Delta Publishes 7,000+ Pilot Displacement Bid | What Does This Mean for Furlough?
KEY POINTS & HISTORICAL CONTEXT:
- This displacement will affect 7,096 pilots of which 6,633 of those pilots will be displaced by force, not choice. This equates to over 47% of the Delta seniority list.
- Anyone hired after December 2016, within the past 2 years and 3 months, will not be assigned an aircraft. This means approximately 2,327, 16% of their pilots, are in severe danger of possible furlough.
- For historical comparison, post 9/11, airlines saw a 30% traffic decline, similar to the projections airline executives are currently making for the Covid-19 recovery.
- Prior to 9/11, if you were to combine their seniority lists, Northwest and Delta employed 13,753 pilots. Post 9/11 they furloughed a combined 1,988 pilots which was 15% of their seniority list.
- Currently, the most junior Captain at Delta was hired in mid-2018. After displacements and furloughs are complete, a junior Captain will be around a February 2001 hire date.
BOTTOM LINE:
- It looks likely that pilots will be furloughed based on historical comparisons.
- 4,325 pilots will take major pay cuts due to either downgrades in aircraft size (ex. Boeing 767 to Boeing 737) or downgrades in position (Captain to First Officer).
- It appears Delta management is strategically positioning themselves to seek contract concessions.
- Make no mistake, furloughed pilots will face intense competition for jobs as other airlines like American and United follow suit.Be different or be unemployed. If you’re seeking a job, October 1st is your deadline. After that, the market will be flooded.
[/fancy-ul]Want the nitty-gritty details? Please keep reading for an in-depth analysis of what is going on at Delta and how this will affect airline, military, and corporate pilots alike.
Delta published their pilot displacement award Sunday afternoon affecting 7,096 pilots:
132 Advanced Entitlements (AE) - A position awarded based on pilot preference.
331 Voluntary Displacement (VD) - If the company has posted surpluses in an aircraft category, senior pilots can elect to volunteer to take the displacement in lieu of a junior pilot.
6,633 Mandatory Displacement (MD) - Forced out of aircraft category due to surplus.
For reference, United employs 13,500 pilots and plans to displace about 4,700 to new airplanes, seats and bases, which equaled 35% of their seniority list.
Delta, on the other hand, employs 14,657 pilots, which means they're displacing nearly 48% of their seniority list.
It is important to understand that a percentage of these displacements are simply to a different base with seat and aircraft maintained. However, according to Delta management, approximately 3,800 training events will be triggered with this award placing a massive cost on Delta’s operations.
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- Displaced pilots are not held to the traditional 2 year seat lock. As such, pilots can leave their newly assigned aircraft as soon as a new opportunity pops up, which is likely to happen within 2 years.
- This also means training costs could balloon significantly over time as displaced pilots bid other aircraft when new opportunities come available. Can they afford this?
- We've seen Delta pilots in the 2019 timeframe attend 3 different aircraft type rating courses over a roughly 12 month period due to smaller displacements.
- This most recent bid will lead to over 2,300 pilots being displaced out of an aircraft without being assigned a new one. This means come October 1st, these pilots are likely to be furloughed if other mitigation efforts are not accomplished.
- As we covered a few weeks ago, this bid takes into account the retirement of 660 pilots.
- Additionally, the union stated: “If the Company does furlough, they will furlough in inverse seniority order. It is possible that some pilots who are UNA will not be furloughed. It is also possible that some pilots who have an aircraft and status will be furloughed. Now is a good time to begin planning for displacement to a lower-paying category, commuting to a new base, and the possibility of a furlough if you haven’t already started.”
- UNA pilots, while unassigned to an aircraft, are paid First Officer pay in the smallest, lowest paying fleet, the Boeing 717.
- Here are the current pay rates from Delta’s CBA. Pilots from the B-767 and smaller have been displaced to UNA with B-717 pay rates.
- Quite a few senior Widebody FO's are making the transition to narrow body Captain slots seemingly to help maintain their higher pay. As a result, numerous Captains have been downgraded to First Officer positions severely reducing their pay.
- The most senior pilot on the UNA (unassigned) list from what we saw is a December, 2016 hire currently flying the 717. In analyzing the data we noticed a 2017 hire pilot on the 767 that will be seeing a reduction in pay of approximately $47/hr. At 72 hours a month, this reduction equates to a pay cut of $40,297 a year at a minimum.
- Any pilot hired after December 2016 requires only 30 days notice for furlough. Pilots hired prior to December 2016 require 90 days notice for furlough. We dive into this more below.
- This bid sees the ability to hold captain take a multi-year seniority hit, sliding over 3,200 spots. This is a significant impact to pay, commuting, and quality of life for many Delta pilots.
- There were no training bypasses offered.
