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-   -   Profit Sharing? (https://www.airlinepilotforums.com/united/141173-profit-sharing.html)

Wilfortina 01-30-2023 06:21 AM


Originally Posted by ThumbsUp (Post 3580504)
It's less about the 6.9 vs 2.5B. Delta is just more profitable and has consistently been over the last decade. If we wanted to be on parity you would have to address the 10/20% and make those numbers higher.

Did you read the post you’re responding to? He ran the numbers with the SAME PROFIT

Aztecsfight 01-30-2023 05:22 PM


Originally Posted by ThumbsUp (Post 3580504)
It's less about the 6.9 vs 2.5B. Delta is just more profitable and has consistently been over the last decade. If we wanted to be on parity you would have to address the 10/20% and make those numbers higher.

Quarter 4 2022 being first exception.

ThumbsUp 01-30-2023 05:32 PM


Originally Posted by Aztecsfight (Post 3582580)
Quarter 4 2022 being first exception.


Annual is all that matters for profit sharing. Delta has beat us pretty handily in every year for the last 10 years.

Sunvox 01-31-2023 04:39 AM


Originally Posted by horrido27 (Post 3580466)
This is not directed to only Sunvox or SalingFun.. but they seem pretty knowledgeable of our/their respective PS.

So, a couple of simple questions-

IF both companies reported 5Billion in Profit for FY23 (NOTHING to do with Delta's current TA, or our potential TA).
1) What would the PS be for their respective pilot groups? Ie.. how much in the pilot pot?
b) based on that amount, and the number of eligible pilots.. what would be the "expected" PS Percentage.

2) IF two pilots both made 200k in FY22. Based on what I (and others are reading-)
The UAL pilot would be getting 200ooo x .016787= $3357.40 as Profit sharing
The Delta pilot would be getting 200ooo x .05023= $10046.
However, (and correct me if I am wrong)- $10046 x 16% BFund = another $1607.36 for a total of $11653.36.

THAT is a significant difference.
If it all comes down to a few words, ie- Pretax PROFIT up to/over $2.5B vs. Pretax PROFIT up to/over 6.9% margin
A set amount vs a set percentage.

Back to another question-
Two pilots will be getting 1.6787% PS for their FY22 amount.
UAL pilot to get $3357.40
Delta pilot to get $3357.40 + $537.18 BFund = $3894.58

If the above is correct, we (UAL Pilot Group) can not say [With a Straight Face] that our two plans are essentially the same.

And there is nothing wrong with plans being different.. but lets just acknowledge it.
We can argue the value of PS and IF it should or shouldn't be in a UPA/PWA. It seems some pilot groups are going away from it while others are making it more solid.
Personally I like the idea of being rewarded in making our company profitable. Just always felt that a BFund contribution should also be included.
BTW- on our PS page it mentioned that the amount to be distributed to eligible employees is nearly $133million. I was alittle surprised by that low amount. Expected almost double that.

Motch

Motch please forgive me if I'm not reading your post correctly, but let me try to clarify a couple issues I think you are missing.

Number one: Assuming both companies had $5 billion in profit.

On the Delta side the calculation is straight forward with no further assumptions:

The first $2.5 billion gets added to the PS pool at a 10% rate so $2.5 * .1 = $250 million
Then the amount over $2.5 billion (which in this case is $2.5 billion) gets added at a 20% rate so $2.5 bil * .2 = $500 million

so Delta would get $500 mil + $250 mil = $750 mil in their PS pool.

Now for United we have to make a second assumption and that assumption is what revenue to use. How about this years revenue? That is $45 billion.

So first question is what's 6.9% of $45 bil? Answer $3.1 billion.

So now we can calculate the pool.

Step one is 10% of the amount calculated above goes into the pool:
$3.1 bil * .1 = $310 million
Step two is the remaining profit gets multiplied by 20% and that amount is added to the pool.
$5 bil - $3.1 bil = $1.9 bil then $1.9 bil * .2 = $380 million

so UAL pilots would get a pool equal to $310 million + $380 million = $690 million

Delta's pool $750 million; United's pool $690 million

Keep in mind that UAL has fewer pilots so some of that difference would be mitigated in the final payout calculation.

