Most Flight Time & Fastest Upgrade
12-02-2018, 04:29 PM
#11
Gets Weekends Off
Joined APC: Jul 2017
Posts: 1,729
Originally Posted by Excargodog
The majors BENEFIT by delaying career progression and upgrades.
It isn't just the military training that gives retired military pilots the edge, it's that they are cheaper. And they are cheaper because they are OLDER.
Let's do a quick model just to illustrate. For the sake of simplicity, we won't look at inflation or other issues. We'll also assume for simplicity that the actual pay for each pilot counting per diem etc is the hourly pay times 1000 plus a 15% direct 401k contribution. We'll also assume that both pilots upgrade after five years at the legacy.
Let's then look at the current rates for one of the legacies and compare average annual cost for a year's flying for the two cases.
One person is a 25 year old graduate of a Part 141 school and the second is a 45 year old military retiree. Both entered college after turning 18 and graduate at age 22+.
At that point, the military retiree - then on an AFROTC scholarship - had been commissioned and entered active duty and sent to undergraduate pilot training (UPT). Graduating from UPT a year later he incurred an active duty service commitment of ten years to run concomitantly with his ROTC commitment. Basically, it means he MUST serve a total of eleven years, but by then he is stuck on some staff job not doing much flying. Nonetheless, over halfway to a lifetime pension and lifetime medical benefits, he sticks it out another nine years and manages to retire as a LtCol at age 42 +. After a year or so he decides to get back in the flying game. Eighteen months later he has 1000 hours of 121 time and puts in for the majors and six months after that gets picked up by a major. He goes to training and completes his major airline IOE on his 45th birthday.
The 141 graduate gets a series of time building jobs after graduation before acquiring the necessary 1000 hours for his RATP. He spends a couple years at a regional and he gets hired by a major in time to complete his major airline IOE on his 25th birthday.
The pay scale at the major airline by year is as follows and for the first 20 years it will be the same for both pilots.
5 152
4 149
3 138
2 126
1 90
Total. 655K
Total plus 401k. 753.25K
Ave personnel cost FO $150.65 K per year.
For the FO years, average annual personnel cost is equal for both pilots. Same for the first seven years after upgrade.
12 259
11 253
10 249
9 242
8 237
7 232
6 230
Total. 1,702K
Total plus 401k. 1,957.3K
Ave Capt cost years 6-12 = $279.614K
At that point, however, both pilots will be at the top rate. Except the military retiree (or anyone else hired at age 45) will be at that top rate for only eight more years before he must retire while the younger pilot will work for an additional twenty years longer than that at the topmost rate.
Average cost thereafter is 259 +15% = 297.85 annually for either pilot.
For the 45 year old new hire total cost to age 65 FOR ALL CAPTAIN YEARS ONLY = 1,957.3 + 297.85*8 = 4.340 million or $217K annually for every year he works as a Captain before retirement.
For the 25 year old new hire total cost to age 65 FOR ALL CAPTAIN YEARS ONLY = 1,957.3 + 297.85*28= 10.297 million or $294K annually for every year he works as a Captain before retirement.
In this model, hiring the 45 year old in lieu of a 25 year old results in an annual savings of $77K for each younger person not multiplied by a period of 20 years, a savings to the airline of over $1.5 million.
Now granted, you will have fewer years to amortize the cost of the original type rating - twenty years rather than forty years, but a type rating? Maybe $15K and maybe another $10 K for trading pay, and yeah, you'll have to do that TWICE when you hire a SECOND 45 year old to replace the first one that retires, but that is only an extra $25K every 40 years, trivial compared to the twenty years of $77K a year savings.
Now this also has real implications because of flow from wholly owneds. It is apparent to management that the longer you can keep young pilots at the regional's and the slower the upgrades and flow, the older the average starting age will be when seniority is reset at the major. The older the starting age at the major, the cheaper the average reimbursement.
The HR people and the accounting department did not miss seeing the financial effect of the change from retiring at 60 to retiring at 65. Almost all of those extra five working years was paid at the very highest rate.
