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Old 06-10-2009, 02:32 PM
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DWN3GRN
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Joined APC: Jul 2008
Position: F-4 Wild Weasel
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Airline Relationships

The past several years have been very turbulent ones for the major, legacy airlines which have experienced numerous bankruptcies and changing operations. Rather than using their own pilots on the mainline seniority list to fly the 50- to 90-seat jet aircraft or modern 76-seat turboprop aircraft into midsize and smaller cities in the U.S., Canada and Mexico, they have established economic relationships with regional airlines to provide this service and feed the major carriers through their hub cities. The major carriers exert a great deal of economic, and other pressures on the regional airlines to provide their service at the lowest possible price. The major carrier controls all aspects of ticket pricing and schedules and regularly moves flying between their regional partners, which forces major changes of pilot domiciles among the regional carriers. An operational and safety relationship providing surveillance and oversight of regional airline operations must be required and maintained by those major carriers who either own or contractually use regional airlines. Even with these relationships, there is no guarantee that “One Level of Safety” will be provided by the dependent carriers. Safety comes not just from oversight from an outside airline or organization but is an intrinsic value built into an airline from the highest levels of internal management. Given operational criteria and guidance, this value must be recognized and nurtured to realize true safety in operations. ALPA’s endeavors to establish One Level of Safety and contract standards have been rebuffed by the managements of some mainline and regional carriers.

Before the practice of codesharing with regional partners began, ALL flying was done by the pilots of an airline on one, single pilot seniority list. This practice ensured that several years of airline operations experience for newly hired airline pilots -- even those with military or thousands of hours of previous civilian flight time -- was earned before assuming the command responsibilities of an airline captain. The pilots of the name brand airline were trained and met the same high standards, whether they flew 70-seat DC-9’s or 400-seat B-747’s, or they were not promoted to be an airline captain. The pilots that once flew for such regional airlines (which were in the 70’s and 80’s referred to as “national carriers”) as Ozark, Southern, North Central, Hughes AirWest, AirCal, Allegheny, Piedmont, PSA, and Frontier, held career jobs at those carriers. They flew 40-50 seat propeller-powered aircraft and 70- to 100-seat jet aircraft. They had good jobs with pensions, work rules, and wages that made them career destinations. Those pilots were not just trying to gain experience to get a job with a major airline. Their pilot seniority list operated to guarantee stability and years of cockpit experience before assuming command. The merger mania of the 80’s saw those carriers swept into the major or legacy airlines.

Then, as competitive cost concerns increased with the post-deregulated upstart carriers, the legacy airlines began to outsource the flying to as many as a dozen new “regional” partners flying 30- to 50-seat props and 50- to 90-seat jets. The name brand airline then began the practice of having their “partners” bid against each other to maintain these “fee for departure” outsourcing contracts. As the legacy airlines replaced more and more mainline flying by this outsourcing scheme to regional operators, they furloughed hundreds of highly experienced pilots, and refused to allow these experienced pilots to fly for the contractor carrier, effectively replacing them with lower paid and lower experienced pilots.

With this overriding concern on lowering costs by the legacy carrier, the stable and experienced regional partners were whipsawed against each other and forced to continually lower their costs to today’s substandard levels or be replaced by another newly created contractor. This system of replacing one regional with another has created unprecedented, rapid growth at a few low-cost regionals where newly hired pilots are upgraded to Captain with less than one year of air line flying experience. A copilot seeking to upgrade to captain with the minimum of 1,500 total hours has not been through several years of thunderstorms and winter storms despite the fact that they meet the FAA minimums. He or she has not flown with hundreds of other Captains nor been through several years of annual training and checking events. Before this unconscionable focus on outsourcing mania began, most airline pilots would have 10 or more years of airline experience as a co-pilot before qualifying for command.

The legacy airlines grant these outsourcing contracts to the regional carriers for short periods from 2 to 7 years so that higher costs and their experienced pilots can once again be replaced by new airlines with new pilots. Today, even though the “regional” carriers are flying up to 40% of the US airline domestic system, few of the regional airline pilot jobs created by the outsourcing schemes are worthy of an experienced aviator career. The duties and responsibility of a captain and a co-pilot flying 30 to 100 passengers for a regional partner airline is just as important to their passengers as a Captain flying a B-777 or Airbus 330 for a legacy carrier. In a further example of this safety compromising business practice, the legacy airline, will oftentimes during growth periods refuse to hire the experienced “regional” pilot from one of their fully owned or contract partners to become a co-pilot on a 100-120 seat mainline airplane. However, that same pilot may be a captain flying a complex jet aircraft with 70 passengers on 5 or 6 flights per day in the service of the codeshare, mainline airline which sold the ticket to the passengers. This cycle of outsourcing with very little oversight by the ticket-selling carrier has created a very unstable environment which has broken the One Level of Safety mandate.

