View Single Post
Old 01-29-2018, 02:19 PM
  #826  
Planepirate
Gets Weekends Off
 
Joined APC: May 2017
Posts: 227
Default

Originally Posted by doz4dllrs View Post
Why are you guys comparing airline size with pay? Wouldn’t comparing profit margin and their ability to pay be a better benchmark?

F9 puts up ~25% margins vs legacies at ~ 10-15%. Who has the ability to afford the better contract?

Ups and Fedex are no where the size of the legacies but they have some of the best contracts. They didn’t negotiate based ob their size but on what their airline could afford to pay and the work they do.

Am I missing something here?
Yes you are missing something. I used to think it was as simple as margins too, but it’s not.

For example: Delta had a Q3 margin of 15.6%. Total income was $1.72 billion. Delta has about 14,450 pilots. So that means that Delta made a profit of $119,000 per pilot for that quarter.

Spirit had a slightly lower margin of 15% for Q3. The profit was $65.5 million. Divide that by 1850 pilots and Spirit made approximately $35,400 per pilot for the quarter.

$119k vs $35k

Although the margins are similar at both Airlines, it doesn’t paint the whole picture as to what the company can afford to pay. As you can see, Delta can afford to pay much more.

That being said, both Spirit and Frontier could afford to pay industry standard and still be profitable in the current environment. The company will disagree with that statement. The question is: who will the mediator believe?
Planepirate is offline