There's a reason management and Wall Street have been upset about the amount of PS we receive. It's "unprecedented" that labor gets this much.

I'd like to stick with the current precedence.

 

We were pressured to give up some profit sharing because "Wall Street hates how much we get", and we were warned that continuing the status quo would prevent us from being investment-grade...

http://www.barrons.com/articles/s-p-welcomes-delta-back-into-investment-grade-ranks-1504806183

 

Great post Ted. It's pretty easy to look around and see that now. Pay rates among the legacies are essentially the same. The only thing setting us apart is our higher profit sharing payouts. I also look at it as a little insurance while the company grows its business without using us.

 

I also don't mostly. There's no magic way to exceed peers by a significant amount, for an extended period of time. You could say that future pay raises would absorb the exchange, or you could say that future pay raises may not be as big because of profit sharing. Management really doesn't care what label is on the value they transfer to us. It's all eventually wrapped up in pilot costs.

Which leads us to a second dimension often overlooked. What about the down years without profit? Now the way I've described above is of significant more value.

If you subscribe to managements view that we'll be profitable forever, why worry about any of it? If you think we might still be subject to the rise and fall of normal business cycles, exchanging the first level of PS for pay turns out to be way better.

 

I get both sides of the "should we trade PS for pay" and I side with the "no" camp on that.

However I find it disturbing that PS is such an emotional issue that sometimes seems to supersede far superior sections like Scope. Its almost as if some say that if outsourcing increases profits then its OK because we have good PS. But PS is a function of income. As we lose flying (or don't gain flying, etc) then we lose the foundational money that PS is based on in the first place.

I agree we shouldn't trade PS for pay, for numerous reasons already mentioned. But the way some fawn over it has me concerned that at least some would entertain further scope sales in exchange for more PS. And yes at least some who wear polos instead of hats and ties to work every day have at least entertained the concept. That should absolutely be off the table. More scope should be the biggest priority with way off in the distance.

 

Public corporation?...shareholders hold an equity position. They are paid from profits in both dividend and share value growth.

No profit. They dont get paid.

Dont see much difference than the equity position we hold in roi directly from the profit line. In fact we get most of the upside of an equity position with none of downside.

Like a disappearing share value. Yes. We hold an equity position in the corporation so far as ps is concerned.

Now help me with the 11th and 12th commandments i guess i missed? Thou shalt never get an hourly rate increase without surrendering something else?

And thou shalt always recieve ever increasing pay rates?

Both are foundational to your calculation. And both were never handed down to us.

There is NO prohibition on retaning ps as is....in addition to negotiating a 10% hourly rate increase.

You are missing the importance of retaining the ps mechanisim in a pwa. Its not the specific dollar value in any given year. Or the transactional value in any given pwa amendment cycle.

Ps serves as an economic shock absorber for labor both going up, and down the economic business cycle. And we would do a huge disservice to our future pilots to entertain in any way diminishing yet again what we have.

Once upon a time pilots around here 'monetized' the hourly pay rate for yet unhired thousands of us.....all to satisfy their own mathematical calculation for compensation.

If its all right with you all...id rather not be a party to making that kind of mistake.

 

Your math works with several assumptions that may or may not happen. Giving up 3.B.4. being independent of PS was huge. PS diversifies our income, making a rate cut much less likely during a downturn. It also doesn't require any action to "snap back" as the company profits we earn on the profit. My opinion is that WB international flying will stay roughly the same and not significantly exceed the 650,000 GBHs we now set as a floor. (ceiling really)

The business will continue to grow through JV+equity "virtual mergers." Managements entire job is to grow the business as profitably as possible. PS keeps us aligned with that goal. I also think with the addition of the MEC livery option of 1.E.9. the method of growth will be a single brand strategy eventually. If we franchise out China we will have the soon to be largest market in the world. That is the prize at the end of all this. I prefer to keep as much of the corporate profits as possible and negotiate rates along with the rest of the industry.

 

Not an unreasonable general opinion. I fixed the one sentence for you.

 

Agree with your change but to monetize it permanently reduces the benefit which is a substantial and unique form of compensation that ties us to ALL the company growth. Did you see we have a new credit card out now? The Amex deal brings a lot of revenue to Delta. That "automatic salary cut" benefits the cost structure and hastens a recovery. Quicker return to profitability means quicker return to profit sharing.

https://www.delta.com/content/www/en...dit-cards.html

 

Dharma, a couple of questions for you. Considering hourly pay rates only, do you think over the next few contract cycles there will be a significant hourly pay rate difference among the major carriers? Now let's add PS to the mix. Do you think our hourly pay rates over the next few contract cycles will be less than other major carriers?

My answer to the first one is NO, I don't see there being a significant difference in negotiated rates. To the second, again, my answer is NO.

I understand what you are saying with the initial bump but I believe over a couple of contract cycles (that could very well include delaying tactics by management) we would lose any advantage that might be gained from a conversion of the 10%. I think management is looking long term with this and sees an advantage they could exploit if we convert.

If we want to convert that 10% to something other than hourly pay rates..........such as a retirement annuity/medical..........I might think about it. For straight hourly pay rates that can be massaged over time.......No.

Denny