Now the other misconception is that Delta then adds 16% more. That 16% of $750 million would be another $120 mil. That's not how the 401k 16% gets calculated. It's backed out of the total $750 million pool.

Not sure if that helps or not because I may have completely misread your post and you may already realize this.

Bottom line: We could improve our PS clause for sure, but the difference is not quite as egregious as some think.

EDIT: I'm just having a new question come up in my mind that I do not know the answer to. Once the Profit Sharing pool is calculated do UAL pilots share the SAME pool with FAs? And, conversely does DAL share their pool as well? That could be a HUGE difference if UAL pilots share the PS pool with FAs and Delta does not. Honestly I do not know the answer to that question. Time to do more homework :D

Buck Rogers 01-31-2023 05:24 AM


Originally Posted by Sunvox (Post 3582795)

Now the other misconception is that Delta then adds 16% more. That 16% of $750 million would be another $120 mil. That's not how the 401k 16% gets calculated. It's backed out of the total $750 million pool.

Not sure if that helps or not because I may have completely misread your post and you may already realize this.

It doesn't help because you keep repeating "the 16% DC is backed out" at Delta. You have been told repeatedly that this is not the case. The 16% is additive . The Delta PS language is quoted in post 161.

ThumbsUp 01-31-2023 05:45 AM


Originally Posted by Wilfortina (Post 3582108)
Did you read the post you’re responding to? He ran the numbers with the SAME PROFIT

No he didn't. He calculated it based off of the same salary with current profit sharing percentages. Delta's profit was nearly double United's for 2022.

jerryleber 01-31-2023 05:50 AM


Originally Posted by Sunvox (Post 3582795)
Delta's pool $750 million; United's pool $690 million

Keep in mind that UAL has fewer pilots so some of that difference would be mitigated in the final payout calculation.

Now the other misconception is that Delta then adds 16% more. That 16% of $750 million would be another $120 mil. That's not how the 401k 16% gets calculated. It's backed out of the total $750 million pool.

Bottom line: We could improve our PS clause for sure, but the difference is not quite as egregious as some think.

Honestly I do not know the answer to that question. Time to do more homework.

Time to stop posting blatant misinformation.

The difference between the two PS formulas is substantial and will get worse as inflation and growth lead to higher revenues. The crossover between 10% and 20% is key.

United likely has more pilots than Delta now.

Delta's PS is simply part of the compensation on which their BC contributions are based.

ThumbsUp 01-31-2023 05:53 AM


Originally Posted by jerryleber (Post 3582840)
Time to stop posting blatant misinformation.

The difference between the two PS formulas is substantial and will get worse as inflation and growth lead to higher revenues. The crossover between 10% and 20% is key.

United likely has more pilots than Delta now.

Delta's PS is simply part of the compensation on which their BC contributions are based.

Jerry-have you ever seen the actual profit sharing plan for UAL or Delta? Not the UPA/PWA language, but the company plan that is much more detailed. If so, do you have a link to it?

Hedley 01-31-2023 05:57 AM


Originally Posted by jerryleber (Post 3582840)
Time to stop posting blatant misinformation.

The difference between the two PS formulas is substantial and will get worse as inflation and growth lead to higher revenues. The crossover between 10% and 20% is key.

United likely has more pilots than Delta now.

Delta's PS is simply part of the compensation on which their BC contributions are based.

Can you show the math to back up your claim, or show where others are making mistakes? Not being snarky, but others are using math in their arguments. Please do the same to show where they are wrong using identical profits between United and Delta. Without data, an argument is just adherence to a narrative rather than fact.

jerryleber 01-31-2023 06:07 AM


Originally Posted by Hedley (Post 3582849)
Can you show the math to back up your claim

There is no need to get granular if you understand the difference between the $2.5B v 6.9% crossover from 10% to 20%. It is simple math. As revenues exceed $36B the Delta formula is superior and as revenues/profits grow as Kirby predicts the difference gets larger. Add to that that Delta's PS is part of their compensation on which their 16% BC contribution is based. Don't get lost in the weeds.


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