Originally Posted by
sailingfun
Just to clarify but I think you know this. delta predicts up to 7 billion in revenue by 2023. That is a increase of 3.6 billion from current revenue generated by the AMEX program. Those numbers however are not profit. There are large costs associated with the program. Using a typical 15% return the 3.6 billion should up Delta’s profit 540 million dollars a year. That’s a massive increase but does not sound as good as your 7 billion number. Stating they will be making 7 billion is flat out incorrect. Revenue is not profit and the revenue increase from today is 3.6 billion not 7.
The one thing I do know is you are very intelligent. You did not post this by mistake. It was posted intentionally and you knew it was wildly incorrect to claim it was 10 times the improvements we are asking for in the contract. The other strange thing is that if the 10 times the contract cost statement were correct you suggest we will obtain 700 million in contractual improvements. I understand the opener was closer to 2 billion.
So we profit 7 billion on a deal with Amex revenue at 3.6 billion and sign a similar deal with them that increases to 7 billion in 2-3 years, right? But some how we can’t really expect the new 3.4 billion to go to profit? If so that means 3.4 billion goes to employees and fuel, sign me up. And we’d still profit 7 billion.
I know you are mainly disputing a small detail like not all the Amex money is profit, but depending on where you put it in the budget it actually could be, the benefits of being wildly profitable.