Newest DL BK info...

[Kristie]

I wish I could keep tabs on this better, but I only have enough time lately to hear it through the grapevine...

I don't know yet what happened at yesterday's hearing.

--
Delta bankruptcy hearing continues; aircraft sale approved

Lisa Treon
11/29/2005

The Delta Air Lines hearing in the U.S. bankruptcy court continued this week with some harsh words from the judge for both Delta and its counsel.

One issue resolved: Judge Prudence Carter Beatty said she would allow Delta to sell an undisclosed number of aircraft including Boeing 737s, Embraer 120s and Boeing 767s. No information was given on potential buyers or prices. Permission was also given to reject an Atlanta office lease; no details were disclosed.

During the hearing, Beatty covered a wide range of issues surrounding the bankruptcy plan. She said Delta may have been wrong to spend $2.4 billion to buy back its own shares in the years before it filed for bankruptcy in September. "It is a question of if you had that money rather than had spent it that way, you might not be in the position you are in," she said.

On Monday, she said the carrier's motion seeking to void its pilots' contract had the taint of "union busting."

"The issue is whether or not at this time I should permit the rejection of the union contract," Beatty said. "One can talk about union busting and that is precisely what this kind of motion has the taint of..."

Beatty noted that she does not believe the court can enjoin a strike by pilots. "I don't have any jurisdiction of whatever you do," she said.

She also came down hard on Delta lawyer Jack Gallagher. "Frankly, I think you have a bias here," she told Gallagher. "It's a personal bias against the pilots."

Gallagher argued that the airline needed to weigh the pilots' rights against those of its 44,000 other employees. "There is not enough money left in this company to continue to pay these pilots," he said.

Earlier, the pilots' lawyer Bruce Simon grilled the carrier's chief financial officer, Edward Bastian, questioning the numbers in Delta's restructuring plan. "Your projection of your fuel expense is $100 million above what the market tells us today," said Simon, a lawyer for the Air Line Pilots Association, which represents Delta's 6,000 pilots.

Delta's plan for stemming its cash drain next year and regaining positive cash flow in 2007 was finalized in September, reflecting oil prices which peaked shortly after Hurricane Katrina. The plan is based on an estimate of jet fuel priced at $1.73 per gallon in 2006 and 2007. That compares with current market forecasts of $1.69 a gallon, Simon said, adding that each cent of added fuel cost is equivalent to $25 million to $26 million in costs on an annual basis.

[roz]

