Airlines: Some Costs They Can't - And Shouldn't - Cut 86 comments
-
Font Size:
-
Print
- TweetThis
Today, like most every day, just over 44,000 of the world's most experienced airline pilots employed by the 9 largest airlines in the United States will accept full responsibility for over 1.5 million lives sitting on the other side of their locked cockpit doors. Over the next 24 hours, these pilots will make over 13,500 take-offs literally around the world. Through every imaginable type of weather, they will be in command of over 36,000 hours of flight time. And, if today is like most days, you will never hear or read about even one of those flights.
There is a perception that salaries are an important key to discretionary cost-cutting by the airlines. Charts below attempt to put that information in perspective as regards pilots.
So what does it really take to be a commercial pilot?
First, similar to a doctor taking years to get qualified in the operating room, there are no 'entry level' pilot jobs at the major airlines. Before being hired by a major airline a commercial pilot will likely have a college degree and either been trained as a pilot in the military or have spent several years acquiring thousands of flight hours experience on smaller aircraft.
Fully depending on the airline’s growth, it could take as many as 20+ years to move from a co-pilot to captain.
Airline pilot wages, benefits and working schedules are based on company seniority. If a pilot leaves one airline he/she will start at the bottom of the next airline’s seniority list as a new hire.
Once hired by a major airline, regardless of prior experience, a pilot goes through several weeks of training and testing before being qualified on that airline’s specific aircraft operations. Every time he or she moves to a different type of aircraft or moves from co-pilot to captain he will again require more weeks of training and testing.
Pilots have to pass a medical check every six months with an annual EKG required as they get older. Due to very stringent medical requirements, approximately 15% of airline pilots are forced to retire before they reach their mandatory retirement age.
The FAA has strict limits on the maximum number of hours pilots are allowed to fly: The maximums are 1,000 in a year, 100 in a month and 30-32 in 7 days (international flight limits are slightly higher than domestic). In order to actually get an hour of flight time, depending on your seniority and the airline’s schedule, you can expect to be away from your base from two to four times actual flight hours. For the most part, a pilot only gets paid when the aircraft is moving. (Note: Pilots do not get premium pay for working holidays or weekends.)
What is a pilot worth?
Actually the important question should be: In the future, is the job going to be worth it for those individuals you want and expect to be responsible for so much?
Since 9/11 and the bankruptcy or reorganization of every legacy airline, pilot hourly pay rates have been reduced to what they were almost 20 years ago. In addition, work rule changes force pilots to work more and longer days than they ever have. Pilots from United (UAL), Delta (DAL), Northwest (now merged with Delta) and USAir (LCC) all lost significant amounts of their pensions as those airlines went through bankruptcy after 9/11.
Recognizing the above, how much of the average passenger airline ticket fare is now used to pay pilots to accept the responsibility they do? Not very much!
Tables below use industry data to calculate the average 'cockpit' wage cost for two pilots per hour of flight for the average passenger fare. Data considers reported passenger revenue kept by the airline and does not include taxes and airport fees. (USAir data includes America West pro forma. Delta and Northwest merged in October 2008. Aircraft movement is considered flight time for this report. )
For year 2008 the average cockpit wage cost per average passenger fare per hour of flight was $3.73. See figure 1 for specific airlines.
Figure 1
Since 9/11, United, Delta, Northwest and USAir filed bankruptcy. American (AMR) and Continental (CAL) reorganized outside of bankruptcy in 2003.
In the past seven years, while inflation increased by 20%, the average hourly cockpit wage cost for the average passenger fare dropped by 29%.
See figure 2 for the year over change since year 2002.
Figure 2
When comparing year 2008 with 2002, Southwest (LUV) and JetBlue (JBLU) were the only two airlines that had their passenger fare ratio of cockpit wage costs increase. (In 2002, both of these airlines had the lowest fare ratios in the industry.) In figure 3 you can see how the average cockpit wage cost ratio of the average passenger fare per hour of flight changed for each selected airline since year 2002.
Figure 3
As you can see, on average, the coffee you purchased in the terminal before your flight cost more than what both pilots will earn from your passenger fare for each hour of flight they accept responsibility for your safety.
Whether it is in the operating room or an airline cockpit, if you want the “best” individuals there, you will have to provide the incentives to get them first.
The bottom line questions are: In the future, who do you want replacing these aging and very experienced veteran pilots? Is it worth a few dollars more to attract the “right stuff” to be responsible for such an important job?
Data source: SEC filings and BTS reports
Disclosure: At the time of writing, the author and his family hold stock and derivative positions in AMR.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 86 comments:
On Oct 31 01:39 PM The Geoffster wrote:
> Too many pilots maybe?
UAL Captain
Charts 62-64 will provide the wage percentage change of passenger fares for pilots, flight attendants and management.
www.airlinefinancials....
Robert Herbst
(author of article above)
On Oct 31 01:39 PM The Geoffster wrote:
> Too many pilots maybe?
Oh, and some airlines (eg JetBlue) do pay pilots double on holidays.
On Oct 31 01:28 PM AirBoss wrote:
> And as bad as the Majors story is -- and it is -- the story is far
> worse at Regional/ACMI operators, where the FO is at food stamp wages
> and flies more legs at low altitudes in the weather with less capable
> equipment.
small Boeing 737's. If you had you would change your tune..
forums.jetcareers.com/...
AIRCON
AIR CONFERENCE is a voluntary, non-profit association serving as the Washington-based labor policy organization of scheduled air carriers in the United States. Created in 1971 as a vehicle for dealing with accelerating labor costs on an industry-wide basis, AIR CONFERENCE provides for inter-carrier exchange of information on negotiations and other employee relations matters. It is the only legally approved forum for joint study of labor policy matters of common interest to the scheduled carriers.
aircon.org/
On Oct 31 03:38 PM mdwmann wrote:
> The pilots will be the demise of AA!
I would not invest in any airline stock as you are guaranteed that you will eventually lose $$$! Like the financial and medical industry the aviation industry must be completely be reorganized. All three industries are poorly operated and even though pilots do not nowhere come near to what the other two industries earn, all three need a complete overhaul!!!
Full disclosure, I was employed with Eastern Airlines in the '70's...R.I.P. EAL!
This stat however was very telling: "Over the next 24 hours, these pilots will make over 13,500 take-offs literally around the world [without an accident]".
Very true. The only other place I know of that has this kind of precision and accuracy is semiconductor manufacturing. Well done by the pilots; too bad about the drop in wages.
On Oct 31 03:38 PM mdwmann wrote:
> The pilots will be the demise of AA!
If one ever reaches a unique and only status, and the work being done is priceless, then and only then are you outside market forces. Like King Midas, be careful what you wish for....if higher salaries reduce airline profitability and thus the demand for pilot flying hours, did you then get what you wanted and not want what you got?
If you want the full story which includes more detail on what pilots/employees do? You can read it on the instablog.
seekingalpha.com/insta...
To t-bird-
Lots of wild stories about the airline industry. Factually since 1950 there have only been two time periods where the airlines have lost a lot of money.
(considers US based airlines)
1990-1993 the industry lost $12.8 billion
2001-2005 the industry lost $35.1 billion
1950-2008 the industry has a cumulative net loss of approximately $14 billion.
From 1950 through the 1978 deregulation there were no airline failures with small losses in only 3 years (1961-$38M // 1970 -$201M // 1975 -$84M)
Since the 1978 airline industry deregulation there have been over 200 airline failures in just the United States.
(data source: ATA)
Robert Herbst
AirlineFinancials.com
=======================
On Nov 01 08:37 AM Zenilvana wrote:
> Does the auto pilot at modern day airplanes have anything to do with
> the lower wages? Everything seems automatic. Are they just sitting
> there talking to either passengers or crews, except taking off and
> landing? Sometimes some falls asleep out of sheer boring. I may be
> the least qualified person to ask these questions. I just wonder.
