Keep trying MM; you might eventually hit the broad side of the barn if you continue firing wildly into the air with no real aim or purpose. So far you have simply failed to connect with real facts and logic on any meaningful issue, but that doesn’t seem to stop you from posting gibberish over and over again. Let’s look at the facts shall we?
My assertion was that USAPA was never going to deliver a contract based on the fact that the negotiation team is asking for unrealistic terms on the financial issues of the JCBA. Now you may ask why my assertion is a fact rather than an opinion, which is fair – you didn’t ask – but I’ll prove this out anyway. It all comes down to the ability to read financial statements and then use sound logic and reason from there to draw a factual conclusion.
On that note we find that USAPA is requesting a pay-parity retroactive pay increase (signing bonus really) for the east pilots since the date of the merger in 2005. Okay, let’s break that down using very conservative estimates (that would be in your favor MM to make the point). One way to calculate this is to take the $120M Kirby proposal which the Company has said repeatedly would bring the east up to the west pay scale (pay parity) plus it would include a 3% raise for west pilots, right? Now the west pilots represent approximately 1/3 of the total population of US pilots, so their impact on the $120M annual increase needs to be discounted from the Company’s estimates in order to calculate an annual cost for retroactive pay-parity since 2005.
Here’s where the conservative part comes in ... I’ll take 1/3 of the $120M off the proposal to account for the west pilots who would not see retroactive pay under USAPA’s proposal. That reduces the Kirby to $80M in annual retroactive pay for the east pilot group again based on a very, very conservative estimate. Now if we multiply that $80M times six years (assuming USAPA can get to JCBA by the six year anniversary of the merger –not likely, so this is a conservative figure too) we come to a figure of $480M for the retroactive pay USAPA is demanding. Then, we would need to add the value of the increased pay for all pilots under the JCBA which should be no lower than the Kirby proposal of $120M annually, right? Therefore if Management were to go along with USAPA’s demand for retroactive pay and agree to wage increases which are no more than what has already been offered under the Kirby proposal, this would equal a $600M wage increase in the year the contract is ratified. Each year there isn’t a contract the year-one costs would go up by another $80M on a very conservative estimate.
Now, where would Management come up with $600M to offer to USAPA to meet its demands? In 2010 the Company reported its second highest year for profits of only $500M. That means that if the year a JCBA is ratified is financially as good as 2010 on the P&L, USAPA’s proposed retroactive pay demand would convert a decent Net Income into a Net Loss. Hmm, so if the second highest year for profits is still not enough to meet USAPA’s pay proposals, where would the money come from for Management to agree with USAPA’s demand for retroactive pay parity for the east? The answer is that no Management team or Board of Directors would violate their fiduciary responsibility to their shareholders and their creditors to sign off on such an expensive labor contract which would propel them into bankruptcy, especially if the Company has an average year for profits rather than a near record-breaking year. There is simply no way this is going to happen and the USAPA negotiating team should know this. If they don’t then they have no business being on the negotiating committee. If they do, then the only people they are fooling are the gullible east pilots who live in a world detached from reality.
