Any "Latest & Greatest" about Delta?
02-09-2015 | 07:17 AM
Gets Weekends Off
Joined: Apr 2005
Posts: 1,190
Likes: 0
From: 767ER capt
I support the PAC. I re-thought my views (which mirrored GG's) when EAL went down. I looked at all the political shenanigans and Frank L's affiliations and donations and realized we have to have a political voice. We can't and won't win every battle, but with no voice we stand zero chance especially vs deep pocket "Foreign Invaders." IMO our political system is grossly distorted to benefit the massively wealthy (individuals and nations) which doesn't include us. As organized labor the right does view us as communist. They don't generally like us. We have to protect ourselves. The Brothers K aren't spending all that money to promote anything except their personal interests. The ME carriers aren't trying to do the world a service with aviation any more than they did with $147 oil. I have only a few years left: career nearly over. The young folks especially need to choose the lesser of two weevils and defend themselves thru the PAC and emails, calls, and letters to their governmental reps. JMO OFG
Any pilot who has more than a few years left here would be foolish to not contribute. To do otherwise is short sighted and ultimately self destructive. We're all disgusted with the way Washington operates, but despite that, our voice needs to be heard, too.
02-09-2015 | 07:27 AM
Line Holder
Joined: Jul 2008
Posts: 1,325
Likes: 9
From: 3fidy
Quit being such a drama queen. You need to compartmentalize this. DC sucks, but like it or not money talks. Donate to as many far left/right PACs as you choose, for whatever causes you are passionate about. Guns, gay marriage, immigration, abortion, etc. This is not about getting someone elected. If every pilot in the country joined the PAC it still wouldn't influence 99.99999% of who gets elected. We are small fry's. What it does do, is gets the ear of who is there and hopefully convinces them to vote the way that's best for OUR profession. The PAC is buying their votes only on pro-pilot legislation. Our guys are not up there using our money to influence votes on the other issues.
02-09-2015 | 07:46 AM
Gets Weekends Off
Joined: Mar 2008
Posts: 2,919
Likes: 0
They do indeed. Is your point that its good because they have it?
A couple of points
1. Its in the corporate by laws not their contract. They get it whether they like it or not. Current management holds it over their heads. To paraphrase one of my several "A" friends there: We demand a pay raise, management counters by implying profit sharing makes up for less in pay rates.
2. Its capped to IRS limits. I'll never make enough for this to matter but for many of them 9.8% (this year) puts a number of their A's into the cap and they get cutoff.
We're all about to get a very big check. The question we should be asking ourselves is why is it in managements interest to pay us a Valentines Day bonus and not a bi-monthly check??
A couple of points
1. Its in the corporate by laws not their contract. They get it whether they like it or not. Current management holds it over their heads. To paraphrase one of my several "A" friends there: We demand a pay raise, management counters by implying profit sharing makes up for less in pay rates.
2. Its capped to IRS limits. I'll never make enough for this to matter but for many of them 9.8% (this year) puts a number of their A's into the cap and they get cutoff.
We're all about to get a very big check. The question we should be asking ourselves is why is it in managements interest to pay us a Valentines Day bonus and not a bi-monthly check??
I realize this is an extreme scenario, but clearly you believe we should have profit sharing taken into account directly through compensation which would eliminate downturn risk. It's certainly a valid point, but it is extremely important to quantify that amount so we can say definitely that we conceded profit sharing (based on $XX billion profit) for a XX% compensation increase.
02-09-2015 | 08:14 AM
Gets Weekends Off
Joined: Aug 2006
Posts: 1,465
Likes: 0
From: A330 First Officer
They do indeed. Is your point that its good because they have it?
A couple of points
1. Its in the corporate by laws not their contract. They get it whether they like it or not. Current management holds it over their heads. To paraphrase one of my several "A" friends there: We demand a pay raise, management counters by implying profit sharing makes up for less in pay rates.
2. Its capped to IRS limits. I'll never make enough for this to matter but for many of them 9.8% (this year) puts a number of their A's into the cap and they get cutoff.
We're all about to get a very big check. The question we should be asking ourselves is why is it in managements interest to pay us a Valentines Day bonus and not a bi-monthly check??
A couple of points
1. Its in the corporate by laws not their contract. They get it whether they like it or not. Current management holds it over their heads. To paraphrase one of my several "A" friends there: We demand a pay raise, management counters by implying profit sharing makes up for less in pay rates.
2. Its capped to IRS limits. I'll never make enough for this to matter but for many of them 9.8% (this year) puts a number of their A's into the cap and they get cutoff.
