Buffett Bites Back at NetJets Pilot Complaints

[Pervis]

Today's papers report that the new CEO already had a meeting with NJASAP President - supposedly the first one in years.

The only meeting Hansel had with our union was very short lived. After our legal staff, all armed with signed non disclosure agreements, refused to leave the room at Hansel's demand, he up and walked out. Of course his legal staff was allowed to remain.

 

[X-rated]

I'll take a shot at it. This should be very popular

I have given you two days of opportunity to come up with FACTUAL DATA to prove that $250,000 a year is absurd. You have not.

Therefore by definition it is NOT absurd and a reasonable low point to accept as a reasonable CBA wage.

Your opinion is invalid.

That's some interesting "logic" you have there.

First, I don't think 250K for very senior NJA pilots is absurd at all, but 10-250 would mean the most junior captains would make 250K. If the most junior captain is making 250K flying a Phenom, I'm pretty curious how much a 30 year international Global 7000 captain should make? How about 5th and 15th year F.O.'s? That's probably where 10-250 goes off the rails for me.

I certainly don't have the numbers you seek, but I couldn't help notice Pedro kept repeatedly stating Management is demanding pay concessions. For some reason, he failed to mention the Union's demands. That seems strange considering most (at least here on FI) feel so strongly that all are completely reasonable. Why waste the opportunity to show Liz and her viewers how magnanimous your requests are? Could it be Pedro was concerned that saying the union wants $250K for the most junior captain, plus completely free medical, and 100 percent 401K match up to the max might not play well? Heck, he didn't need to mention the need for shorter duty days and sought reduced airport standby.

You keep asking why you should make less than a Delta pilot. Take another look at Delta's pay scales and ask yourself why Delta Mainline EMB 190 pilots makes 50 percent of 777 pilots at each year of service. It has nothing to do with responsibility or having the same skill set. It is about how much revenue pilots generate for their company. Since airlines are scheduled, they enjoy far greater utilization. Because of the increased utilization, and because they carry so many more passengers, they bring in more revenue than a NetJets pilot can hope to despite Mr. Big Bucks paying a fortune for his flight.

NetJets is already ~3 times the cost of charter. 10-250 represents a 108 percent or 130,000 dollar raise for the 10 year captain. If every pilot gets a similar percentage increase, NetJets might cost 4 times charter, and certainly some number of corporate and private flight departments will become more cost effective than fractional ownership as a result. Fractional was supposed to offer better utilization of expensive assets and thereby reduce the cost of flying private. Today, drastically inflated acquisition costs, deadhead inefficiency, high corporate overhead, demanded higher ROI, and now potentially extreme pilot compensation further threaten an industry in decline. Don't kid yourself; you absolutely can price yourselves out of this market.

 

[FamilyGuy]

That's some interesting "logic" you have there.

First, I don't think 250K for very senior NJA pilots is absurd at all, but 10-250 would mean the most junior captains would make 250K. If the most junior captain is making 250K flying a Phenom, I'm pretty curious how much a 30 year international Global 7000 captain should make? How about 5th and 15th year F.O.'s? That's probably where 10-250 goes off the rails for me.

I certainly don't have the numbers you seek, but I couldn't help notice Pedro kept repeatedly stating Management is demanding pay concessions. For some reason, he failed to mention the Union's demands. That seems strange considering most (at least here on FI) feel so strongly that all are completely reasonable. Why waste the opportunity to show Liz and her viewers how magnanimous your requests are? Could it be Pedro was concerned that saying the union wants $250K for the most junior captain, plus completely free medical, and 100 percent 401K match up to the max might not play well? Heck, he didn't need to mention the need for shorter duty days and sought reduced airport standby.

You keep asking why you should make less than a Delta pilot. Take another look at Delta's pay scales and ask yourself why Delta Mainline EMB 190 pilots makes 50 percent of 777 pilots at each year of service. It has nothing to do with responsibility or having the same skill set. It is about how much revenue pilots generate for their company. Since airlines are scheduled, they enjoy far greater utilization. Because of the increased utilization, and because they carry so many more passengers, they bring in more revenue than a NetJets pilot can hope to despite Mr. Big Bucks paying a fortune for his flight.

NetJets is already ~3 times the cost of charter. 10-250 represents a 108 percent or 130,000 dollar raise for the 10 year captain. If every pilot gets a similar percentage increase, NetJets might cost 4 times charter, and certainly some number of corporate and private flight departments will become more cost effective than fractional ownership as a result. Fractional was supposed to offer better utilization of expensive assets and thereby reduce the cost of flying private. Today, drastically inflated acquisition costs, deadhead inefficiency, high corporate overhead, demanded higher ROI, and now potentially extreme pilot compensation further threaten an industry in decline. Don't kid yourself; you absolutely can price yourselves out of this market.

You make some very good points.

While I support the pilots and want to see them get a better contract, I share your concerns about reaching an agreement that is sustainable in good times and bad.

Hopefully cooler heads will prevail and both sides will come together to a compromise that works for each party.

Seeing AJ and Bill meeting with the union on day 2 is a good start.

 

[gunfyter]

The answer is simple as to why Pedro made no mention of the union pay demands. The union hasn't established any. Anything you see here is the personal opinion of the individual.

 

[fischman]

The answer is simple as to why Pedro made no mention of the union pay demands. The union hasn't established any. Anything you see here is the personal opinion of the individual.

Exactly. That, and we don't want to leave anything on the table. In '05 Santulli was quoted as saying "you could have gotten more." I don't want to repeat history.

 

[acaTerry]

You make some very good points.

While I support the pilots and want to see them get a better contract, I share your concerns about reaching an agreement that is sustainable in good times and bad.

