Stormy skies ahead for Delta?

By TheStreet.com

Delta Air Lines (DAL, news, msgs) is flying into one of the toughest, most crucial labor battles it has ever faced.

Delta's merger with heavily unionized Northwest in October 2008 brought thousands of union members into Delta's tent. And the subsequent election of Barack Obama as president paved the way for changes in the composition of the National Mediation Board, which oversees airline industry labor issues.

Obviously, both events involve potential drawbacks for Delta, which became the world's biggest airline by traffic after its $2.8 billion Northwest acquisition.

Over the past few decades, unions have repeatedly made runs at Delta, an outlier in one of the country's most unionized industries. As an example, Northwest was 96% unionized at the time of the merger. At Delta, only pilots and dispatchers, who constitute 15% of workers, are unionized.

Now two of the airline industry's biggest unions, which for the moment continue to represent thousands of Northwest workers, are organizing at Delta and gearing up for a series of elections. The stakes are extraordinarily high. If the unions lose, they not only fail to gain new members but also lose members they already have.

"If Delta is the largest airline in the world, then we are going to be the largest union at the largest airline in the world," says Robert Roach, general vice president of the International Association of Machinists. "With the support we have, both from current Northwest members and from Delta employees who have shown interest in organizing, we think we have a good chance of winning these elections."

Video: Employee Free Choice Act, pro and con

Unlike the IAM, the Association of Flight Attendants has a benchmark by which to gauge its prospects. It staged a union election at Delta in May and won support from about 5,300 of the 13,400 eligible flight attendants.

"As in every organizing campaign, we built support and structure," says Ed Gilmartin, general counsel for the AFA. Now the list of eligible voters has expanded by about 7,000 Northwest flight attendants. "We are very optimistic."

It would be unwise, however, to underestimate Delta, which has been successfully executing its various strategies since entering bankruptcy in 2005. Before its Chapter 11 filing, Delta seemed bent on squandering the world's biggest hub – Atlanta -- on connections to Florida and a mystifying effort to match fares with low-cost competitor AirTran (AAI, news, msgs). But a restructured Delta utilizes its hubs to connect passengers to premium global destinations.

Delta did not rest on its laurels, but rather pursued a merger with Northwest, operator of a Tokyo hub that filled the biggest gap in its network. It enlisted its powerful pilots union as its chief ally, not only gaining support from a key constituency but also avoiding the pilot infighting that soured the 2005 merger of US Airways (LCC, news, msgs) and America West.

Continued: Employees who don't vote

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