> And then, why do airline executives command so much high compensation
> in contrast, of which question is also beyond reach of my concern.
Want real security? Arm the pilots. Most of them are ex-military officers who already have firearms training.
Don't blame price-conscious customers. We have to make a living too. There are other things we could do besides spend 4-5 hours trapped in a tiny seat with too-dry air, crying babies, and coughing passengers.
Two important comparative pilot levels are the same detail for commuter types (commuters now cover 100 seat aircraft...how did that happen?) AND... Cargo Pilots ... Lets see the charts on the guys who do not have the worries of bouncing flight attendents, seat belt lights and complaints to answer about spilled coffee !!! Take a look at FEDEX and.UPS and then a chart of top foreign carriers,,,aka BA, LH, JL, AI , AC,AF, TAM, LAN...and the Mideast, and Chinese carriers ...
This is another layer of middle class coming down and there will not be an end to new interested and trained replacements, because fewer interesting jobs exist and other decisions that bright students have to choose for careers. Right now management is still in control in U.S. labor.
I also feel turn of events was put in motion when a Flight Engineer's with skilled mechanical experience were taken out of the cockpit. There have been a number of incidents where another opinion/interpretation of indications or set of hands could have averted disaster, including taking over the cockpit. As an ex-flight engineer I can remember the pious attitude when the position was taken over by computers. Now it's come full circle and the intent is to make Pilot's redundant. As a passenger I'm not happy about that either.
While I endorse the concern regarding wages, on short international flights, the airport tax can exceed the cost of the ticket. Now THAT is unfair to all concerned.
As others have pointed out, it is a matter of supply and demand. Productivity can increase on some flights with larger airplanes, that might help.
Airplanes are getting more and more automated. The pilot is there essentially to deal with emergencies, that is when you are happy that you have an expensive, experienced captain on board. The investment in the future for governments and industry will be to reduce the number of emergencies and so improve productivity. One could imagine, for example, in say fifty years, a handful of extremely high paid pilots sitting on the ground someplace essentially in control of dozens of airplanes, ready to take the controls remotely at the merest hint of trouble, with all the feedback and sensory feel of actually being in the cockpit in control.
It would be interesting to calculate how much the mechanics make and compare education and training.
yes, computers can fly the plane in some circumstances...but you'd better have a smart, experienced human around when the link goes down or something strange starts happening. And it better be someone who feels some loyalty to the company and the safety of the passengers so they won't be playing the equivalent of 'dungeons and dragons' in the cockpit! a decent salary is one way to make responsible piloting more likely.
good article.
Pan Am was the prime example of bad management, now replaced by GM. GM still has one of the most isolated management structures in corporate America. Therefore GM is kaput, and still digging its own grave.
On Nov 01 10:45 AM americanincanada wrote:
> I believe in the capitalist, free market system. I suppose you can
> have government regulations that will insist on pilots getting paid
> much more, but the likely outcome is fewer, more expensive flights
> only available to an elite, just like it was in the first days of
> air travel.
> As others have pointed out, it is a matter of supply and demand.
> Productivity can increase on some flights with larger airplanes,
> that might help.
>
> Airplanes are getting more and more automated. The pilot is there
> essentially to deal with emergencies, that is when you are happy
> that you have an expensive, experienced captain on board. The investment
> in the future for governments and industry will be to reduce the
> number of emergencies and so improve productivity. One could imagine,
> for example, in say fifty years, a handful of extremely high paid
> pilots sitting on the ground someplace essentially in control of
> dozens of airplanes, ready to take the controls remotely at the merest
> hint of trouble, with all the feedback and sensory feel of actually
> being in the cockpit in control.
As in any other business pilots seized the opportunity to increase their pay because of demand. This got out of hand to some extent and caused a management backlash and whereas before management and the pilots enjoyed a very good relationship with the exception of Eastern which had problems within cockpits with union's, namely the ALPA and the FEIA and Eddie Rickenbacker the CEO. After he left things got even worse.
The question basically is how much is a pilot worth who is given a $300 million airplane and 450 people and told to "be careful" ?
Then came the growth of regional commuter airlines. Everyone with an airplane wanted to get in on the short haul market and commuters sprung up like weeds all over America. Plain economics dictates that you cannot afford to pay the pilot $250,000 a year and be able to survive with the seats available in the plane. So what do you do?
You compromise and attempt to hire a qualified pilot for a wage that makes economic sense. Is the life of a passenger on a commuter airplane worth any less than a passenger in first class on a 747. Of course not but now we have the problem that was so publicized on the Colgan crash in Buffalo. Both pilots hardly earned enough to subsist on.
At one time the military basically supplied the airline industry with highly qualified pilots and the airlines loved it and there was no shortage. Airline pay was extremely low until about 1964 when growth exploded. Prior to 1964 a good salary for a copilot was somewhere around $700 a month. Never mind telling me what $700 would buy in 1963.....I know. It was still low pay and most people who flew the airplanes did so because they loved "to fly airplanes"
Later when the military supply of pilots dried up money was the sole motivator for a new pilot applicant generally speaking because of the high pay rates.
The proficiency standards for a pilot need to be uniform and enforced.
This means that unions also need to adapt a standard and level of proficiency instead of shielding ever member because he pays dues.
This alone may have prevented the Colgan accident in Buffalo.
The FAA has done very little other than create an adversarial relationship with airline pilots. They bend with the political winds and always have. Case in point the DC-10 cargo door problem in the 70's. They knew it was unsafe but political pressure kept it quiet until several accidents made it impossible for them to overlook it any longer.
I don't know that I have proposed a solution but maybe I have helped you understand the problem a little better.
1) Deregulation - It has driven down prices and when that happens costs have to come down too. Wal-Mart is the text book example demonstrating this fact. It may bring some growth and more pilot jobs but not at the same wage rates as before. It's made flying a hassle and accelerated the use of virtual meetings (video conferencing, webex, etc) to replace face-to-face contact.
1) Pilot Unions - Pilots complain about management but management can pick up and leave whenever they feel unloved. Pilots can't really do that and it's their own fault. There union seniority puts them in a straight jacket; they can't strike easily and they can't just leave the airline either. What good does the union do? Not much except to keep the union executives living like swells.
3) 911 and the aftermath. We now have more hassle than ever with TSA making everyone's life more stressful than ever and adding more fee's to every ticket. Soon fees will surpass ticket cost on every flight.
None of these are good for the airline industry and by extension not good for any of the employees. Every employee is affected although I must say the pilots (especially APA) seem to complain, perhaps whine is a more apt description, than most.
Full disclosure - I have family in the industry including a captain.
On Oct 31 08:47 PM formerUAL wrote:
> Poor poor pilots! Just breaks my heart to see that their average
> wage at UAL has fallen to "just" $120k per year (and I question the
> validity of that statistic, UAL just retired the last of the small
> Boeing 737
For the most part, what you appear to want is just what is occurring now. i.e., pilot wages unadjusted for inflation are "free market" albeit a ~20 year low hourly pay rate.
The -problem- I attempted to show is a future one. Because the compensation/benefits for the (pilot) profession has deteriorated so much, there is simply no incentive to encourage the type of individual you will want/need and expect to be responsible for what is required to be the pilot of a commercial jet liner.
Currently some of the largest airlines have a majority of their pilots well into their 50's. While I don’t have the data to prove it, I have no doubt the average age of the pilots for most of the legacy carriers has never been as high as it is. Most major/legacy airline pilots of today are too old to just leave and start a new career. To make-up for lost compensation and pensions, more and more pilots are starting side businesses which, is also adding to the fatigue issue.
TODAY, pilot experience for the major/legacy airlines is not an issue. Airline cutbacks caused by the recession forced the furloughs of thousands of airline pilots, many of which are now flying for the smaller regional carriers. In addition, two years ago the mandatory retirement age was increased from 60 to 65. Three years from now those age 65 mandatory retirements will create thousands of pilot vacancies every year for at least the next decade plus.
