Re-Regulating the US Airline Industry

[BeeVee]

OK - the US Government has now stepped in and bailed out Fannie Mae, AIG, and others.

Does anyone think it may be possible to reverse the De-Regulation Act of the late 1970's and subsidize the airline industry?

I'm fairly certain that British Air, Lufthansa, and Air France are all subsidized by their respective governments.

Doing so would be rough on consumers...airfares would rise significantly and choices would decrease -- but for us IN the industry, it might return this profession to the glory days....thoughts??

 

[Daedalus]

I'm sorry for being so blunt dude, but you need to go educate yourself on the history of the airline industry, and get your facts straight about European airline subsidies and the foolish idea that the government's re-regulation of the airline industry will make our profession better.

 

[Cpt Oveur]

Daedalus said it right. I don't think many of us understand what reregulating the airlines pricing and route structure would do to the airline industry. It's very possible it would furlough more pilots. European, Asian, and South American airlines aren't subsidized any more than US airlines are. If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

Being competitive is the only real job security anyone can hope for their company. A company/organization's ability to adapt and react to the market, technology, economy, etc, etc will do more to ensure its survival than any piece of legistlation.

 

[AC560]

If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

And stop all those US pilots flying in India, China, Emirates, etc. at the same time. Far more US pilots have benefited from the liberalization of routes then have lost.

 

[AA767AV8TOR]

If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

Capt,


Isn’t what you’re truly advocating a form of re-regulation?? Stopping or impeding international carriers from competing here in the US is not true capitalism. It’s called protectionism which is basically the same thing.


I thought the industry could have been on a course for re-regulation with gas at $135/barrel but with lower oil now and with the US Government up to its eyeballs in trouble with bailing out Wall Street, I don’t see the push for it.

If oil spikes again and the entire industry sliding into bankruptcy, the government will have no choice. Pretty much the same deal that is going on with Fanny, Freddy, and AIG.

AA767AV8TOR

 

[waveflyer]

WHY WOULD THE GOV'T BAIL OUT AIRLINES WHEN WE DO IT FOR THEM?

the problem is in how we have set up our career- there are plenty of professions that have not seen the wage losses that we have - b/c they have leverage. Our system was designed to have leverage in a gov't protected system where we could expect our company to last our entire career.
Our seniority system hampers the free hand of competition b/c none of us can say- "FedEx is offering $XXX<XXX- what can you offer me?" We are all married to our companies and have no system to allow the airlines to fail.
We must either employ a national seniority list of some kind- and/or flatten out payrates industry wide so that it won't destroy our lives if our company fails. If we were confident that the next job paid a livable wage- maybe we'd be stronger.

btw- Herb and I are democrats that argue against the current level of regulation. To say this industry needs more regulation is laughable- you apparently haven't noticed how ineffective/unfair the current regulation and tax situation is.
The appropriate role of gov't is oversight to avoid fraud and ensure safety. (something it has failed at repeatedly under republican rule)(Guess what? when CEO's know the gov't will let them get away w/ whatever- they proceed and line their pockets.)

You want better job security and a fairer distribution of revenues-(ie more money for pilots) VOTE DEMOCRATIC- Don't wish for gov't to bail you out- just make sure they do their job and stop the corruption.

 

[123]

Capt,


Isn’t what you’re truly advocating a form of re-regulation?? Stopping or impeding international carriers from competing here in the US is not true capitalism. It’s called protectionism which is basically the same thing.AA767AV8TOR

Actually, capitalism is a social experiment currently being conducted to some degree in many countries throughout the world, much like socialism, communism, marxism, etc. What YOU are talking about is Globalism.

If oil spikes again and the entire industry sliding into bankruptcy, the government will have no choice. Pretty much the same deal that is going on with Fanny, Freddy, and AIG.

AA767AV8TOR

No choice? Can you tell me how the financial industry is the same as the airline industry, specifically in relation to the crisis that the financial market is in and how our industry problems are similiar. I don't see it, but I could always be wrong.

 

[pilotyip]

Life was good for a few pilots under regulation. There are probably 4-5 times as many pilot’s jobs now as there was in 1977. Back in reg time it was about 90% military that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and there reduce the number of pilots needed. BTW SWA the low cost provider has near the top wages, this was done under de-reg.

 

[Bringupthebird]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

 

[maru657]

Yes, there is a case for re=regulation being made. The former head of AMR is requesting a look at it along with others. The expansion of the airline industry was coming with or without de-regulation and many of the majors were heavily ex-militry because that's where the preponderance of the pilots were then. With de-regulation the most potent weapon of labor, the strike, is dead and if US airlines are not subsidized, explain United, Us Air, America West etc.

