ULCC or American?
02-14-2020, 09:20 AM
#91
Gets Weekends Off
Joined APC: Aug 2014
Posts: 511
Originally Posted by Qotsaautopilot
If your primary home is paid off I’d say great. We carry so much risk on our medical certificate. Any one of us could medical out before our next exam. We are racking up guys who will never fly again due to fumes. Even with LTD income I think many pilots would have a major problem adjusting their lifestyle needed if owning multiple properties mortgaged to the hilt. Even then some of those properties my have to sold and potentially at a loss if the housing market is down.
If your primary home is paid off you can take much higher investment risk. Fact is if LTD doesn’t cover the cost of servicing all that debt then one might find themselves out of their family home if it’s not paid for.
I’ll continue to pay down my 3.37% mortgage so that if something terrible happens I know we will be able to stay in our home and not moving into a crummy apartment.
If your primary home is paid off you can take much higher investment risk. Fact is if LTD doesn’t cover the cost of servicing all that debt then one might find themselves out of their family home if it’s not paid for.
I’ll continue to pay down my 3.37% mortgage so that if something terrible happens I know we will be able to stay in our home and not moving into a crummy apartment.
02-14-2020, 09:28 AM
#92
Gets Weekends Off
Joined APC: Nov 2016
Position: 6th place
Posts: 1,826
Originally Posted by Qotsaautopilot
I’m at a ULCC in the left seat. It is true ULCC pilots can make the same as legacy pilots.
The thing that my fellow ULCC pilots fail to include is that to make that money you have to work the system, work more, or both compared their legacy counterparts just flying their line. Lower retirement and no profit sharing. Add also widebody flying and compensation at the legacies and it’s not a comparison. Seniority movement was fast but the legacy retirements are coming and seniority movement at the legacies will be as fast or faster than the ULCC moving forward simply because of the hiring demographics of the ULCC pilots already hired.
I find that many ULCC pilots have a bit of Napoleon syndrome. It’s fine to be happy with what you have but legacy compensation it is not. I have a seniority percentage that’s not worth giving up because of the age demographics hired at delta and United the last couple years. I’d move fast for many years at a legacy and hit a seniority wall when I turn about 60 years old with most guys senior to me being younger. AA might be a different story but for a new hire or junior FO at a ULCC is highly likely to have more career progression and make much more at a legacy.
The thing that my fellow ULCC pilots fail to include is that to make that money you have to work the system, work more, or both compared their legacy counterparts just flying their line. Lower retirement and no profit sharing. Add also widebody flying and compensation at the legacies and it’s not a comparison. Seniority movement was fast but the legacy retirements are coming and seniority movement at the legacies will be as fast or faster than the ULCC moving forward simply because of the hiring demographics of the ULCC pilots already hired.
I find that many ULCC pilots have a bit of Napoleon syndrome. It’s fine to be happy with what you have but legacy compensation it is not. I have a seniority percentage that’s not worth giving up because of the age demographics hired at delta and United the last couple years. I’d move fast for many years at a legacy and hit a seniority wall when I turn about 60 years old with most guys senior to me being younger. AA might be a different story but for a new hire or junior FO at a ULCC is highly likely to have more career progression and make much more at a legacy.
Totally agree. The ULCCs work for many and they’re a great job. But the fact is the money is better at the legacies and the opportunity to fly wide body’s doesn’t exist at a ulcc.
If i was a captain at one of them i wouldn’t leave for a legacy. But if i was looking for that first airline job the ULCCs would be behind the other 6 big airlines and i imagine that’s the same for most people.
02-14-2020, 09:42 AM
#93
Prime Minister/Moderator
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,286
Originally Posted by Excargodog
just remember, past is generally prologue, and the history of the aviation industry is littered with the wreckage of airlines like PanAm, TWA, and others that would have seemed too big to fail and the safe bet at the time.
The current top four (maybe top six?) probably are too big to fail absent a true economic catastrophe. They are also all structurally in good shape (several are in great shape), and a currently well aligned with the business reality they operate in. For example they can compete with ULCC to a significant degree with ultra-discount fares... and they can sell as few or many of those as demand dictates (they don't have the competitive advantage of Discount Airline Pilot wages, but market forces are addressing that to a degree).
02-14-2020, 09:44 AM
#94
Gets Weekends Off
Joined APC: Oct 2010
Posts: 4,603
Originally Posted by Dunkin
Hopefully your mortgage isn’t so much that your LTD wouldn’t easily cover it, also diversifying your income streams helps protect against a loss of medical financial issues. Doesn’t make sense for me to pre pay 4% debt when I’m making 15-20% on side investments.
Where are you reliably getting 15-20% that’s liquid because I’m interested in that.
