Originally Posted by
sailingfun
There is no way to answer that unless you can predict the future profits of the company. In 2000 the company was generating margins like today and everyone said the industry was fundamentally changed and would be profitable forever. By Spring of 2001 we were losing money fast and the industry had experienced its biggest revenue drop ever.
Long term over the next 15 years I suspect we would gain income by moving at risk income to fixed income. Shorter term over the next 3 to 5 years we probably would lose income. It depends on what future value is assigned to the profit sharing if a swap is made. By 2PM today we will have a better idea where the company may attempt to go with PS.
Bold is VERY important. It's the first step, and the IAM vote for DAL FA's will be next.
IF the AA pilots vote down their TA and keep the "industry average adjustment", expect RA to try and pump up our rates as much as possible with the raises we are GOING to get standalone AND via PS shifting, that way it will really turn the screws on AA. I also think the Co. would try and minimize gains in other areas and attempt to "Buy us off" with even more rate increases.
IF AA pilots pass the TA, I think we will see less drive by the CO to change PS, we will go ahead and have actual work rule improvements, and our rates will probably look like AA+x%.
To the other point, I think we would sell it for a profit actually. It's easy math to both sides, and if the MEC sees that it is being sold for a loss I know they would reject that. Heck, that wouldn't even make it past the new NC Chair!
Plus, I don't advocate getting rid of it completely (and neither does the Co.), I like the "upside protection" it provides (and the motivation for the whole company to perform well), that being said I'd rather have as much of it as possible, as soon as possible.
I'd also consider an estimated PS paid quarterly (say 3-4%) or monthly payout (1-2%) with the excess amount paid the following Feb. and keep the accrual formula the same.
I disagree with a "cap" or eliminating the 20% above XXX, that would be a bad idea.