Airline Pilot Central Forums - Regional airlines cut costs at priceof safety

Good article on how Delta handles things.

Regional airlines cut costs at price of safety - Washington - The Buffalo News

Updated: July 15, 2012, 7:58 AM
http://us.bc.yahoo.com/b?P=6b4ec754-...B%3d-1%2fV%3d5 WASHINGTON - After the crash of Continental Connection Flight 3407 in Clarence three years ago, Colgan Air, the low-cost regional airline that operated that flight on behalf of Continental, came under heavy criticism for the inexperience of its pilots and the low salaries they earned.
But now Colgan's parent company, Pinnacle Airlines, is losing business as its main remaining partner, Delta Airlines, opts to work with regional airlines that employ pilots with less experience and lower pay grades.
What's more, a regional airline that's grabbing Delta's flights away from Pinnacle, GoJet, and its sister company Trans States Airlines agreed in March to pay a $1.35 million fine for maintenance violations. The Federal Aviation Administration's initial complaint against GoJet and Trans States, filed two years ago, said those maintenance lapses "endangered the lives" of passengers and air crews.
Add it all up, and the Families of Continental Flight 3407 and other aviation safety experts agree: The airline industry's cost-cutting "race to the bottom" continues, despite the passage of a broad-ranging aviation safety law in wake of the Clarence crash.
"The race to the bottom will exact its toll not just in labor costs, but in safety," said Susan Bourque, one of the leading members of the Flight 3407 families group. "How can anyone who flies not be concerned that the airline who could operate the most cheaply is probably the one on which they are flying?"
Pinnacle, which filed for bankruptcy earlier this year, has struggled, thanks to competition from lower-cost airlines.
Just last week, Pinnacle announced that its longstanding relationship with United Airlines - which recently merged with Continental - will end Sept. 5.
That move will spell the official end of Colgan Air, the Pinnacle operation that flew for United and Continental and that operated Flight 3407. Federal investigators blamed that crash on pilot error.
Pinnacle now finds itself in deep financial trouble, and the end of Pinnacle's relationship with United is only part of its problems.
Pinnacle's chief executive officer, John Spanjers, spelled out the company's problems in a June 22 memo to the airline's employees.
"It's clear that we are competing with carriers that have significant cost and pilot seniority advantages over Pinnacle," Spanjers said.
Pinnacle will continue to operate Delta's regional flights in and out of Buffalo over the next several months, airline schedules show.
But Spanjers noted that Delta had recently told Pinnacle that it received bids from other airlines that were "significantly below" what Pinnacle charges major airlines for flights operated on their behalf on larger regional jets.
And Delta is by no means the only penny-pinching major airline.
"Every mainline carrier has made it clear that the ever-shrinking pie of new flying contracts will be awarded based on which regional provider can offer the most competitive costs," Spanjers said. "This is evident with Delta in its recent awarding of aircraft growth to GoJet and Compass."
Owned by Trans States Holdings, which also includes Trans State Airlines, GoJet and Compass are far newer airlines that have inherent advantages over a veteran regional airline such as Pinnacle.
GoJet flew its first flight in 2005, meaning its most veteran pilots are on year seven of the company's pay scale, while Compass took flight in 2007.
In contrast, Colgan has been around since 1965, and Pinnacle's history dates to 1985.
That means GoJet and Pinnacle employ significantly less experienced pilots who, in general, are much lower on the pay scale than those at Pinnacle, airline industry sources said.
For example, a captain with seven years of experience at GoJet would make about $67,488 a year, based on the hourly rate listed on the Airline Pilot Central web site.
A captain with 15 years experience at Pinnacle, flying a similar though slightly larger regional jet, would make about $89,100.
Co-pilots generally make much less than pilots, and that's especially true at GoJet. A GoJet co-pilot with seven years experience would make $33,744, compared to $39,600 for a co-pilot flying a similar regional jet at Pinnacle.
Such pay differentials mean that GoJet can undercut the bids of more experienced airlines such as Pinnacle when pursuing contracts with the major airlines.
But such penny-pinching has consequences, said William J. McGee, author of a new book called "Attention All Passengers: The Truth About the Airline Industry."
Flying a low-cost regional "is not the same as flying a major carrier," said McGee, who worked in airlines flight operations management before starting a journalism career that included a stint as editor of the Consumer Reports Travel Letter. "The cost-cutting that is going on is pervasive, and in fact, it's dangerous."
Dangerous would be a good word to describe the situation that the FAA said it found at GoJet and Trans States Airlines in 2007 and 2008.
In proposing a $2.5 million civil penalty against the sister airlines two years ago, the FAA said they flew 320 passenger flights on seven GoJet planes and two Trans States planes with maintenance problems. Most notably, the FAA alleged that the airlines:
* Failed to document and complete the needed repairs after alerts from aircraft warning systems.
* Failed to properly fix a plane's oil leak.
* Failed to prove that a plane was inspected after it was damaged by severe turbulence.
* Failed to connect a plane's wing flap actuator to its torque tube, meaning the flaps - which are crucial to controlling speed during takeoffs and landings - didn't work.
The FAA's original complaints against GoJet and Trans States made a damning allegation.
Several of the incidents "endangered the lives and property of the flight and cabin crews, any passengers aboard, as well as the lives and property of others on the ground," the FAA said in its complaint against the two airlines.
The FAA typically settles such complaints against airlines at a lower amount than was initially proposed, and that's just what happened in this case, as Trans States and GoJet eventually agreed to a $1.35 million civil penalty.
The FAA said that details of that settlement would be provided only after the filing of a Freedom of Information Act request, which typically sets off a process that takes weeks, months or years before documents are released.
Neither Trans States Holdings nor Delta responded to a telephone interview request or email.
But aviation safety advocates said they are very concerned.
Sen. Charles E. Schumer, the New York Democrat who was a central figure in passing that aviation safety law two years ago, met last week with Michael Huerta, the Obama administration's nominee to head the FAA.
Schumer pressed Hueta to move forward on the tough new regulations called for under that aviation safety law, which in many cases have been delayed.
The senator said the saga of Delta and GoJet proves that the FAA must move forward quickly on those new safety rules.
"For too many years airlines have been allowed to whittle away at safety standards in order to save a buck," Schumer said.