This is one of the dumbest threads I have read on APC. You wonder if any pilots took a single econ course in college. It may well cost 2.5 billion dollars to overhaul the 50 seaters over time. The overhauls actually span a 7 year time frame I am told which makes sense based on the purchase schedules. The problem with the logic in this tread is the 2.5 billion dollars then is paid by the revenue the aircraft generates and additional money the aircraft command when sold or lease returned. In virtually every aircraft ad you will ever see the first thing mentioned is time on the engines and airframes and time since the last overhauls. This occurs on all our aircraft. You invest money in them to get a return on that money. If you manage your business well your return exceeds your cost.
What makes the thread even stranger is that the posters imply that the cost of the overhauls is a credit against the contract but never mention the cost to acquire additional aircraft as replacement if they decide not to do the overhauls. Lets say they return the jets to the lessors with run out engines. They lease penalties will be large in that situation. Lets say the return the fleet and the cost is 1 billion for 200 aircraft. Delta gets a credit for buy more 78 seaters and only pays .5 billion. Then they have to buy 70 new aircraft at 30 million a piece. Thats 2.1 billion. And wait there is more! Delta now has to lease or purchase the 717's. Lets call that a 1.5 billion dollar deal. Now you have 4.1 billion dollars i costs to save the 2.5 for new engines. Does that mean we get credit for the extra 1.6 billion this deal costs the company and instead of the TA being valued at 1.2. billion its really 2.8 billion. Of course not. That just as inane as the original argument. Delta decided their fleet plan and how to execute it and if they do a good job it covers all the costs and produces a profit. We as a union try to take a big a piece of the profit pie as we can negotiate while handcuffed to the RLA.
Fleet makeup and fleet costs have nothing to do with the value in a contract period. Fleet profit or loss however has everything to do with the value of a contract.
The company has never stated this is a cost neutral contract. What they have stated is that having a better fleet right sized to our markets will allow them to pay the increased pilot costs which will be around 1.2 billion over the life of the contract.
If Delta management made a smart move and hedged 5 billion dollars in fuel and we were able to negotiate a raise based on that profit would you again say its no cost?
Strange Strange thread