Where is the bottom ??

[AA717driver]

We are getting hammered just like the Doctors are. Other than the handful of specialized, extremely rare specialists, the run of the mill docs are getting abused by their practice managers. They are being shipped off to satellite offices and given a hard time of 15 min per patient. Their pay is being reduced by aggressive insurance companies. Still, try to get a slot in a decent medical school.

What is happening to us is happening in many professions. Companies are downsizing and operating with fewer employees doing the same work. We can't work much more so they cut our pay and benefits.

The problem is, at this point in my life, I look back wistfully at the day when I made $120k. My one year at $158k seems like a dream. I still want to fly and get 15 days off each month to play with the kids or the wife. Sure, in a perfect world, we'd all walk off the job until it improved. Or, the airlines would just hire foreigners to fly our airplanes.

Look at the railroad business. Second year pay is $60k. You can make $100k in 10 years. No degree required. BUT... It is a $h!tty job. You are worked like a dog 6 days a week(that means one 24 hour duty free period in 7 days) and are treated like an animal. The union is powerless--they just take the money and run. It is PFT but it takes years to get a slot. The railroads used to be one of the cushiest jobs around. Now it sucks but you have to line up to get one of the coveted jobs.

I guess if you want to call your own shots, you have to go get your MBA from Wharton or Harvard so you can write your own golden parachute and hop from company to company until you retire to the BOD of several companies.TC

 

[captain caveman]

Ooops. Uh, I meant hidden surcharge. If this was a popularity contest we would do this for charity, not pay.

 

[pilotyip]

Harvard, Wharton

I doubt most pilots could get into either one of those schools.

 

[Clyde]

I doubt most pilots could get into either one of those schools.

Why, because you couldn't?

 

[pilotyip]

That is right

I only got accepted at one. Many many pilots could be accepted at both schools if they applied and met the hiring minimums. But not most pilots.

 

[pilotyip]

Caveman downside of pay rasie

Your couple dollars a trip per passenger does not equate. Salaries make up about 35% of an airline expense. This includes all salaries, pilot, mechs, baggage smashers, etc. How much of a raise do the pilots want 10%, 30%, and 50%? After the pilots get their raise, why will the other employee groups not expect a raise? Look at the SWA FA's. So lets assume everyone in the company gets a 30% raise. .3 times .35 ='s 10% increase in salaries. Now we have to recover this with an increase in ticket prices. Assuming airline seats are a perfectly elastic commodity, in that a price increase will result in a decrease in demand. The airline will sell fewer tickets, therefore it will have to raise the ticket prices more than 10%, probably in the 15% range. On $200 tickets this means $30 difference. People switch airlines for a $30 difference, don’t believe me ask NWA, DAL, UAL.

.

 

[chase]

Percentage of salaries that make up CASM

For SWA, the CASM for last quarter was 7.61 cents per ASM....in the past it has been in the mid 30% range....salaries make up 3.14 cents of this total....42% of that total......a historical high number for SWA or any airline. Pilot salaries make up 1/3 rd of the salary cost but make up around 1/7th of the employee force. Yet despite that fact SWA's been able to lower the ratio of airplanes to employees down to 73....efficiency & productivity is key for SWA's past & future success.

The illusion that one employee group's salaries can be viewed as separate numbers when it comes to the overall costs associated with an airlines CASM is an illusion. If one employee groups gets the raise (as was previously stated), it is highly likely all employee groups will eventually rise to that level. Wages that continue to rise without increased productivity, efficiencies & increased revenues will doom an airline (or any busines) just as assuredly as it has contributed to the demise of the current list of bankrupt legacy carriers. It isn't the only reason but it is a factor IMHO.

 

[Lear70]

I predict that as major airline salaries fall to levels which are in parity with their true market value ($90k-$120k, just guessing), you will see regionals increase their payscales ($50k+ baseline). With diminished incentive to pursue jobs in the majors, the supply of pilots willing to fly for $20-30k will dwindle. Why bust your @ss for a job that's only slightly better than what you can get at a regional?

Don't count on it. The last two regionals to negotiate pay raises that weren't in any real danger of losing jobs (Mesaba and COEX - yet to be ratified) haven't raised the bar any meaningful distance. Mesaba's TP rates are decent but not stellar as an overall compensation package, and their jet rates are pitiful. Same with COEX's T.A.

Most regionals have the same problem: about 50% of their pilot group is made up of relatively young "I just want to fly" kind of people who will continue to put growth ahead of their own future.

1. They don't understand that THEY'RE NOT GOING ANYWHERE ELSE.
2. They can't see far enough into their future to realize that after 4th or 5th year jet captain they're going to start marrying, raising kids, and wanting to travel and it's hard to do that on $60k to $75k a year.
3. They don't see (or worse don't care) about the industry as a whole. Part of the "Me" generation as one of my coworkers puts it.

