"Pilot Shortage" - well ?
08-20-2014, 07:35 PM
#41
Gets Weekends Off
Joined APC: Jan 2009
Posts: 1,459
Originally Posted by OnCenterline
A bit of history is in order here. After deregulation, airlines did not know how to operate in an unregulated market, and so most of them screwed it up in fabulous fashion: goofy city pairs, poor network management, new fleets, the airline-within-the-airline fiascos. That was the order of the day through the 1980s and early 1990s. The result was predictable: many failed.
In the late 80s and early 90s, there was a gradual turnover of management as the older generation retired. The new generation began the imposition of containing capacity and doing a better job of controlling inventory (Bob Crandall at American was at the forefront of this, which is something he learned working for Hallmark selling greeting cards). Others followed, and eventually it was perfected, esp. in the post-9/11 world. None of the airline managers in that era were hold-overs any more. All had come from other backgrounds, and had a much better understanding of the value and cost of a seat. In fact, there is no commodity more useless than an empty seat on a plane that is pushing back from the gate--it can never be sold again.
In the last 10-15 years, airlines have shown phenomenal discipline in controlling inventory, and thus costs. It is that discipline that has allowed the industry to thrive, along with overhauls in the overall model, including some of the fluff in legacy labor contracts (not just the pilots).
The legacies may have pilots working more hours, but they still don't come close to the average line of a regional pilot, where line values start at 82-84 hours per month, while the min line value at a major may be 70-75, even when taking into account seasonal spikes in the summer. Throw in differences in vacation and sick accrual, along with the ability adjust schedules, and regional pilots still work harder.
Bare in mind as well that while the majors are "wildly profitable," all of them are dealing with sizeable debt loads that need to be addressed. Delta (I believe) has a total debt burden of $8-10 billion, and United's is around $14 billion. Those are big numbers, and both carriers are aggressively working to pare them down. If you think they're making money now, wait until those debt loads are reduced. Remember, the only airlines that are making money strictly on their operations are Southwest and jetBlue. Everyone else is only making money because of ancillary fees.
As for growth, the reality is that there isn't much room for organic growth for network carriers. They already go where people want to go, and as far as the areas that they don't go, someone in their alliance does. There comes a point where it is cheaper to book someone on an alliance partner vs. opening a station on your own. The growth now is in total revenue, and that's where all the fees come into play.
The smaller cities in the US are about to learn that (cheap) air service is not a right, it's a privilege, and you will only have it if the demand is there.
The pilot shortage is indeed here, but it will be some time before the real pain is felt. I do believe that something will happen to change the market for pilots, whether it's more pay or some other incentive, but it will happen.
In the late 80s and early 90s, there was a gradual turnover of management as the older generation retired. The new generation began the imposition of containing capacity and doing a better job of controlling inventory (Bob Crandall at American was at the forefront of this, which is something he learned working for Hallmark selling greeting cards). Others followed, and eventually it was perfected, esp. in the post-9/11 world. None of the airline managers in that era were hold-overs any more. All had come from other backgrounds, and had a much better understanding of the value and cost of a seat. In fact, there is no commodity more useless than an empty seat on a plane that is pushing back from the gate--it can never be sold again.
In the last 10-15 years, airlines have shown phenomenal discipline in controlling inventory, and thus costs. It is that discipline that has allowed the industry to thrive, along with overhauls in the overall model, including some of the fluff in legacy labor contracts (not just the pilots).
The legacies may have pilots working more hours, but they still don't come close to the average line of a regional pilot, where line values start at 82-84 hours per month, while the min line value at a major may be 70-75, even when taking into account seasonal spikes in the summer. Throw in differences in vacation and sick accrual, along with the ability adjust schedules, and regional pilots still work harder.
Bare in mind as well that while the majors are "wildly profitable," all of them are dealing with sizeable debt loads that need to be addressed. Delta (I believe) has a total debt burden of $8-10 billion, and United's is around $14 billion. Those are big numbers, and both carriers are aggressively working to pare them down. If you think they're making money now, wait until those debt loads are reduced. Remember, the only airlines that are making money strictly on their operations are Southwest and jetBlue. Everyone else is only making money because of ancillary fees.
