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Robert Herbst has been a commercial pilot since 1969. His aviation experience and financial background provides a unique analytical perspective into the airline industry. His website, AirlineFinancials.com (http://www.airlinefinancials.com/), provides airline industry analysis and commentary for... More
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  • The Pilot Story You Won’t See on TV Tonight-
    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 behind their locked cockpit doors. Over the next 24 hours, these unnoticed 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 nothing simple about putting hundreds of lives into an aluminum tube using jet engines to propel it 35,000 feet above the ground traveling close to the speed of sound to eventually land safely on a stretch of concrete most anywhere in the World. Make no mistake about it, flying is dangerous. It is only made less dangerous by the dedicated men and women who work in the industry putting the safety of their passengers as their number one priority.
     
    When an unexpected in-flight emergency occurs, there is no shoulder on the road to pull over, call 911, and wait for help. It won’t make media headlines today, but like every day when something breaks on an aircraft or someone makes an unintentional mistake, some pilot will use his/her training, knowledge and experience turning an in-flight emergency into a routine landing that will save hundreds of lives.
     
    Every day some licensed mechanic uses his/her experience to repair some part of an aircraft to prevent a future tragedy. Many times every day, flight attendants use their training, experience and on board medical safety equipment to keep passengers alive after a heart attack and deal with a multitude of other in-flight issues.
     
    This year we witnessed how decades of knowledge, experience and training gave two previously unheard of pilots the ability to land a commercial jet with no engine power on a river and not lose a single life. Unfortunately, we also learned how mistakes from the cockpit cost the lives of so many in the Buffalo crash. And just this past week, pilots were reminded of the consequences of not doing their job in a responsible way.
     
    Contrary to what many have been led to believe, commercial jets do not just fly themselves. While technology has improved reliability and added many safety features, jet engines still fail and weather will always be a significant factor which requires knowledgeable and experienced pilots to navigate safely through.
     
    Many passengers are surprised to learn only a few runways are equipped to allow an automatic landing. The fact is most landings are being hand flown by pilots as over 95% of the runways commercial airlines use do not have the technology required for auto pilot landings.
    Note: Every auto pilot landing has pilots diligently monitoring the instruments with their finger on the switch to take over if any ground or aircraft system fails.
     
    So what does it really take to be a commercial pilot?
     
    Since I have flown commercially for the last 40 years, I’d suggest I’m qualified to share a few facts you may not know.
     
    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 you 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 your prior experience, you will go through several weeks of training and testing before being qualified on that airline’s specific aircraft operations. Every time you move to a different type of aircraft or move from co-pilot to captain you will again require more weeks of training and testing.
     
    Every 9 months for the duration of a pilot’s career, he/she will go through several days of training and check-rides to make certain they are prepared to deal with dozens of emergency procedures.
     
    You will routinely and unknowingly, have a company and/or FAA inspector show up for your flight and sit in the cockpit to monitor your performance.
     
    Pilots have to pass a medical check every six months with an annual EKG required as you get older. Due to very stringent medical requirements, approximately 15% of airline pilots are forced to retire before they reach their mandatory retirement age. Commonly used medications for typical colds and medical issues are not allowed to be used by pilots on duty.
     
    Unacceptable performance on any of the above will remove a pilot from flight status and depending on the circumstance, a pilot can be terminated.
     
    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, you only get paid when the aircraft is moving (Note: Pilots do not get premium pay for working holidays or weekends. Pilots can also expect to miss many special events as they are working a multi day flight sequence.)
     
    Before every flight, an airline captain must sign a release stating he/she is accepting responsibility, and authority for an aircraft valued at tens of $millions carrying hundreds of lives. Similar to a surgeon in the operating room, there is a large support group of fellow employees to make it possible for all of the objectives to be safely accomplished. But in the end, it is the captain that must use his/her knowledge and experience to make critical and occasional life saving decisions. 
     
    Is the job worth it?
     
    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. Fatigue is a growing problem as long scheduled days get even longer when weather and maintenance delays are encountered.
    Note: 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 have? 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.
    Note: 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.
     
    Compare this to what a surgeon is compensated for the responsibility of one life at a time.
     
     Figure 1 pilot hourly wage cost
    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 pilot hourly wage cost
    Figure 2
     
    When comparing year 2008 with 2002, Southwest and JetBlue were the only two airlines which had their passenger fare ratio of cockpit wage costs increase. In year 2002, both of these airlines were the lowest 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 pilot hourly wage cost
    Figure 3
     

    On your next airline flight, as you walk by the cockpit, you now know on average, the coffee you purchased in the terminal cost more than what both pilots will earn from your passenger fare for each hour of flight they accept responsibility for your safety.

     
    If your flight crew appears tired, it is because they are likely to be in some part of their duty day that will routinely go more than 12 hours and end with a short layover at some airport hotel before they start over the next day.
     
    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- The above opinions should not be used to determine the worth of any stock or investment. At the time of writing, the author and his family hold stock and derivative positions in AMR.
    Tags: AMR, DAL, CAL, UAUA, LCC, LUV, ALK, AAI, Transport Sector Airlines
    Oct 30 05:37 pm | Link | 3 Comments
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