Originally Posted by
DWC CAP10 USAF
10% up to $2.5B, then 20% above $2.5B
And ours is 10% up to 6.9% profit margin and 20% above that.
When we originally negotiated this, 6.9% equated to almost exactly $2.5Billion, so our two plans were virtually identical. If we had each had the same profit way back then, we would have had the same payout. (except that theirs includes a 16% 401K contribution on top that we don't get)
Unfortunately, we chose a poor metric based on math. As both companies have grown and increased their cost and revenue structure, Delta's payout stays at 2.5Billion, but 6.9% profit margin on that larger enterprise now equates to about $2.9 to $3.0 Billion. So, we have an additional 400 to 500 million dollars of profit that is paid out at the lower rate. So, even if we managed to get the same profit as Delta, we would still get less profit sharing.
That being said, this is but one aspect of the whole deal, and their lack of large WB slots does eat away at a bunch of the advantage they have in profit sharing.