As the year draws to a close, I want to provide an update on last week’s Special MEC Meeting and ALPA’s preparations to resume Section 6 negotiations in mid-January. The Delta pilots have waited patiently throughout the pandemic to negotiate much-needed improvements to our contract. We were on the frontlines providing essential travel to healthcare workers during the pandemic’s darkest days. When travelers returned to the skies, we flew record amounts of overtime flying to help Delta operate its schedule and gradually return to profitability. Now is the time to return to the table to secure a contract for the Delta pilots that is commensurate with Delta’s industry-leading status.
Section 6 Re-Engagement
While in session, your elected union representatives received comprehensive presentations from Subject Matter Experts and provided updated direction to the Negotiating Committee (NC). Your feedback – through telephone polling, the contract survey, emails, attendance at union events and direct contact with your elected union representatives – was front and center throughout the three-day meeting. We adjourned with a unified plan to resume where we left off in March 2020.
Our collective resolve has only strengthened during the last 20 months. In the weeks ahead, you can expect to hear much more about the resumption of mediated Section 6 talks. The pace will be accelerating, and I ask that you continue to stay engaged and informed.
Recent developments bode well for our negotiations and underscore the Company’s ability to invest in the Delta pilots. For example:
- Delta has announced it is investing an additional $1.2 billion in Joint Venture partners Aeromexico, LATAM and Virgin Atlantic as these carriers restructure and emerge from bankruptcy. This brings the total investment in foreign airlines to over $5 billion, and clearly indicates Delta has money to spend. As internal stakeholders whose careers are tied to Delta, we expect management to invest in the pilots as well.
- Delta is projecting to carry almost 8 million passengers between Dec. 17 and Jan. 3.
- The Company anticipates a 4Q pretax profit despite an increase in COVID cases due to virus variants.
- Delta’s brand is stronger than ever as evidenced by the Company winning the coveted J.D. Power Award.
Additionally, management is on record as stating that “reaching an agreement with ALPA on a contract that maintains our pilots’ position as the best overall compensated in the industry” is a priority. To be clear, our PWA encompasses more than compensation. Our pilots expect a new contract that is industry leading across the four pillars of Pay, Scope, Retirement & Insurance, and Quality of Life. If management is serious about reaching a deal, they will return for renewed negotiations on January 18 and invest in us as long-term stakeholders with a contract that reflects more than just "best overall compensation."
Global Scope and the MBCBP
The MEC also received updates on the progress of Global Scope and Market Based Cash Balance Plan (MBCBP) negotiations with the Company. Slow but relatively steady progress is being made at the table in Global Scope talks. The Company and the NC meet frequently, and the list of open items has been reduced. However, there are still differences in respective proposals that must be addressed for any deal to move forward.
Since the passage of LOA #20-04, extensive negotiations over the plan features within the MBCBP have taken place between ALPA and the Company. These negotiations have delivered a framework that will lead the industry:
- A tax-deferred, ALPA dues-free secondary plan that supplements the current 401(k) and acts as potential insurance for the Delta pilots against future changes to tax code.
- Professional management by outside industry professionals, not ALPA or the Company.
- An investment strategy that takes an approach similar to the “Retirement Lifecycle” fund within the current Delta Pilots 401(k) plan. While we should note that past performance is not indicative of future returns, this strategy has returned 8.15% during the past year, with annualized returns over the last three, five and 10 years of 10.36%, 8.08%, and 6.5% respectively.
The plan complements and supports our C2019 retirement proposal, which aims to increase retirement value for all Delta pilots. Delta pilots have led the industry by securing this plan in unprecedented times, and several of our peers are following suit. The plan is presently working its way through the regulatory process with the Internal Revenue Service and the United States Department of the Treasury. As the rollout of the plan nears, expect further communications that will recap details of the MBCBP and outline the implementation timeline.
Happy Holidays!
In closing, this has been a year of hard work, recovery, regrouping and refocusing on our contractual priorities. The Delta pilots have led the Company through this unprecedented time. As we look to 2022, your unity and resolve will help us achieve a contract that we can be proud of and a contract that reflects our contributions to the Company’s success – past, present and future.
I wish you and your families a safe, happy and healthy holiday season.