December 14 - Delta Delivers A Huge Christmas Present To Airbus


INDUSTRY ANALYSIS


Delta Delivers A Huge Christmas Present To Airbus, And Yet Another Lump Of Coal To US Aerospace Workers


By Kevin Mitchell

Delta Air Lines is unrivaled in the pantheon of hypocrisy. It has mastered the art of unabashedly saying one thing in its anti-competition political advocacy while doing the exact opposite because, insultingly, it thinks politicians are not smart enough to notice. 

It, therefore, should come as no surprise that Delta, while claiming to be a champion of American jobs in its political campaign against competitive choice offered to passengers by Emirates Airline, Etihad Airways and Qatar Airways (Gulf Carriers), has an America LAST policy when it comes to buying aircraft.  

Sadly for American workers and suppliers, Delta’s Buy European/Buy Canadian policy was on full display today when it announced it is purchasing 100 Airbus A320neos with a reported book value of $12.7 billion. Likely a quid pro quo for Airbus swooping in to try to rescue Delta’s Bombardier C Series purchase that the Trump Administration found to be illegal trade dumping?

According to the US Department of Commerce’s jobs multiplier, today’s Delta decision to yet again turn its back on Boeing and its workers will cost some 65,000 American jobs.

No one should be surprised by this latest example of Delta’s overarching advocacy mantra: “always say what you think politicians want to hear before laughing under your breath while doing the opposite.” It manifests not just in its Buy European and Buy Canadian aircraft purchases, it also animates its extensive practice of outsourcing its international crew jobs to foreign alliance and joint venture partners.

In 2014 Delta was faced with a choice of supporting American or European jobs when it purchased aircraft to replace its older generation Boeing 747s and 767 aircraft. Delta chose European workers. It purchased 25 Rolls-Royce powered Airbus A350-900s – its new “flagship” aircraft according to Delta CEO Ed Bastian and COO Gil West – and 25 Rolls-Royce powered Airbus A330-900neos. With a reported market value of $14.3 billion, according to the Commerce multiplier, this Delta transaction alone outsourced more than 70,000 American jobs.

Then there is the contentious Bombardier C Series fight where Delta has sided with Canadian manufacturer Bombardier against the Trump Administration and Boeing and its workers. Delta got a sweetheart deal when it purchased 75 C Series 100 aircraft with an option for 50 more. Those are convertible to the larger CS300s. The Trump Administration concluded that deal was too good to be legal and that it constituted illegal trade dumping that threatened American jobs. It announced that two substantial tariffs would be imposed. 

Mr. Bastian blasted the Trump Administration’s decision calling it “absurd” and defended Bombardier whom Mr. Bastian called its “great partner.” Defiantly, he warned, "[w]e don't believe that will be the end of the story." He further poked Boeing’s workers in the eye by declaring that the Canadian-built CS100 will “be our (Delta’s) best domestic aircraft.” 

With a list price of $5.6 billion dollars, this Buy Canadian choice by Delta cost around another 30,000 American jobs based on the Commerce Department’s multiplier.

Its aircraft purchases are not an isolated example of Delta turning its back on American workers. It is part of a pattern – The Delta Way. 

Delta is also a champion of outsourcing US crew jobs to its foreign alliance and joint venture partners. It claims Gulf Carrier competition is a current and future threat to US crew jobs but cannot cite a single example of a Delta jet idled by such competition, nor a single employee furloughed as a result of it. It is a hollow political argument full of bluff and bluster but devoid of any basis in fact. 

What is tangible and provable, however, is the significant and increasing number of international crew jobs Delta outsources to foreign partner airlines. For instance, earlier this year Delta chose to end its Seattle-London Heathrow daily flight and instead give it to joint venture partner Virgin Atlantic. 

If we are to believe the Partnership for Fair and Open Skies and Americans for Fair Skies, two anti-competition lobbying groups Delta generously funds, that choice by Delta management to outsource Seattle-Heathrow flying cost 1,500 American jobs. That is just the tip of the US job loss iceberg when you consider the substantial and growing number of Delta foreign partner aircraft that fly to Delta’s US hubs siphoning passengers off of its network and sucking US crew jobs out of Delta aircraft and onto foreign partner planes.

It is deeply disturbing that Delta, with its appalling record of offshoring and outsourcing American jobs, seeks to hijack President Trump’s America First vision in its anti-Open Skies campaign. However, it is not surprising in the least; when it comes to hypocrisy, Delta is always first in line for takeoff.

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