Midnight Mike
2006-04-07, 11:08 PM
What if Delta's Pilots Walk Out?
Posted: April 7th, 2006 11:14 AM EDT
Pilot union leaders at Delta Air Lines have drawn their line in the sand: A strike could begin as soon as April 18 if a special panel rules that the airline can toss out the existing contract and impose new wage cuts.
Talks between union and management negotiators continue on a deal that would avert a strike at Atlanta's biggest carrier --- one that could deal a fatal blow to its Chapter 11 recovery effort.
But with the potential strike date little more than a week away, many fliers wonder whether a walkout will really occur and what it would mean.
Here are a few questions and answers to help you assess the situation:
How likely is a pilot strike?
The odds are against it --- right up until the moment it happens. The overwhelming majority of these disputes wind up being settled before a union makes good on strike threats.
Two other big airlines that went through recent Chapter 11 restructurings, United and US Airways, weathered perils-of-Pauline labor disputes without taking strikes. Northwest Airlines, like Delta now flying under Chapter 11, got a strike-averting pilot deal in early March, though it still must be ratified.
Delta itself has been through two sets of tense pilot negotiations in the past two years, one resolved in the fall of 2004 and another last fall.
The latter, however, only produced an interim agreement that set up the current dispute.
What can travelers do to protect themselves?
Pay with a credit card, so that if a strike occurs and your flight is canceled, you can at least get the charge canceled as well. Some travel experts say Delta would likely try to rebook passengers on other carriers or refund unused tickets, but there would be far more stranded travelers than available seats. Travelers booked with frequent flier miles would have lower priority.
To hedge your bets on an already-booked trip, you could double-book on another airline and use the credit from the Delta ticket later, minus rebooking fees.
As far as booking future travel on Delta, it's a judgment call. While history suggests a last-minute settlement is in the making, there's no guarantee. An airline spokesman said Thursday that travelers can "book with Delta with confidence."
What would trigger a walkout?
Air Line Pilots Association Chairman Lee Moak now has his union's authority to call a strike anytime after April 17. He has said he will do so if a three-man "neutral panel" called in by both sides decides Delta can scrap the union's current contract and impose the cutbacks it wants as part of its Chapter 11 recovery plan.
The panel is due to rule by April 15, although it has strongly urged the two sides to keep working toward a deal. After hearings last month, the panel said both sides will be guilty of an "abandonment of responsibility that will and should haunt all of you" if they fail to reach a consensual solution.
Can Delta block a strike?
Maybe.
Delta contends that under these circumstances a strike would be illegal; the union says it would have the right to strike rather than work without a contract. Delta could seek an injunction to block a walkout, with financial penalties against the union for noncompliance. Whether it could get a favorable ruling quickly enough to forestall major service disruptions remains to be seen.
The dispute is in a gray legal area because, so far, it has been outside the usual contract negotiation process overseen by the federal National Mediation Board. Normally an airline union can legally strike after negotiations follow a path proscribed by the NMB. In this case, the NMB hasn't been involved, though some legal experts argue it could still step in before a strike can occur.
ALPA argues that unions in other industries have been able to strike after bankruptcy courts rejected contracts.
Delta, led by Chief Executive Gerald Grinstein, sought new pilot concessions about the time it filed for Chapter 11 protection last September. That pushed labor issues into the court's realm. When initial talks failed, Delta asked its judge to void the pilot contract so it could impose terms. The judge was holding hearings on the request when the two sides struck a temporary pay cut deal in December.
That deal included an agreement to keep talking on a permanent accord or name a neutral panel to decide the matter if no deal was reached by March 1, which is what happened.
Is there any chance President Bush would block a strike?
In certain situations the White House can intervene to block a strike that would disrupt transportation on a national scale. The best-known example was in 1997, when President Bill Clinton ended a pilot strike at American Airlines moments after it started. It's unclear whether the same rule could apply with an airline in bankruptcy court, and there's been no talk of presidential intervention so far.
Does Delta shut down if the pilots strike?
Delta's financial chief, Ed Bastian, testified in the recent arbitration hearings that there's no plan to operate during a strike. Pilot strikes are more devastating than most because pilots are hard to quickly replace. Unless an airline is prepared for a strike and can withstand financial distress, survival is very tough.
