Magenta Line August 7, 2009
“We’re controlling our costs very well, but we’re not doing it at the expense of taking care of our people and our customers. We still are committed to doing everything we can to avoid involuntary frontline furloughs. So keep doing a good job so that we win more of the customers, and hang in there. It’s tough and we don’t know when the economy is going to perfectly turn around, but we do know how to work together and do a good job for our customers.” - Delta CEO Richard Anderson July 23, 2009
Today is Friday, August 7, 2009 and there are 13 items for discussion.
Item 1: Fred’s Fuzzy Math – Part One
The problem when you try to baffle people with—uh, things that don’t smell right at first sniff—you usually have one killjoy in the crowd with a calculator and enough brain cells to refute you.
Case in point: this month’s flight operations update, starring Captain Fred Abbott. Have you noticed that we’ve now had two flight operations updates in two months? We think the last time this happened, Eisenhower was still playing golf. Anyway, here’s a non-useful but enlightening quote from Captain Fred:
"Similarly, reserve utilization fell from 50.5 hours in 2007 to 37.4 hours in 2008, and was a very low 30 hours through June in 2009. And there have been more than a few reserve pilots in 2009 who found themselves in any given month with no trips flown."
Really. The numbers themselves are probably true—but they illustrate just how far down the blind canyon we’ve allowed management and manpower planning to fly us.
Newsflash: We don’t really fly anybody around January through mid-June. The bulk of our flying takes place mid-June through mid- September. You cannot use staffing numbers for the lull months and use them to staff the busiest months of the year. Unless, of course, you plan on abuse of the entire pilot group as a daily ritual. Likewise, you can’t use reserve utilization numbers for January through mid-June to prove that our reserves don’t fly much mid-June through mid-September.
As one of our fellow abusees puts it:
“Talk about a distortion of the numbers.... holy ba-jesus. He knows full well that these reserve utilization numbers are artificially low because they furloughed 147 in the fall... and a chitload of 737 captains were sitting around on reserve waiting to be trained to their displaced equipment. Due to the furloughs, we had coverage some days of 100+ reserves in the EWR 737 CA sub base while these guys (me included) sat reserve. Now he wants to use these numbers to make a case that we don't work our reserves too hard or that our staffing is sufficient? And he calls you three distorters of the fact? What does he think... we're 3 years old? Unbe-freaking-lievable.”
Thank you. A man of words if we ever met one.
And there’s this from Kate Malone, our former Council 170 Secretary-Treasurer:
Regarding Fred’s quote above: “And herein lies one of the problems. This management team believes that the above statement is a problem.
CAL management has been misusing reserves as long as I have been here at Continental. Reserves are there as backups, for when the schedule falls apart. They're not supposed to be flying full lineholder schedules. That's why they're called 'reserves'. 35 to 50 hours should be the norm for the amount of hours they fly. Having to pay reserves to be on call and not fly is the cost of having the luxury of having the ability to maintain the schedule when it starts to fall apart.”
We could not have put it better ourselves.
The management of Continental Airlines is throwing a party for themselves at our expense. As we’ve noticed repeatedly, most things they do are at our expense. But this year they’ve got the 75th Anniversary of the airline as cover. Management gets bonuses, we get 75th Anniversary cocktail napkins with our cup of water as we non-recline in our middle coach seat. Meanwhile, we have a thunderstorm in EWR or IAH and the operation ceases for hours as crews split and their airplanes are grounded, crew scheduling won’t answer the phone, and onsite management is nowhere to be found. Chief pilots are forced from behind their desk to fly as First Officers and junior manning “opportunities” abound. These are not major weather events like hurricanes, these are afternoon thunderstorms. Management has no discernable plan for irregular operations except the abuse of reserves. While they celebrate the anniversary they had nothing to do with creating, they show by their daily operation of the airline that they have learned nothing from the previous 75 years of our airline’s history.
Proper staffing is not magical, it is not mysterious, and it is not buried in the black arts. It is a few numbers scratched on the back of an envelope or an inch or two of adding machine tape. If it takes more than a couple of minutes to calculate or more than one sentence to explain—it’s wrong and it will fail at the most critical moment. Math is like a brick wall—you can run into it over and over—but it’s still a brick wall and will still be there long after you knock yourself unconscious.
Maybe that’s why management seems dazed and confused all the time.
Item 2: Fuel Hedging: The Gift That Keeps on Taking, Redux
Last week we talked about the miniscule 442 million dollar fuel-hedging loss we took over the past 18 months. In corresponding with a couple of our pilots we realized that that number by itself is somewhat meaningless without the proper context to put it in perspective. So here’s this: out entire pilot payroll is about 630 million annually. So for the 18 month period ending June 2009, our total pilot costs were about 945 million. How much of a raise could we have gotten with that 442 million? How many of our 147 hostages would still be with us?
We remember clearly management’s disdain for Southwest’s financial status over the past few years. They used to snicker at them because most of Southwest’s profit was due to a competent fuel hedging team. We, on the other hand, struggled with mediocre management AND hedgers who evidently had their charts upside down.
As Bob Uecker said in the movie Major League: “You can close the book on Kellner—thank God.”
Item 3: We Need a Sticker on the Side of the Airplane for This One
We can visualize it: as our passengers board our aircraft they are greeted with a large colorful sticker, perhaps in a nice arch over the door: Continental’s Pilots 1995-2008: the Most Poorly Compensated in the Industry! Welcome Aboard! Don’t Forget to Tip Your Pilots!”
As we previously discussed, math is an absolute, and we have a couple of guys among our pilots pretty adept with a calculator. For the 14 years from 1995-2008, we were the lowest of the low in cockpit block hour costs in every year except one: 2005. That year we tore it up by coming in 4th out of the 6 legacy airlines on our list.
Now you might say, “Well, I bet we were close to the top, moneywise, right? I mean, 6th place could still be worth 90% of the top, huh?” Hey, remember where you work, or as management says: “We’re not happy until you’re not happy.” No, Continental Airlines, one of the “100 Best Places to Work”, has compensated us at the rate of 62.8% of the industry leader for the past 14 years. When you think about our financial performance, think about the HUGE financial head-start our management was able to extract from our pockets over this period. Our management may not be very good but they were good enough to convince us to work for 62% of an industry-leading pilot contract. They took the rest for themselves—except the small part they paid to put the “100 Best Places to Work” sticker on the side of our airplanes.
During part of the time we were taking our 62% solution, half of the industry was in bankruptcy—yet even post-bankruptcy, these carriers still paid their pilots 30+% more than our management paid us. Of the 14 years from 1995-2008, 2003 was the zenith of our financial achievement as pilots. During that year, we were still lower than the lowest industry-leader cost of the entire 14 years: Delta in 1995.
As we are fond of saying: they can pay us—and they will.
Item 4: Fred’s Fuzzy Math, Part Two, or, “Will Someone Please Take Fred’s Calculator?”
“In fact, for active pilots who were on the seniority list on March 2005, average W-2 earnings have increased by 21%”
Uh huh. OK, well, in 2005 we had hundreds of new-hires still working for food-stamp wages. Today, due to the miracle of time passing, those guys who worked for $30 bucks an hour while on probation now make from $75 to $109 bucks an hour—which is a lot more than a 21% raise—so how is the average only 21%??? The magic of math with stubble around the edges. Two of your Council 170 officers have been here since 1987. They are topped at 12 year pay and have been for a while. Their 2008 W-2’s are virtually the same as they were in 1999 and, today, have about one-half the earning power they did 10 years ago.
Fred, please; put down the calculator and go get a cup of coffee—you’re just embarrassing yourself.