A note on the confusing LEC memo warning of furloughs published last week:
Atlanta based Delta Air Lines pilots reported receiving a message from their Atlanta LEC branch of ALPA advising their junior pilots to prepare for furlough, the memo stated; “If there is an opportunity to secure a job that will pay your bills for the next 12 to 24 months, we advise you to take it.”
The lone LEC memo, which oddly, was not reciprocated by DAL ALPA MEC also stated that pilots hired after December 1, 2016 should anticipate a bid result of ATL B UNA (unassigned) or NQAT (not qualified, awaiting training).
We decided to not publish this story last week, as verifying it’s authenticity was difficult. Considering this notification was only published by one LEC we feel this is a stand-alone opinion by the LEC as the MEC has not also published the warning.
We are not sharing this as a factual opinion from Delta’s ALPA representation, but because it directly correlates to CBA protections that Delta pilots should be familiarizing themselves with under the Scope and Furlough sections of their agreement.
Below we show some of the verbiage as it relates to scope and furlough notification:
“If a pilot on the seniority list with an employment date prior to December 1, 2016 is placed on furlough, the Company will convert all 76-seat aircraft for operation as 70-seat aircraft. The number of such aircraft will continue to be limited by Section 1 B. 47. e. as though they were being operated as 76-seat aircraft. The Company may again commence operating such aircraft as 76-seat aircraft effective on the date that the most junior pilot protected by the first sentence of Section 1 B. 47. f. Exception one is recalled from furlough.”
“A pilot will be notified in writing of his pending furlough at least 30 days in advance of his date of furlough.
Exception: A pilot on the seniority list as of December 1, 2016 will receive at least 90 days’ written notice in advance of his date of furlough.”
“No pilot on the seniority list as of December 1, 2016 will be placed on furlough if the staffing at the time of notice or at time of furlough is less than the PBS Staffing Formula (Section 22 C.) for any position.”
Click here to read the entire MEC memo which includes FAQs for the displacement bid.
Thanks to our clients for providing the feedback on the LEC memo.
See what Simple Flying has to say about the LEC memo
Business vs. Leisure | Corporate Prepping for Growth?
With the recent good news from Southwest Airlines stating that they plan to be at full schedule by January while adding 11 new routes and Frontier adding 18 routes for Summer of 2020 while returning 3% of their fleet to service by June 1st, it is beginning to look like there is a desire for leisure travelers to return to the air.
Southwest Andrew Watterson boldly stated: “As we’ve seen in past downturns, we’ve been able to capture substantial demand post the downturn,” in an interview with TPG. “We’d expect no different this time.”
It is important to note that the optimism we are seeing and the fuller aircraft we are flying still don’t take into consideration the large number of aircraft parked in long-term storage across the country. When we take a look at 2019 vs 2020 TSA passenger screenings we are still down nearly 90%.
Business Jet travel is seeing a rise in bookings, still not meeting their 2019 numbers, but a much more rapid increase compared to the airline side.
In conversations we’ve had internally with managers at charter and fractional operations we are seeing increased interest in business jet travel by both corporations and well-to-do passengers that normally travel via first class on legacy airlines.
Our sources claim these passengers are looking for a mode of transportation that allows for minimal contact with screening, and other, unknown passengers.
Private Jet Card Comparisons did a nice job breaking down the Memorial Day weekend bookings for the 135 & 91K side of the industry:
- “From the Wednesday prior to Memorial Day through Tuesday, the number of [Airline] passengers who passed through TSA checkpoints hovered at just 12% of 2019 levels.”
- “Flights by charter operators achieved 59% of activity levels on a year-over-year basis. During the period there were 13,742 departures, down from 23,453 in 2019.”
- “The busiest day was the Thursday before the holiday with 2,516 flights compared to 4,216 in 2019, a 60% level. However, on Saturday activity by charter operators ended up at 71% of last year’s level.”
- “Top charter operators include Gama Aviation Signature, Delta Private Jets, and TMC Jets, all part of the Wheels Up group, Executive Jet Management, XOJet, Jet Linx, Solairus Aviation, JetEdge, and Fly Exclusive.”
- “For fractional operators, which Argus includes NetJets, Flexjet, Airshare, Nicholas Air, Northern Jet Management, AirSprint, and Planesense, activity for the holiday weekend was at 55% of 2019 levels. On Saturday it reached 68% of prior year totals.”
- “Air Partner said call volume for May is up 210% over 2019.”
- “Richard Koe said, “Business aviation is clearly coming back faster than scheduled aviation…The U.S. is the key market with Florida, Texas, Arizona leading the recovery. We should see an acceleration in the recovery in the next couple of months as lockdown measures get released and forward bookings get flown. The industry will be hoping that pent-up demand gets released in time for at least some of the summer season.””
Click here for the full article.
Additional Resources
How Does the Coronavirus Compare to 9/11?
How to Survive Disruptive Change
Are Furloughs Coming?
What Should Pilots Do In These Uncertain Times?