LCCs Retirement Plans???

[atldc9]

I like our current contract, and expect more out of our next one.

There are areas that need to be adjusted to fit our evolving operations, and there are areas where we, as the pilot group, would like to see the compensation levels go up. The total package is the important factor for me. I want it all. I want to run thru the K B toy store and get every last stinking toy.

But alas, I don't think it will happen. I hope to see tweaking of the work rules, more pay at the top of the scale, and more for the FO's. The mid year CA's are doing alright, as that was a big focus our last time around. I think the retirement will be pushed a bit, and there is definitley interest in some sort of profit sharing/stock option plan adjustment. The options we got last time aren't worth much yet, so that is not a real big item for me. I would rather the company pick up loss of medical insurance, as well as pay more of the cost of health insurance.

And I want a company car. I hate cars. Don't even want ot think about them.

 

[FDJ2]

Ask him how your 12 year 717 rate of $154/hour compares to United's 737 rate at 12th year...or AA's Fokker 100 rate of $109.79/hour at 12th year. Or ask him about how Airtran's 1:3.5 trip rig compares to United's rig package. Frankly...I am very impressed by Airtran's contract and their provisions. It is definitely a career airline. Go Joe Leonard. Seems to me that Airtran is going to help UAL and AA get their contracts back up a bit and raise the bar.

Sam

How does that 12 year 717 rate of $154/hour compare against some non-bankrupt airlines lowest paid equipment.

Alaska: $196
ATA: $187
SWA: $186
NWA: $191
DAL: $230

Of course this isn't a perfect comparison, since almost no one else flies the 717, but it's a ball park comparison.

Now I recognize that Airtran is a young company and no Airtran pilot is even close to 12 years longevity, but hopefully by the time your pilots start drawing that 12 year paycheck your pay rates will be more in line with the non bankrupt carries. $154/hr really isn't a bad start, but strong companies ought to be able to support strong contracts, companies should not be strong on the backs of their employees.

 

[Ty Webb]

Actually, FDJ2, the pay rate for the B737-800 at AirTran is $163.29 for an eleventh year pilot. That would be the most senior group.

So, how does $163.29 stack up to the others 11th year pay (all of which are "majors" by the way)? Not too shabby, considering that when our contract was negotiated we only had about 600 pilots!

ATA's numbers are good, with the new contract . . . ours is up next year, so I think we'll be looking for something comparable to theirs.

Looking at the 12th year numbers you published for the other companies-

Alaska: $196
ATA: $187
SWA: $186
NWA: $191
DAL: $230

Looks to me like the one that sticks out like a sore thumb is DAL. Are you trying to tell me that the Shuttle guys are making $230./hr in the 12th year?

Why don;t you post those numbers, so we'll have something to compare 'em to.

 

[Sam Fisher]

How does that 12 year 717 rate of $154/hour compare against some non-bankrupt airlines lowest paid equipment.

Alaska: $196
ATA: $187
SWA: $186
NWA: $191
DAL: $230

Of course this isn't a perfect comparison, since almost no one else flies the 717, but it's a ball park comparison.

Now I recognize that Airtran is a young company and no Airtran pilot is even close to 12 years longevity, but hopefully by the time your pilots start drawing that 12 year paycheck your pay rates will be more in line with the non bankrupt carries. $154/hr really isn't a bad start, but strong companies ought to be able to support strong contracts, companies should not be strong on the backs of their employees.

For the record: I do not fly for Airtran.

However, I noticed some interesting things in your comparison.

You used the May 1, 2004 numbers for Alaska. Their current book rate for years 11 and up is $189.23 and not $196. You are aware that they are entering into mid-term Section 6 negotiations, right? I highly doubt that those numbers stay the same. Do I like it? No...but it is reality.

You also used the July 1, 2005 numbers for ATA at $187/hour. Frankly, this methodology doesn't make sense to me. Their current book rate for the 737 is $145.25 and in July of 2004 it goes to $155.33. How are ATA's financials these days? My guess is that they will never see that 2006 number of $187 but again, that is just a prediction. I hope I'm wrong because I am a huge fan of ATA's contract.


Quoting DL's and NWA's numbers are also a little misleading, given the fact that both are in concessionary talks at the moment.

