Originally Posted by
Dharma
notEnuf, this is a good explanation. But there is a way to transfer even more value to the pilot group. The explanation is connected to my previous explanation to Bob. Here's how...
Take the initial portion of Profit Sharing value, the amount paid out at the 10% level, and convert it to a pay raise. That value then compounds every year we get a pay raise, increasing in value. Retain the amount above the 10% payout to participate in your description above. Do the math. This is a more valuable approach.
Your math works with several assumptions that may or may not happen. Giving up 3.B.4. being independent of PS was huge. PS diversifies our income, making a rate cut much less likely during a downturn. It also doesn't require any action to "snap back" as the company profits we earn on the profit. My opinion is that WB international flying will stay roughly the same and not significantly exceed the 650,000 GBHs we now set as a floor. (ceiling really)
The business will continue to grow through JV+equity "virtual mergers." Managements entire job is to grow the business as profitably as possible. PS keeps us aligned with that goal. I also think with the addition of the MEC livery option of 1.E.9. the method of growth will be a single brand strategy eventually. If we franchise out China we will have the soon to be largest market in the world. That is the prize at the end of all this. I prefer to keep as much of the corporate profits as possible and negotiate rates along with the rest of the industry.