Delta Pilots Have An Issue With Aeromexico

Filed Under: Aeromexico, Delta

All things considered Delta has the best labor relations of the “big three” US carriers, though generally speaking you’ll always find the most contention between management and pilots at a given airline.

Along those lines, the Delta Master Executive Council of the Air Line Pilots Association (which represents Delta pilots) has just filed with the Department of Transportation regarding Delta’s partnership with Aeromexico.

Why Delta Pilots Have An Issue With Aeromexico

Not only does Delta own a stake in Aeromexico, but they also have a joint venture with them. That means that the two airlines coordinate schedules and pricing for travel between the US and Mexico.

Their joint venture is up for renewal at the end of next year, and Delta and Aeromexico have filed with the DOT requesting the elimination of a five year review condition for the joint venture to be maintained.

In response to this request, Delta pilots have filed with the DOT requesting further stipulations. Why?

Delta pilots feel that flying between the US and Mexico has unfairly been taken away from them. Essentially they feel that growth between the two countries has disproportionately been on Aeromexico flights, and as a result flying is being taken away from Delta pilots. In other words, Mexico is stealing their jobs! 😉

They’re probably not that far off. After all, if the two airlines are sharing revenue and are trying to maximize their overall profitability, it’s logical enough that Delta would want to push quite a bit of flying to Aeromexico, since they even have a stake in the airline.

Aeromexico has significantly lower operating costs than Delta. The union also claims that Delta is in violation of their own contracts with pilots regarding the Delta and Aeromexico partnership. They claim that the minimum amount of flying that Delta would have to do as part of this partnership is being breached.

So, what do the pilots want? They’d like the DOT to add conditions that maximize the jobs for US workers by better balancing the growth as part of this joint venture.

This Isn’t The First Complaint From Delta Pilots

Just a couple of weeks ago I wrote about how Delta pilots also filed with the Department of Transportation expressing concern over the proposed expanded joint venture between Delta, Air France, KLM, and Virgin Atlantic.

Essentially they argued that growth with transatlantic flight has disproportionately been with European airlines, and that’s not fair for pilots.

Bottom Line

I don’t think Delta pilots are too far off here. Delta management loves talking about how US aviation jobs are at risk due to the Gulf carriers, but there’s no doubt that they’re “outsourcing” quite a bit of flying to their joint venture partners.

This allows them to share profits, and in instances where they have an equity stake in the airline, it’s especially advantageous for them to do this. Never mind the fact that in many cases foreign airlines have cheaper labor contracts.

That being said, while this is definitely hypocritical on Delta’s part, I’m not sure they’re actually violating anything that the DOT should be concerned with. The union does claim that their contracts are being violated, though:

  • This would be separate from what the DOT is looking into
  • I imagine if they were actually violating their contract, the union would be suing management

I’ll be curious to see what comes of these situations…

Comments
  1. Ben – Isn’t a joint venture just institutionalised price fixing, and, if so, why do airlines partake in this over something like a more simple codeshare agreement or an interline agreement?

  2. Purely anecdotal but I recently took a Thursday evening flight on AeroMexico from MEX to JFK. Flight was oversold, and I would say 75% of the passengers appeared to be American commuters – mostly consultants/bankers heading home in suits and business clothes. Half the plane boarded when they called SkyPriorty. The crowd looked identical to the Monday morning crowd on a LGA-ORD shuttle flight.

    Have to imagine that a lot of these US-Mexico AeroMexico routes are highly lucrative and very stable, so while I don’t generally agree with airline union complaints like this, I too see where they’re coming from here.

  3. Flights on Delta metal aren’t just lowering to Mexico. Look at Asia, or to anywhere they have joint venture ships. I love Delta-they are hands down the best of the US carriers but they are more than happy to outsource flights to the JV partners.

  4. @Alex, my understanding is that through a Joint Venture, the airline has more control over the market share. In this case, Delta is able to share the profits with AMX and have a larger degree of control in regards to beating out the competition.

    As I understand it, a simple codeshare agreement doesn’t guarantee anything beyond coding that airline on another flight (ie AA on BA metal). But I would like someone to clarify this.

    It’s more beneficial for a JV because now you can provide more streams of revenue without necessarily sending an insane amount of flights?

  5. I imagine Delta keeps the higher revenue routes themselves. As far as the pilots complaining, they always have about something. If anything the Delta connection pilots are vastly underpaid.

    Delta pilots could always go elsewhere for another job.

