Originally Posted by
Timbo
Any 'trade' of profit sharing for pay rates is really a double hit for the pilots.
How?
Here's how: Let's say the company is going to make $8 Billion for the year (just spit balling here for the math).
Let's say we traded a 20% raise, for the same amount of profit sharing, 20%. Let's say that 20% in money is $1 Billion (again, just picking numbers for the math).
Ok, what just happened to the $8 Billion profit?
Well, now it's not going to be $8 Billion, only $7 Billion, because $1 Billion of it just went to fund our pay raise.
So now, we have cut our profit sharing, TWICE!
We traded away the 20% for the same amount in pay, but now any remaining profit sharing will be calculated on $1 Billion LESS in profits.
FUZZY MATH ALERT!!!
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?