Source: APA
There has been much debate over the company's December 23, proposed pay rates. With the exception of Group I, we believe the proposed hourly rates are in the ballpark, however, when comparing the total pay compensation between pilots at American and Delta, we believe it may fall a bit short.
It's certainly no big secret that unlike Delta CEO Richard Anderson, Doug Parker does not see the value in having everyone pulling in the same direction via profit sharing. Nonetheless, in order to truly get an apples to apples pay comparison, we must also take into account other pay compensation such as profit sharing.
In 2014, pilots at Delta are scheduled to receive an additional 15% in compensation in the form of profit sharing. In looking ahead to 2015, airline analyst are predicting profits at Delta that will result in an additional 20% of pay in the form of profit sharing. For some lineholder captains, this additional pay will be in excess of $55,000 for 2015. Not too shabby.
While it is important to compare the payrates in the current proposal with those in the MTA, we also believe it's just as important to compare total pay compensation between pilots at American and our closest competitor, Delta. Below are several charts to compare total pay compensation between Pilots at American and our peers at Delta.
The first 3 charts represent total annual pay compensation (pay and profit sharing) at both American and Delta. In determining the annual compensation we used the current Delta rates as well as the proposed American rates. We also assumed pilots at both airlines receives 1020 annual pay hours (same number negotiating committee and company use) and we assumed pilots at Delta will receive 15% profit sharing (actual) in 2014 and 20% profit sharing (current estimate based on analysts) in 2015.
As you will see, with the additional profit sharing compensation there is still a considerable pay gap between pilots at American and Delta. Of course, this annual pay compensation gap will likely become even greater when Delta pilots negotiate a new CBA sometime this year as expected.
The following 9 charts compare hourly rates by converting the total annual pay compensation into an hourly rate. This is accomplished by adding annual salary + profit sharing and then dividing that number by 1020 hours. Using the Delta B777 above as an example: ($270.55*1020) + ($55,139(profit sharing))/1020 produces a comparable annual hourly rate of about $324 an hour. In other words, if B777 pilots at Delta earned $324 an hour they would earn the same if they did making $270 an hour plus projected 2015 profit sharing. Looked at it yet another way, the following charts depict the hourly pay rate American pilots would have to attain to be compensated equally with pilots at Delta.
We fully understand profit sharing is not an absolute with respect to pay, however, even with the proposed pay rates we are still well below our peers at Delta.
Furthermore, we have also heard rumblings that Delta pilots may modify their profit sharing in return for a higher payrate, this of course would increase their guaranteed pay as well as have a positive impact on next year's mid-contract adjustment.
