Delta Air Lines to Build Heavy Maintenance Facility in Queretaro, Mexico

[WorldTraveler]

I believe it has been several years since DL contracted out ramp handling at the Marine Air Terminal, which also handles the ORD-LGA flights as well as LGA-BOS and LGA-DCA - all of which are focused on point to point (non-connecting traffic). As you may recall, DL considered moving the Shuttle operation into the expanded C/D terminals at LGA while US was going to move its operation in entirety post slot swap to the MAT. I'm not sure what changed but US is staying in part of terminal C and the DL Shuttle remains in the MAT. One of the selling points of the DL Shuttle has been the MAT which is a dedicated facility and much less chaotic than the rest of LGA.

The economics of the LGA air shuttles have changed dramatically in the 21 years and 1 week since DL took over the Pan Am Shuttle as the first step in acquiring PA's assets. I most certainly preferred DL mainline 727s and then other mainline aircraft to the E17Xs that operate at least part of the schedule... but that is a class example of how the business has moved and DL had to adapt.

The question still remains as to how DL's EXISTING people were harmed because of the move. Shock at what exists doesn't change the argument that if DL people were laid off because of the move, then there would be a basis for complaining. I strongly suspect that those DL employees were accommodated at LGA or JFK where DL has grown its presence dramatically in recent years and continues to do so.

You two can argue all day long on the detriment to DL employees by the freedom DL has to impose its own terms but the real measurement of truth comes in knowing the outcome. Do DL's employees fare better or worse than employees at other airlines who have contracts which have been summarily trashed in BK? When solid proof is put on the table showing that DL employees DO NOT fare as well as their peers at other airlines, then we can call DL's system broken. The overwhelming evidence is that DL's employees as a group endured less cuts in BK and continue to enjoy as good as or better salary, benefits, and job security as their peers.

If that is company propaganda, then DL employees are buying it and aren't smart enough to know better since not one of the work groups have chosen to be represented by unions.

But DL employees are no different from those at any other airline or any other company. They will work to protect their own interests. The fact that they have not chosen to be represented by unions speaks volumes about THEIR assessment, not mine, of how well DL treats them relative to their peers.

Employment and the choice to be represented by a labor union is a yes/no, all-in or all-out decision. You can't be represented by unions on some issues and not others. It absolutely is cherry-picking to focus on one issue while refusing to look at the whole and its value relative to DL employees' peers. Again, DL employees recognize the package nature of the employment "contract" or they would have voted in unions to fix things like the 5th week of vacation which is probably one of the most persistent complaints among DL's non-grandfathered non-contract employees.

DL doesn't permit bumping someone from an existing position precisely because of the cascade effect it produces which is no different from what many pilot groups are allowed to do. It is also why DL does not segregate domestic and int'l FAs to allow greater flexibility w/o forcing anyone to move based on changes in the operation.

If the charge was that I started to post something under Spectator's sign that was intended to be posted by WT, then I plead guilty as charged. You can look at WT and Spectator's reputation pages to see that I use both logons to neutralize the negative and postive votes because I continue to believe that the current half-blind system of post voting does not provide true accountability as to who votes on what posts. All it does is create anonymous hit-and-run voting which does nothing to contribute to the conversation.

Honest dialogue is based on discussing and defending differing opinions and being able to do so without personally attacking the individual who has different views or changing one's assessment of that individual - positively or negatively - because of their opinions.

I would RELISH the opportunity to sit down with any one on this board and chat without respect to whatever positions they espouse or not. My respect and admiration for NO ONE is shaped by their view. It is shaped by who they are as people and nothing else.

Having had the opportunity to personally dine with, visit, and even stay at the homes of some people on this forum who have very different opinions from mine on issues far beyond what I discuss on this forum, I can affirm without wavering that my respect, admiration, and appreciation for those people is completely unrelated to and unchanged by whatever positions they made yesterday, today, or will make tomorrow but rather is based on those people's unchanging character.