02-14-2020, 09:53 AM
#95
Gets Weekends Off
Joined APC: Aug 2014
Posts: 511
Originally Posted by Qotsaautopilot
True but if your LTD doesn’t cover all debt you may have to start shedding stuff or end up in bankruptcy or foreclosure if you you can’t. And if you’re furloughed forget it unless flying isn’t your primary income.
Where are you reliably getting 15-20% that’s liquid because I’m interested in that.
Where are you reliably getting 15-20% that’s liquid because I’m interested in that.
02-14-2020, 09:58 AM
#96
Gets Weekends Off
Joined APC: Mar 2014
Posts: 3,094
Originally Posted by Qotsaautopilot
If your primary home is paid off I’d say great. We carry so much risk on our medical certificate. Any one of us could medical out before our next exam. We are racking up guys who will never fly again due to fumes. Even with LTD income I think many pilots would have a major problem adjusting their lifestyle needed if owning multiple properties mortgaged to the hilt. Even then some of those properties my have to sold and potentially at a loss if the housing market is down.
If your primary home is paid off you can take much higher investment risk. Fact is if LTD doesn’t cover the cost of servicing all that debt then one might find themselves out of their family home if it’s not paid for.
I’ll continue to pay down my 3.37% mortgage so that if something terrible happens I know we will be able to stay in our home and not moving into a crummy apartment.
I was single at the time and recovered over more than a decade but I got furloughed and ended up in negative equity in my house simultaneously in 2008. Lost my home as a result. 4% being low or not if you can’t service the debt you’re out on the street
If your primary home is paid off you can take much higher investment risk. Fact is if LTD doesn’t cover the cost of servicing all that debt then one might find themselves out of their family home if it’s not paid for.
I’ll continue to pay down my 3.37% mortgage so that if something terrible happens I know we will be able to stay in our home and not moving into a crummy apartment.
I was single at the time and recovered over more than a decade but I got furloughed and ended up in negative equity in my house simultaneously in 2008. Lost my home as a result. 4% being low or not if you can’t service the debt you’re out on the street
If you lost your home it's because you didn't have a safety margin built in and you bought too much house...my house went negative equity as well (we bought in mid 2008, just prior to the crash) but despite losing $70k in income we still have the house. We had student loans too. 2008-2009 sucked.
The future reckoning with increased automation replacing jobs will cause a huge divide between the haves and have nots. Business profit will initially soar and the market returns will reflect that. Owning your house outright might be nice, but wouldn't it be better if you controlled millions in assets with annual cash flow of $100k+ just sitting on your butt? (let me introduce you to the stock ticker "O")
Putting large sums of money into investments is even more important if you want to hedge bets against future automation or medical loss. Of note, if your company includes LTD offsets, most likely your investment income (capital gains, rental income) is not counted towards that offset. So that could be used to significantly enhance your QOL if you medical out.
Buying more than one property, over leveraging your primary residence, etc is different than living a reasonable middle class life but stuffing tens of thousands a month into investments. Times are really good, take advantage of the income while we are still earning it. Also take advantage of the time off to diversify skills, this should be a priority if you are concerned about losing your job.
Last edited by Name User; 02-14-2020 at 10:40 AM.
02-14-2020, 10:04 AM
#97
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,503
Originally Posted by rickair7777
Different era. Pan Am and Eastern (the two big failures) had been struggling for a long time, and de-regulation was the final nail.
The current top four (maybe top six?) probably are too big to fail absent a true economic catastrophe. They are also all structurally in good shape (several are in great shape), and a currently well aligned with the business reality they operate in. For example they can compete with ULCC to a significant degree with ultra-discount fares... and they can sell as few or many of those as demand dictates (they don't have the competitive advantage of Discount Airline Pilot wages, but market forces are addressing that to a degree).
The current top four (maybe top six?) probably are too big to fail absent a true economic catastrophe. They are also all structurally in good shape (several are in great shape), and a currently well aligned with the business reality they operate in. For example they can compete with ULCC to a significant degree with ultra-discount fares... and they can sell as few or many of those as demand dictates (they don't have the competitive advantage of Discount Airline Pilot wages, but market forces are addressing that to a degree).
https://www.seattletimes.com/busines...rlines-pilots/
Assuming the Big Three or Big Six will never have their own ‘Kasher moment’ in the event of a significant downturn is - I believe - unwise.
The history of airline pay has been a volatile one. Those assuming it can only go up do so at their own risk. Yes, I believe over the long haul with prudent money management you will very likely do better at a legacy (at least one with widebodies) than at a ULCC. But that’s over the long haul and with prudent money management. I know a couple of retired Delta pilots that could tell you stories about building their retirement plans around pensions that were suddenly greatly reduced. They certainly aren’t living in cardboard shacks under the freeway even now, but their retirements certainly were a severe cutback from what they had planned on.
