Originally Posted by
BenderRodriguez
This is solely for debate purposes.
Leave the contract out of it for a second. It is YOUR opinion that we need more "internal investment", so let's roll with that first. Are you referring to employees pay and bennies? We are -allegedly- (I am having trouble keeping up with rampers' and FA pay) the highest paid in the industry, or at least very close to the top. What makes you think that the company needs to invest more in that area? Or are you talking about CAPEX and facilities?
Buybacks are to placate investors. They own the company. You and I just work here. When they see 25% of the profits being paid in bonus monies, they are thinking "that's more than enough, where's my ROI?" True. DAL has been printing money this year and last year. Why do you think you and I are more "entitled" to that than the owners? The share buybacks are not nearly as nefarious as some are making them out to be. There's plenty of money to go around, and we'll get our share, but to complain about the return to shareholders is nuts.
Waterloo has been bypassed by having low debt. It's gonna be interesting to watch the industry in the next economic downturn. I'll take $5B in debt over $20B in debt all day long.
We desperately need more investment in infrastructure. We've obviously done some, and that's great. But until we get high volume widebody air with new hoses at every single gate at every station we fly to, 6B in "shareholder return" is a collosal waste. Until we get ample (which means a few more than we need) tugs and tow bars, 6B in peak value buybacks are a waste. Until we either replace the 88s or find a realistic nav solution 6B in peak value buybacks are ridiculous. Jetways that clearly need maintenance more often because they break frequently. Better food especially for domestic first class. Power at every seat. Agreessive response to the endless growth mode airlines that barf capacity all over us while they grow. We could dominate the biggest 2 domestic threats
and wage one heck of a response to ME3 for 6B dollars (in addition to whatever we're spending) and the return would be far superior than the nothing we get from peak value buybacks over time.
I'm not objected to rewarding investors. I think the best way to do that is with a higher share price over the long term, not junk economics like short term peak value buybacks that do nothing long term. I'm in favor of a reasonable dividend and slowly increasing it. I'm in favor of paying down debt and think we should do a bit more right now. Lighting 4B in fire while paying down an extra 2B in debt would do much more to promote a sustainable engine of shareholder value than lighting 6B in fire right now.
To any extent that we do buyback shares, it should be during the dips inherent to an irrational market and analcyst fits of panic. That would do more to have the shareholder's backs long term than what we're doing right now.
While I'm not objected to keeping "paid for" 88's around, how much fuel could we save by replacing them with zero debt
free and clear A320's or 737s? Because you can buy a lot of those for the 6B you're lighting on fire in front of labor just to say nah nanny nah nah.
There are far superior ways to blow 6B in a few years that would build an even healthier and more sustainable company, and provide far greater shareholder return for the long haul, than lighting it on fire just to keep it away from labor.