Leaving ASA, & age 65

[JoeMerchant]

It's amazing to me that ALPA doesn't want this approval. Even though their President has been more enthusiastic about the change than Duane Woerth was. It's the ALPA President's signature at the bottom of all of those concessionary agreements that make it necessary for pilots at certain airlines to fly past age 60. Without the erosion of benefits and pay folks could comfortably retire at 60 as done in the past. In my view, ALPA's long-standing approach to negotiations and hard-lining have made these circumstances a reality. Being unwilling to be dynamic and adaptive in less than stellar economic times have contributed greatly to this problem. It's not entirely management that is the source of the legacy pilot's position.

A pilot's earning power is greatly increased in those last few years and in a few cases, with specific airlines, it is well over the $1,000,000.00 mark. I am not necessarily excited about the possibilty of my upgrade time being extended by another year or two, but the overwhelming benefit in the long-term mandates that I look at the possibilty of what 5 more years can do for me, financially. It is not my intention to fly past 60, but I should be able to if my physical isn't in question. This rule is predatory and arbitrary and needs to be removed. If it stays in current form then all commercial pilots, ATP or not, need to retire at 60. This is the only equitable way to do it. How is a 64 year old Gulfstream pilot safer than a 63 year old 737 pilot?

This issue has personal ramifications for every 121 pilot. Therefore, the vote is a personal decision and mine is for age 65. I hope the day doesn't come when I need to start over late in life; but if it does, I would be hard-pressed to replace my earning power as an appliance salesman at the Home Depot.

The only side-note that I would add to this rant about saving the old-farts is that I believe that those already retired have missed the boat and cannot revlaim their position at their old airline with their seniority. This would cause some of the worst infighting that the industry has ever seen. Unfortunately, someone has to fall on the sword here and it shouldn't be active pilots.

Well said Dude. Things going well? We miss you in the Bada Bing lounge...

 

[JoeMerchant]

Someone else has to fall on the sword eh? Your hypocrisy is nothing short of astounding. Everyone else should take one for the team except you. Stop trying to sell the young guys a bill of goods. Your proposal is damaging to them. Go clean your dentures.....

rtmcfi,

Dude is a "young guy", that understands the big picture. It isn't just old guys that support a change to the age 60 rule. Some of us understand the economics and support a change long before we reach 60.

Dude eats too much Nathans to have dentures.......

 

[BEXFlyer]

ATRdriver,

I think you need to take into account the lost money over the years, and I believe that is how fins spreadsheet works - he can shed more light on it. For example, as a 12 year ATR captain, I made about 90K last year. If I went to CAL today, I would lose about 60K next year. Assuming I go to the 700 as fins did in his spreadsheet, I can see how it would probably take about 10 years to get back to even. Over the next couple of years, I would lose over 100K and would have to make that back when I started making more. Until I made captain, my hourly rate would never reach par.

Hope all is going well with you at CAL.

It is called opportunity costs, and is a real number....."I would have made 100k at Regional X in year 10", "But at CAL the first year, I will make 30K" You are already down $70K in your year 1 Break-even analysis. (not to mention any $$ that you have to borrow to cover your expenses in year 1 at CAL. Even if you borrow from your own savings...say 30K.....you have to factor that in. You need to "pay yourself back" in a proper break-even analysis. Lost opportunity costs + amount you have to borrow from yourself, gives you the real number. Above example.....70K (lost) + 30K borrowed.......leaves you down 100K in year one for a "true" analysis. Once you put yourself in a hole, It takes many years to dig yourself out.....tortise and hare kind of thing. For myself, i figued (10 year Eagle Cpt.) it would take me 8 years to break even (If I upgraded to Cpt. at CAL in year 7) (worst case senario age 65) Would love to go over to CAL, not fair to my family to do so.

