DAL whines about sick & loses $2 BILLION...
12-10-2015, 09:38 AM
#11
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Joined APC: Feb 2008
Posts: 2,324
Originally Posted by Merle Dixon
Management talks about sick leave use and "abuse" while losing $1.95 billion in oil hedges.
Delta's 2015 oil hedge loses:
"Getting it wrong has been costly. Hedging losses over the past three quarters totaled $1.95 billion for Delta, the world’s third-largest airline."
U.S. Airlines Are Betting Oil Prices Won't Rally Any Time Soon - Bloomberg Business
Delta's 2015 oil hedge loses:
"Getting it wrong has been costly. Hedging losses over the past three quarters totaled $1.95 billion for Delta, the world’s third-largest airline."
U.S. Airlines Are Betting Oil Prices Won't Rally Any Time Soon - Bloomberg Business
12-10-2015, 11:48 AM
#12
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Joined APC: May 2015
Posts: 181
Warning ****Cocktail napkin math in public:
If the 1.95 Billion loss is represented by a One Dollar bill, the 48 Million sick leave abuse amount would be about two and a half cents.
Maybe Gold Finger can double check my rocket surgeon math; the numbers are too large for my Iphone calculator to run.
If the 1.95 Billion loss is represented by a One Dollar bill, the 48 Million sick leave abuse amount would be about two and a half cents.
Maybe Gold Finger can double check my rocket surgeon math; the numbers are too large for my Iphone calculator to run.
Last edited by Army80; 12-10-2015 at 12:17 PM.
12-10-2015, 12:09 PM
#13
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Joined APC: Jul 2007
Position: Left seat of a little plane
Posts: 2,399
Originally Posted by badflaps
There are positive sides to no pension, for instance, living in a three story walk up apartment is great cardio and a SNAP card reduces your sugar intake.....
Money in my own name please, now and in the future.
12-10-2015, 07:45 PM
#14
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Joined APC: Jun 2015
Posts: 4,116
Herk....im not a pension redux advocate. Its a question of recognizing the phantom value of what is now.
Don't want delta to backstop the pbgc benefit its ok with me.... but there better be some serious cash in hand increases instead.
Don't want delta to backstop the pbgc benefit its ok with me.... but there better be some serious cash in hand increases instead.
12-11-2015, 11:15 AM
#15
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Joined APC: Jun 2015
Position: 320/A
Posts: 879
I'm not clear on the $48 million figure. Is that the amount said to attributable to "abuse," or is that actual value of all sick leave used?
Either way, ALPA needs to quantify some numbers and spin them 180 degrees. As in, what is the value of unused sick leave that we hand over to Delta each year? By my math the total sick leave liability (or call it a benefit, your choice) is worth something north of a half billion dollars per year. Here's how I got there with some vague generalities and ballpark assumptions. Let's just say the upper half of the seniority list is alotted 270 hours and the lower half gets 240. For ease I need to pick a median hourly rate. So I chose $190 as it is roughly the transition point from big airplane F/O to little airplane captain. If my methodology dug deeper into assigning captain rates exactly where they belong, I'd guess the final sum would be bigger. This is a conservative estimate: 6000 x 240 = 1.44M hours; 6000 x 270 = 1.62M hours, added together 3.06M hours. Multiplied by $190 = $581,400,000 in sick leave value. That's probably off by a significant factor, but I'm thinking more, not less. So let's say $500M for conservative argument's sake. Subtract $48 million. Let's just call that a drop in the bucket.
I think Delta pilots are a wonderful "deal," conserving nearly half a billion dollars in sick leave costs each year. What's the problem?
Either way, ALPA needs to quantify some numbers and spin them 180 degrees. As in, what is the value of unused sick leave that we hand over to Delta each year? By my math the total sick leave liability (or call it a benefit, your choice) is worth something north of a half billion dollars per year. Here's how I got there with some vague generalities and ballpark assumptions. Let's just say the upper half of the seniority list is alotted 270 hours and the lower half gets 240. For ease I need to pick a median hourly rate. So I chose $190 as it is roughly the transition point from big airplane F/O to little airplane captain. If my methodology dug deeper into assigning captain rates exactly where they belong, I'd guess the final sum would be bigger. This is a conservative estimate: 6000 x 240 = 1.44M hours; 6000 x 270 = 1.62M hours, added together 3.06M hours. Multiplied by $190 = $581,400,000 in sick leave value. That's probably off by a significant factor, but I'm thinking more, not less. So let's say $500M for conservative argument's sake. Subtract $48 million. Let's just call that a drop in the bucket.
