Let's Start an Airline-Hypothetically

[enigma]

I don't think that the majors are going out of business because they can't schedule pilots to everyone's satisfaction.

Of course not, and thats a point that I was trying to make on a previous thread. Airlines go down because of factors like fuel costs, overexpansion, accidents, etc. Overpriced, underworked labor is a symptom of poor management. Managers who are focused in on squeezing the last ounce out of a pilot are ignoring other more important aspects of the business. I think of it as the, stumble over a dollar to pick up a penny, syndrom.

regards,
enigma

 

[Dragonbravo]

We need more details to really get into this. Some great questions have been brought up. What type of operation? What bases? What cities are we planning on serving? Astra, you need to start giving more info. Are you sure you aren't don't this for Kapps?

 

[TonyC]

There are a number of private investors that want to start an airline. They want to be the leader in customer service and consistent high levels of performance and reliability. They are in the exploraty stage of building this airline. Because they know that their ultimate success will be dependent upon hiring highly qualified and motivated employees, they are willing to permit six members of the 11 member board of directors to come from their workforce. Members of the board will serve no longer than two years.

The investors will guarantee funding for the purchase of airplanes, support equipment, gates, etc., to keep the airline afloat for the first five years.

From their market analysis they have determined that a 200 passenger airplane capable of flying coast to coast might be their best option but they are open to suggestions.

The investors are adament about keeping their workforce non-union and are willing to pay above median scale to accomplish this.

Due to your airline experience and apparent business knowledge from testing they want you to join their team. Your input will help establish pay rates, upgrade times, work rules, benefits etc., as a minimum but they are also looking for input in all areas of their operation.

Hiring mins are expected to be high due to their idea that their ideal crew would be headed by two Captains, alternating crew days in the PIC/SIC position. That being said they will start with highly experienced Captains and FOs. Upgrade times are expected to take two years from FO to Captain. Having two captains on board will be used, along with high levels of customer service, to seperate themselves from their competition.

Anyone interested?

Since so many of the parameters have already been fixed, we'll just have to run with them.

HIRING MINS: 4000 TT, 2500 JT - - Type rating in company aircraft required. Interviews will only be given to personal acquaintances of memberes of the board.

Other personnel (Handlers, Mechanics, Gate Agents, Ticket Agents, etc.) All positions will be filled by pilots with the above min quals. See scheduling below.

Scheduling: Pilots will bid on lines that consist of flying trips, serving as CSA, ticket agent, gate agent, and other ground support personnel. Only when all of these positions are manned by pilots will the company benefit from a unified thought process, whereby everyone appreciates the role of all the other players. A typical line would consist of 3 days flying, 3 days as a Gate Agent, 3 to 4 days as a Ramp rat/baggage handler, and 3/4 days in other support functions.

CAPT of the Day: When two Captains are assigned to the same leg, they each will be given the opportunity to speak from the podium to all ticketed passengers for that leg. After a maximum of 1 minute speech from each, passengers will indicate by raising their valid boarding passes which of the two captains will act as PIC for the leg. In the event of a tie, the Gate Agent (who is also a Captain) will choose one of the two who will then be removed from the flight to continue serving his day as the New Gate Agent - - the old gate agent will then assume PIC duties for the leg. In the event that such an occurence leaves either or both Captains away from their intended overnight, both, or either, will receive a First Class ticket and a free day of travel to return to his intended RON location. 200% pay premium will be paid for this disruption.

All Captains will receive 2 months of paid vacation the first year, and will accrue an additional 1 week of vacation for each year thereafter. Pilots electing to forfeit 1 day of vacation to serve in a support duty (CSA, Gate agent, handler, etc.) will be credited an additional month of vacation. Any Captains who forfeit 10 days in one year to serve in a support function will then be entitled to 12 months vacation each year, hence retirement plans will be unneccessary.

RETIREMENT: Captains electing to take all vacation due must work 15 years before being eligible for full retirement at 135% of 12 times the highest monthly salary ever recieved. Highest monthly salary ever recieved includes any month the Captain was ever employed by any airline at any time. (EX: Captain was paid $23,000 during one month at airline X - - retirement would be 12 x 23,000 x 1.35 = $372,600) Captains who elect to retire earlier than 15 years will incur no penalty for early retirement.

In addition to regular vacation, each pilot will receive the month of his birthday off as extra vacation. Pilots who choose to work during the month of their birthday (or Christmas, or New Years, or Valentine's Day, or St. Patricks Day, or Mothers Day, or Independence Day, or Labor Day, or Memorial Day, or Father's Day, or Halloween, or Thanksgiving, or Grandparent's Day, or Secretary's Day) will be compensated at 150% of their normal pay rate.

