Originally Posted by
Feng
Ummmm okay...so IF during a downturn and 1/3 of the airlines just took concessionary contracts, I'm sure you'll be the first one to argue that the good contracts are irrelevant and we should strive for concessions also because those are the newest contracts and we should get the average of those. Hmmmm
Sadly, that seems to be reality. I don't like it, and I won't advocate for it, but precedent is there. For reference, see Alaska's Kasher award back in 2005. The company was profitable, yet a bankruptcy-average contract was awarded. It sucked, but it happened.
Originally Posted by
Feng
Your housing example is just crazy!
How so? You're trying to find the current value of something. Not the value of something from 2011. What houses are selling for NOW is what is relevant.
Originally Posted by
Feng
Companies should pay fair market rate based on their segment of the industry. Market rate is whatever your competitors in your segment of the industry CURRENTLY pays.
To argue that, well... they're negotiating right now and will have a better contract soon thus we should compare ourselves to their next contract has as merit as the company saying, "well, 2 contracts from now Alaska/virgin will have a contract during a downturn so we'll use that as a baseline."
I think perhaps we've miscommunicated. I'm not trying to compare anything to future rates, just current rates. Contracts past their amendable date aren't "current," and don't make much sense for comparison. If we're going to do that, can I use Delta and United rates from 2000, corrected for inflation? Should an arbitrator deciding a contract at a narrowbody carrier use Spirit's current rates for comparison?