Wow!
Ex-Delta exec fights to keep free flights

By RUSSELL GRANTHAM , MATT KEMPNER
The Atlanta Journal-Constitution
Published on: 12/06/05
M. Michele Burns, the Atlanta executive who landed deals allowing her to parachute from Delta Air Lines and Mirant Corp. with millions of dollars, is fighting to keep her loftiest perk: free flights for life aboard Delta.
The airline, which is struggling to stay airborne while in Chapter 11 bankruptcy, wants to cut off first-class flight privileges for its former financial chief and her family.
In court papers filed last week, Burns argued that Delta can't cancel the flight privileges — awarded to her when she left the airline in April 2004 — under federal bankruptcy code. She also said the carrier would lose more than it gained from the move.
Delta will "incur few or no actual costs or expenses ... because there generally are empty seats on the debtor's aircraft," Burns said in the filing with the U.S. Bankruptcy Court in New York.
Burns is no stranger to flaps over executive pay and perks.
In 2002, while at Delta, she helped the airline during its creation of controversial bankruptcy-proof pension trusts for about three dozen executives. That provided her with at least $1 million in a personal pension trust beyond the reach of creditors.
Around the same time, Burns also was among a long list of Delta executives who were paid hefty bonuses while the airline was losing money, cutting jobs and appealing for federal aid. That year, she was awarded a bonus of $846,000, on top of her $560,000 salary.
Despite those incentives, Burns and other Delta executives left the company in droves. Her next stop was Mirant, the bankrupt energy trader, where she became chief financial officer.
Now she's finishing a 20-month stint with Mirant, flush with at least $8.2 million in severance pay, bonuses and other payments from the company as it emerges from its own Chapter 11 case.
Efforts to reach Burns for comment Monday were unsuccessful.
Delta spokesman John Kennedy said the airline asked the bankruptcy court to relieve it of fulfilling all individual compensation agreements with former senior executives. He said that while many executives had such agreements, he was unsure of how many there were or whether others included flight privileges.
"Given the severity of our financial situation and the sacrifices that Delta's active and retired people are making, the company believes it's right and appropriate," Kennedy said Monday.
"We've always said that our restructuring would not be painless and that all Delta stakeholders would need to participate."
Kennedy said Burns was the only former executive to challenge the cutoff.
Burns received the unlimited rights to Delta's generally most expensive seats on a so-called positive space basis, meaning they were reserved as though she and her family were paying passengers. The benefit was part of an agreement for her to provide occasional consulting services for the airline until May 2009.
Delta declined to comment on whether Burns did any consulting.
Long-tenured retirees are allowed to fly free on the carrier. But Burns left Delta after only five years with the company and wouldn't normally qualify for such privileges, much less rights that gave her the higher priority on seating.
Delta promised the flights to Burns, her spouse or domestic partner and their children as long as she lives and doesn't use them for business purposes.
Stanley Barczak, who co-authored an unsuccessful shareholder proposal earlier this year that called for Delta to renegotiate compensation for former executives who tapped the pension trusts, said he was not surprised by the current tussle over Burns' free-flying perk.
He noted that starting next year, active Delta employees would be charged a $50 annual fee to use their personal flight privileges.
"Allowing her to fly free while everybody else is paying would add insult to injury after her time with the company," said Barczak, a Delta baggage handler from Richwood, Ky., who was recently furloughed after 27 years with the company.

[Kristie]

WOW! that's ballsy!!

I hope she gets what's coming to her!

[roz]

TA Reached:

ATLANTA, Dec. 11, 2005 – Delta Air Lines, Inc. confirmed today that it has reached a tentative interim agreement with the Air Line Pilots Association, International (ALPA), the collective bargaining representative of the company’s more than 6,000 pilots.

Subject to pilot ratification by no later than December 28, 2005, the tentative interim agreement provides for a 14 percent hourly wage reduction and reductions in other pilot pay and cost items equivalent to approximately an additional one percent hourly wage reduction. The interim cost reductions would be effective December 15, 2005 and would remain in effect while the parties seek to reach a comprehensive agreement. The company and ALPA would seek to negotiate a tentative comprehensive agreement by March 1, 2006, with pilot membership ratification by March 22, 2006.
“This agreement reflects the resolve of Delta people to work together to help save the company. We recognize and appreciate the additional sacrifice this will represent,” said Ed Bastian, Delta’s chief financial officer.
Delta and ALPA will request that the Bankruptcy Court suspend the hearing on the company’s motion to reject the existing Delta-ALPA collective bargaining agreement pursuant to section 1113 of the U.S. Bankruptcy Code, pending the ratification process for the tentative interim agreement.
Delta has said that achieving additional annual pilot labor cost reductions is an important element of its restructuring plan. The restructuring plan calls for an additional $3 billion in annual cost reductions and revenue improvements to be realized by the end of 2007. The $3 billion improvement target is in addition to the approximately $5 billion in annual financial benefits the company says it is on track to deliver by the end of 2006, as compared to 2002.

[Kristie]

Latest info is that the tentative agreement that the union came out with has pissed off all the DAL pilots - mainly because the BK judge didn't even get to hear the pilots side of the case before an agreement was reached...so now they feel that not only are they fighting mgmt, they're also fighting the union...the least the union could have done was let the BK judge hear the details and see how it goes....

and apparently, all because Wash DC got all up in arms with the union knowing that they're fully prepared and willing to go on strike (100% pilot encouragement).

sounds to me like the union is trying to circumvent doing some work, so they're coping out at 14% which, if you ask me, is still too damn high!! I would have gone for the 9% for a year, 10% for a year deal.. but 14% off the bat - Forget that!

so my question now, to the man, is what other contract changes did they agree to? because if the contract that mgmt proposed didn't change - then i'm still a NWIH vote (No Way In Hell)...