 

[Kev3188]

I believe it has been several years since DL contracted out ramp handling at the Marine Air Terminal, which also handles the ORD-LGA flights as well as LGA-BOS and LGA-DCA - all of which are focused on point to point (non-connecting traffic). As you may recall, DL considered moving the Shuttle operation into the expanded C/D terminals at LGA while US was going to move its operation in entirety post slot swap to the MAT. I'm not sure what changed but US is staying in part of terminal C and the DL Shuttle remains in the MAT. One of the selling points of the DL Shuttle has been the MAT which is a dedicated facility and much less chaotic than the rest of LGA.


The economics of the LGA air shuttles have changed dramatically in the 21 years and 1 week since DL took over the Pan Am Shuttle as the first step in acquiring PA's assets. I most certainly preferred DL mainline 727s and then other mainline aircraft to the E17Xs that operate at least part of the schedule... but that is a class example of how the business has moved and DL had to adapt.

None of that makes it okay- especially when the company continues to tout the line about "taking care of their employees."

Do DL's employees fare better or worse than employees at other airlines who have contracts which have been summarily trashed in BK?

Yes.

If that is company propaganda, then DL employees are buying it and aren't smart enough to know better since not one of the work groups have chosen to be represented by unions.

That seems to be changing more and more by the day.

Not one group? You sure?

But DL employees are no different from those at any other airline or any other company. They will work to protect their own interests. The fact that they have not chosen to be represented by unions speaks volumes about THEIR assessment, not mine, of how well DL treats them relative to their peers.

No, it speaks to the power of messaging, indoctrination, and the effectiveness of bumps in base pay.

Employment and the choice to be represented by a labor union is a yes/no, all-in or all-out decision. You can't be represented by unions on some issues and not others.

Nobody has said otherwise.

Again, DL employees recognize the package nature of the employment "contract" or they would have voted in unions to fix things like the 5th week of vacation which is probably one of the most persistent complaints among DL's non-grandfathered non-contract employees.

Maybe. I'd say it's a close second to the absolute inconsistency in applying policy and procedure, with lack of transparency up there as well.

DL doesn't permit bumping someone from an existing position precisely because of the cascade effect it produces...

DL doesn't "permit" anything because they don't have to.

If the charge was that I started to post something under Spectator's sign that was intended to be posted by WT, then I plead guilty as charged. You can look at WT and Spectator's reputation pages to see that I use both logons to neutralize the negative and postive votes

Do whatcha gotta.

In the meantime, keep hammering out those paeans to ma Delta.

 

[Glenn Quagmire]

DL went  into BK with everyone else. After all your posts about DL becoming the world leader in everything, are you saying that a CBA would result in a repeat trip?

Excellent point Kev. I am weary of the "trashed by bk" line. If Delta wants to go that route, WT would have a head explosion. A return of the unions is more probable than a BK trip for Delta in its Five-year window.

 

[WorldTraveler]

Do DL's employees fare better or worse than employees at other airlines who have contracts which have been summarily trashed in BK?

Yes.

The question was "better" or "worse" so I'm not sure of your vote.
I've asked several times for evidence of how DL's non-contract employees have fared worse than their unionized peers at other airlines. In the absence of evidence, it would appear you do agree that DL employees don't fare any worse.

Not one group? You sure?

I made the qualifier "major" group earlier. Of the 40K employees (+/- a few thousand) who voted in representation elections, 98% are not represented by unions today. Tell me the size of that group that did vote for representation on the DL side and wasn't before but was at NW?

Yes.

Not one group? You sure?



No, it speaks to the power of messaging, indoctrination, and the effectiveness of bumps in base pay.

Excellent point Kev. I am weary of the "trashed by bk" line. If Delta wants to go that route, WT would have a head explosion. A return of the unions is more probable than a BK trip for Delta in its Five-year window.

DL HAD its opportunity in BK and could have trashed its employees far more if it had wanted to. But it didn't.

Now, DL is on the verge of adding hundreds of millions if not billions of dollars in additional profits to the bottom line thru the refleeting, NYC expansion and shift of revenue from competitors, and the refinery deal which already has better economics than when the company made the deal.
DL's fundamentals are strong. DL employees won't lose because the company is failing financially.