We're all about to get a very big check. The question we should be asking ourselves is why is it in managements interest to pay us a Valentines Day bonus and not a bi-monthly check??
My opinion only, but I would like a contract negotiated in the current company economic environment that doesn't require me to give up something I've already paid for in order to get pay rates that are commensurate with what the company is currently making and repaying us for a portion of what we have given.
If after section 6 negotiations the company wants to come back to us and pay us a certain percentage above the then current contract then let the union vote on it and if it passes then we get more on top.
I don't like it hidden as "If we didn't give it up then our pay raises would have been smaller".
02-09-2015 | 08:14 AM
Works Every Weekend
Joined: Dec 2007
Posts: 3,506
Likes: 0
From: 737 ATL
Its astounding to me that in this environment of enormous profits, management and DALPA have been able to steer the terms of debate toward a mindset where we are talking about what concessions we might have to give.
We don't owe this corporation one nickel. They owe us. We bailed them out.
Let's not forget, a significant portion of the current "profits" are what used to be our pension.
We've already funded our own contract. The "very big check" is pennies on the dollar.
02-09-2015 | 08:36 AM
Gets Weekends Off
Joined: Mar 2008
Posts: 2,919
Likes: 0
The question we should be asking ourselves is why we are even asking the question.
Its astounding to me that in this environment of enormous profits, management and DALPA have been able to steer the terms of debate toward a mindset where we are talking about what concessions we might have to give.
We don't owe this corporation one nickel. They owe us. We bailed them out.
Let's not forget, a significant portion of the current "profits" are what used to be our pension.
We've already funded our own contract. The "very big check" is pennies on the dollar.
Its astounding to me that in this environment of enormous profits, management and DALPA have been able to steer the terms of debate toward a mindset where we are talking about what concessions we might have to give.
We don't owe this corporation one nickel. They owe us. We bailed them out.
Let's not forget, a significant portion of the current "profits" are what used to be our pension.
We've already funded our own contract. The "very big check" is pennies on the dollar.
Furthermore, anyone else feel as though dragging out this contract negotiation for a few years probably wouldn't be the worst thing in the world. The company is forced to payout 20% on the dollar for profits above $2 billion annually until a new TA is ratified. The whole time value of money suddenly works in our favor for once, so why rush I say? No need to sacrifice quality for expediency.
02-09-2015 | 08:41 AM
Runs with scissors
Joined: Dec 2009
Posts: 7,847
Likes: 0
From: Going to hell in a bucket, but enjoying the ride .
The question we should be asking ourselves is why we are even asking the question.
Its astounding to me that in this environment of enormous profits, management and DALPA have been able to steer the terms of debate toward a mindset where we are talking about what concessions we might have to give.
We don't owe this corporation one nickel. They owe us. We bailed them out.
Let's not forget, a significant portion of the current "profits" are what used to be our pension.
We've already funded our own contract. The "very big check" is pennies on the dollar.
Its astounding to me that in this environment of enormous profits, management and DALPA have been able to steer the terms of debate toward a mindset where we are talking about what concessions we might have to give.
We don't owe this corporation one nickel. They owe us. We bailed them out.
Let's not forget, a significant portion of the current "profits" are what used to be our pension.
We've already funded our own contract. The "very big check" is pennies on the dollar.
Also, if management were to give us say, a 25% raise, that would be an increase to the COST side of the equation.
However, a 25% Profit Sharing payout is NOT on the cost side of the equation, PS comes from PROFIT, which is determined after subtracting COSTS.
Richard has to answer (stupid) questions at those investor conferences we all listen to (or should) and one of the questions they always ask is, "What do you project your operational cost increases will be, going forward?"
Well, Profit Sharing is NOT part of a "cost increase" at all. It is a distribution of profits, after costs are subtracted from income.
It's just like paying out a dividend to the investors, only in this case WE were the investors, when we sacrificed 42% of our PAY (which it would take an 18% pay rate increase just to recover today) and our DB funding going forward.
Remember, the DL South DB plan was over $4 Billion UNDERFUNDED when they flushed it down the toilet.
The first $4Billlion of any Delta Profit can be directly attributed to the company NOT funding our DB PLAN!
Then add in the over $1Billion per year just for the south guy's pay cuts! FOR 10 YEARS! That's another $10 BILLION they still OWE US!
02-09-2015 | 08:47 AM
Runs with scissors
Joined: Dec 2009
Posts: 7,847
Likes: 0
From: Going to hell in a bucket, but enjoying the ride .
Now, let's talk about "At Risk" pay, vs. a "Pay Raise".