COMMUTING:
Pilots will be paid per diem at $50/hr and be given First Class deadhead tickets from their home of record to their domicile in addition to one day's regular pay in ordeer to travel to domicile prior to beginning a trip. If the scheduled or actual block hours of that deadhead trip exceed 1 hour 30 minutes, the pilot will receive a day of rest and a paid hotel room (4 star or better) paid at 150% normal rate. Upon completion of a trip, Captains will receive a day of rest and a paid hotel room at 150% normal pay rate, and a First Class deadhead ticket to home of record. Again, perdiem will be paid at the rate of $50/hr.

TRAINING:
NA - - All Captains must be trained prior to hire, and will remain proficient by flying the line.

SCOPE:
The Company promises not to hire anybody to do the job cheaper than the pilots on the Master Seniority List. Pilots that demonstrate superior airmanship, personality, and nose-rubbing skills will be offered first choice in bidding assignments. Seniority determines nothing - - only your ability to get along with the cheief pilot.

Hub-and-Spoke vs. Point-to-point:
Will be decided on an as-needed basis for each leg. Captians (PIC, SIC, Gate Agent, CSA, baggage handler, and tug driver) will conference before each revenue leg and determine whether the leg should flow into a hub-and-spoke arrangement, or simply be point-to-point - - Gate Agent will call ahead after block-out to the destination station to advise which system the flight will feed into. Destination station will then call in Reserve Captains - - oh, wait - - we won't have reserves in this airline - - never mind. OK, if it doesn't work out at the Destination station, the Gate Agent will advise all the passengers waiting in the gate area that they will be reticketed on another airtline in First Class with triple frequent flier miles.

Workrules can be renegotiated as often as desired by the pilots, but they can never be detrimental to the pilots. Any change must result in an incremental increase in hourly rates, retirement benefits, and uniform allowances.

And, speaking of uniforms.

All Captain must wear a full uniform - - dark slacks, white shirt with epaulets, 4 gold bars, a dark tie, and of course the dark blouse. Hats are mandatory. Shirts only come in Size 16½/33 - - pilots must fit the shirt to be hired.

OK, I might have missed some details, but that just about covers the important stuff, right?

 

[enigma]

Tony, man your TOUGH. LOL

cheers,
enigma

 

[Astra Guy]

I have a few minutes here. As for the workforce the founders believe that all should be internal and not contracted. It builds for better cohesion. As for the aircraft the idea is one type of airplane that will seat 200 folks and go coast to coast. There should be a small business class with upgrades similar to what AirTran has in place. Enigma brings up a good point about commutes. 4 on and 5 off sounds like a good mix considering the possible commute. Our goal here is to determine the airframe, for one. As for the bases what about LGA, Baltimore...ID escapes me, MIA, ORD, ATL, DFW, LAX, SFO and SEA? This would allow for some business activity as well as vacationers.

As for compensation for employee board members it amounts to a six year contract for them, two on the board, the first year in developing the system, the second year after kickoff and four flying the line. Compensation at the highest level for a line pilot while on the board should be equitable. Remember the board members aren't investing any of their own money...they are helping to build the model and determine the infrastructure to make this airline profitable for investors as well as employees.

Lots of good questions posted here. I knew the airline guys would chip in and their experiences help mold a reasonable model.

 

[TonyC]

Tony, man your TOUGH. LOL

cheers,
enigma

My kids say that, too.

I've been rethinking the whole thing, and you might be right.

Hats should only be mandatory when operating as the PIC. That way, the customers can more readily identify the guy what's in charge.

 

[enigma]

It seems that I didn't make myself perfectly clear. I didn't mention the number of days a pilot should work in between blocks of days off. Some of you seem to have perceived that I was proposing 4 on, 5 off. Not true, I would be happy working 5 on, five off, or even 6on, 5 off, 5 on, 5 off, and so on.

As long as working days are limited to no more than 18 days (calender days) a month, and I get day off blocks long enough to get stuff done at home, I'll be happy.

regards,
enigma

 

[bart]

Hats should only be mandatory when operating as the PIC. That way, the customers can more readily identify the guy what's in charge.

What happens if the gate agent has to break a PIC election tie and left his hat at home? Can he borrow the tug drivers or would he have to give up the slot to the baggage handler?

 

[Astra Guy]

Enigma,

I (we) appreciate your input. We will surely take what you say and weigh it appropriately.

Regardless of some other nay sayers I think that if we go through the process and cover every aspect that management and employees need to deal with that everyone might learn something. If nothing else then a few of us will get more educated and have a better understanding of what you folks deal with daily.