[roz]

lta Air Lines Interim Agreement, Part 1

Letter #50

LETTER OF AGREEMENT

Between

DELTA AIR LINES, INC.

and the Air Line Pilots in the service of

DELTA AIR LINES, INC.

as represented by the

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL

DECEMBER 2005 INTERIM AGREEMENT

This LETTER OF AGREEMENT is made and entered into in accordance with the provisions of the Railway Labor Act, as amended, by Delta Air Lines, Inc. (“the Company”) and the Air Line Pilots Association, International (“the Association”).

The Company and the Association are parties to a collective bargaining agreement setting forth the rates of pay, rules and working conditions for the Company’s pilots signed November 11, 2004 (“Pilot Working Agreement” or “PWA”).

NOW THEREFORE, the parties agree to this interim modification of the PWA as follows:

1.

Composite Hourly Rate Reduction

The composite hourly rates set forth in

Section 3 B. of the PWA will be reduced by 14%

effective December 15, 2005.

2.Night Pay and International Pa

The provisions regarding night pay in

Sections 3 A. 9. and 3 D. and throughout the PWA will be eliminated effective December 15, 2005. International pay in Section 3 C. and throughout the PWA will be $5 for Captains and $3 for First Officers effective December 15, 2005.

3. Per Diem

Effective December 15, 2005, amend
Sections 5 B. 1. and 2. to read:
1. Domestic per diem: $1.85
2. International per diem: $2.40

[roz]

4. Miscellaneous--Part 2


a. Effective January 1, 2006 amend
Section 24 L. 2. to add a note:
Note: The Company may charge a yearly pass usage fee that will be the same charge as for other employees, but will not exceed $50 per year per primary pass rider.

b. Effective December 15, 2005, add an Exception to



Section 9 B. 2. to read:

Exception: In the event such rotation is removed from open time within 96 hours of report time for such rotation, the pilot(s) who would otherwise have performed such flying will not receive pay protection.

c. Effective December 15, 2005, amend

Section 12 A. 19. b. 1) to add an exception to read: Exception: Flight segments to/from Hawaii will have a 60 minute report.

5. Post-Retirement Pilots

The Tentative Agreement regarding LOA #49 between the Company and the Association dated November 11, 2005, will become effective as of December 15, 2005.
6. Membership Ratification; Bankruptcy Court Proceedings

A. The Negotiating Committee agrees that it will actively support ratification of the Letter of Agreement by the MEC and by the pilots. The MEC Chairman agrees that he will
1) represent to the members that the relief provided by this Letter of
Agreement is important to give the parties the opportunity to reach a
comprehensive agreement on changes to the PWA in a timely manner;
and,
2) actively support ratification of this Letter of Agreement by the pilots by 5
p.m. Eastern time on December 23, 2005 if possible, but no later than 5
p.m. Eastern time on December 28, 2005.
B. If this Letter of Agreement is ratified by the MEC by 5 0 p.m. Eastern time on December 11, 2005, the Association and the Company will jointly request the Bankruptcy Court to suspend the hearing on the Company’s section 1113 motion and will consent to extend the December
16, 2005 statutory date for a court decision on that motion, subject to resuming the hearing the week of January 2, 2006, and establishing a new statutory date of seven days after the hearing resumes, but not later than January 13, 2006, for a Court decision on the section 1113 motion pursuant to Paragraph 6. C. of this LOA.
C. If this Letter of Agreement is not ratified by the pilots by 5 p.m. Eastern time on December 23, 2005, or December 28, 2005 as applicable, the Association and the Company will jointly ask the Court to resume the hearing on the section 1113 motion the week of January 2, 2006 or as soon thereafter as the Court’s schedule permits, with a decision date of seven days after the hearing resumes, but not later than January 13, 2006, for a Court decision on the section 1113 motion.

