Carl Spackler

Exactamundo.

Carl

Carl Spackler

Sticky this everyone. That's what the hurry is here. That's why management has devoted so much time to this. It's gotta happen before July.

Carl

notEnuf

Background...

Delta Pilots Ratify Five-Year Contract, Boosting Carrier's Costs by $2.4 Billion - WSJ

All 5 years of C2K cost Delta 2.4B or 480m/yr

We just paid 500m to shareholders in 1 quarter.

We did this while...

Writing down hedges
Prepaying pension obligations
Paying down debt
Setting aside for profit sharing



And...



Wait for it...



Wait for it...



Having the best first quarter ever in the industry!
Like ever. I mean in history. EVER. E-V-E-R

But I'm just sayin...

4/8/3/3, we will get them next time for sure, time value of money, at risk compensation... (except its not at risk because its already accounted for and disclosed. Read... in the bank waiting)

boog123

But the downturn is coming, someday, might as well get started early

notEnuf

Maybe contract language that says:

You may opt out of profit sharing for 15/10/5/5 or retain profit sharing and you get a part of the larger pie left by those who opted out. Win/win. No need for discourse or complaining because of self determination.

Oops. Sorry! My bad, colored outside the lines...

I will try to confine my thinking to the inside of the box. Darn now I lost my street cred. I guess I will have to stick to the facts and reference my data when I post online!

forgot to bid

Call Profit Sharing a Bonus and Wall Street won't have a problem with us having it. Profit Sharing = profit reduction in their eyes, bonuses... now that's just the cost of doing business.




/Deep Thoughts

slowplay

For a guy hired in 2007 you've got a pretty good memory! Here's a little history of profit sharing at Delta.

We first got profit sharing in POS96. It paid on a ratio of income to revenue, and didn't pay until the company met a ratio of 2%. It was capped at 10% of pilot income (though it never made it that high). The plan paid 3.2% of pay for the 2 months of Delta's FY96 that remained, and 5% for FY97. That plan was modified (monetized) in 1998 to a flat 6% of income. Profit sharing wasn't included in C2K. C2K pay rates compounded upon that monetized profit sharing for 2000, 2001, 2002, 2003, and 2004. Only 2000 would have had profit sharing paid under the old plan, but the contractual pay raises continued until 5 months before the amendable date even though we had 1310 pilots on furlough, our pension plan headed towards termination, and our company headed towards bankruptcy.

Profit sharing returned as part of LOA 46 in November, 2004. It had 3 tiers, $0 up to $500M PTIX, 10% up to $1.5B PTIX, and 20% over $2.5B PTIX. It never paid.

As part of LOA-51 in April, 2006, profit sharing plan was improved. We got 15% first dollar up to $1.5B and 20% above that. That plan paid nothing in 2006, and 5.5% in 2007.

Profit sharing was modified again by the JCBA, with 15% of first dollar through $2.5 billion and 20% above $2.5B to reflect the increased scale and revenue base of the newly merged Delta-NWA. It paid $0 in 2008 and 2009, then 6.52% in 2010, 4.85% in 2011, and 6.67% in 2012.

We all know the changes that C2012 brought, where we monetized $43 million of profit sharing into pay rates (approx. 2% at that time) by reducing the percentage of the first $2.5B PTIX from 15% to 10%. The plan paid 8.26% in 2013 and 16.58% in 2014.

NWA also had profit sharing plans through the years with several changes in the varying CBAs. Their profit sharing plans paid as follows:

1998 - 0.2%
1999 - 0.5%
2000 - 0%
2001 - 0%
2002 - 0%
2003 - 0%
2004 - 0%
2005 - 0%
2006 - 1.85%
2007 - 3.77%

Saying that nobody believed that we'd hit the $2.5B PTIX number isn't correct. Saying that in April 2012 only the most optimistic projections had 2014 PTIX at $4.5B , or 2015-2017 above $5B would be correct, from my point of view. Whether it has been an ATC shutdown, middle east war, terrorism, fuel spikes, financial crisis or economic uncertainty, since deregulation something has always managed to bring the airlines down. Now that the industry is a little more rational, maybe things will be different.

RockyBoy

I may have been hired in 2007, but I've been familiar with what Delta pilots have went through for quite a few years before that. Not quite as familiar as your PS synopsis, but I know there were not many guys in 2004 that thought Delta was going to turn a 2.5 Billion in profit in one year. You were probably the only one.

slowplay

Don't get me wrong...I wasn't worried about the LOA-46 profit sharing plan_ever_paying. I was more worried about whether I'd have a job after bankruptcy. For the 2012 plan that was a different story. I was pretty confident of $3B PTIX, but we've blown through projections and had to revise upwards every year since then. I much prefer working on this side of the profit/loss curve.

TenYearsGone

I have sneaking suspicion. I hope I am wrong but Im thinking RA may be on his way out and wants to settle this before he leaves. If he is leaving, I hope it is not related to a health issue.

TEN