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Is Seniority Killing the Airline Industry
05-06-2009 | 10:29 AM
#1
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From: Light Chop
Is Seniority Killing the Airline Industry?
Is Seniority Killing the Airline Industry?
Is Seniority Killing the Airline Industry? - BusinessWeek
For decades it’s been a maxim of the airline industry that workers are captive, bound by a seniority system that doles out the choicest wages and work schedules. Seniority is the reason newly hired flight attendants and ramp workers find themselves on the job before 6 am, and on weekends. And while new captains make $50-$60 hour in 50-seat jets, veterans sit at the front of 777s and 747s, where the hourly pay often tops $200.
Thus, if you’re an airline employee displeased about your income or schedule or both, you have little recourse. Quitting won’t land you a better job at a rival: You’ll be the new kid on the block. However, in recent days, I’ve heard some smart people begin to question whether this system is harmful and ought to change.
First, on April 29, the U.S. Chamber of Commerce had its annual aviation summit where JPMorgan airlines analyst Jamie Baker diagnosed two primary industry woes: unfettered access to capital and a contentious relationship with organized labor. In a Q-and-A forum with US Airways (LCC) CEO Doug Parker, Baker noted that if he personally wanted to leave his employer, he could take his skills and experience elsewhere. Yet there is “no portability at airlines for labor;” an unhappy pilot “can’t take his skill set and sell it to Delta or sell it to United.” Responded Parker: “It’d be nice, it’s just not practical.”
The next day, responding to a recent discussion at the Dallas Morning News about former TWA flight attendants’ subordination in their seniority integration with American (AMR), aviation blogger Bill Swelbar also suggested improved mobility for airline employees. (Swelbar serves on an airline board, so he’s not just an academic muser.)
Given that the airline industry will likely get smaller before and if it gets bigger, it is high time that organized labor puts down its swords and constructs a national seniority list. Employees should have the right to move within the industry should their carrier cease to exist. Seniority should not be a shield for some to hide behind. Rather it should promote stability for those experienced workers that choose to offer their services for hire in an open market.
Seniority also remains one of the largest impediments to the industry’s Holy Grail, consolidation, as it remains so tricky to merge two seniority rosters. In fact, a federal trial opened just last week on a lawsuit filed by six former America West pilots who say their union did not properly meld pilot seniority when bankrupt US Airways was merged into the company in 2005.
It is true that seniority remains a buffer from a purely market-based wage system for many legacy airline workers. If it hopes to ever turn a consistent profit, the industry likely needs to shrink anywhere from 25%-40% of its current size – massive capacity cuts that would dramatically alter the supply-demand equation and deepen unemployment.
That is why I think it’s unlikely unions would support any major restructuring of seniority. Theirs is an industry in decline at the present. Pay, aircraft types, etc. would need be revamped completely. In an email to clarify, Swelbar says a seniority restructuring would apply to the future industry, not current workers. “A transition to a salary for pilots and flight attendants is probably long overdue,” he says.
A new compensation system for workers is an intriguing notion and holds the potential of fixing the so-called “labor problem” many in management and Wall Street bemoan. Assuming we’ll be just as safe when the market alone sets remuneration, is there a fundamental drawback to dismantling seniority in this industry? I’m curious if we’ll ever see it.
...
For decades it’s been a maxim of the airline industry that workers are captive, bound by a seniority system that doles out the choicest wages and work schedules. Seniority is the reason newly hired flight attendants and ramp workers find themselves on the job before 6 am, and on weekends. And while new captains make $50-$60 hour in 50-seat jets, veterans sit at the front of 777s and 747s, where the hourly pay often tops $200.
Thus, if you’re an airline employee displeased about your income or schedule or both, you have little recourse. Quitting won’t land you a better job at a rival: You’ll be the new kid on the block. However, in recent days, I’ve heard some smart people begin to question whether this system is harmful and ought to change.
