mispoken

As a new guy, I'm wondering why there isn't a move to roll profit sharing into an hourly wage? It seems like a good way to guarantee and lock in the additional income that profit sharing has been paying over the last few years. It seems like right now a lot of the profit (I think I read 70%) of the profits the company has seen has been due to low fuel prices. So, hanging on to profit sharing as it stands (while good now) will probably see a decent decline in the future. Or maybe it won't, maybe fuel will stay low. I guess that's the bet we are taking right now. Additionally, with the capital expenditures on the horizon (billions in LAX and C-Series orders), that seems it could cut into the profit sharing, no? Unknown to me is if the agreement excludes such capital expenditures when figuring profit sharing pay outs. Is this method prohibitive due to the seemingly large initial pay increase it would require (30+%) in order to roll them into hourly wages?

300SMK

Central banks all over the globe target inflation. PS increases with said inflation while dollars an hour is a declining amount year over year.

mispoken

But, what if our contract includes yearly wage increases that exceed inflation? And what about when profits go away and there is no PS?

notEnuf

Profit sharing compensates for the success of the entire company and all its subsidiary and JVs.

Hourly rates compensate for your time. While profit sharing compensates for investments already made.

Profit sharing has a shock absorber effect and automatically recovers when the company makes a profit.

Watch the leadership conference video on Deltanet. It explains the fundamental business changes that have positioned Delta for sustained profitability. The key is branding initiatives and diversification. These are only recoverable through profit sharing. You have less career potential than UAL and AAL but the good news is you don't have to work to reap the rewards of the international virtual merger strategy.

BobZ

But........ what if we do as you propose.... and then the much ballyhooed black swan alights our ship...... and we then take 40% hourly pay reductions to save our ship from sinking?

And then profitability returns......?

What then? What do you propose we 'convert' at that juncture to recover our hourly pay rates?

Your question accepts the premise Ps and hourly rates are either-or. I reject that premise.

300SMK

DAL revenue growth going forward will be through partial ownership, JV and CS. Just look at how many airlines we have under that umbrella. As this plan unfolds the percentage paid to the DL pilots will significantly outpace inflation or yearly wage increases. Furthermore, during my time here yearly wage increases have always come at the expense of contract protections, QOL, etc.

Hank Kingsley

Most view that as a concession, funding pay raises. Next contract, we've already paid for the pay rates we're trying to increase. Now we have already given up PS. What did AMR, UAL give up to get industry leading pay rates? We have to give up PS to match UAL?

mispoken

Good points!

tunes

This exactly

Banzai

As succinct and accurate an explanation as one can provide. This is why eliminating PS needs to be a non-starter.