MEMORANDUM OF UNDERSTANDING
DELTA AIR LINES, INC.
and the Air Line Pilots in the service of
DELTA AIR LINES, INC.
as represented by the
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
TRANSATLANTIC JOINT VENTURE ADJUSTMENTS
This Memorandum of Understanding is made and entered into under the provisions of the Railway Labor Act, as amended, between Delta Air Lines, Inc. (the “Company”) and the Air Line Pilots Association, International (the “Association”).
WHEREAS, the Company and the Association are parties to a collective bargaining agreement setting forth the rates of pay, rules and working conditions for the Company’s pilots (“Pilot Working Agreement” or “PWA”) effective October 30, 2008, and
WHEREAS, the Company entered into a Transatlantic Joint Venture Agreement (JV) with Air France, KLM and NW, dated May 20, 2009, to establish a long-term alliance between the parties, linking their route networks and enabling them to market globally integrated air transportation services, and
WHEREAS, the Company and the Association are parties to Letter of Agreement 16, Transatlantic Joint Venture Agreement dated July 15, 2009, (“LOA 16”), and
WHEREAS, Section 1 E. 9. provides that the Company will review with the Association any Company plans to amend the existing AF/KL JV agreement, or enter into a new profit/loss sharing agreement with AF/KL or another carrier, and further that before any such new or amended agreement is finalized, the parties will meet for the purposes of negotiating terms applicable to such agreement, and
WHEREAS, the Company intends to amend the existing AF/KL JV agreement to add a third party carrier and to adjust baseline EASK capacity and allocation, and
WHEREAS, Section 1 P. 4. contemplates the potential for EASK capacity increases and or decreases in accordance with the AF/KL JV agreement and for adjustments in the EASK allocations, and
WHEREAS, the Company and the Association wish to confirm their understandings regarding the Company’s amendments to the AF/KL JV agreement.
NOW THEREFORE, it is mutually agreed:
Section 1 P. 4. provides that the Company will manage increases and/or decreases in EASK capacity so as to maintain the Company’s EASK capacity share in accordance with the terms of the AF/KL JV agreement.
Section 1 P. 4. Note one: provides that the Company’s baseline EASK allocation and the Company’s minimum EASK allocation in Section 1 P. 4. will be adjusted accordingly in the event the parties to the AF/KL JV agreement reset or adjust the baseline EASK allocation as a result of, inter alia, capacity adjusted as a result of the inclusion of a third party carrier or new competing operations (using the methodology in the AF/KL JV agreement).
The Company intends to amend the AF/KL JV agreement to include Alitalia (“AZ”), Compagnia Aerea Italiana, S.p.A., a third party carrier, in the AF/KL JV and to adjust the Bundle 1 EASK capacity share and baseline allocations of the US and European parties. Therefore, the JV agreement shall hence be the AF/KL/AZ JV agreement effective April 1, 2010.
The baseline EASK allocations in the AF/KL/AZ JV agreement are 50% for DL and 50% for AF/KL/AZ of the total EASK capacity. Section 1 P. 4. is updated to reflect such adjustment. Effective with the three year measurement period ending on March 31, 2011 (including applicable AZ flying during the 12 month measurement period of April 1, 2010 to March 31, 2011 only), the Company shall maintain no less than 48.50% of the EASK capacity share in this measurement period (Company’s baseline EASK allocation minus 1.50%). A new three year rolling measurement period will begin April 1, 2011 and the actual capacity share percentages for all previous years will be disregarded for capacity share measurement purposes. In the case of the rolling three year measurement periods ending March 31, 2014, and thereafter, the Company shall be required to maintain no less than 48.50% (Company’s baseline EASK allocation minus 1.50%) of the total EASK capacity subject to the provisions of Section 1 P. 6.
In the first 12 month measurement period following March 31, 2010 (i.e., from each April 1 to March 31 of the following calendar year), during which the Company’s EASK capacity share is greater than or equal to 49.75%, a new three year rolling measurement period will begin and the capacity share percentages for all previous years will be disregarded for capacity share measurement purposes.
This MOU will become effective on its date of signing and will remain in effect concurrent with the PWA.
IN WITNESS WHEREOF, the parties have signed this Memorandum of Understanding, this ___ day of June, 2010.
FOR THE COMPANY
FOR THE ASSOCIATION
Captain Timothy S. O’Malley