Delta Airlines 2012 Annual Report Download - page 87

Employees Under Collective Bargaining Agreements
At December 31, 2012 , we had approximately 74,000 full-time equivalent employees, approximately 15% of whom were represented by unions.
The following table shows our domestic airline employee groups that are represented by unions.
During the June 2012 quarter, we reached an agreement with the Air Line Pilots Association, International (“ALPA”) to modify our existing
collective bargaining agreement, which covers approximately 10,700 Delta pilots. The agreement, which was ratified by the pilots in June 2012 and
took effect on July 1, 2012 , becomes amendable on December 31, 2015 .
In addition, 220 refinery employees of Monroe are represented by the United Steel Workers under an agreement that expires on February 26,
2015.
Labor unions periodically engage in organizing efforts to represent various groups of our employees, including at our operating subsidiaries, that
are not represented for collective bargaining purposes.
War-Risk Insurance Contingency
As a result of the terrorist attacks on September 11, 2001, aviation insurers significantly (1) reduced the maximum amount of insurance coverage
available to commercial air carriers for liability to persons (other than employees or passengers) for claims from acts of terrorism, war or similar
events and (2) increased the premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S. government has
been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground
damage) and the aircraft hull. The U.S. Secretary of Transportation has extended coverage through September 30, 2013, and we expect the coverage
to be further extended. The withdrawal of government support of airline war-risk insurance would require us to obtain war-risk insurance coverage
commercially, if available. Such commercial insurance could have substantially less desirable coverage than currently provided by the U.S.
government, may not be adequate to protect our risk of loss from future acts of terrorism, may result in a material increase to our operating expense
or may not be obtainable at all, resulting in an interruption to our operations.
Other
We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract specific
equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations
are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination
occurs.
NOTE 11 . EMPLOYEE BENEFIT PLANS
We sponsor defined benefit and defined contribution pension plans, healthcare plans and disability and survivorship plans for eligible employees
and retirees and their eligible family members.
Defined Benefit Pension Plans. We sponsor defined benefit pension plans for eligible employees and retirees. These plans are closed to new
entrants and frozen for future benefit accruals. The Pension Protection Act of 2006 allows commercial airlines to elect alternative funding rules
(“Alternative Funding Rules”) for defined benefit plans that are frozen. Delta elected the Alternative Funding Rules under which the unfunded
liability for a frozen defined benefit plan may be amortized over a fixed 17-year period and is calculated using an 8.85% interest rate. We estimate
the funding requirements under these plans will total approximately $675 million in 2013.
Defined Contribution Pension Plans. Delta sponsors several defined contribution plans. These plans generally cover different employee groups
and employer contributions vary by plan. The cost associated with our defined contribution pension plans is shown in the tables below.
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Employee Group Approximate Number of Active Employees Represented Union
Date on which Collective
Bargaining Agreement Becomes
Amendable
Delta Pilots
10,700
ALPA
December 31, 2015
Delta Flight Superintendents (Dispatchers)
340
PAFCA
December 31, 2013