As for growth, the reality is that there isn't much room for organic growth for network carriers. They already go where people want to go, and as far as the areas that they don't go, someone in their alliance does. There comes a point where it is cheaper to book someone on an alliance partner vs. opening a station on your own. The growth now is in total revenue, and that's where all the fees come into play.
The smaller cities in the US are about to learn that (cheap) air service is not a right, it's a privilege, and you will only have it if the demand is there.
The pilot shortage is indeed here, but it will be some time before the real pain is felt. I do believe that something will happen to change the market for pilots, whether it's more pay or some other incentive, but it will happen.
08-21-2014, 03:55 AM
#42
Gets Weekends Off
Joined APC: Feb 2008
Posts: 19,273
Originally Posted by OnCenterline
It's awfully hard to walk away from an extra $1.5-2.0 million over 5 years (salary and overtime plus 401(k) contributions), especially with current contracts. My own unscientific survey indicates that the cost of medical insurance is the biggest reason guys are staying. If they airlines allowed them to stay in the plan until 65, or even 67, folks would be much more likely to jump ship early.
08-21-2014, 05:00 AM
#43
Mishap Pilot
Joined APC: Jan 2011
Posts: 72
Originally Posted by OnCenterline
It's awfully hard to walk away from an extra $1.5-2.0 million over 5 years (salary and overtime plus 401(k) contributions), especially with current contracts. My own unscientific survey indicates that the cost of medical insurance is the biggest reason guys are staying. If they airlines allowed them to stay in the plan until 65, or even 67, folks would be much more likely to jump ship early.
Pay on large corporate jets is very good, and likely to get better in a shortage and with larger jets. Generous retirement plans would be a way to attract seasoned pilots with a deferred cost to the company. It will be all too easy to attract a major airline pilot in his late 50s, if they desire. The biggest downside to corporate flying has always been risk of being downsized, but a five or seven-year plan makes that risk negligible.
08-21-2014, 05:32 AM
#44
Mishap Pilot
Joined APC: Jan 2011
Posts: 72
Originally Posted by OnCenterline
A bit of history is in order here. After deregulation, airlines did not know how to operate in an unregulated market, and so most of them screwed it up in fabulous fashion: goofy city pairs, poor network management, new fleets, the airline-within-the-airline fiascos. That was the order of the day through the 1980s and early 1990s. The result was predictable: many failed.
In the late 80s and early 90s, there was a gradual turnover of management as the older generation retired. The new generation began the imposition of containing capacity and doing a better job of controlling inventory (Bob Crandall at American was at the forefront of this, which is something he learned working for Hallmark selling greeting cards). Others followed, and eventually it was perfected, esp. in the post-9/11 world. None of the airline managers in that era were hold-overs any more. All had come from other backgrounds, and had a much better understanding of the value and cost of a seat. In fact, there is no commodity more useless than an empty seat on a plane that is pushing back from the gate--it can never be sold again.
In the last 10-15 years, airlines have shown phenomenal discipline in controlling inventory, and thus costs. It is that discipline that has allowed the industry to thrive, along with overhauls in the overall model, including some of the fluff in legacy labor contracts (not just the pilots).
The legacies may have pilots working more hours, but they still don't come close to the average line of a regional pilot, where line values start at 82-84 hours per month, while the min line value at a major may be 70-75, even when taking into account seasonal spikes in the summer. Throw in differences in vacation and sick accrual, along with the ability adjust schedules, and regional pilots still work harder.
Bare in mind as well that while the majors are "wildly profitable," all of them are dealing with sizeable debt loads that need to be addressed. Delta (I believe) has a total debt burden of $8-10 billion, and United's is around $14 billion. Those are big numbers, and both carriers are aggressively working to pare them down. If you think they're making money now, wait until those debt loads are reduced. Remember, the only airlines that are making money strictly on their operations are Southwest and jetBlue. Everyone else is only making money because of ancillary fees.
