Pay cut of 14% from LOA #46 followed by annual pay raises starting January 1,2007.
Additional pay increases tied to Company financial performance (protection against the
Contract ’96 debacle).
• Limited authority to operate 71-76 seat DCI jets, provided that no pilot on the
current seniority list (Troy Kane and above) is placed on furlough. This
protection is not subject to a force majeure clause.
• There are no changes to any of our duty rigs or scheduling (except for Hawaii
reporting); our quality of life items.
• The MPPP will be terminated and the money will be placed in your account that
you control.
• Notes and Equity to return a substantial part of our concessions.
• Duration of 3.5 years (12/31/2009, same as LOA #46).
• The effective date of the agreement will be June 1, 2006 if the T/A is ratified and
is approved by the Bankruptcy Court.
The following is a summary of the T/A:
Scope
• 76-seaters will be allowed at DCI, with strict limitations on numbers, and with
incentives for mainline growth.
• If the Company furloughs a pilot on the current seniority list (Troy Kane and above), DCI
cannot fly any of the 71-76 seat jets with more than 70 seats. In fact, they must then
physically remove the excess seats from ALL such aircraft for the balance of this
contract.
o Beginning January 1, 2007, DCI is allowed to operate fifteen jets
configured with 71-76 seats. They may operate these aircraft prior to this
date, but with a maximum of 70 seats.
o On January 1, 2008, DCI is allowed to operate an additional fifteen 71-76
seat jets.
o Additional 71-76 seaters can be added, but only on the basis of mainline
aircraft growth (three 71-76 seaters for one growth mainline aircraft).
• Delete minimum block hours and planned percentages.
• Delete designated flying block hours.
• Change in control provisions allow flexibility in Chapter 11, but preserve
essential protections in an airline-to-airline transaction during Chapter 11.
• Delete the required recall of all furloughed pilots by August 1, 2008.
• Delete the requirement to be at a 75 hour ALV in certain categories for 3 months
prior to furloughing. Maintain the three month furlough notice requirement.
Compensation
• Composite hourly pay rates will remain at 14% below the LOA 46 rates for the
balance of 2006.
• On January 1, 2007, rates will be increased 1.5%.
• On January 1, 2008, rates will increase by at least 1.5%, and may increase up to
6% based on corporate financial performance.
• On January 1, 2009, rates will increase by at least 1.5% above the minimum 2008
rates, and may increase up to 6% above the actual 2008 rates, based on corporate
financial performance.
• On December 31, 2009 rates will increase another 1%.
• See attached minimum and maximum pay rate tables.
• The 12 year captain rate for the EMB-190/CRJ-900 will be $95.70 on June 1,
2006 and subject to the above adjustments.
• The 12 year captain rate for the EMB-195 will be $112.50 on June 1, 2006 and subject to
the above adjustments.
• Delete night pay.
• International pay is $5.00/hr for captains and $3.00/hr for F/Os.
• Increase profit sharing pool divided among all employees from LOA #46 to a 15% payout
at first dollar of pre-tax income; 20% payout on pre-tax income over $1.5B divided
proportional to W-2 income.
• Domestic per diem is $1.85/hr.
• International per diem is $2.40/hr.
Hotels
• Expanded hotel reviews and a stated preference for nationally branded hotels.
Relocation
• To be eligible for relocation at company expense, a pilot must move within 125 miles of
his new base. Pilots who currently have a moving entitlement retain their eligibility.
• Increase lump sum to cover miscellaneous moving expenses to $2000.
Vacations
• Effective April 1, 2007, reduce the value of a vacation day to 3 hours.
• Effective April 1, 2007, delete the 6th week of vacation and reduce the vacation
accrual rate.
Administrative Flying
• Administrative pilots may fly a rotation from open time without a line pilot being paid for
the rotation. The rotation may only be removed within 96 hours of report and, in most
instances, it must have gone through at least one PCS run prior to removal by the
administrative pilot.
Training
• Improve MEC oversight of CQ material preparation.
• Clarification of pay time for distributed training that is not on a CD, but could be
in another form of media, such as a workbook.
Hours of Service
• Sixty minute report for flight segments to/from Hawaii.
• Increase DBMS displays for flight hour and PWA limitations.
Sick Leave
• The new sick leave year will be from June 1 – May 31 for all pilots.
• Pilots in their 9th year and above will have 240 sick leave hours each year.
• On a rolling 3 year basis, a pilot will have 240 hours at full pay and the rest at 75% pay.
• Pilots returning from disability will have their full pay sick leave credit hours
recharged (once in a career).
Scheduling
• The company must comply with the TLV limits commencing April 1, 2007.