You mention "non-bankrupt" companies. Is AA bankrupt? What will you call UAL/AAA's rates once they emerge from bankruptcy and you can't use that term any longer? Frankly - I do not see AA/UA/US's rate "snap back" the day they turn a profit. That would be quite the "wet" dream. Those are legacy carriers who needed significant overhauls, not just in wages, but in the overall operating model....which is why we'll see US Airways fail in the next few years - not because of labor costs but because of mismanagement and a flawed business model.

Do I think that $154/hour is a low number for a 117 seat airplane? Yes. Is it the worst in the industry? Not even close...and it blows AA and UAL's numbers out of the water. Heck, CAL's Small Narrowbody Rate (737-500, 300, 700) is $158/hour. And CAL doesn't have nearly the rig package that Airtran does - not even close.

This industry is changing. This is not a cyclical event in my opinion. The "model" is flawed, in more ways than one. While I wish Delta the best of luck in holding the line, so to speak, I think the biggest push for this industry should be in elevating the overall compensation packages of those pilots flying 30-90 seat "regional jets" or whatever they are calling them these days.

Sam

 

[FLB717]

below

 

[FLB717]

The AAI 737-800 number is wrong (not in rate but in top out), the top out is 173 Hr. based on 12 years of service. All so the 717 seats 117 vs a 737-700 at 136 if a real comparison is to be made. The point being our rates are not bad at all. Some are better, others worse. Me Im just happy to have job that pays me well and treats me good compaired to the place I came from and with no better place to go.

 

[FDJ2]

Looks to me like the one that sticks out like a sore thumb is DAL. Are you trying to tell me that the Shuttle guys are making $230./hr in the 12th year?

Why don;t you post those numbers, so we'll have something to compare 'em to.

Ty, our shuttle guys make $243/hr in the eleventh year and $245 in the 12th. I wouldn't consider those numbers as ones that stick out like a sore thumb, but rather as something you might hope to achieve one day. Good luck.

 

[FDJ2]

However, I noticed some interesting things in your comparison.

You used the May 1, 2004 numbers for Alaska. Their current book rate for years 11 and up is $189.23 and not $196. You are aware that they are entering into mid-term Section 6 negotiations, right? I highly doubt that those numbers stay the same. Do I like it? No...but it is reality.

We are talking about "current" 12 year rates, right? You should also note that no AAI pilot is at 12 years yet, nor will there be any 12 year AAI pilots in 2004 or 2005. You can guess at what Alaska and ATA rates will be, but you don't know, you can also guess whether they will be around in a few years. AAI had a few poor performing years and AAI's predecessor, Valuejet, went tango uniform in less than 12 years, should I therefore conclude that perhaps no AAI pilot will make the vaunted 12 year mark.

The analogy started with a hypothetical AAI 12 year B717 captain. None of which exist, by the way, nor will there be any in 2004 or 2005, that's why it is hypothetical.

You make a good point about AA not being bankrupt, but their contractual concessions were driven by impending bankruptcy. They effectively gutted their own contract. Doesn't say much for the APA.

As far as NWA or DAL future rates, who knows, maybe those numbers will change in 2005 or 2007, or maybe they won't.

Like I said before, that was not a perfect analogy, different airframes, different benefit packages, different rigs, different work rules, etc. I also didn't discuss top end pay. What's the best an AAI captain can expect to make after 25 years with the company in a 737 (an airframe they still don't have on the property) versus a 25 year NWA 747-400 captain?

 

[FDJ2]

The point being our rates are not bad at all. Some are better, others worse.

FLB717, I agree, your rates do go up nicely down the road. Not bad, I'd say about middle of the road. But we should all strive to elevate the value of this profession and not settle for the middle of the road. If you are working for an industry leader, you should strive for an industry leading compensation package. You deserve it and you should get it. AAI compensation isn't that bad for a new company, but I implore you not to settle for less than industry leading and try to raise the bar for the industry, not just bankrupt or nearly bankrupt carriers.

