Pilots in the job market--

[ozpilot]

Heres the AIN Article:

UNIONS ARE DETRIMENTAL TO FRACTIONAL INDUSTRY
Editor:
I am tired of AIN's coverage of the ongoing saga regarding IBT 1108 versus Netjets' management. Thank goodness the dispute is settled for now, but the pilot grousing issue won't go away.
No one forced these pilots to go to work for Netjets, and if the deal and working conditions are so bad, they should resign. If no pilots are available to replace them, I guess Netjets will have to soften the work rules for the available pool of pilots. However, I don't think that is the case.
I have more than a million air miles under my belt and, from my perspective, the same people who in no small part brought us the collapse of the major airlines will execute the identical slow-death routine on the fractional industry. This collective attitude will eventually destroy one of the better things to come along to rejuvenate business aviation and will make already hideous costs even more so.
Obviously, some of the passengers Netjets carries run public companies as personal-enrichment fiefdoms instead of for the benefit of their shareholders. Other passengers are just rich-either through earnings, inheritance or illegal means. I suspect that in some perverse way, these union flight crews justify their money and work-rule demands as a kind of a latter-day, union-enforced and mandated noblesse oblige. How disingenuous.
Samuel Kephart, CEO
Virtual Acumen
Spearfish, S.D.

 

[GVFlyer]

This is repeat of an old post, but it fits here. This is a pilot board so saying anything in defense of management is like peeing into the wind, that it is going to come back to you. CEO's are not intentionally running airlines into the ground. They would very much like to succeed. For lack of other reason it would make their resume look great, they would be doing something no other CEO had ever done. Top management includes many besides the CEO, the CEO sets direction as requested by the board. The CEO has little control over the airline, the airline is run by regulation and union contracts. They are at the mercy of the purchasing public, who with Internet access has made the airline ticket a perfectly elastic commodity. There is little they can do inside their structure. Other high paid top management personnel, in Operations, Maintenance. Marketing, Legal, Finance, etc. have unique skills in dealing with large organizations. This makes them marketable when shopping for a job, unlike pilots whose skills are nearly universal. An issue of ATW in the last year had an article about “Airline Management a dying breed”, the article basically said no one wants to do it. The good track record CEO’s are going to other industries. With tremendous, payrolls, overhead burdens, and extremely low margins, there is no tried and true path to success. Most have tried to increase market share, but this has lead to low price and ridiculous breakeven load factors in 95% range. What is management supposed to do? Eliminating management will bring the end quicker for the airplane industry, and their salaries are insignificant to the airlines operating costs. Without management you could not operate the airline, The FAA would shut it down without approved Part 119 key management. Would the pilots step up and become management for free in their spare time. Why is every time, pilot salaries come up, they are immediately compared to top management. I saw an article in ATW in the 2002 that stated at DAL there were 17 members of top management made more than the top DAL Captain. The combined top 17 salaries equaled less than 1/6 of 1% of the combined pilot salaries. If management worked for free all pilots in the company would get a 1/10 of 1% raise. (for a $100K per year pilot that would be $3/wk increase in take home) Boy that raise would really make the pilot group happy. Top management possesses skills that allow them to move from job to job and command high salaries. And every one of these managers wants to see his/her airline prosper. They just can not do it. Are they paid too much? maybe, should they be paid more than pilots? how are you going to attract a good CEO at pilot wages?

Good post pilotyip. You've explained in excellent detail why each of the legacy airlines must go through bankruptcy to restructure costs.

GV






~

 

[GEXDriver]

NetjetWife

Yes, the article had been posted on the NJ board. Semore paraphrased it very well.

When you add in their family members, that's a lot of lives that have been impacted in a positive way!
Let's not forget that once the momentum is under way, change becomes easier.

A RISING TIDE SHOULD LIFT ALL BOATS

Paddling, however, is required. Man the oars! Or cards........in this case.

You don't know yet if organized labor's increase of Netjet's operating costs will have the same effect it did on the airlines. It is particularly difficult to judge because the fractional industry is not yet a mature business and, at least according to SEC fillings, has never turned a profit.

