Alaska TA is out. Pay Rates.

[ualdriver]

UAL 12 year 737
CAP = $136 + 17% B+C fund
F/O = $93 + 17% B+C fund

New Alaska TA 12 year 737
CAP = $172 + 3% B fund + pension
F/O = $115.60 + 3% B fund + pension

I'm going to leave the value of Alaska's pension fund out of the comparison because I simply have no way of valuing it- or at least easily, but I would imagine that it is probably worth at least several hundred dollars per month in gross earnings if one was to fund one themselves. If someone told me what a typical Alaska Captain could expect from his A fund upon retirement, I could ballpark it.

Assuming each pilot has a marginal tax bracket of 25%.

United's 16% B+C fund, 25% marginal tax bracket is worth 21.3% pretax

Alaska's 3% B fund, 25% marginal tax bracket is worth 4% pretax

Apples to apples comparison UAL's old contract to Alaska's TA.....

$136 x 1.213 = $164.97/hr. pretax Captain United
$93 x 1.213 = $112.81/hr. pretax F/O United

$172 x 1.04 = $178.88/hr. pretax Captain Alaska
$115.60 x 1.04 = $120.22/hr. pretax F/O Alaska

plus......the Alaska guys have a very valuable A fund which is not included in the above numbers.....if my math is correct, looks like you guys have us beat with the TA by 9% + the value of your A fund, not including all the work rule/QOL stuff which is probably better than ours as we basically got JetBlue/Valujet/Frontier work rules.

 

[Old School 737]

I think guys that just retired are leaving with a 50% lump sum in the $500,000-700,000 range depending on length of service etc. The rest of their retirement comes as a smaller monthly check verses a bigger one if they took a 100% retirement monthly annuity check, but I don't think any body is taking that option. Plus the guys that just left got $100,000 one time payment to leave.

It seems like our TA undervalues the A plan when converted to a straight B plan. I would think even par would be in the 14-16% range. I mean I already get 3% so is the 10.5% they want to give me in addition really a fair comparison?? I don't think so but anybody with number skills care to chime in???

 

[SRMairlines]

Couldn´t have said it better. We will ALWAYS want more $$$ - that´s just life. But QOL is where it´s at for me. I know I won´t see the long call reserve and being on 2 hour forever doesn´t sound all that great. Also no furlough clause is scaring me with the new "improved work rules." I´m not going to drop the "no vote" just yet, but I will be at the road show asking some questions. I just don´t see how this will pass unless it´s a 55% by the senior guys who just want their $$ and bonus.

Baja.

Even the past two "scumbag" regional outfits I worked for had negotiated "no-furlough clause" language in their contracts. Those companies didn't even have outstanding grievances relating to furloughs.

The way I see it, the furloughed guys initiated the furlough grievance and if any pre-arbitration settlement exists, they should be the ones to vote. Esentially I would leave it up to the 60 to decide the fate of this TA since the MEC decided to use them (as injured bait) to get more money. (injured bait attracts sick fish)

As for you and I Baja... It is hard to tell until after the vote if we will join them. As for the MEC, they have some explaining to do (in regards to the furloughed or future furloughs). I am guessing the Jr. guys will formulate a lawsuit (which they will win & receive 25% of the senior guys pension for damages) Leaving these guys to dry is dangerous for our pilot group and the profession. - Sound familiar ???

 

[chris69]

For apples to apples with SWA, immediately take off between 7 - 10% of the pay rate for self funding of the 401k. The match may go up to 9.3%, but you would have to pay in 10% to get it. For example, if the new TA is ratified, pay rates go to $116.21 for a 7yr FO and $180.64 for a 12yr CAPT. With the TFP to Hourly multiplier around 1.139 they become $132.36 and $205.74 respectfully. Subtract $16,500 per year from taxable income for the full match, which would lessen FO hourly pay more than the CAPT, probably to around the full -10%, while the CAPT would be around -7%. Just round numbers, but SWA pay rates don't tell the whole story. With profit sharing down to 3.5% from it's historic 10% (probably less than 7% since 9/11), I'd take the B fund option in leiu of PS, and also keep the match.

 

[Penguin46]

Airtran F/O rates are published in the commuter airline thread.

 

[becket]

. I am guessing the Jr. guys will formulate a lawsuit (which they will win & receive 25% of the senior guys pension for damages)

That's a bit far fetched dont you think? Being furloughed sucks but it's a fact of life in this industry. Alaska Airlines has the same right to furlough as any other airline.

 

[SRMairlines]

That's a bit far fetched dont you think? Being furloughed sucks but it's a fact of life in this industry. Alaska Airlines has the same right to furlough as any other airline.

There is a little sarcasm in my post. You are right about the right from Alaska Airlines to furlough, but I do think the furloughed guys have the right to see their grievance through. Lawsuits that pertain to these matters have been quite common during the history of ALPA. This grievance was started by the furloughed guys (not the MEC/NC and therefore they should choose how it ends.) I hope to get more information at the roadshows so I can get more insight on the MEC's thinking.

Who knows, maybe a side letter that needs to be withheld due to insider information that pertains to calling guys back with growth is underway. Maybe this contract will get these guys back sooner than later?

The FACT of the matter is:

Alaska has the right to furlough as defined in our current contract. They did not properly follow all the subsections on how to prevent it and carry it out in the event it was necessary. So the furloughees filed a grievance and now that grievance will be settled with membership ratification of this TA.

