Thanks-- I appreciate the quick response!

Interesting times for sure. DAL is projecting more profit in 2015 than 2014. 2014 is 4B+. Our business model is based on $100/barrel oil going forward. $50/barrel changes things. More profit for DAL and as long as profit sharing remains the same, we get a big taste.

New entries to the market are going to be limited by pilots willing to fly with them. 50 seat RJs are not going to work because there will be no pilots to fly them in just a few years. More 88's? Possibly. A340's even make sense. 747's make sense. Everything changes.

I think it means the squeeze is on for marginal producers. That includes countries that aren't well managed, and it includes little guys here in the US.

As soon as that gets resolved, and enough of the little guys go bankrupt or get bought out by the big guys, as soon as enough fragile countries get into deep unrest, as soon as Russia can't take it anymore and finds a new way to put geopolitical risk on the table, it goes up.

Then we realize that capacity is still greater than demand, peak-oil is nonsense, and it comes back down.

Which suits the big traders fine, because volatility is how they squeeze money out of you and me.

So I guess for airlines, it means the benefits are meaningful, but not guaranteed over any significant length of time.

I hope it stays just expensive enough that people keep making energy-conscious decisions, and demand growth doesn't pick up.

If you've found a way to have the 88 make sense, please PM me. I could use the help.

If the numbers are correct on how much Delta saves when oil drops $1 then by 2016-17 we should be close to an 8-10B company. If that is the case our profit sharing would near 30-35% of our annual pay. :eek:

Who thinks it's a good idea to "monetize" profit sharing?

Excellent post.
There is no point in signing this agreement. It is useless.

In fact it may do more harm than good.
The "cure" provision is jaw dropping. It is absolutely astounding that anyone would negotiate a contract that specifically allows the other party to be in violation every other year and says right in the agreement that there will never be a penalty. Who would sign something like that?
I wonder if the bank would let me skip every other mortgage payment?

That language is ridiculous. Our negotiators should be embarrassed.

The worst part is the horrible precedent it sets for the upcoming AF/KLM non-compliance problem. I think ALPA just signaled what they plan to do about that issue. Nothing.

88's are like the Crown Vic of the airline world. Buy them for nothing from an old man, add a spot light on the drivers side window, drive them for a decade, scrap them out when your done with it, and the chicks are all over anyone driving a Crown Vic.

$50/barrel oil does change everything. Profit sharing at 30% of annual compensation would be pretty unprecedented and Wall Street would hate it. DAL will be obligated to negotiate for it to come down. It will be in our best interests to drag our feet in negotiations - maybe for years.

The pressure on the Company to get a deal would be immense. Monetizing profit sharing into a huge% raise might be enough to lower profit sharing. But with these developments, probably not.

Just to be clear: I am keeping an open mind on it, but I'm not seeing the full benefits yet, and I certainly don't see how the entire agreement is sufficient.

Your post brings up a good question: what about the AF/KLM/AZ JV? How does this work with that? I had expected that this agreement would be comprehensive, not a one-off, and set up the parameters for the existing and future JV's. That's what I initially thought they meant by "Global Production Balance".

There is another version of "Global Production Balance" I've heard about, which is that Delta can't buy 49% of VA, and grow VA beyond England, and pocket benefits, without us flying more. That is actually smart, although limited to this airline.

I think this second version is all we're getting: if VA expands, then we do about 2/3 of the extra joint flying. But first, we give them about 10 % of the growth, free. Is that about right?