Not going to agree. We've been in good times for YEARS now and still...nothing. You aim high in good times and make the money while its there. When the company makes less, you have a different set of expectations.
DAL settled a TA in less than 1/4 the time we have. And that was their M.O...the money is there, pay up. It is no different here. This turnaround was earned as much by our backs getting overloaded as any other factor, probably more. If the planes don't fly, NJA makes no money. Well, the planes have been moving and NJA is nearly paid off on all debt. IOW, it will be a debt free operation soon. So why should we lower our expectations because of what "might" happen later when we are doing so well?
If the hard times come, we can deal with those when the time comes, not now. As we say where I grew up: "make your hay while the sun shines".

 

[Helmsalee]

Delta mainline does not operate the EMB 190. Sad, but true.

 

[T-1GUY]

Last I checked a new 777 cost about 320 million dollars paid for by Delta. A new phenom 300 cost about 8.7 million paid for by the owners. I am a professionally trained pilot. I will fly either plane. I demand a professional salary for my skills. Simple fact, Netjets can't keep experienced pilots if the wages are not comparable. There is a shortage of experienced pilots that is only going to get worse. Currently, Netjets cannot train new pilots fast enough to keep up with the number of pilots leaving. Hence, major airline pay is coming to Netjets.

 

[G4dude]

Last I checked a new 777 cost about 320 million dollars paid for by Delta. A new phenom 300 cost about 8.7 million paid for by the owners. I am a professionally trained pilot. I will fly either plane. I demand a professional salary for my skills. Simple fact, Netjets can't keep experienced pilots if the wages are not comparable. There is a shortage of experienced pilots that is only going to get worse. Currently, Netjets cannot train new pilots fast enough to keep up with the number of pilots leaving. Hence, major airline pay is coming to Netjets.

Yep. The shortage will give us a big raise, and it's about time.

 

[imacdog]

That's some interesting "logic" you have there.

First, I don't think 250K for very senior NJA pilots is absurd at all, but 10-250 would mean the most junior captains would make 250K. If the most junior captain is making 250K flying a Phenom, I'm pretty curious how much a 30 year international Global 7000 captain should make? How about 5th and 15th year F.O.'s? That's probably where 10-250 goes off the rails for me.

I certainly don't have the numbers you seek, but I couldn't help notice Pedro kept repeatedly stating Management is demanding pay concessions. For some reason, he failed to mention the Union's demands. That seems strange considering most (at least here on FI) feel so strongly that all are completely reasonable. Why waste the opportunity to show Liz and her viewers how magnanimous your requests are? Could it be Pedro was concerned that saying the union wants $250K for the most junior captain, plus completely free medical, and 100 percent 401K match up to the max might not play well? Heck, he didn't need to mention the need for shorter duty days and sought reduced airport standby.

You keep asking why you should make less than a Delta pilot. Take another look at Delta's pay scales and ask yourself why Delta Mainline EMB 190 pilots makes 50 percent of 777 pilots at each year of service. It has nothing to do with responsibility or having the same skill set. It is about how much revenue pilots generate for their company. Since airlines are scheduled, they enjoy far greater utilization. Because of the increased utilization, and because they carry so many more passengers, they bring in more revenue than a NetJets pilot can hope to despite Mr. Big Bucks paying a fortune for his flight.

NetJets is already ~3 times the cost of charter. 10-250 represents a 108 percent or 130,000 dollar raise for the 10 year captain. If every pilot gets a similar percentage increase, NetJets might cost 4 times charter, and certainly some number of corporate and private flight departments will become more cost effective than fractional ownership as a result. Fractional was supposed to offer better utilization of expensive assets and thereby reduce the cost of flying private. Today, drastically inflated acquisition costs, deadhead inefficiency, high corporate overhead, demanded higher ROI, and now potentially extreme pilot compensation further threaten an industry in decline. Don't kid yourself; you absolutely can price yourselves out of this market.

I don't think you understand how pay by longevity works.

 

[FamilyGuy]

Not going to agree. We've been in good times for YEARS now and still...nothing. You aim high in good times and make the money while its there. When the company makes less, you have a different set of expectations.
DAL settled a TA in less than 1/4 the time we have. And that was their M.O...the money is there, pay up. It is no different here. This turnaround was earned as much by our backs getting overloaded as any other factor, probably more. If the planes don't fly, NJA makes no money. Well, the planes have been moving and NJA is nearly paid off on all debt. IOW, it will be a debt free operation soon. So why should we lower our expectations because of what "might" happen later when we are doing so well?
If the hard times come, we can deal with those when the time comes, not now. As we say where I grew up: "make your hay while the sun shines".

I've seen the same philosophy by many athletes. They want to get their payday when their contract is up. The wise ones recognize the fact that it's not just them but the team that makes them successful and they structure their pay to make sure they can surround themselves with a good supporting cast.

 

[Diesel]

I've seen the same philosophy by many athletes. They want to get their payday when their contract is up. The wise ones recognize the fact that it's not just them but the team that makes them successful and they structure their pay to make sure they can surround themselves with a good supporting cast.

But at the end of the day you can't even have a game without the quarterback. (pilots)

 

[T-1GUY]

Either management works a contract with my agent (Union), or I take my skills to another team

 

[gunfyter]

But at the end of the day you can't even have a game without the quarterback. (pilots)

If football you could go with a ground game. But an air carrier. ? Lol.

 

[fischman]

I've seen the same philosophy by many athletes. They want to get their payday when their contract is up. The wise ones recognize the fact that it's not just them but the team that makes them successful and they structure their pay to make sure they can surround themselves with a good supporting cast.

It's the rising tide. A tire costs $75. A gallon of milk is $4. A NetJets pilot is $250,000. It costs what it costs.