The lunacy of airline pay calculation
#71
And your assumptions, and putting words into my mouth, are equally amazing.
I understood full well what I was getting into. I don't depend on this job to pay my bills. So I'm not complaining about the pay. I'm simply asking why the system is the way it is. Because it's an archaic set of rules that in no way corresponds with how the vast majority of modern compensation agreements are structured.
I understood full well what I was getting into. I don't depend on this job to pay my bills. So I'm not complaining about the pay. I'm simply asking why the system is the way it is. Because it's an archaic set of rules that in no way corresponds with how the vast majority of modern compensation agreements are structured.
The key is what are the costs difference in your plan versus the current system.
You don't need this job? The job doesn't need you either.
#72
Gets Weekends Off
Joined APC: May 2014
Position: Captain - Retired
Posts: 265
Remember, management and ALPA doesn't want you talking about this.
As I said...like talking to a brick wall!
#73
We have a few folks in their late 20s who each grossed over $160K last year. A solid healthcare plan is $400/month when purchased on the California insurance exchange. Also, they can deduct all sorts of expenses that salaried workers cannot, including commuting to our office.
I think our compensation is quite generous... Show me an airline pilot who pulls down that kind of money at that kind of age...
I think our compensation is quite generous... Show me an airline pilot who pulls down that kind of money at that kind of age...
#75
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Joined APC: Jul 2008
Posts: 854
(BTW it's generally not cool to hand out personal info about other members here if you happen to know them)
Except that it doesn't work that way anymore.
The airline, like any business, wants compensation to be proportional to production. Crewmember pay per flight hour is reasonably proportional to production so it works for management. Management also wants the pay system to provide incentive for the existing employees to voluntarily produce more as that allows them to operate with fewer crewmembers which lowers overall labor cost. The current system provides that incentive.
The crewmembers want to work efficiently while at work so that they can put in a full month in as few days away from home as possible. Duty and Trip rigs provide incentives for the company to produce schedules that are as efficient as the flight schedule and duty/rest rules allow.
The problem here is that Skywest's duty rig apparently only applies to trip construction and not the actual time on duty. That accomplishes the goal of providing the incentive to produce efficient trips. The problem comes in when there are delays and cancellations which extend the duty day.
A 50 seat jet can actually be more efficient than a 150 seat jet on shorter routes, especially when loads are not going to fill that 150 seat jet.
The smaller jets are used to keep the yield high on routes which can't support higher yields with higher capacities. If the airplane used is too big the airline has to offer too many seats at too low a price driving down the yield. With the smaller jet you eliminate most, if not all, of the cheapest fares and dramatically reduce the number of cheaper fares that are offered. The result is a much higher yield for the flight which overcomes the aircraft's high CASM.
It is very common in many industries to find that the more productive employees are paid higher than the less productive employees. A pilot who flies a larger airplane is producing more ASMs per hour of flight than one who flies a smaller airplane. The airline can sell those ASMs to produce more RSMs which means more revenue.
Bottom line is that the smallest airplanes don't produce enough product, which leads to not enough revenue, to support significantly higher pay for the crew. The larger airplanes produce more product and revenue which allows the higher pay which had been negotiated over the decades.
#76
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Thread Starter
Joined APC: Apr 2014
Position: RJ right-seat warmer
Posts: 632
And our junior folks are in their mid to late 20s. Wish I had been making anything close to that when I was that age.
#77
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Joined APC: May 2014
Position: Captain - Retired
Posts: 265
Very well said. That's exactly what it is. Except that it has been refined over the years to work in favor of management and the mainline airlines especially with the help of ALPA to benefit a very few people.
#78
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Posts: 854
#79
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Joined APC: May 2014
Position: Captain - Retired
Posts: 265
Seniority protects Captain's authority as management can't use a pilot's willingness to cut corners as a gauge for promotion. With seniority a Captain can stand up and say no to an operation that he doesn't believe is safe without fear of it affecting his career advancement. See "Flying The Line" for the story of how this developed.
If a captain is a trouble maker, barely passes his checks, uses sick days like vacation days and disrupts the airline do you really believe he should be promoted?
The airline, like any business, wants compensation to be proportional to production.
Management also wants the pay system to provide incentive for the existing employees to voluntarily produce more as that allows them to operate with fewer crewmembers which lowers overall labor cost. The current system provides that incentive.
CASM is always significantly higher in a small jet than in the larger mainline jets. Three or four times higher.
The smaller jets are used to keep the yield high on routes which can't support higher yields with higher capacities. If the airplane used is too big the airline has to offer too many seats at too low a price driving down the yield. With the smaller jet you eliminate most, if not all, of the cheapest fares and dramatically reduce the number of cheaper fares that are offered. The result is a much higher yield for the flight which overcomes the aircraft's high CASM.
