scambo1

Only if it's a pilot base.

Schwanker

I don't know exactly what ALPA's budget is, but Delta pilots pay around $40, 000, 000 per year to the union. These funds are used to pay all our experts in Herndon among other things. I expect our experts on the Economic and Financial Analysis committee (or whatever they are called) not to miss these trends. Are my expectations too high? I also have high expectations for my own performance as does Delta. Not that I think C2012 was a complete miss, but I really hope we get it right next time.

scambo1

You will get pushback from the regular suspects for calling into question EF&A. I agree with you, they are maybe good at costing, but not so good at predicting. Sort of like the gs13s who manage the pbgc ...insufficient skin in the game.

sailingfun

Pilot or flight attendant base including AFP bases.

sailingfun

The problem is it's hard to go into negotiations on the basis the company is at some future point going to be making huge profits. This industry is the very definition of cyclic. Many of our new hires think the profits are locked in forever now and the good times will continue to roll. This is my third round of good times at Delta where the new hires including me thought the same thing. When it stops and it will at some point it will be overnight and dramatic. Make sure your wearing a seatbelt!

Schwanker

As it's been said, "Make hay when the sun shines."

Bucking Bar

(1) Beats the alternative
(2) Management would rather lock in low, at present profit levels than deal with ALPA at a more profitable level when higher pay is justified
(3) Management needs a known cost structure BEFORE making expansion plans to capture more revenue
(4) "Labor Problems" could dampen profits (and/or Wall Street expectations)

... and while the industry is cyclic, you and I have never seen this sort of capacity discipline and load factors in our lifetimes. Even now, growth plans are very restrained.

... and there remains some low hanging fruit. Management has done a good job optimizing revenue. Management has not done nearly as good a job on the cost side. The costs of outsourcing are better allocated, but still stand room for improvement. We are now 15 to 17 billion dollars or more into our outsourcing experiment with wholly owned carriers. Those costs are not transparently carried to our bottom line, partly because management has been none too keen to admit insourced, outsourcing, remains a failure of management planning and execution. A lot of those costs are "spread like peanut butter" to the mainline operation.

NWA style accounting controls and systems are improving management's visibility into the operation.

Further, any debt that costs more to carry than it's return on invested capital is a drag on profitability. We are doing well to get that debt off the books.

You are correct that macroeconomic factors could harm all US businesses, but I continue to be optimistic about Delta's performance amongst our peer group.

Just my opinion

Bucking Bar

Well, wait a minute.

I have rallied against some of the decisions made by these men. But, let us be fair in our consideration of events. We all know this chart, we have lived this chart:


Our labor representatives had to make choices, tough choices, often at the risk of losing more in front of a Judge. This was probably the worst revenue environment ever faced by a labor organization.

Look around ... seriously, take a moment to think about who survived. When labor got too tough, they got killed. I love the stand Eastern Air Lines took ... their pilots are unemployed for their effort. None have ever bought a cup of coffee or beer in my presence and none ever will. Sprit's one of the few winners in the labor wars and guess who their strike leader was ... our MEC Chair.

Since things have turned around our MEC (some new blood, but many experienced hands) have been effective at capturing pay and benefits for our pilots. They live under the same contract we do. Just like us they want the best for our pilot group.

Yeah, we have difficult work ahead of us. We should thank God it appears our work will be in a better environment than what our predecessors have faced.

Alan Shore

While I agree with your post in general, I am concerned about the misleading aspect of the graph, as it shows revenue trends adjusted for inflation. One would have to ask at what rate this inflation was calculated and how our compensation has fared over the same period of time, adjusting for that same rate.

It would be simpler if we could view that chart in dollars that have not been so adjusted.

Bucking Bar

It would be some work to prepare the charts specific to Delta Air Lines pay (I could, but someone's going to have to pay me) Perhaps ALPA will do that work for us in the C2015 info that will be posted soon.

Otherwise: NOTE: Fuel price is the average of all fuel used for scheduled and nonscheduled domestic flights for the selected carriers shown in each graph. Average airfare adjusted for inflation using the Consumer Price Index (CPI) for airline fare, base year 2010 = 278.186. Average fuel cost per gallon adjusted for inflation using the CPI for fuel oil and other fuels, base year 2010 = 275.132. Legacy carriers include American Airlines, Continental Airlines, Delta Air Lines, United Airlines, and US Airways. TWA, Northwest, and America West are included as these carriers merged with American Airlines, Delta, and US Airways, respectively.

SOURCE: U.S. Department of Transportation, Research and Innovative Technology Administration, Bureau of Transportation Statistics, OND (U.S. Carriers, average airfare) and Form 41 Financial Data Schedule P12a (fuel data) as of July 6, 2011.

Data and Statistics | Bureau of Transportation Statistics

Have at it.