I have said many times before and will reiterate again that the threat of unionization has helped DL employees maintain as much as they have gained... if you believe that DL employees are upset enough w/ their situation, push for a several union votes. History shows that DL employees are far more willing to say they want a union in order to force a vote but don't follow thru in the "ballot booth."

The free market works both ways - and I believe in it. The company cannot unilaterally impose terms which the employees find unacceptable or unions will appear. Unions cannot push something that the company will not pay - and that is why BK has resulted in a massive erosion of compensation for airline employees.
Push on your end of the equation and if employees believe the company is failing them, you'll get unions.
I am not the least bit afraid if employees want to push the unionization agenda.

The BK argument is still valid because AA is not finished w/ imposing new terms on their employees. If all of the major airlines stay out of BK, then the market will find new forces that affect DL employee compensation.
DL operated for 70+ years before BK and its employees had above average compensation, benefits, and job security compared to its peers. If DL continues to believe in that philosophy, they'll find a way to make their formula work with or without BKs from their peers.

 

[Kev3188]

The question was "better" or "worse" so I'm not sure of your vote.
I've asked several times for evidence of how DL's non-contract employees have fared worse than their unionized peers at other airlines. In the absence of evidence, it would appear you do agree that DL employees don't fare any worse.

At Will employment means DL's employees are worse off.

I made the qualifier "major" group earlier.

You said "not one of the work groups have chosen to be represented by unions."

DL HAD its opportunity in BK and could have trashed its employees far more if it had wanted to. But it didn't.

7.5 did most of the work for 'em as far as the ramp goes.

DL's fundamentals are strong. DL employees won't lose because the company is failing financially.

Who says they all get to share in that? At this company, some employee groups are more equal than others,

I have said many times before and will reiterate again that the threat of unionization has helped DL employees maintain as much as they have gained... if you believe that DL employees are upset enough w/ their situation, push for a several union votes. History shows that DL employees are far more willing to say they want a union in order to force a vote but don't follow thru in the "ballot booth."

Once again, the employees of the "world's greatest airline" should not rely on other carriers to pave their way. As for a vote, like GQ said, don't be surprised to see some in the near to mid future.

The free market works both ways - and I believe in it. The company cannot unilaterally impose terms which the employees find unacceptable or unions will appear.

You bet they can. They can alter any work rule/pay/benefit they want at any time. By the time a union "appears," it might be too late.

Unions cannot push something that the company will not pay - and that is why BK has resulted in a massive erosion of compensation for airline employees.

No one's asking for the world. You're the one that's convinced it's all about economic items. I contend that a zero cost CBA could be put into effect tomorrow, that would likely satisfy 85-90% of employees. Here's a hint: It's NOT MONEY people are pushing back against.

DL operated for 70+ years before BK and its employees had above average compensation, benefits, and job security compared to its peers. If DL continues to believe in that philosophy, they'll find a way to make their formula work with or without BKs from their peers.

Translation: "Delta has a long history of treating it's employees fairly." Awesome. That's one more talking point to check off the list. Keep going; you've almost hit 'em all!

 

[WorldTraveler]

if you believe you can find something that even 51% will find better than what they have, you get a union.

Convince them.... I don't vote.


I'm more than happy to help you in your campaign if it results in something better for DL employees.

 

[Kev3188]

We're working on it...

Don't need your help; the company is doing a ton of the work for us. Thanks, though.

 

[Dalmd88#2]

And I believe went so far as to send T7 and 737 PSV out....only to have the brought back in.

IMHO this is the last step. If this fails as badly as sending it out the other 3rd parties has failed then HMVs will come back in house. I'd love to see this venture lose 800M or so.

PS how did the numbers turn out on the 757 HMV they did in Bay 4? not to long ago? on-time and under I hope.

The bay 4 HMV took a real long time. The hold up was paperwork and the Feds signing off on it. We only did it in house because we were the only ones that were willing to do it due to the headaches. For us it was a good deal. We paid for the HMV and got a pretty good monthly lease which didn't kick it until it flew. I think the HMV cost were right where they thought it would be.

