Originally Posted by
VacancyBid
If you're looking at the individual's W2, yes ... that's true. But that isn't how public corporation accounting works.
As noted above, they are going to hire someone on X date. That person has a set cost on year X+1, X+7 etc. That cost is the same for a flow or OTS hire. The theoretical difference will only show up (if anyone tracks it .. and they won't) then Widget #24601 is doesn't retire in 2055.
Mainline accounting will show an immediate benefit if a high cost regional captain is replaced with a lower cost one. That benefit will accrue to the decision makers immediately.
No, the cost is NOT the same, because the guy who flows will ALSO be replaced. By someone who will make very nearly as much. The 12 year CA making $202 an hour gets replaced by an FO (previously making $117.00 an hour) who will require a training period when he is STILL being paid while contributing nothing to the bottom line as well as utilizing instructor and Sim time and then himself be making $180 an hour. But before that can even happen, someone must be hired to replace him/her a with recruitment, interview, background check, etc time, and then given an ATP and type rating (again while contributing nothing to the bottom line) who - if they don’t wash out - will then get paid $102 an hour.
Max savings on the new junior CA is $5 an hour times 1000 hours a year (and seriously, how many of us actually fly 1000 hours every year) and on the new FO is $15 an hour for the first year and less for each subsequent year. So max possible salary savings the first year is going to be $20k and potential savings goes downhill every year thereafter. While the costs to make that switch are front loaded at recruiting p, initial, and upgrade training costs with inherent downtime during which the two “workers” produce no revenue and are occupying a company hotel and receiving company benefits and per diem.
You can’t SERIOUSLY believe that’s an economic win for the company. If you do, you desperately need to take an accounting class
if faster flow made sense for AA, trust me, their own accountants would be pushing for it.