You're words of today may come to be regarded much like United's ALPA chief Rick Dubinsky's 2000 statement, "We don't want to kill the golden goose. We just want to choke it by the neck until it gives us every last egg."

 

[FLYLOW22]

God forbid a pilot is allowed to make a career earning by just flying an airplane and not having 2 or 3 more fast food jobs on the side.

The $99 coast to coast biz model for the ailines is so far from broken that it is unfixable. Government subsidy is the only way to go from here... or we can trudge on to complete and utter meltdown as well.

As far as comparisons between the Frax industry and the 121 debacle... we don't strangle the Golden Goose... we fly it around. The Golden Goose is not going anywhere and enjoys the product that we deliver. NJA is not a Golden Goose. They are a middleman. If costs rise, the middleman gets to keep less. THe middlemanis not happy about that fact, hence the resistence towards labor to achieve livable wages. The middleman lost.

The middleman will continue to make money hand over fist and bury it between the sheets so that the world cannot follow it but who cares? We know that the amount of money being poured intot he machine vs. what is coming out is such a disparity that that idea of even worrying about where the money went hasn't even surfaced to our top 100 questions. We know the middleman can afford it.

Our 6's were not unreachable. Our goals were not outrageous. We achieved what we did because we sought reasonable expectations and did not settle for POSTA offers.

The pilots of NJA are not interested in the Labor/Management games. We are interested in taking care of our Owners and our families. The rest is ball bearings.

 

[GEXDriver]

As far as comparisons between the Frax industry and the 121 debacle... we don't strangle the Golden Goose... we fly it around. The Golden Goose is not going anywhere and enjoys the product that we deliver. NJA is not a Golden Goose. They are a middleman. If costs rise, the middleman gets to keep less. THe middlemanis not happy about that fact, hence the resistence towards labor to achieve livable wages. The middleman lost.

The middleman will continue to make money hand over fist and bury it between the sheets so that the world cannot follow it but who cares? We know that the amount of money being poured intot he machine vs. what is coming out is such a disparity that that idea of even worrying about where the money went hasn't even surfaced to our top 100 questions. We know the middleman can afford it.

Nice rhetoric, but virtually meaningless. Netjets operates in a niche market with no pricing power. The middleman has to stay in business for you to have a job. Your job is much closer to the airline model than the corporate one. You produce required revenue for your company to stay in business, we don't. You have a very expensive operating model which has not yet shown that it can be profitable. You man at four to five pilots per airframe, where corporate mans at three pilots or less. Up to 50% of your flying can be deadhead and therefore non productive. Average aircraft usage for corporate is about 450 hours per year; with your card programs you can fly each airplane over 1200 hours a year thereby decreasing the value of the owners asset at a much accelerated rate.

You are also apparently alleging that Bershire Hathaway is falsifying their Security and Exchange Commission filings, in which case you're lost anyways as your senior leadership will be going to Club Fed.

 

[FLYLOW22]

Nice rhetoric, but virtually meaningless. Netjets operates in a niche market with no pricing power. The middleman has to stay in business for you to have a job. Your job is much closer to the airline model than the corporate one. You produce required revenue for your company to stay in business, we don't. You have a very expensive operating model which has not yet shown that it can be profitable. You man at four to five pilots per airframe, where corporate mans at three pilots or less. Up to 50% of your flying can be deadhead and therefore non productive. Average aircraft usage for corporate is about 450 hours per year; with your card programs you can fly each airplane over 1200 hours a year thereby decreasing the value of the owners asset at a much accelerated rate.

You are also apparently alleging that Bershire Hathaway is falsifying their Security and Exchange Commission filings, in which case you're lost anyways as your senior leadership will be going to Club Fed.

You know it all dude. I wouldn't possibly dreamof debating you even though you are in error You are still entitled to your position even though you are commenting on something that you have only viewed from the outside.

Wait... no I will debate you. No pricing power? Well... I'd say that NJA is the pricing driver for the frax. When our pay went up, those companies who could afford to ante up did. Those who did not follow suit... well, the writing may just be on the wall.

