Foreign airlines pose a risk to aviation jobs in the US! Sound familiar? Nope, for once it’s not Delta making these accusations against the Gulf carriers, but rather it’s Delta’s pilots union making these accusations against Delta management.
Delta’s new transatlantic joint venture
A couple of weeks ago I wrote about how the US Department of Transportation tentatively approved a new comprehensive joint venture between Delta, Air France, KLM, and Virgin Atlantic.
Currently Delta has a joint venture with Virgin Atlantic, and Delta has a separate joint venture with Air France-KLM. However, with this new joint venture there would be a single partnership between all the airlines, allowing them to coordinate schedules and pricing across the Atlantic.
When the DOT makes a decision like this, there’s always a period for public comment, before final approval is granted. It’s normal to see objections, especially from competitors.
However, this time around we’re seeing objections from a party you don’t often hear complaints from — Delta’s pilots.
Why Delta’s pilots oppose the new joint venture
The Delta Master Executive Council of the Air Line Pilots Association (which represents Delta pilots), has made their concerns regarding this new joint venture clear.
They believe that additional conditions are necessary to ensure that Delta operated services and US aviation workers realize the promised benefits of the amended joint venture.
Specifically, Delta’s pilots are urging the Department of Transportation to:
- Expand the scope of their proposed five year review of the joint venture to assess the impact it has on US aviation jobs, and the balance of flying and growth opportunities generated in joint venture markets; in other words, they want to see after five years how many flights Delta has added, compared to how many flights partner airlines have added
- Impose an interim review of the joint venture on December 31, 2019, to ensure that progress is being made with these metrics
The reason they’re concerned is because what they saw following the approval of previous joint ventures:
In 2013, the Delta MEC expressed strong support for the Delta-Virgin joint venture on the basis that it would “produce new flying opportunities for Delta and its employees”—and thereby grow and enhance US job and career opportunities—through expanded service offerings between the US and the United Kingdom.
Nearly six years later, the promised growth in US-UK services has accrued almost exclusively to Virgin, and the promised US job and career opportunities predicated on Delta operational expansion in that market have failed to materialize. In fact, Delta-operated flying in the critical New York-London market has actually decreased since the Delta-Virgin joint went into effect.
This use of the JV mechanism to effectively outsource Delta flying to a foreign carrier whose flight crews work under substantially less favorable wages and work rules is fundamentally inconsistent with the Department’s public interest objectives of strengthening the competitive position of US air carriers relative to foreign air carriers, and encouraging fair wages and working conditions.
They note that this joint venture, if approved, would significantly reduce Delta’s financial incentive to expand their own operations in the markets, allowing significant transatlantic growth on other airlines instead.
Bottom line
While Delta has the all around best labor relations of the “big three” US airlines, in this case the pilots definitely aren’t wrong.
When it comes to battling the Gulf carriers, Delta always talks about how critically important it is to protect US aviation jobs. However, many of their joint ventures haven’t led to the amount of expanded flying you’d expect, as Delta has instead left much of the expansion to partner airlines.
Now, in this case I think the pilots may be raising their concern a bit too late. Delta already has joint ventures with the individual airlines involved, so I’m not sure we’ll see all that much expansion because of this joint venture. Rather I think we’ll see more schedule coordinating.
What do you make of the objections of Delta pilots?
Bob, you’re an idiot.
Delta management appears to be making a rational commercial decision (at least if they can get away with it): Virgin is the cheaper provider of air service between London and the US, and Delta’s 49% ownership of Virgin allows it (Delta, the company, and Delta management) to benefit from the efficiencies of using Virgin metal (and its two-pilot staffing of many flights) rather than the more expensive Delta metal (with three pilots on all flight...
Delta management appears to be making a rational commercial decision (at least if they can get away with it): Virgin is the cheaper provider of air service between London and the US, and Delta’s 49% ownership of Virgin allows it (Delta, the company, and Delta management) to benefit from the efficiencies of using Virgin metal (and its two-pilot staffing of many flights) rather than the more expensive Delta metal (with three pilots on all flight under, one assumes, the Delta-ALPA DL MEC collective bargaining agreement).
The DL MEC can protect itself against such “outsourcing” in negotiations with Delta. If there are indeed violations of the existing labor agreement, there is recourse to binding arbitration.