In the past, well trained military pilots use to fill a high percentage of airline jobs. Retired military pilots are no longer going to the airlines when they can earn so much more in other professions. Because the pilot profession use to have desirable benefits, it attracted the very brightest and most responsible individuals.
This -story- is all about the safety of the future. As the relatively old but very experienced pilots of today retire, what type of qualifications do you -expect- from those who replace them? Flying a jetliner and having the responsibility for hundreds of lives is not as simple as many want to believe.
Robert Herbst
AirlineFinancials.com
=====================
On Nov 01 01:42 PM Ben Simonton wrote:
> Sounds like a stupid question to me. I would like a free market to
> determine how much they are paid, not some opinion held by one or
> more persons. What happened to the free market capitalism that made
> us the most prosperous nation in the world. We are fast losing it
> with these kind of questions.
On Oct 31 05:47 PM r2d2c3po wrote:
> What do you think about part of the problem being airfare discount
> shopping? People are able to search and book fares online and purchase
> the airfare that is .50 cents cheaper because they can save .50 cents
> over the other carrier. Will people buy from a airline that is
> raising its prices to increase pay wages across the board, from ramp
> to flight crew?
Over recent years, a greater and greater percentage of domestic fares are increasingly being set by the low cost airlines. Now, even some of the international routes are being developed by these same carriers-- to Mexico, the Caribbean, Central America, etc. Meanwhile, the legacies will continue to reduce their capacity and attempt to survive on more long-haul international routes.
To an even larger degree in the future, airline pilots are going to be paid at closer to market rates, even with the strenuous efforts of their unions to resist!
On Nov 01 06:09 PM hokieincanecountry wrote:
> The relatively-free market is working. The non-legacy airlines have
> the lowest costs per available seat mile--(e.g. Southwest, AirTran,
> JetBlue, etc.).
>
> Over recent years, a greater and greater percentage of domestic fares
> are increasingly being set by the low cost airlines. Now, even some
> of the international routes are being developed by these same carriers--
> to Mexico, the Caribbean, Central America, etc. Meanwhile, the legacies
> will continue to reduce their capacity and attempt to survive on
> more long-haul international routes.
>
> To an even larger degree in the future, airline pilots are going
> to be paid at closer to market rates, even with the strenuous efforts
> of their unions to resist!
Next time you fly on a "dark and stormy night" with lightning flashing all around you and the airplane in bouncing all over the sky, send a message up to the pilot and tell him you think he might be overpaid.
On Nov 01 06:09 PM hokieincanecountry wrote:
> To an even larger degree in the future, airline pilots are going
> to be paid at closer to market rates, even with the strenuous efforts
> of their unions to resist!
Maybe it's the unions.................
On Oct 31 04:15 PM Dave English wrote:
> American Eagle has long been a DOT major airline (over 1 Billion
> in revenue, over 200 aircraft flying over 5 time zones, etc etc)
> and it hires pilots with only 200 something hours and 10 hours in
> multi-engine aircraft. The starting pay is under $20,000. Folks buying
> a ticket on American may get the experienced gray haired AA captain,
> or they may get a kid who had his first flying lesson six months
> ago. It's a broken system.
>
> Oh, and some airlines (eg JetBlue) do pay pilots double on holidays.
The traveling public, buying a ticket on a part 121 airline deserves something better than an OJT rookie up front. Both pilots should have (1) an aptitude for flying, (2) relevant training, (3) proven track record, (4) experience.
The industry thinks number (2), training is all that matters and can make up for lack in the other 3 areas. Marvin Renslow demonstrated that does not work. The insurance company now will get writers cramp writing checks with lots of zeros.
"Today, like most every day, just over 44,000 experienced pilots"
"Over the next 24 hours, these pilots will make over 13,500 take-offs"
"they will be in command of over 36,000 hours of flight time"
This implies 3.2 crew members per leg.
Even if each cockpit crew is 3 - pilot, co-pilot and flight engineer, this seems way wrong as on average crews fly more than one leg per day if each leg averages only 2.7 hours. [I generously assume the 36,000 of flight time is leg-time and not aggregate pilot flight hours as it is hard to imagine only .82 flight-hours per pilot per day - 36,000 hour flight time divided among 44,000 pilots]
If only considering pilots, no way 44,000 used, even if each crew only flies 1 leg => 2x13,500 = 27,000
Also, what is the average load factor per leg been over the years?
The trend to larger aircraft increases this average, thus more passenger hours would naturally mean cockpit wage dollars per seat-hour would drop if salaries were the same. Dollars per seat-hour could even be dropping over time even if pilot salaries are rising.
Clearly more data [trends of - pilot count, aircraft size, load factor] is needed to confirm that cockpit crew costs are falling when measured by dollars per passenger seat-hour.
On Nov 01 10:13 PM Propwash wrote:
> The US Air Force launches new pilots off to fly anything in the USAF
> inventory with 250 hours of pilot time after they complete the 1
> year training course. 1st Lt. pay is pretty low too.
> Maybe it's the unions.................
On Nov 02 09:08 AM jbde wrote:
> Please explain the math:
>
> "Today, like most every day, just over 44,000 experienced pilots"
>
> "Over the next 24 hours, these pilots will make over 13,500 take-offs"
>
> "they will be in command of over 36,000 hours of flight time"
>
> This implies 3.2 crew members per leg.
> Even if each cockpit crew is 3 - pilot, co-pilot and flight engineer,
> this seems way wrong as on average crews fly more than one leg per
> day if each leg averages only 2.7 hours. [I generously assume the
> 36,000 of flight time is leg-time and not aggregate pilot flight
> hours as it is hard to imagine only .82 flight-hours per pilot per
> day - 36,000 hour flight time divided among 44,000 pilots]
>
> If only considering pilots, no way 44,000 used, even if each crew
> only flies 1 leg => 2x13,500 = 27,000
>
> Also, what is the average load factor per leg been over the years?
>
> The trend to larger aircraft increases this average, thus more passenger
> hours would naturally mean cockpit wage dollars per seat-hour would
> drop if salaries were the same. Dollars per seat-hour could even
> be dropping over time even if pilot salaries are rising.
>
> Clearly more data [trends of - pilot count, aircraft size, load factor]
> is needed to confirm that cockpit crew costs are falling when measured
> by dollars per passenger seat-hour.
Southwest can pay its pilots better because they are much more productive than the pilots of a typical legacy airline. They also have been profitable, and thereby have not needed to pass through bankruptcy court--not even once! Their fares are relatively low, and they (along with other low cost airlines) are setting the fares on many routes and steadily taking market share domestically from the legacies.
Look at total cost per available seat mile, not just at pilot pay and benefits. Southwest is still one of the lowest cost majors--they've lost their cost lead recently to AirTran.
On Nov 01 08:22 PM CAVU wrote:
> Then explain why the pilot labor costs at SW are higher than any
> legacy relative to ticket price. The industry is saying that pilot
> wages are the problem when the executive pay, poor planning, debt
> service costs for equipment aquisition, and just plain old mismanagement
> on executive levels are the real problem. Every time they screw up
> as executives...they get a bonus and try to cut pilot wages....free
> market is why regionals hire pilots that can't even fly on a good
> day without an autopilot. The system is not working at all....it
> is screwed up beyond repair...
> Ben,
> In the past, well trained military pilots use to fill a high percentage
> of airline jobs. Retired military pilots are no longer going to the
> airlines when they can earn so much more in other professions. Because
> the pilot profession use to have desirable benefits, it attracted
> the very brightest and most responsible individuals.
>
> This -story- is all about the safety of the future. As the relatively
> old but very experienced pilots of today retire, what type of qualifications
> do you -expect- from those who replace them? >
> Robert Herbst
> AirlineFinancials.com
Bob,
Thanks for an excellent article highlighting an important quandary facing both the airlines and the flying public in short order when pilot retirements start to increase again in three years. Pilots retirements have basically stopped for the next few years due to the recent increase in pilot retirement age from age 60 to 65. The rule change has helped keep experience pilots in the cockpit for the near term but this will not be the case in a few years when retirements again start to pick up. Airlines at some point will have to start replacing a very mature and experienced pilot force over the next decade.
