Poor Larry Ellison wants pilots to give back his money

Discussion in 'General Discussion | Travel' started by Gargoyle, Nov 23, 2014.  |  Print Topic

  1. Gargoyle
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    Pilots from Island Air recieved a $4,000 Christmas bonus, but now the airline wants the money back.

    The regional airline owned by billionaire Larry Ellison said it paid the bonuses prematurely in October.

    The Honolulu Star-Advertiser reported Saturday that the company plans to take payroll action to recover the erroneous payments.

    The bonuses went to about 45 pilots and amounted to less than $180,000. That really puts a huge dent in poor Larry's finances.

    Pilots who deposited bonuses into retirement plans will have those returned. Those who received a cash disbursement will have the amount taken out of paychecks over the next four months, or they can just write a check.
     
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  2. lapointdm

    lapointdm Silver Member

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    If they are christmas bonuses... why not let them just have it?! It's almost christmas anyway.. Larry is not making a good name for himself :p
     
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  3. uggboy
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    uggboy Gold Member

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    Indeed, he doesn't. :oops::oops::oops:
     
  4. Gargoyle
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    So they take back the bonuses now and then give them back again in a few months. Brilliant. Larry can earn another 5 months interest on the money.
     
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  5. Dublin_rfk

    Dublin_rfk Gold Member

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    And a better tax write off as well.
     
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  6. daninstl

    daninstl Gold Member

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    I read this story over the weekend and can't figure out what in the world they are doing. It seems like because they didn't get some planes on time to generate revenue from them that the pilot bonus is tied to that event. It's like they are saying they can't afford to pay the bonuses since they didn't get the planes yet. Weird.
     
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  7. viguera
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    viguera Gold Member

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    Well the article is sort of inflammatory in itself... nobody without some sort of agenda would write "less than $180k" like the figure is small, so they're obviously contrasting that to Larry's net worth. He probably doesn't know anything about it, but they're trying to make him out to be the bad guy because it's such a paltry sum to someone with that much money, I suppose.

    Island Air is a small operation... 5 ATR 72s and a few routes, and they're a private company so you have no visibility into their books. But it looks like they had 2 firm orders for Q400s to replace the ATRs and an option for 4 more, and paying the bonuses was tied to the delivery.

    They've made a lot of changes over the last couple of years though, especially after Les Murashige retired due to “personal reasons" (yeah right). They were considering the ATR-72-600s after they dropped the old Dash-8s.

    If you put your ear to the ground, the rumor is that they don't know what they're doing. The Q400 is a big, expensive airplane to run those island hops, and Island Air might have been planning for capacity that they don't have. Looks around for reviews of their flights and you'll see a lot of legs into OGG going with only a handful of people (even single passengers), on an airplane that's not only $10 million more than their current one but also more expensive to operate.

    I can see what they were trying to do with the fleet replacement, but even that seems to have been their own fault. The reliability issues they've had with the ATRs seem to come from a rash decision to acquire them... they're 20 year old frames that they got from American Eagle relatively cheap, and probably need a lot more maintenance than they anticipated -- Air Tahiti had the same issue with the ATRs they used for small hops.

    I wouldn't be surprised if someone is looking at the current numbers, compared to whatever projections they had, and decided to put the brakes on the new airplanes and come up with a better solution. This won't generate a whole lot of goodwill with the pilots that were supposed to get bonuses upon delivery, but that also shows you just how crazy this whole setup sounds.
     
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  8. NYBanker
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    NYBanker Gold Member

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    I don't follow the tax angle that you are suggesting. What is it from this action that increases the otherwise full deductibility of the expense?
     
  9. gooseman13

    gooseman13 Silver Member

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    So the initial post is not exactly accurate - the bonuses are specifically tied to delivery of new aircraft that are no longer about to be delivered in the next few weeks. The coincidence of timing of the bonus has led to some articles claiming they are holiday bonuses, which they are not.

    Good points by Viguera above. Note that the company has a new CEO that just started last month I believe. He's started a new fleet analysis and deferred at least temporarily the delivery of the new aircraft.
     
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  10. NYBanker
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    NYBanker Gold Member

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    Any story can be written to shoot at "the man" it seems. :)

    Thanks for providing clarifying details.
     
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  11. anileze

    anileze Gold Member

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    Anyone who has dealt with Larry, or his company; or had the unfortunate luck of living in his town; know that the reality is not too far away. Larry reminds one of "Grinch that stole Christmas"
     
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