 

[JoeMerchant]

It is called opportunity costs, and is a real number....."I would have made 100k at Regional X in year 10", "But at CAL the first year, I will make 30K" You are already down $70K in your year 1 Break-even analysis. (not to mention any $$ that you have to borrow to cover your expenses in year 1 at CAL. Even if you borrow from your own savings...say 30K.....you have to factor that in. You need to "pay yourself back" in a proper break-even analysis. Lost opportunity costs + amount you have to borrow from yourself, gives you the real number. Above example.....70K (lost) + 30K borrowed.......leaves you down 100K in year one for a "true" analysis. Once you put yourself in a hole, It takes many years to dig yourself out.....tortise and hare kind of thing. For myself, i figued (10 year Eagle Cpt.) it would take me 8 years to break even (If I upgraded to Cpt. at CAL in year 7) (worst case senario age 65) Would love to go over to CAL, not fair to my family to do so.

I agree Bexflyer and I understand the math. For some of us, it doesn't make sense given the new compensation numbers at the majors.

 

[rtmcfi]

rtmcfi,

Dude is a "young guy", that understands the big picture. It isn't just old guys that support a change to the age 60 rule. Some of us understand the economics and support a change long before we reach 60.

Dude eats too much Nathans to have dentures.......

Dude may be young, but I'm not so sure that he understands the value of money over time. There are relatively few people who benefit from a change in the retirement age. Only those approaching retirement. For everyone else, the economics are horrible. This will cost the airlines, the public, and generations of pilots. Those of us that can see the big picture support the current stucture long before we reach 60.

 

[JoeMerchant]

Dude may be young, but I'm not so sure that he understands the value of money over time. There are relatively few people who benefit from a change in the retirement age. Only those approaching retirement. For everyone else, the economics are horrible. This will cost the airlines, the public, and generations of pilots. Those of us that can see the big picture support the current stucture long before we reach 60.

I'm not going to speak for Dude, as he is quite capable of speaking for himself, but I do believe he understands the value of money over time. The fact is, as life expectancy increases, so must the retirement age. It is simple math. This is the problem with Social Security and Pension plans. Retiring at 60 made sense with a life expectancy of 65, but not at 75. The numbers for most people don't work....

 

[ASARJMan]

Wow, that is a great reserve system. Sounds like reserves at Air Tran have it better than line holders. IF this is true, then I think the line holders are getting the shaft. Why should a reserve get it better than a line holder?

Any Air Tran types want to confirm this reserve system?

Mr Knowledge appears again! Listen asadrivel, you get what you negotiate. But you'll never understand that will ya. Loser.

STRIKE ASA!

 

[redflyer65]

Just curious.

What is the pay structure of an ASA IP?

 

[wms]

Wow, that is a great reserve system. Sounds like reserves at Air Tran have it better than line holders. IF this is true, then I think the line holders are getting the shaft. Why should a reserve get it better than a line holder?

Any Air Tran types want to confirm this reserve system?

It is true, and there are great rules for lineholders, too. Also no junior-manning on your last leg.

 

[Gummo]

I agree Bexflyer and I understand the math. For some of us, it doesn't make sense given the new compensation numbers at the majors.

Actually Bexflyer's math is wrong. He is double counting the 30K that he "borrows" from himself, since it simply reflects a personal choice for dealing with the 70K income shortfall. He chooses to burn through the 30K in savings, when he could drastically cut his spending (kids, we're having ramen noodles again) and not touch his bank account.

Think about it this way- you earn 100k your last year at ASA and 30 K the next year at CAL. Your combined income for the two years is 130K, not the 200K you would have if you stayed at ASA. You would be 70k short, not 100k short.

Now if you want to be more rigorous in the analysis, you should also account for the time value of money and inflation. That is to say that money earned in the first year of the example is worth more than money earned in the second year, both because it will have more buying power (inflation) and it can generate a return in the second year (time value of money). Of course in the long term these factors (esp. inflation) are balanced by pay increases, unless you work for ASA and are pay frozen at 5 year old rates.

 

[Britpilot]

It is true, and there are great rules for lineholders, too. Also no junior-manning on your last leg.

I can confirm those reserve rules. I was on reserve (737) for three months and the lowest credit I received was 92 hours. As a line holder my average is 85 hours. In December it was 103 hours, January 85 hours and projected for February 95 hours.
Reserve was a pleasure here and the extra money was nice being on first year pay. If you live in the Atlanta area, reserve is easy.

 

[BEXFlyer]

Actually Bexflyer's math is wrong. He is double counting the 30K that he "borrows" from himself, since it simply reflects a personal choice for dealing with the 70K income shortfall. He chooses to burn through the 30K in savings, when he could drastically cut his spending (kids, we're having ramen noodles again) and not touch his bank account.

