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Airline Pilot Pay justification

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jetflier

Well-known member
Joined
Dec 22, 2003
Posts
718
I can't take credit for this great explanation of pilot pay, I copied it from another site:

In M^%$ )(***l's post about his daughter's starting attorney pay there were many comments about the sad state of pilot pay. &^% made his point about us not negotiating in a vacuum - and it's fair enough. We all should know that pilot pay is but one component of the company's overall expenses and that achieving profitability is a complex goal for management. Nevertheless, I want to address another legitimate perspective on current and future pilot pay that deserves serious attention, namely the perspective gained by considering how much each passenger actually pays the pilots who safely fly them to their destinations. Shoot me down here - or agree - that this is a legitimate perspective we should be pushing more publicly. Whatever your response is if it's thoughtful I welcome it.

I fly captain on MD-88's and MD-90's. For argument purposes let's say my average seat count is 145 passengers. I'm sure somebody has the average load factor for these narrow body aircraft, but it looked pretty high to me in 2009. If it was 80%, then the average number of passengers on board an MD-88/90 was 116.

If every passenger with this load factor directly paid me $1.30/hour that would have covered my $150/hour 2009 wage. We have various employee benefits, and credit hours that are not directly productive, so ballpark we could probably agree $.70/hour more might cover those extra costs? So if the load factor is 80% and every passenger pays the captain $2/hour (and the FO $1.50/hour), then we're talking $3.50/hour going to both pilots of an MD88/90. Our legs probably average two hours.

We should all think about this for a few moments. Passengers pay hundreds, usually many hundreds of dollars per leg to fly on our jets. If my arithmetic is accurate it means passengers pay narrow body captains and their FO's about $7 total of their fare for a typical two hour flight - a very small percentage of their ticket cost. If this is true, how is it that a minimum cost of living pilot pay raise in any economic environment hasn't been demanded by DALPA and cannot be accommodated by management? How is it that the pay cuts we endured were not defended against in such visible and defensible terms? For management to pay both an MD-88/90 captain and the FO 116 more dollars/hour each - and again cover our credit hour costs and retirement benefits - all they'd have to do is directly pass on to passengers a $3.50/hour increase in the price of their ticket. $150, plus $116, would be $266/hour for MD-88/90 captains. And over $200/hour for FO's. Now we're beginning to talk real pay and DC retirement fund restoration.

More perspective. I tip the van driver two bucks if he takes me anywhere but to an airport hotel. I tip the Sky Cap a buck a bag to check my bags and family in at the curb - four bucks for about four minutes of his life. If every passenger tipped me a buck a minute - $120 for the two hour flight - times 116 passengers - that would be $13,920 for one flight. I don't expect anyone to tip, or pay, pilots like they might tip Sky Caps, but how about another $3.50/hour as eminently reasonable?

If polled, how many passengers would complain that paying a total of $10.50 instead of the current $7 they're paying to the two pilots for their two hour trip would be an unfair burden? How many of our passengers, the overwhelming majority of whom have a nice word to say to us upon deplaning, would say we don't deserve it? How many would be shocked to hear how little of their ticket price flows to us? I know the personal investment in our piloting skill sets we've all made - the under pressure training, flying experience, sound judgment - and our unique career terminating risks from loss of medical or FAA certificate action (not to mention being the continual focus of terrorist attack) - everything we bring to the air travel experience at Delta is worth far more to the passengers than they're currently paying directly to us. I'd like to see what they pay to pilots broken out on their ticket stub, just like taxes, fuel surcharges and whatever else is listed so they can know exactly what they're paying us. I believe most passengers would agree they could and should pay their pilots more. Especially when it would take such a small increase in a ticket's price going directly to pilots to offset the historically crushing effects of inflation combined with the recent successful attacks by managements in bankruptcy to gut pilot standards of living.

There was never not a time to publicly, loudly and longly make the it's a very small percentage of your ticket price argument to the world, but the time is especially ripe now to set the stage for truly restorative pay raises in the near future - with the abusive pay and work rules at the so-called regionals getting congressional scrutiny and media coverage and people widely appreciating split second life-saving performances of major airline pilots like Sully and Skiles.

As always during my 1* years here at D%^& I'm left wondering why this argument has never been made. It hasn't been made to us by our union in rallying support for a strike vote. Its never been made to my knowledge in the public arena. How does management get away with ever (ceo, president in bankruptcy court) saying we don't merit our pay? Or get away with saying they can't pay any more - not even a small 1-2 percentage increase in an average ticket price that could flow to pilots and quickly get us back to 1987 purchasing power wages? How come %ALPA - my labor union not just my schedule with safety association - never frames the argument in such simple, easy to fathom, dollars directly paid to pilots by passengers terms? Never slaps down demonstrably hollow management claims with simple arithmetic? How about a few full page ads in USA today informing the flying pubic how little they actually pay to their pilots when management again tells us we cost too much in 2012 and restoring the profession is out of the question?

