Delta Stock Buyback Round 2
 

Delta presented at Raymond James today.

The first round of stock buyback will be completed in June, 2 years early. Looks like they will announce a second buyback in June as well.

And.....

we got a 3% pay increase and a 33% reduction in profit sharing.

DALPA continues to refuse to mention the over $15 billion and counting we have made in life changing concessions.

Is it so much to ask for the Delta pilots to snap up to their 2004 pay rates prior to another stock repurchase?

Is it too much to ask for DALPA to stop playing dead?

"We are also committed to returning more cash to shareholders overtime, when we announced in May the initiation or depending on your perspective reestablishment of a dividend that hadn’t been paid in over a decade. We were committed to an annual return of cash with a $500 million buyback program spread over three years of about $350 million to $375 million a year. We have actually kind of doubled that pace.
So through the first six months of that program, we returned $350 million of cash to shareholders. And we announced at our Investor Day that we expect to complete that $500 million buyback program by our shareholders meeting this year, putting us on a trajectory of actually returning about $700 million of cash on a run rate basis to shareholders.
We do expect to announce our next repurchase authorization and an update to our dividend policy by the time of our annual meeting in June and we are actively having conversations with the board between now and then to determine what the right course of action to take, but stay tuned there is more on that to come."

Nothing new here. The BOD approved $500M in stock buy back some time ago. I seriously scratch my head over it because with 850 M shares outstanding and a $34 stock price, this does nothing to pump up the stock price... only about a 1% return. Paying down debt would produce a much better return, but I only went to a state school, so these high finance maneuvers are pretty much over my head. And I am pretty sure that $400 million could be leveraged to buy a few big airplanes with which to generate even more revenue. *sigh*

Of course none of this has anything to do with DALPA, but don't let that get in the way of a good rant.

So you think we should continue to work for chapter 11 pay rates while management chooses to buy back stock to enrich themselves? Does the stock bought back provide a conduit for management to reward themselves without issuing shares?

You have yours, I get it.

It has nothing to do with "having mine". And I am pretty sure we are doing a little better than Chapter 11 rates.

Don't bother with gzsg he is a DPA insider trying to sell his wares. Evidently he s not getting enough traction on the other boared where he posted the same thing.

Should have bought a couple thousand shares of stock a few years ago when it was $5.

Shouldn't have sold mine at $13 when Financial Engines said so.....

So I'm not the only dumbass:p Sold mine at 16.

I bought some back at $26 ;)

My financial advisors told me to get rid of it at 12. "too much risk."

Sure glad I didn't take that advice! That's been by far my best performing stock...

Every financial planner will tell you not to own stock in the company that writes your paycheck!

Yep. Just a little better. Chapter 11 was a 42% pay cut in buying power. We're currently at a 34% pay cut.

Doh! Those d@mn rates and math just don't lie, do they.

Nothing like a dose of reality and truth to set things straight. :D

And every financial planner will tell you their advice is no guarantee.

If 100% of them told you to sell at $12, then 100% gave bad advice.

Where does our "buying power" rank relative to the rest of our industry?

Barely ahead of most. And for the last several years our airline has been the most successful by a wide margin. Our pilot group has been in a position of leadership to lead this profession out of the abyss. What have we done? We've acted like the abyss is some kind of "new normal" and we've set a low bar. We've provided poor leadership and squandered our opportunity.

Thanks for asking the question! :D

Probably good advice, but 100% wrong in this case.

It would be interesting to know how many millions "Financial Engines" has cost Delta employees over the last couple years.

My point exactly. Do your own research and make investment decisions that you are comfortable with. After all, it's your money not theirs. Although they want a big chunk of yours.

What is your definition of industry? Seriously.

Well even sometimes "good advice" turns out to be wrong. Nobody can predict the future. All we can do is use probabilities to put the odds in our favor and include smart things like diversification in our financial planning.

I agree with you about Financial Engines though... I'm not impressed.

I think that is really good advice. Fees compound over time and end up significantly affecting your end result. Unless a financial advisor can get really stellar results over time for you (Bernie Madoff?), you can probably come out ahead doing it yourself and not paying fees. It does require that you take the time and effort to educate yourself about investing though. For example, a little over 9 years ago I took the time and effort to research this. I ended up investing some money to take a class to learn a specific investment method (Snider Method), which has performed beautifully for me ever since. If I had just tried to figure it out on my own by trial and error, I don't think I would have been anywhere near this successful in building my retirement accounts.

He lives on an island. He doesn't care about the rest of the industry. It is not relevant to his argument.

How did you know? These are my fellow island inhabitants: ;)

http://www.blackgate.com/wp-content/...99s-Island.jpg

(Oh, and in case you were wondering... I think Mary Ann is hotter than Ginger.)