I know you said you weren't interested in being involved but we would like to have your input as we go along...much as you have given so far.

Ron

 

[Publishers]

Geez

Geez guys, I want to be pilot friendly too.

The problem is that the people that say you have 5 years probably will not give it to you if they start seeing a good deal of red ink they had not counted on.

One reasons that pilot started airlines fail is that they think exactly like you guys have been talking about.

When I was in the aircraft leasing business, the one thing we did not want to hear when someone approached us about leasing an aircraft was that it was a new carrier started by pilots. It was the kiss of death to getting the aircraft. Same thing when we were doing an airline certification program, pilot groups were to pay everything in advance.

Enigma wants his time off and good for him. As an airline executive, my hours were at the 60 plus a week level and I traveled about 250,000 miles a year. My wife divorced me because she never saw me. I* would have loved one of these 5 on 5 off deals.

One of the things that gets me in these boards is all the griping about duty time and workload. The pilots that I play golf with are always laughing about how little they are required to do.

One reserve pilot I know went nuts because they called him for a flight the night he had a party scheduled. It was the only time in the whole month he had to fly at all.

 

[Astra Guy]

Hey Guys,

I haven't had enough time today to read through all of the posts. Been doing my regular job, you know. The thing to remember is we will not be able to put all of this together overnight. I think I posted some domiciles. as a starting point. Those can be modified. If we want to do this right then we will need some input on aircraft choices, operating costs, seat-mile costs, maintenance considerations, etc before we can even chose an aircraft. Next we will need some scheduling support from someone who is in the business to give us an idea of crews/airplane and of course that has to take into consideration the route structure, legs, duty hours, etc.

While some have expressed how ludicrous this exercise is I think that there might be something to gain by going through the process. There will be others that drop by and give us there nickels worth and some of it will be credible and some, as you have seen will not be.

End game plan is to cover as many aspects as we can and then come up with possibly a viable solution to answer each question as they come along. This is not designed to create and ideal airline strictly from the least amount of effort for the most amount of money thing for crews. Those days are heading south fast.

And to answer someone's question I am not going to create a model for anyone. It is a learning exercise only. It might actually be able to open some eyes on some management problems that have to be dealt with to get something like this off of the ground and make it a lasting enterprise.

Thanks for all that have provided meaningful input so far.

 

[SDF2BUF2MCO]

Customer base

Bart and Shadow have alluded to it, but what kind of customer are you going after? Business, leisure, or all things to all people?
If you're going after the biz traveler might consider what JB does with the entertainment stuff and/or computer.
One thing that is for sure there should be a policy of no facial hair or tattoos allowed on female pilots or female flight attendants. Might not be PC though. Sorry couldn't resist.

 

[enigma]

Enigma,

I (we) appreciate your input. We will surely take what you say and weigh it appropriately.

..........

I know you said you weren't interested in being involved but we would like to have your input as we go along...much as you have given so far.

Ron

Ron,

I'm obviously ok with spouting off my opinions. What I don't want to do is become a "board member" and be obligated to continue when I run out of interest.


regards,
enigma

 

[Dragonbravo]

Whatever aircraft we go with, then we go with that one aircraft. 757's then we fly only 57's. Save huge on having a common fleet. Looking for diversity in the fleet then 737-300/500/800, whatever works for our needs. Keep as much the same as possible. We need to get other things set up before we worry about pilot schedules and quality of life issues. There will be a time for that later. I mean we don't even have an airplane or city pair yet and we're already discussing hats. (Personaly, keep the hats, lose the blazers. I hate wearing those things)

 

[Mr. Irrelevant]

Some funny stuff, but what I like of the original suggestions was only two years on the board. I think three years would be better as there should be some continuity. Also, capping at three years might keep the board members in the game so to speak. COPORATE GOVERNANCE is such a DISGRACE in America that something like that should be done. Too many board members just sign off on whatever the CEO tells them.

Publishers and Bart have it right about concentrating on profitability. If you want all of these great QOL issues for pilots, get profitable first.

I'd pay less than average with incentive pay for a profitable company. Same for every position at the company. This would require people that share the same vision for the company. There's no I in team, right??? Plus, no sick days. If you get sick and call in, you're paid for it. Abusers of excessive sick days get fired over time. That's just a pet peeve of mine.

I'd look for something less than a 200 person airplane as well. SWA has pretty much already covered these issues with JBLU attempting to do the same with a few additional angles thrown in. The street would let you know in far less than five years what your chances would be.


Mr. I.

 

[enigma]

Re: Geez

Geez guys, I want to be pilot friendly too.

After all of the arguments you make against pilots, I somehow have a hard time accepting that statement.

