LCC upgrade time?

[Singlecoil]

The "major" I work for has informed us that the want to cut our pay based on the average of the 8 major carriers and the "4 LCC's that fly in our markets".

However, averaging 10 year Jetblue FO pay into everyone else's is a blatant attempt to skew the data in their favor, as there are no 10 year Jetblue Captains, let alone FO's. It is up to all of us to keep the bar raised and my group needs a little data right now to help all of us out.

Can someone please post the upgrade time at:

Frontier

Airtran

Jetblue

ATA


Also, what is the most senior FO? They gave us all of the payscales, so I don't need that. I just need to devolop a B.S. filter to apply to their model. Also, JetBlue stock options are worth about $200,000? Is that right?

Many thanks.

 

[Ty Webb]

AirTran's October class has a pilot who was hired in September, 2001. The November upgrade class will likely have some November 2001 hires, so you can say the upgrade is around 2 years . . . . I have heard from reliable sources that it will be down to 18 months very soon.

 

[Flying Freddie]

From first day of ground school as a new hire until first day as Captain on the line at jetBlue was 1 year and 42 days. This was in the last 60 days.

 

[gator]

Upgrade

I would suggest that at SWA, upgrade is very Base specific. While in Oakland (select a junior Captain base) it may be 5 years depending on growth, at Dallas it may be 13 years. These are the extremes.

While the other bases are on average around 5-6 years. Once again this can change rapidly depending on jet orders and growth.

I hope that helps.

Have a great day.

 

[jetblue320]

Also, JetBlue stock options are worth about $200,000? Is that right?

jB new hire pilots receive 6000 stock options that vest over 7 years (10% per year for 5 years then 25% in the 6th and 7th year). The value of that portfolio is the same as everyone else at jB with 6000 options but the exception is the price per share your options were set at, or strike price as it is commonly called. Your strike is set by the Board of Directors based on your date of hire and the market price of JBLU that day (or maybe they average it for a week, not sure). And don't forget, the jB pilots that were hired before the stock split last year in December now have 9000 shares (assuming they didn't sell any off) and their strike price was reduced by 1/3.

That was kinda long for waht you probably wanted but in a nutshell, the options that "most" of the jB pilots have now are valued at about $485,000. That is based on 9000 shares at Friday's JBLU closing price of $53.90.

Hope that helps.

 

[jetblue320]

Rebuttal

I guess it's ok to rebut my own post.

Flying Freddie pointed something out to me in a PM that makes sense. When I stated the "value" of the stock options that jB pilots get I didn't incorrectly state the value, but I guess I didn't do a good job of averaging.

If you are a recent new hire, your strike price is much greater than those of a seniority of say, two years or greater. So I guess if you are less than about 2 years, your options are "worth" closer to roughly 200k. Worth meaning what you have "net" after the sale of them all. Of course, the point (today) is moot because you have to exercise and sell "vested" shares to net anything. I was just speaking in general terms because everybodys personal financial structure is unique. The term "value" in which I referred to in my post could be defined as gross if you sold all 9000 @ $53.90, which, the majority of jB guys as of today could not do.

Of course, there are lots of folks out there (the Naysayers) that will argue this whole subject saying that jB stock will be worthless soon and not worth the paper it is written on. I have heard that one a thousand (make that 9000) times!

See ya

 

[F9 Driver]

Hard to tell going forward,

but I upgraded in two and a half years just on line last month.

The switch from 737's make it so that most of the training is transition rather than upgrade.

With the expansion plans made public this month I'd guess that two to three years would be a good assumption for a while. We are looking at 62+ aircraft by 2008 up from 38 today, and have around 430 pilots right now.

The senior FO's who want to upgrade asap are around two and a half years seniority. Newhires will face substantially longer upgrade times.

 

[amfteamster]

jetblue320,

what is your strike price?

 

[Eagleflip]

(Edited to correct bogus math...sorry)

Not that you asked me, but I'm rather leery of offering such "personal" information on the net, or in person.

Other that being snotty (and that really isn't my intent), here is the bigger picture. Regardless of one's strike price, the long term numbers for any stock options are hugely dependent on splits and subsequent growth.

THE FOLLOWING IS NOT AN ATTEMPT AT GLOATING, SMIRKING, OR OTHERWISE CROWING ABOUT JETBLUE OR ME...IT IS FOR ILLUSTRATIVE PURPOSES ONLY. JetBlue may fail tomorrow and I'll be eating govmint cheese, so I'm not predicting this will really happen. Simmah down--ahem... now I'll continue.

Even those who's strike price was $43, the long term investment gain for our stock will--hopefully--far outweigh the actual cost of the stock. Should the stock split 3 for 2 tomorrow, the initial 6000 shares will instantly translate to 9000 shares, albeit at a lower price ($34.67) commensurate with the increased number of shares. Remember that the price falls when a stock splits. Assuming a stock price of $52.00 (rounded off for sanity's sake), today you'd have 6000 shares worth $312,000. Tomorrow, at the opening bell, you'd have 9000 shares worth $312,000.

As for the cost: Assuming the strike price was initially $43, you owed a total of $43 x 6000 = $258,000. After the split, the stock price would be reduced by roughly 1/3d to $28.67. Total stock price is now $28.67 x 9000 = $248,000. Despite the split you'd still have to pay (pre-tax) $258,000 for the entire batch of stock.

In a year, should (would we be so lucky) that stock increase again to $52 and split 3 for 2, the 9000 shares would now be translated into 13,500 shares. Those 13,500 shares would be worth $702,000. Your payment for the stock remains $258,000.

What if it happens yet a third time? (After all, Southwest's stock has split many times over in the past twenty years) A 3 for 2 split would yield 20,250 shares total. If the stock were subsequently to increase to the pre-split price of $52, those shares would be worth $1,053,000. The cost remains the same. The long term gains given splits can be enormous, especially if you see several splits in your lifetime.

Long message, short summary: the strike price, while important, is not the overriding issue when it comes to stock options.

Any clarifications are welcome.

Next rant: the Alternative Minimum Tax. Ugh.

 

[Blue Dude]

Oh, boy, Eagleflip, you weren't a math major, huh? (ducks)

A 3 for 2 split increases the share amount by 50%, and the price drops 33%. So a holding of 9000 shares becomes 13500. Another 3 for 2 split would yield 20250 shares, etc. Your description was certainly sound enough, though.

Ditto the AMT. It sucks.