 

[FLB717]

FDJ2,
I will not settle for less. Being a former CMR driver I can walk the talk just fine. However I WILL NOT price myself out of a job either. To me I would rather make a few cents less than none at all. Allso lets take a moment to understand that this is ONLY ou SECOND contract, how many has Delta or American had in the last 50 to 70 years? As far as my job being here in 25 years, well see. I remind you that you job also may or may not be here in 25 or even 5 (unlikely) years, just ask those guys from Western thier point of view on that. And how much of a cut are you going/willing to take for mother Delta. While we are at the "Raise the Bar" point of the thread lets all support the Mesaba Pilots on Jan 10.

 

[FDJ2]

FDJ2,
I remind you that you job also may or may not be here in 25 or even 5 (unlikely) years, just ask those guys from Western thier point of view on that.

None of us can bank on our jobs being here 25 years from now, but if history is our guide, the longer your carrier has been around, the more likely it is to survive.

Western guys are doing great, their making more than they ever made at Western and flying larger equipment to more distant destinations.

 

[Ty Webb]

Hey, sounds pretty good- if your company can aford to pay those rates and still be profitable. After all, it's a business, not a charity.

I wouldn't consider those numbers as ones that stick out like a sore thumb, but rather as something you might hope to achieve one day.

Well, onsidering that they're at leat 20-30% higher than the other companies, I would say that in today's environment, they definitely stick out.

As far as hoping to achieve that rate of pay, well, if it is sustainable, sure, that would be nice, but if the cost is five or six more years in the right seat, and very likely two or more years out on furlough, stocking mulch at Home Depot, well, no thanks. I'll take our reasonable pay, rapid upgrade and rapid seniority accrual . . . . and believe me, that is a very valid choice for many people.

Good luck.

Good luck to you, too.

 

[Ty Webb]

Wow, just saw this bit of textural diahhrea from FDJ2:

We are talking about "current" 12 year rates, right? You should also note that no AAI pilot is at 12 years yet, nor will there be any 12 year AAI pilots in 2004 or 2005.

Wrong-o Champ. We have over 35 guys who are in their 11th year today. If you really want to talk facts, feel free to ask, but don't just pull numbers out of your tailpipe, alright?

AAI had a few poor performing years and AAI's predecessor, Valuejet, went tango uniform in less than 12 years, s

Before the crash (which was attributable to criminal conduct by a subcontractor) VJ stock was the best-performing airline stock in history (source: Hard Landings- the history of the airlines). V-J stock is still convertible to AAI stock, not exactly the same as a company that came on the scene, went broke and vanished.

I therefore conclude that perhaps no AAI pilot will make the vaunted 12 year mark.

Well, we'll know by 12/04, because that will be when the most senior guys start their 12th year (source: AirTran Seniority list)

Which brings me to my point-

Some of you guys seem to have a whole lot invested in making AAI out to be this villainous entity . . . .and you are eager to believe that we are somehow a ragtag bunch of deficient pilots offering a subpar product.

The truth of the matter is that we are doing a great job of delivering what our customers tell us they want- safe, efficient, economical transportation at a reasonable price. And as long as you keep sneering at us and underestimating us, we will continue to kick your butts.

Merry Christmas.

 

[Sam Fisher]

We are talking about "current" 12 year rates, right?

Right, we are. We're talking about current book rates, not ATA's 2005 rate or Alaska's 2004 rate, but rather, the current book rates.

You should also note that no AAI pilot is at 12 years yet, nor will there be any 12 year AAI pilots in 2004 or 2005.

False.

You can guess at what Alaska and ATA rates will be, but you don't know, you can also guess whether they will be around in a few years.

I sincerely hope they are around. I can guess at their rates, but I won't....but I'll go out on a limb and say they will be less than their current contract provides for. Eg, I don't think their 2005 rates will hold.

AAI had a few poor performing years and AAI's predecessor, Valuejet, went tango uniform in less than 12 years, should I therefore conclude that perhaps no AAI pilot will make the vaunted 12 year mark.

Of course not. VJ didn't go under however. VJ bought Airtran Airways for the name. It is still a viable business entity today.

The analogy started with a hypothetical AAI 12 year B717 captain. None of which exist, by the way, nor will there be any in 2004 or 2005, that's why it is hypothetical.

False again.

You make a good point about AA not being bankrupt, but their contractual concessions were driven by impending bankruptcy. They effectively gutted their own contract. Doesn't say much for the APA.