The difference between a $100,000 annual raise for all %^ pilots (about the amount we each lost since 2004) and what we're making now is less than the price of two fancy cups of coffee many of our passengers think nothing of buying before boarding a &* airplane. That, my fellow pilots, is flat out amazing to me. Pilot pay as a percentage of ticket price should inform us, our management and the flying public as we move forward to a deservedly brighter future.

Frats,
 
If it raised your tickets price by $3.00 the consumer would shift to a lower cost carrier. The internet has made it impossible to raise prices.
 
Richard Anderson made over 20 million last year alone, divided by 365/24/60 = $38 dollars a minute and this includes while he sleeps. Maybe he could spare a buck or two. JP
 
In my opinion ALPA isn't worth what we pay them. They are in, they get our dues and that's it - they know how much of a hurdle it is to get rid of them and turn our union in house and they are coasting.

But guess what, the ball has started rolling and there is an effort to get things changed!

DAPA!
 
It's too bad there isn't some sort of organization that could organize the pilots and do something like protest across the industry for better wages.

Yeah... and we would call this a worganization. Maybe the WORG for short.

And if everybody contributed just a little bit of money they could hire lawyers and negotiators and use the power of the group to for big business to pay fair wages.

What do you guys think?
 
Anyway to findout

Richard Anderson made over 20 million last year alone, divided by 365/24/60 = $38 dollars a minute and this includes while he sleeps. Maybe he could spare a buck or two. JP

Wow! Sure adds perspective to the original post when you say it that way.

Anyway to findout, what the upper echeleon is making, like in a website or so?

Thank you
 
"An eventual result of Truman's 1945 summit was a five-year contract between United Auto Workers President Walter Reuther and the big three automakers that included cost-of-living adjustments, productivity-based wage increases, health insurance, and guaranteed-benefit pensions. Daniel Bell (then a writer for Fortune magazine) named the agreement, versions of which would be adopted by Big Steel and other industries, the Treaty of Detroit. Even non-union companies mimicked the Reuther pact. The federal government's ongoing collaborative role in the process was demonstrated in April 1962 when President John F. Kennedy, having talked the United Steel Workers into accepting a moderate wage increase, publicly attacked U.S. Steel over a price hike he deemed excessive ("a wholly unjustifiable and irresponsible defiance of the public interest"), forcing the steel giant to back down. According to Levy and Temin, this display of muscle "helps to explain why the reduced top tax rate" enacted two years later (it dropped to 70 percent) "produced no surge in either executive compensation or high incomes per se." Fear of attracting comparable attention from President Lyndon Johnson kept corporations from showering the bosses with obscene pay hikes."

Read the rest of the story here - http://www.slate.com/id/2266025/entry/2266031/
 
Again in the end it seems the consumer of airline tickets is being ignored. They will determine by their ridership what airline's can afford. The airline is almost a completely elastic commodity. Raise the price 3% and see a corresponding drop in riders, if only union carrier do this, pax shift to lower cost noon-union carriers. The result at the higher priced airline is better paid pilots but fewer jobs. As in all things in an attempt to work against market forces, good for the seniors guys, not so good for everyone else. I know this is old, but it fits here. I saw an article in ATW in 2001 that stated at DAL there were 17 members of top management made more than the top DAL Captain. The combined top 17 salaries equaled less than 1/6 of 1% of the combined pilot salaries. If management worked for free all pilots in the company would get a 1/10 of 1% raise. (for a $100K per year pilot that would be $3/wk increase in take home) Boy that raise would really make the pilot group happy. Top management possesses skills that allow them to move from job to job and command high salaries. And every one of these managers wants to see his/her airline prosper. They just can not do it.
 
If it raised your tickets price by $3.00 the consumer would shift to a lower cost carrier. The internet has made it impossible to raise prices.

YIP, you have accurately parroted management's excuse, but it is WRONG. Ticket price is only one part of the equation, and only the leisure traveler cares ONLY about price. Departure time, arrival time, frequency, connection times and other factors are important to a large number of travelers. SWA is not always the cheapest ticket, but has the perception of being the cheapest. Same with AirTran. many people just go to the airline's proprietary site and book.