Think about it this way- you earn 100k your last year at ASA and 30 K the next year at CAL. Your combined income for the two years is 130K, not the 200K you would have if you stayed at ASA. You would be 70k short, not 100k short.

Now if you want to be more rigorous in the analysis, you should also account for the time value of money and inflation. That is to say that money earned in the first year of the example is worth more than money earned in the second year, both because it will have more buying power (inflation) and it can generate a return in the second year (time value of money). Of course in the long term these factors (esp. inflation) are balanced by pay increases, unless you work for ASA and are pay frozen at 5 year old rates.

How can you say my math is wrong when that IS my personal situation. You do not know what my expenses are, nor do I expect you to grasp the concept of opportunity costs or a "true" break-even analysis.....because you clearly do not. Yes, In 2 years I would have made 130K at Eagle/CAL, but also YES, I would have made 200K in 2 years if I stay at Eagle....real numbers. Try a few MBA courses and you may "get it"......or even a junior college Finance 101 class.

 

[Speedtape]

Are you taking into consideration the $20,000 you lose in the first year of moving to Air Tran? Even second year in your example, I find it hard to believe that you can get within 2000 dollars the second year at 56 vs. 67 dollars.

Are you taking into consideration that this company is nothing more than a temp agency? Are you taking into consideration that this company is not an independent stand alone "free market enterprise" company? Are you taking into consideration that this quasi company is mismanaged by a bunch of airline rejects that can't pay you properly, can't execute simple business functions like sending out valid insurance cards, answer phones at the GO, return phone calls to support team members regarding processes to do their jobs properly, can't answer phones regarding questions about basic benefits?

The chances that this quasi company will even be in business in 7 years is a dice roll at best.

 

[Dude]

rtmcfi,

I am painfully aware of compounding and what my money, today, does for me tomorrow. What I am trying to articulate is that this industry is full of folks that will benefit from the rule change and I believe to be among them. One cannot argue that recent events and the current state of our industry has left thousands without viable options for their retirement and their cost of living when they approach retirement. If you are one of those that has been able to invest well, make stellar decisions, keep your job and benefits, and make a handsome hourly rate for a prolonged period of time, then I congratulate you. If not, where is your head and the others that agree with you? I will attempt to tell you; it's five feet in front of your nose and you have the depth perception of an airline dispatcher. My intent is not to insult you and those that disagree with the rule change, but the prevailing argument in defense of the status quo in age 60 is flawed and shortsighted. My additional time as a first officer, and the money sacrificed, will be far overshadowed by the $1,000,000.00 that I have the opportunity to make past 60.

What if you have done everything right and all of the sudden you have a diabetes, vascular, neurological, or other potentially catastrophic problem at 56, 57, or 58? You will most likely lose your medical and fight to get it back and when you finally do, you're 60. What about this scenario? This is not only plausible, it happens regularly. With these things in mind, it is incumbent upon all to preserve what's left of our profession and ensure that we are able to earn as long as possible. Your inability to upgrade at 5 years versus 6 or 7 years, pales in comparison to the effect that this rule has had on thousands of our predecessors and thousands more to come. If you are at an airline where you cannot live comfortably for an addtional couple of years on FO pay then go somewhere else. I can live on $130,000.00 plus for another year or two.

Hey Joe,

Send some Nathan's, I'm dying out here. Not that enchiladas aren't great, Nathan's is just kickin comfort food, yo!

 

[Gummo]

How can you say my math is wrong when that IS my personal situation. You do not know what my expenses are, nor do I expect you to grasp the concept of opportunity costs or a "true" break-even analysis.....because you clearly do not. Yes, In 2 years I would have made 130K at Eagle/CAL, but also YES, I would have made 200K in 2 years if I stay at Eagle....real numbers. Try a few MBA courses and you may "get it"......or even a junior college Finance 101 class.

I didn't realize that principals of mathematics vary with ones personal situation. Apparently you have your own personal version of addition and subtraction, right?