As for growth, the reality is that there isn't much room for organic growth for network carriers. They already go where people want to go, and as far as the areas that they don't go, someone in their alliance does. There comes a point where it is cheaper to book someone on an alliance partner vs. opening a station on your own. The growth now is in total revenue, and that's where all the fees come into play.
The smaller cities in the US are about to learn that (cheap) air service is not a right, it's a privilege, and you will only have it if the demand is there.
The pilot shortage is indeed here, but it will be some time before the real pain is felt. I do believe that something will happen to change the market for pilots, whether it's more pay or some other incentive, but it will happen.
In the late 80s and early 90s, there was a gradual turnover of management as the older generation retired. The new generation began the imposition of containing capacity and doing a better job of controlling inventory (Bob Crandall at American was at the forefront of this, which is something he learned working for Hallmark selling greeting cards). Others followed, and eventually it was perfected, esp. in the post-9/11 world. None of the airline managers in that era were hold-overs any more. All had come from other backgrounds, and had a much better understanding of the value and cost of a seat. In fact, there is no commodity more useless than an empty seat on a plane that is pushing back from the gate--it can never be sold again.
In the last 10-15 years, airlines have shown phenomenal discipline in controlling inventory, and thus costs. It is that discipline that has allowed the industry to thrive, along with overhauls in the overall model, including some of the fluff in legacy labor contracts (not just the pilots).
The legacies may have pilots working more hours, but they still don't come close to the average line of a regional pilot, where line values start at 82-84 hours per month, while the min line value at a major may be 70-75, even when taking into account seasonal spikes in the summer. Throw in differences in vacation and sick accrual, along with the ability adjust schedules, and regional pilots still work harder.
Bare in mind as well that while the majors are "wildly profitable," all of them are dealing with sizeable debt loads that need to be addressed. Delta (I believe) has a total debt burden of $8-10 billion, and United's is around $14 billion. Those are big numbers, and both carriers are aggressively working to pare them down. If you think they're making money now, wait until those debt loads are reduced. Remember, the only airlines that are making money strictly on their operations are Southwest and jetBlue. Everyone else is only making money because of ancillary fees.
As for growth, the reality is that there isn't much room for organic growth for network carriers. They already go where people want to go, and as far as the areas that they don't go, someone in their alliance does. There comes a point where it is cheaper to book someone on an alliance partner vs. opening a station on your own. The growth now is in total revenue, and that's where all the fees come into play.
The smaller cities in the US are about to learn that (cheap) air service is not a right, it's a privilege, and you will only have it if the demand is there.
The pilot shortage is indeed here, but it will be some time before the real pain is felt. I do believe that something will happen to change the market for pilots, whether it's more pay or some other incentive, but it will happen.
Yes regional pilots fly a lot more than mainline, it is a grueling job in many ways. Pilots did it because it was expected to be a temporary stop on the way to the majors, not a destination. Then mainline pilot groups found themselves competing for jobs with regional pilot groups, giving up pay and productivity to keep their jobs, and the whole career lost significant value, all the way to the top jobs.
I'm not sure why you mention debt. Exceptionally high profits indicate demand is well above supply, that means there is significant room for more profit through expansion, room for growth. More profit means more debt can be serviced or retired, more profit is never a bad thing.
Last edited by scottm; 08-21-2014 at 05:44 AM.
08-21-2014, 12:43 PM
#46
Gets Weekends Off
Joined APC: Oct 2012
Posts: 140
Kinda sick of hearing there will "never" be a shortage at the majors.
Only the regionals huh?
Isn't that "regional" flying needed by the majors? You think they'll sit idly by while routes and aircraft go unstaffed? And They're unable to get passengers into hubs to get on international "mainline" flights.
All the flying is eventually going back in house, the first ones to do so will be able to staff their network, the ones that don't or are slowest are going to have EMB 170s and CRJ 900s sitting on a ramp somewhere with no one to fly them. Call it what you want.
Only the regionals huh?
Isn't that "regional" flying needed by the majors? You think they'll sit idly by while routes and aircraft go unstaffed? And They're unable to get passengers into hubs to get on international "mainline" flights.
