Denny Crane

I got this article passed on to me. Looks like it's written by a pilot (had to take out his picture in uniform) but none the less I think it is very relevant. Thought you all might like to see and comment on it:

Airlines: Some Costs They Can't - And Shouldn't - Cut

by: Robert Herbst October 31, 2009 | Seeking Alpha.com

Robert Herbst



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.

The Juice

"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."

Best line of the article.

__________________
Sic Semper Tyrannus

captjns

Same article but different shape.

You know… pasta comes in all forms… Linguini, Spaghetti, Vermicelli, Fettuccini, Orzo… when you put them all together… you still got pasta.

Well, to me, this article is like a variation of… but that just me. By the way… you want pesto, bolognaise, or tomato, or olive oil and garlic with that pasta.

DAL 88 Driver

Excellent, Denny! Thanks for sharing.

I have to ask... Why didn't ALPA write a press release and/or article like this several years ago? As the largest association representing professional airline pilots, why are they basically silent about this issue?

Ottopilot

You're kidding, right? ALPA has been silent? Maybe it's you who have been silent (YOU are ALPA). I've been on the street picketing with other ALPA pilots about this. Where were you? ALPA does ads and billboards about this same topic. Nothing new.

__________________
-Otto Pilot

captjns

Pacifying the masses, ie, members can go just so far. Perhaps ALPA needs to explore changing advertising firms...

DeadHead

When the day comes that our ALPA reps spend less time on the fourth floor and more time in the crewrooms, other then on election time, we will continue to have valid peer-concerns such as these pushed to the side.

It's a microscopically-thin line between fighting a certain evil and becoming another type of evil.

I'm not speaking for everyone at ALPA, I know there are those there who genuinely care about the direction of this profession, but specifically I'm speaking against those who "work the system" and feel no moral abstinence towards double/triple dipping the pot for themselves.

DAL 88 Driver

No, I'm not kidding. Picketing and billboards have their place and serve a specific purpose... but it's not the same purpose as a professionally done, comprehensive public relations campaign that would get this story out and help the public, public officials, and business people realize that pilot costs are not all that significant in the grand scheme of things. If safety is truly the first priority in this industry, then there are some costs that just should not be cut. I think we can make that case effectively for our profession. I haven't seen ALPA do that to any great degree. Maybe I missed it?

boilerpilot

I agree fully. That being said, while ALPA and the other unions have failed in this perspective over the last 25 or so years, the tide seems to be turning in the right direction. While deadheading, commuting, and nonreving, I now hear people talking about how poorly pilots are paid, and in the words of one passenger (on a delayed flight, no less), "who would ever want to be a pilot these days? I hear nobody's going into it because they get paid so low."

REGARDLESS of whether or not her statement is true, it at least shows a reversal of public perception regarding pilots and their wages. Let's not forget that just a few short years ago, when airlines were asking their pilot groups for wage concessions, people were talking about the greedy pilots who only work 70 hours a month and get paid $300k a year. This changed public perception will help us increase wages across the board, certainly as negotiations times and contract times (for the regionals) come up.

The public reaction to an article about "those greedy pilots wanting even more money, which will raise your fare prices" is very different from an article about "that greedy management that won't raise that poor FO's salary above poverty level". And believe it or not, public reaction DOES matter.

Does it matter in the short term, in terms of passengers putting their money where their mouth is? Perhaps not short term, but long term I think definitely. They might not put "you don't pay your pilots enough" on their comment card, but maybe they'll prefer to fly mainline instead of the puddle jumpers, because the regionals abuse their pilots, overwork them, and they have to have second jobs or live with their parents just to survive.

Basically what I'm saying is it's not cut and dry, but we can all agree on one thing: this is good press for us to have, and it will only help us in reversing the graveyard spiral our wages have taken.

I would rather read this same article a thousand times than see just one article about how spoiled rotten Airline X's pilots are because they want to increase their salaries during contract negotiations. ALPA needs to concentrate less on cheesy billboards saying "We are the professionals that get you there safe", and start interfacing with a REAL advertising firm, advertising in new media (I.E. not billboards, but maybe Hulu or the like?), so that we can really get the message across to the general public, not just the flying public.

EDIT:
Oh, and all these articles, news stories, etc have the positive effect of perhaps changing a potential puppy mill graduate from pursuing the profession. The only bad thing about this press is your neighbors might finally not think of you as "That rich pilot who never works and makes $300k a year".

deltabound

To be fair, a pilot is worth exactly what he is willing to work for (compensation-aly speaking). There seem to be plenty of takers for the going rates.

I'm all for strong armed bargaining tactics to raise that rate. But that's not really a reflection of what he/she's "worth". That's a reflection of how effective his bargaining agent can be.