Enigma wants his time off and good for him. As an airline executive, my hours were at the 60 plus a week level and I traveled about 250,000 miles a year. My wife divorced me because she never saw me. I* would have loved one of these 5 on 5 off deals.

You worked 60 hours a week. As a pilot working a normal four day, morning shift, I will work 72 hours. If I work a five day shift, I will work ninety-six hours. As you know, I can only fly one thousand hours per year, a figure that works out to eighty-three and a third hours per month. If you divide eighty-three by eight hours, you get ten point four. If you divide eighty-three by six you get thirteen point eight. What this means is that an efficiently scheduled airline can only use a pilot for fourteen days at most.

So, I have to ask, If you can only use me 1000/1, 30/7, or 8 between rest periods, and I can perform those hours in fourteen days a month, what reason do you have for wanting me to put in more than fourteen days? You stated that you were an airline executive, so I have to assume that you were a scheduled carrier, not charter. If you were scheduled, what could you gain by keeping a pilot on duty for more than fourteen days a month? Even if you only had five hours of flying for me to do, you would still only need me seventeen days, so why the attitude towards pilots that want to maximize their days off? Does making your pilots fly more days a month make you feel more like you're getting your moneys worth?

I'll bet that you spent most work nights in your own bed. As an airline executive, you most likely moved to the town your line was based in and stayed there. I spend work nights on the road, as a pilot, I may not be able to live in base. My base may have changed due to managements continual indecision to do with efficient base staffing. I realize that my story is atypical, but at my first airline, I was based in four domiciles in two years. Only one of those moves could be even remotely my choice. My current line has moved me six times in four and a half years, only one was my choice(upgrade). I just have a hard time feeling sorry for long management hours.

One of the things that gets me in these boards is all the griping about duty time and workload.

I've flown twelve hundred hours a year back when commuters were 135. I've flown well over nine hundred hours in 121. I have SWA friends who manage to fly over 990 and still have seventeen days a month off. Heck, I've got one buddy who gets almost one month vacation and still flys almost one thousand hours on a four day a week schedule.

In conclusion, I consider it management job to run an efficient schedule. If they can't do so, I do NOT consider myself a lazy slacker just because I prefer to work an efficient schedule.

Why do managers consider me a lazy slacker for only wanting to work fourteen days?

I don't have any complaints about workload, and that's as it should be. I personally don't want to load my wife and kids on an airplane flown by a pilot who is stressed. Pilots MUST normally run at some level below 100% in order to allow them the mental processes necessary to deal with their world turning to worms. A situation that inevitably happens at the worst possible time.

enigma

PS, sorry about your wife.

 

[Astra Guy]

I think in deciding on an airplane that we should think about 757s and compare those from a performance, cost/mile/cost/seat-mile, maintainability...ultimately dispatchability against another airframe. I don't have the specifics on any of these airplanes but that should be accessible.

I do have a couple of ideas about what might seperate us from the others. The seating situation should not be setup like they were made for Asians. There needs to be leg room. A 757 might be comfortable in coach with a 3-2 setup. Not sure. I believe it has the capability to carry many more than the 200 threshold but if seating was arranged proplerly we could tone it down to a 200 seat airplane and possibly be cost effective.

Fare structure should not be setup as the legacy's have theirs. Simple and fair structure where we could charge a rate that with a 60% seat fill would break even. Walkup fares should not be more than 25% above 30 day out ticket prices. Upgrades to business class could be a $50 hit or some price that helps fill those seats.

As Enigma has brought up and from my own knowledge I know the airlines drive their folks into the ground on duty time on the days they work. Another way to help the airline market themselves as being ahead of the pack as well as keeping crews working a more normal work day is to limit their duty days to 10 hours. Can you imagine the ads that could be run that not only directly educate the flying public on tv and other medias about the 14 to 16 hour days that other carriers require? Do you think the flying public really wants to be in the back of an airplane late at night knowing that the crew is probably on the last leg of a 12+ hour duty day of that crew? I don't think so. I think a 10 hour day is enough...base the compensation around that model, 5 on and 5 off seems fair to me.

A combination of SWA, JetBlue, Airtran and other airlines might fit our model. What we have to think about is what is good and bad about each and take the best of all and apply those into our operation.

With the pricing structure I mentioned above I don't think we need to target a business type vs any other type of passenger. There would surely be a mix but I think basing airplanes at and setting up bases where there is a concentration of business traveling does make sense. One other base I didn't mention that could be added is Denver...primarily for the ski crowd in season and there is enough business there to keep things afloat in between.

Let's get some data on airplanes...keeping the fleet all of the same type and choosing that airplane first. We can work from there.