Simply put, airlines are not attracting the top talent as they once did. As a former military pilot myself, I have friends in the military that will not touch this touch the airline industry due to the low pay and the inherent instability of the job and the profession. Over the past two decades, thousands of pilots have lost both pay and pensions due to the many bankruptcies that have occurred in the era of deregulation. Many potential pilot applicants see the inherent risk and shun any thought of a career as a pilot. Many furloughed pilots have now completely turned away from the profession and gone on to other careers, that even though may be less lucrative for the long-term, are less risky and more stable.
As a father of college and high school children, I am also seeing it among their friends when they find out their career path and potential earnings for pilots in the first 10-15 years. None of their friends are choosing a pilot career when they find out the amount of money, education and training needed to become a fully qualified professional pilot and consequently what they would be earning.
The cost versus benefit equation; why spend between $100,000 - $125,000 in education costs or dedicate 10 years in the military to land a job that will pay you between $16,000 - $35,000 the first 5-7 years and are expected to be away from home for up to six months per year? College graduates with creditable degrees in medical, engineering, and computer science can now expect to start in the range of $60,000 - $100,000 – that’s starting pay. Graduates with degrees in Petroleum Engineering are now starting in the range of $80,000 - $130,000 with $60,000 signing bonuses. This data is from the Colorado School of Mines in Golden, CO. Though it is fun and challenging being a commercial pilot, where is the economics in becoming a pilot? There is a very uncertain future facing pilots today.
Truth be told, when pay in ratcheted down, a lesser candidate is attracted. This is basic business sense. Some of the above posts show the naiveté of the general flying public today. Though modern airliners are marvels of innovation, they are still far from fly alone machines. Many things can still go wrong that requires competent human intervention. On a daily basis, only a small percentage of landings are actually done by the autopilot, most are hand flown. Examine the recent BA 777 accident in London where the pilot had to take over on short final when both engines flamed out due to icing in the fuel or when Sully made his great landing in the Hudson.
As the recent Northwest incident and the Colgan crash in Buffalo, NY fully illustrate, just a few minutes of neglect and inexperience on the part of pilots can wind up in sheer disaster and loss of lives and careers. Witness the impact of decrease wages among the regionals hiring practices this past decade. Pilots with experience levels as low as just a few hundred hours total time and a record of busted checkrides are now being hired and pushed through the pipeline.
The pilot position is too critical to the airline heath and economic well-being to hire novices and people of questionable character and education levels. An airline cannot expect to survive if the public cannot trust the pilots up front. One accident is worldwide front-page headline news and can bring an entire company to its knees in a matter of minutes. Keeping pilot compensation low is just penny wise and pound-foolish.
If the airlines (and the flying public) want to continue to have the best and brightest in the cockpits flying them around, there is little doubt the pay and compensation packages (hence ticket prices) will have to improve. Our lives and flying safety depend on it.
Craig Keller
AA 767 Pilot
Any artificial adjustment such as a minimum wage for pilots or whatever it is you people seem to be implying would be a disaster. A higher pay will attract higher quality people but you still need a way to distinguish them from the average.
> In the past, well trained military pilots use to fill a high percentage
> of airline jobs. Retired military pilots are no longer going to the
> airlines when they can earn so much more in other professions. Because
> the pilot profession use to have desirable benefits, it attracted
> the very brightest and most responsible individuals.
>
> This -story- is all about the safety of the future. As the relatively
> old but very experienced pilots of today retire, what type of qualifications
> do you -expect- from those who replace them? Flying a jetliner and
> having the responsibility for hundreds of lives is not as simple
> as many want to believe.
>
> Robert Herbst
> AirlineFinancials.com
>
> =====================
>
> On Nov 01 01:42 PM Ben Simonton wrote:
Your article is extremely well done and has stimulated quite a response. It seems that most agree that something needs to be done and I agree that increasing the standards for the job is certainly a step in the right direction but it has to be done with resolve. Unions have to brought on board and allow the weak link to go when it is time. Some one mentioned that the USAF turns pilots loose after 250 hours to fly anything in their inventory. Sir: that ain't so !
In my opinion a copilot in the cockpit flying passengers for hire with 250 or so total hours is unsafe and regardless of how much time the Captain has.
There is no excuse for the Colgan crash given the after report that the crew had never been given stick push training and treated icing a "somewhat of a problem".
I learned many years ago not to second guess an accident because I wasn't there but that one was pretty flagrant.
We have lots of pilots sitting in the left seat of commuter airlines and some major airlines who have never been in more than 45 degrees of bank and "upset training" is minimum if at all.
This is indeed a serious problem facing the airlines in the future.
I am glad that I had 40 years {5 Navy and 35 with a major} and it was at the very best of time in both.
Management can make mistakes again and again, and still get bonuses and pay raises. Pilots can usually only make a mistake once...with terrible consequences.
Because air travel is so common now and reasonably affordable, most consumers are very jaded. The American sense of entitlement at all levels will hopefully be successfully reevalutated when it comes to this particular issue with lives at stake. And it won't take continued tragedies before companies wake up to the coming dilema of experienced pilots shortages that are already escalating.
Unfortunately when it comes to executive pay, whether in the airlines or wall st. it seems that the status quo of greed and inefficiency still reigns over reason and common sense.
Be careful what you wish for when it comes to cheap travel.
Southwest can pay its pilots better because they are much more productive than the pilots of a typical legacy airline. They also have been profitable, and thereby have not needed to pass through bankruptcy court--not even once! Their fares are relatively low, and they (along with other low cost airlines) are setting the fares on many routes and steadily taking market share domestically from the legacies.
Look at total cost per available seat mile, not just at pilot pay and benefits. Southwest is still one of the lowest cost majors--they've lost their cost lead recently to AirTran.
On Nov 01 08:22 PM CAVU wrote:
> Then explain why the pilot labor costs at SW are higher than any
> legacy relative to ticket price. The industry is saying that pilot
> wages are the problem when the executive pay, poor planning, debt
> service costs for equipment aquisition, and just plain old mismanagement
> on executive levels are the real problem. Every time they screw up
> as executives...they get a bonus and try to cut pilot wages....free
> market is why regionals hire pilots that can't even fly on a good
> day without an autopilot. The system is not working at all....it
> is screwed up beyond repair... Nov 02 10:11 AM |Report abuse| Link | Reply 00
You are guilty of gross plagiarism, as you posted two of my paragraphs (which I posted this morning) as your own without any attribution.
hokie...
On Nov 02 01:44 PM Vote TL wrote:
> People are overlooking the reason that Southwest currently has better
> pay packages at the moment. They were moved to the top of the list
> due to legacy airlines going bankrupt and being bailed out. ie...
> massive labor cost cutting and pay reductions Most of the concessions
> with these companies were made by Labor and Unions to save their
> jobs. Now Southwest looks like they pay the most...only in comparison.
> The reason they haven't had to go through this is that they have
> managed to stay profitable for 30 years. (only this may not hold
> true in this economy)
>
> Management can make mistakes again and again, and still get bonuses
> and pay raises. Pilots can usually only make a mistake once...with
> terrible consequences.
>
> Because air travel is so common now and reasonably affordable, most
> consumers are very jaded. The American sense of entitlement at all
> levels will hopefully be successfully reevalutated when it comes
> to this particular issue with lives at stake. And it won't take continued
> tragedies before companies wake up to the coming dilema of experienced
> pilots shortages that are already escalating.
>
> Unfortunately when it comes to executive pay, whether in the airlines
> or wall st. it seems that the status quo of greed and inefficiency
> still reigns over reason and common sense.
>
> Be careful what you wish for when it comes to cheap travel.
