Originally Posted by
fcoolaiddrinker
It’s not locked it. Rates increase over 3 years starting amendable date. Every day indigo holds out they save whatever that difference is. Now that difference will need to be captured with retro. Meanwhile they can use that savings and get a 5% rate of return guaranteed worst case. They save nothing by paying now. They lose millions annually.
Management would be fired immediately if they were to agree to proposed rates day one with nothing to show for it.
You forget that the "difference" saved in salary is more than LOST in revenue because the company can't retain/expand. For every pilot this company DOESN'T retain, they lose far more than the salary that pilot cost no matter what year pay they had when they left. If the company wasn't making money off of pilots, it wouldn't be in business. Why save a couple million on salaries if it means you lose tens of millions in revenue? When you look at it, the difference isn't really that much - maybe $100 more / hr. That will likely decrease the profit per pilot ratio by a few dollars in total - which is more than offset by the increase in volume of flights offered.
Which would you rather be - AA with a profit per pilot per flight of $10 (with over 15,000 pilots) or F9 with a profit per pilot per flight of $20 (and only 2000 pilots)?
This opportunity cost is almost always forgotten... In just about ANY negotiation that takes a long time (and/or is recurring), it's better to negotiate salary NOW then later. Just ask Jerry Jones that bout the Dak Prescott contract.