Originally Posted by
JetManJim
Just calculate our PS on $7 billion and then on $10 billion based upon the current formula- because that is where we are heading. DAL corporate debt is declining fast and because of improved financial condition can be refinanced at a very low interest rate. You don't want debt to get too low or you become a takeover target. So after debt is retired and with money saved from refinancing existing debt, the money you were using to pay down and service debt flows right to the bottom line. Furthermore, as older employees retire they are replaced with newer less expensive employees, so over time overall labor costs (on a per pilot basis) will also decline. Our brand image has improved to the point that people will pay more to fly Delta. That trend should continue into the future with an ever improving product and our fleet is renewed. PS is our ace card now and I believe ALPA is going to negotiate it away.
Ah, now I see where you have strayed. Allow me to help. Section 3.I of the PWA explains the math on how our "profit sharing plan" is calculated. We are compensated based on Pre-tax income, not net profit.
- PTIX of 0-2.5 Billion accrues 10% towards the pool. The max is $250 million.
- PTIX 2.5 billion and above accrues at 20%, the max is unlimited.
- Pilots get roughly 1/3 of the total accrued amount.
For 2014, PTIX was roughly 6.75 Billion. We expect an increase from 2014, let's be generous and use 20% YOY. That means a PTIX of 8.1 billion dollars. So we subtract 2.5 from 8.1 to get 5.6 Billion. 20% of that is 1.12 Billion; now add in the 250 million from the 0-2.5 accrual.
We now have $1.37 billion in the pool of money to be given out.
1.37 divide by 3 is $456.67 million.
Pilots are $25 million for each 1% of pay.
Section 3.I would pay the pilots around 18.25%.
In order for 2015 to pay the pilots 40% as you allege, the pilot portion would need to reach at least $1 billion, so the total pool would have to reach $3 billion. DAL's PTIX would have to be $16.25 billion in 2015 for your math. It is highly unlikely we will see a 240% increase in PTIX YOY.
In order to get a 50% payout, DAL's PTIX would have to reach $20 billion.
To answer your $10 billion profit (do you mean profit or PTIX) if PTIX: It would mean a PS payment of 23.3%