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AJC Article: Pay Cuts Downsize Pilots' Careers

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tittyjet

Throbbing Member
Joined
Apr 20, 2003
Posts
275
The Atlanta Journal-Constitution
Published on: 08/07/04


United Airlines Capt. Eric Brown is used to dealing with emergencies and making contingency plans.

During 17 years at the Chicago-based airline and five as an Army pilot, the Alpharetta resident has practiced handling everything from engine failures to emergency landings.

Now, Brown and thousands of fellow airline pilots face a threat few had expected: deep wage cuts, coupled with the prospect that some major U.S. airlines could fail.
United is in Chapter 11, and Delta Air Lines — where Brown's wife, Barbera, is a flight attendant — is struggling to avoid it. United, American and US Airways already have cut pilot wages sharply. At Delta, wage rates are likely to fall between 23 percent and 35 percent when management and pilots union leaders finish protracted negotiations, based on their latest proposals.

The cuts have pilots across the industry tightening their belts and revising expectations. Many are cutting personal spending and hedging their bets with side jobs or backup career plans.

"We used to be pretty highly leveraged," Brown says. "We've spent the last two years unleveraging."

Major airline pilots still make good money by most people's standards, and few expect sympathy from the public or other employees. A midcareer United pilot makes about $137,000 and up, even after stiff wage cuts, according to Air Inc., an Atlanta aviation career firm.

But Brown and others, who spent many years working in military or lower-paying aviation jobs to get onto the major airline career ladder, now see a downsized payoff that takes some of the luster off the profession.

"Pilots are trained to prepare for all kinds of what-ifs," says Brown, 46. "We think of all the things that can possibly go wrong, and then we prepare for them. But no one envisioned the kinds of things we're seeing today. Our industry is being battered by economic forces that are beyond our ability to control."

In addition to pay cuts, Brown and his peers at United have absorbed benefit cuts and work rule concessions that keep them on the road longer — roughly 17 days a month in Brown's case, up from 15.

About $250,000 in Brown's personal contributions to United's old employee ownership plan have been wiped out,and retirement benefits are at risk.

The airlines' dire condition has convinced the Browns to cut spending and take on extra work. Barbera had hoped to reduce her Delta flying schedule to spend more time with their 6-year-old daughter, but the international flight attendant is working full time as a hedge against a United failure.

Brown is more involved with a painting and home repair business, Job Done Right, where he negotiates contracts and manages a four-person crew.

It's common for airline pilots to have secondary jobs at the outset of their careers, when they are at risk of furloughs. But such sidelines are rare among midcareer captains at established carriers.

"I started Job Done Right a couple years ago," Brown said, "and more recently I decided that I really had to make something out of it. It's small, and our references are word-of-mouth. But the work is out there, and with the state of the airline industry, I figured it would be smart to start growing the business right away."

Glory days gone

Jim Stainbrook, founder of Precision Approach Asset Management, a financial planning firm that caters primarily to Delta and American pilots, says major airline fliers are right to lower their expectations. He expects pilot pay at Delta to fall about 35 percent if the carrier avoids Chapter 11.

Delta is seeking $1 billion a year in labor savings from pilots who have so far offered about $700 million, including a 23 percent cut.

"The glory days are over," Stainbrook said. "A 35 percent pay cut is a big pay cut — and it's permanent."

Midcareer pilots have traditionally stretched to buy "captains' houses," figuring earnings would steadily increase to cover higher mortgages. Spouses who might have sacrificed to help finance the lean earnings years sometimes leave the work force, and kids are approaching college age or in private schools.

Delta pilots have the highest pay in the airline industry, with midcareer captains typically earning around $200,000 a year or more.

"Even so, a lot of pilots live paycheck to paycheck," Stainbrook says. "They might be able to absorb a 10 percent pay cut without major lifestyle changes — but not 35 percent."

George Mathes, vice president at Clearly Gull, a Wisconsin financial management firm that specializes in pilot portfolios, says flying careers have been permanently altered by the post-9/11 collapse among major U.S. carriers.

"Flying for the airlines is still going to be a decent job," said Mathes, a retired United pilot. "But the pay is going to be nothing like it used to be. If you're with a low-cost carrier, you'll find things gradually getting better. If you're with a legacy carry, you'll see things gradually getting worse."

'The worst is over'

The changes are being forced by reductions in business travel, fuel price boosts, and Internet-fueled bargain hunting.

Low-cost carriers such as AirTran, Jet Blue and Southwest have grown to the point that old-line carriers must match prices across most of their route systems. But the big carriers' fatter cost structures prevent them from making money at prices dictated by low-cost airlines.

Senior Delta pilots have been retiring at an unprecedented rate in the last six months, and those who remain say they expect pay cuts to color the rest of their careers. Several Delta pilots interviewed for this story say they're making plans to cope with a dramatic fall in career earnings.

