I Wonder....

[realityman]

Which allows him to further expand his company and hire more pilots.

.........or just keep more money for himself while screwing over his employees.


The thought that keeping labor costs low will allow for more company expansion doesn't really have a direct correlation.

For example, let's say you have a charter company with 50 clients. Enough to keep 10 planes and 25 pilots reasonably busy and still turn a profit. Now, if the owner of the company could cut labor costs in half, how would that allow for expansion? The number of clients hasn't changed, so no need for more planes. No, he just pockets the extra money and laughs at his employees.

Would cutting his pilots' salary in half allow him to drop his prices so much that he could attract a lot of new business? Can you give an example in aviation where you've EVER seen that happen?

I remember right after 9/11 the airlines had priced many tickets so low they were practically giving them away. Naturally, they were losing money with that stupidity. The end result was almost all of the legacy carriers ended up in bankruptcy. They gutted most of their employees' contracts while in bankruptcy and wrung major concessions out of everyone, including the pilots. So, did you see ticket prices fall, or at least stay low after labor costs were reduced? Were more pilots hired? Even now, while making good profits, they aren't expanding much. They've only appeared to get bigger because of consolidation. Yes, there's hiring going on but it's mostly from attrition.

So come on G4, show me an aviation company that cut pilot costs and used that money to expand.

I don't know what aviation universe you're living in, but in this one taking away from pilots ends with richer upper management, not bigger companies.

 

[G4dude]

.........or just keep more money for himself while screwing over his employees.


The thought that keeping labor costs low will allow for more company expansion doesn't really have a direct correlation.

For example, let's say you have a charter company with 50 clients. Enough to keep 10 planes and 25 pilots reasonably busy and still turn a profit. Now, if the owner of the company could cut labor costs in half, how would that allow for expansion? The number of clients hasn't changed, so no need for more planes. No, he just pockets the extra money and laughs at his employees.

Would cutting his pilots' salary in half allow him to drop his prices so much that he could attract a lot of new business? Can you give an example in aviation where you've EVER seen that happen?

I remember right after 9/11 the airlines had priced many tickets so low they were practically giving them away. Naturally, they were losing money with that stupidity. The end result was almost all of the legacy carriers ended up in bankruptcy. They gutted most of their employees' contracts while in bankruptcy and wrung major concessions out of everyone, including the pilots. So, did you see ticket prices fall, or at least stay low after labor costs were reduced? Were more pilots hired? Even now, while making good profits, they aren't expanding much. They've only appeared to get bigger because of consolidation. Yes, there's hiring going on but it's mostly from attrition.

So come on G4, show me an aviation company that cut pilot costs and used that money to expand.

I don't know what aviation universe you're living in, but in this one taking away from pilots ends with richer upper management, not bigger companies.

When aviation companies cut expenses and still provide a good product, they expand by offering lower prices, generating higher volume, creating the requirement for more planes and pilots. Salaries of pilots are set by the tension between pilots' desire to make maximum money and management's desire to pay minimum dollars for pilots. If the pilots are not happy, they can go elsewhere, especially in today's marketplace dealing with the shortage of aviators.

 

[G4dude]

.........or just keep more money for himself while screwing over his employees.


The thought that keeping labor costs low will allow for more company expansion doesn't really have a direct correlation.

For example, let's say you have a charter company with 50 clients. Enough to keep 10 planes and 25 pilots reasonably busy and still turn a profit. Now, if the owner of the company could cut labor costs in half, how would that allow for expansion? The number of clients hasn't changed, so no need for more planes. No, he just pockets the extra money and laughs at his employees.

Would cutting his pilots' salary in half allow him to drop his prices so much that he could attract a lot of new business? Can you give an example in aviation where you've EVER seen that happen?

I remember right after 9/11 the airlines had priced many tickets so low they were practically giving them away. Naturally, they were losing money with that stupidity. The end result was almost all of the legacy carriers ended up in bankruptcy. They gutted most of their employees' contracts while in bankruptcy and wrung major concessions out of everyone, including the pilots. So, did you see ticket prices fall, or at least stay low after labor costs were reduced? Were more pilots hired? Even now, while making good profits, they aren't expanding much. They've only appeared to get bigger because of consolidation. Yes, there's hiring going on but it's mostly from attrition.

So come on G4, show me an aviation company that cut pilot costs and used that money to expand.

I don't know what aviation universe you're living in, but in this one taking away from pilots ends with richer upper management, not bigger companies.

An example: Delta paid pilots an exorbitant amount a few years ago, an "industry leading contract." What a laugh. You know who benefitted? Valuejet/Airtrans. They expanded because their main competitor was overpriced due to bloated overhead brought on by, you guessed it, that wonderful "industry leading contract!"

 

[CMI]

I think we all know who G4D0uche is blowing under the table in VNY!

 

[realityman]

An example: Delta paid pilots an exorbitant amount a few years ago, an "industry leading contract." What a laugh. You know who benefitted? Valuejet/Airtrans. They expanded because their main competitor was overpriced due to bloated overhead brought on by, you guessed it, that wonderful "industry leading contract!"

Are you sure you're not in management? Because the line "It's labor costs that are ruining this company." is their standard line.

Airtran's business model was very different from Delta's. Two types at the most. Same way Southwest was able to keep costs down. This "expensive pilot" argument has been debunked repeatedly, and I'm out of time. Gotta go.

 

[ghostrider64]

G4 point is all fine and good, yet he avoids one major fact....Netjets is swimming in profits and has done so for years, even the down ones. They don't expand due to lower costs, they expend when demand for private planes increases.

BTW G4 haven't you heard, Netjets is no longer cutting prices (I confirmed this recently by speaking directly to a senior regional sales manager), they are actually increasing prices because everything they have to sell, is pretty much SOLD! Oh but that flies in the face that they have to cut costs(pilot pay and benefits) in order to increase sales...

You're either a management idiot/plant, or you've absolutely no idea what the hell is really going on.

 

[Hawkered]

G4 point is all fine and good, yet he avoids one major fact....Netjets is swimming in profits and has done so for years, even the down ones. They don't expand due to lower costs, they expend when demand for private planes increases.

BTW G4 haven't you heard, Netjets is no longer cutting prices (I confirmed this recently by speaking directly to a senior regional sales manager), they are actually increasing prices because everything they have to sell, is pretty much SOLD! Oh but that flies in the face that they have to cut costs(pilot pay and benefits) in order to increase sales...

You're either a management idiot/plant, or you've absolutely no idea what the hell is really going on.

Or both. Your final paragraph suggests the two are mutually exclusive, we've found out recently they're not.

 

[windshear73]

We won! 120 yes, and 57 no of 192 eligible voters. TMC Jets is now an organized pilot group!

 

[windshear73]

http://teamster.org/news/2014/12/travel-management-company-pilots-vote-join-teamsters

 

[CRAWDADDY]

When was the last time anyone heard from Publishers?