JetBlue Worries About Losing Pilots to Better-Paying Airlines
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JetBlue will be walking a tightrope in 2014 as it continues negotiations with pilots. The airline has been falling behind rivals in terms of profit margins, but the struggle to retain pilots means JetBlue is going to have to increase their compensation. This is stuff to keep executives awake at night.
— Dennis Schaal
DENNIS SCHAAL, SKIFT
OCT 30, 2013 6:20 AM
Amidst all the talk about a looming pilot shortage driven in part by new training requirements, JetBlue CEO David Barger said today he’s not worried about a pilot shortage — he’s concerned about keeping the pilots the airline already has on the payroll.

Over the long term, Barger said, retaining pilots is a key issue.

Speaking during JetBlue’s third quarter earnings call, Barger said the number of applications the airline receives for pilot jobs is “good.”

Speaking about cost headwinds in 2014, JetBlue CFO Mark Powers said the airline is continuing discussions with pilots about compensation and is committed to providing wages and benefits in line with their peers.

Through the end of 2012, JetBlue employed 2,204 pilots, all non-union, and they accounted for 40% of JetBlue’s salary expense.

Groups looking to unionize JetBlue’s pilots claim wages and benefits aren’t on par with peers at other airlines.

JetBlue acknowledged last year that it may have to raise compensation for pilots if it hopes to keep them.

“Our pilot pay structure, for example, is based on an industry derived average and to the extent our competitors continue consolidating and/or begin raising their pilot salaries in the face of a possible pilot shortage, we may have to address increased salary cost pressure to retain our pilots in an environment where our capacity is also forecast to continue to grow,” JetBlue stated in its 10-K annual financial filing covering 2012.

Barger said it takes about 6 to 6.5 years for pilots to achieve captain status at JetBlue and that not only compensation, but a host of other issues, including new aircraft types and lifestyle issues, will come to bear in retention efforts.
JetBlue Worries About Losing Pilots to Better-Paying Airlines - Skift

 

When it all comes down to it, supply and demand will govern which airlines have shortages and which don't.

The ones that pay the best, treat their employees the best, etc... will never be short... they will be the goal for aspiring pilots. The ones below that will be a pipe-line to the best and a haven for those who do not have the qualifications to make it all the way there (no DUI, college, etc).

So, Mr Barger, do you want to be a career goal or a stop along the way?


This goes for every airline out there... places like Delta, Southwest, and FedEx will probably never be short. JetBlue, US Airways (no merger), ... could go either way.

It'll be interesting to see when and who will be the first airline to shut down because of a lack of ability to attract pilots. Great Lakes? Endeavor?

 

Please, please, please let it be Lakes.

 

My vote is RAH.

 

No mention of the training cost to replace and upgrade the pilots. How many training events when a Capt departs? 3.

33 confirmed pilots are leaving in Nov for Delta. Most Capts.

 

We didn't see marked improvement in 2007 until 10% of the pilot group left. What percentage is it going to be this time?

 

Confirmed? How so?

 

Another one quit today to go back. We know the numbers as most are in contact with one another and have shared those numbers with friends. Most are waiting to call in at the last minute should their classes be cancelled.
Also DALPA confirmed it.

 

The "sweet spot" is also a sticky spot. They don't want to be a lead-in airline, but they are having a hard time seeing how to afford offering a big enough incentive to prevent that. They can't take away services or add seats, because that would taint the product.

One option that I'm sure is on the drawing board is simply to accept being a lead-in airline, balancing the extra training costs with lower personnel costs provided by lower overall payscales, reduced-cost (to company) benefits, and more pilots on the junior end of the payscale due to turnover.

That might fuel a union bid, but the union is eventually going to happen one way or the other. Bringing in more junior pilots might stall it for a bit. This strategy could also play to a union leadership more to the company's liking - looking at short-term benefits vs. longer-term ones that are more expensive to the company.

 

It's a done deal, I know about ten of them and they have confirmed the 33 number.