If you look at what we will get in 2017 for the year 2016 the profit sharing would end up about 4% less. The max would be 5.74% plus maybe a quarter of a percent if management gave themselves a large increase in stock. We are losing 2% or more by the shift in payroll over to the non con side. If it would have been 26% this year the drop would be to 22%. That's not much less lucritive in my book.

 

While the shift in payroll on the noncon side will reduce the PS pool from what it would've been without the payroll hike, once you get to the PS pool our % of that pool will be higher. My guess is there are specific profit levels where this works out in our favor and others where it does not. It is my gut feeling that a constant high level of profit works best for us since the noncons 20% trigger only comes into play for profit increase from year to year.

To use an extreme and unrealistic example, if we were to make 100B in profit for 2 years in a row, year 2 the noncons would see "only" 10% for the entire amount, while the pilots would see 10% for the first 2.5B and 20% for the next 97.5B. As I understand, that 95B in between now has significantly fewer people drawing from it, thus more money per pilot. Somewhere there is a crossover point where the noncon trade works in our favor, I have no idea where that number is.

Seeing as how my degree is EE and not finance, I am willing to accept I could be 100% FOS if somebody can explain my flaw in logic and explain in simple terms.

 

Yeah..our rejected TA had a god awful PS formula. 6 billion $$$ trigger..and mgmt could take money off the top before we could count the formula.

 

Care to show your math on that assertion? I think your "quite a bit more" part is a stretch.

As many have said before, pay rates are only a SMALL part of the equation. The sum of all the parts in the failed TA did not hold the value that DALPA and the company kept claiming with their deception.

 

Bingo

A TA in these times should sell itself....concessions and other give aways are unnecessary. I still can't fathom why DALPA, Donatelli and company tried to sell us on that failed TA. Pay is VERY important, but items like work rules and scope are hard to change/get back once you give them away. That Failed TA would have decimated a lot of bargaining leverage in future contract negotiations.

 

Mike- I'm pretty sure the union has put out a letter in the last couple months debunking this. The gist is- for a given profit, we pilots will get the same amount of profit sharing regardless of how it impacts the payout for non-cons. 10 billion profit this year and next year- non-cons would get some amount of it @ 20% this year, all at 10% next year. Our total payout to be divided amongst the pilots would be the exact same number- our formula calculates as if there was no change to the non-cons plan. The only way their reduction in profit sharing would potentially increase the pilots profit sharing would be if the company took the $ they didn't pay to the non-cons and used it in some way to increase profits in later years (pay down debt for less interest expense, buy more efficient jets for less mx & fuel expense, etc). Alternatively if they vaporize that $ into stock buybacks, it does absolutely nothing for us.

 

Our profit sharing will be calculated and paid as if the non cons were under the same program. I confirmed that with the union. It will be a phantom calculation for them to determine our checks.

 

UAL 757 rate-246
DAL 757 TA rate 260

UAL 767 rate 255
DAL TA rate 260

 

Did not see this before my reply. All that you posted is correct. RA reduced the profit sharing payout to us and the non cons with their new program. No one calls him stupid!

 

I'd correct that for you but the data is unavailable. I guarantee 2016 total pilot payroll expense will be bigger than it would have been under the TA. Go ahead ask me how, so I can explain it.

Or would you rather do it?