02-14-2020, 10:19 AM
#98
Prime Minister/Moderator
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,286
Originally Posted by Excargodog
Not talking about failure per se. They didn’t FAIL when they went into bankruptcy, just used the threat of failure to void contracts, cease paying into pension funds, and enable furloughs. Just like Alaska had their pay cut 26% at the whim of a mediator when management convinced him they needed it to stay competitive.
https://www.seattletimes.com/busines...rlines-pilots/
Assuming the Big Three or Big Six will never have their own ‘Kasher moment’ in the event of a significant downturn is - I believe - unwise.
The history of airline pay has been a volatile one. Those assuming it can only go up do so at their own risk. Yes, I believe over the long haul with prudent money management you will very likely do better at a legacy (at least one with widebodies) than at a ULCC. But that’s over the long haul and with prudent money management. I know a couple of retired Delta pilots that could tell you stories about building their retirement plans around pensions that were suddenly greatly reduced. They certainly aren’t living in cardboard shacks under the freeway even now, but their retirements certainly were a severe cutback from what they had planned on.
https://www.seattletimes.com/busines...rlines-pilots/
Assuming the Big Three or Big Six will never have their own ‘Kasher moment’ in the event of a significant downturn is - I believe - unwise.
The history of airline pay has been a volatile one. Those assuming it can only go up do so at their own risk. Yes, I believe over the long haul with prudent money management you will very likely do better at a legacy (at least one with widebodies) than at a ULCC. But that’s over the long haul and with prudent money management. I know a couple of retired Delta pilots that could tell you stories about building their retirement plans around pensions that were suddenly greatly reduced. They certainly aren’t living in cardboard shacks under the freeway even now, but their retirements certainly were a severe cutback from what they had planned on.
If AS had their pay cut in arbitration, it was because THEY signed up for said arbitration. Outside of BK, RLA has no provision for someone to arbitrarily assign you a pay cut.
And BK is legally harder now than 15 years ago.
My gut feel is that any routine, moderate recession would not see furloughs at most (big) majors... furloughs create big training costs, so you have to plan on keeping furloughed pilots out for at LEAST three years. Retirements would aggravate that calculus.
02-14-2020, 11:31 AM
#99
Gets Weekends Off
Joined APC: Oct 2010
Posts: 4,603
Originally Posted by Dunkin
Use LLCs for business investments. I’ve bought shares of small businesses that pay very high return rates in cash every month.
02-14-2020, 11:36 AM
#100
Gets Weekends Off
Joined APC: Oct 2010
Posts: 4,603
Originally Posted by Name User
Four years ago instead of paying off my house I put the $250k into the market as finance stocks sold off. Current value today is $730,000. It would make me sick looking back to see I missed out on almost a half million in gains to save 3.12% which current day would be about $30k in interest. (Knock on wood!!)
If you lost your home it's because you didn't have a safety margin built in and you bought too much house...my house went negative equity as well (we bought in mid 2008, just prior to the crash) but despite losing $70k in income we still have the house. We had student loans too. 2008-2009 sucked.
The future reckoning with increased automation replacing jobs will cause a huge divide between the haves and have nots. Business profit will initially soar and the market returns will reflect that. Owning your house outright might be nice, but wouldn't it be better if you controlled millions in assets with annual cash flow of $100k+ just sitting on your butt? (let me introduce you to the stock ticker "O")
Putting large sums of money into investments is even more important if you want to hedge bets against future automation or medical loss. Of note, if your company includes LTD offsets, most likely your investment income (capital gains, rental income) is not counted towards that offset. So that could be used to significantly enhance your QOL if you medical out.
Buying more than one property, over leveraging your primary residence, etc is different than living a reasonable middle class life but stuffing tens of thousands a month into investments. Times are really good, take advantage of the income while we are still earning it. Also take advantage of the time off to diversify skills, this should be a priority if you are concerned about losing your job.
If you lost your home it's because you didn't have a safety margin built in and you bought too much house...my house went negative equity as well (we bought in mid 2008, just prior to the crash) but despite losing $70k in income we still have the house. We had student loans too. 2008-2009 sucked.
The future reckoning with increased automation replacing jobs will cause a huge divide between the haves and have nots. Business profit will initially soar and the market returns will reflect that. Owning your house outright might be nice, but wouldn't it be better if you controlled millions in assets with annual cash flow of $100k+ just sitting on your butt? (let me introduce you to the stock ticker "O")
Putting large sums of money into investments is even more important if you want to hedge bets against future automation or medical loss. Of note, if your company includes LTD offsets, most likely your investment income (capital gains, rental income) is not counted towards that offset. So that could be used to significantly enhance your QOL if you medical out.
Buying more than one property, over leveraging your primary residence, etc is different than living a reasonable middle class life but stuffing tens of thousands a month into investments. Times are really good, take advantage of the income while we are still earning it. Also take advantage of the time off to diversify skills, this should be a priority if you are concerned about losing your job.
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