Delta Ramp Workers Organizing Committee

Saturday, January 12, 2008

ROLL THE DICE

FUEL PRICES SOAR
MERGER TALK HEATS UP


Fuel prices recently topped $100 dollars a barrel only to pull back slightly by weeks’ end. Merger talk is in the air and rumors are quickly becoming facts. Worry, and the unknown upheaval that will occur when merger mania begins, have gripped the airline world. Unions and their members (particularly the IAM) are mobilizing to protect their interests.

What do we have as the un-represented workers at Delta? Well, we can look forward to ‘promises, policies and commitments’ that were made to us by our old and new management team. Do you think that, along with the power and influence of the Delta Board Council, will take care of us? The obvious answer is…NO!

Forcing the rush to merge are two key factors; fuel price and economic recession. These economics are coupled with the potential of a big-business friendly government coming to an end. The airlines can’t afford both of these negative financial factors simultaneously, and they must act while the political climate favors them.

One has to wonder why the legacy carriers didn’t lock in fuel prices late last year by hedging at $50 to $60 dollars a barrel, like Southwest did. Many carriers were looking forward to competing with Southwest this year because analysts predicted that its long edge in hedging was finally coming to an end.

Ray Neidl, an airline analyst from Calyon Securities, has reported that only Southwest hedged fuel for 2008 at a significant level. They were able to lock in prices at $55 dollars a barrel for 80-90% of their 2008 fuel needs. Someone should be asking Delta’s fuel purchasers and fuel analysts why they didn’t have the foresight to do the same. Honestly, do we even have people at our airline who understand geo-political realities; who follow trends and markets; who comprehend the global economy with emerging world markets such as India and China competing for ever depleting finite resources such as oil? Of course the cost of fuel was going to sky-rocket. Anyone driving a car knew that. And Delta did very little about it.

Continental Airlines has been quoted as saying, “We have a very focused hedging strategy, which basically locks in our fuel cost for tickets as they are sold so that we have a fixed or known margin on sales, Other forms of hedging are basically betting.”

So most U.S. carriers don’t hedge because they consider it gambling. It seems to us that refusing to hedge is the greater gamble. Putting ones’ head in the sand is an insane approach to fuel planning and purchasing.

Even at $55 dollars a barrel, Southwest is predicting that their expenditures on fuel will cost them $500 million more than 2007. Imagine how much more Delta will be spending on its fuel purchases this year over last year. There will be little or no profit because of that poor planning.

You don’t have to be told who that impacts the most. Can you say, “Good-bye” to industry standard pay and profit sharing?

There is really only one protection to economic uncertainties and upheaval. We need to unionize to help protect what little we do have. We need to organize to help ensure that we will be part of the new airline created by merging. Remember, growing one airline by merging two together isn’t growth, it is consolidation. People and jobs are going to disappear.

Delta has promised to protect your seniority. That is an easy promise to make, but may be impossible to keep. What if the city you are in is axed, will you have bumping rights? Don’t count on it. There are no rules for un-represented employees; they will be made up along the way. Seniority protection means very little if you have no seniority or no union contract.

The next time you see a smirking face of a DBC member, ask them just how Delta plans on going about protecting your seniority. Ask them for details. One can only imagine how short that conversation will be.

If you want real representation, real seniority protection and a real voice in the merger, the IAM is the only sure way to realize it.

Be prepared. Fight for your future. Fight for your job. Join the union. Join the IAM!