I don't want to trade one for the other, because it is self correcting. If we get a big pay raise, that will come out of the profits, i.e. the overall profit will be lower, due to 'costs' going up.
So we in effect are already trading one for the other, why should we pay for a pay raise, twice??
When it comes to, "Do you want a pay raise or profit sharing?" my answer is, I want BOTH.
When Delta was going into bankruptcy, and again on the way out, they asked us to give BOTH, our DB plan AND TWO PAY CUTS. Not one or the other, BOTH.
As is being pointed out by our LEC guys, Profit Sharing is "At Risk", so you cannot count on that as a substitute for a pay raise, it's not. It's 'at risk' pay. We need to return our regular pay to at least 2004 levels, add in some inflation, and KEEP profit sharing untouched, since we never know how much it will be.
I don't want to trade one for the other, because it is self correcting. If we get a big pay raise, that will come out of the profits, i.e. the overall profit will be lower, due to 'costs' going up.
So we in effect are already trading one for the other, why should we pay for a pay raise, twice??
When it comes to, "Do you want a pay raise or profit sharing?" my answer is, I want BOTH.
When Delta was going into bankruptcy, and again on the way out, they asked us to give BOTH, our DB plan AND TWO PAY CUTS. Not one or the other, BOTH.
As is being pointed out by our LEC guys, Profit Sharing is "At Risk", so you cannot count on that as a substitute for a pay raise, it's not. It's 'at risk' pay. We need to return our regular pay to at least 2004 levels, add in some inflation, and KEEP profit sharing untouched, since we never know how much it will be.
Last edited by Timbo; 02-09-2015 at 09:04 AM. Reason: spiritual clarity
02-09-2015 | 09:04 AM
veut gagner à la loterie
Joined: Apr 2008
Posts: 23,286
Likes: 0
From: Light Chop
Good article in AvWeek about fuel and fleet plans. Anderson is quoted as saying we have not altered our fleet plan for the lower cost of fuel. The article also refutes some of the wildely inaccurate estimates on fuel costs and yearly savings for Delta posted here. Our cost per gallon is going to come in at 2.45 to 2.50 a gallon in the first quarter. It was 2.62 4q last year.
You don't have to read avweek, the military's R/C airplane magazine, this was in the January 20th call on 4Q2014 that we all listened to back on January 20. Here were the fuel highlights that I don't believe are in dispute:
- $2.45-$2.50 for 1Q 2015
- $2.25-$2.35 for entire 2015
- $2.82 is the price Delta budgets everything on.
Paul Jacobson:
Moving onto fuel, fuel expense declined by $342 million for the quarter, driven by the sharp decline in market fuel prices. Our all in fuel price was $2.62 per gallon which was $0.43 lower year-over-year. Our results this quarter included $180 million in settled hedged losses which were offset by $105 million profit at the refinery. At December 31st we had $925 million in hedge margin posted with counterparties which we suspect will be substantially reduced by June 30 based on current prices. Based on current prices, we are projecting an all in fuel price of $2.45 to $2.50 per gallon for the March quarter.
For the full year we are forecasting an all-in price of $2.25 to $2.35 per gallon which is approximately $0.50 to $0.60 lower than 2014. These lower prices should produce over $2 billion in lower fuel expense including hedges. For 2016 we are well positioned for full downside participation should fuel remain at these levels.
As I mentioned, the refinery made $105 million profit for the December quarter which represents $151 million improvement versus last year.
Moving onto fuel, fuel expense declined by $342 million for the quarter, driven by the sharp decline in market fuel prices. Our all in fuel price was $2.62 per gallon which was $0.43 lower year-over-year. Our results this quarter included $180 million in settled hedged losses which were offset by $105 million profit at the refinery. At December 31st we had $925 million in hedge margin posted with counterparties which we suspect will be substantially reduced by June 30 based on current prices. Based on current prices, we are projecting an all in fuel price of $2.45 to $2.50 per gallon for the March quarter.
For the full year we are forecasting an all-in price of $2.25 to $2.35 per gallon which is approximately $0.50 to $0.60 lower than 2014. These lower prices should produce over $2 billion in lower fuel expense including hedges. For 2016 we are well positioned for full downside participation should fuel remain at these levels.
As I mentioned, the refinery made $105 million profit for the December quarter which represents $151 million improvement versus last year.