Airlines derive their revenue from getting an assload of asses from a to b in the shortest time possible. The airplanes that operate are for the most part leased up the ying yang and make money when the airplane has the gear up and the rig is airborne. Revenue is what comes from primarily selling tickets. Profits is what happens only rarely with 121 when the groundhog sees his shadow and does a backflip, triple gainer back into his hole. The airlines have a very high cost, highly competetive environment to operate in where the pax can immediately go to brand Y if they don't like Brand X.

NJA makes money from the sale, the operation of and the disposal of it's managed airplanes. NJA is a middleman. BKH buys 100 frames and NJA sells those frames in fractions to any who want them. The planes make money whether they fly or not. Frax have tremendous control over pricing as they can charge additional fees for taxes, fees, fuel, etc as they occur. IT IS THE MOST AWESOME AND ENVIABLE BUSINESS PLAN ON THE PLANET. We don't make much revenue for the company as you suggest. Most of NJA revenue comes from sales. Some comes from operations and some comes from disposals.

Corporate flight department flying is completely NOT comparable to frax. Your company can pay you whatever they feel like paying based on company earnings. NJA pays us what we negotiate for based on what we demand based on what we calculate the company can afford based on what they charge owners minus 96% of revenue for them to do their thing as managers.

We have more pilots per plane becasue our planes fly around the clock everyday, all the time as compared to yours which travels delicately between the hamptons and aspen 3 times a year. We have a 14 hour duty limit which means that several times one crew will hand off the rig to another and then go into rest upon which time at rest expiration they will meet another crew and pick up their rig. These planes fly a 24 hour operation and hence we need more pilots... you follow Iceman? Godd. Cause yur dangerous.

Let's see... next ass blowing point... oh yeah... 50% of flights are deadheads. The cost of those deadheads is built into the pricing... but then again, we have no control over pricing do we. Ummm.... ok. By the way, did you mean 50% of the segments regardless of whether I flew BED-SFO and positioned to SJC or are you saying 50% of total hobbes time, NM travelled, timezones crossed? What units here bubba?

Depreciating assets? I dunno. That's a question for NJA Sales. You can reach them for comment by dialing 614.239.5500. Enjoy. We can't seem to keep up with sames at all from what I am hearing. This is one reason why airframes are getting the crap flown out of them. I know, I know. It sucks to be sucessful.

Club Fed? I don't know anything about that place. I'm a regular blue collar guy and proud of it. Don't do much golfing. Pool and darts, now there ya go!

Anything else you'd enjoy blowing out of your ass tonight friend?

 

[Diesel]

just picked up a x tonight. It had been running non stop for the last 3 days. 4 crews and 3 days. Tonight is the longest the plane has sat. No deadheads for me tomorrow. Just another coast to coast.

I think the X will enjoy the time off it has tonight. Tomorrow it has another long day followed by a handoff to another crew which will run it for another 14 hours.

 

[GVFlyer]

You know it all dude. I wouldn't possibly dreamof debating you even though you are in error You are still entitled to your position even though you are commenting on something that you have only viewed from the outside.

Wait... no I will debate you. No pricing power? Well... I'd say that NJA is the pricing driver for the frax. When our pay went up, those companies who could afford to ante up did. Those who did not follow suit... well, the writing may just be on the wall.

Airlines derive their revenue from getting an assload of asses from a to b in the shortest time possible. The airplanes that operate are for the most part leased up the ying yang and make money when the airplane has the gear up and the rig is airborne. Revenue is what comes from primarily selling tickets. Profits is what happens only rarely with 121 when the groundhog sees his shadow and does a backflip, triple gainer back into his hole. The airlines have a very high cost, highly competetive environment to operate in where the pax can immediately go to brand Y if they don't like Brand X.

NJA makes money from the sale, the operation of and the disposal of it's managed airplanes. NJA is a middleman. BKH buys 100 frames and NJA sells those frames in fractions to any who want them. The planes make money whether they fly or not. Frax have tremendous control over pricing as they can charge additional fees for taxes, fees, fuel, etc as they occur. IT IS THE MOST AWESOME AND ENVIABLE BUSINESS PLAN ON THE PLANET. We don't make much revenue for the company as you suggest. Most of NJA revenue comes from sales. Some comes from operations and some comes from disposals.