• A Delta jumpseat reservation will now satisfy the commuting policy.
General
• Flow back jumpseat to be negotiated with Alaska, Northwest and Continental
immediately and with US Airways and United beginning January 1, 2007.
• A flight attendant jumpseat may be occupied by a pilot, but only if it is the only
seat available on the aircraft and no flight attendant (working or not) has
requested the jumpseat.
• Yearly non-rev pass fee of 50 dollars maximum, and no more than other
employees.
• Pilots on the FOQA monitoring team will be covered under Section 24 J. 2. and
not subject to GS charges to ALPA.
• LOA #52 establishes the Civil Reserve Air Fleet procedures.
• Financial advisory fees and major ALPA costs paid by Company.
Medical and Dental Benefits
• Increase premiums for future retired pilots and survivors prior to Medicare
eligibility.
• Provide “access only†medical coverage post-Medicare eligibility.
• Provide for modifications to medical insurance to capture savings from the Health
Coverage Tax Credit.
Retirement, Insurance, and Disability and Survivor Benefits
• Money Purchase Pension Plan accounts will be distributed to individual pilots for
self-directed investment.
• Defined Contribution (DC) Plan contribution of a flat 9% to all pilots after Pilot
Defined Benefit (DB) Plan termination.
• Maintain company 2% 401(k) cash contribution.
• ALPA will not oppose DB Plan termination.
• Implement Roth 401(k) accounts and permit contributions up to the IRS limits for
all plans.
• Disabled pilots receive disability income until mandatory FAA retirement age.
• Disabled pilots will continue to receive DC Plan and 401(k) contributions at two
times their disability benefit. This provides a retirement benefit for a disabled
pilot for the years of service while disabled.
• Income offset once a pilot on long-term disability (LTD) achieves outside income
that equals LTD income.
• Limited neutral medical examiner process for continued LTD eligibility.
• $500,000 life insurance (with guaranteed insurability) replaces current survivor
annuity beginning 1/1/08.
• Life insurance decreases to $250,000 on retirement, and then steps down in
$50,000 segments during first five years of retirement, ending with the current
$10,000 benefit.
• Company authorized to expend up to $60 million per year from the D&S Trust to
pay legally permissible pilot expenses. Establish D&S Trust re-funding
mechanism.
• Amend D&S Plan to assure that only persons who are or have been on the
seniority list (and their survivors and beneficiaries) are eligible to be beneficiaries
of the D&S Trust.
• Amend D&S Plan to clarify that in the event of DB Plan termination, disability
benefits are offset by calculated (not actual) retirement benefits.
• Clarify MPPP offset in the event of DB Plan termination.
Bankruptcy Protection Covenant, ALPA Claim, and Notes
• The Bankruptcy Protection Covenant is an extensive legal document that
supersedes the LOA #46 Bankruptcy Protection Letter.
• The company cannot file another Section 1113 motion to reject the PWA during
this bankruptcy unless in imminent danger of losing its DIP financing and
satisfaction of other tests.
• Legal protections for ALPA and its representatives.
• The company must propose and may only support a Plan of Reorganization
(POR) that contains the ALPA Notes, the ALPA Claim (equity), and other terms,
including assumption of the PWA as modified.
• If the company's POR does not comply with the ALPA terms, procedures are
established to return to the PWA in its entirety as it existed prior to LOA #50.
• $650 million note or cash (at company option) in consideration of contract
concessions if the DB plan terminates. MEC to determine allocation.
• $2.1 billion bankruptcy claim in consideration of contract concessions. In a
bankruptcy, a claim is usually paid in equity (stock in the reorganized company
when it exits bankruptcy). The value of equity resulting from a claim will depend
on the value of the company at exit from bankruptcy and the size of the total
claim pool. The value of the stock is usually much less than the nominal value of
the claim itself. For example, in the United Airlines bankruptcy, at the time of
exit from bankruptcy, the newly-issued United stock traded at about 24% of the
nominal value of the claim; today the stock is trading at about 16% of the nominal
value of the claim.
• The MEC may be able to decide that the notes, cash and equity described above
may be allocated to qualified retirement plans, up to Section 415© limits.
Recovery Compact
• Process established to repair and improve employee-management relations.
Delta’s Section 1113 © demands that were not achieved
• 19.5% pay cut with no pay raises
• Delete 401 (k) company contribution
• Five year duration
• Delete all furlough protections
• No financial returns
• $325 million concessions per year and no recognition of DB Plan termination
• 79-seat jet DCI aircraft
• Delete the change of control provisions
• Establish a sick leave reliability program and impose draconian sick leave terms
• Minutes under offset by minutes over
• 15 minute release per duty period
• No captain on relief crew for flights over 12 hours
• Change max scheduled duty time
Additional pay increases tied to Company financial performance (protection against the
Contract ’96 debacle).