First, on April 29, the U.S. Chamber of Commerce had its annual aviation summit where JPMorgan airlines analyst Jamie Baker diagnosed two primary industry woes: unfettered access to capital and a contentious relationship with organized labor. In a Q-and-A forum with US Airways (LCC) CEO Doug Parker, Baker noted that if he personally wanted to leave his employer, he could take his skills and experience elsewhere. Yet there is “no portability at airlines for labor;” an unhappy pilot “can’t take his skill set and sell it to Delta or sell it to United.” Responded Parker: “It’d be nice, it’s just not practical.”
The next day, responding to a recent discussion at the Dallas Morning News about former TWA flight attendants’ subordination in their seniority integration with American (AMR), aviation blogger Bill Swelbar also suggested improved mobility for airline employees. (Swelbar serves on an airline board, so he’s not just an academic muser.)
Given that the airline industry will likely get smaller before and if it gets bigger, it is high time that organized labor puts down its swords and constructs a national seniority list. Employees should have the right to move within the industry should their carrier cease to exist. Seniority should not be a shield for some to hide behind. Rather it should promote stability for those experienced workers that choose to offer their services for hire in an open market.
Seniority also remains one of the largest impediments to the industry’s Holy Grail, consolidation, as it remains so tricky to merge two seniority rosters. In fact, a federal trial opened just last week on a lawsuit filed by six former America West pilots who say their union did not properly meld pilot seniority when bankrupt US Airways was merged into the company in 2005.
It is true that seniority remains a buffer from a purely market-based wage system for many legacy airline workers. If it hopes to ever turn a consistent profit, the industry likely needs to shrink anywhere from 25%-40% of its current size – massive capacity cuts that would dramatically alter the supply-demand equation and deepen unemployment.
That is why I think it’s unlikely unions would support any major restructuring of seniority. Theirs is an industry in decline at the present. Pay, aircraft types, etc. would need be revamped completely. In an email to clarify, Swelbar says a seniority restructuring would apply to the future industry, not current workers. “A transition to a salary for pilots and flight attendants is probably long overdue,” he says.
A new compensation system for workers is an intriguing notion and holds the potential of fixing the so-called “labor problem” many in management and Wall Street bemoan. Assuming we’ll be just as safe when the market alone sets remuneration, is there a fundamental drawback to dismantling seniority in this industry? I’m curious if we’ll ever see it.
...
Last edited by forgot to bid; 05-06-2009 at 02:48 PM.
05-06-2009 | 10:49 AM
#2
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From: B-737NG preferably in first class with a glass of champagne and caviar
The term contributory negligence applies to this. Seniority isn’t the criminal hear. Company management with their greed who use bully tactics and are very happy to have a fragmented union working for their airline … lack of unity of the pilot’s who… and the unions who will not endorse a national union and do not motivate unity of the pilots to stand up against management... as some unions are no less greedy than their management foes.
05-06-2009 | 10:59 AM
#3
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Joined: Mar 2008
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From: FAA 'Flight Check'
I don't claim to understand the intricacies of the seniority in the airlines system, but it does amaze me that the pilot especially has no means to transfer his seniority between companies. From an outsider's view - it does seem that a national seniority system would be a good thing. I look forward to seeing more information on this subject here. DEBATE ON!
USMCFLYR
USMCFLYR
05-06-2009 | 11:59 AM
#5
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Joined: Oct 2006
Posts: 863
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From: Center seat, doing loops to music
Lack of ability to exercise lateral career moves is part of the reason the airline job stinks. The glut of pilots willing to do this job subjected to a gazillion hours TAFB for an ILS and flight time logbook entry, is the other.
The problem is that the metrics used to evaluate an applicant strive to attain a quality where one pilot is the carbon copy of each other. Therefore in the inability for labor to distinguish oneself from another pilot (since the job of a pilot is after all to be standard), the only 'criterion' deemed suitable is some arbitrary date of X aggregate list. It's a terrible metric but "it's all we got"...Meh, I'll pass.