Corporate flight department flying is completely NOT comparable to frax. Your company can pay you whatever they feel like paying based on company earnings. NJA pays us what we negotiate for based on what we demand based on what we calculate the company can afford based on what they charge owners minus 96% of revenue for them to do their thing as managers.

We have more pilots per plane becasue our planes fly around the clock everyday, all the time as compared to yours which travels delicately between the hamptons and aspen 3 times a year. We have a 14 hour duty limit which means that several times one crew will hand off the rig to another and then go into rest upon which time at rest expiration they will meet another crew and pick up their rig. These planes fly a 24 hour operation and hence we need more pilots... you follow Iceman? Godd. Cause yur dangerous.

Let's see... next ass blowing point... oh yeah... 50% of flights are deadheads. The cost of those deadheads is built into the pricing... but then again, we have no control over pricing do we. Ummm.... ok. By the way, did you mean 50% of the segments regardless of whether I flew BED-SFO and positioned to SJC or are you saying 50% of total hobbes time, NM travelled, timezones crossed? What units here bubba?

Depreciating assets? I dunno. That's a question for NJA Sales. You can reach them for comment by dialing 614.239.5500. Enjoy. We can't seem to keep up with sames at all from what I am hearing. This is one reason why airframes are getting the crap flown out of them. I know, I know. It sucks to be sucessful.

Club Fed? I don't know anything about that place. I'm a regular blue collar guy and proud of it. Don't do much golfing. Pool and darts, now there ya go!

Anything else you'd enjoy blowing out of your ass tonight friend?

When GlobalExcuseDriver refers to pricing power he is referencing an economic term concerning the "Price Elasticity of Demand." He is suggesting that in your case, price is inelastic and you cannot set the price of goods and services among your competitors, e.g. Flight Options and FlexJet. Flex, by the way, appears to be aggressively lowering prices while their parent company, Bombardier, develops point designed aircraft for the fractional industry such as the CL 300.

The "Club Fed" to which he refers are Federal minimum security prisons such as Eglin Federal Prison Camp and it's twin at Maxwell AFB, where wealthy white collar criminals are sent to do their time.

GV

 

[SafetyTheSeat]

Wish I could cut and paste it. Entitled "Unions are Detrimental to Fractional Industry", and one of the most lucid interpretations of the conditions in todays ever-changing business aviation environment, it is a must read!

Sam Kephart, BRAVO! Well said, and timely!

Yep I read it....... It's called:

F.U.D.

 

[netjetwife]

The gall of those pilots! Wanting to be treated as professionals?! Amazing isn't it, that the FOs think they should be able to support a family without government assistance or having to work two jobs? What made those greedy NJ pilots think the company could pay them fairly, anyway? Could it be the fact that all along NJA had been charging the owners for the pay raise that they resisted handing over? Not profitable? What a joke! NJA profits made it possible to fund other Netjets....like NJE...for example. The holiday party sounded rather lavish, according to a few pilots who attended. Doesn't sound as though they're worried about costs. Why should they be? NJA is still getting away with underpaying FOs. The pilots gave them a 5 year contract---MORE than fair!

 

[FLYLOW22]

When GlobalExcuseDriver refers to pricing power he is referencing an economic term concerning the "Price Elasticity of Demand." He is suggesting that in your case, price is inelastic and you cannot set the price of goods and services among your competitors, e.g. Flight Options and FlexJet. Flex, by the way, appears to be aggressively lowering prices while their parent company, Bombardier, develops point designed aircraft for the fractional industry such as the CL 300.

You are asking a guy who flies the rig around about the numbers game that NJA invented? Not my debate. What I do see here at NJA is that none of the gripes from "management" here is ever about lack of money (except during negotiations). I don't think that management cares, frankly, what the competition is charging. For the most part they don't care about the competition as they are not considered true competitors (not my words... theirs). NJAs plate is full taking care of existing clients and making room for as many more as they can handle... seems like something is working ok. Revenue is adjusted every 5 years for NJA asd contracts come due. Again, I don't see much energy being spent on looking at the other guys. I do think that NJA would see repayment of money invested with manufacturers on planes that are built for frax flying. That is just my opinion though and doesn't rank next to our CEOs ego.

