Hogprint said:
gutshot posted:
What is it we are demanding that you are so against? Refresh my memory.
I'd like to know, too. I've heard demands all the way up to $200K in retro pay and 1.2 times NBAA 90th percentile pay (because that multiplier is how much more productive you are than us corporate guys).
I do know that how much you can get is limited, however. You have a very expensive operating model. Corporate mans aircraft at 3 per airplane, you man at over 5 per aircraft. Half of your flying is deadhead. Corporate flys their aircraft on average 400-450 hours per year. With your card programs you may exceed 1200 hours on a single airframe in a year, thereby causing the asset at to lose value at an accelerated rate.
You have a niche market. If a client flys only 100 hours a year, it's cheaper to charter, If he flys 300 hours a year or more, it's most cost efficient to own. The guy who flys 200 hours a year gets the most bang for his buck with a fractional share if he can place his aircraft "into trade" and thereby qualify for tax depreciation. Santulli figured this out, that's why all your tail numbers end in QS for Quarter Share.
The profit basis for your company has changed as well. You used to make money selling airplanes. With airframers backing Citation Shares, FlexJet, Avantair and to some extent, Flight Options, your margins there have shrunk and you must depend on operations for profits.
This means you have no pricing power. Despite what Kevin Russell says, your market share is 47.7%. You can't set pricing among your competitors.
If I buy a 1/8th share Citation Excel/XLS from you, it costs $1,312,500.00, $14,524.00 in monthly management fees and $1,804.00 an occupied hour.
If I buy the same airplane from Citation Shares, it costs $1,312,000.00, $15,200 in monthly management fees and $1,900.00 an occupied hour.
If I buy a 1/8th share of a Lear 45 from Flexjet, it costs $1,258,000.00, $11,320 in monthly management feels, and $1,650.00 an occupied hour.
The point is that you have said that your pay raises should come primarily from increases in monthly management fees. You don't have much margin to increase your management fees before you become overpriced in a competive market place. If you raise your management fees your competitors will not follow suit, they will simply sell more shares and increase their market share as yours diminishes.
You attempt to demonize management, but you have to understand that their first responsibility is not to you, but to the shareholders. Maintaining shareholder value is the principal responsibility of any CEO or president and the board of directors reminds them of this constantly. They must not make an agreement with you that threatens the viability of the company.
What I do is different from what you do, so I'm not sure a comparison is appropriate. You generate revenue for the company. I don't. I'm a productivity multiplier for my company. I play a part in making my company's growth possible, therefore if my company is doing well, I should be doing well. When I take-off, I'm managing a $47,000,000.00 asset for the company and it's my view that I should be compensated in the same manner as any other company executive that is managing a near $50 million business segment. Fortunately, the company agrees.
I meet a lot of great NJA pilots on the road. They deserve a good salary and a decent place to go to work free from the kind of strife that many of the more strident union organizers seem to generate. If you watch carefully, you can see the guys fresh from the military or the regionals, who are just happy to have a job, being approached by the former airline guys who have already killed their last place of employment and other disaffected pilots, who begin their rant about "flying the pledge" and supporting your union brothers.
The traditional union model is not well suited to the global economy of the 21st century in that it is an anti-productive model. That is to say, that the usual thrust of union operations is to try to have more workers, doing less work, at a greater rate of pay.
A more productive model would have the union working with management and pilots to get the most pay possible while insuring the continued health of the company.
Berkshire Hathaway is willing to open up the books. Why don't you look at them, determine what the company can pay and stay in business, demand that, and adopt a new goal of being the best paid company in the fractional business?
GV
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