Some airlines have lived to tell about pilot strikes, however. Northwest recovered from a 15-day pilot walkout that crippled operations in 1998. Eastern Airlines, Delta's one-time rival in Atlanta, stayed alive almost two years with line-crossing flight crews and new hires after pilots joined a mechanics strike in 1989. But it retreated into Chapter 11 and endured constant turmoil before folding.
The head of the neutral panel in the Delta case, Richard Bloch, warned after last month's hearings that "each side has within its power the ability to destroy the company" if they don't get a deal.
If a strike forces Delta out of business, what happens in Atlanta?
First and foremost: heartache, stress and dislocation for thousands of Delta workers and their families, followed by economic ripples across the area.
Travel in and out of Atlanta would be snarled, since Delta and its feeders provide the bulk of service --- close to 1,000 flights daily. AirTran and other carriers would likely beef up service but could probably not take up the slack right away.
Delta's assets --- including gate leases at Hartsfield-Jackson and its fleet of jets --- would likely be auctioned in bankruptcy court. Given the airport's massive capacity and ready-made facilities, another airline might try to buy enough of both to take over Delta's connecting hub.
Such a hub might mesh well with the route systems of United, Continental, American or Northwest, though the latter's own Chapter 11 case would make such a huge move unlikely.
Bottom line: The city would probably get replacement air service after a messy interim period. But it would no longer have an Atlanta-based airline or the local job and economic base that Delta generated.
What are they arguing about?
Delta wants more than $300 million in annual concessions from pilots as part of its broad plan to realize $3 billion in cost cuts or revenue gains as it retools in court. The union has offered a package valued at about $140 million.
The union contends Delta is demanding more than it needs and doesn't count other areas of pilot sacrifice, such as the likely termination of pension plans.
Pilots already agreed to a steep wage cut of 32.5 percent in a late 2004 deal that helped Delta avert a Chapter 11 filing at that time but didn't stop its tide of red ink. Their union contends a further 18 percent cut and other concessions would impose disproportionate pain.
Delta attorneys have pointed out that pilots enjoyed industry-leading wages from 2001 through 2004, thanks to a contract signed just three months before 9/11. The company contends the new cut it seeks would leave pilots contributing a proportionate percentage to the recovery plan.
It has already imposed two rounds of pay cuts on other workers and shed thousands of non-pilot jobs.
Bloch said his panel found "real flaws, oversights, exaggerations and shortcomings" in both sides' arguments.
Posted: April 7th, 2006 11:14 AM EDT
Pilot union leaders at Delta Air Lines have drawn their line in the sand: A strike could begin as soon as April 18 if a special panel rules that the airline can toss out the existing contract and impose new wage cuts.
Talks between union and management negotiators continue on a deal that would avert a strike at Atlanta's biggest carrier --- one that could deal a fatal blow to its Chapter 11 recovery effort.
But with the potential strike date little more than a week away, many fliers wonder whether a walkout will really occur and what it would mean.
Here are a few questions and answers to help you assess the situation:
How likely is a pilot strike?
The odds are against it --- right up until the moment it happens. The overwhelming majority of these disputes wind up being settled before a union makes good on strike threats.
Two other big airlines that went through recent Chapter 11 restructurings, United and US Airways, weathered perils-of-Pauline labor disputes without taking strikes. Northwest Airlines, like Delta now flying under Chapter 11, got a strike-averting pilot deal in early March, though it still must be ratified.
Delta itself has been through two sets of tense pilot negotiations in the past two years, one resolved in the fall of 2004 and another last fall.
The latter, however, only produced an interim agreement that set up the current dispute.
What can travelers do to protect themselves?
Pay with a credit card, so that if a strike occurs and your flight is canceled, you can at least get the charge canceled as well. Some travel experts say Delta would likely try to rebook passengers on other carriers or refund unused tickets, but there would be far more stranded travelers than available seats. Travelers booked with frequent flier miles would have lower priority.
To hedge your bets on an already-booked trip, you could double-book on another airline and use the credit from the Delta ticket later, minus rebooking fees.
As far as booking future travel on Delta, it's a judgment call. While history suggests a last-minute settlement is in the making, there's no guarantee. An airline spokesman said Thursday that travelers can "book with Delta with confidence."
What would trigger a walkout?
Air Line Pilots Association Chairman Lee Moak now has his union's authority to call a strike anytime after April 17. He has said he will do so if a three-man "neutral panel" called in by both sides decides Delta can scrap the union's current contract and impose the cutbacks it wants as part of its Chapter 11 recovery plan.