All the flying is eventually going back in house, the first ones to do so will be able to staff their network, the ones that don't or are slowest are going to have EMB 170s and CRJ 900s sitting on a ramp somewhere with no one to fly them. Call it what you want.
08-21-2014, 01:00 PM
#47
Gets Weekends Off
Joined APC: Jul 2013
Posts: 4,672
Originally Posted by OnCenterline
The legacies may have pilots working more hours, but they still don't come close to the average line of a regional pilot, where line values start at 82-84 hours per month, while the min line value at a major may be 70-75, even when taking into account seasonal spikes in the summer. Throw in differences in vacation and sick accrual, along with the ability adjust schedules, and regional pilots still work harder.
Pre 117, what you're saying was almost ALWAYS true. But 117 has changed some what how a regional pilot flies now.
Due to the fact that mostly (AGAIN MOSTLY) regional flights are "shorter", a regional pilot has to put in more segments to get the daily productivity up in a day. This means a longer day naturally. Combine with this a bank system where a regional pilot would often fly to hub, sit, fly turn, sit, then to go overnight makes for a long duty day. Pre 117, it could be done in a 13-14 hour day no problem to get 5-8 hours out of the pilot. NOW, it puts them right at an FDP limit, with NO margin for more unless an extension is involved. So although regional pilots are still working more, it's not as much as it used to be. The actual affect is working MORE days to get the same pay as pre 117.
Is the type of day or pairing I outlined universal and ALWAYS apply? Of course not. But it's very much a norm. Regional pilots are experiencing more lost weekends and 12-14-16 hour flight time trips/pairings/patterns/rotations/sequences/ID's, NOT ALWAYS CREDIT TIME depending on the specific CBA.
So, AGAIN, a regional pilot STILL "works" more. But it's translating/shifting to more days worked for the company to get the productivity out of the pilot. If we lived in a fantasy land and ALL regionals had daily/trip rigs, some regional pilots could be crediting 100+ hours a month if they were on a min day off line with maybe 80 actual flying. I'm talking on an ORIGINALLY AWARDED LINE, NOT after trading/manipulating/picking up, whatever. But we can't have pilots crediting that that ya know, it means the regionals cost would go up, the next lowest bidder would take over, and cycle would repeat.
Wait, what the heck did I just say? There's a "pilot shortage" coming, for one of the few times in the "dark decade", labor (pilots) has some leverage to exert...............
08-21-2014, 02:09 PM
#48
Gets Weekends Off
Joined APC: Jun 2014
Position: 737 FO
Posts: 360
Originally Posted by scottm
$400k/yr for five years? Not in this country, not even including 401k and occasional overtime. And especially not for the large number who will never make widebody captain, or will only make it as junior on reserve at a base far from home and family.
So, yes, it's a realistic number for the senior captains that are still on property, and that is who I was referring to. You are correct that the cadre of pilots in this elite group will be very small, but don't kid yourself---aggressive 737 captains can clear $300K a year. And we haven't even discussed the rates that will be in a effect beginning with the next contract.
I disagree that airlines have had any form of capacity discipline. Even as they descended into and through bankruptcy, the financial press was full of criticism for their lack of capacity discipline. Crandall and his peers at other airlines were ruthless in dumping extra capacity on a market to squeeze out smaller competitors, even at a loss, that was how they competed. Network size was king, even if smaller routes didn't make money. The whole regional airline system was expected to lose money, and squeeze concessions out of unions, which it very much did. While the mainlines grew their regional affiliate flying rapidly, they shrunk their mainlines reluctantly and haltingly.
I'm not sure why you mention debt. Exceptionally high profits indicate demand is well above supply, that means there is significant room for more profit through expansion, room for growth. More profit means more debt can be serviced or retired, more profit is never a bad thing.
I'm not sure why you mention debt. Exceptionally high profits indicate demand is well above supply, that means there is significant room for more profit through expansion, room for growth. More profit means more debt can be serviced or retired, more profit is never a bad thing.