As far as the T7 and 737 PSV's. The 7's are done and the latest round of 737 PSV's are being done in IND by AAR. We really don't have the dock space to do this round. That is why they are contracted out. The check consists of a full cabin gut job that takes like three weeks. Most other PSV's take five to seven days. If we still had the TPA or DFW bays it could happen in house. I don't see us adding any bay space in the US. The cost, all of them, not just payroll are too high.

 

[WorldTraveler]

We're working on it...

Don't need your help; the company is doing a ton of the work for us. Thanks, though.

ok... I'll stick to my job as the endowed chair of the dept. of opposition since if I left that post, you would lose the means to extol your point of view here. We don't want the DL forum following the same path as the UA forum.

Oh, Coxa turned it around today.

I don't see us adding any bay space in the US. The cost, all of them, not just payroll are too high.

presumably removing 100 of the oldest aircraft w/ the 737-900 order will reduce maintenance demands, and hopefully it is the outsourcing that will go first.

 

[Overspeed]

You mean one of those labor contracts that EVERY single US airline that had one waltzed into BK, petitioned that the contract be tossed, and either labor caved or the judge granted the company's wish.

And we could well see yet another US airline labor contract get tossed today....

Yet despite the lack of a contract, DL mechanics do more of the work on the DL fleet in house than any other airline except for AA, which itself just tossed its own labor contract just weeks ago, leading to dramatically more outsourcing.

In the US airline industry, there are no secrets, and maintenance expenses, including what is outsourced is regularly reported.

here is a nice pretty graph (page 9) to show you and others where US airlines stand on outsourcing.

Note also that AA's cost for outsourced maintenance was HIGHER in 2009 than DL's even though DL outsourced a slightly higher percentage.

Further, DL is the largest airline MRO in the Americas and brings in $500M in INSOURCED revenue via Tech Ops, a number that they intend to increase.
http://www.iata.org/...Report_FY09.pdf


Lowest cost is NOT necessarily the end all and be all; getting the job done right at the lowest cost is the goal - that is what well run businesses do.

It's probably why DL Tech Ops spoke at an IATA conference on outsourcing strategies - and note the performance metrics in the presentation they use to ensure the work is done as bid.

http://www.iata.org/..._Strategies.pdf

Wonder why an airline that outsources less than any other major US airline except AA - and DL may end up at the top of the list of the % of in-house maintenance by next year - was chosen to speak about how to successfully manage outsourcing, and still manage to use its facilities and people to make money on MRO work?

It's the same reason why DL mechanics have consistently expressed NO INTEREST in being represented by a union.

There are two ways to be fooled.
One is to believe what isn’t true; the other is to refuse to accept what is true.

Soren Kierkegaard

I have no idea how IATA arrived at those outsourcing percentages. Go to the MIT ADP website or DOT BTS website and run the F41 outsourced maintenance spend divided by the total maintenance spend. At AA the OSS percentage has never been above 30% since 1998 and before that it was less than 20%. Which is another reason why the OSS percentage based on the F41 alone without doing some research is misleading.

In 1998 AA entered in to a joint venture with TAESL which was reported to be brining in between $600M to $700M annually. Why is that significant? Because all of TAESL's labor is TWU union labor. All of AA's Trent and RB211s are repaired and overhauled by TAESL which due to the JV arrangement, all of AA's 757 and 777 engine expense that is shown as "repair expense" on the F41 is actually outsourced to TAESL. And since its done by TWU labor, the TWU does not consider it outsourced since we do not lose jobs because of it.