The "Club Fed" to which he refers are Federal minimum security prisons such as Eglin Federal Prison Camp and it's twin at Maxwell AFB, where wealthy white collar criminals are sent to do their time.

GV

Never spent much time in a Turkish Prison.

 

[SkyGirl]

Nice rhetoric, but virtually meaningless. Netjets operates in a niche market with no pricing power. The middleman has to stay in business for you to have a job. Your job is much closer to the airline model than the corporate one. You produce required revenue for your company to stay in business, we don't. You have a very expensive operating model which has not yet shown that it can be profitable. You man at four to five pilots per airframe, where corporate mans at three pilots or less. Up to 50% of your flying can be deadhead and therefore non productive. Average aircraft usage for corporate is about 450 hours per year; with your card programs you can fly each airplane over 1200 hours a year thereby decreasing the value of the owners asset at a much accelerated rate.

You are also apparently alleging that Bershire Hathaway is falsifying their Security and Exchange Commission filings, in which case you're lost anyways as your senior leadership will be going to Club Fed.

It may be a dumb question, but if 200 hours is a quarter share, then 800 hours must be a full share or 100% aircraft utilization. Where do the additional 400 hours come from?

_SkyGirl_

 

[FLYLOW22]

It may be a dumb question, but if 200 hours is a quarter share, then 800 hours must be a full share or 100% aircraft utilization. Where do the additional 400 hours come from?

_SkyGirl_

Creative financing.

 

[WheresRocky]

More URFM

The gall of those pilots! Wanting to be treated as professionals?! Amazing isn't it, that the FOs think they should be able to support a family without government assistance or having to work two jobs? What made those greedy NJ pilots think the company could pay them fairly, anyway? Could it be the fact that all along NJA had been charging the owners for the pay raise that they resisted handing over? Not profitable? What a joke! NJA profits made it possible to fund other Netjets....like NJE...for example. The holiday party sounded rather lavish, according to a few pilots who attended. Doesn't sound as though they're worried about costs. Why should they be? NJA is still getting away with underpaying FOs. The pilots gave them a 5 year contract---MORE than fair!

More RUFM diatribe from ALLAnetjetwife.

Don't know what RUFM is: newly coined phrase by one of your own...

FLYLOW22 said:

We like to call it the URFM pal!

Come to the dark side. Make more money. Secure a schedule and a lifestyle that will allow you to enjoy time off with loved ones. Help us rape and pillage the ability for big business to sew and stitch their golden parachutes. Help us turn the CEOs 5th house in Aspen into W2 earnings for you and your peers.

Yes we are terrorists... to some who pay the bills and had their chance to abuse hard-working laborers.
__________________

Unionistic radical fundamentalism at work. RUFM up, Netjetwife!

 

[miles otoole]

I don't think that management cares, frankly, what the competition is charging. For the most part they don't care about the competition as they are not considered true competitors (not my words... theirs). NJAs plate is full taking care of existing clients and making room for as many more as they can handle... seems like something is working ok. Again, I don't see much energy being spent on looking at the other guys.

A big ego, indeed. From a pure competitive standpoint, you had better hope management and sales are losing sleep looking at the other guys. Just looking at aircraft, unless your prospects don't care about what aircraft they purchase, the landscape is VERY competitive across the industry.
CJ3 vs. LR40XR vs. 400XP
Sovereign vs. CL300 vs. G200 vs. CX
DA2000 vs. DA2000EX vs. CL604
With the large jets being a draw, it seems to me that NJA clearly doesn't have a superior competitive aircraft, some in fact inferior by many standards. I sure hope your service is far superior.
I personally would be a bit nervous if my management team told me they don't even consider the competition. Heck, Michael Dell is famous for worrying about his companies competiton-and look at the market share they command. I can't imagine him telling his team that he doesn't even consider the competition. A huge ego upstairs, indeed. That alone would make me nervous.