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Thursday
Nov202008

« Delta's Singular Focus: Executing Its Singular Vision »

This blog has pointed to the upcoming labor negotiations in the US airline industry many times. Labor issues at many US airlines are emerging that underscore this blogger’s call that these upcoming negotiations will be the most important since the airline industry was deregulated in 1978. And we are not really talking about economics yet. In the past couple of weeks:

1. jetBlue pilots file for union representation
2. Southwest pilots upset at company’s plan to code share
3. Southwest’s employees picket
4. United wins temporary restraining order over its ALPA unit
5. American flight attendants picket
6. American pilots erect yet another billboard
7. Alaska pilots demand share of benefits derived from Delta partnership

Some of the names are different, but the issues remain the same. Quietly, Delta just goes about its business to move to a full integration in as quick a time as possible.

Renaming the Delta “Widget”

Its humble beginnings as a crop dusting operation founded in Macon, GA; initially headquartered in Monroe, LA; and utilizing “Delta” to describe the “Mississippi Delta” geography it initially served, today’s Delta is anything but. In 1959, the red, white and blue triangle "widget" becomes Delta's logo resembling the swept-wing appearance of a jet. Delta unveiled a more contemporary triangle in 2000. Then in 2007, it unveiled the three-dimensional red “widget” logo.

The third dimension is important. Today’s three-dimensional widget is reflective of the widget used in the logo in the 1970’s and 80’s - a period when Delta was renowned for its customer service. Delta lost its focus in the late 1980's and 1990's. Today's Delta is a new Delta - one that is doing most everything to return to those roots. And in that context, for me, this Delta represents Change. Change that is symbolized by the fourth letter in the Greek alphabet.

Under its new leader, Richard Anderson, today’s Delta is less about the "Mississippi Delta" and more about the “Delta’s” found at the mouths of the rivers around the world: Nile; Rhine; Rhone; Danube; Mekong; and the Tigris-Eurphrates to name a few. Today’s Delta is letting/will let very little sediment stand in the way of reuniting the flow of momentum the company possesses despite the fact that distributaries, or diversions, will naturally occur over the coming months.

Filing for a Single Transportation System

Yet another example of where Delta’s acquisition of all of Northwest’s financial assets on October 29, 2008 is different is the speed with which it filed with the National Mediation Board (NMB) for a determination that a "Single Transportation System" exists. It was not the company that first filed with the NMB, it was the Air Line Pilots Association (ALPA). One of the most unique attributes of this merger versus the many others that have been completed in the US airline industry is that the merger was completed with a joint ALPA collective bargaining agreement in place on day one.

The determination that a single transportation system exists will allow ALPA to operate under this single collective bargaining agreement; govern as one decision-making body; and possess the rights to administer the agreement collectively bargained with the company when, and if, disputes arise among many other issues. ALPA was joined by the Northwest Airlines Meteorologists Association (NAMA) and the Professional Airline Flight Control Association (PAFCA) that represents the dispatchers at Delta in seeking a determination if Delta has completed the tests necessary to be considered a single transportation system from the NMB’s viewpoint.

Delta Air Lines submitted its position statement on the single transportation system issue with the NMB on November 4, 2008. Among the many issues to be considered by the Board: Delta points to common ownership and management including the fact that employees of each Northwest and Delta were granted equity in the new entity; that the combined entity is presented to the public as a single carrier; that Delta and Northwest now share common control over labor relations citing specifically the seniority integration underway between the two ALPA-represented groups; and that Delta and Northwest were combining operations including airport facilities and information technology.

Based on my limited understanding of case law, it is hard to find an area where the NMB would struggle to find the New Delta a Single Transportation System. Now what does this mean for representation and seniority integration issues? When the NMB determines that a Single Transportation System exists, then the representation elections among the various class and crafts of Northwest and Delta employees can commence in as little as 14 days after the determination is made.

The Next Significant Labor Steps in the Delta Integration

The most interesting representation election that is almost certain to happen will be among the Northwest flight attendants, represented by the Association of Flight Attendants – CWA (AFA), and the unrepresented Delta flight attendants who have twice voted down representation by AFA. Regarding seniority integration procedures, remember, it was the Delta Board that did the right thing by adopting Labor Protective Provisions ahead of any merger announcement for its employees in order to put a marker down defining how they will be treated.

I wrote a piece on this back in February that also outlined the rules and some thoughts on outcomes . I fully expect that an election will take place as to whether the AFA will represent the flight attendants of the combined entity, or not. Almost certainly the 35%, of the combined flight attendant work force, threshold is met to trigger an election here given the fact that the Northwest cabin crews are already unionized. At Northwest, the International Association of Machinists and Aerospace Workers (IAMAW) represent two distinct groups of employees: the Flight Simulator Technicians; and the Office, Clerical, Fleet and Passenger Service Employees. Whether the fleet and passenger service employees will be considered one class and craft - I do not know.

What I Do Know

Delta has done virtually everything to move this merger along at an unprecedented pace. Its decision to ask pilots to negotiate integration procedures and a collective bargaining agreement as a condition of the transaction looks very smart. With a pilot seniority decision due soon, the work with the pilots is largely done. If I am a non-pilot employee of Delta, I could not be happier as history only points to the disproportionate amount of management attention/diversion that is given to the pilot group until such agreements are reached.

Not that the other employees and their issues are less important than pilots, it is just that certificates, operating and training procedures, manuals etc. all require common cockpit practices. If I am the AFA, I like the speed of the process here as the second attempt to organize the Delta flight attendants is only a few months on ice and the Northwest flight attendants are concerned over future representation.

Delta’s speed to resolve these issues bodes well for the company and its employee-shareholders. Once the representation issues are completed, then either there will be a negotiation of a new collective bargaining agreement; or Delta work rules and compensation will be applied to the respective, and like, work forces.

Given that uncertainty breeds anxiety which undermines a focus on the job at hand, Delta is walking the talk that customers and employees are its next most important area of focus. My only fear in the labor space is that one of the parties works to slow the process underway. There is a calm for employees that know what their number is, what they will make and what rules govern that work and that calm will be undone if too much time is spent dealing with technicalities and mundane issues.

One has to look no further than Phoenix to see what is taking place among people doing the same work yet are being paid differently. For the most part (I know ALPA got voted out), it is class and crafts of employees with the same union representation that cannot get a deal. At the end of the day, the question to employees is a simple one: will I be better off with a collective bargaining agent, or not? The necessary determination will soon be in place that will allow all employees to make that decision – and that is a good thing.

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