This is actually a management concept. The following is from:
"Measurinhttp://www.scrapmetalinsurance.com/Safety_Vs.htmlg the cost of safety
Demonstrating the value of safety to management is often a challenge because the return on investment (ROI) can be cumbersome to measure. Your goal in measuring safety is to balance your investment vs. the return expected. Where do you begin?
According to the International Risk Management Institute’s (IRMI) “The Cost of Safety” article, there are many different approaches to measuring the cost of safety, depending on your goal. Defining your goal helps you to determinewhat costs to track and how complex your tracking will be.
For example, you may want to capture certain data simply to determine what costs to build into the price of a product or service. Or, perhaps you want to track your company’s total cost of safety to show increased profitability, which would include more specific data collection like safety wages and benefits, operational costs (such as safety training expenses), insurance costs, etc.
Since measuring can be time consuming, general cost formulas are available. A Stanford study conducted by Levitt and Samuelson places safety costs at 2.5 percent of direct labor costs, and a study published by The Economist Intelligence Unit (EIU) estimates general safety costs at about 8 percent of payroll.
If it’s important for your organization to measure safety as it relates to profitability, more accurate tracking should be done. For measuring data, safety costs can be divided into two categories:
1. Direct or ‘hard’ costs, which include:
§ safety wages,
§ operational costs,
§ insurance premiums and/or attorney’s fees,
§ accidents and incidents
§ fines and/or penalties,
2. Indirect or ‘soft’ costs, which go beyond those recorded on paper, such as:
•accident investigation;
•repairing damaged property;
•administrative expenses;
•worker stress in the aftermath of an accident resulting in lost productivity, low employee morale and increased absenteeism;
•training and compensating replacement workers;
• developing a poor reputation, which translates to difficulty in attracting skilled workers, losing business share, etc.
When calculating ‘soft’ costs, minor accidents are considered to be about 4 times greater than direct costs, and serious accidents about 10 – 15 times greater, especially if the accident generates OSHA fines and/or litigation costs.
According to IRMI’s Cost of Safety article, just the act of measuring costs will drive improvement. In theory, those providing the data become more aware of the costs and begin managing them. This supports the common business belief that what gets measured gets managed. And, as costs go down, what gets rewarded gets repeated."
So I ask, "would IROs exceed 2.5% of our total labor costs?"
Rhetorically I answer probably not. Maybe of total pilot costs, but certainly not of total labor costs.
"Would it be worth it if it prevented an accident??"
I never understood that. The IRO makes more due to the 756 blended rate and they are taking up a seat in back that could be sold for money. How is the company not working them? It's to their benefit too.
If that's the case then he's even more idiotic than we thought because it's cheaper to work an IRO than to deadhead on the 757.
You are correct on the $$ aspect of a "single" flight.
If you would look at the big picture....ie: over a years time, you would know that DH time DOES NOT count as flight time which is factored in your 30/7 (32/7 Int'l.), or 1000 in 12 month window. They can actually run with a thinner over all pilot staff annually in the fashion that their presently doing now....DH IRO over, and work them on the way back.
When looking beyond the 'single' flight as you cited, they can actually save $$ in the long run (amortized over a year) when staffing the way they presently do with less pilots on staff as opposed to working them both way on ie "UK's" which would pin increased 'flight hours' on IROs that would otherwise 'free' DH time when factoring staffing v annual marketing hours the company plans per year.....I think that now is a prime example, if carrying higher staffing was 'not a big deal', I don't think they would be spliting hairs on a '147' guys/gals during staffing reductions......SUCKS! W/O excuse, it should be like AA's gig....you uses 3 on the return X-ing?? You use 3 going over regardless of less than 8 hrs.
Looking at CAL's present model, does that mean it's the right/safe thing to do?? That would be a resounding - NOPE.
If we're down to pinching pennies this hard....we're in deep do do. It must go beyond the fuel hedge error, bad publicity for stranding pax on an RJ, or the false advertisement on the web site. ($75,000.00 fine)...which would pay a lot of IRO time. Certainly, I can't be the only CAL guy scratching my head, wondering what the he!! has happend to this airline in the last several months.
If we're down to pinching pennies this hard....we're in deep do do. It must go beyond the fuel hedge error, bad publicity for stranding pax on an RJ, or the false advertisement on the web site. ($75,000.00 fine)...which would pay a lot of IRO time. Certainly, I can't be the only CAL guy scratching my head, wondering what the he!! has happend to this airline in the last several months.
Don't scratch too hard....When CAL (like every other Fortune 500) pays several millions to a 'soon to be' departing CEO, along with his rank and file, I can show you pretty quickly where a lot of the cash streams-forth out the door.
Pretty simple, the pilot group for years has bowed down and let mgt 'run us over'. I can't help to think that 'some' of this mass shifting of flying from the NE on this present bid is Mgt's attempt at some type of Union Breaking tactics. I honestly believe Mgt is caught with a slight 'deer in the headlights' look at how there maybe some hint of cohesiveness amongst the rank and file in the pilot group....something about EWR's well run LEC??
You are correct on the $$ aspect of a "single" flight.
If you would look at the big picture....ie: over a years time, you would know that DH time DOES NOT count as flight time which is factored in your 30/7 (32/7 Int'l.), or 1000 in 12 month window. They can actually run with a thinner over all pilot staff annually in the fashion that their presently doing now....DH IRO over, and work them on the way back.
When looking beyond the 'single' flight as you cited, they can actually save $$ in the long run (amortized over a year) when staffing the way they presently do with less pilots on staff as opposed to working them both way on ie "UK's" which would pin increased 'flight hours' on IROs that would otherwise 'free' DH time when factoring staffing v annual marketing hours the company plans per year.....
I thought of that, but as an IRO for the last 4 years or so (on the 757/767/777), I've never gone over 30/7 or 100/month or 1000/year with DH time. They weren't saving anything on me. Are they on other pilots?
I thought of that, but as an IRO for the last 4 years or so (on the 757/767/777), I've never gone over 30/7 or 100/month or 1000/year with DH time. They weren't saving anything on me. Are they on other pilots?
I know when your on the 777, your lines are only built w/in the low to mid 70 hour lines correct?? 2.5 trips a month if you look at carry-ins?
If you were mid/especially lower senority on the B756, at least the summer or two prior, it was NOT uncommon to have an FO with 12 days off do the 18 days worth of X-ings (6 - 3day trips a month):
Example....take 15 hrs trips x 6 = your given 90 hrs. The first 10 hrs of DH does NOT count trouble your block when building the lines. So instead of having to have a second pilot on staffing to cover the spread of 87.5 cap to the 90 hrs....they play the DH game to do the 90hrs worth of line building to keep staffing lean.
I am just assuming, but since your holding the B777 now, you were not on the lower side of BES senority as an IRO on the B756 doing 6 X-ings a month I would think?? I could very well be wrong....just a guess.
All in all, yes....they are able to do the SAME amount of work with less pilots on staffing while playing the DH game, especially when the NY-Europe was a sizable amount of their ops in the NE.
I am not hear to say this is good by any means, it SUX!
Similar Threads
Linear Mode