Thanks for all of the input.

 

[Astra Guy]

A couple of things here. Enigma brought up that management sets the schedules. Let's think about the empowerment concept that Shadow brought up.

First, I believe that the "management" will utlimately be coming from the workforce. The function of the founders' board members would be to focus on market analysis...providing statistical input to determine bases, expansion, etc. The function of the employees board members would be to run the operation. I like the term associates rather than employees since it employees does not connotate empowerment. Basically the founders have determined that they will provide some input that will lead the airline in the direction that will result in profitability, but with less than a majority on the board they know that some of their ideas won't fly. The founders are smart enough to realize that associates with line experience in the industry should be the best at running the day to day operations. In fact there will be a structure that leads to that very concept being put into place. There will be a CP, of course. There will also be Senior Pilots at each base. The Senior Pilots will report to the CP. The pilots will report to the Senior Pilot at each base location. The same concept applies to FAs, CSRs, Gate Agents, Ramp workers, etc. Initially these positions will be appointed based on interest and merit. However, there has to be a people management structure to cap that. A position that evaluates the evaluators and can make adjustments for non performers. Work objectives and target success criteria can be developed for each position.

The tenure of board members should be short enough to allow them to reap what they have sewn. In other words don't let anyone sit on a board so long that they lose perspective of what has happened to their associates and not feel the effects of that first hand.

 

[Astra Guy]

Let's talk about a compensation model. I mentioned a salaried structure.

Let's assume there is a way to establish work objectives, set a target success critiera for each work objective and then be able to measure that performance to determine how successful one has been in meeting that target success critieria.

Let's also assume that we can establish bonus objectives and a way to measure those from an individual standpoint. The bonus objectives would be established for each year's time table.

Now assuming we decided on a salaried structure then without getting into the actual numbers let's also assume that there is a way to pay the salary and measure performance above the median. That could reap a salary+ form of reimbursement. Annual reviews would create a way to measure the past year's performance and give the reviewer the chance to establish next year's rate based on last year's performance. Everything would be linked to the CPI. In addition to given of atleast a raise based on the CPI it would allow for annual increases up to 3% above CPI for the best performers.

There would be a Christmas bonus...one week's pay based on the current weekly rate of pay.

There would be an annual bonus. To keep it simple let's assume that 10% of the salary would be the normal amount for everyone, across the board. The makeup of this bonus would be dependent upon a 50% mix of company profitability and a 50% mix of individual performance. Bonus objectives would be established on the front end between the supervisor and the associate. There may be three or four objectives each weighted appropriately based on meeting those objectives and how they tie into profitability of the company. The result of a normal year would be a 10% of salary amounting to the annual bonus. There would be assigned a factor to determine how that % might change capping at 2. Let's assume that the company just met their profit goals in a year. The individual though met the criteria for a factor of 2 from his/her performance. The result is that the bonus now ends up being 15% of their salary. In the best years it could reap a 20% of salary being paid out as a bonus. In the worst years if profitability was way down the factor could be a .5 or less but if the individual kept exceeding his objectives at the rate of 2 then he could be assured of a 10% bonus. Make sense?

For those that will say that as a pilot you either do it right or you don't I can guarantee you there is a way to measure piloting performance. Has nothing to do with late departures, arrivals, etc. Has everything to do with semi-annual performance and line flights with a Check Airman aboard. There could also be a way to encourage ideas from them to help streamline the processes that have merit and are adopted. This same concept could be applied to all associate positions throughout the organization.

More on this later.

 

[bobbysamd]

Job openings?

We currently have reserve Captains that act a FO's if needed. I would recomend not starting out that way. You need an Capt and FO. not Capt and Capt. This way it is clear who is the PIC of the aircraft. Furthermore, each crew member has flows in acrodance with there duties. If you are a Capt. one day and an FO the next.

It's like the old story about how dangerous it is having two flight instructors on a flight with one training the other!

I haven't read each comment in detail, but you probably want to follow the model used by LCCs. Their employees have multiple duties, e.g., pilots who also work as dispatchers. Accordingly, any openings for someone who could instruct in the training department, assist in your legal department, and help in your public relations department? If so, then I'm your man. (Notice that I am not applying to be a pilot.) My mini-resume is to your left.

Finally, I, reluctantly, have to side with Pub only to the extent that you have to run your airline as a business. Of course, pilots love airplanes, and, to a great extent, management loves new whiz-bang equipment. History shows that, when, thirty years ago, so many companies jumped on the 747 bandwagon and lost their shirts. You have to select equipment that is proven, solid, and maintenance-friendly, and not necessarily cutting-edge.

Drop me a PM if you can use me!