Originally Posted by
Bucking Bar
TEN,
In a word, "yes." Our outsourced flying is more profitable than the work we perform ourselves.* As we further and further decouple from the value of our flying to this airline, I wonder when someone is going to ask the obvious the obvious question; "wait ... you want a raise based on the profits earned by another pilot group?"
It goes without saying that as Delta fails to invest in an efficient 100 to 130 seat jet, the ongoing cost of the inefficient Douglas jets will increase the pressure to outsource. We've got to get the right tools to compete.
* Delta's 10K suggests outsourced flying is responsible for 21% of revenue, but generates 47% of our operating profit. If true, this gives some idea of the cost to "take it back."
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Perhaps Sailing, Slow, or Alpha will share the real numbers that helped reach the decision that was made in the Compass matter. It would be a very productive discussion.
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Bar,
I know we have some smart people on VA ave., but the question I have is how do they attribute those percentages? If a pax pays $500 to fly AGS-ATL-LAX, how much revenue gets credited to mainline and how much to the rj? Can that formula change to put more impressive numbers in front of the NMB?
Also, (and I honestly don't know) are those numbers just for RJ outsourcing or does it include the JV's and AK codeshare? Pretty easy to show big profit percentages if you take half the revenue of a full A380 with little to no capital outlay. In addition, what kind of accounting goes on with respect to our side of the JV? Do we account all the expenses of operating a 767 across the pond, but only tally half the money towards the "profit?"
Does the number only represent outsourced flying or does it include other forms of revenue derived from outsourcing?
I have not looked at the 10K, but if they did not firmly define how they arrived at those numbers, those percentages become very suspect to me.