• Limited authority to operate 71-76 seat DCI jets, provided that no pilot on the
current seniority list (Troy Kane and above) is placed on furlough. This
protection is not subject to a force majeure clause.
• There are no changes to any of our duty rigs or scheduling (except for Hawaii
reporting); our quality of life items.
• The MPPP will be terminated and the money will be placed in your account that
you control.
• Notes and Equity to return a substantial part of our concessions.
• Duration of 3.5 years (12/31/2009, same as LOA #46).
• The effective date of the agreement will be June 1, 2006 if the T/A is ratified and
is approved by the Bankruptcy Court.
The following is a summary of the T/A:
Scope
• 76-seaters will be allowed at DCI, with strict limitations on numbers, and with
incentives for mainline growth.
• If the Company furloughs a pilot on the current seniority list (Troy Kane and above), DCI
cannot fly any of the 71-76 seat jets with more than 70 seats. In fact, they must then
physically remove the excess seats from ALL such aircraft for the balance of this
contract.
o Beginning January 1, 2007, DCI is allowed to operate fifteen jets
configured with 71-76 seats. They may operate these aircraft prior to this
date, but with a maximum of 70 seats.
o On January 1, 2008, DCI is allowed to operate an additional fifteen 71-76
seat jets.
o Additional 71-76 seaters can be added, but only on the basis of mainline
aircraft growth (three 71-76 seaters for one growth mainline aircraft).
• Delete minimum block hours and planned percentages.
• Delete designated flying block hours.
• Change in control provisions allow flexibility in Chapter 11, but preserve
essential protections in an airline-to-airline transaction during Chapter 11.
• Delete the required recall of all furloughed pilots by August 1, 2008.
• Delete the requirement to be at a 75 hour ALV in certain categories for 3 months
prior to furloughing. Maintain the three month furlough notice requirement.
Compensation
• Composite hourly pay rates will remain at 14% below the LOA 46 rates for the
balance of 2006.
• On January 1, 2007, rates will be increased 1.5%.
• On January 1, 2008, rates will increase by at least 1.5%, and may increase up to
6% based on corporate financial performance.
• On January 1, 2009, rates will increase by at least 1.5% above the minimum 2008
rates, and may increase up to 6% above the actual 2008 rates, based on corporate
financial performance.
• On December 31, 2009 rates will increase another 1%.
• See attached minimum and maximum pay rate tables.
• The 12 year captain rate for the EMB-190/CRJ-900 will be $95.70 on June 1,
2006 and subject to the above adjustments.
• The 12 year captain rate for the EMB-195 will be $112.50 on June 1, 2006 and subject to
the above adjustments.
• Delete night pay.
• International pay is $5.00/hr for captains and $3.00/hr for F/Os.
• Increase profit sharing pool divided among all employees from LOA #46 to a 15% payout
at first dollar of pre-tax income; 20% payout on pre-tax income over $1.5B divided
proportional to W-2 income.
• Domestic per diem is $1.85/hr.
• International per diem is $2.40/hr.
Hotels
• Expanded hotel reviews and a stated preference for nationally branded hotels.
Relocation
• To be eligible for relocation at company expense, a pilot must move within 125 miles of
his new base. Pilots who currently have a moving entitlement retain their eligibility.
• Increase lump sum to cover miscellaneous moving expenses to $2000.
Vacations
• Effective April 1, 2007, reduce the value of a vacation day to 3 hours.
• Effective April 1, 2007, delete the 6th week of vacation and reduce the vacation
accrual rate.
Administrative Flying
• Administrative pilots may fly a rotation from open time without a line pilot being paid for
the rotation. The rotation may only be removed within 96 hours of report and, in most
instances, it must have gone through at least one PCS run prior to removal by the
administrative pilot.
Training
• Improve MEC oversight of CQ material preparation.
• Clarification of pay time for distributed training that is not on a CD, but could be
in another form of media, such as a workbook.
Hours of Service
• Sixty minute report for flight segments to/from Hawaii.
• Increase DBMS displays for flight hour and PWA limitations.
Sick Leave
• The new sick leave year will be from June 1 – May 31 for all pilots.
• Pilots in their 9th year and above will have 240 sick leave hours each year.
• On a rolling 3 year basis, a pilot will have 240 hours at full pay and the rest at 75% pay.
• Pilots returning from disability will have their full pay sick leave credit hours
recharged (once in a career).
Scheduling
• The company must comply with the TLV limits commencing April 1, 2007.
• A Delta jumpseat reservation will now satisfy the commuting policy.