Add that 50% to the few who are too old, scared, or just lazy to risk an airline closing up shop rather than pay a 50% pay raise, and you have the 60% you need to keep passing P.O.S. T.A.'s. Not to mention the fact that unless you have a Letter of Recommendation or came from a codeshare affiliate with a "training pipeline" into the jet, you can't get an interview at a regional right now - too many pilots willing to take $20k (or $16k here at Pinnacle).

Sad but true.

 

[secks]

Look at the railroad business. Second year pay is $60k. You can make $100k in 10 years. No degree required. BUT... It is a $h!tty job. You are worked like a dog 6 days a week(that means one 24 hour duty free period in 7 days) and are treated like an animal. The union is powerless--they just take the money and run. It is PFT but it takes years to get a slot. The railroads used to be one of the cushiest jobs around. Now it sucks but you have to line up to get one of the coveted jobs.

That's pretty much all correct, except for the PFT thing. The only large RR out there that PFTs is CSX. Not to get off topic here, but RRs are well-justified to PFT, because the turnover rate is atrocious. Many leave during or right after training, most after a few years. PFT provides RRs with a way to filter out those who are not serious about the job without losing a dime. It generally takes under a month to get on with a Class I RR (the big ones). They're hiring like crazy right now due to labor shortages.

Don't count on it. The last two regionals to negotiate pay raises that weren't in any real danger of losing jobs (Mesaba and COEX - yet to be ratified) haven't raised the bar any meaningful distance. Mesaba's TP rates are decent but not stellar as an overall compensation package, and their jet rates are pitiful. Same with COEX's T.A.

Most regionals have the same problem: about 50% of their pilot group is made up of relatively young "I just want to fly" kind of people who will continue to put growth ahead of their own future.

Add that 50% to the few who are too old, scared, or just lazy to risk an airline closing up shop rather than pay a 50% pay raise, and you have the 60% you need to keep passing P.O.S. T.A.'s. Not to mention the fact that unless you have a Letter of Recommendation or came from a codeshare affiliate with a "training pipeline" into the jet, you can't get an interview at a regional right now - too many pilots willing to take $20k (or $16k here at Pinnacle).

The problem with the Mesaba example is that although there was no fear of losing jobs complicating matters, there is still the issue of people chasing hours for the major salaries. Granted, though .. the 50% you mentioned with good seniority probably weren't quaking in their boots.

I hate to say it, but unions are partially to blame for this situation. Before I go on, don't think for a second that I don't think unions have their place. Millions of workers would be in a world of $hit without them.

However, airline unions are a strange duck. Due to the dramatic increase in compensation from one year of seniority to the next, seniority is extremely coveted .. by ANY union's standards. This dictates that pilots who have accrued decent seniority will often put up with anything in order to keep those paychecks coming in. That's problem number one. Then you've got the (understandably) starry-eyed cadets coming in who will literally live in poverty to do something that 1) interests them and 2) will earn them some decent money if they just hold on for dear life. That's problem two. Problem three .. too many pilots.

In a nutshell:
1) the 50% of pilots with good seniority feel beholden to their airline
2) the 50% of pilots with low seniority are willing to work for low wages because they:
a) like the job (for now)
b) see much improved compensation in the future
3) there are too many pilots

Put all of that together, and you've got a bad situation for pilots. However, much of this artificially created by the current unionization scheme. If you were to flatten airline compensation to a greater degree (like the railroad, for instance), those 50% of pilots who fear losing their job would have much less to fear. Their seniority would primarily be used as a bargaining chip for good routes. Those 50% with low seniority will be less inclined to wallow in poverty when the upper payscales have been slashed. This will kick the baseline payscale up. I also envision that these measures would drive away many pilots, tightening up the labor pool and thus boosting wages.

It would be bloody for awhile .. very bloody. You're going to have some very pissed off pilots .. for a few years. But you've got to be smoking crack if you think pilot unions can secure $150k+ salaries when the airlines are bleeding, junior pilots willingly live at the poverty level, and the supply of pilots well exceeds demand. Something has got to give. If you flatten the scales, I believe that in the long run, things will improve.

 

[spitfire1940]

flattening compensation?

sounds like a good idea, but it sounds like that would mean taking our seniority-based pecking order and throwing it out the window.

If that were possible, and I would guess it isn't, what would you replace it with?

Or could you flatten the salaries and leave the seniority system in place?

The thing that kills me about flying for the airlines is that it seems to be the ONLY industry in the world where if you put 10 years into a company and it goes belly up, you have to start from zero with a new company ... back to first-year FO pay.