FYI - DL went as high as 45% maintenance expense outsourced after BK. They have dropped but not because DL is bring work back in, its because when you send the work from good paying jobs in ATL, to Canada (lower wages), and then to Asia and soon to be Mexico (even lower wages) you are getting the same work done outside for less money. Did DL start putting their own airframes back in to their hangars to do HC/MBV? No. DL had the lowest maintenance costs than any other network carrier before they outsourced and their costs have been rising faster after a brief drop in 2005 through 2006. Since then they have been on a MRO merry go round trying to find a vendor they can live with. WN CEO Kelly stated at the last MRO that outsourcing costs have been rising rapidly which is probably the reason DL is entering in to a JV with Aeromexico to get a handle on the increases. A shame DL did well with higher paid and experienced workers before in ATL and did not need to screw over US workers to get low maintenance costs.

If anything, DL is not adding higher paying jobs in ATL. DL shows in recent FAA records that they have been adding staff at DL Tech Ops but they are listed as non-certificated mechanics and there is almost 1,500 of them now.

 

[Dalmd88#2]

If anything, DL is not adding higher paying jobs in ATL. DL shows in recent FAA records that they have been adding staff at DL Tech Ops but they are listed as non-certificated mechanics and there is almost 1,500 of them now.

We have hired off the street for AMTs in the past couple of years for a lot of stations, including ATL. Most have been back fill to replace retierments. I have not seen an increase in ASM positions in the hangar. Most bays have 6-8 guys spread over all three shifts and weekend crews. The increase might have been in the deadicated cabin condition crews. Leads are AMTs with a few other AMTs but most are ASM. Many of the ASMs are also going to school to get their a&p and they get looked at first before we hire off the street.

 

[WorldTraveler]

Speed,
Glad you jumped into the topic and glad you cited the DOT stats – which is precisely what I have cited numerous times.
Let’s start w/ your observation – a correct one – that DL’s outsourcing jumped dramatically in 2010 and 2011. Two things occurred in 2010 that dramatically affected DL’s maintenance numbers and neither you or anyone else factors them into the discussion.

The DL/NW merger occurred and all of PMNW’s maintenance operations showed up as DL’s in 2010. Remember that NW gutted its in-house maintenance capabilities with the AMFA strike and lockout which is fully reflected in the amount of outsourcing they did – which peaked at more than 70% before DL took over NW. NW outsourced most of its maintenance – probably at above average rates since they moved a huge amount of maintenance outside of the company in a short period of time – and never resolved the situation before the merger. Apparently much of the PMNW fleet (esp. the Airbus) is still outsourced, if I am correct – because DL simply does not have the space to accommodate all of NW’s outsourced fleet.

DL right-sized its maintenance operation during BK to operate at 25% outsourced maintenance on its own fleet – which it did immediately post BK. But when the merger occurred, DL could not accommodate NW’s maintenance operation in-house using DL’s post-BK maintenance structure.

It is thus ironic that the PMNW employees are the ones who want to find fault w/ DL’s maintenance operation while PMDL maintenance employees note that DL is using its facilities and employees to their maximum potential and keeping work in-house to the greatest degree possible using the vast majority of licensed mechanics. The union proponents here even go so far as acknowledge the hatred that NW mgmt had for AMFA but mistakenly draw the conclusion that DL is attempting to or could do the same thing to DL employees as it did to NW’s union-represented workforce when the facts clearly say the opposite.

All of these calculations that others bring in about the amount of outsourcing at various airlines fail to consider the level of insourcing that DL Tech Ops does. DL has publicly said in SEC filings that DL Tech Ops generates $500M in revenue. Subtract that value from what DL spends on outsourcing and DL’s net outsourcing comes to about 15% - far lower than any other US airline. That is a pretty remarkable number considering that DL hasn’t added in any heavy maintenance capabilities since the merger to replace what NW gutted.

But yet another factor that drives DL’s larger outsourcing numbers in the last two years is the huge amount of aircraft mods DL is doing, driven by their intention to keep and acquire older aircraft instead of buying as many newer aircraft as their peers. DL is in the midst of a huge spike in maintenance activity as it brings the combined fleet up to a common, higher standard and as it brings in used aircraft like the M90 that are not up to DL standards. When you factor in DL’s mod activity as well as its acquisition of used aircraft and put DL on a comparable basis against other carriers, DL’s level of outsourcing is about 10% - vastly different from any other airline and vastly different from the 40% number that shows up (accurately but w/o any adjustments/considerations) in government documents. Those new aircraft at other airlines show up on the balance sheet as debt while DL is buying many used aircraft with cash it is generating today. DL has noted that its reduction in debt over the past 2 years continuing thru next year will have reduced interest costs by $500M per year. Reduced debt means less threat to employees from excessive costs. And, for now, DL is the only network carrier that is paying for frozen pensions – which eat up $500M or more in cash per year. Other airlines ditched their pensions completely.