  6. Under an airline JV, the two airlines *SHARE all revenue* on the agreed sectors.

    Effectively Aeromexico is doing the flying with lower opex than Delta, and charging pax the same prices as they would on Delta.

    It’s well beyond price fixing.

  7. I wouldn’t generally see that the DOT would entertain this complaint unless the Delta pilots could actually show statistics that flights overall are reduced by Delta. If Delta is operating the same number of flights, but to different locations, it would be hard for the pilots to show that their jobs were suffering.

    For example, IF last year Delta operated 4 flights from ATL to MEX, and 0 flights to [Let’s say BOG for the purpose of the example], and this year Delta is operating 0 flights ATL-MEX and 4 flights ATL-BOG: How are the pilots saying the JV is negatively affecting their employment?

    Maybe I just don’t understand the specifics of the complaint adequately, but hasn’t DL been growing year over year on their own metal? If they have added any pilot jobs at all since the JV started the complaint will be nigh impossible to prove. I’ll be curious to see how it plays out.

  8. Just realize that AMX has, at most, the 10th of Delta’s fleet… Are these guys arguing there’s no equity on the scheduling between the U.S. and MX? Do they really miss flying to MX? Are mexican pilots “stealing” their jobs Come on! The capacity proportion of each fleet is way out of measurement. AMX is doing the best they can, given the awful conditions of mexican aviation policy.

  9. What the Delta Pilots are saying is, that Delta Airlines has reduced the flying between the United States and Mexico on Delta branded aircraft after the creation of the Joint Venture. The same thing has happened with European and Asian flying.
    The contract between Delta and the pilots spells out how Many flights delta should be operating (often a percentage) versus the other members of the joint venture. With a minimum amount spelled out as well. In this case, Delta has already violated the pilot contract in regards to Aeromexico 7 times after the joint venture was created.

    Check out http://dalscope.org/

    It’s pretty interesting.

  10. It’s not just pilots and flight attendants that are having their jobs outsourced.
    Heavy aircraft Maintenance is being outsourced to Mexico and China.

  11. I have been saying this for years. This is why Delta has eliminated so many international routes in Asia. Why fly there if you can rely on Korean or China Eastern and not front the costs? Same for Virgin Atlantic in the UK or Air France and KLM in Europe. Now, we’re seeing it with Mexico and elsewhere in Latin America with Aeromexico. Yes, Delta has kept marquee routes but that’s it.

  12. Those speaking of “high revenue” flights: The flights to Mexico from USA are extremely expensive. I flew to BJX (Leon) many times over the past 5 yrs and fare normally is North of $900. Flights were changed to AM a couple of years ago and although reliability (over Delta commuter carriers in the evening) improved, the on board service with AM is lower than Delta. In any case, there has to be huge profits on these flights due to the high market cost of fares. UA and AA similar.

  13. Lucky, can you please post or link to the factual statements from the DOT complaint? Delta is not parking its aircraft in favor of MX operations, so the pilots are complaining that they are not flying to Mexico instead of where they are flying now? I am so confused.

    Thank you,

  14. Well, at least based on my own limited experience, Aeroméxico has a much better service and their seat pitch is also 1 inch more, both Business and Eco. So I would choose them over Delta in any case.

  15. From a client’s perspective:

    I’ve been flying Delta and AeromĂ©xico between the US and MĂ©xico every single week for the last 3 years through most of the major US hub cities (ATL, ORD, IAH, JFK, DTW). Basically my Delta tickets are very frequently, but not always, flights operated by AeromĂ©xico. Buying the tickets on either airline directly is the same ticket price essentially.

    The difference for me between a Delta ticket on an Aeroméxico flight versus 100% Delta is that the Aeroméxico flights are a little less efficient/organized, more likely to experience short delays, less transparent on communication, and have messier boarding. But not at an overly noticeable level.

    Delta and AeromĂ©xico’s integration is nowhere near as seamless as they advertise it and pretend that it is, with some flat out false advertising by Delta in their email communication and in their website. The upgrade process is not automatic as they claim. Seat selection at the point of purchase is non-existent for Delta tickets on AeromĂ©xico flights. Wifi availability on AeromĂ©xico’s flights is less likely and not as consistent or good. However both companies flight crews and staff are friendly and the flights are nearly identical in comfort. Food quality is slightly lower on AeromĂ©xico.

    I definitely prefer a 100% Delta flight, and I’m definitely frustrated at Delta’s attitude and support on flights operated by AeromĂ©xico, their integration needs serious improvement, but they’re still better than all the other airlines on US-Mex flights.

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