Consolidation is in the future, everybody is awaiting 2013 like it's gonna be Moses and the opening of the Red Sea, but between downsizing and huge scope giveaways the retirements won't come close to making up for the huge number of people right now plastered to the fence like a poor Bolivian at a soccer match, waiting for the green light ready to get on food stamps to do this job. I doubt enough political fortitude and incentive will exist among the senior pilots to put away their self-preservation for the "greater good" of the hungry. Pilots are not volunteer firefighters or librarians, pilots are right of self-centered as a collective, in the scale of human dispositions. The odds of pushing through a national seniority list are not good. It would be great if it did though....
Even if you discount the top hourly scales, there are enough people in the street willing to do the job for 80K top out salary, to cover the current capacity and then some. Translation? The dream is dead, you can't compete with the 50K/yr chump at the bottom whose just happy to fly an airliner. That coupled on the top end with Boomers who are like Cartman from South Park...they'll just take their ball and "screw you guys I'm going home". I'd brush up on that bengali if I were to stick around......
The problem is that the metrics used to evaluate an applicant strive to attain a quality where one pilot is the carbon copy of each other. Therefore in the inability for labor to distinguish oneself from another pilot (since the job of a pilot is after all to be standard), the only 'criterion' deemed suitable is some arbitrary date of X aggregate list. It's a terrible metric but "it's all we got"...Meh, I'll pass.
Consolidation is in the future, everybody is awaiting 2013 like it's gonna be Moses and the opening of the Red Sea, but between downsizing and huge scope giveaways the retirements won't come close to making up for the huge number of people right now plastered to the fence like a poor Bolivian at a soccer match, waiting for the green light ready to get on food stamps to do this job. I doubt enough political fortitude and incentive will exist among the senior pilots to put away their self-preservation for the "greater good" of the hungry. Pilots are not volunteer firefighters or librarians, pilots are right of self-centered as a collective, in the scale of human dispositions. The odds of pushing through a national seniority list are not good. It would be great if it did though....
Even if you discount the top hourly scales, there are enough people in the street willing to do the job for 80K top out salary, to cover the current capacity and then some. Translation? The dream is dead, you can't compete with the 50K/yr chump at the bottom whose just happy to fly an airliner. That coupled on the top end with Boomers who are like Cartman from South Park...they'll just take their ball and "screw you guys I'm going home". I'd brush up on that bengali if I were to stick around......
05-06-2009 | 12:20 PM
#6
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From: B737, Capt.
I think a national seniority list could be a curse. From the interviewing pilots perspective, would you hire someone who will be placed above the FO you just flew with? How about above yourself? At SWA there are FOs on the interview team. How do you think that interview would go if you were 'senior' to them. My guess is that they would not want you taking 'their' captain seat.
From a company standpoint, would they be better off, fiscally speaking, with a new pilot at $52/hr or one at $198/hr? I'm thinking that with an NSL, that if you had say 15 years seniority and then for some unfortunate reason needed a job, that you would be unemployable. At least now you do have the ability to start over. Just some things to think about.
From a company standpoint, would they be better off, fiscally speaking, with a new pilot at $52/hr or one at $198/hr? I'm thinking that with an NSL, that if you had say 15 years seniority and then for some unfortunate reason needed a job, that you would be unemployable. At least now you do have the ability to start over. Just some things to think about.
05-06-2009 | 01:03 PM
#7
Day puke
Joined: Feb 2006
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From: Out.
I think a national seniority list could be a curse. From the interviewing pilots perspective, would you hire someone who will be placed above the FO you just flew with? How about above yourself? At SWA there are FOs on the interview team. How do you think that interview would go if you were 'senior' to them. My guess is that they would not want you taking 'their' captain seat.
From a company standpoint, would they be better off, fiscally speaking, with a new pilot at $52/hr or one at $198/hr? I'm thinking that with an NSL, that if you had say 15 years seniority and then for some unfortunate reason needed a job, that you would be unemployable. At least now you do have the ability to start over. Just some things to think about.
From a company standpoint, would they be better off, fiscally speaking, with a new pilot at $52/hr or one at $198/hr? I'm thinking that with an NSL, that if you had say 15 years seniority and then for some unfortunate reason needed a job, that you would be unemployable. At least now you do have the ability to start over. Just some things to think about.