The last thing the US Department of Transportation should do is insert itself into this labor-management dispute. The Delta pilots have more than enough negotiating strength to address the issue if it is really that important to them. Their call for DOT intervention is an attempt to have the Government plump its thumb in the scales in their favor. This is not to say that DOT’s tentative approval of this mega-JV was the right decision: I am strongly inclined to agree with the criticisms voiced by JetBkue in the proceeding—but that is a different discussion.
All that said, the behavior of Delta management demonstrates in spades just how hypocritical Anderson and now Bastian have been in their fevered tirades against the Gulf carriers, not to mention the tens of millions of shareholder dollars they have wasted on this anti-consumer campaign. Shame!
Delta pilots suck They are a bunch of Navy Brats that just land on taxiways
Gate people in west EU make around 25 Euro per hour , that's one thing; second, I believe is just outsourcing and cutting costs with any costs for D. The more pilots they have the bigger the problem.
Delta's 'sharing' of ATL-LHR routes to Virgin stinks for frequent fliers ... so much so that I make sure I am on Delta metal. Maybe it would be better with the new arrangement, but if not, I am with the pilots. And I am probably with them on principle anyway.
What fails to be understood by many of the commenters is there is a contract between the Delta pilots and Delta Air Lines regarding Joint Ventures. Delta is in violation of that contract to the time of 25 current standing violations regarding JV. The contract calls for equitable growth among the JV partners. This involves growth in wide body aircraft at Delta which means growth in pilot jobs. The current contract violations with JV’s have...
What fails to be understood by many of the commenters is there is a contract between the Delta pilots and Delta Air Lines regarding Joint Ventures. Delta is in violation of that contract to the time of 25 current standing violations regarding JV. The contract calls for equitable growth among the JV partners. This involves growth in wide body aircraft at Delta which means growth in pilot jobs. The current contract violations with JV’s have kept growth in wide body aircraft and jobs either flat or declined while the JV partners have expanded. Imagine you worked at a company that outsourced all their growth even though you had a contract that says you can outsource but not more than you grow. Then they ignore the contract and do what they want. That is the pilots argument. Don’t sign a contract then ignore it.
Awesome idea! Buy American products to get ground them for a year and cut service, deny boarding American people, burn the money that could be used to improve customer experience and give back to American employees?
I think one of the most successful strategy that makes the current Delta (grossing most revenue this year) is not take Boeing’s patriotic pot pie.
I think Delta is a great airline. I only wish they would buy American products (Boeing, GE, Pratt&Whitney). If they are going to worry about foreign carriers like Qatar, and Gulf region carriers for example, in their violation of fair skies act then stay away from Foreign made products. I see the pilots point though. They’ll have to remember the thousands of mechanics, ground people, flight attendants that make their jobs possible though. And I...
I think Delta is a great airline. I only wish they would buy American products (Boeing, GE, Pratt&Whitney). If they are going to worry about foreign carriers like Qatar, and Gulf region carriers for example, in their violation of fair skies act then stay away from Foreign made products. I see the pilots point though. They’ll have to remember the thousands of mechanics, ground people, flight attendants that make their jobs possible though. And I believe they do respect that.
Years ago i worked at dl and recall the pilots telling then ceo ron allen that the ground personel were being overpaid. We in turn were subjected to "project 7.5" and 15k of us were winnowed out. Always been a one way street with dl pilots.
And where does Alitalia fit into the big picture? Try to get from JFK to Rome on Delta equipment. Near impossible.
Is the leadership of the Delta pilots union over-represented by pilots based at JFK? That might explain their concern. The JFK-LHR route is now dominated by non-US carriers. I'm thinking BA as well as VS.
The pilots union (alpa) is one of the strongest unions in the history of unions. They may or may not be right but they will stand their ground and people will listen. Even delta and they are very vocal about their stance on unions. Also I know a lot of pilots delta pilots in particular and found this statement quite humorous. However, this time around we’re seeing objections from a party you don’t often hear...
The pilots union (alpa) is one of the strongest unions in the history of unions. They may or may not be right but they will stand their ground and people will listen. Even delta and they are very vocal about their stance on unions. Also I know a lot of pilots delta pilots in particular and found this statement quite humorous. However, this time around we’re seeing objections from a party you don’t often hear complaints from — Delta’s pilots.
It seems like lucky doesn't know any delta pilots. Good dudes but they always have something to complain about. So their objection is no surprise as it seems obvious that this move could weaken their bargaining leverage by potentially sourcing cheaper pilot labor. They know they have to stay on top of this kind funny business as airlines are known to excel in sneakiness.