 

[Old School 737]

For apples to apples with SWA, immediately take off between 7 - 10% of the pay rate for self funding of the 401k. The match may go up to 9.3%, but you would have to pay in 10% to get it. For example, if the new TA is ratified, pay rates go to $116.21 for a 7yr FO and $180.64 for a 12yr CAPT. With the TFP to Hourly multiplier around 1.139 they become $132.36 and $205.74 respectfully. Subtract $16,500 per year from taxable income for the full match, which would lessen FO hourly pay more than the CAPT, probably to around the full -10%, while the CAPT would be around -7%. Just round numbers, but SWA pay rates don't tell the whole story. With profit sharing down to 3.5% from it's historic 10% (probably less than 7% since 9/11), I'd take the B fund option in leiu of PS, and also keep the match.

Good comparison. But we don't have a match just the A plan and 3% B plan. I wish they also offered a match as well.

 

[ualdriver]

I think guys that just retired are leaving with a 50% lump sum in the $500,000-700,000 range depending on length of service etc. The rest of their retirement comes as a smaller monthly check verses a bigger one if they took a 100% retirement monthly annuity check, but I don't think any body is taking that option. Plus the guys that just left got $100,000 one time payment to leave.

I'm surprised guys retiring aren't pulling every dime they can out of their A fund. I don't think there's any way I would leave one dime in the trust of any airline!

Regardless, you're guessing that a guy that's been around the block at Alaska could take a $600K-ish lump sum, and then receive a small monthly amount beyond that? Any idea what that monthly payment would be and/or what his lump sum would be if he took 100% as a lump sum?

These are all major wags, we both know, but I'm just curious......

 

[Old School 737]

I'm surprised guys retiring aren't pulling every dime they can out of their A fund. I don't think there's any way I would leave one dime in the trust of any airline!

Regardless, you're guessing that a guy that's been around the block at Alaska could take a $600K-ish lump sum, and then receive a small monthly amount beyond that? Any idea what that monthly payment would be and/or what his lump sum would be if he took 100% as a lump sum?

These are all major wags, we both know, but I'm just curious......

We cant take 100% lump sum. Only 50%

 

[igneousy2]

The Pension formula is 1.9% times your Final Average Earnings times your years of service.

So assuming you retire as a Captain at the top rate at the end of this contract with 25 years of service and that you had been a Captain for 5 years your calculation would look like this...

Top rate under TA is $180. So to find your FAE I'll assume you flew 80 hours for 5 years. So basically $180 times 80 times 12 = $172,800

.019 times $172,800 times 25 = 82,080

In other words your A fund would pay you $82,080/year for the rest of your life. There are several other options that have relatively minor effects on the calculation that can reduce the amount that I won't get into depending on the payout method (50% survivor, 75% survivor, how old is the survivor, did you opt out of QPSA, etc.)

But anyway, for simplicity your pension is $82,080/year. The concept behind the lump sum is they calculate how much cash it would take to give you that income per year. You take $82,080 and divide it by the "going" interest rate (how they determine that is probably already a subject of another thread as we are in a transition which has the intent of shrinking all of our lump sums) which right now is actually very low...say 6% which gives you $1,368,000. Because our plan only allows a 50% withdrawl then you would get a check for $684,000 and the company plan would pay you $41,040 a year until you or Alaska Airlines died whichever occured first.

I ran a spreadsheet on the 3 options for someone like me with 25+ years left to go and if you're in the same boat as me, option C is a really bad idea. I based it on putting the IRS maximum into your 401K which as best as I could find out right now is $16,000/year from the pilot or 25% of pilot income total from company and pilot...and assuming I upgrade 10 years from now...option B breaks even with option A if you can get a return of about 6% in your DC. Option C doesn't break even in my estimation until you get about a 12% return. Don't take these calculations to the bank, as I still have to let someone smarter then me in these kinds of things look at what I did.

In any case it is no wonder the MEC did not want to release the numbers too early because everyday I think about this I am leaning more and more toward "no" in fact, right now I am trying desperately to hang on to the fence so that I will at least have somewhat of an open mind when I get to the road shows.

One other reason to put in the no colum that is having sway with me is that if we get this raise, it will encourage some of the 60+ guys to stay even LONGER to get their FAE up. I've got 30 years to get this thing settled...I have some savings built up...I'll be just fine...the guys close to retirement are probably itching to get this passed ASAP. This might be a strong enough argument for me to vote no all by itself.

later

 

[NWaviator]

Just answer me this... With the scope can AAG outsource to a third party and does it have any info on max seats for other parties to fly. It sure would be nice to help the "red hair step children" to help limti the chance of outsoursing. Please shine some light on this. Thanks.

 

[turbodriver]

From what I understand, the scope in the TA applies to Alaska Airlines not Alaska Air Group. Simply, they can still give flying away.

 

[SRMairlines]

Alaska could contract out to a third party to fly 737's or even 777's. The flying could not be done on behalf of Alaska Airlines Inc. Our scope is only for the Alaska Inc certificate. The only language in the TA that applies to Small Jets is for merger/aqusition language. If AAG buys an airline with 76 seaters/80,000lbs MTOW or less then no SLI will take place. Anything bigger then we merge the lists.

 

[Widow's Son]

Chris,

If you are going to account for the self deposit then you have to adjust by the 30ish% that you would be giving to Obama if not into the 401k