Originally Posted by shiznit

That isn't an "extension" though. That is a rework on a massive scale, with tremendous cost. No incentive for the company to even entertain it. The purpose of an extension is to keep the working environment stable to undertake an event such as a major acquisition or merger. If RA & Co. want to "buy some peace", it's just a matter of what the Co. will be willing pay!

I completely concur that we need some scope protections, it needs to be addressed considering what the future is shaping up to be.

I have been thinking about this possible scenario and have come up with my conditions for an extension. (and yes I have contacted my rep and informed him of my position/thoughts).

1. Extension of 18 months max.
2. MOU/LOA/NMB recognized letter with the company that binds them to production balances in all future codeshare/JV agreements, and to phase them into all current agreements.
3. Pay rate increases of 10% at beginning.
4. 5% increase to rates 12 months later.
5. Significantly increased profit sharing percentage for pilots(at least double).
6. DC increase of 1%
7. Increase Vacation pay to 5:15. (=1.5% annual pay increase per week)
8. Openers exchanged at the 12 month point, and NMB assisted negotiations immediately at the 18 month point.
9. A 5% retro payment and 5% pay rate bump going forward if the reason for the desired extension fails to materialize/deal falls through.


Essentially it boils down to a day one increase of 10% pay + 4% PS + 4.5% Vac. pay + 1% DC = 19.5% on day one.

Reworks and enhances "network scope" over time, but lets the company still undertake new opportunities.

At the one year point nets an additional 5%, and starts the negotiations.

We enter NMB negotiations with 26% higher compensation than if we had been frozen in negotiations for 1.5 years without a new deal, company gets to advertise stability to get a deal done, but protects the pilots with an ADDITIONAL 5% if the company just wanted to "stall"(for a 31% increase at 12 months plus one day).

Every 1% the pilots compensation increases costs approx. $18 Million if this board has accurate info..... That translates to a $351 mill. year 1 and $481 mil year 2 in pre-tax cost increases.

The US corp. tax rate is 35% so the company will write off 1/3 of the costs. Net cost for DAL Inc. to pay for the extension is $228.2 mil. in year 1 and $312.7 mil in year 2. TOTAL $541 mil. net cost.

According to alfa, DAL spent $229 mil in the 3Q 2011 on 12.5B debt.
That equates to roughly $900 mil in 2011. Debt will be cut by $2.5B over the next 1.5 years, so roughly $415 million in principal reduction and $180-200 million in interest ≈ $600 million EACH QUARTER.
So, to give the DAL pilots a 18 month "extension" it will cost DAL Inc. $30 mil./mo. (or one quarters' worth of debt payment out of 6 quarters.) They owe a debt to the pilots, time to start paying. I can be flexible and work with the company, like any other creditor, as long as they make an earnest effort too.

This is MY opinion, feel free to craft one of your own.