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Old 06-03-2006, 07:50 AM   #1
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Default Switching to Cargo Flying

Why some passenger pilots switch to flying cargo

COREY DADE

June 2, 2006

The Wall Street Journal

Kevin Smith saw his pilot friends at Delta Air Lines rattled when it filed for bankruptcy last September. So when the pilot union at Mr. Smith's employer, AMR Corp.'s American Airlines, started cost-cutting talks several weeks later, he decided it was time to look for a new job.

In December, the 42-year-old Mr. Smith landed in the cockpit at United Parcel Service Inc., where he flies cargo planes packed with boxes - and is paid 74 percent less than the $100,000 a year he made at American. Even though it will take Mr. Smith four years to work his way back to his old paycheck, he is willing to endure it in hopes of holding on to the things that used to make being an airline pilot so alluring: job security, advancement and steadily rising wages.

''Guys who flew commercially (once) looked down on guys who flew freight,'' Mr. Smith says. Now, though, ''I've got my buddies at Delta, Northwest and United calling me.''

The turbulence that has led to $38 billion in combined losses since the start of 2001 for the six largest hub-and-spoke passenger airlines in the U.S. is causing their pilots to flood major cargo airlines with job applications - even as contract negotiations are heating up between pilots and cargo airline management. FedEx Corp. had 14,000 applicants for the 420 pilot slots it filled last year, while UPS picked the 233 new pilots it hired from 10,000 applications, including 8,000 from passenger pilots.

FedEx and UPS did 28 percent of all pilot hiring at major U.S. airlines last year, up from 8 percent in 2004, according to AIR Inc., a pilot-placement firm in Atlanta. Smaller cargo carriers also are expanding, including Kalitta Air of Ypsilanti, Mich., which flies 14 planes, up from three in 2000.

Pay concessions at passenger carriers, including Northwest Airlines last month, have pushed annual base pay for their pilots with five years on the job down by 7.5 percent since 2000 to about $81,500. The most-experienced senior captains have seen their pay shrink 12 percent to about $180,744 a year. In contrast, five-year cargo pilots now make an average of $108,330 a year, while top captains are paid $194,566.

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The reversal in the pilot pecking order reflects surging global freight demand that is filling cargo planes with everything from computers to toys to flowers. FedEx and UPS, which operate the world's two largest cargo airlines, made about $22 billion in combined profit since the start of 2001, and more growth is expected as they expand their delivery networks in China.

But the diverging fortunes of the two pilot groups are fueling labor strife at several unionized cargo carriers, where management insists that pay levels should reflect the downturn in pilot wages and employment at passenger airlines. Union leaders claim that FedEx, UPS and other growing cargo carriers are trying to use the financial crisis at passenger airlines to deprive cargo pilots of well-deserved increases in pay and benefits.

Thriving cargo airlines such as FedEx's ''not only have the ability to pay, but the ability to pay very easily,'' says David Webb, a FedEx captain who is chairman of the Air Line Pilots Association unit at the Memphis, Tenn., company. FedEx and the union are in their eighth month of federally mediated contract talks after 17 months of negotiations on their own failed to yield an agreement.

So far, it looks like the cargo carriers have much more leverage than their pilots. Last September, pilots at Atlas Worldwide Holdings Inc., which is merging the crews of subsidiaries Atlas Air and Polar Air Cargo, went on strike - but returned to work two weeks later after agreeing to a raise in line with the Purchase, N.Y., company's original offer.

Atlanta-based UPS and the union representing its 2,700 pilots started contract talks four years ago. Efforts to reach a deal on a new contract hit a snag again last month when union board members rejected a recommendation from their own negotiating committee, causing an indefinite recess in the talks. The union's board ''is in a state of dysfunction,'' Tom Nicholson, president of the Independent Pilots Association, told UPS pilots in a recorded message. The split centers on a proposed pay scale as well as retirement bonuses for pilots hired when UPS launched its airline in 1988 and who now are approaching retirement age, according to people familiar with the situation.

Mr. Nicholson told members last week that the union and UPS are ''working together in good faith'' in informal discussions at the direction of the mediator. However, UPS spokesman Mark Giuffre said this week that ''we've not been instructed or directed by the National Mediation Board to conduct any formal or informal negotiations with the union at this point.''

UPS and union officials declined to comment on the specifics of the talks, citing a media blackout imposed by the mediator. The pilot union has said it wants pay raises that are consistent with recent revenue growth rates at UPS, without disclosing specifics. In the first quarter, UPS's revenue rose 17 percent to $11.52 billion.

UPS says its pilots make an average of more than $175,000 a year, while the union says pilot pay is about $168,000 annually. The union has said the two sides are about $40 million a year apart in their contract talks.

Meanwhile, four-year contract proposals by FedEx and its pilots differ by about $100 million, according to union official Wes Reed, who is coordinating pilot demonstrations outside Kinko's shops owned by FedEx. FedEx spokesman Maury Lane says the company has offered more than $500 million in raises and signing bonuses that would boost average yearly base pay 14 percent to $208,000 from $182,428. FedEx's current pilot pay is among the highest of any U.S. airline.