Beyond ticket price, every airline also has a different RASM. It is up to management to decide how to raise the most money per aircraft, but paying a professional pilot a decent wage must be factored in, period.

If ALL airlines had to pay a minimum rate for pilot services they would all just have to absorb the cost, and could not use lower pilot pay as a competitive advantage. That is why I am in favor of an industry Guild (like the AMA or the Bar Association) for Pilots that set minimum pay rates per aircraft . . . and by "minimum" I mean like 2001 pay rates.
 
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I think what the original post is forgetting about is the thousands of other employees that make up an airline. the 2 pilots are only 2 of those thousands.
Also, fuel costs more than wages anyway. so that $300 ticket is already down to $150.

still though, get all you can, just don't use an argument resembling this.
 
YIP, you have accurately parroted management's excuse, but it is WRONG. Ticket price is only one part of the equation, and only the leisure traveler cares ONLY about price. Departure time, arrival time, frequency, connection times and other factors are important to a large number of travelers. SWA is not always the cheapest ticket, but has the perception of being the cheapest. Same with AirTran. many people just go to the airline's proprietary site and book.

Beyond ticket price, every airline also has a different RASM. It is up to management to decide how to raise the most money per aircraft, but paying a professional pilot a decent wage must be factored in, period.

If ALL airlines had to pay a minimum rate for pilot services they would all just have to absorb the cost, and could not use lower pilot pay as a competitive advantage. That is why I am in favor of an industry Guild (like the AMA or the Bar Association) for Pilots that set minimum pay rates per aircraft . . . and by "minimum" I mean like 2001 pay rates.

It would be nice if there were a minimum pay rate for pilots based on longevity. Get seniority out of the equation. If ALPA/SWAPA/USAPA/APA and the Teamsters could negotiate those rates with the ATA I think it might work. Airline managements want constants and they want to know what is going on down the line in regards to labor costs. This would help define that and set the bar so the airlines aren't slashing labor to undercut each other. Each union/pilot group could negotiate rates above he minimums but pay would not go below the minimums.

This is all a pipe dream though because I think airline management loves it when they negotiate a deal against pilot unions. Just as they have done over the last decade with the help of the courts.
 
YIP, you have accurately parroted management's excuse, but it is WRONG. .............or of an industry Guild (like the AMA or the Bar Association) for Pilots that set minimum pay rates per aircraft . . . and by "minimum" I mean like 2001 pay rates.
Maybe I am wrong, go ahead make the demands from AT to get what you want, I am just saying there maybe unintended consequences, that is all.


It would be nice if there were a minimum pay rate for pilots based on longevity. Get ............. Just as they have done over the last decade with the help of the courts.
What about non-union carrier and upstarts that see a great cost differential to make money and steal ridership should that ever be considered in putting additional burdens on the airline?

BTW I sometimes wonder if the pilot force is isolated from the consumer?
 
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Maybe I am wrong, go ahead make the demands from AT to get what you want, I am just saying there maybe unintended consequences, that is all.


What about non-union carrier and upstarts that see a great cost differential to make money and steal ridership should that ever be considered in putting additional burdens on the airline?

BTW I sometimes wonder if the pilot force is isolated from the consumer?

Not isolated at all YIP. Do you think management or the BOD thinks about the consumer when they award upper management perks and contracts? $20 million for Richard Anderson? There is a limited amount of pie at the table and each group has a responsibility to get as large a piece as they realistically can.

If Ty's idea of a professional guild ever comes into being, then I would imagine those that play outside the guild never gain entrance. Kind of like Scabs. You go and work for upstart "X" that is paying below the negotiated guild minimum, you are banned from being in the guild forever and partaking in any guild benefit. How many will want to take that chance with an upstart?

I'm not talking about government mandates but an industry/labor negotiated settlement that sets a baseline. Airlines benefit by having fixed costs in regards to pilot labor and pilots benefit in a multitude of ways. The acutal pay rates would be negotiated from the minimum pay. Airlines can pay more than the min rate to attract pilots in scarce/boom times or they can pay them the minimum in leaner times.

I highly doubt anything like this would ever happen, but as with any pipe-dream, it is fun to think about. Pilots are their own worst enemies. Senior selling out junior; all about me's running around everywhere; under-cutters; scabs and so on. Why would management want to end this culture? They have gained huge pieces of the pie because of it.
 
Maybe I am wrong, go ahead make the demands from AT to get what you want, I am just saying there maybe unintended consequences, that is all.


You missed the point, YIP. It wouldn't be just AirTran, it would be ALL carriers. Everyone pays at least the minimum. . . . . That's the point.
 
