Originally Posted by
Fr8Master
I'm aware that hiring one pilot is less expensive than building a new sim building and buying sims. I said marginal pilot for that specific reason. Lets say a sim theoretically provides the capacity for 90 pilots per year. Hiring the 52nd through 59th pilot is relatively cheap.
Ever wonder why Southwest will not pursue outsourcing? Historically it was because a regional carrier will not work in a point to point system in an efficient way, as it does for the hub and spoke carriers. Now, I suspect staffing needs will be an additional constraint that will absolutely hammer the regionals (which makes me happy) and may require legacies to add A220's ERJ 195's to their fleets and staff in house.
My point is, and my questions remains unanswered, does ANYONE know the terms of the ATLAS contract? I certainly don't. I suspect none of y'all do either. Therefore you cannot tell me that it is 100% cheaper to outsource. In my opinion, FedEx is holding back airplanes and pilots to protect their system. Covid has created shocks in our pilot group with regard to quarantines and pilots going out sick/close contacts removed from flying etc. In my opinion, management put a value of xxx dollars on having a certain number of airplanes and pilots committed to protecting our system in house. They saw Atlas as an option to instantly increase coverage/capacity. Why do you think it's a long term contract? Well, why was FedEx requiring long term contracts to new customers when belly freight stopped moving on passenger planes when the world stopped for a couple months? BECAUSE WE COULD. Well, Atlas stands in a position to demand a long term contract because if we don't they can easily find someone who will right now. If you haven't noticed, the supply chain is seriously strained and people are paying whatever it takes to get their products moving.
Anyways, I don't think I'll change any minds. I already said I'd prefer fedex planes and pilots to fly fedex packages and I'll always feel that way. I simply think the decision was more complex than company posturing before a contract and I think the costs are likely much closer than people think.
We aren’t taking about one more sim in the falcon building. We are talking about adding a whole other wing, a new building, to the existing training facilities. Then furnishing it with a dozen more simulators. And hiring more instructors. And etc etc. Its either that or pay Atlas to move our freight and pay us a penalty. FedEx was getting heat from Wall Street on capital expenditures. They still are evidence from their continued defense of in the last earnings call. So they scrapped that idea and went with the short term cheaper alternative. This was all pre-COVID. Eventually, I hope, they will build the extra wing because they’ll probably have to in order to expand the way they are currently planning. And because in the long term, it probably is cheaper as the cost of each additional pilot is incremental once the facility is up and running.
Or alternatively they can get scope concessions instead. The big picture here is that management opened up scope for a reason. And it’s probably not in our best interest why they did. So changing the equation to incentivize management NOT to outsource is paramount regardless of what that cost is now.
Lastly, there is no need to wonder why SWA doesn’t outsource. Their pilots’ scope clause doesn’t allow any domestic outsourcing and very little of international. It had nothing to do with regional point to point flying (which expressjet successfully staffed for 18 months). The very little outsourcing their near international scope allows (when it was negotiated before they started international flying), is disincentivized by language in that section of their scope clause. Which is why SWA later chose not to outsource their near international flying and instead do it all themselves.
Scope is everything.