Details on Delta TA
#3511
Management has faced critism in financial circles over the refinery and is working hard to justify it. Listen again however to his statement on paying off the refinery. He talks only of initial investment. He does not talk about the cost to upgrade the refinery or the losses it sustained over several years. They are a ways from paying off those items. With the recent plunge in oil they may get there but it has not happened yet. The initial investment was only 150 million.
The operation at the refinery the airline owns lost $50m, but the airline's savings in fuel is only expressed as an average cost per gallon. Delta was something like 8-cents better than peers for the year. Part of that was a better-than-peers tax payout for JetA because you don't pay tax on fuel you give to yourself. That benefit was not expressed as a separate item in the reports.
Even when the price of oil plunges, the amount of tax on a gallon of JetA does not. The tax benefit of giving it to ourselves is real, and not required to be reported.
#3512
Gets Weekends Off
Joined APC: Jun 2009
Posts: 5,113
I think the undeniable fact is that the future value of the PS is speculative. Personally, I've thought Delta was a good investment for several years. I don't base that at all on what we employees are being told, but based on what the owners are being told via earning calls and guidance, and even that, I usually discount. Overall, I want upside protection, but I'm also reducing my exposure to the stock. For the same reasons, it might be OK to have a little less exposure to the company's performance via PS, if it implies a trade in addition to rate increases, not a self-funded "raise".
Thing is, I have absolutely no idea how you could prove the result was one or the other.
#3513
Gets Weekends Off
Joined APC: Dec 2014
Posts: 1,184
My understanding is that the "impact on the profitability" (not the same as "profit and loss") of the refinery is not easy to read in the 10K reports.
The operation at the refinery the airline owns lost $50m, but the airline's savings in fuel is only expressed as an average cost per gallon. Delta was something like 8-cents better than peers for the year. Part of that was a better-than-peers tax payout for JetA because you don't pay tax on fuel you give to yourself. That benefit was not expressed as a separate item in the reports.
Even when the price of oil plunges, the amount of tax on a gallon of JetA does not. The tax benefit of giving it to ourselves is real, and not required to be reported.
The operation at the refinery the airline owns lost $50m, but the airline's savings in fuel is only expressed as an average cost per gallon. Delta was something like 8-cents better than peers for the year. Part of that was a better-than-peers tax payout for JetA because you don't pay tax on fuel you give to yourself. That benefit was not expressed as a separate item in the reports.
Even when the price of oil plunges, the amount of tax on a gallon of JetA does not. The tax benefit of giving it to ourselves is real, and not required to be reported.
#3514
Jump ball question:
EdGrimley posted this comment: "If you believe what Ed says in the video about the performance of this pilot group vs our peers, there should be little argument whether this pilot group deserves an industry leading contract in pay rates (not including profit sharing) and work rules."
Here's the question: Do we believe what the executives tell us?
Not picking on EdGrimley here. Just looking for some opinions.
EdGrimley posted this comment: "If you believe what Ed says in the video about the performance of this pilot group vs our peers, there should be little argument whether this pilot group deserves an industry leading contract in pay rates (not including profit sharing) and work rules."
Here's the question: Do we believe what the executives tell us?
Not picking on EdGrimley here. Just looking for some opinions.
Carl
#3517
Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,991
I like much of what you wrote in that post, but you have to admit that the part quoted is pretty funny. Ignore them, but believe me that profits are going up and up!
I think the undeniable fact is that the future value of the PS is speculative. Personally, I've thought Delta was a good investment for several years. I don't base that at all on what we employees are being told, but based on what the owners are being told via earning calls and guidance, and even that, I usually discount. Overall, I want upside protection, but I'm also reducing my exposure to the stock. For the same reasons, it might be OK to have a little less exposure to the company's performance via PS, if it implies a trade in addition to rate increases, not a self-funded "raise".
Thing is, I have absolutely no idea how you could prove the result was one or the other.
I think the undeniable fact is that the future value of the PS is speculative. Personally, I've thought Delta was a good investment for several years. I don't base that at all on what we employees are being told, but based on what the owners are being told via earning calls and guidance, and even that, I usually discount. Overall, I want upside protection, but I'm also reducing my exposure to the stock. For the same reasons, it might be OK to have a little less exposure to the company's performance via PS, if it implies a trade in addition to rate increases, not a self-funded "raise".
Thing is, I have absolutely no idea how you could prove the result was one or the other.
Sink,
You are exactly correct - if we reduce PS during section 6 we have no idea how much we are "paying" for our raise.
You would have to monetize PS separate from section 6.
For instance this past year we received about 16% from PS. So if we got a 25 raise contingent upon eliminating PS it would actually be a 9% raise.
Would 9% in this negotiating environment even be considered a single in the ever present baseball analogy? Maybe a fielders choice with a RBI for good measure.
Granted - it would be "less" at risk than PS but not totally without risk which should be totally obvious to all since we are still not even up to C-2000 rates.
Scoop
#3518
For those that don't have the DALPA contract comparison anymore, page 27 shows profit sharing/bonus comparisons. The YES in the fourth column indicates that profit sharing is pensionable at Delta. Apparently Karnak believes that means Delta pilots lead the industry in compensation.
I understand how you'd want to diminish that. First World problems.
#3519
Don't know if WE do, but YOU certainly do. You were one of the strongest trumpeters of management's claims that the 717's weren't coming anyway, and the 50 seaters will just get re-engined if we voted NO, and we needed to say yes to C2012 because the window of opportunity was so short, and...
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