Now take a deep breath and go read what you wrote the first time, look up the meaning of the term "opportunity cost", then see if you can follow along. Check out Wikipedia http://en.wikipedia.org/wiki/Opportunity_cost or The Economist web site http://www.economist.com/research/Economics/alphabetic.cfm?term=opportunity#opportunitycost

In your little scenario you have already assigned a value (70K) to the opportunity cost. That is the amount that you wouldn't earn during the first year at CAL. I think we may even be in agreement on that.

The problem you get into is where you try and add in the amount you "borrow from yourself" to deal with the income shortfall.

Even if you borrow from your own savings...say 30K.....you have to factor that in. You need to "pay yourself back" in a proper break-even analysis. Lost opportunity costs + amount you have to borrow from yourself, gives you the real number. Above example.....70K (lost) + 30K borrowed.......leaves you down 100K in year one for a "true" analysis.

That is not an additional cost beyond the 70K that you didn't earn. As the Wikipedia entry says "Note that opportunity cost is not the sum of the available alternatives, but rather of benefit of the best alternative of them." You are not down 100K, you are down 70K. Your "true" analysis is in fact in error. There is a 70K hole in your finances after your first year at the new job and you have chosen to fill it in part by taking 30k out of savings, but the 30K is not a separate, additional cost.

I should note that there is in fact an opportunity cost associated with using the 30K to live on, since it could have been put to a productive use such as earning interest. This is what I was alluding to in my comment about the time value of money. It is a parallel to the interest cost you would incur if you borrowed 30K to live on while you took the new job. You would need to consider if you were trying to do a detailed analysis of the alternatives.

Now did you get that Pookie, or do I need to dumb it down some more for you?

 

[BEXFlyer]

Pookie,

Not ONCE, did I call the 30K that I borrowed from myself an "opportunity" cost. It is part of my "break-even" analysis, which must be factored in.

Please reread ALL posts on this thread and get back to me......No, wait.....Please reread ALL post on ALL threads in Flightinfo and get back to me.

 

[Gummo]

You know it sucks to be wrong, especially when you've chosen to make an ass of yourself in public. Maybe you should just apologize to me and get on with things, rather than continuing to prove yourself a fool.

I was just pointing out that your analysis was mathematically incorrect and I tried to explain why the difference between 200K and 130K is 70K and not 100k. That sent you off on a rant about how I can't "grasp the concept of opportunity costs or a 'true' break-even analysis" and how I need to go to junior college to equal you great intellectual achievements. Since you seemed to think I don't understand opportunity costs, I thought you might be confused yourself.

Of course, Buttercup, you can stick to your guns and use your fallacious analysis. Perhaps it consoles you in your failure to get a better job.

 

[Muff-N-Man]

For DAL?

Fins, I've done similar scenarios, but not quite as in-depth. Have you run the numbers on DAL? I get about 3-4 years for parity there.

 

[DrunkIrishman]

Age 65 was a reg based on *ahem* safety. It has no validity in the argument for career impact of active pilots. Sorry.

 

[Muff-N-Man]

Using the numbers from airlinepilotcentral here are some of the numbers a spreadsheet analysis of moving on from ASA generated. My assumptions included upgrades within 2 years of the current low upgrade times at each airline, and the numbers began for a Captain with 7 years at ASA. At every airline I tried to figure out a percentage for all the available benefit programs, but my numbers may be low at FedEx since it is hard to make future cash value assumptions on A plan retirement programs based on 2% of FAE and years of service.

Time to break even on total pay and benefits:
Continental: 8 years
AirTran: 9 years
Fed Ex: 11 months

Total Pay and Benefits after 20 years:
ASA: 2,000,250.00
Continental: 2,985,343.60
AirTran: 2,753,214.60
Fed Ex: 4,293,187.50

Total Pay and Benefits over 25 years:
ASA: 2,541,000.00
Continental:3,966,277.60
AirTran:3,619,347.60
FedEx:5,769,750.00

The effect of age 65 on ASA's earnings would be $541,000 at current rates! But the effect at FedEx would be nearly $1.5 million in today's money. Wish Flightinfo's formatting would allow me to dump the whole chart in here for your perusal.

Since there are several airlines close to these airline's compensation structures hopefully this provides useful, relevant, information to anyone who is curious.

Have you run this for DAL? I've done something similar, but not as in-depth, and came up with 3-4 years.