>
> Southwest can pay its pilots better because they are much more productive
> than the pilots of a typical legacy airline. They also have been
> profitable, and thereby have not needed to pass through bankruptcy
> court--not even once! Their fares are relatively low, and they (along
> with other low cost airlines) are setting the fares on many routes
> and steadily taking market share domestically from the legacies.
>
>
> Look at total cost per available seat mile, not just at pilot pay
> and benefits. Southwest is still one of the lowest cost majors--they've
> lost their cost lead recently to AirTran.
>
> On Nov 01 08:22 PM CAVU wrote:
On the other hand, technology and regulatory structure could make it so we all just work and vacation in cyberspace, and no one has to travel anywhere.
The question- which is the future? And should it be decided by a marketplace, or elected officials? If the marketplace, then pilot salaries will continue to drop as technology and labor availability conspire to make qualified pilots less scarce relative to demand. If elected officials- then get ready for thousands of more articles like this touting pilots, planes, travel, cyberspace, CO2, and every possible factor regarding air transport...
Both articles below written back in 2007 before 3407....
----------------------...
Expectations, and how to save $5 on an airline ticket
“When I fly, I always take Delta… That’s because they pay their pilots the most money… You don’t want to fly with unhappy pilots.”
Johnny Carson, Tonight Show monologue, 1981
Traversing race, culture, gender, education level and socio-economic standing is the desire to be happy. It is the most powerful force buried at the center of the human soul. An individual’s “happiness” is directly linked to how life unfolds relative to expectations. Hopes and dreams in a mate, family, friends, social standing, or a career are just a few areas that can fall short, meet, or exceed expectations.
Tragic irony of high expectations is the possibility they will not be met hence a greater risk of an unhappy life. Throughout life expectations are created and destroyed. Over the course of a lifetime a common pattern emerges where expectations follow a trace akin to a bell curve. Zero at birth, peaking mid-life, and diminishing as one passes the “mid-life crisis”. With this knowledge one might conclude the key to happiness at any point along the curve is to simply lower your expectations. Unfortunately expectations are often set as a result of something external to or as a result of something the individual did or did not accomplish. Print, video, and other environmental exposure are powerful influences. Performance in academics, sports, social life, college and graduate school play an important part of setting expectations. Success indexes life’s expectation curve higher while failure drives it lower. A driven, successful, highly capable person who has climbed the ladder to Chief of Neurosurgery at Massachusetts General will have radically higher expectations than a person who flunked out of high school, smoked dope for three years before setting a lifetime career goal to become a forklift driver at the city garbage dump.
Business leaders recognize it’s essential in a market-based enterprise to have happy employees. “Best man or woman for the job” does not imply the one who has the highest level of capability but rather the person whose capabilities and expectations most closely match the duties, responsibilities, and compensation the job has to offer. Management must balance the need for competence against cost. When a business cannot meet employee and customer expectations balanced against revenue, it will fail. When an entire industry finds itself in this situation, the entire industry will fail.
In the airline industry an unprecedented percentage of unit revenue and unit expense is outside control of management. In 1978 pricing power was wiped out with passage of the Airline Deregulation Act. During the 1990’s the Internet matured making it almost impossible to gain a revenue advantage over a competitor. Awash in red ink it was no surprise the chainsaw was wielded at labor in an attempt to reduce costs following the Dot-com bust of 2000 and the events surrounding September 11, 2001. It was the perfect storm. Luckily the airlines had resources in place to deal with the tragedy. For the last 35 years a Washington D.C. based think tank funded by the airlines, Airline Industrial Relations Conference, has existed to achieve one objective: Control airline personnel cost. How well have they done? In a word, phenomenal. I will illustrate the fruits of their labor with their crowning achievement.............. Airline pilots
In terms of inflation adjusted dollars, Airline pilots today earn less than half of what they did 35 years ago. The unit of work can be measured by flight hours, duty hours, hours away from home, Revenue Passenger Miles, Available Seat Miles, or most importantly, revenue generated per pilot.
Industry hyperbole: Pilots are paid way too much. Look at the hourly wage. Look at how little they work. Seems like a whole lot of money to pay someone for a part time hobby.
In reality if consideration is given to opportunity cost, time value of money, true number of hours required to become and work as a commercial pilot, risk in terms of not completing a career for any number of reasons, including getting killed; The economic justification is not substantiated to become a commercial pilot even if the career goal is attained.
Industry belief: There is not now nor will there ever be a shortage of people willing to work as pilots at any wage.
True fact. Nor will there ever be a shortage of people willing to be Professional Ball players, or Firefighters or CEOs at any wage. The question is this: Will the industry be able to attract and retain the level of competence required at any wage? The answer is no. At the current Federal minimum wage you would not be able to consistently find competent Professional Ball players, Firefighters, CEOs or Airline pilots.
Industry stance: Pilots don’t get paid minimum wage and planes are not falling out of the sky.
The current national manpower pool of airline pilots came in with substantially higher career expectations, thus capability than what will be the next generation airline pilots. Airlines now operate on borrowed time during the transition. It will take years, perhaps a decade for current pilots to retire and or leave the profession in significant numbers before the damage to safety will be acknowledged.
Industry opinion: Statistically we are enjoying an era of unprecedented airline safety. There will always be some level of risk to flying.
A time bomb is being built as airlines focus on lower expectation pilots. As the industry continues the “race to the bottom” airline leadership will confront a pilot labor pool decimated to such an extent that safe, reliable air transportation will no longer be feasible within the cost structure they created. As the next generation pilots take command we will see much more of what is now just the tip of an alarming iceberg: Unthinkable missteps by incompetent pilots resulting in massive loss of life and substantial hull losses. Recent events such as the Helios 737 crash, the West Caribbean MD-82 crash, the American Airbus A300 crash, the Northwest Pinnacle CRJ crash and the Delta Comair CRJ crash are examples are inexcusable errors that should have never happened. Safe air travel was built by minimizing identifiable risk. The industry has become complacent with the current level of safety and is willing to accept increased risk in an effort to reduce personnel costs.
Industry objective: Replace human capability with technology. Over the last 35 years the modern airliner has been loaded with safety features in an attempt to idiot-proof flying. If we can teach Homer Simpson to run a nuclear power plant we can now teach his twin brother to fly a jet plane.
Flying is a dynamic environment requiring considerable judgment and intervention beyond the capability of technology. Members of the Airline Industrial Relations Conference need to dispatch with the NTSB Go Team so they could see first hand the true fruits of their labor. The severed body parts and blood splattered airplane wreckage. The stench of burned human flesh and charred remains at the crash site of Delta Comair 5191 in Lexington, Kentucky. They should be required to console the loved ones of those who were killed. Only Airline Industrial Relations Conference members would attempt to quantify why such a hull loss is acceptable. Air Conference members should be held accountable for manslaughter, or if they fully understand what they have done, murder. Safety of the flying public needs to take priority over trying to staff airline cockpits with the cheapest human resources the industry can find. The Simpson’s is just a cartoon.
Interviewing people from every walk of life for three decades he understood what made people tick. If he were alive today, Johnny Carson would not be flying Delta or any other airline. He would not be able to find any well-paid happy pilots. The leaders of the airline industry have won and the flying public has lost. And it was all for what? $5.
----------------------...
MPL: the future of your career
Financial failure of the airline industry and all its woes can be traced to one cause. Lack of self-control. Post deregulation the industry irrationally over supplied the market with seats. Concerns of the cost to provide service or that the demand for their product is finite was ignored. They turned their service into a commodity and lost the ability to set a price in the market. For well over a decade the only recourse has been cost reductions. Many line items were non-negotiable so all effort was focused on those items where possible savings could be realized. Unfortunately as they reached the bottom even safety related items were not exempt from the ax.