The panel is due to rule by April 15, although it has strongly urged the two sides to keep working toward a deal. After hearings last month, the panel said both sides will be guilty of an "abandonment of responsibility that will and should haunt all of you" if they fail to reach a consensual solution.
Can Delta block a strike?
Maybe.
Delta contends that under these circumstances a strike would be illegal; the union says it would have the right to strike rather than work without a contract. Delta could seek an injunction to block a walkout, with financial penalties against the union for noncompliance. Whether it could get a favorable ruling quickly enough to forestall major service disruptions remains to be seen.
The dispute is in a gray legal area because, so far, it has been outside the usual contract negotiation process overseen by the federal National Mediation Board. Normally an airline union can legally strike after negotiations follow a path proscribed by the NMB. In this case, the NMB hasn't been involved, though some legal experts argue it could still step in before a strike can occur.
ALPA argues that unions in other industries have been able to strike after bankruptcy courts rejected contracts.
Delta, led by Chief Executive Gerald Grinstein, sought new pilot concessions about the time it filed for Chapter 11 protection last September. That pushed labor issues into the court's realm. When initial talks failed, Delta asked its judge to void the pilot contract so it could impose terms. The judge was holding hearings on the request when the two sides struck a temporary pay cut deal in December.
That deal included an agreement to keep talking on a permanent accord or name a neutral panel to decide the matter if no deal was reached by March 1, which is what happened.
Is there any chance President Bush would block a strike?
In certain situations the White House can intervene to block a strike that would disrupt transportation on a national scale. The best-known example was in 1997, when President Bill Clinton ended a pilot strike at American Airlines moments after it started. It's unclear whether the same rule could apply with an airline in bankruptcy court, and there's been no talk of presidential intervention so far.
Does Delta shut down if the pilots strike?
Delta's financial chief, Ed Bastian, testified in the recent arbitration hearings that there's no plan to operate during a strike. Pilot strikes are more devastating than most because pilots are hard to quickly replace. Unless an airline is prepared for a strike and can withstand financial distress, survival is very tough.
Some airlines have lived to tell about pilot strikes, however. Northwest recovered from a 15-day pilot walkout that crippled operations in 1998. Eastern Airlines, Delta's one-time rival in Atlanta, stayed alive almost two years with line-crossing flight crews and new hires after pilots joined a mechanics strike in 1989. But it retreated into Chapter 11 and endured constant turmoil before folding.
The head of the neutral panel in the Delta case, Richard Bloch, warned after last month's hearings that "each side has within its power the ability to destroy the company" if they don't get a deal.
If a strike forces Delta out of business, what happens in Atlanta?
First and foremost: heartache, stress and dislocation for thousands of Delta workers and their families, followed by economic ripples across the area.
Travel in and out of Atlanta would be snarled, since Delta and its feeders provide the bulk of service --- close to 1,000 flights daily. AirTran and other carriers would likely beef up service but could probably not take up the slack right away.
Delta's assets --- including gate leases at Hartsfield-Jackson and its fleet of jets --- would likely be auctioned in bankruptcy court. Given the airport's massive capacity and ready-made facilities, another airline might try to buy enough of both to take over Delta's connecting hub.
Such a hub might mesh well with the route systems of United, Continental, American or Northwest, though the latter's own Chapter 11 case would make such a huge move unlikely.
Bottom line: The city would probably get replacement air service after a messy interim period. But it would no longer have an Atlanta-based airline or the local job and economic base that Delta generated.
What are they arguing about?
Delta wants more than $300 million in annual concessions from pilots as part of its broad plan to realize $3 billion in cost cuts or revenue gains as it retools in court. The union has offered a package valued at about $140 million.
The union contends Delta is demanding more than it needs and doesn't count other areas of pilot sacrifice, such as the likely termination of pension plans.
Pilots already agreed to a steep wage cut of 32.5 percent in a late 2004 deal that helped Delta avert a Chapter 11 filing at that time but didn't stop its tide of red ink. Their union contends a further 18 percent cut and other concessions would impose disproportionate pain.
Delta attorneys have pointed out that pilots enjoyed industry-leading wages from 2001 through 2004, thanks to a contract signed just three months before 9/11. The company contends the new cut it seeks would leave pilots contributing a proportionate percentage to the recovery plan.
It has already imposed two rounds of pay cuts on other workers and shed thousands of non-pilot jobs.
Bloch said his panel found "real flaws, oversights, exaggerations and shortcomings" in both sides' arguments.