Delta, NWA pilots lay out arguments over seniority

Delta Air Lines
Delta Air Lines, based in Atlanta, is in the process of acquiring Northwest Airlines of Minnesota.
David McNew/Getty Images

(AP) - Delta Air Lines pilots want their seniority list merged with Northwest Airlines's pilot list based on pilots' status and aircraft category, while Northwest pilots insist the fair and equitable method is to merge the lists based on pilots' date of hire.

The arguments were laid out during closed-door arbitration hearings that began Thursday at a hotel near Los Angeles.

The media has been barred from the hearings, which will continue later this month and again next month. The Associated Press obtained transcripts of the sessions so far.

Announcing the deal
Richard Anderson (L), CEO of Delta, and Doug Steenland, President and CEO of Northwest Airlines, discuss details of the two carriers' merger agreement.
Chris Hondros/Getty Images

The two sides have been in a stalemate over how to integrate their seniority lists after Atlanta-based Delta acquires Eagan, Minn.-based Northwest later this year, though they have approved a joint collective bargaining agreement covering more than 12,000 pilots.

Pilots value their seniority. Those at the top of the list get first choice on vacations, the best routes and the bigger planes that they get paid more for flying.

Northwest pilots tend to be older than Delta pilots because many senior pilots retired from Delta during the run-up to the airline's 2005 bankruptcy filing.

An arbitration panel -- California labor attorney Fredric Horowitz, attorney Dana Eischen and veteran arbitrator Richard Bloch -- has been called in to resolve the seniority issue. A written decision, which would be binding, is due by Nov. 20.

In his opening statement on behalf of Delta's pilots, attorney Jeffrey R. Freund told the panel that to integrate the two pilot lists, the first step should be to place the aircraft on both sides of the combined company in broad categories and then look at each pilot's status on those aircraft.

Pilots value their seniority. Those at the top of the list get first choice on vacations, the best routes and the bigger planes.

For example, Freund said, there could be international wide-body captains and narrow-body first officers.

He said that whatever the categories are, the appropriate process would be to then count the pilots in each status and category who held those positions on a particular date, on the respective seniority lists.

So, if there were 200 Delta international wide-body captains and 100 Northwest international wide-body captains, the top 300 pilots from the two seniority lists would be distributed on the merged seniority list on the basis of two Delta pilots and then one Northwest pilot, and so on down the line.

Freund said the pilots in other aircraft categories should be distributed on the merged list the same way.

"That's the way its been done at Delta in every decade, the '70s, '80s, '90s and now the 2000s," Freund told the panel. "And every decade up until this decade, there has been seniority integration that has been done on status and category and it's been done fundamentally successfully."

But Daniel M. Katz, an attorney for Northwest pilots, told the arbitration panel in his opening statement that the only truly fair way to integrate the two lists so that pilots on each side understand they are where they belong is to do it based on the date they were hired.

Delta Air Lines
Delta Air Lines customers check bags with a sky cap at the Delta ticket counter at San Francisco International Airport.
Justin Sullivan/Getty Images

Katz said that method has been chosen by some prior arbitration panels.

"There is no justification for departing from that methodology, to go to a status and category ratio that would create the very enmity and hostility that we've all avowed to avoid," Katz said.

Testimony during the sessions so far was given by several witnesses, including Daniel Akins, a consultant who has worked for airline unions.

He testified that Delta and Northwest can expect to grab a greater share of the sales in their large markets after the combination than they would get individually. He said that's because business travelers favor airlines with more flights.

So, an airline might have 60 percent of the seats in a market, but get more than 60 percent of the revenue because bigger-spending business travelers will favor that airline.

Akins said he believes some of Delta's predicted $2 billion in post-combination savings includes that assumption.

He said that is something "the Justice Department never hears about, but in the yield management departments of each airline they know that the larger the market share of each city, the greater the revenue share."

The hearing sessions that started Thursday and ran to Sunday were to continue Oct. 20-24 in Washington and then return to Los Angeles from Nov. 15-17.

Horowitz and Bloch also served on an arbitration panel selected in 2006 to determine whether Delta, which was under bankruptcy protection at the time, could void its pilots' contract and impose pay and benefit cuts unilaterally.

Delta's pilots union, which had threatened to strike, eventually agreed to concessions, and that panel never issued a ruling.

Delta's stock-swap deal to acquire Northwest, announced April 14, was given the go-ahead by shareholders of both companies on Sept. 25. It is still subject to regulatory approval. Delta is hoping to close the deal by the end of the year.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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