The regional system was never expected to "lose" money. What killed the regional airlines was the fixed-price fee-for departure model. That was attractive to the majors because it allowed them to know exactly what the cost of regional block hour was going to be, and it was attractive to the regional because it was guaranteed revenue. Prior to the FFD becoming standard, it was very common for regional carriers to get a fixed percentage of each ticket price. At Comair, where I was, we got 35% of every ticket that Delta sold on our flights. We also had our own ticketing and reservation system, and any tickets that we sold, we kept 100% of the revenue. That's how Comair became, quite literally, the most profitable airline in the world prior to the purchase by Delta.
As for debt, I mention it because the majority of the debt that was taken on post 9/11 was not for growth or expansion. It was for survival. The airlines borrowed billions in order to buy them the time they need to restructure and clean up the messes that could no longer be avoided. Debt can be used for growth, but it doesn't have to be (Southwest had virtually no debt until they bought AirTran; they pay cash for each plane they get, and while their growth was slower, it was more controlled and more profitable in the long run). Debt can also kill a company, so it needs to be addressed (it sank Eastern, and very nearly killed both USAir and Delta). In the case of the airlines the last several years, they needed to start producing profits just to avoid paying usury-level interest rates on the money they had to borrow.
Another way to look at the effect of debt is this: SWA has the highest hourly rate of pay and the highest min-day value for the equipment they fly. They openly discuss the fact that the reason this is so is because they own the planes outright. The difference in pay from their employees to those at legacy carriers is money the legacy carriers have to use to service debt or pay leases on planes they don't own.
I do agree that the growth in the regional sector hurt mainline pilots, but that's only because the mainline pilots were so short-sighted when the RJ came into the picture. It still hurts them because mainline and regional contracts have different pay rates for the same planes, and that brings down pay across the board.
Reservist Kinda sick of hearing there will "never" be a shortage at the majors.
Only the regionals huh?
Isn't that "regional" flying needed by the majors? You think they'll sit idly by while routes and aircraft go unstaffed? And They're unable to get passengers into hubs to get on international "mainline" flights.
All the flying is eventually going back in house, the first ones to do so will be able to staff their network, the ones that don't or are slowest are going to have EMB 170s and CRJ 900s sitting on a ramp somewhere with no one to fly them. Call it what you want.
Only the regionals huh?
Isn't that "regional" flying needed by the majors? You think they'll sit idly by while routes and aircraft go unstaffed? And They're unable to get passengers into hubs to get on international "mainline" flights.
All the flying is eventually going back in house, the first ones to do so will be able to staff their network, the ones that don't or are slowest are going to have EMB 170s and CRJ 900s sitting on a ramp somewhere with no one to fly them. Call it what you want.
08-21-2014, 11:10 PM
#49
Gets Weekends Off
Joined APC: Feb 2008
Posts: 19,273
[QUOTE=scottm;1709461]$400k/yr for five years? Not in this country, not even including 401k and occasional overtime. And especially not for the large number who will never make widebody captain, or will only make it as junior on reserve at a base far from home and family.
A significant number of pilots at Delta break 400k counting the DC plan. I just flew with a 767 FO who broke 300k not counting the DC plan.
A significant number of pilots at Delta break 400k counting the DC plan. I just flew with a 767 FO who broke 300k not counting the DC plan.
08-22-2014, 02:20 AM
#50
Gets Weekends Off
Joined APC: Aug 2006
Position: A330 First Officer
Posts: 1,465
[QUOTE=sailingfun;1710021]
Not by straight pay. Unfortunately when you talk of most of these guys that make something significantly out of the norm for pay, it's because they only live for Delta. Heck we have 08 hires in NYC on the MD88 that fly so many greenslips that they make more than 767 Captains, however they live in base, or a crashpad, and they have their bags packs so they can run to the airport at a moments notice. Sorry but that's no life.
Originally Posted by scottm
$400k/yr for five years? Not in this country, not even including 401k and occasional overtime. And especially not for the large number who will never make widebody captain, or will only make it as junior on reserve at a base far from home and family.
A significant number of pilots at Delta break 400k counting the DC plan. I just flew with a 767 FO who broke 300k not counting the DC plan.
A significant number of pilots at Delta break 400k counting the DC plan. I just flew with a 767 FO who broke 300k not counting the DC plan.
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