"A Barrel of Pilot" - ALPA discussion
 

A Barrel of Pilot

Mar 25, 2016

In his best-selling book Negotiating With Giants, Peter Johnston cites the pivotal event in John Rockefeller’s iconic business career as his decision to initially buy more refineries in Cleveland than in Pittsburgh. The Cleveland refineries appeared less lucrative since they were farther from the main oil fields of Western Pennsylvania. But what Rockefeller saw in his vision, was a single railroad in Pittsburgh that could name its price, while Cleveland had multiple railroads which Rockefeller could play against each other, as well as a shipping industry on the Great Lakes that he could play against the railroads.

Rockefeller focused his operations in Cleveland and his plan worked in spades. The Standard Oil empire grew exponentially and the situation eventually led to the South Improvement Company scandal, which came about only because Rockefeller held such enormous leverage over the railroads. If you are inclined to read a little more history on how Rockefeller pulled it off, I’m willing to bet that you will find yourself doing what I did, which is mentally replacing the word “railroads” with “regional airlines”, along the way.

Today’s major airlines did not invent the whipsaw game. The concept has been around for as long as commerce has existed. Johnston's book is filled with historical lessons on how many brilliant individuals and small groups avoided being played against others and instead put themselves in a position where they could extract maximum value, even against the so-called "giants".

One of my favorite pilot conversations, which we have all heard many times in some shape or form, goes something like this:

“Airlines don’t dictate what they pay for fuel, so why should they be able to dictate what they pay for a pilot? Managements don’t get to dictate the price of a barrel of oil, so why should they be able to dictate the price of a barrel of pilot?”

What is being contemplated in this line of discussion is treating our profession like a commodity that is accepted by all carriers as simply the cost of doing business. Wouldn't that be a refreshing change?

In the thirty-eight years of airline deregulation, every assault imaginable has been made upon the cost of a barrel of pilot. I don’t need to write a history lesson here. Every airline pilot has lived it and felt it in a very tangible way. Rockefeller's leverage over the railroads overshot the free-market system, which eventually tempted him to bend the rules to keep his sweet gig going. The regional airline situation has overshot the free-market system for pilots, and managements will be increasingly tempted to seek ways to press every boundary possible in order to keep their gig going as well. This is where we need pilot unity more than ever.

In a dramatically consolidated industry, pattern bargaining is finally re-emerging among the major carriers, as mainline pilot contracts are now in a much narrower span of parameters. The trend-line has finally reversed from the downward spiral and pilot groups are all working to undo the damage inflicted by "pattern bankruptcy". Combined with the pilot shortage emerging among the regional carriers and the historic wave of retirements ahead of us, we are increasingly in a position to "commoditize" the profession. We are increasingly in a better position to help market forces move the bar back to where it should be. This is why we need pilot unity more than ever.

Just as Rockefeller took advantage of multiple railroads and shipping companies, the airlines are still taking advantage of the regional carriers and they have the regional managements over a barrel. Thousands of pilot careers are caught up in this leverage game and the airlines are still able to take advantage of a wide array of disjointed and fractured pilot groups.
WE NEED LESS PILOT UNIONS, NOT MORE.

It’s only natural to focus on our parochial issues. But going forward, we need more and more pilots looking at the big strategic picture. Well over half of us at American Airlines (and other major carriers for that matter) will be retired within ten to twelve years. Most of us are on a glide-path to retirement. But instead of pulling up the ladder on the next generation, which has happened far too often, we can start the major actions and muscle movements required to restore this profession to what it used to be and what it needs to be. The free market has spoken and the pay and benefits for such a highly licensed and certificated profession are not attracting enough candidates to subject themselves to the painfully expensive training, followed by the grueling years of regional airline pay.

The pilots of the industry need to speak with one strong voice during any debate on changing the mandatory retirement age. We need to speak with one strong voice as the industry contemplates the creation of ab-intio programs to cope with the pilot shortage. The pilots of the world's largest airline need to be the leaders of that voice, and not on the outside fighting for relevancy and a seat at the table.

As the pilot shortage intensifies, we need to speak with one strong voice as Washington DC is heavily lobbied to explore every possible alternative for filling cockpit seats, including the threat of lowering barriers to foreign carriers. [Virgin Atlantic has declared itself as up for sale under the right terms, and rumor has it that a Middle East carrier (Etihad?) wants to make a substantial investment.]

The pilots at JetBlue have recently joined ALPA. A few weeks ago, Frontier pilot leaders voted unanimously to join ALPA and their membership is in the process of ratifying that decision. Pilot consolidation is a positive trend. A significant number of pilots at AA have responded to the ALPA discussion, asking how they can get involved in a movement to go back to ALPA. Most importantly, some of the pilots who led this effort over fifteen years ago have reached out, saying that circumstances are much better this time around to resurrect this debate and bring this long-overdue transition to fruition.

If you are an American Airlines pilot and you support this effort, here are three initial steps you can take:

1. Email your APA leaders (and candidates) and let them know you support exploring a merger with ALPA.

2. Join the Facebook group which is working on this effort. Send a request to join "ItsNot1963". This group is not to debate the issue, but is for pilots who are already firmly committed to taking actions to make this happen. (American Airlines pilots only, please).

3. If you are interested in becoming more personally involved, send me an email, and I will link you up with the pilots who are rolling up their sleeves to lead this effort.

John Rockefeller became the wealthiest man in our nation's history. Today, adjusted for inflation, he would be worth more than the seven richest Americans combined. Rockefeller knew that multiple entities were something he could exploit, while he consolidated his own organization every chance he could. It made him an epic fortune. As airline pilots, OUR strength will come from continuing to consolidate, unite and coordinate our strategies. Over time we can mitigate the whipsaw between pilot groups, and return much, if not all of the regional flying back to the mainlines where it belongs. Ultimately, our consolidation can increase the pressures on the industry to pay all of us what is truly market-based and appropriate for "a barrel of professional pilot" over the course of our entire careers.

Neil Roghair

Best make it a merger
Never get enough APA members interested enough to "vote" by returning a card

This article is based on the false pretense that ALPA negotiates under one contract. They do not. Even if every airline in the world were ALPA, we would still all have different contracts. So, nice article that makes you feel good but really doesn't mean squat.

This will probably earn me some groans, but as long as ALPA attempts to simultaneously represent the interests of legacy carriers and our scope concerns with the interests of regional carriers that are (at least on a management level, I don't blame the pilots for this) interested in circumventing and subverting those scope agreements, I can't fully accept the idea of leaving the APA.

"We need FEWER pilot unions..."


Sent from my iPhone using Tapatalk

Low grade on Econ 101. If pilots are like barrels of oil then every month when you open your paycheck, the amount would be different depending on whether the AF & Navy were riffing their pilot forces or ramping up with retention bonus.

Unfortunately pilots are human and have future expectations & sometimes like to fly. This means that the market is infinitely fractured, not like JDR in Cleveland in 1870,


DD

The most consistently, by average over the last ten years, highest paid and positive career progressed pilots have been non ALPA.

American and Southwest.

Surely you are joking? American?

No groans here, you're right. Furthering your point... 2 of every 3 dollars of dues goes to ALPA National. And this is the same ALPA that the Delta pilots were/are close to dumping right? The APA has its problems, however ALPA is not the answer.

This is the same Neil Roghair that brought us the JCBA right?

NO LTD (lasts 18-24 months with offset) & No minimum duty day rig and that's just where the problems get good. They also did a great job for TWA & US Air. ALPA... the joke continues. Maybe they're interested in the AA group to replace the dues money (that's all they are about) when Delta bails out.