Curious how the numbers would shake out?
Here's where the numbers have been...
http://www.airlinefinancials.com/upl...a_mainline.pdf
Here's where the numbers are probably going and you can monkey with it if you do the interactive version for DAL...
Airline comparison charts
If you look, we accounted for $1.488B in W2 earnings in 2009 and probably $2.239B in total cost or just tack on 35% above W2 equals total pilot cost. We're approximately 32.7% of the total employee costs for Delta, or let's say 33%. There are no pilot only numbers for 2010 but 2010 was lower than 2009. So I'd assume since we didn't retire many people that costs increased not decreased from 09 to 10. Probably by a percentage proportional to our average hourly increase percentage between 09 and 10.
So just to see what would happen when we give ourselves a hefty immediate raise, I'm going to...
assume contract 2012 is 2011 signed on January 1, 2011 and pay becomes effective immediately. I'm going to give us a 4% raise from 2009 to 2010 and thus we cost $2.329B and $1.51B in W2 for 2010.
If I take out the other 67% employees and give them a standard 5% raise so their total cost is $4.678B in 2011 and ours with a 0% increase is $1.51B.
Thus and all of that to say, for every 5% we ask above 2010 numbers we increase costs by $116M and $75M in W2 wages. Take it to a 40% pay increase and that's a total $.932B increase in total cost and $.529B in W2 wages.
So that would amount to a 17.6% increase in total wages, salaries and benefits which if I then plug into the airlinefinancials interactive spreadsheet for 2011 projection I end up going from a $1.57B net income to $719M net income.
Now if all of the other employees get to piggyback and make a 40% increase in pay, they lose $793M.
So if Delta said, here's the deal, 2010 was great but 2011 and beyond are going to suck, double dip, extremely high oil prices, international unrest, blah blah blah, and whatever we give you we have to give everyone else or they'll unionize. So for the sake of the company, we're not going to allow 2011 to go below a $1B net income projection.
That means you guys get a 13% increase in total cost and we still have $1.030B in net income which we could lose anyways if the economy tanks. But what you could negotiate is "okay, 13% increase in first year of the new contract but it increases at a number disproportionate to what the rest of the employees get. Nobody is going to pay attention to year 2 anyways, so we say, hey pilots negotiated a pay raise and therefore everyone gets a pay raise but only for year 1 and then the pilots get another large increase in year 2 while the other employees return to the normal increase."
Where is Bar?
Alright, I'm going back to studying.
or I might just go to the bathroom.