No, not really.

See my previous post on the subject. It has relevance, but not in the way you think.

Hey, I get it, tsquare. You think we're just leaves blowing in the wind of the free market. I'm completely with you on the concept of the free market and capitalism, but not on the whole blowing in the wind thing. What you fail to understand is that the free market is full of people who see opportunity where others see nothing. That's what made this country great... people who were not content with saying something couldn't be done just because it hadn't been done before, or giving up just because they suffered a setback.

So since I know you are a free market, capitalism believer (which I am too), the only thing I can figure out about you is that you are far enough along in your career that you don't want to rock the boat at this point. Basically, you've disengaged from the free market and capitalism when it comes to our profession. You're willing to give up and just let the chips fall where they may so you don't have to take any risk. I just don't understand how you reconcile this with your fundamental beliefs. Thurston Howell III would be disappointed in you...

http://www.wearysloth.com/Gallery/Ac...650206-136.jpg

I think Ginger is hotter short term, but MaryAnn seemed like more of a keeper.

I thought Betty Rubble was hotter than Wilma too.

Capt Kirk could find hotness in green alien women.

Nope. I want more pay. I am willing to take risk, but only if that risk makes sense. Just saying no, "because we already gave and now it's time for payback", is not necessarily a viable strategy IMHO. It could be, but I could also not be. An interesting part of your argument is the part about being a part of free market capitalism. That we are. But YOU well know also that in order for there to be a market, someone has to buy and someone has to sell. Works with stocks (DAL pushing $35/share.... YEAH BABY, YEAH!) and it works with contract negotiations, hence my statement that everything is negotiable. However, there is no place in the free market for hostage taking. (And what is really interesting is that it is we that would be taking ourselves as hostage) If you can give me a good reason to say no, I will be on board. But I have to see an end strategy. Just saying no until the company capitulates is stupid, because it completely ignores TVM, and even you believe in that or else you wouldn't be working options on the first of the month. If that makes me risk averse, then so be it. And you gotta get rid of TC and the doughnuts. Sorry. That divisiveness has to go because it will never unite the bigger group. YMMV

Oh, Mary Ann, definitely, and I'd take Bailey over Jennifer in a heartbeat.

WKRP?

Denny

It's a position, not a strategy. Specific strategies have to be developed once the objective (position) is set. Clearly, we already gave and we already gave A LOT! Either we expect to be restored or we don't. Based on most of your statements here (and on just about everything DALPA has said and done in the past 8 years or so), you/DALPA do not expect to be restored.

And, BTW, I don't even expect to be fully "paid back." That would involve all the compensation I missed out on for the past 10 years while our pay has been drastically cut. I estimate that, with the pay cuts, loss of pension, and loss of advancement due to outsourcing... each of us has contributed an average of at least $1 million each already. Nobody (including me) is asking for that back. All I'm suggesting is that we should have our compensation restored going forward. I think, given the extremely generous contribution we've all already made, that is more than reasonable.

Leverage is used to advance in business all the time. It is a significant part of the free market. Happy, motivated employees are one of the most, if not THE most, important assets to any company. Delta cannot accurately judge whether they are compensating us appropriately if our representatives make it seem like we're fine with the way things are. And if they think we're good now, imagine how much better we'd be (and how much potential there would be for even greater bottom line results) if the vast majority of us felt that our compensation was reflective of our true value and that we were not being taken advantage of just because they can. Now that doesn't affect me, because that's my work ethic. But I can guarantee you that I've flown with plenty of pilots over the years that have most definitely been affected by this. Delta has no idea how much better our already excellent pilot group could be. And the reason they have no idea is because DALPA has shielded them from reality.

eeeeeeeeyup!

Sadly, Delta has allowed Financial Engines to spam us all. I initially were intrigued but soon realized what a mistake it would have been to use them. I am disturbed with the literature and sales job done by Fidelity and FE. I sold my Delta stock and bought Tesla among others. Certainly haven't regretted that choice.

Oh, and I used to be a series 7 stockbroker and financial journalist and have two basic advices:
1. Don't have stock in the company you work for (too emotionally attached. Think Enron.)
2. Don't buy airline stock - ever.

This^^^^

Of course I wish I still had my merger stock now that it's up in the 30's, but I sleep better knowing I'm not totally screwed if something happens to delta. I got out about the same point as Buzz and haven't looked back once.

Btw, Buzz, if you got out at 13ish and immediately reinvested it in the market you still are doing okay - and much more diversified wrt to your "airline career" exposure. It's not a matter of IF the airline stocks will take a bath again, but when.