Management proclaims, “labor must be paid at market rate”. Airline workers look around in bewilderment and don’t understand that the “market rate” has nothing to do with what other airlines are paying or what their jobs had paid in the past. The “market rate” has nothing to do with trying to find highly qualified human resources to join a dynamic team. “Market rate” is simply lowest cost labor an airline can find to perform a task. This is problematic in the airline business because it’s a service industry and several jobs are safety sensitive. Two glaring examples include pilots and mechanics. The bar has been significantly lowered for entry into the pilot profession. Extensive experience levels, testing, screening, astronaut physicals and simulator evaluations of yesteryear are gone. This is great news for those who want to fly as airline pilots. Barriers to entry have never been lower. Bad news for those expecting a high paying career as a pilot, also bad news for passengers expecting airlines to be selective and staff the flight deck with highly capable crews. In the maintenance area airlines have attempted to distance themselves by outsourcing. In some cases even outsourcing the work to another country.
When and where did the coordinated attack against labor originate? A substantial level of credit (or blame, depending on your perspective) can be attributed to 35+ years of work by the Airline Industrial Relations Conference. AIRCON was established by the airlines before deregulation as a balance of power over labor unions and its formation required government approval since such collusion would have been considered illegal. After deregulation the balance shifted towards management and has become very biased in their favor over the last decade. Beyond AIRCON and deregulation precipitating factors include:
- Internet
- Economy swings
- September 11, 2001
- Price of jet fuel
- Governmental taxes, fees and regulations
- Legal environment favoring business over labor
- Revenue shift, as more high margin passengers are able to abandon airlines and seek out hassle free travel afforded by private, charter, fractional and Very Light Jets (VLJs)
- Reliance on safety equipment, warning systems, automation and new technology to take the place of capability
- Reliance on standardized training, procedures and increased oversight to take the place of judgment and decision making
A little more detail and insight concerning the pilot flying your airliner reveals the following: Historically the career path to a Captain’s seat took many years. After college a pilot would typically put in 6 to 10 years of military or civilian flying and then move on to the airlines. The pilot would then begin his/her airline flying in the Flight Engineer seat. Eventually the pilot would be promoted to First Officer. Often more than 20 years after s/he began flying, and literally millions of dollars worth of flight experience, the pilot would finally upgrade to Captain of a jet airliner. The FAA “minimums” were never the true “minimums” for the job because the “average” applicant far exceeded the “minimums”. A significant safety margin occurred as airlines sought out pilots with the highest level of education, training, experience and physical attributes available. Compensation packages were very attractive and the airlines could select exceptionally qualified individuals to pilot commercial airliners.
Today things are quite different. As self-inflicted financial stress and competitive pressures grew, the “race to the bottom” forced the airlines that once had the luxury of seeking out the best pilots money could buy, to find the cheapest pilots money could buy. In the United States the FAA determines the “minimum” qualifications to perform the duties of a commercial airline pilot. We are now seeing airlines put pilots in very complex jet aircraft who barely meet the “minimums”. The public unknowingly assumes the government provides adequate safeguards when they buy a ticket, and airline management feels secure they can point the blame to the FAA if something goes wrong. Excellent industry safety records have allowed deliberate reductions in safety margins to facilitate cost reductions. This is where morality collides with free market forces. A safety record is history. The thing that matters right now is the flight you are about to take. The obligation should be to minimize identifiable risk, and operate every flight with the highest level of safety, not the lowest level of cost.
Worldwide ICAO regulations determine the minimum qualifications for various aviation related standards, including pilot qualifications. Recent changes in ICAO regulations have significantly lowered the qualification requirements for new airline pilots. In an attempt to lower labor costs, reductions in pilot experience levels have been agreed on. Under new regulations a recently created Multi Pilot Licenses or MPL rating is so short on experience that a MPL pilot would only be allowed to fly ANY aircraft under the supervision of another pilot. In the past both airline pilots were qualified with previous “Pilot in Command” flying experience. Now under this scheme pilots will gain experience on the job with the unsuspecting passengers in the back, hopefully, oblivious to the lack of experience up front. It will be interesting to see how the insurance underwriters respond to writing very big checks for avoidable “pilot error” hull losses.
The MPL was a big step backwards for air safety. As the safety margin shrank from what was once the very robust level of qualifications, getting ever so close to actual “required minimums” the industry- Airlines, Insurance Companies, FAA, ICAO, and pilot unions should have sought to increase “minimums” not lower them. Currently the FAA has not approved the new lower standards for use in the United States but nothing prevents a foreign airline from flying into or out of the country with a MPL pilot at the controls. If you think the safety records for some of the foreign airlines have been marginal, just wait. One reason for two pilots is to account for the possibility of incapacitation. If the (soon to be 65 year old) Captain becomes incapacitated, who will supervise the MPL trainee who is not allowed to fly unsupervised?
Southwest Airlines is unique in that they require every pilot to hold an Airline Transport Rating or ATP with a PIC type rating before being placed on the payroll. This applies to the Captain and First Officer. This means the FAA has determined both pilots are qualified to act as “Pilot in Command” and goes beyond the FAA “minimums” and very far beyond the new ICAO “minimums”. No other domestic airline requires this level qualification. Next time you board an airline other than Southwest ask the First Officer if s/he holds a ATP and PIC type for the aircraft you are about to fly. Then ask yourself “Why am I flying with a flight crew less qualified than Southwest?”
And no, I do not fly for Southwest.
1. Most pilots are stuck where they are at. They have few skills that are transferrable. So most are not going anywhere despite pay, and the airlines know that. Not all pilots, of course.
2. It is just much easier to fly a plane than it was twenty, thirty, forty, fifty years ago when the pilot needed to stay engaged the entire time. Pilots would leave the cockpit wet from sweat from manually flying the aircraft. Not now.
3. ALPA has done much to reduce pilots' image from professionals to rank-and-file blue collar labor, leaving the public, which is predominately anti-union, with little sympathy for them.
4. Cost pressures will squeeze airlines to be aggressive during contract negotiations.
Disclosure: I am former Delta.
I couldn't give the whole Company high management grades but the Treasurers department gets the highest marks.
On Nov 01 12:16 PM User 105447 wrote:
> Sorry, but there is no way a "cyber-enviroment" can duplicate all
> sensory inputs. Most importantly the will to stay alive. When aircraft
> become drones controled from a central location, I will stop flying
> or get my own plane.
> Pan Am was the prime example of bad management, now replaced by GM.
> GM still has one of the most isolated management structures in corporate
> America. Therefore GM is kaput, and still digging its own grave.
>
I'm convinced of your devotion to the job you are doing, but flying planes has been moving from the heroic ( early XX century) to automatic control, today you can tell that fighting pilots are in the last generation, the next Fxx will be without pilots will be more capable with more G's force turns and less training and expense.
As a DARPA scientist friend told me once "the only reason to have pilots in a plane today is the psychology impact in passengers", but day will come, today people moves in automatic train in air terminals, tomorrow will move their cars in automated highways.... that day passengers planes will be automatically operated, we are 15 years away of it.
the pilots are the only thing keeping it going!
On Oct 31 03:38 PM mdwmann wrote:
> The pilots will be the demise of AA!
Your comments are unbelievable. Who said experience and experience alone is all that is required to make a safe pilot? Only you. Your argument is against yourself. Unbelievable.
A pilot should have 4 things:
(1) Aptitude
(2) Training
(3) Performance history
(4) Experience
4 items. Clear on that?
4 things. Got it?
Don't substitute 1 for the other 3. Comprendo?
Don't assume lack in 1 area can be made up for by extra in another. Understand?
Why do you suppose that for decades JAL hired only English speaking pilots. The reason is because Insurance companies would only insure their airplanes if they did. The reputation of Japanese pilots was not good. I am not taking away anything from them but for the longest time they were amomg the world's worst instrument pilots. I was TDY once to the JMSDF for purposes of ferrying a C-118 from Burbank to Tokoyo because they didn't have anyone they could trust to do the job.
The previous post by seaav8tor states it perfectly !