It is very common in many industries to find that the more productive employees are paid higher than the less productive employees. A pilot who flies a larger airplane is producing more ASMs per hour of flight than one who flies a smaller airplane. The airline can sell those ASMs to produce more RSMs which means more revenue.
As you said there are many more factors and the cost of the pilots and other fixed overhead (gate fees, slots, etc) along with the specific costs for the equipment (which varies as discussed) doesn't mean that a smaller jet must pay pilots crap wages to be profitable. Otherwise we'd just use heavy jets on every route but less frequently.
Bottom line is that the smallest airplanes don't produce enough product, which leads to not enough revenue, to support significantly higher pay for the crew. The larger airplanes produce more product and revenue which allows the higher pay which had been negotiated over the decades.
In the end you're just rationalizing lower pay. The real issue should be that pilots should be paid what the free market would allow rather than these artificial limits imposed by management and the unions designed solely to keep labor costs down. If a jet isn't profitable then the airline shouldn't operate it. There's a reason all those 50 seaters got built in the first place.
#80
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Joined APC: May 2014
Position: Captain - Retired
Posts: 265
Here...read this post several pages back....
I would take it a step further and eliminate hiring seniority altogether so regional airlines can draw upon the large pool of available experienced pilots paying them salaries commensurate with their experience...reducing training costs and forcing regionals to compete with each other for pilots.
You're 100% right and usually only the folks who didn't grow up submitting to standard aviation abuse really get this point.
My opinion...
1) Eliminate longevity for pay purposes. Equipment/seat pay would be a fixed figure (subject to COLA raises). This would allow airlines to attract and retain entry-level talent, and remove most of the incentive to destroy a high-longevity airline and replace it with a low-longevity startup.
Longevity would still apply for traditional things like vacation accrual, 401k vesting, etc. so you do get rewarded for sticking around.
Seniority would still of course apply for schedules, vacation bidding, equipment/seat/domicile bidding.
2) A step further...eliminate block pay and replace with duty pay (like any other industry). Duty pay would be lower than current block pay, based on a formula like this...
Assume a five-hour block is minimum desired productivity, and say three legs is average.
Old rate: $100/block hour
New rate: 5 hours x $100 = $500 for the day.
Now we add up the non-flight duty for three reasonably efficient legs:
Report - block out: 45m
2nd Turn: 30m
3nd Turn 30m
Block in- duty off: 15m
Total = 2 hours
Block + non-flight duty = 7 hours. Since we got paid $500 for that reasonably efficient 7 hour duty day, our new duty rate would be $72/duty hour.
Ramifications:
- Company has incentive to schedule efficiently...non-productive duty time is no longer free to the company.
- If company can't schedule efficiently we get paid for our time.
- Super senior folks no longer enjoy windfall combinations of high pay combined with highly efficient trips while junior folks suck up lengthy unpaid sits combined with low pay and multiple legs.
- Seniority still buys many perks...you can bid long duty days to get pay more if you want, and still get weekends holidays off as always.
- We get paid for IROPS.
- Takes some of the sting out of switching airlines, but that shouldn't really be necessary since there would be little incentive to shuffle flying around.
My opinion...
1) Eliminate longevity for pay purposes. Equipment/seat pay would be a fixed figure (subject to COLA raises). This would allow airlines to attract and retain entry-level talent, and remove most of the incentive to destroy a high-longevity airline and replace it with a low-longevity startup.
Longevity would still apply for traditional things like vacation accrual, 401k vesting, etc. so you do get rewarded for sticking around.
Seniority would still of course apply for schedules, vacation bidding, equipment/seat/domicile bidding.
2) A step further...eliminate block pay and replace with duty pay (like any other industry). Duty pay would be lower than current block pay, based on a formula like this...
Assume a five-hour block is minimum desired productivity, and say three legs is average.
Old rate: $100/block hour
New rate: 5 hours x $100 = $500 for the day.
Now we add up the non-flight duty for three reasonably efficient legs:
Report - block out: 45m
2nd Turn: 30m
3nd Turn 30m
Block in- duty off: 15m
Total = 2 hours
Block + non-flight duty = 7 hours. Since we got paid $500 for that reasonably efficient 7 hour duty day, our new duty rate would be $72/duty hour.
Ramifications:
- Company has incentive to schedule efficiently...non-productive duty time is no longer free to the company.
- If company can't schedule efficiently we get paid for our time.
- Super senior folks no longer enjoy windfall combinations of high pay combined with highly efficient trips while junior folks suck up lengthy unpaid sits combined with low pay and multiple legs.
- Seniority still buys many perks...you can bid long duty days to get pay more if you want, and still get weekends holidays off as always.
- We get paid for IROPS.
- Takes some of the sting out of switching airlines, but that shouldn't really be necessary since there would be little incentive to shuffle flying around.
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captain_drew
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12-05-2012 08:29 AM