Originally Posted by Dictum

If you simply adhere to market principles, the higher pay should go to the group whose services are scarcer. We all know the legacy airlines have no shortage of applicants whereas Allegiant may be experiencing a shortage of applicants their management deems "qualified" (see below).

So, why is it that Allegiant pays less than the legacies? The short answer is that the legacies have long standing union contracts that distort an individual pilot's value in the market. This is a very good thing! Allegiant has no established union contract. A non-union company is able to exercise more control over the compensation of their employees being unfettered by a contract with its pilots. The more complex answer has to do with the labor supply and the hiring preferences of the better paid airlines.

Beyond numeric flight time, the harsh truth is that the Allegiant management couldn't care less about who they hire. To MG, pilots are just another subset of employees. Actually, he doesn't get involved at all outside of general guidelines handed down to the flight department management: he simply wants to have a group that will clear his insurance requirements and not expose him to legal liability surrounding their level of experience (as ultimately defined by the FAA as sufficient) should there be an accident. He has no preference for military or civilian, etc. All MG wants is somebody who meets a minimum qualification for the job and will accept it at the compensation level he has set for the position. MG is a pure businessman concerned with profits and losses. Personal biases concerning "suitability" for the position (in terms of initial selection) do not play a part in hiring at Allegiant. If anything, Allegiant tends to look for pilot employees that will remain employed through the payback period for their training which is, most likely, a very short time.

So, MG gets pilots for what he can get them for on the open market. He's had a cost advantage for a long time thanks to the ignorance of his generally young and guileless pilot group whose market experience was very limited. By this I mean the Allegiant pilot group took an excessively long time to unionize. Anti-union resistance was very high until recently. Market-experienced members of their group argued in futility for years and against certain anti-union personalities who were given far more heed than they rated. In the end, as we see, those self-serving and malignant personalities were proven wrong and misguided after all.