On Nov 02 11:50 PM Milano wrote:
> Unbelievable! Who is this guy and how does he equate experience with
> safety? These two things have only a minimal correlation. > no experience in the cockpit. Some of these "excellent" candidates
> have never even flown as a passenger inside of a commercial plane.
> Yet they go on to become some of the best pilots in the world. Really
> now, how can a Japanese pilot who is 32 years old land a 747 just
> as competently (if not more competently) than a a 55 year old U.S.
> pilot who is more experienced? No doubt that experience is an important
> criterion. However, I believe that diligence and work ethic are more
> relevant factors to being a safe pilot. Case in point is the very
> experienced Northwest pilots who recently overshot the MSP airport
> by 150 miles. They both had decades of experience and an excellent
> safety record yet apparently had no regard for the safety of their
> passengers. I would say that they were neither diligent employees
> nor did they hold a high degree of work ethic. This author needs
> to focus on the other factors that compromise safety. Experience
> is a way to scare people and ask employers for more money. The salary
> of large commercial jet pilots needs to decrease, while the salary
> of small jet and small prop pilots need to increase. The danger lies
> with these smaller regional operations where the lack of pay together
> with extreme fatigue causes unsafe conditions.
On Nov 03 03:37 AM seaav8tor wrote:
> Milano,
>
> Your comments are unbelievable. Who said experience and experience
> alone is all that is required to make a safe pilot? Only you. Your
> argument is against yourself. Unbelievable.
>
> A pilot should have 4 things:
>
> (1) Aptitude
>
> (2) Training
>
> (3) Performance history
>
> (4) Experience
>
> 4 items. Clear on that?
>
> 4 things. Got it?
>
> Don't substitute 1 for the other 3. Comprendo?
>
> Don't assume lack in 1 area can be made up for by extra in another.
> Understand?
My opinion is that airlines have become ATMs for CEOs and the like. Every penny that they save (take away) from a pilot does not go toward another valuable cost. It goes directly to the Executives' pockets. There are many areas where greater costs can be achieved, and in most cases they are. Such as landing fees, aircraft leases, engine leases, fuel hedging, and an array of other things. However, lining their pockets while taming labor must be a nice profitable game to play.
These non-labor savings are probably the biggest reason why airlines are able to bring cost efficiency to the traveling public. Paying pilots a reasonable salary would only increase their costs by a few cents. However, most CEOs must feel that they are entitled to that money and not the pilots (a calculated risk perhaps). Yes, some of it may have to do with supply and demand, especially after 911. The problem however, may come in the near future when the supply of not only pilots, but well qualified pilots could be in short supply. No college student in their right mind should pursue this career. Not when he/she can expect to make $20,000 their first year and not very much more for many years after that.
I for one have not, and will not take my 12 yr old son flying on a small airplane. Why? Because he's an ingenious kid and I'm terrified at the idea of him liking it to where he'll want to pursue it as a career. I'm simply not prepared to take that risk with him. Not with these CEOs who want to Walmartize this industry. Furthermore, I don't know too many other airline pilots who would encourage their own kids to pursue this career either.
Unions: Unions are a necessary evil in this industry. Without them, the majority of airline pilots would probably qualify for food stamps. It's not an exaggeration, it's a fact. The talent at the top (CEOs) now at days appear to have been trained by the likes of the elites in third world countries, such as Mexico and Guatemala. Where the rich are super rich while down the street there are people starving and living in cardboard boxes. If you've been to any of these countries you've probably witnessed it.
Most of these Executives are not interested in creating a good product, or reasonable wages for their employees. They're merely interested in the size by which their bonuses can be increased each year. Sadly, pilots due to our investment in our careers and the lack of mobility, have become good targets of opportunity for them. Even worse, the laws over years have been tailored to their convinience to make it easier to achieve this goal. Just like Wallstreet and Bankers, taking all they can because they can.
Our argument is not merely pay for the sake of pay. Rather it is pay commensurate with the upkeep, responsibility, liability, and training that a professional pilot has to endure. Things such as Medicals every six months, EKGs if over 35yrs of age, jeopardy checkrides every six months or every year for First Officers, dealing with the stresses of congested airspace, congested ramp areas and taxi ways, and last but not least, being left with huge amounts of debt from student loans for most. For some these loans can exceed $100,000. Yet most will not make much more than $70,000 for the better part of the first ten years of their careers. The pay and treatment of pilots by this wave of Executives is simply not on par with what it takes to be in this profession.
The fact of the matter is that you didn't do anything to contribute to high salary, high quality airline jobs. You are simply a beneficiary of some guys who had some principles and balls a few decades ago. When it's all said and done, you will have extracted much more from this industry than you gave. I can smell you from here.
On Oct 31 04:20 PM 757okie wrote:
> yeah and all the regionals would love to take majors jobs for the
> regional price
On Nov 03 08:28 AM Talon wrote:
>. As far as "performance history", isn't
> that experience? Comprendo? Understand?
No it is not.
A pilot can have 10,000 hours of experience..... But, if he/she,
Busted out of military pilot training, then,
Went the civilian route and busted the Private check ride,
Busted the Commercial check ride,
Failed the first attempt on the ATP exam,
Busted the ATP check ride,
Has 2 FAA incidents, 3 violations,
1 aircraft accident, hull loss, pilot error, resulted in a temporary suspension,
1 DUI
Then, the pilot has a significant amount of experience but a poor performance history.
As many can tell, I hardly ever post. But this article and many of the comments compelled me to do so.
I "assumed" that a quick mouse drag and copy would clearly indicate I was making comments relating to YOUR post. Sorry for the mistake.
I was only trying to add and clarify SW's current pay structure and why they are at the top. I thought that it would give more ammo to your comments. That is all. I'm clearly not the brightest on blog technology, but I'm certainly not trying to steal your thunder. Peace.
Vote TL
hokieincane...: Comments (10) FollowVote TL,
You are guilty of gross plagiarism, as you posted two of my paragraphs (which I posted this morning) as your own without any attribution.
hokie...
On Nov 02 01:44 PM Vote TL wrote:
> People are overlooking the reason that Southwest currently has better
> pay packages at the moment. They were moved to the top of the list
> due to legacy airlines going bankrupt and being bailed out. ie...
> massive labor cost cutting and pay reductions Most of the concessions
> with these companies were made by Labor and Unions to save their
> jobs. Now Southwest looks like they pay the most...only in comparison.
> The reason they haven't had to go through this is that they have
> managed to stay profitable for 30 years. (only this may not hold
> true in this economy)
>
> Management can make mistakes again and again, and still get bonuses
> and pay raises. Pilots can usually only make a mistake once...with
> terrible consequences.
>
> Because air travel is so common now and reasonably affordable, most
> consumers are very jaded. The American sense of entitlement at all
> levels will hopefully be successfully reevalutated when it comes
> to this particular issue with lives at stake. And it won't take continued
> tragedies before companies wake up to the coming dilema of experienced
> pilots shortages that are already escalating.
>
> Unfortunately when it comes to executive pay, whether in the airlines
> or wall st. it seems that the status quo of greed and inefficiency
> still reigns over reason and common sense.
>
> Be careful what you wish for when it comes to cheap travel.
Vote TL only. Hokie to follow
> Southwest can pay its pilots better because they are much more productive
> than the pilots of a typical legacy airline. They also have been
> profitable, and thereby have not needed to pass through bankruptcy
> court--not even once! Their fares are relatively low, and they (along
> with other low cost airlines) are setting the fares on many routes
> and steadily taking market share domestically from the legacies.
>
>
> Look at total cost per available seat mile, not just at pilot pay
> and benefits. Southwest is still one of the lowest cost majors--they've
> lost their cost lead recently to AirTran.
>
> On Nov 01 08:22 PM CAVU wrote:
Your comment speaks for itself.
On Oct 31 03:38 PM mdwmann wrote:
> The pilots will be the demise of AA!