The only thing wrong with the current senority system is that it doesn't extend to management.
05-06-2009 | 01:33 PM
#9
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From: Jet Pilot
Anybody with great seniority, with very rare exceptions, has probably experienced great juniority at one point during his or her career. Seniority is both a blessing and a curse - great if you have it, not so great is you lack. However, this has been a big part of the game for a long time, and most of us are aware of the rules going into it.
I don't have the highest seniority nor am I extremely junior either. But, I'm willing to exercise patience and work within an imperfect system which rewards it's participants with due rewards if the opportunity for longevity presents itself.
I dislike the notion of a national seniority list for a whole multitude of reasons. First, who is negotiating for me and the interests of my pilot group? I like the notion of an independent union negotiating on behalf of my group and my group alone. National seniority list hovers dangerously close to a "nationalization of the union" and thus more and varied interests. The result, as I see it, is a bloated organization with the politics that go along with it.
Second, what if I had to start over at another carrier at the bottom? I wouldn't want anyone to jump over me as a new-hire, and I would feel uncomfortable being hired above someone else, as that could lead to harsh feelings within said pilot group. While some think the current structure to be unfair, I would be willing to bet that a comparable percentage would feel the same way with a national union.
Third, the reason many airlines let go of pilots is due to cost/overstaffing. If one airline is furloughing, then chances are many others are doing so as well. If the name of the game is to control costs, what is to keep many carriers from removing the help wanted sign and doing more with less? This might mitigate hiring due to the fact that carriers would prefer not to hire than to hire people at varying pay rates - which could be high depending on seniority.
It only "stinks" if you have to make a lateral career move. If not, the current system is quite good. Not to sound like a broken record, but this is a known condition for all of us who choose to enter this profession. It is what it is.
I don't have the highest seniority nor am I extremely junior either. But, I'm willing to exercise patience and work within an imperfect system which rewards it's participants with due rewards if the opportunity for longevity presents itself.
I dislike the notion of a national seniority list for a whole multitude of reasons. First, who is negotiating for me and the interests of my pilot group? I like the notion of an independent union negotiating on behalf of my group and my group alone. National seniority list hovers dangerously close to a "nationalization of the union" and thus more and varied interests. The result, as I see it, is a bloated organization with the politics that go along with it.
Second, what if I had to start over at another carrier at the bottom? I wouldn't want anyone to jump over me as a new-hire, and I would feel uncomfortable being hired above someone else, as that could lead to harsh feelings within said pilot group. While some think the current structure to be unfair, I would be willing to bet that a comparable percentage would feel the same way with a national union.
Third, the reason many airlines let go of pilots is due to cost/overstaffing. If one airline is furloughing, then chances are many others are doing so as well. If the name of the game is to control costs, what is to keep many carriers from removing the help wanted sign and doing more with less? This might mitigate hiring due to the fact that carriers would prefer not to hire than to hire people at varying pay rates - which could be high depending on seniority.
Lack of ability to exercise lateral career moves is part of the reason the airline job stinks. The glut of pilots willing to do this job subjected to a gazillion hours TAFB for an ILS and flight time logbook entry, is the other.
05-06-2009 | 02:04 PM
#10
Day puke
Joined: Feb 2006
Posts: 3,865
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From: Out.
For seamen and officers, there are a number of ranks and tonnage certificates. Even Master has several different levels (limited 100 tonne, 100 tonne, 500 tonne,.... up to unlimited).
Seafarer's professions and ranks - Wikipedia, the free encyclopedia.
Approved Courses - USCG National Maritime Center
Each of them require experience and/or schooling to move up.
So, IMHO, if the regs were to change to something like:
Pirvate, Commercial (to 12,500lbs), ATP 40k lbs, ATP 100k lbs, ATP 300k lbs, ATP unlimited
AND
If our planes still required Pilots, Copilots/FOs, Second officers, Engineers, and Navigators,
OR
If a pilot had to go from a B1900, to a Saab, to a DC9, to a 737, to a 747
THEN we might be able to compare the pilots to seaman.
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