PILOT GROUP PROFILE
in Delta Pilots Restructuring Agreement
Delta Pilots at a Glance
Pilots: 8,000 pilots, with about 800 on furlough.
Operations: Delta flies domestically and to Latin America, Europe, and Japan.
Pilot bases: ATL, CVG, DFW, LAX, NYC, SLC.
Hub cities: Atlanta, Cincinnati, Salt Lake City.
Company headquarters: Atlanta, Ga.
Equipment: MD-88s, B-737s, B-757/767s, B-777s
Alliances: Delta has alliances with Alaska, Continental, Northwest, and SkyTeam International.
By Karen P. Miller, Senior Communications Specialist
Air Line Pilot, January 2005, p.17
In the early morning hours of Oct. 28, 2004, the Delta Air Lines pilots’ Master Executive Council gathered at a hotel in northern Virginia to vote on a tentative agreement reached after around-the-clock negotiations with management. The tentative agreement, if ratified, would provide Delta with $5 billion in cost savings over a 5-year period. The MEC was quite certain that if the tentative agreement was rejected, Delta management would file for bankruptcy that morning.
The situation was precarious, but the MEC was prepared. Elected representatives spent months receiving periodic updates from ALPA’s economic experts regarding Delta’s deteriorating financial condition, exacerbated by record-high fuel prices. The MEC members understood the implications of bankruptcy, having listened to numerous briefings from legal counsel and financial advisors. Most importantly, they knew they had the support of a large majority of Delta’s 8,000 pilots, including about 800 on furlough. Over the course of nearly 18 months, the MEC had executed an aggressive communications plan to inform the pilots and keep them updated. Polling and other feedback channels show that the plan worked--Delta pilots continued to be supportive and trust the MEC to make good decisions despite Delta’s bleak economic picture and the massive concessions required.
"Our communications philosophy throughout the negotiating process was simple: give pilots the facts and let them make an educated decision," says First Officer Chris Renkel, the MEC Communications Committee chairman.
Most importantly, the pilots understood that pilot leaders had a plan and believed that the MEC’s goals were realistic, reasonable, and achievable. The MEC chairman, Capt. John J. Malone, had clearly and repeatedly explained the union’s objectives: to attain an agreement that was equitable across the seniority list; to give management only what it needed, not wanted; and to leave a structure in place to rebuild for the future. The union also maintained that any pilot concessions must be part of an overall company restructuring and include substantial returns. "The pilots will be part of the solution, but we alone cannot solve Delta’s problems," Capt. Malone reiterated throughout the negotiating process.
In a display of unity, the MEC voted unanimously on October 28 to ratify the tentative agreement and submit it to the members for ratification. Since Delta desperately needed additional financing, the ratification process had to occur quickly. Additionally, management had asserted that because of ongoing negotiations with other stakeholders, management needed to know the outcome of the pilots’ vote by Nov. 11, 2004. The union had less than 3 weeks to educate pilots on significant contractual changes that would affect their careers.
Capt. Malone set the tone in a hotline message to all pilots. "Let me say from the outset that it pained me to see such drastic changes made to almost every section of our contract; they are significant and will affect each of us and our families. However, your union and our economic experts were convinced that immediate relief was necessary to prevent a bankruptcy filing in light of the company’s economic condition."
In less than 24 hours, the communications effort was running at full speed. The MEC website, e-mails, flyers, and hotline message quickly disseminated information to the pilot group about the tentative agreement. Additionally, the union scheduled and taped a road show in Atlanta, which was available for viewing via a webcast within a day. More than 900 pilots and spouses attended this meeting to learn about the agreement and potential alternatives if they did not ratify it. The mood of the crowd was somber, respectful, and appreciative of ALPA’s efforts.
"Our goal was to present the pilots with complete information, including a landscape of the airline industry, Delta’s liquidity position, and our options going forward," says F/O Renkel. "These were the same issues that our negotiating team considered in the final stages of the talks."
In a letter e-mailed to pilots during the ratification process, Capt. Malone offered an honest assessment of the tentative agreement. "I wish I could provide reassurance that you will grow to like the new contract if it’s ratified, or that in time it won’t seem as draconian," he stated. "I do not think either will be the case. With that said, I still believe that our collective best option is to ratify the tentative agreement."
Capt. Malone’s approach resonated with line pilots. "The tentative agreement wasn’t sold or tampered with," says Atlanta B-737 First Officer Alicia Hayes. "It wasn’t good news, but the communications were great."
"Most pilots knew where we were heading," says Atlanta B-737 Capt. David Chuhran. "The union’s communications were timely, unemotional and unbiased. They stuck to the facts."
With news media interest reaching a fevered pitch, not just during membership ratification but throughout the entire negotiations, the MEC had adhered to a simple strategy when dealing with reporters and airline analysts. "We tried to ensure that a pilot always heard developments from the union first, not by picking up a newspaper," says F/O Renkel. "We were responsive to reporters but concentrated on internal communications first and foremost. When we talked to reporters, we kept our message simple, focusing on the pilots’ dedication to their company and the importance of management accountability. Labor has become a common scapegoat among airline executives."
To help address rumors and answer pilots’ numerous questions about the tentative agreement, the MEC established an expanded "duty officer" program. Pilot volunteers staffed phone lines throughout the ratification process. Additionally, MEC committee members monitored the pilots’ website and quickly responded to common concerns or misperceptions about the agreement.
"While I was unhappy with many aspects of the tentative agreement, I was convinced that the MEC had done everything possible to make the best of a bad situation," says Atlanta B-737 Capt. Kevin Powell. "The line pilots very much appreciated ALPA’s tireless efforts to answer the many individual questions we asked during the short ratification period. Frankly, if someone didn’t understand the nuances of this agreement before the time to vote, it’s because he or she didn’t bother to ask."
On Nov. 11, 2004, ALPA’s Election Ballot and Certification Committee announced the results of the ratification ballot. Of those pilots eligible to vote, 90 percent cast a ballot, with 79 percent voting in favor of the agreement. On a hotline message to the pilot group to communicate the ratification results, F/O Renkel reiterated a key union message: "It is now up to management to execute its business plan and return Delta to viability. There’s no one left to blame for a failure."
Over the coming months, the MEC’s focus will shift to contract education and implementation. Many contractual provisions will be phased in over time, including the transition to an entirely new scheduling structure, called the Preferential Bid System (PBS). "During the post-ratification phase, our objective is to help pilots know and enforce the new agreement," says F/O Renkel. Additionally, the union will continue to carefully monitor Delta’s financial condition through the experts in ALPA’s Economic & Financial Analysis Department.
"The past year has reinforced my viewpoint that if you communicate openly with pilots, providing them with factual information in a business-like manner, they will weigh all the options and make an educated, unemotional decision," says F/O Renkel.
The Delta pilots now find themselves in a role similar to that of pilots of other restructured carriers: waiting to see if management can implement a successful business plan in a changed environment. "Management will be under a magnifying glass in the coming weeks and months," says F/O Renkel, "with 8,000 pilots watching to see if their investment is being used wisely to help our airline recover and return to profitability."