I think Delta pilots are a wonderful "deal," conserving nearly half a billion dollars in sick leave costs each year. What's the problem?
Last edited by zippinbye; 12-11-2015 at 11:21 AM. Reason: Sp
12-11-2015, 11:20 AM
#16
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Joined APC: Mar 2015
Position: stake holder ir.delta.com
Posts: 10,051
Here's why oil hedging is a gamble and not insurance. Today oil hit 35.65 WTI and 37.97 Brent. In order for a hedge position to be positive you would have had to call oil at 35 back in June or December of last year.
Had you been allowed to make that bet as a corporate commodities manager, you would have been way out on a limb. Your job would have probably been dependent on that position.
As a corporate commodities portfolio manager, you are now looking at 35 dollar oil knowing you have to make a call on upside but what is your call number? Oil has decayed all year, pundants have said 50 would hold then 45, then... now 35.
What is your only real safe play? A moderate laddered hedge higher to protect the energy bill. Which will most certainly lose money even if oil bottoms and stays stagnant. If you don't hedge for a higher price you will lose your job if oil rises and you are unprotected.
The moderate the impact play is always a loser but an argument can be made for protection. Great intentions that are guaranteed to lose some money but hopefully not a lot of money. Open market oil leaves you exposed but if the competition is also exposed, you have matched their cost.
If you bet on the continual fall in oil, how low? And when will it reverse?
Sound like gambling yet?
Come on........... Seven!
CRAPS!
Had you been allowed to make that bet as a corporate commodities manager, you would have been way out on a limb. Your job would have probably been dependent on that position.
As a corporate commodities portfolio manager, you are now looking at 35 dollar oil knowing you have to make a call on upside but what is your call number? Oil has decayed all year, pundants have said 50 would hold then 45, then... now 35.
What is your only real safe play? A moderate laddered hedge higher to protect the energy bill. Which will most certainly lose money even if oil bottoms and stays stagnant. If you don't hedge for a higher price you will lose your job if oil rises and you are unprotected.
The moderate the impact play is always a loser but an argument can be made for protection. Great intentions that are guaranteed to lose some money but hopefully not a lot of money. Open market oil leaves you exposed but if the competition is also exposed, you have matched their cost.
If you bet on the continual fall in oil, how low? And when will it reverse?
Sound like gambling yet?
Come on........... Seven!
CRAPS!
12-12-2015, 06:51 AM
#17
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Joined APC: Dec 2009
Position: Narrow/Left Wide/Right
Posts: 3,655
Originally Posted by ATL7ER
Agreed.
But the fuel hedging losses pale in comparison to the stock buybacks. $7 BILLION over 3 1/2 years. And those are completely voluntary by the company.
The fuel hedge losses suck and show incompetence by the people in charge of them, but at least I'm pretty sure that they didn't TRY to lose money on them.
The stock buyback, at near 52 week highs, is totally discretionary. Same with the decision to hike the stock dividend by 50% (not included in the $7B figure above).
It would be like you or I deciding to cash out our 401k and use the $$ to buy X number of high end Porsche's or Mercedes, but then complaining loudly that our home utilities went up $100/year and it's hurting our bottom line.
KMA Delta.
But the fuel hedging losses pale in comparison to the stock buybacks. $7 BILLION over 3 1/2 years. And those are completely voluntary by the company.
The fuel hedge losses suck and show incompetence by the people in charge of them, but at least I'm pretty sure that they didn't TRY to lose money on them.
The stock buyback, at near 52 week highs, is totally discretionary. Same with the decision to hike the stock dividend by 50% (not included in the $7B figure above).
It would be like you or I deciding to cash out our 401k and use the $$ to buy X number of high end Porsche's or Mercedes, but then complaining loudly that our home utilities went up $100/year and it's hurting our bottom line.
KMA Delta.
12-17-2015, 07:02 AM
#20
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Joined APC: Jun 2015
Posts: 4,116
Elaborate?
The pbgc is structurally insolvent. It is not a matter of 'if' they will be forced to cut/terminate benefit payments...... it is simply a matter of when.
Alpa behaves as if this reality doesn't even exist.
Anyone calculating the pbgc payments as a reliable component of their retirement security is being far more foolish than those who did so with the phoney baloney pension.
The pbgc is structurally insolvent. It is not a matter of 'if' they will be forced to cut/terminate benefit payments...... it is simply a matter of when.
Alpa behaves as if this reality doesn't even exist.
Anyone calculating the pbgc payments as a reliable component of their retirement security is being far more foolish than those who did so with the phoney baloney pension.
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