Originally Posted by
Timbo
Oberon, here it is again:
So tell me what you think he meant by the comments I highlighted above.
By Justin Bachman August 13, 2014
With U.S. airlines awash in cash these days, one of the big questions in the industry has become how much of that wealth will pilots seek next year when contracts at several carriers come up for renegotiation.
Contracts at four large airlines—Delta Air Lines (DAL), Hawaiian (HA), Spirit (SAVE), and Jazz Aviation, a regional operator for Air Canada—are up for talks in 2015, covering nearly 15,000 pilots represented by the Air Line Pilots Association, the largest pilots union in North America. JetBlue Airways’ (JBLU) 2,500 pilots are also hoping to secure their first contract next year, after voting this spring to join ALPA.
U.S. carriers are producing enormous profits after years of consolidation. In the most recent quarter, the six largest U.S. carriers collectively earned $3.97 billion, with American, Southwest, Alaska Airlines (ALK), and JetBlue all reporting record net income for the period. U.S. carriers lost almost $60 billion from 2000 to 2009.
“This is really a good story,” ALPA President Lee Moak said Tuesday during a visit to Bloomberg Businessweek in New York, part of a quick tour to assure Wall Street analysts that ALPA’s contract demands won’t prove onerous to airlines. “I almost can’t stand it, it’s so good.”
You highlighted more than the Moak quote. Italicized above is the quote, "This is really a good story, I almost can't stand it, it's so good". Presumably, he is talking about the bolded "story" above. Some have seemed to latch on to the description of why Moak went to Wall Street, to "assure...analysts that ALPA's contract demands won't prove onerous to airlines". Clearly that isn't the "story" Moak is talking about because it isn't a story, it's just a description of what he is doing.
The author describes Moak as visiting Wall Street to "assure analysts...contract demands don't prove onerous". Moak didn't say this but I'll take the author at his word. I don't think our contract demands will prove onerous to airlines either. They are making billions of dollars and they can afford more expensive contracts.
Southwest expects to pay out $228 million to workers this year in profit shares, nearly double the amount from 2013. United paid $190 million in February tied to its income last year. (Delta and United make the payments on Valentine’s Day.) Several airlines also pay workers monthly incentives for meeting performance targets, such as more on-time arrivals and improvements on the rate of mishandled bags. United paid employees an extra $125 for meeting on-time arrival and departure goals in July. Delta says it paid nearly $92 million last year in similar incentives. “The employees are now coupled to the airlines,” says Moak, a Delta captain who is stepping down at year’s end after four years as president.
Of course, all the cash an airline generates can go to shareholders or employees, and that basic dynamic is likely to play out in the 2015 contract negotiations—especially at Delta and Spirit, both industry leaders when it comes to superior financial returns. Moak contends that ALPA pilots at the larger carriers enjoy what he calls “mature, good contracts” already. Radical overhauls aren’t in the cards, he says.
"Mature, good contracts" is subjective. If you don't think our contract is mature or good I'm not going to tell you you're wrong. I think our contract has pretty good work rules and is lacking in compensation.
Most of the contract talks are likely to center on basic compensation—hourly pay rates and how much carriers pay into pilots’ retirement plans. “
There will be a business discussion of pay as it relates to revenue,” Moak says. “
You can argue about $2 or $2.05, and that matters to the crew member,” but “
you’re working on the margins” on the new contracts, he says.
"There will be a business discussion of pay as it relates to revenue". Of course there will be. Companies are making a lot of money and can afford to pay us.
"You can argue about $2 or $2.05, and that matters to the crew member...you’re working on the margins". I can't make sense of this. "$2 or $2.05" has no context. I'm not sure what "margins" he's talking about. The margins of $4 billion profit?