So yes, military training is good training and per se desirable, but frankly, the attrition rate of someone coming off ten years of flying at the regional's is probably going to be lower than the attrition rate of a military flyer who has been doing nonflying duties his last half dozen years before retirement, at least unless the military flyer does a touch and go at a regional himself to knock the rust off. But at least as important in the eyes of many members of the HR community is the ability to get 20 years of 'discount' flying out of the older aviator(s). Far cheaper to sequentially hire a couple of 45 year olds who will only spend 40% of their careers making top pay to fill those cockpit seats than to hire one twenty-five year old who will spend 70% of his career at those levels.
It isn't just the military training that gives retired military pilots the edge, it's that they are cheaper. And they are cheaper because they are OLDER.
Let's do a quick model just to illustrate. For the sake of simplicity, we won't look at inflation or other issues. We'll also assume for simplicity that the actual pay for each pilot counting per diem etc is the hourly pay times 1000 plus a 15% direct 401k contribution. We'll also assume that both pilots upgrade after five years at the legacy.
Let's then look at the current rates for one of the legacies and compare average annual cost for a year's flying for the two cases.
One person is a 25 year old graduate of a Part 141 school and the second is a 45 year old military retiree. Both entered college after turning 18 and graduate at age 22+.
At that point, the military retiree - then on an AFROTC scholarship - had been commissioned and entered active duty and sent to undergraduate pilot training (UPT). Graduating from UPT a year later he incurred an active duty service commitment of ten years to run concomitantly with his ROTC commitment. Basically, it means he MUST serve a total of eleven years, but by then he is stuck on some staff job not doing much flying. Nonetheless, over halfway to a lifetime pension and lifetime medical benefits, he sticks it out another nine years and manages to retire as a LtCol at age 42 +. After a year or so he decides to get back in the flying game. Eighteen months later he has 1000 hours of 121 time and puts in for the majors and six months after that gets picked up by a major. He goes to training and completes his major airline IOE on his 45th birthday.
The 141 graduate gets a series of time building jobs after graduation before acquiring the necessary 1000 hours for his RATP. He spends a couple years at a regional and he gets hired by a major in time to complete his major airline IOE on his 25th birthday.
The pay scale at the major airline by year is as follows and for the first 20 years it will be the same for both pilots.
5 152
4 149
3 138
2 126
1 90
Total. 655K
Total plus 401k. 753.25K
Ave personnel cost FO $150.65 K per year.
For the FO years, average annual personnel cost is equal for both pilots. Same for the first seven years after upgrade.
12 259
11 253
10 249
9 242
8 237
7 232
6 230
Total. 1,702K
Total plus 401k. 1,957.3K
Ave Capt cost years 6-12 = $279.614K
At that point, however, both pilots will be at the top rate. Except the military retiree (or anyone else hired at age 45) will be at that top rate for only eight more years before he must retire while the younger pilot will work for an additional twenty years longer than that at the topmost rate.
Average cost thereafter is 259 +15% = 297.85 annually for either pilot.
For the 45 year old new hire total cost to age 65 FOR ALL CAPTAIN YEARS ONLY = 1,957.3 + 297.85*8 = 4.340 million or $217K annually for every year he works as a Captain before retirement.
For the 25 year old new hire total cost to age 65 FOR ALL CAPTAIN YEARS ONLY = 1,957.3 + 297.85*28= 10.297 million or $294K annually for every year he works as a Captain before retirement.
In this model, hiring the 45 year old in lieu of a 25 year old results in an annual savings of $77K for each younger person not multiplied by a period of 20 years, a savings to the airline of over $1.5 million.
Now granted, you will have fewer years to amortize the cost of the original type rating - twenty years rather than forty years, but a type rating? Maybe $15K and maybe another $10 K for trading pay, and yeah, you'll have to do that TWICE when you hire a SECOND 45 year old to replace the first one that retires, but that is only an extra $25K every 40 years, trivial compared to the twenty years of $77K a year savings.
Now this also has real implications because of flow from wholly owneds. It is apparent to management that the longer you can keep young pilots at the regional's and the slower the upgrades and flow, the older the average starting age will be when seniority is reset at the major. The older the starting age at the major, the cheaper the average reimbursement.