Except for seats and flight attendants, cargo and passenger planes are basically identical. But cargo pilots pass through different security checkpoints than passenger pilots and board planes parked at out-of-the-way hangars. Most freight moves at night, meaning cargo pilots can make outbound and return flights on a shift entirely in the dark.

Flying at night is ''not one of my favorite things to do,'' says Steve Hunter, who started flying at Atlanta-based UPS last year after 20 years at US Airways Group Inc. He recently bid for a seat on routes to Asia and Europe with more daytime flying.

Mr. Hunter, 50, took a $104,000-a-year pay cut to join UPS. ''We burned through a tremendous amount of savings'' before his annual pay was bumped up to about $75,000 - still less than half his peak earnings at US Airways. He says the sacrifice was worth it because he isn't worried anymore that his job could vanish before he reaches retirement age. ''Now we're plugging along,'' he says, ''working my way back up.''
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Old 06-03-2006, 06:48 PM   #2
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Should've gone Purple, then first year pay cut would've only been 55%, and he would've progress rapidly towards 100k.
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Old 06-04-2006, 06:36 PM   #3
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Quote:
Originally Posted by fr8rcaptain
Should've gone Purple, then first year pay cut would've only been 55%, and he would've progress rapidly towards 100k.
Not everyone can pass the military entrance exam interview over there though.
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Old 06-04-2006, 10:54 PM   #4
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Quote:
Originally Posted by fr8rcaptain
Should've gone Purple, then first year pay cut would've only been 55%, and he would've progress rapidly towards 100k.
What does that mean "should have gone purple"?
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Old 06-04-2006, 11:42 PM   #5
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What does that mean "should have gone purple"?
im guessing FedEx bro..
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Old 06-05-2006, 08:37 AM   #6
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My advice it to do what you love (or at least can stand). Once you get a seniority number somewhere good, stick with it. Don't chase the golden ring. By the time you get there it will be brass.

Pax flying is down in the dumps now but I believe the pendulum will swing again (I have to believe that).
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Old 10-12-2006, 11:26 AM   #7
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Default Future insight

All,
I have a question and hopefully I can garner some insight from your sage experiences. I am retiring soon from the military. I am not a military pilot but plugging away at my qualifications slowly but surely. I also work part-time for FedEx. Given the huge amount of applications referenced in the WSJ article, does anyone think that being a current FedEx employee will help in my hopeful transition to the flight deck?

Thanks,
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Old 06-23-2007, 10:01 AM   #8
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Hey Double D,

Here's a post from a guy that went from throwing boxes to flying at FedEx. Keep in mind he was mad qualified...yet he still made some sacrifices to get to where he wanted to go.


I did what you're inquiring about. A little background (sorry in advance for the long post)...

Retired USAF. UAL for 1 1/2 years, furloughed. Consulting work while trying to get back to a flying job. After contacting my USAF friends at FedEx, I decided Purple & Orange was the way to go.

Mid 2004, FedEx would NOT interview furloughed folks (other than US Air on a case by case basis). My sponsor suggested throwing boxes for a period of time (it varies, more on this to follow) and get on board as an internal hire.

Policies change and FedEx is interviewing furloughed folks on a case by case basis. The advantage to being an internal hire is that if you are qualified for a given position and FedEx is hiring into that position, you are guaranteed the interview (provided your record at FedEx to that point is clean).

I applied and was hired as a courier. A better choice for me (more on this later) then being a handler. 7 months later I was called for the interview. 1 month later I recieved the "You're Hired" call. The system works. Some things to consider...

I remained a courier for 4 more months after being hired. FedEx policy states that you stay in a given job for a minumum of 1 year prior to internally switching positions. This was an easy 4 months, as I knew a large carrot resided at the other end of the tunnel.

Again, in my opinion, being a courier is less routine than tossing boxes (handler) at the airport or local station. If you have other employment, being a handler might be a better fit.

Be careful of the following if you take any of these positions...You WILL sign a letter of commitment (LOC) to that particular station/airport. This committment is usually longer than the 1 year FedEx corporate policy (i.e. 18 months, 24 months, etc). While all these commitment time frames are waiverable, the 1 year corporate policy is not typically waived. The station/airport LOC is waiverable, but is at the discretion of your local manager. Get this ironed out prior to signing on the dotted line. I was very up-front with the manager that hired me and when I was hired to fly, there were no surprises/hard feelings. As a matter of fact, I had a great relationship with my co-workers and supervisors and they were all genuinely very happy for me.

During my interview process, I received many compliments/thanks for having been a courier. You certainly gain insight to a side of the company that most of our pilot brethren never see. Plus, I dropped 15 pounds running around as a courier! Stay positive and it is an enjoyable experience.

I couldn't be happier with my career choice. Great company, great group of professional aviators.

Hope this helps.
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Old 06-23-2007, 10:14 AM   #9
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That's an answer that has been researched for 7 months.
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Old 06-23-2007, 10:25 AM   #10
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Quote:
Originally Posted by Freightpuppy View Post
Not everyone can pass the military entrance exam interview over there though.
As opposed to what UPS had for qualifications when window was open recently. Not even a superior chick pilot like you would have been able to apply.
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