Jed Morton, a Delta pilot since 1997, starts his second year of law school at Georgia State University this month.

"I want to put my eggs in a basket that I'm carrying," says Morton, 39, an Air Force Academy grad and former fighter pilot. "Flying for the airlines is a great job. But you have the constant uncertainty of strikes, furloughs and other events like 9/11 that are totally beyond your control."

Morton, a math major at the Air Force Academy, got interested in law while his wife, Jeanne, was a law student.She now works at an Atlanta law firm while preparing for the Georgia bar exam. The couple lives in a downtown loft.

"I'm still an idealist," he says, "There are a lot of people out there who need legal help and can't afford it. If I can keep flying for Delta, practice law with my wife and help people who need it, that would be a pretty perfect world."

Mortonarranges his flying schedule so that he can attend class about three nights a week.To do it, he gave up a higher-paying assignment in larger jets and moved to smaller planes that allow more flexible scheduling.

The Walhalla, S.C., native says he got used to austere living in the military and never took on the trappings of financial success.

"I carry my lawbooks with me on trips," he says. "I don't play golf. My life pretty much revolves around work and school."

Kit Darby, a United captain and founder of Air Inc., says pilots are "prudent" to align their lifestyles with reduced earnings and to hedge their bets with second careers.

But unlike some experts, Darby remains upbeat. He thinks the worst of the airline downturn is over — and he expects pilot wages to bounce back.

"Last year was as bad as it gets in the airline industry," Darby said. "Now, the situation is improving worldwide. More pilots have been hired in the last six months than the entire year last year.

"The worst is over. The majority of the stress is over. There's going to be growth, there's going to be jobs. And pilot wage and benefit levels will still be way above the average American's."

Darby also disagrees with industry observers who say hub-and-spoke systems such as Delta operates in Atlanta, Cincinnati and Salt Lake City are obsolete. Consolidating passengers at places like Hartsfield-Jackson airport is still the most efficient way to provide airline connections for passengers traveling to or from secondary cities.

"The hub-and-spoke system is here to stay," Darby said. "The upstarts have cherry-picked the lucrative point-to-point markets. But once they're gone, they're gone."

'Hoping for the best'

Brown says he and his wife have refinanced their home at a lower interest rate and canceled services, postponed new car purchases and cut back on restaurant meals and other nonessentials.

On his days away from flying, Brown visits work sites and meets with contractors and homeowners to promote his painting and home repair business. He also makes calls and sends bids via e-mails from the road.

Brown says he typically flies about four days a week, and his wife is gone about three days. Their schedules often mean they "pass in the night," he says.

As long as United keeps flying, Brown says the couple's finances will remain on solid footing. Brown says he plans to keep flying for 14 years until mandatory retirement at age 60.

Brown and his wife say they thought they had done everything they could do to minimize career risk by going to work for two of the "big three" U.S. airlines. It seemed unthinkable then that both airlines could be facing bankruptcy at the same time.

"We're in good shape to weather the economic storms as long as United keeps flying," he said. "We're hoping for the best and planning for the worst."
 
As an aside, it's my understanding DW's pay is somewhere around $400k. Thank goodness.
 
Good ol' Kit Darby: The eternal optimist -- with something to sell.
 
$400k?!?!

I thought the Association buys him out from NWA at his hourly rate. That's how it usually works with MEC members.


I hope someone can clarify this.
 
I read on another thread that Dickhead Woerthless is getting paid $412k...please say it ain't so.
 
Unfortunately, I have seen the same $$ figures you are mentioning. Between regular salary and other "perks" like housing allowance etc., that was around the total I saw.

Now, I will admit that right now I can't quote an exact source for the info., but I'm sure its out there. If I find a definitive source, I'll let you know.

As far as I am concerned, he shouldn't be getting any more than he would be flying the line. After all, this position isn't about the money right?? It is about serving your fellow union "brothers,"...... right?? LOL
 
JohnDoe said:
As far as I am concerned, he shouldn't be getting any more than he would be flying the line. After all, this position isn't about the money right?? It is about serving your fellow union "brothers,"...... right?? LOL

I agree. I think the MEC officers at each airline only get paid what they would on the line, why should DW be any different. This is bull**CENSORED****CENSORED****CENSORED****CENSORED**.
 
It is high time for that motherfukker to go. I'd love to see a poll about his popularity figures right now. He's completely lost touch with the rank-and-fie.


Can we still post polls here? If so, how? I don't see the button anymore.
 
"But unlike some experts, Darby remains upbeat. He thinks the worst of the airline downturn is over — and he expects pilot wages to bounce back."


Absolutley laughable. I don't think you have to be genius to figure out the bottom as far as wages will go is even close to being reached. Wait and see what retirements will look like 5 years from now.
 

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