For the first time, I agree with the labor union. Delta should stop doing JVs and expand their own services.
@Icarus you are right, yet not limited to that, Delta holds a minor portion (less than 4%) of stakes in China Eastern, who holds 10% of Air France-KLM as well...
It’s a real SkyTrade core.
Delta definitely needs a more comprehensive transatlantic JV to loop UK and west beyond in along with Europe continent (or just Europe, if Brexit succeeds), where it can compete with the AA/IAG and UA/LH Group, especially Alitalia is in the Schrödinger status.
I suppose DoT is running on the right track of the antitrust judge as Corporate customers will benefit more from this JV. Labor’s right is not point of interest at this stage at least.
@daniel if you do think that crew members ( including pilots and flight attendants) get better wages in the EU. You are wrong.
A gate agent for a US airlines working in CDG makes 11 euros per hour. Agents in the USA make 30dls per hours doing the same job.
I am confused. Pilots want to decide where Delta flies? That’s overstep on part of the Union. JVs have nothing to do with Delta’s overall capacity growth and deployment of aircraft, unless I am missing something here, JVs, among other things, allow more options for how the capacity is deployed.
Union needs not embarrass itself and the Pilots picking fake battles.
So DL metal on JFK-LHR has decreased from 3x/day (2013, pre-DL/VS JV) to 2x/day (Summer 2019) and ATL-MAN is not flown by DL any longer. However, total US-UK frequencies have increased from 10x/day before the JV to 13x/day today. DL and VS may re-align assets as part of the JV in order to more effectively compete (meaning shifting metal between markets). Does ALPA really find a 1/day reduction in JFKLHR a threat despite overall growth...
So DL metal on JFK-LHR has decreased from 3x/day (2013, pre-DL/VS JV) to 2x/day (Summer 2019) and ATL-MAN is not flown by DL any longer. However, total US-UK frequencies have increased from 10x/day before the JV to 13x/day today. DL and VS may re-align assets as part of the JV in order to more effectively compete (meaning shifting metal between markets). Does ALPA really find a 1/day reduction in JFKLHR a threat despite overall growth in the US-UK market that they cite? I really struggle to make sense of their argument. Furthermore I’m intrigued to know more about how DL would be stronger in the UK market without a JV with Virgin as they seem to suggest.
July 2013 (pre-JV):
LHRATL (3/day) 21.790 seats/mo
LHRBOS (1/day) 6.541 seats/mo
LHRDTW (1/day) 7.626 seats/mo
LHRJFK (3/day) 21.793 seats/mo
LHRMSP (1/day) 7.626 seats/mo
MANATL (1/day) 7.533 seats/mo
July 2019:
LHRATL (2/day) 16.337 seats/mo
LHRBOS (1/day) 7.254 seats/mo
LHRDTW (2/day) 14.260 seats/mo
LHRJFK (2/day) 14.508 seats/mo
LHRMSP (1/day) 7.006 seats/mo
LHRPDX (1/day) 7.006 seats/mo
LHRSLC (1/day) 7.006 seats/mo
EDIBOS (1/day) 5.208 seats/mo
EDIJFK (1/day) 5.208 seats/mo
GLAJFK (1/day) 5.208 seats/mo
DL metal stats:
2019 July vs 2013 July
30.00% growth in DL frequencies flown US-UK
22.07% growth in DL seats flown US-UK
Source: Diio mi
How is this affecting pilots?
It's not like because of the JV, Delta will be grounding planes or reducing 'total' number of flight elsewhere in their network.
Trying to get a pay raise is one thing, being afraid of losing jobs because Delta would rather park their billion dollar fleet just to outsource flight crews to AF/KL/VS is absurd.
The counter argument to that during bad times and furloughs, well if it comes to that,...
How is this affecting pilots?
It's not like because of the JV, Delta will be grounding planes or reducing 'total' number of flight elsewhere in their network.
Trying to get a pay raise is one thing, being afraid of losing jobs because Delta would rather park their billion dollar fleet just to outsource flight crews to AF/KL/VS is absurd.
The counter argument to that during bad times and furloughs, well if it comes to that, they are out of luck anyway. Which when that time comes, all pilots today would have more seniority and less to worry about furloughs. Unless another post 9/11 thing hits again, by then we might have a DL/UA/AA merger?