You missed the point, YIP. It wouldn't be just AirTran, it would be ALL carriers. Everyone pays at least the minimum. . . . . That's the point.
Oh I see a return to 1976 and regulation. Not union enforced but gov't enforced, kinda like a min wages for pilots. Life was good for a few pilots under regulation. There are probably 4-5 times as many pilot’s jobs now as there was in 1977. Back in reg time it was about 90% military that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and therefore reduce the number of pilots needed. Good for senior guys, not so good for everyone else. Hey go for it if it floats your boat.
 
SWA is not always the cheapest ticket, but has the perception of being the cheapest. Same with AirTran. many people just go to the airline's proprietary site and book.

If you go on most search fare search engines, the only major airline that doesn't show up is SWA, and as you said, many times they are not the cheapest, however, kudos to SWA for making the travelling public believe they always are and making people book on them without researching fares.

As for the cheapest ticket being the allure, sometime it is, however, many will gladly pay a a few bucks more for a direct flight, for a bit more legroom, assigned seats or better departure and arrival times.
 
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There are probably 4-5 times as many pilot’s jobs now as there was in 1977.

Yep and probably 4 or 5 times more passengers today than in 1977, yet the airlines continues to be in a financially precarious situation. Which leads us to the next question, do you honestly believe, that if every ticket, on every airline cost $30 more tomorrow, that you would see a drastic drop off in passengers?

I for one am not buying it, airfares, even if $30 higher would still be historically cheap, particularily if adjusted for inflation. Sure, some people would contemplate taking the car, but the time loss, the cost of gas and sometime hotel cost wouldn't be worth it, NY-LA in a car, 3 days of great fun. How about the wife and kids NY to Mouse world, oh yeah!

4 People can fly from NY to LAX and return for $1120, or they can drive 3 days each way for a cost of, back of the envelope math, $1024. Yep, airline travel certainly is overpriced! Never mind the fact, that with all that driving, a weeks vacation would turn into 24 hrs in LA before said people turns around and go back.

Better yet, let's take Amtrak, a goverment subsidized bussiness that you and I are paying for. It's going to be coach seats, not very pleasant for 3 days each way but cheaper and after all, it is all about cheap, well that little jaunt is a meager $1800.

I know, I know, that airline ticket is looking better and better, but there has got to be a even cheaper way, oh yeah, I got it, Greyhound. Sure it isn't great sitting on a bus for 2.5 days each way with the wife and two bored kids, but think of all the money we'll save, enough for a hotel night or two, hmmm, now let's see, 4 people NYC to LAX....WTH, it's $1464.

"Hey honey, I found a really great airfare for the four of us!"

There is a price to be paid for convenience and time savings, one that doesn't involve the new hire F/O being able to collect food stamps! Of course, you being management, you probably diasgree with that!
 
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drastic drop?

Yep and probably 4 or 5 times more passengers today than in 1977, that if every ticket, on every airline cost $30 more tomorrow, that you would see a drastic drop off in passengers?

"Hey honey, I found a really great airfare for the four of us!"

There is a price to be paid for convenience and time savings, one that doesn't involve the new hire F/O being able to collect food stamps! Of course, you being management, you probably disagree with that!
Define drastic drop? 5%, that would result in 5% reduction in seats available. And 10% reduction in F/O's and a 5% reduction in CA seats. Air travel is a bargain coast to coast, no doubt, but lets look at DTW -TPA/ MCO, busy route. It can be easily driven in about 16 hours, compared to 9 hours on AT. You 1 hr drive from to arrive 2 hrs early to fly to ATL, 1.5 hour, 1 hour changes planes 1.5 hour to TPA, 1 hr wait for baggage and pick up rental car 1 hr drive to the condo. For a family of 4, the $30 per seat will be a motivator to drive. I know pilots have trouble thinking that anyone could be crazy enough to want to drive when they could fly. But many people view it as an alternative to flying. If prices go up too much many will elect not to travel at all, after most people are not as well off as airline pilots. This is not a management view this just an observation from talking to family, neighbors, and others. Pilot should do whatever they think is best for themselves, Adam Smith's way, but there are unintended consequences of the market movement that are well beyond the ability of any group to dictate how the market will react. If you fly because you like to, you don’t worry about this stuff.
 
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You are correct YIP. If you fly because you like to, don't worry about this stuff. If you have a family to take care of; care about the profession or want to help improve quality of life then please worry about this stuff. Apathy is no answer if you care. But, if you fly just because you love it (I call that a hobby), have a pension from the man (mil pension) or whatever reason, I guess you don't have to worry. Have fun!
 

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