Years ago, I met a pilot who'd just started flying. He didn't tell me about the thousands he expected to make in 10 years, or the chalet he just purchased in Snowmass. He told me how happy he was to be able to do something he loved. He told me he would do it for free and couldn't believe he was actually getting paid for it. As far as executive compensation goes, it was you, the stockholder (and you probably have some airline stock) that hired him. You offered him a certain amount of money and he said OK. You did it through your board of directors that you elected. That CEO is getting as much as he can, just like you... and me, I might add. But, if you don't think he's worth it, fire him. I saw a guy on the street corner who would be MORE than willing to be your CEO for well under 100K. All that savings could be split up amongst you and your colleagues ... until your company folds (I hope you don't have too much airline stock).
It is what it is. The economy, consumers, employers and employees alike have been confronted with some of the most incredible challenges we've ever faced. Each of us is trying to make it through the day-to-day. We're trying to pay for our house, our car, tuition for our kids... and put food on the table. My folks didn't pay for my college... which was a lot less, I might add ... till the profs began telling people how important THEY were. Anyway, maybe our dollars would go farther if we ate out less and practiced a little frugality
I've been in this business for over 35 years. I've seen my "real" income slashed by over 50%. But thank goodness I don't need to buy expensive American "Union made" tools and toys like I used to! The Chinese have enabled me to live the "beyond-my-means" lifestyle I've become accustomed to. I just saved $22 on a pipe wrench last week! I can use that savings toward that Sony 55" TV I've been eyeballin'. I shouldn't hafta tighten my belt. It's everyone elses fault our economy in the skids... and my credit cards are all maxed out at 29.99%. Airlines let me fly coast to coast for less than a hundred bucks and I can finance my car for 7 years now... so the $500 a month for that compact, full-sized Chevy Impala won't break my bank.
To maximize your earnings potential, you need to research the jobs that are actually in demand. Nurses are able to name their hours. As the boomers, and airline pilots, age, there'll be a greater need for health care professionals... Doctor.
Oh yeah, lest we forget, wasn't it a pair of experienced airline pilots who just happened to overfly Minneapolis by some... what was it, 150 miles... cuz they were playing Mah-Jong Challange on their laptops? At least the commuters don't have enough room for computer shelves in the cockpit.
OK, future sense? There won't be enough pilots cuz they're now all into nursing. The airlines won't have enough to fly all the planes so they'll hafta cut back. Passengers will compete for the fewer seats with more bucks. Enhanced revenue per ASM will mean airlines' bank accounts will be flush with cash. The pilots that are left will be able to command higher wages.
OMIGOD! Make more, pay more... make less pay less. We may be on to something here!
On Nov 01 03:25 PM Robert Herbst wrote:
> Ben,
>
> For the most part, what you appear to want is just what is occurring
> now. i.e., pilot wages unadjusted for inflation are "free market"
> albeit a ~20 year low hourly pay rate.
>
> The -problem- I attempted to show is a future one. Because the compensation/benefits
> for the (pilot) profession has deteriorated so much, there is simply
> no incentive to encourage the type of individual you will want/need
> and expect to be responsible for what is required to be the pilot
> of a commercial jet liner.
>
> Currently some of the largest airlines have a majority of their pilots
> well into their 50's. While I don’t have the data to prove it, I
> have no doubt the average age of the pilots for most of the legacy
> carriers has never been as high as it is. Most major/legacy airline
> pilots of today are too old to just leave and start a new career.
> To make-up for lost compensation and pensions, more and more pilots
> are starting side businesses which, is also adding to the fatigue
> issue.
>
> TODAY, pilot experience for the major/legacy airlines is not an issue.
> Airline cutbacks caused by the recession forced the furloughs of
> thousands of airline pilots, many of which are now flying for the
> smaller regional carriers. In addition, two years ago the mandatory
> retirement age was increased from 60 to 65. Three years from now
> those age 65 mandatory retirements will create thousands of pilot
> vacancies every year for at least the next decade plus.
>
> In the past, well trained military pilots use to fill a high percentage
> of airline jobs. Retired military pilots are no longer going to the
> airlines when they can earn so much more in other professions. Because
> the pilot profession use to have desirable benefits, it attracted
> the very brightest and most responsible individuals.
>
> This -story- is all about the safety of the future. As the relatively
> old but very experienced pilots of today retire, what type of qualifications
> do you -expect- from those who replace them? Flying a jetliner and
> having the responsibility for hundreds of lives is not as simple
> as many want to believe.
>
> Robert Herbst
> AirlineFinancials.com
>
> =====================
>
> On Nov 01 01:42 PM Ben Simonton wrote:
Some intelligent discussion.
Much sad commentary by some very short sighted and ignorant fools, sound like congressmen.
Enjoy the "free" safe ride you are getting from my 32 years of perfect "performance history".
You take all the risks you want, but you won't catch me riding in a commercial airliner behind some 30 day wonder with "foolproof technology" when my generation has moved on!
Call it whatever the hell you want, there is absolutely no safe substitute for experience in aircraft operation, none.
On Nov 01 10:47 AM finmah@yahoo.com wrote:
> Interesting article but while wages appear to be low - what about
> all the work rules? This is often forgotten unitl you are management
> trying to schedule and also figure in retirement packages with health.
> Aren't JetBlue and Southwest different -nonunions? Same for auto
> worker - it isn't only the actual hourly wage but the restrictions
> like lack of cross functionality ie some airline pilots help with
> the luggage or ticketing?
>
> It would be interesting to calculate how much the mechanics make
> and compare education and training.
One of my lifetime best friends was a pilot for United Airlines and what I know about him is that he was screwed tattoo and put out to pasture in the harshest way a man going into retirement could every be treated. He lost $$millions$$ of dollars in his lifetime pension annuity retirement income benefits to the stupid management decisions and failure to put enough monies away to fund promised pension payments for his and his fellow United Airline pilots pension plan. So much so it was forfeited over to GPBC (Guaranty Pension Benefits Pension)and reduced to 1/4 of it's required payments for life. Sadly GPBC itself is being overloaded with GM,C, and many other banks and hundreds of to come bankruptcies and failures in corporate America. So these lifetime faithful employees, Flight attendants, tarmac workers will ultimately see GPBC go busted as it's now almost in default by billions of dollars to end with up all of these wokers losing everything th ey saved and after a dedicated lifetime of working?? FAIR? NO...a disaster for all of these retirees.
Who in the hell is crazy enough to INVEST in these AIrlines.Companies starting out losing money going thorough their entire existence losing money??Daaaa Something's wrong with that picture./ This article as good as it is only points out a small part of the horrible outcomes for all of these employees.
As a financial planner, investment consultant all my working life I had the privilege of working with many old Piedmont Airlines and US Air pilots etc and actually talking them into taking early retirement and demanding a lump sum payout settlement on every possible penny that they could get and putting their fund in Section 72 IRA Roll Over plans and diversify their entire retirement program. Lucky for them my advise to them, they are all happy campers now with their full boat withdrawals setting in their own self managed plans. Because of their decision to take early retirement and a lump sum settlement rather than a paid monthly pension payout.They've had the sad privilege of watching their fellow airline employees who choose not to do that see their invested funds, pension funds plans get destroyed like so many of the United Airline pilots have in the last 8..9 years.
Sadly I couldn't convince my dear friend to do the same with his United Airline Funds and UAL stock back then. He like his fellow retirees have somewhat lost it all..no lump sums..the airlines stopped allow that years ago. What has happened is he's had him monthly pension reduced to 1/4 of what he should be getting. He now stands to even lose that payment option when we will end up seeing the GPBC go the way all of us will see Medicare and Social Security crash around our heads!! Sad Sad state of future affairs!
NO AIRLINE STOCK INVESTMENTS FOR ME EVER!!!
AIRLINE MANAGEMENT SUCKS!!! IRLINE stocks are worthless fancy paper after all said and done!