The HR people and the accounting department did not miss seeing the financial effect of the change from retiring at 60 to retiring at 65. Almost all of those extra five working years was paid at the very highest rate.
So yes, military training is good training and per se desirable, but frankly, the attrition rate of someone coming off ten years of flying at the regional's is probably going to be lower than the attrition rate of a military flyer who has been doing nonflying duties his last half dozen years before retirement, at least unless the military flyer does a touch and go at a regional himself to knock the rust off. But at least as important in the eyes of many members of the HR community is the ability to get 20 years of 'discount' flying out of the older aviator(s). Far cheaper to sequentially hire a couple of 45 year olds who will only spend 40% of their careers making top pay to fill those cockpit seats than to hire one twenty-five year old who will spend 70% of his career at those levels.
12-02-2018, 09:05 PM
#12
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,501
Originally Posted by havick206
You really think they’re that smart?
Some are. I read an article in an HR management magazine some years back that specifically discussed the increased compensation costs that resulted from going from mandatory retirement at age 60 to mandatory retirement at 65.
It cautioned airline management personnel to fight like crazy to avoid any further extensions, simply because that was almost exclusively the most expensive and least productive (based upon vacation length and their ability to use their seniority to cherry pick the most economically advantageous schedule) group of pilots.
We aren't Europe or Asia. At the major airline level there really is no shortage of applicants, nor will there likely ever be. Keeping those applicants in the regionals for as long as possible simply maximizes the cheap labor you are going to get from them.
12-03-2018, 09:31 AM
#14
Gets Weekends Off
Joined APC: Mar 2011
Position: 737 FO
Posts: 2,480
Originally Posted by DiamondDriver
For the 175 it is Compass for both quickest upgrade time and flight time building.
Specially only talking about 175 operators.
Specially only talking about 175 operators.
12-03-2018, 12:24 PM
#15
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,501
Originally Posted by word302
Pretty sure Horizon has Compass beat on upgrade time, if anyone actually cares about equipment.
Last edited by Excargodog; 12-03-2018 at 12:44 PM.
12-03-2018, 01:44 PM
#16
Gets Weekends Off
Joined APC: Mar 2011
Position: 737 FO
Posts: 2,480
Originally Posted by Excargodog
Only for those hitting the magic window which by now is pretty much closed, since every Q400 pulled from service puts 4-5 FO's senior to you ahead of you for upgrade. Not to mention, it takes a long time to get to 1000 hrs when you are flying 20-30 hours a month.
12-03-2018, 03:23 PM
#17
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,501
Originally Posted by word302
You’re making a lot of assumption. They still have a bunch more planes getting delivered. Guys are holding lines after 4 or 5 months. Besides that you can’t even get a class date at Compass.
I realize there are people who have been on reserve for years and to them four or five months doesn't seem like much. I was on reserve for TWO WHOLE WEEKS before holding a line, and have logged just over 80 hours a month since completing IOE.
And I will grant you that classes are booked up quite a ways out at Compass, but they are booked up six months out at Republic and other regional's too. But I'm not pushing Compass, just saying what a friend who is an FO at Horizon related to me.
I'm not saying Horizon is a bad place, I applied to Horizon and Skywest and got a CJO at both before eventually deciding to go elsewhere, mostly for the faster upgrade and larger bonus.
And Horizon does have a flow of sorts to Alaska, and you get the guarantee sitting reserve, even if you fly so little you have trouble making consolidation.
But the question was MOST FLIGHT TIME as well as fastest upgrade, and that sure isn't Horizon, not presently anyway.
12-03-2018, 08:35 PM
#19
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,501
Originally Posted by knewyork
Another name for this thread could be “I want to pick a regional for the absolute worst reason possible”
Which of the two do you believe to be the "worst reason possible,"
1. Most flight time, or
2. fastest upgrade?
12-03-2018, 09:17 PM
#20
Gets Weekends Off
Joined APC: Sep 2016
Posts: 1,948
Originally Posted by Excargodog
Which of the two do you believe to be the "worst reason possible,"
1. Most flight time, or
2. fastest upgrade?
1. Most flight time, or
2. fastest upgrade?
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