Quote:
Originally Posted by slowplay
YGTBSM.
You understand that there are very limited protections in our current PWA and that the change to 1.E. in the rejected TA was an improvement, right?
Yesterday a major airline analyst wrote about Delta changing tax strategy for international operations. Here's what Hunter Keay of Wolfe Research said:
DAL has made public comments about a desire to lower tax payments in the context of discussing its international operations, initially at its Dec-14 analyst day. We’ve spent considerable time evaluating potential actions in this area and we expect DAL to announce specific tax initiatives at its analyst day next month. We view this as a catalyst for the stock.
Many options. DAL may establish one or more international subsidiaries to shelter some profits from U.S. taxes while keeping its AOC as long as the parent company remains U.S.-based, regulators were convinced that citizenship and control requirements were met through clear operating agreements, and aircraft were housed in the U.S., enabling FAA oversight. This feels like the most likely outcome but we also evaluate more exotic options for DAL like a full blown tax inversion (a reincorporation outside the U.S.) or earnings stripping (e.g., establishing an Irish leasing subsidiary).
Karma police. DAL has strong opinions on many regulatory topics like Ex-Im and Gulf Airline subsidies, to name two. With Ex-Im now likely being renewed and unclear progress on the Gulf airline subsidy issue it seems DAL has increasingly less to lose from the Hill in the event of a bold tax saving move, which may be met with displeasure from regulators. But if regulators are going to tax airlines heavily (both overtly and covertly) and then pile it on further by investigating them for price fixing when prices are clearly falling, well… this is what they’ll get, to paraphrase Radiohead.
We know of no specific plans by DAL. But we do know that DAL has an NOL tax shield that should burn off soon, DAL has specifically mentioned Amsterdam as a “good place” in the context of discussing lowering its effective tax rate, and we know DAL is unafraid of taking bold, calculated and unprecedented risks. Especially lately.
I know, you "didn't think they'd do that". Sheesh.
INSY slow play. The current PWA, section 1 covers permitted types of flying by non-Delta pilots. In it the aircraft are limited to RJ size aircraft. That language has prevented management from doing what TA15 would have allowed with the MEC chairman approval.
Do you remember when a few RJ's were spotted at JFK, I believe, where the word "connection" was painted with such a light gray paint, we called management on it because our contract says the word "connection" has to be visible with the word Delta. We won that too, and the carrier was required to use a darker paint and fix the issue.
You may think the current language is weak, some of you even said during the vote that we had no protection currently, but so far it has held up and prevented them from outsourcing mainline size aircraft flying. And I hope if you are currently working in ALPA, that you know our contract well enough to know better. Which means you and your Dalpa PTP guys are flat out lying to us. Either that or you are very ignorant when it comes to our contract. Either way, you have absolutely no business discussing matters related to our contract with us.
05-25-2017