You mention TAESL and you are right that AA does insourcing as well – but in a joint venture in which RR gets a chunk of the profits. But TAESL is far smaller than DL Tech Ops – even the engine overhaul component – and TAESL does a significant amount of work on AA engines which isn’t surprising since AA is one of the largest Rolls-Royce operators in the Americas. AA’s net insourcing via TAESL is far smaller than DL Tech Ops since all Tech Ops insourcing is truly work from airlines other than DL.

Look at the FAs and pilots as yet another example where the company gained flexibility which brought jobs back to the US and to mainline DL employees.

NW by virtue of its labor contract used non-FA language agents onboard, most of whom were not US-based but who also were not factored into the FA staffing levels. As soon as the representation issues were resolved, DL staffed all flights which operate to/from the US w/ US based FAs using FAs who already had language capabilities – often putting more language FAs on the flights than existed with NW. DL gained flexibility, lowered costs, increased customer service, and provided more opportunities to US based FAs.
The pilots – through a union – have allowed the addition of large RJs but in the process have gained more flying overall by DL pilots as overall RJ flying is being reduced, allowed DL to add the 717 to the fleet, and gained pay raises by allowing the company to increase efficiency by allowing DL to largely staff the 717s with surplus pilots which DL has carried on the payroll since the merger – at a cost of several hundred million dollars per year.

Other airline pilot unions don’t like that DALPA has given up scope which historically has resulted in lost jobs- UA parked its fleet of 737-500s when it gained the ability to fly 70 seaters. Obviously, DL sees its relationship with its pilots differently and is willing to share what it gains in flexibility and reduced costs where other carriers use that flexibility to lay off employees.
Yes, DL has used its flexibility to do things which some other airline unions would not allow – but it has resulted in gains for DL employees as DL becomes more efficient.

But the question remains if DL employees are better off than their peers and on that basis, the answer is indeed that DL employees are financially better off and more of them are employed than at other airlines, regardless of whether they have as much “control” over their seniority as at other airlines.

Apparently DL employees consider that increased control immaterial or at least not significant enough to cause them to hire a union.

 

[Overspeed]

Speed,
Glad you jumped into the topic and glad you cited the DOT stats – which is precisely what I have cited numerous times.
Let’s start w/ your observation – a correct one – that DL’s outsourcing jumped dramatically in 2010 and 2011. Two things occurred in 2010 that dramatically affected DL’s maintenance numbers and neither you or anyone else factors them into the discussion.

The DL/NW merger occurred and all of PMNW’s maintenance operations showed up as DL’s in 2010. Remember that NW gutted its in-house maintenance capabilities with the AMFA strike and lockout which is fully reflected in the amount of outsourcing they did – which peaked at more than 70% before DL took over NW. NW outsourced most of its maintenance – probably at above average rates since they moved a huge amount of maintenance outside of the company in a short period of time – and never resolved the situation before the merger. Apparently much of the PMNW fleet (esp. the Airbus) is still outsourced, if I am correct – because DL simply does not have the space to accommodate all of NW’s outsourced fleet.

DL right-sized its maintenance operation during BK to operate at 25% outsourced maintenance on its own fleet – which it did immediately post BK. But when the merger occurred, DL could not accommodate NW’s maintenance operation in-house using DL’s post-BK maintenance structure.