@Tom the DL AF KL VS JV is already agreed in Europe and awaiting the DoT approval.
Bizarre. Delta owns 49% of virgin Air France KLM 31%
Alone Virgin is not significant
Their argument is ridiculous as they are complaining about their own partner airlines
Delta employees have a great profit share , however work conditions in the US are generally not good
Earnings and conditions at Air France and KLM are far better
Say the Delta pilots in a country with no universal healthcare, no maternity...
Bizarre. Delta owns 49% of virgin Air France KLM 31%
Alone Virgin is not significant
Their argument is ridiculous as they are complaining about their own partner airlines
Delta employees have a great profit share , however work conditions in the US are generally not good
Earnings and conditions at Air France and KLM are far better
Say the Delta pilots in a country with no universal healthcare, no maternity let alone paternity leave , 2 weeks paid vacation , awful primary education system .. could go on
@Bagoly hahaha of course. I forgot I was dealing with stupid Americans and not the intelligent people who inhabit the rest of the world
@Daniel
The rights and wages are not American.
Therefore, to a typical American mindset they are "worse".
They don't let facts get in the way of that opinion.
“to a foreign carrier whose flight crews work under substantially less favorable wages and work rules” - huh?? Employees of virgin and Air France-KLM have far better rights and wages than US workers, which are fully protected and guaranteed under EU law. That’s such a ridiculous claim by Delta pilots
Maybe someone can correct my understanding of things. It has been my understanding that Delta could operate flights cheaper than its partners KLM and Air France, specifically because of labor costs. If this is true, I would think the Delta pilots would be in a good position for work protection. What is the incentive for KL/AF to handle more transatlantic traffic?
Totally agree with Ryan (I live in Atlanta, and I can see how Delta stifles almost all competition in direct flights from ATL to Europe. It's no secret that Delta has a corrupt relationship with Atlanta city hall that manages Atlanta airport. The worst loyalty program among all US airlines.
With this new partnership agreement Delta will probably make getting an award tickets from ATL to Europe even more expensive, in many cases simply non-affordable to families.
Do you think the pilots would have even said this if it weren't currently in negotiations for a new contract?
They're not in the wrong, I feel. As a consumer who previously relied on DL for the NYLON route I was very annoyed that they allotted much of the flying to VS on ancient A340s with coffin class seats. It ensures Virgin survival at the cost of Delta unless Delta reallocate their jets to pursue other ventures elsewhere. But what could possibly be more lucrative than New York-London?
@Tom
The JV is already approved by all authorities on the European side.
The final approval is on the US side.
Would you really expect Delta pilots to support outsourcing their own jobs and careers? If the construct was balanced growth between the JV partners I’m sure they’d endorse it. The fact that Delta is willing to dilute their own highly touted brand to save a buck on labor tells you the true nature of their intentions. In the end the consumer loses because they do not get the same Delta service they are paying a premium for.
From a purely selfish standpoint, unless and until AF and KLM update their business class cabins to all aisle access and lie flat seats, these airlines are to be avoided. If DL reduces their international capacity, this would definitely be a loser. As for the labor issue, I’m with the DL pilots.
@aeroman380 - it’s “cut off your nose to spite your face.”
@Tom I totally agree. It seems AMS and CDG are overrun with DL metal. I hardly can see KL or AF metal for the DL. What is the saying....cut your nose to see your face or something?
As with most media and blogs they are very American centric as we never hear both sides of the story.
Also. "...US Department of Transportation tentatively approved a new comprehensive joint venture between Delta, Air France, KLM, and Virgin Atlantic". Have the French, Dutch and UK tranport ministries already approved of the joint venture or it this solely of the approval of the US DoT?
"Foreign airlines pose a risk to aviation jobs in the US!" We never seem to hear the same claim made by other countries complaining that foreign and, which to them include, US airlines risk their aviation jobs. Why does the US feel that the rest of the aviation world must conform to them, at their own cost?
Delta is the world’s bully in the aviation market. World’s most gigantic hypocrites. Atleast Ed Bastien will stop crying in the breast milk about the ME3
Pilots are right. JVs have reduced Delta own international flying. Most glaring is Asia.
Pilots even have a website about this. The company has been in violation of minimum contractual flying for a couple years now as partner flying has grown instead.
http://dalscope.org/
Some interesting stuff there