The NTSB has performed several safety studies of the regional, air taxi, and air carrier industry. As a result of those studies, the Board called upon major airlines and their code-sharing partners to establish a program of operational oversight that would include periodic safety audits of flight operations, training programs, and maintenance and inspection as well as emphasize the exchange of information and resources that will enhance the safety of flight operations. The Board believes that there may be large differences between code-sharing partners in terms of the knowledge, expertise, and other resources for assuring safe operations. They noted that this is particularly true when a code-sharing carrier uses the brand identity name and paint scheme of the larger carrier. Passengers have no choice but to fly on the code-share carriers even though they purchased their ticket from the major carrier and deserve the same level of operational oversight, control and service, which the code-share partner may not be able to deliver.

The regional airlines, in their own cost-saving measures, have gone to extraordinary lengths to provide their product at the lowest possible price. As an example, Trans States Holdings, which operates Trans States Airlines, established a second subsidiary airline, GoJet Airlines, which operates United Express flights from United Airlines hubs at Chicago O’Hare, Denver, and Washington Dulles airports flying Bombardier CRJ700 Regional Jets. A passenger buying a ticket on United Airlines may very well, unwittingly, end up on a GoJet flight. As a new airline, GoJet can abrogate prior relationships their parent airline may have with service providers to provide cheap airline seats for their code share partner.

Another example of this type of cost pressure can be seen at Midwest Airlines which has outsourced over 75% of its flying to regional partners. They have laid off 75% of their experienced pilots and replaced them by contracting with Republic and Skywest Airlines. Midwest Airlines refuses to train their long-time pilots in the new smaller jet aircraft. This has the effect of the Midwest pilots with over 15 years of airline experience being replaced by pilots with less than three years experience in a blatant disregard for the value of its own employees. Economics of outsourcing to cheaper contractors has clearly trumped the safety value of maintaining experience in the cockpit.

Pilots flying for airlines like GoJet, Gulfstream, Colgan and others are at the bottom of the economic scale with starting salaries below $20,000 per year. In many cases, pilots have accumulated extraordinary costs just to earn the basic FAA licenses of commercial, instrument and multi-engine ratings. A 4-year flight education at a college or university can cost from $120,000 to $180,000, or more. It is difficult to repay these expenses and maintain any sort of reasonable lifestyle on the starting pay of a regional pilot. So these jobs frequently end up as a stepping stone to a major carrier, an opportunity to build valuable flight time before moving on to a more lucrative job with a major carrier. In fact, some airlines publicly call themselves “stepping stones” without reservation, as could be heard in a recent NTSB public hearing. This type of relationship effectively represents a disincentive to provide more than the bare minimum training or to provide any motivation for experienced employees to remain. Typical wage differences between major and regional carriers can be as much as $70,000 for a Captain and $50,000 for a first officer at 5 years of service. The differentials increase dramatically the longer the pilot is employed.

When an economic downturn comes, operations contract, major airlines park their airplanes, and employees are furloughed. These furloughed employees will generally not take the jobs in the regional industry; they have other skills to market. It is a telling factor that as pilots were called back from furloughs following the 9-11 downturn, a majority chose not to return even to the major airlines; they found other jobs, many times in an entirely different industry, or returned to full-time military service. In today’s economic and outsourcing business practices, pilots with decades of experience are laid off from the legacy airlines and cannot afford to work for one of the regional partner airlines as a newly hired first officer. Their experience is not given any value for employment at the legacy carrier’s code share partners and they are faced with starting over as a first officer for less than $20,000 per year.

In today’s airline industry, the legacy major airlines have farmed out the flying to the lowest regional bidder while rejecting any attempts to retain their experienced pilots within their extended airline systems.

Retirement benefits have also been reduced within the regional industry. Managements have refused to grant sufficient improvements for retirement benefits due to, among other reasons, the (assumed) belief that the pilot will not be there long anyway. However, as we have seen, the overall longevity of pilots staying at the regional level has increased as the economic outlook has changed. Major carriers have reduced their overall capacity steadily in recent years, and at the same time reduced their pilot headcount. When combined with the increase in retirement age to 65, the regional pilot may have little choice but to maintain employment at a carrier that offers lower wages, with lower health and retirement benefits and far less in quality of life.

Commuting Pilots

Aviation is a turbulent industry; numerous cost and operational pressures occur daily. Airlines frequently make adjustments to their fleets’ size and geographical distribution. Crew bases open, close, or change, sometimes with little or no notice to employees stationed there. An airline that services a city or town with a Bombardier CRJ700 jet today may serve it with an ATR-42 turboprop tomorrow and next week, service may cease entirely. As these operational decisions are made, crew bases move, change, or close. A CRJ base may become an ATR-42 base and the CRJ base may move to a different part of the country. When companies make such changes, the pilots involved may have several alternatives. They can move to the new base where CRJs are being flown, they can remain where they live and commute to the new base, or, if permitted by their employer, they can be trained in the new airplane now being flown out of their old base, which may require a large pay cut. Any of these can be very disruptive for the pilots and in turn, their families.
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