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Wear The Fox Hat
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- Dec 15, 2001
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Some news about the hourly pay.
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3152319,00.html
Frontier's pilots approve hourly pay
Carrier says switch from monthly salary to boost productivity
By David Kesmodel, Rocky Mountain News
September 1, 2004 Pilots at Denver-based Frontier Airlines have agreed to revamp their pay system in a move that potentially will save the company millions of dollars a year.
The pilots, represented by the Frontier Airline Pilots Association, voted overwhelmingly to be paid on an hourly basis instead of receiving a set monthly salary regardless of hours flown.
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The agreement, to be attached to the pilots' contract with the discounter, means the 500-plus pilots will have an incentive to fly more hours, boosting productivity.
Pilots will see pay increases, on average, through the switch, which will result in higher pilot costs in the pact's first six months, said Frontier's chief financial officer, Paul Tate.
But for the long term, the airline expects savings through more efficient scheduling of pilots and a reduction in how many pilots it will need to hire when it adds planes and routes, Tate said. It costs Frontier about $30,000 to train a pilot.
The airline, the 16th-largest U.S. carrier by traffic, expects pilot productivity to increase by about 10 percent. That "certainly will get us in the top half of the industry," Tate said. Frontier has been in the middle of the pack, which "isn't good enough" for a low-cost carrier.
Average percentage wage increases will be in the single digits, he said.
Under the old system, a first-year captain's base pay equaled about $115 per hour of flying, and a 10-year captain's equaled about $151, according to AirlinePilotPay.com.
The majority of U.S. carriers pay their pilots on an hourly basis.
The salary system at 10- year-old Frontier not only was hurting productivity, but also was affecting pilots' quality of life, Tate said. Pilots couldn't easily switch schedules to attend family functions or other events.
An agreement on pay and lifestyle changes in the middle of a contract term is unusual in the industry. The company heralded it as evidence of good labor relations at Frontier.
"It's a feather in our cap. It's quite rare," Tate said.
The move comes as the two sides get ready to work out a new contract. The existing agreement ends next May.
The union is "really happy" with the so-called side-letter deal, said Jeff Thomas, an Airbus captain and president of the pilot union. "We're looking to compete long term. There's a real emphasis on making this thing work."
Previously, a pilot who flew 85 hours in a month would get the same pay as a pilot who flew 65 hours in the month. Flight schedules are now built to guarantee pilots at least 75 hours of flight time each month, and a pilot must fly at least 70 hours to get paid.
Federal rules limit pilots to 100 hours of flying per month.
"Any time you can go from fixed costs to variable costs, it's a good event," Helane Becker, an airline analyst with Benchmark Co. in New York, said of the agreement.
Frontier, whose lone hub is at Denver International Airport, is striving to cut costs amid sky-high fuel prices. Fuel costs and a rash of low fares have caused the carrier to report losses for two straight quarters.
Frontier's unit costs - the cost to fly a seat a mile - were 8.09 cents in the April-June quarter. That was as good or better than the figures at two of the top U.S. discounters, Southwest and AirTran.
Analysts on average are forecasting a profit of a penny a share in the quarter ending Sept. 30, Frontier's fiscal second period.
The airline carries the second- most passengers at DIA after UAL Corp.'s United.
[email protected] or 303-892-2514
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3152319,00.html
Frontier's pilots approve hourly pay
Carrier says switch from monthly salary to boost productivity
By David Kesmodel, Rocky Mountain News
September 1, 2004 Pilots at Denver-based Frontier Airlines have agreed to revamp their pay system in a move that potentially will save the company millions of dollars a year.
The pilots, represented by the Frontier Airline Pilots Association, voted overwhelmingly to be paid on an hourly basis instead of receiving a set monthly salary regardless of hours flown.
Pilots will see pay increases, on average, through the switch, which will result in higher pilot costs in the pact's first six months, said Frontier's chief financial officer, Paul Tate.
But for the long term, the airline expects savings through more efficient scheduling of pilots and a reduction in how many pilots it will need to hire when it adds planes and routes, Tate said. It costs Frontier about $30,000 to train a pilot.
The airline, the 16th-largest U.S. carrier by traffic, expects pilot productivity to increase by about 10 percent. That "certainly will get us in the top half of the industry," Tate said. Frontier has been in the middle of the pack, which "isn't good enough" for a low-cost carrier.
Average percentage wage increases will be in the single digits, he said.
Under the old system, a first-year captain's base pay equaled about $115 per hour of flying, and a 10-year captain's equaled about $151, according to AirlinePilotPay.com.
The majority of U.S. carriers pay their pilots on an hourly basis.
The salary system at 10- year-old Frontier not only was hurting productivity, but also was affecting pilots' quality of life, Tate said. Pilots couldn't easily switch schedules to attend family functions or other events.
An agreement on pay and lifestyle changes in the middle of a contract term is unusual in the industry. The company heralded it as evidence of good labor relations at Frontier.
"It's a feather in our cap. It's quite rare," Tate said.
The move comes as the two sides get ready to work out a new contract. The existing agreement ends next May.
The union is "really happy" with the so-called side-letter deal, said Jeff Thomas, an Airbus captain and president of the pilot union. "We're looking to compete long term. There's a real emphasis on making this thing work."
Previously, a pilot who flew 85 hours in a month would get the same pay as a pilot who flew 65 hours in the month. Flight schedules are now built to guarantee pilots at least 75 hours of flight time each month, and a pilot must fly at least 70 hours to get paid.
Federal rules limit pilots to 100 hours of flying per month.
"Any time you can go from fixed costs to variable costs, it's a good event," Helane Becker, an airline analyst with Benchmark Co. in New York, said of the agreement.
Frontier, whose lone hub is at Denver International Airport, is striving to cut costs amid sky-high fuel prices. Fuel costs and a rash of low fares have caused the carrier to report losses for two straight quarters.
Frontier's unit costs - the cost to fly a seat a mile - were 8.09 cents in the April-June quarter. That was as good or better than the figures at two of the top U.S. discounters, Southwest and AirTran.
Analysts on average are forecasting a profit of a penny a share in the quarter ending Sept. 30, Frontier's fiscal second period.
The airline carries the second- most passengers at DIA after UAL Corp.'s United.
[email protected] or 303-892-2514