It is thus ironic that the PMNW employees are the ones who want to find fault w/ DL’s maintenance operation while PMDL maintenance employees note that DL is using its facilities and employees to their maximum potential and keeping work in-house to the greatest degree possible using the vast majority of licensed mechanics. The union proponents here even go so far as acknowledge the hatred that NW mgmt had for AMFA but mistakenly draw the conclusion that DL is attempting to or could do the same thing to DL employees as it did to NW’s union-represented workforce when the facts clearly say the opposite.

All of these calculations that others bring in about the amount of outsourcing at various airlines fail to consider the level of insourcing that DL Tech Ops does. DL has publicly said in SEC filings that DL Tech Ops generates $500M in revenue. Subtract that value from what DL spends on outsourcing and DL’s net outsourcing comes to about 15% - far lower than any other US airline. That is a pretty remarkable number considering that DL hasn’t added in any heavy maintenance capabilities since the merger to replace what NW gutted.

But yet another factor that drives DL’s larger outsourcing numbers in the last two years is the huge amount of aircraft mods DL is doing, driven by their intention to keep and acquire older aircraft instead of buying as many newer aircraft as their peers. DL is in the midst of a huge spike in maintenance activity as it brings the combined fleet up to a common, higher standard and as it brings in used aircraft like the M90 that are not up to DL standards. When you factor in DL’s mod activity as well as its acquisition of used aircraft and put DL on a comparable basis against other carriers, DL’s level of outsourcing is about 10% - vastly different from any other airline and vastly different from the 40% number that shows up (accurately but w/o any adjustments/considerations) in government documents. Those new aircraft at other airlines show up on the balance sheet as debt while DL is buying many used aircraft with cash it is generating today. DL has noted that its reduction in debt over the past 2 years continuing thru next year will have reduced interest costs by $500M per year. Reduced debt means less threat to employees from excessive costs. And, for now, DL is the only network carrier that is paying for frozen pensions – which eat up $500M or more in cash per year. Other airlines ditched their pensions completely.

You mention TAESL and you are right that AA does insourcing as well – but in a joint venture in which RR gets a chunk of the profits. But TAESL is far smaller than DL Tech Ops – even the engine overhaul component – and TAESL does a significant amount of work on AA engines which isn’t surprising since AA is one of the largest Rolls-Royce operators in the Americas. AA’s net insourcing via TAESL is far smaller than DL Tech Ops since all Tech Ops insourcing is truly work from airlines other than DL.

Look at the FAs and pilots as yet another example where the company gained flexibility which brought jobs back to the US and to mainline DL employees.

NW by virtue of its labor contract used non-FA language agents onboard, most of whom were not US-based but who also were not factored into the FA staffing levels. As soon as the representation issues were resolved, DL staffed all flights which operate to/from the US w/ US based FAs using FAs who already had language capabilities – often putting more language FAs on the flights than existed with NW. DL gained flexibility, lowered costs, increased customer service, and provided more opportunities to US based FAs.
The pilots – through a union – have allowed the addition of large RJs but in the process have gained more flying overall by DL pilots as overall RJ flying is being reduced, allowed DL to add the 717 to the fleet, and gained pay raises by allowing the company to increase efficiency by allowing DL to largely staff the 717s with surplus pilots which DL has carried on the payroll since the merger – at a cost of several hundred million dollars per year.

Other airline pilot unions don’t like that DALPA has given up scope which historically has resulted in lost jobs- UA parked its fleet of 737-500s when it gained the ability to fly 70 seaters. Obviously, DL sees its relationship with its pilots differently and is willing to share what it gains in flexibility and reduced costs where other carriers use that flexibility to lay off employees.
Yes, DL has used its flexibility to do things which some other airline unions would not allow – but it has resulted in gains for DL employees as DL becomes more efficient.

But the question remains if DL employees are better off than their peers and on that basis, the answer is indeed that DL employees are financially better off and more of them are employed than at other airlines, regardless of whether they have as much “control” over their seniority as at other airlines.

Apparently DL employees consider that increased control immaterial or at least not significant enough to cause them to hire a union.

How do quantify "better off"? If you were a DL AMT working airframe overhaul...uh, not so good. How much airframe overhaul does DL do in-house? Practically nothing. And that is a shame and a shortsighted decision on DL management's part.

