From Envoy 3rd Quarter Q&A:

Q. What are your projections for pilot flow specifically in regards to Envoy?
A. We anticipate approximately 200-300 pilots will flow through from Envoy to American in 2016, depending on American’s capacity needs and hiring requirements.

I thought the flow was going to be 375 for 2016. Knowing AAG, I'm sure they will likely be on the lower side of this estimate. What's up with the 375 Cuj?

Not contingent on new hires until Envoy gets the pilot corps to the point where they are at or near mins to staff Envoy's aircraft.

Previously, Envoy management had about 130 aircraft in the plans. This may have changed a bit due to the slow transfer of the CRJ's to PSA. If PSA can't staff, then Envoy keeps the CRJ's even longer bringing the total Envoy frames over 130 eventually. Also, some of the 140's are staying through 2016 that would have gone away. The total hull loss in 2016 from the 2015 fleet number is 4. It was much more in the original plan. These numbers also include the 175's coming in throughout 2016.

Management likely has a backup plan in place that forecasts staffing for 140 to 150 aircraft which would require 1600 to 1700 total pilots. After the pilot ranks reach that number, the flow is absolutely contingent on new hires.

Well that day WILL come but you are just offering conjecture on how Managment will confront the problem. Can you offer a logical argument, citing past practices and statements to support your conclusion? Because I can in support that they will not hinder the flow.

It's because everybody is giving us different information. I think there was 3 different numbers given out now.

Isom Announced 750 in the October crew news video. Which 50% would be 375, meterable down to 360 at 30/month

The one you have shows 200-300 flows

Below says 700, which would be 350 for Envoy:
In this week's 'Arrivals' newsletter:

Q What are future pilot hiring projections?
A Jim Thomas, MD,Flight Training & Standards

Our plan is to hire approximately 700 pilots next year and hope to continue hiring at least the same number for several years. This hiring is a result of many factors, including the addition of our new A350 fleet, our planned international growth, and the fact that a lot of our pilots are approaching the FAA’s mandatory pilot retirement age of 65. About half of our new hire pilots come to us via flow-through agreements with our wholly owned regional carriers. The remainder consists of pilots who return to American as a result of cancelling their deferral from furlough and those who come from the large pool of qualified applicants.

How about dollars? Let's say that Envoy ends up with 130-150 aircraft feeding AA that need pilots. Do you really think that they will continue the flow after reaching minimum staffing numbers while parking planes if they are unable to hire enough bodies to replace the flows?

What about the past practice of the company metering the flow which finally caused the union to file a grievance? This was in the past 4 years. The grievance came too late as far as I'm concerned, but this is ALPA after all.

Exactly. Dollars and Parker is going to pursue whatever solution brings new hires in the doors at his wholly owned regionals and costs him the least amount of dollars. Parker knows that the flow has value to applicants. Currently, he feels that the flow has so much value that he won't need to increase pilot compensation in order to attract enough pilots. He has stated this on several occasions during town hall meetings. Endeavor has had to give out $20,000 bonuses to attract and retain pilots. RAH has significantly increased FO pay in hopes of meeting its recruitment demands. envoy is using the flow incentive.

What would happen to Endeavor's recruitment if they announced they will no longer offer 20 Grand in bonuses? Or RAH if they revert to $21 an hour for the first year? For Parker to impede the flow would be the same thing. Its a catch 22. Yes, stopping the flow would temporarily help his regional staffing but will precipitate a huge exodus of junior pilots and bring recruitment to a standstill. It would ultimately make his regional staffing worse, not better. He does understand this.

In my opinion, Parker will ultimately need to offer further incentives to new hires in addition to the flow. I would guess that this will be done in the form of a bonus program. In the end, when the regional staffing becomes critical, offering more money (bonus, increased pay, or school loan reimbursement) will ultimately cost Parker less money without sabotaging envoy recruitment efforts than stopping the flow. It will be his cheapest alternative which it why I can confidently tell you, that is the course he will take.

It is easy to say, "Yeah, they will just stop the flow." but it will not be the lowest cost solution so AAG will not pursue it. I could also see an acquisition solution.

