Can you please enlighten for the uninformed like me?

 

Analysis of every earnings call, investor meeting, and public appearance/interview/speaking engagement Kirby has done over the last 3ish years will reveal that -

1) His goal is to be the biggest airline ever
2) This goal requires a 10 year strategy
3) The 10 year strategy is built largely around the pilot shortage. He plans to use the shortage as a competitive advantage and hire every pilot he can over the next 5-10 years. He has stated that whatever company has the pilots Will get the business.
4) This long-term strategy will not be impacted by short term swings in the economy
5) He believes crew cost will be come a pass-through just like fuel

All this means he cannot afford to wait on a contract and allow competitors to hire the pilots. Especially since Delta will have to match whatever he pays, so it’s really not hurting him to go over Delta because of what he calls cost-convergence.

Takeaway: hold the line and be patient! Do not fold.

 

He will pay a bit over Delta, 5% however in a major cost area is huge in the business world. He will modify the plan as needed to avoid the premium. It would probably be cheaper to hire zero time pilot candidates and pay for the training than pay a 5% premium. There is always a plan B.

 

all of this is true but I don’t think that we have a hard time attracting pilots despite our sub-par contract. Industry leading is a nice buzz word but being #2 will be perfectly fine for SK.

 

Delta only has to match rates. Kirby is fine matching their rates. It’s all the soft money and work rule improvements that we’re asking for that are causing the friction. We haven’t been shown the math yet. If our total cost is significantly more than Delta we might have a drawn out negotiation. If the total cost are close to what Delta just signed, Kirby doesn’t really have a good argument to stall.

 

Everyone needs to have some patience. It hasn't been even 2 weeks since Delta passed their contract. Even if I believed Kirby at his word, he said a couple of weeks to get it done.

By my count, 4 more days and we'll see. These things do not happen quickly.

"Not close." I hope closer than not.....

 

it’s been a year since Tumi ta. there are about 3000 pilots who didn’t even expect to be able to vote on this contract who are now eligible. Patience is understandably thin.

 

Again, he won’t pay 5% over Delta because of their snap-up. Exceeding their current rates by 5% would still put us at parity. If he really wants to go for the title of industry-best pay, he could include a second snap-up, or outpace them in later years of the contract, but expect anything like that to be nominal- to the tune of 1%. Either way, understand there’s a big difference between how much we exceed Delta’s current contract rates by & the actual net difference in rates once all equalizing factors came into play.

 

Sailingfun is talking about total book cost being >5% over DL's...not just pay rates.

Every word in the UPA increases / decrease the total manpower required. Management does not care what makes up the top line cost of the UPA (manpower, rates, etc), just that it is near parity to DL. The question is, is the company's offer magnitudes less than DLs or is our ask magnitudes more?

 

Admittedly I don’t have actual numbers, but I suspect that for us to merely match Delta on pay & work rules, our total cost would have to be much greater than theirs, because they started ahead of us on QOL stuff. E.g., to get where they were able to get w/ a $7B investment, we’ll need to spend $9B- 2 to catch up & 7 to match. The disconnect may be in that the union wants to match ends while the company is only willing to match means.

Just a theory, though.