 60% load factor. The loads on travelnet reflect the 60% capacity cap. If you click on the flight # you are looking at it will show you in a bit more detail. Actual availability/authorized availability (actual cabin capacity) and you can see the reduction more clearly.

    .

    .

    *Currently 554 mainline aircraft are parked, 1 more will be parked this week. A total of 555 a/c will now be parked short term and long term.

    All A320 and B737-900 will be parked.

    All MD88/90 will be retired by the end of June.

    Some B767/757 will be retired and/or sold.

    *Last MD88 flight is 80 / 02JUN IAD-ATL

    *Last MD90 flight is 90 / 02JUN IAH-ATL

    .

    Retirement package will be out soon, most likely with a decision date of July, 1. Be ready

    Highly probable this will be the last retirement package for 5-10 years.

    .

    Interesting fact of the day:

    You all know about DB Cooper, hijacked a plane and stole money on board then opened the rear stairs of the 727 and jumped out. After that event Boeing had to engineer a lock to prevent the rear stairs from opening in flight. (not sure why they didn’t do it to start with)

    Guess what they named that lever that locked the rear stairs??

    ..

    The big schedule take down is in place and expected to be reduced until November. Commuters’ options will be minimal to non-existent in some cities, EXPECT ad hoc cancellations and daily schedule adjustments due to crew resources and light loads. We are currently at about 80-95% reduction with some cities seeing 90-95% reduction.

    .

    Cargo Charter flights will have a new set of call signs. We will now be using 3000 series numbers. 3335-3344. (Pilots take note of this.) Non-revs CANNOT fly on these flights.

    .

    FAA has cut back operating hours of 69 ATC control towers. Many are mid to larger size airports
    .

    Continued risk across the NAS (National Airspace) of ATC towers and centers going temporary ATC-zero due to constraints from the virus. This can cause diversions and/or cancellations.

    .

    Airports we are parking planes at:

    ATL, BHM, BYH, CAN, CWF, ILN, MCI, MWH, MZJ, QRO, SBD, SIN, VCV.

  7. #27
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    Good update.

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