Richard H. Anderson - Chief Executive Officer
We actually use pretty high fuel prices in all of our planning and this was a shared experience with Ed and I, we’ve learned this over the years that planning with a low fuel price will only disappoint and planning with a high fuel price if you end up being wrong and the fuel price is lower, you’ll be pleased. But it’s really important when you’re planning an airline over the long term, or making a 30 year MPV decision on buying an airplane to use a very high fuel price otherwise you’re not going to get an ROIC and a free cash flow number that you’re going to like.
Paul, our fuel price for our assumption for our budget was $2…?
Paul A. Jacobson - EVP and Chief Financial Officer
$2.82.
Richard H. Anderson - Chief Executive Officer
$2.82 even though we knew it was going to be lower. But that way you plan the capacity on a much more muted basis and you make sure that you put the strategies in place to hold yield and RASM.
We actually use pretty high fuel prices in all of our planning and this was a shared experience with Ed and I, we’ve learned this over the years that planning with a low fuel price will only disappoint and planning with a high fuel price if you end up being wrong and the fuel price is lower, you’ll be pleased. But it’s really important when you’re planning an airline over the long term, or making a 30 year MPV decision on buying an airplane to use a very high fuel price otherwise you’re not going to get an ROIC and a free cash flow number that you’re going to like.
Paul, our fuel price for our assumption for our budget was $2…?
Paul A. Jacobson - EVP and Chief Financial Officer
$2.82.
Richard H. Anderson - Chief Executive Officer
$2.82 even though we knew it was going to be lower. But that way you plan the capacity on a much more muted basis and you make sure that you put the strategies in place to hold yield and RASM.
From either RA, GH or PJ:
- upgaging the domestic fleet
- our fleet can run at this level of CapEx very easily for a very long period of time on our fleet so we don’t see some big fleet order coming.
- We think there’s going to be an opportunity for a bunch of used airplanes for us at some point here giving all the NEO deliveries in the narrow body world.
- We just placed our wide body order, we’re fine on wide bodies so the fleets in good shape and the run rate cap ex that you saw this year, the $2.1, that vicinity is a good run rate because we’ve got to keep our ROIC above that 18% so it’s going to reduce debt and higher shareholder cash returns.
- We haven’t changed our fleet plan by one airplane since fuel has come down. So, could you? Yes. Have we? No.
- So, there’s just a natural tendency that it’s going to flow against net debt because we’re pretty disciplined about not wanting to take up our aircraft cap ex and we already have the 50 wide bodies ordered and we’ve got 717, 737, A321s coming and on the margin they’ll be a few more airplanes as we hit 30 years of age on some of our domestic fleet where we’re going to have to make some purchases but I don’t see the cap ex commitment changing from where we’ve been.
- The total shell count (aeroplanes) for 2015 will be down about 10 year-on-year.
- We did retire all the airplanes that we had contemplated. The activation of the 747 was a swap so it was not a net new airplane to the system and we saw the opportunity, which is a great opportunity with our partners at China Eastern, starting in April we will be able to be co-terminus with them.
Last edited by forgot to bid; 02-09-2015 at 09:48 AM.
02-09-2015 | 10:10 AM
Banned
Joined: Jan 2013
Posts: 65
Likes: 0
From: NYC A320 FO
If, hypothetically, we were to be approached by a TA (similar to AMR) that removed profit sharing altogether, what kind of pay percentage increase would you consider to be sufficient?
I realize this is an extreme scenario, but clearly you believe we should have profit sharing taken into account directly through compensation which would eliminate downturn risk. It's certainly a valid point, but it is extremely important to quantify that amount so we can say definitely that we conceded profit sharing (based on $XX billion profit) for a XX% compensation increase.
I realize this is an extreme scenario, but clearly you believe we should have profit sharing taken into account directly through compensation which would eliminate downturn risk. It's certainly a valid point, but it is extremely important to quantify that amount so we can say definitely that we conceded profit sharing (based on $XX billion profit) for a XX% compensation increase.
A value can be assigned to almost anything. Further everything has intrinsic (tangible) and implied (foreseeable) value. In my opinion in the next 2-4 weeks both of those values with respect to profit sharing will never be exceeded. With the value of profit sharing so high I would not even consider negotiating it away for ONLY pay rates. But I believe there will never be another time to hand it back to management with a polite "No Thank You" and add more value to our contract overall.
We could negotiate a contract where we add to already improved contract provisions in Scope, Vacation, Sick, 401K match and Pay Rates without returning Profit Sharing to management.
Or,
We can negotiate a contract where we add even MORE to already improved contract provisions in Scope, Vacation, Sick, 401K match and Pay Rates returning Profit Sharing to management.
Which scenario do you embrace?
Thread
Thread Starter
Forum
Replies
Last Post