Btw, Mary Ann no question. :D

You didn't keep it in context.

You claimed - "Just a little better. Chapter 11 was a 42% pay cut in buying power. We're currently at a 34% pay cut."

Does it matter where we fit relative to everyone else?

If we were 50% above 2004 pay rates, but 5-10% behind our peers…you'd be happy?

Edit. Warren Buffet's rules excepted.
1) Don't lose money.
2) see rule 1.

The rest is just fluff.

No, his number is taken in a vacuum. It always has been. But to be fair, he seemingly would be happy if dALPA went all in and came out and said we want restoration (whatever that is). But then I think he would move on to say that they aren't doing enough to make sure that happens. It is a never ending cycle.

But your question is an interesting one.

I didn't keep it in the context you wanted me to keep it in. You guys may have gotten used to controlling the message through your official DALPA communications and on the old DALPA Forum, but you can't do it here.

I really, honestly, do not care what anyone else makes. 50% above the 2004 MD-88 Captain rate would put me at $356/hour. Yes, I would be more than happy with that! It's more than I even expect. This isn't a competition. This is about getting appropriate compensation for the job we do, the responsibility we have, and for the sacrifices we've all made to get to this point in our careers. Whether you look at 2004 (C2K) rates or, for example, 1986 rates... they come out about the same in terms of buying power. There was a standard of living provided by this profession that was pretty well established for decades. That standard of living was decimated through the bankruptcy process. And DALPA has spent the past almost decade acting as if bankruptcy has established a "new normal." There's lots of blame to go around for why we took the cuts in the first place. But like many things in life, it's how you respond to adversity that really defines you. At this point, I believe most of the blame lies squarely at the feet of DALPA. They have responded very poorly.

A 34% pay cut is not appropriate today. I don't think it was even appropriate for bankruptcy (it was too much), but it's certainly not appropriate now with our company making billions in profits!

Not sure what you're trying to relate this to here. But Warren Buffet's rule is a good one and is a big part of the reason I invest the way I do.

Close, but not quite right. It's not taken in a vacuum. Quite the contrary, it's people like you who are thinking in a vacuum. You're thinking strictly in terms of comparisons with other pilot groups and using that to argue against restoration. That, my friend, is a self fulfilling prophecy if ever I saw one. And you're completely ignoring all the other arguments that support the case for restoration.

If DALPA came out and defined our objective as restoration and then legitimately went about trying to make that happen, you wouldn't be hearing much from me. If they'd done this in the first place, you probably wouldn't even have known who I am, DAL 88 Driver or otherwise. Believe it or not, I don't like debating. I'm perfectly happy to fly my trips, enjoy the personal satisfaction from doing a really good job and working with some really great people, and then go home and think about something else.

So with this and the post 2 above, you hereby waive all rights to ever mention SWA ever again.

It occurred to me while I was writing it that you might misunderstand. If we can use someone else's pay to help our case with restoration, then by all means we should use it. That's the only thing that's important about SWA pay. If we got full restoration and then they got a 100% pay increase, I really would not care in the least that we were making less than they are.

Ahhhhh OK, so when someone is making more, then it can be used. When they make less, you ignore it. Got it. No double standard there. No vacuum. And also, since you have pointed out many times, SWA never went thru BK, so their pay is not affected, and therefore is still at pre BK rates. The "restoration" argument that should be made in this case is relative to others that have been damaged, and that does NOT include SWA. Don't get me wrong, I think we should make more than they do, and if they ever sign a contract, I will wager that you will find we will. And when we sign our next contract, it will be by a significant amount. But it probably won't satisfy your C2K + metric.


Really?

I get that we should it to bolster our argument, but you cannot ignore those making less because you then open the door to that argument. Look at it the other way around. The company can say that we make more than 95% of the other carriers on an equivalent equipment basis. You then say, but not SWA. It just doesn't make sense as a negotiation tactic. And then you even want to go farther and say that since the M88 "does the same job as a SWA 737" that it should be considered in the same vein. I have a 12 leg trip later this month (failed bidding). Should that be considered similar because it is the exact same Florida shuttle that SWA does?

Oh, and when is the vote?

Your thinking is so one dimensional. I didn't say anything about SWA pay being our entire argument. It's just one thing that contributes to the case for restoration. Other carriers with pilots making less are also not nearly as profitable as Delta. Also, many of those carrier's pilots took extreme pay cuts in their company's bankruptcies and should be making more than what they're making now too. You are under the (false) impression that there is some rule in business that says employee costs have to be equal between companies. This is simply not true.

But go ahead and resign yourself to bankruptcy level compensation as a new normal. I'm not going to change your mind.