How Lee Moak Changed the Airline Industry
At the time, three and a half years after emerging from bankruptcy, Delta posted a record quarterly profit. It was implementing raises that made pilot pay rates higher than before the bankruptcy was filed. Meanwhile, pilot unions at both American and United (UAL - Get Report) had replaced confrontational leaders, who accomplished little, with more moderate successors, although progress on achieving contracts has been slow at both carriers.
During his tenure at Delta, Moak made two major deals. The first was the bankruptcy contract that allowed the airline to emerge successfully and enabled pilot gains later on. The second was a four-year deal, signed in 2008 after Delta and Northwest announced plans to merge. It brought Northwest pilots to Delta pay rates, gave all pilots annual pay raises and pushed seniority integration into the future. The 2008 contract marked the first time a labor agreement was reached in advance of the close of an airline merger. It became the industry standard as pilots at other airlines contemplated merger contracts. In June 2012, six months before that contract expired, Delta pilots signed a new one.
Looking back, Moak said the intense drama at Delta between 2005 and 2008 demanded that he learn quickly and think strategically. Delta was facing a shutdown when he took office, Moak said. "Delta never really believed in the idea of going into bankruptcy," he said. "They had tried to restructure out of court in 2004. When they finally made the decision to file in 2005, it might have been a little late: They were short of cash and came close to liquidation."
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