D. If this Letter of Agreement is ratified by the MEC and the pilots by the times set out in Paragraphs 6. A. and 6. B., the Association and the Company agree to fully commit their resources and representatives to seek to reach a comprehensive agreement. The Company and the Association agree that in those comprehensive negotiations they will seek to reach agreement on the terms and conditions that would be implemented if the pilot defined benefit
pension plan is terminated. The Company and the Association agree that in those comprehensive negotiations they will seek to reach agreement regarding profit sharing and the sharing of equity when the Company reorganizes. In such equity discussion, the parties will acknowledge the December 2004 pilot cost reductions. The time limits for reaching a
comprehensive agreement are as follows: (i) tentative agreement by the negotiating committees by 500 p.m. Eastern time on March 1, 2006; (ii) ratification by the MEC by 500 p.m. Eastern time on March 8, 2006; and (iii) ratification by the pilots by 500 p.m. Eastern time on March 22, 2006.
E. Subsequent to the MEC ratification contemplated by paragraph B. hereto, the parties will jointly request entry of an order by the Bankruptcy Court that provides that if a comprehensive agreement on permanent changes to the PWA is not reached and ratified by the respective times set out in Paragraph 6. D., the Association and the Company will promptly proceed to submit the matter at issue in the Company’s section 1113 motion to binding decision by a third party neutral panel, under the following terms and conditions:

(1) The third party neutral panel will be Frederick Horowitz, Robert Harris
and Richard Bloch;
(2) The legal standards governing the third party neutral panel’s decision will
be the standards of section 1113 of the U.S. Bankruptcy Code, as
applied by the U.S. Court of Appeals for the Second Circuit, including
the requirement that the third party neutral panel’s decision be limited
to granting or denying the Company’s section 1113 motion;
(3) Neither the Company nor the Creditors’ Committee will assert that the
Bankruptcy Protection Letter (“BPL”), as part of the pre-petition PWA, is
itself rejectable under section 1113 of the Bankruptcy Code and
therefore unenforceable. Except as provided in the prior sentence, the
Company and the Association each will retain the right to assert
that the interpretation of the BPL by the third party neutral panel must
or must not be consistent with other laws, including, without limitation,
section 1113 and other provisions of the United States Bankruptcy
Code;
(4) The third party neutral panel’s decision will be final and binding, subject to appeal
only on the grounds on which third party neutral’s (arbitrator’s) decisions are subject to
appeal under federal law generally;
(5) The proceedings before the third party neutral panel must commence within seven
days after the failure to meet any of the applicable time limits set out in Paragraph 6. D.,
or as soon thereafter as the third party neutral panel is available;
(6) The third party neutral panel’s decision must be issued within 45 days after the failure
to meet the applicable time limit set out in Paragraph 6. D.;
(7) The Company and the Association will bear equally the third party neutral panel’s
fees and related costs;
(8) If both parties request, the third party neutral panel will assist the parties in the
comprehensive negotiations;
(9) If the decision of the third party neutral panel is to authorize rejection of the PWA, the
third party neutral panel will also determine the amount, if any, of the Association’s prepetition
rejection damage claim for the purposes of the chapter 11 proceeding;
(10) The sole parties to the third party neutral panel proceeding will be the Company and
the Association; and
(11) Such other governing procedures as the parties may agree upon or as the third party
neutrals may establish;
(12) The Association’s members will have the same attendance rights at the third party
neutral panel’s hearing as they would in court (subject to room capacity).
F. This interim agreement will not be cited by either party as evidence of the Association’s
appropriate share of labor cost savings in connection with the comprehensive negotiations or
section 1113 proceedings or proceedings before the third party neutral panel.
G. The parties will have the same rights following a rejection decision by the third party neutral
panel as following a rejection decision by the bankruptcy court, except that appeal rights will
be limited to those set forth in paragraph 6. E. (4) of this Letter of Agreement. The
Association members will have the same voting rights with respect to a comprehensive
agreement as they do at present, whether the comprehensive agreement is reached before or
after a rejection decision.