General
• Flow back jumpseat to be negotiated with Alaska, Northwest and Continental
immediately and with US Airways and United beginning January 1, 2007.
• A flight attendant jumpseat may be occupied by a pilot, but only if it is the only
seat available on the aircraft and no flight attendant (working or not) has
requested the jumpseat.
• Yearly non-rev pass fee of 50 dollars maximum, and no more than other
employees.
• Pilots on the FOQA monitoring team will be covered under Section 24 J. 2. and
not subject to GS charges to ALPA.
• LOA #52 establishes the Civil Reserve Air Fleet procedures.
• Financial advisory fees and major ALPA costs paid by Company.
Medical and Dental Benefits
• Increase premiums for future retired pilots and survivors prior to Medicare
eligibility.
• Provide “access only†medical coverage post-Medicare eligibility.
• Provide for modifications to medical insurance to capture savings from the Health
Coverage Tax Credit.
Retirement, Insurance, and Disability and Survivor Benefits
• Money Purchase Pension Plan accounts will be distributed to individual pilots for
self-directed investment.
• Defined Contribution (DC) Plan contribution of a flat 9% to all pilots after Pilot
Defined Benefit (DB) Plan termination.
• Maintain company 2% 401(k) cash contribution.
• ALPA will not oppose DB Plan termination.
• Implement Roth 401(k) accounts and permit contributions up to the IRS limits for
all plans.
• Disabled pilots receive disability income until mandatory FAA retirement age.
• Disabled pilots will continue to receive DC Plan and 401(k) contributions at two
times their disability benefit. This provides a retirement benefit for a disabled
pilot for the years of service while disabled.
• Income offset once a pilot on long-term disability (LTD) achieves outside income
that equals LTD income.
• Limited neutral medical examiner process for continued LTD eligibility.
• $500,000 life insurance (with guaranteed insurability) replaces current survivor
annuity beginning 1/1/08.
• Life insurance decreases to $250,000 on retirement, and then steps down in
$50,000 segments during first five years of retirement, ending with the current
$10,000 benefit.
• Company authorized to expend up to $60 million per year from the D&S Trust to
pay legally permissible pilot expenses. Establish D&S Trust re-funding
mechanism.
• Amend D&S Plan to assure that only persons who are or have been on the
seniority list (and their survivors and beneficiaries) are eligible to be beneficiaries
of the D&S Trust.
• Amend D&S Plan to clarify that in the event of DB Plan termination, disability
benefits are offset by calculated (not actual) retirement benefits.
• Clarify MPPP offset in the event of DB Plan termination.
Bankruptcy Protection Covenant, ALPA Claim, and Notes
• The Bankruptcy Protection Covenant is an extensive legal document that
supersedes the LOA #46 Bankruptcy Protection Letter.
• The company cannot file another Section 1113 motion to reject the PWA during
this bankruptcy unless in imminent danger of losing its DIP financing and
satisfaction of other tests.
• Legal protections for ALPA and its representatives.
• The company must propose and may only support a Plan of Reorganization
(POR) that contains the ALPA Notes, the ALPA Claim (equity), and other terms,
including assumption of the PWA as modified.
• If the company's POR does not comply with the ALPA terms, procedures are
established to return to the PWA in its entirety as it existed prior to LOA #50.
• $650 million note or cash (at company option) in consideration of contract
concessions if the DB plan terminates. MEC to determine allocation.
• $2.1 billion bankruptcy claim in consideration of contract concessions. In a
bankruptcy, a claim is usually paid in equity (stock in the reorganized company
when it exits bankruptcy). The value of equity resulting from a claim will depend
on the value of the company at exit from bankruptcy and the size of the total
claim pool. The value of the stock is usually much less than the nominal value of
the claim itself. For example, in the United Airlines bankruptcy, at the time of
exit from bankruptcy, the newly-issued United stock traded at about 24% of the
nominal value of the claim; today the stock is trading at about 16% of the nominal
value of the claim.
• The MEC may be able to decide that the notes, cash and equity described above
may be allocated to qualified retirement plans, up to Section 415© limits.
Recovery Compact
• Process established to repair and improve employee-management relations.
Delta’s Section 1113 © demands that were not achieved
• 19.5% pay cut with no pay raises
• Delete 401 (k) company contribution
• Five year duration
• Delete all furlough protections
• No financial returns
• $325 million concessions per year and no recognition of DB Plan termination
• 79-seat jet DCI aircraft
• Delete the change of control provisions
• Establish a sick leave reliability program and impose draconian sick leave terms
• Minutes under offset by minutes over
• 15 minute release per duty period
• No captain on relief crew for flights over 12 hours
• Change max scheduled duty time
