Originally Posted by SharpestTool

OK, lets say that Spackle has won the issue on PS. PS is variable compensation, but only to the upside since there is no "at risk" element. LOL! Hang with me here... if PS was to go down due to a drop off in profitability... I know, I know, it never will, the pilots will be good with that. Certainly good enough that they would never chose to monetize at a higher rate. Therefore we elect to retain full current exposure to PS.

Further, RA will never account for future risk exposure to PS because it cannot be calculated. Even if it was possible, the NMB would tell him he is full of it and would slap him down. He will just have to the roll the dice and hope it all works out.

So, what is the most we will get from him in this situation, assuming all else remains the same and we've reduced the money making sections to annual pay rate increases.? I know, I know, RA does not have a maximum because it is not he who decides our max compensation, it is us (according to Spackler). Lets make it easy and assume a 3 year contract. I think it would be helpful if we further assume two scenarios: 1) a contract delivered at the amenable date, and 2) contract delivered at some point beyond the amenable date. In scenario 2, lets include a date along with the pay raises expected.

So this exercise is not about what we want, I want quite a bit (I know, I know, what we get is defined by what we want because it is us that determines the max.) So lets assume that we all want $10,000 per hour. This exercise is about what is doable, and specifically doable within a defined timeframe and within historical processes.

I'll start.

1) on time: 8, 3, 3

He will meet AA's rates plus 1% and then maintain that margin in the out years. His thinking (Spackler's as well) is that PS is variable but certainly not at risk (our risk), and our pay margin in reality will be 17% with PS. I know, I know, we just have to say stuff it and those rates will climb because he cannot cap them. He will think a 17% margin is fair and he'll guess that the NMB will agree. I know, I know, the NMB will refuse to count PS. It isn't the 17% margin that he thinks the NMB will sign off on, it is the 1% margin.

2) 11, 3, 3 delivered at amendable date plus 18 months. After watching PS decline slightly in 2015, the early look at 2016 PS shows a further decline. RA is comfortable raising the stakes a bit with a reduced PS liability. The margin is now 4%. The NMB has no heartburn with industry standard plus 4%. Delta pilots are eager to get the meter running again.

Ok, let the Poo fly! But, lets not forget to play. Don't forget your projections!