[roz]

7. Part 3
Non-Assumption
Nothing in this Letter of Agreement will constitute or be deemed to be an assumption of the
PWA by the Company, and except as expressly provided herein, the Company and the
Association will retain all rights available to them under Chapter 11 of the Bankruptcy Code or
otherwise.
5
8.
Effective Date and Duration
Once ratified, this Letter of Agreement will be effective as of December 15, 2005 and will
continue in full force and effect until a comprehensive agreement on permanent changes to the
PWA is reached or the third party neutral panel issues its final order on the merits of the Section
1113 Motion. In the event that this Letter of Agreement is not ratified in accordance with the
time frames set forth above, then this Letter of Agreement will be null and void and of no further
force or effect, except as to Paragraphs 6. B., 6. C., and 6. F.
IN WITNESS WHEREOF, the parties hereto have signed this December 2005
Interim Letter of Agreement this ____ day of December 2005.
FOR THE COMPANY FOR THE ASSOCIATION
By: By:
Scott A. Kruse Captain Duane E. Woerth
Senior Legal Advisor President
WITNESS WITNESS
By: By:
Geraldine P. Carolan Captain Lee Moak
Vice President — Labor Relations Chairman, Delta MEC
By: By:
David Watson Captain Tim O’Malley
Director — Pilot Resources &
Scheduling
Chairman, MEC Negotiating Committee
By:
Captain Randy Worrall
MEC Negotiating Committee
By:
Captain Rick Dominguez
MEC Negotiating Committee

That's it--read it and think....

[ASACRJwife]

Hey Kristie,

I thought the deal for a 14% cut was a cave by management to get the pilots to NOT strike, since it doesn't equal the $300+ million that they're looking for. Now I know differently. Gotta love ALPA, huh?
Over here at ASA, things are not good, since mgmt. decided to shelve most of the contract that has been hashed out for the last 3 years because they needed to do a "cost analysis" since the purchase of ASA, I mean Skyeast, by Skywest. So now the MEC has proposed a vote of no confidence, with a proposed strike ballot to be coming out soon. I hope our guys do the job and show them that they will stike if they have to.

We were hoping that the Delta pilots would really send a message with a strike, but that's not going to happen. I was joking around that my DH wouldn't be doing much flying if the Delta pax weren't being brough into ATL in the first place!

Ah, well, we'll see what January brings.

Stacey

[Kristie]

I dunno really.. it might be a cave by both sides, esp since mgmt wasn't going to budge - however, maybe mgmt noticed that their side of things with the BK judge wasn't going good and the only way to make ends meet was to slide the paycut down and get it taken care of BEFORE ALPA went in front of the BK judge? maybe mgmt already knew that ALPA might actually pull ahead of the fight...

it's really hard to say since none of us are in on those hearings - all we hear is what we hear via media and as far as i could tell, it seemed that the judge was noticing the union busting tactics and getting on the CFO's case about what the financial picture REALLY is?? last i heard, he failed to produce documents to prove that they even needed $300 mil from the pilots. that AND she wanted to see the list of things that had no monetary value that were added to the contract - she wasn't too pleased about those items since they're completely unrelated to the money needed to turn DAL around. so maybe it was mgmt's "omg, we've got to get a concensus for more than 9% before ALPA goes in front of the judge or we won't get our bonuses with the extra $$ for *saving* the company".. who knows...

I know, I think we too were hoping DAL pilots would be able to bring the profession back up with a strike and i bet that mgmt knew it would happen if they kept continuing with the section 1113 hearings.

problem now is that we can't make a stand - for the DAL pilots and for the entire profession...the union has taken that opportunity away (for now) and that's really what's pissed everyone off...

who knows, had the union continued the fight (instead of going into flight mode) and gone in front of the BK judge - who knows where we'd be at right now!!