Something like that is easy to (keep) say(ing) and one can point to real and/or rumored "big asks" as evidence and all that. Fine. But where is the proof that we'd have an agreement already...and more importantly what would it have been? Would they have agreed to anything basically instantly that didn't include some concessions? Would some of those concessions have been bear traps where we'd be saying "gee we didn't think they'd do THAT!"?

If we're going to play the straw man time machine game, we have to play both sides of the board.

Was the union's "big ask" too big and that prevented an agreement already? Maybe. That's not an unreasonable conclusion based on what we know. But its likewise pretty unreasomable to assume that whatever the company would have agreed to nearly instantly would be something we're better off with in total now. Was what we would have otherwise gotten better than status quo including any inevitable concessions and the downline effects of unintended consequences? What we needed the most then and what we need the most now are better scope and work rules. And we may end up with even more leverage now compared to then because of the potential training/hiring/recovery situation.

Not only will we never really know, but we're still in a pretty good position all things considered.

The "but the union extremists" argument has outlived any usefulness it may have once had and its time to move on. That dog no longer hunts.

 

Assuming we would do this responsibly with an annuity which belonged to the pilot, not subject to bankruptcy or a subsequent pilot group deciding to modify the agreement in future negotiations:

At today's rates, that is a transfer of $1.048.496 per pilot without your COLA. Guessing that not all pilots are going to age 65, we can expect in the vicinity of 550 retirements per year, or $577,500.000.00 so about $3 Billion dollars if the next contract takes us through a 5 year cycle.

To make that work, the lift would be somewhere in the vicinity of 20% of payroll. ..... but sure, if you can make the math work at 1/4 of 1%, I'm in. In fact, if you can do that you should have your own show and knock Jim Cramer off the air.

It would make sense for us to remember the reason Am. West, US Air, United, Delta and Northwest went into bankruptcy,, more than any other reason, was to scrub pensions off their books and toss them on the PBGC. Delta's CEO was the CFO for that. It can be guessed that he would be against a defined benefit plan, even if we were willing to forgo other forms of compensation to transfer large amounts of wealth to our most senior and highly paid pilots.

 

Yep ... that's correct.

Hence I don't see the majority of pilots finding value in a transfer of wealth towards the top.

FWIW - by the definition I am almost peak DZ'er, but I think a reasonable litmus to measure contractual asks is "what benefits the Delta pilots" holistically without targeting a specific demographic. The only exception is scope. Preventing furloughs and protecting progression is scope.

 

Sorry, I wasn't more clear. If you read the clip and take it in context, you will see that "the poison well" I was referring to was the division in the pilot group. To me, it is pretty apparent that just the thought of a conversation about any supplement (even a COLA) is "painful". The proposal that the union supported was so extreme it tore the fabric of any possible gains that the younger pilots will support(or even listen to)

As to the union ask? .... it was so big that that management pushed back from the table and "see you at at mediator table"....that was when we were making 6.5 Billion a year. Beats me what they would say now, or what you can get now. My gut tells me that it's not near what it would have been therefor waiting until profits return might be a good strategy. But that is up to the union.

 

Sorry you lost me. I really have no idea what you are saying(my bad). What I threw out was a 2% COLA(like SS gets or military or civil service) for pilots hired before around 2004 that have a PBGC or frozen DB. My PBGC is around 60k a year paid for by the insurance and the PBGC(taxpayer)....so no cost to Delta. The 2% or roughly $1,200 per year it what the incremental cost is for me. So, I'm not sure where you get 3Billion for the contract, maybe more like 10 million per year for the 10,000 pilots(or so) that this affects Whether that is retro back to date of freeze, who it affects etc is all up for discussion. No point in muddying the waters if there is no support for any type of plan.


The nut I am attempting to crack is the impact inflation has on the frozen plans. If the money was in your own name(as it is today) you could manage that inflation risk. If the DC would have always been 16%....again, you can manage the inflation risk. Alas, for the folks that don't/didn't have 30 years of 16% DC to save in their own name...some sort of COLA to help defray the inflation costs and preserve the buying power of the frozen plan

 

Its even more interesting in light of the alleged 6 month scope commitment narrative...

 

The cost of your idea is about $1.1 million PER retiree; $600,000,000.00 to cover the 550 or so who are anticipated to retire annually.

My First Officer thought the idea was a "ponzi scheme." He is a hard sell I guess.

 

I am for enhanced retirement benefits for the people who need it. Most of these guys voted to pay you when times were bad, don’t be so short sighted. No matter what the excuse is they were dealt a rough hand and if we can fix it we should try. If it does not work at least we tried. No matter what, the next contract is not going to be a home run, I will be shocked if we end up getting much better than inflation when you count the missed pay raises in 20, 21, and prob 22.

 

since 49.5% of the pilot group voted no, I’m not sure if “most” did or did not vote to avoid furloughs

and from JamesBond’s posts at the time, I’m sure he didn’t.

 

From the feedback I've heard from the DZ, they absolutely voted no because "furloughs are part of your business."