We have differing views and you present a different way of looking at
things. AMR burned me in the past and I know AAG is different management, but in the end, they are all the same. The execs are looking out for the stock price, shareholders and themselves.

Let's visit this particular topic in a year and see how things shake out. For the Envoy pilots, let's hope that your scenario plays out. I just think that the availability of pilots is becoming more critical. The crisis of pilot availability is already here and most regional management groups are throwing money and/or flow at it right now.

Look back to just two years ago and compare it to now. Great Lakes was still paying $16/hr. Now they are paying $28 and are about out of business due to the lack of bodies. How about Republic? Bedford stalled for 8 years to get rock bottom rates and rake in the dough off the backs of the pilots working under that old agreement. He literally pushed this latest contract through himself.

Hopefully you have apps in at the Big 3, Alaska, Jetblue, Spirit, Virgin, etc. I wouldn't sit around Envoy waiting on the big flow if any of the above call.

Most envoy pilots outside of the 824 that I talk with have this attitude. The Flow is great, but they are not waiting around for it. I can tell you though, that not since letter 3 was originally created, have I seen the flow work better than since Parker has taken over.

For the reason as you stated above, in the current and coming "mainline" hiring environment, Parker knows that his regional pilots will be leaving for other companies regardless of the flow. All regional airlines are going to have to increase pay. AA has to hire pilots, so with the flow, they offer an incentive to come to envoy, keep that pilot from leaving for Spirit and get an AA new hire that they were going to have to hire anyway. The flow is practically free for him to offer. Now, when he does have to increase his incentives to prospective regional new hires, he will only have to offer $10,000 bonuses instead of $20,000.

Even in a Defcon 1, situation critical scenario, I think envoy pilots will be just fine. Already the Big 3 are bringing former regional routes back to mainline as a solution to dealing with the forced reduction in regional lift. Delta is looking at flying the Embraer 190 at mainline along with its B717 fleet. United is adding A319 to cover this flying. AA already has a E190 fleet. When that time comes and Parker decides to convert the existing envoy E175s into E190s at mainline, where do you think he will get the pilots from to flying those aircraft?

Currently, Parker is advertising that envoy will be the quickest way for ( the average ) pilot to get to AA. If that incentive is not enough to attract sufficient regional new hires, it would be an easy transition for AA to say, its wholly owned regionals are the ONLY way to AA.

Also consider the alternatives for a 1500 hr pilot today. He could come to envoy and have a guarantee job at AA in 6 years. He could go to Endeavor for higher pay and one day get an interview with Delta but that deal has so many loopholes in it, he really stands a chance of never getting to go to Delta. He could go to RAH for higher pay but Bedford has already publically stated that RAH cannot afford the new cost structure. Bankruptcy is a real possibility there so that pilot runs the risk of having to start over in a year or two. And even if RAH is still around in 6 years, he will have to compete will all the other regional pilots, LCC, Cargo, and Military pilots for mainline pilots spots. And if more companies develop programs like Commutair just did, those interview spots will become fewer and fewer.

And RAH is not alone in its "rock and a hard place" position between pilot compensation and fixed CPA revenue. TSA, SkyWest, AWA, etc, all have a fixed revenue stream from their mainline CPA in a pilot market place of rapidly increasing costs. I do not see any of the mainline CEOs being willing to increase those companies revenue especially Doug Parker, RAH's biggest customer. I think we will see fewer regional contract airlines before we ever see envoy's staffing reach "critical mass".

That may be the case for some, but I personally know of several pilots recently hired at the WOs who aren't eligible or otherwise not hire-able at the major level. Examples include no college degree, closeted skeletons, and even the Captain who got fired from my company for taxiing an RJ into a 757. THAT guy is at PSA now, and will flow to AA no questions asked. Scary but it is what it is.

My point is there are plenty of pilots at the WOs who HAVE to have the flow to move on. It is not something that is "nice to have in my back pocket", but absolutely required for them to have any hope of making it to a legacy. The WOs don't have as much leverage as you think. Just look at some of the folks hired at PSA over the past two years. Those are your futures bros at mainline. A flow would be nice, but personally I'd rather move up to a company that only hires those who work hard and network their asses off.

See ya there bruh


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