Or maybe it says a lot about them. Perhaps they saw the writing on the wall. Either let the company gut the contract on their own terms in BK or bargain it out without driving their company into BK. I'm not sure what it really says about the APA. Draw your own conclusions. Let's see how your concessionary talks progress.

As far as NWA or DAL future rates, who knows, maybe those numbers will change in 2005 or 2007, or maybe they won't.

Again, I can virtually guarantee they will change. To what degree they'll change I have no idea. I hope they don't change much of course, but I am a realist.

I also didn't discuss top end pay. What's the best an AAI captain can expect to make after 25 years with the company in a 737 (an airframe they still don't have on the property) versus a 25 year NWA 747-400 captain?

This is relevant HOW to the discussion? This isn't a "whose watch is bigger" contest. This all started as a discussion on retirement packages and morphed into a LCC vs. Legacy Carrier discussion. Point is....some of the legacy carriers have far worse overall compensation packages then Airtran/ATA for similar aircraft. That is a fact.

Sam

 

[Freight Dog]

OK... I'm openly trying to hijack this thread and return it to the original.

My airline (Aloha) is unique in a sense that we only fly 737's, yet we're not considered a LCC. Looking at Airtran's retirement package, it's not bad. We have A-plan, B-plan (currently 7% contribution), and nonmatching 401K.

I'm a young guy, and I will have had 33 years with Aloha when I turn 60 barring the unforecast ticker or other problems, but one thing is for sure:

I REFUSE TO COUNT ON MY AIRLINE RETIREMENT! I've seen too many people put all their eggs in one basket and lose everything. I've seen people get wiped out right after the market crashed immediately after 9/11. Talk about a reality check... I'm doing my own retirement completely separate from my airline career.
Now, if Aloha is still around when I hit 60, and our retirement remains the same, I'll happily retire as a gazillionaire from my own retirement and Aloha's retirement... but if someting unforeseen happens... I know I won't be kicking the can down the street either.

Merry Christmas to ALL!

 

[FDJ2]

Wow, just saw this bit of textural diahhrea from FDJ2:

We are talking about "current" 12 year rates, right? You should also note that no AAI pilot is at 12 years yet, nor will there be any 12 year AAI pilots in 2004 or 2005.

Wrong-o Champ. We have over 35 guys who are in their 11th year today. If you really want to talk facts, feel free to ask, but don't just pull numbers out of your tailpipe, alright?

Ah yes, your ValueDeath roots, how could I forget. A terrible accident which was due to the criminality of your sub contractors and the convenient turning the blind eye of your management team.

 

[FDJ2]

VJ didn't go under however. VJ bought Airtran Airways for the name. It is still a viable business entity today.

Now why would ValueJet purchase a new name?

Back to the subject at hand, there are no 12 year AAI captains on the 717 in 2003. There will be some former ValueJet guys in 2004 who will obtain that lofty 12 year mark, not many, but a handful due to their Valuejet days, a fact that I was not aware of. But like I've said numerous times, this is not a perfect analogy, neither was the original example by FB717, which highlighted 12 year 717 rates, which no one has obtained, and then compares them to those of a bankrupt carrier and an extorted concessionary contract and then claims that AAI is somehow setting some benchmark wage rates for others to aspire too.

You insinuate that the APA saw the writing on the wall, I think they had the wool pulled over their eyes. I guess it's just a matter of perspective. At the end of the day we each have to make our own career decisions, I choose to work for a carrier that's been around a while, has both an extensive international and domestic route structure, has industry leading pay and benefits as opposed to a start up airline. Sure some of the legacy carriers have gone under,or been acquired, but not the overwhelming majority of them. The same can not be said for the start up carriers.

 

[Sam Fisher]

At the end of the day we each have to make our own career decisions, I choose to work for a carrier that's been around a while, has both an extensive international and domestic route structure, has industry leading pay and benefits as opposed to a start up airline. Sure some of the legacy carriers have gone under,or been acquired, but not the overwhelming majority of them. The same can not be said for the start up carriers.

Ah, I'm sure you've heard this before but remember....

You'll never know if you made the "right" choice on your career airline until the day you retire. Luck has a lot to do with it. To think otherwise would be laughable in my opinion. I am sure there were plenty of guys who were "the best and brightest" at Pan Am, Eastern, and Braniff, etc.

