vegabondpilot

Bluedriver, you’re missing ExCargo’s point. According isn’t as black and white as you seem to think it is. There are tons of ways to massage the numbers to effect the outcomes that you want. Corporate finance is more art than math. Amazon famously netted zero profit during their tremendous growth phase (along with a meteoric share price rise). Shareholders called for Bezos’ head, right? Lulz.

There are levels to this and it would be very wise to include protections from accounting *******ery.

Bluedriver

Major airline CBA's require the numbers used for profit sharing payout calculations be the same as those reported to shareholders. Many of these plans pay out large sums of money, in most years... Delta has had to pay particularly large payments to employees, and the CEO (past or present, can't remember which) has said they regret giving such a rich plan. Southwest has also paid large sums to employees, regularly. United just enriched their plan to match Delta's in their new agreement.

Tell me, if it was so easy to simply "accounting trick" these payments away, why haven't they been able to do it? Why are these other airlines writing these big checks if they can just manipulate the payments away?

Of course I know there are "gimmicks" that can be used, I've literally said as much in these posts. I've also given some reasons why they don't work long term in many/most cases.

But most importantly, what "protections" are you expecting or referring to? The one Cargo mentioned is laughable, if not delirious. It has been an epic battle, to date, simply to get JB management to talk about reinstating our previous profit sharing plan, or better yet improving it to an industry STANDARD plan. And profit sharing only pays during the good years... To think they would suddenly agree to a plan that not only pays during the good years, but also pays during the catastrophic years? From this management group that won't even talk about a conventional STANDARD plan enjoyed by all our peers? Are you feeling okay?

And... If JB could simply "accounting trick" the payments away on a standard profit sharing plan so easily, why haven't they just given it to us while laughing like Ray Liotta in Good Fellas??? "YEAH, SURE, HERE YOU GO JB PILOTS, GOOD LUCK WITH THAT"!!!!! (Here is where I wish I knew how to insert the Ray Liotta laughing GIF from Good Fellas).

I missed nothing at all from his points. They are either bad points, incomplete, or have no viable solution, at least not any solution he has put forth yet. And mostly, the problem he describes hasn't been much of a problem... As long as the plan and language are proper. But I do want the best plan and solution possible, so if you something valuable to add, I am listening.

And the reason my response was so aggressive to Cargo is because we have had this discussion, several times, on the JB board in the past.

Excargodog

And the reason I’m so aggressive is that we will likely NEVER AGAIN have the leverage we will if this actually does get to JCBA negotiations in our lifetimes. It’s Negotiations 101. It absolutely doesn’t hurt to have some unique off-the-wall ask as a shot across managements bow and may well make them cave to more peer airline like profit sharing rather than run the risk of pioneering this. That would not be a bad thing. But if you don’t think companies can avoid making profits by simply doing things that will increase share price and pay their execs with shares as the capital gains accumulate you obviously have never worked in the tech sector.
Dividends are so last century. Capital gains (unrealized and untaxed until you draw them out) rule. And no, we don’t want an ESOP. The UAL pilots got taken to the cleaners with that one at UALs bankruptcy.

Bluedriver

On this, we agree. It's a perfectly good starting point for negotiations, which I have said, even in this discussion.

But, what I also did say (to your point about our JCBA leverage), there are many other industry leading expectations I have in pay/QOL, and those "other" priorities are ultimately more important than the distinction between profit sharing and revenue sharing. Profit sharing (or revenue sharing) is an absolute RED LINE for me, as are many other industry leading pay/QOL items. So I don't believe it's wise to use too much (greatly more than necessary) of our negotiating capital on any one item that's wildly outside of industry norms. Especially to solve a problem that so far in our industry hasn't been shown to be much of a problem.

And you have never addressed this simple question. If JetBlue could simply "accounting trick" it's way out of paying profit sharing on a properly written plan, why have they fought so incredibly hard giving it to us???

I know where your heart is on this issue, and at the core, you and I are in the same place, and on the same team. Yes, let's start the survey responses at revenue sharing. Can't have the moon if you only ask for a cheeseburger.

Lincoln Osiris

Good luck with NK pilots being on board with that. I even saw in one of the base chats a pilot "wish list" and it actually said under pay "no increase needed". That is who you will be getting for fellow CBA voting co workers.

Excargodog

What has it cost THEM in negotiating capital to stick you with the current (pretty much non-functional) profit sharing you now have? That’s an honest question - not a dig. I wasn’t following JetBlue contract negotiations when that pseudo-profit sharing plan was put in your CBA.

But again, it’s Negotiations 102:

RemoveB4flght

I’ve mentioned to you before the difference between growth companies and dividend companies. LUV pays a dividend, DAL pays a dividend. Investors buy these stocks expecting a share of profits. SAVE and JBLU are growth companies, investors expect to make money through share price increase by achieving target growth rates. To achieve these growth targets, annual profits are either put back into the company (research plow back ratios) or to service debt to do the same. It’s not some tin foil hat conspiracy accounting tricks to hide profits, it’s all public record. Large, established companies are the most likely to pay significant dividends, since substantial growth is more expensive and less likely means of boosting share price (and thus shareholder wealth). This is why those Delta pilots get more significant profit sharing checks, and why the current B6 language doesn’t yield very much.

Even combined with NK, JetBlue has some serious capital expenditures ahead of it if they want to continue growth and expansion to break into the legacy playing field. More planes, more staff, more infrastructure. It’s highly unlikely that JBLU will offer a dividend to shareholders for the foreseeable future. This is also why it’s unlikely that stronger profit sharing language will result in those fat annual checks you salivate over. Revenue sharing may result in that, but a slice of the pie before all the bills are paid, or even the shareholders are paid, well that’s an even tougher ask.

TL/DR it’s foolish to expect profit sharing to yield anything significant until the stockholders who own the company are receiving a taste.

Noisecanceller

Should be a damn easy get then.

Bluedriver

No, that doesn't answer my question. We asked, and pushed very hard (not max hard, but a strong effort was made). On several occasions. They absolutely refused, said it was a "non-starter".

Why is it a "non-starter" for management if they can just "accounting trick" their way out of paying us?

Bluedriver

Well, for much of JB's earlier existence (remember the whole company is only ~23 years old) they had a much richer profit sharing plan than now. Those were when the company was REALLY a growth company. And several years we got really big checks. So at least I know I don't have to listen to your "info" anymore.

And you can keep your low expectations, and company sympathy out of our upcoming JCBA negotiations. For most of JB, we want back what we had for most/much of the airlines existence.