Tax reform and negotiations
 

I'm sure we have some smart peers out there that could ballpark some numbers regarding Indigo's windfall with respect to the new corporate tax rate.

I'm not that guy but it'd be interesting during this lull to address it. I'm not savvy with financials but my guess is somewhere around $23 million/year savings for Indigo going from a 35% to 21% rate.

That's another nudge towards resolving this contract. If we were close enough to resolution before this tax cut to continue negotiations without release then we should be wrapping this up or walking soon.

I think they will save more like 33 million a year in taxes.

Profit of around 300 million a year

Based on their conduct in negotiations over the past two years, I believe there is zero correlation between Frontier’s profit and what Indigo believes our pilots should be paid. They started negotiations by asking our pilot group for concessions, not off our new contract proposal, but from our current 2007 bankruptcy contract. The answer will always be for them to pay as little as possible for as long as possible; there is no other strategy in play or it would have shown itself by now.

So it doesn’t matter how much money the tax reform is letting them keep, call it 33 million or 3.3 billion, their strategy will remain the same.

6 months minimum before we see anything unfortunately.

Will they benefit from the tax law changes if they are able to offset their gains with the debt incurred from the A/C order?

All the aircraft are leased, they assume no debt. Frontier will benefit greatly from the new tax policy

Spirit spent several years in contract negotiations. If this is correct, you guys have been in negotiations for only 2 years. How close are you really in getting a TA?

I vaguely remember Spirit starting negotiations approximately 6 months prior to Frontier. Anyone that can tell you how close we are to finishing is a liar.

Spirit opened about 3 years ago. Amendable date was Aug 1, 2015.

Not that it will directly correlate to our negotiations but Spirit entered into mediation roughly around the same time as Frontier. So if you’re comparing apples to apples, it would be based upon when we entered mediation, not when we began with our early openers.