I one day hope to work for one of those strong, network-type, industry-leading carriers. In the meantime, I will continue plodding along in my small jet, all the while working to make our compensation, benefits, and work rules better at this level in the industry.

Sam

 

[Ty Webb]

What are you, about 12? What kind of an idiot thinks this is funny? If I wanted to stoop to your level, I'd start throwing mud about the various crashes and mishaps that Delta has had, but I am a better man than you, apparently.

Never one to be encumbered by mere facts, you stumble forth again:

There will be some former ValueJet guys in 2004 who will obtain that lofty 12 year mark, not many, but a handiful due to their Valuejet days, a fact that I was not aware of.

Here we go again, Chief. There are also original AirTran Airways guys who are in their eleventh year, right now.

Why don't you stick to a subject that you know something about- like how many gerbils are hiding out in your colon- and leave the AAI stuff to us?

 

[R985]

A-fund (traditional pension plan) vs. B-fund

I would like to return this thread and this forum back to the reason for which it was started but first a word or two. I am ashamed of the mudslinging between some of the so-called professional pilots on this forum! I have been a professional pilot for over 27 years and have never seen anything so embarrassing or unprofessional on a public website. We all know that pilots have been known to “eat their young” but in the past we have done it privately in the crew rooms, crash pads or on our own private forums that had restricted access!

For the pilots that want to jump on the old ValueJet/AirTran crash band wagon! Just remember there are several families that are still suffering from the loss of that aircraft and two of those families are pilot families just like yours! The holidays are a particularly hard time for them. They should be mentioned in your prayers not your mudslinging!

Just remember it is not the size of the aircraft or the salary you get paid that makes you a “professional” pilot but the right attitude.

P.S. Arrogance is not part of the right attitude!

Now what was we talking about? Oh yes, retirement plans.

One of problems facing the pilot groups trying to negotiate a retirement plan with the traditional A-fund is it takes a lot of up-front money to “seed” an A-fund. Depending on the age of the airline and the number of pilots retiring in the near future it may take several hundreds of million of dollars to set up a fund that is viable for years to come. Remember there has to be enough money to take care of immediate retirements and the seed money must make up for all of the back years the fund did not exist and leave enough for future retirements. This seed money must grow as the airline and the pilot group’s wages grow over the years. When the stock market returns are not doing well then neither is the A-fund. The airline must then put in more money to keep the pension from being “under-funded”! That can lead to a lot of zeros! XXX,000,000 This money must come from somewhere in the compensation pie (package) during negotiations. In an airline that is in an expansion mode that means there is less money to lease aircraft, gate space and train pilots. In a down economic time in the airline industry like now, it may mean there is not enough cash in the bank to ride it out until the good times come back around. Because of the high cost of starting up a traditional pension and the possibility of losing all or part of the money if the airline goes out of business ALPA national has gone more for a B-fund type of retirement. I can not speak for every airline’s B-fund but at ATA that money goes into an account at an investment company that the airline and the union do not control. That money is controlled by the pilot and can be invested in mutual funds and stocks like a traditional 401K account. After five years with the company the pilot is “fully vested” and if the pilot leaves, retires, or gets their self fired for some reason the money is his and the company can not take it away. If the company goes out of business or is bought out the money is the pilot’s. The company can not borrow from it or under-fund it by not making payments (check out Hawaiian Air’s A-fund pension problems). I personally want my money up front and I will take the risk of investing it wisely. (A B-fund in hand is better than an A-fund promise in the bush) By the way, there is a limit to how much the company can match on the B-fund. The government will only allow them match the first $200,000 of income you make as some of the pilots at ATA found out this year! Make sure you have a provision in your contract that the matching portion that can’t go into the fund in put in your check so you can invest it somewhere else.

For the guy researching LCC retirement plans: ATA has a B-fund and a 401K that the company matches at .60 cents on the dollar up to 6% of the employee’s salary.
Example: FO making $90,000 (some make more by the way at ATA) puts in 10% of his/her salary in the 401K = $9,000
Company match is .60 x $5400.00 (6% of $90,000) = $3400.00 for that year

(PC) Happy Holidays