DL Tech Ops with its industry leading lean maintenance program and the Six Sigma, Lean and High Performance programs had the lowest cost maintenance of any mixed fleet airline before outsourcing. What sank DL in to BK was the high cost pilot's CBA and it was a bad management decision to outsource everything. I don't know which consulting company they had advising them at the time but outsourcing was not well thought out as far as maintenance is concerned. The ACTS/Aveos, ST Aero, HAECO, and Avborn experiences have not panned out well for them. DL's maintenance costs did not drop dramatically through outsourcing. The DL AMTs had their processes dialed in and were way ahead of all their competitors in that area. DL management expected huge cost reductions by believing what it took years for their AMTs to learn could be just dropped in to any MRO. Wrong answer.

So "better off"...no way. DL made a mistake by not keeping their work in-house and marketing their skills and capacity to all the other airlines. UA outsources the most out of the majors and they have never been the lowest cost. Outsourcing a bloated and inefficient maintenance program just makes that same program cheaper but not necessarily cheaper overall.

And a final point, the most profitable and highest quality MRO is by far Lufthansa Technik and they are union.

 

[Kev3188]

ok... I'll stick to my job as the endowed chair of the dept. of opposition since if I left that post, you would lose the means to extol your point of view here.

Oh FFS...

Come down off the cross already...

 

[WorldTraveler]

Overspeed,
since your post is so full of misinformation and opinion that isn't substantiated by fact, let's waste no time in putting the truth on the table.

1. DL's BK was no more a result of excessive pilot costs than was UA's. UA cut 50% of its workforce between 1999 and the CO merger so it isn't hard to figure out what the problem was. in contrast, DL cut 25% of its workforce in the same period. UA was grossly overstaffed in every area of the company.
2. DL's BK was directly attributable to a dramatic change in the marketplace post 9/11 such that DL's business model of carrying domestic connecting passengers as one of the largest segments of its business was no longer viable - and that changed in less than 5 years. With that strategy and using more widebodies on domestic routes than any other US airline, DL was the world's most profitable airline in the late 90s but carrying connecting domestic passengers and NOT carrying int'l passengers to the degree AA and UA did put DL at a substantial disadvantage in costs and revenue generation.
What was the reason for UA's BK BTW and why did they manage to outsource such a high percentage of maintenance in their BK?
3. Somehow DL managed to cut its pilot costs less than what UA cut theirs and DL's pilots are now on their 2nd post BK contract with pay rates more than 25% higher - and DL is generating operating margins higher than UA. No, pilot costs were not the only of even largest problem.

UA most certainly does NOT do more insourcing than DL - unless UA is violating accounting rules and not reporting it. UA does not even bother to say how much insourcing it does so it can't be much. If you can find a statistic quoting how much UA does, let us know.

UA outsourced 51% of its maintenance based on DOT reports in 2011 while CO outsourced 46%. DL outsourced 38% and that was after absorbing NW's operation which had outsourced 70% of its maintenance before DL acquired them. As late as 2009, prior to the NW acquisition, DL outsourced just 26% of its maintenance which was on par with AA. In 2009, UA outsourced 41% of its maintenance and has not had a lower rate of outsourcing than DL since 2003.

spend a little time studying the data here to get caught up on the facts.


http://web.mit.edu/airlinedata/www/default.html
Kevin,
I'm waiting for your answer on the net number of employees the unions lost with the representation votes.... what was that one union that acquired a small number of DL employees and in contrast how many did the unions lose from NW employees?

Those are facts and they are not personal. Focus on them instead of fighting to hold onto a goal of increased unionization that can't be attained. DL employees are not dumb and they chose not to be represented by unions for a reason - actually quite a few of them.

The union mindset that dictated labor relationships at NW and still do at other companies don't apply at DL. There are obvious factual justifications to show why DL employees are indeed better off - and those are the same reasons why DL employees have consistently not chosen to expand union representation and why your and others' attempts to argue based on union logic have not worked and won't.

http://web.mit.edu/a...ww/default.html