Originally Posted by
MikeF16
While the shift in payroll on the noncon side will reduce the PS pool from what it would've been without the payroll hike, once you get to the PS pool our % of that pool will be higher. My guess is there are specific profit levels where this works out in our favor and others where it does not. It is my gut feeling that a constant high level of profit works best for us since the noncons 20% trigger only comes into play for profit increase from year to year.
To use an extreme and unrealistic example, if we were to make 100B in profit for 2 years in a row, year 2 the noncons would see "only" 10% for the entire amount, while the pilots would see 10% for the first 2.5B and 20% for the next 97.5B. As I understand, that 95B in between now has significantly fewer people drawing from it, thus more money per pilot. Somewhere there is a crossover point where the noncon trade works in our favor, I have no idea where that number is.
Seeing as how my degree is EE and not finance, I am willing to accept I could be 100% FOS if somebody can explain my flaw in logic and explain in simple terms.
Mike- I'm pretty sure the union has put out a letter in the last couple months debunking this. The gist is- for a given profit, we pilots will get the same amount of profit sharing regardless of how it impacts the payout for non-cons. 10 billion profit this year and next year- non-cons would get some amount of it @ 20% this year, all at 10% next year. Our total payout to be divided amongst the pilots would be the exact same number- our formula calculates as if there was no change to the non-cons plan. The only way their reduction in profit sharing would potentially increase the pilots profit sharing would be if the company took the $ they didn't pay to the non-cons and used it in some way to increase profits in later years (pay down debt for less interest expense, buy more efficient jets for less mx & fuel expense, etc). Alternatively if they vaporize that $ into stock buybacks, it does absolutely nothing for us.