 

[BoilerUP]

If a financial giant fails, the other financial giants that hold that failed giant's debt takes a massive hit...causing their rating to fall and a call on their debts, making them default...and the parade cascades down the line until most if not all the giants (who manage your 401k, are institutional traders, and provide credit for everybody from F100 companies to mom and pop shops to Average Joe Mainstreet for a mortgage) have fallen. And guess who provides credit to most if not all of the small local and regional banks...

Failures of that magnitude would collapse the US financial system and therefore the economy, and cause us all a REAL world of hurt.

If an airline, even one like UAL or AA fails tomorrow, within days and weeks there will be other airlines to fill in some (but not all) of that airline's capacity and routes. The employees without jobs will no doubt be hurt, but with less capacity and competition fares will rise, improving the profitability of the remaining airlines.

One can't reasonably make an argument that a bailout of Fannie/Freddie and a bailout of UAL or any other airline are even somewhat similar as to their effect on the national economy.

 

[Amish RakeFight]

-- but for us IN the industry, it might return this profession to the glory days....thoughts??

Who besides a few pilots (small seemingly powerless group in the grand scheme of things) really care about the "glory days." Not a fan of John Cougar Melloncamp, are you? The glory days are NOT coming back. Handle it.

Automation along with the contemporary pragmatic business models have a LOT to do with it not returning.

There was a reason pilots were paid more and treated with more dignity and respect. The dynamics (the myriad facets of aviation) of the airline revolution have progressed to a point where it's never going back to what's been perceived as the glory days.

heck, I remeber when PC's first came out and programmers were making well over 6 figures right out of a 4 yr program. Now that salary is nothing like it used to be. The field is saturated and computers can do more themselves. Technology builds on technology and in the process, inevitably alienates many things such as wages, workers and so forth.

 

[BoilerUP]

Who besides a few pilots (small seemingly powerless group in the grand scheme of things) really care about the "glory days." Not a fan of John Cougar Melloncamp, are you?

Bruce Springsteen did "Glory Days", not Mellencamp.

 

[Amish RakeFight]

Bruce Springsteen did "Glory Days", not Mellencamp.

You're right. I get them confused!

Thanks.

 

[BoilerUP]

You're right. I get them confused!

Thanks.

:beer:

/likes both JM and da Boss

 

[Bringupthebird]

Yes, there is a case for re=regulation being made. The former head of AMR is requesting a look at it along with others.

What they are saying is that the airline system (due to there being no viable long-haul competition vis a vis rail) has become a national interest of sorts and should be protected.

What it has actually become is a commodity, with no real distinction among players. The internet distribution has helped hasten the erosion of yields by stoking hyper-competitiveness. Add the fact that the airline biz is all about cash and that it's profit margins are grocery-store thin and you can see why the best and brightest aren't attracted to this dead-end industry.

And they aren't about to pay a penny more for labor than they have to.

 

[waveflyer]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

It's always been that way grumps, we just got lazy w/ our unions and had corrupt nmb and gov't officials w/ an agenda interferring w/ our negotiating ability.
To say that it's young guys fault - it's ridiculous- united has had several periods where they hired and trained pilots w/ 200 hours and a commercial license. The military takes zero time guys and gets them up to speed in a year- It can always be done. Our problems lie in our lack of leverage and the fact that the old do not look out for the young.

 

[cjdriver]

Nothing will happen that does not benefit your management. If it behooves them to re-regulate they will have it done by their lackies in the legislature/administration.

 

[waveflyer]

would you give up that easily in an emergency, CJ?

 

[milky]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

This has been my exact point on so many posts. In a market sense, our value is not so good right now. Some would argue that there is something to be said for experience in the cockpit, but the market does not seem to agree much right now. So, pay your big money to get your big ATP and make $20,000/year. That's the way it is going these days...

 

[Bringupthebird]

It's always been that way grumps, we just got lazy w/ our unions and had corrupt nmb and gov't officials w/ an agenda interferring w/ our negotiating ability.

Why do you suppose United hired people with 200 hours? Were they passing over guys with 10,000 hours? Could it have been the fact that they had hundreds of jets on order and a ton of retiring prop pilots who were unwilling to embrace change?

The point is, when this job was at it's greatest, it was very difficult to get. When the RJ explosion proved that you can throw a 300 hour guy into a jet and they don't come falling from the skies, it meant that experience was overpriced and unnecessary.

It's unnecessary to make this a young/old thing. The young should see the airline pilot job as one of many they will have over the course of their lives rather than as a lifelong career.

The fantasy of the white-haired old salt retiring to his sailboat after a well-lived career is a bunch of crap. He's down filling out an application at Home Depot and wishing he was either 25 years older (so he wouldn't need as much money to live on for the remainder of his life) or dead.

 

[waveflyer]

Thank you management grumpy-
I don't mean to make this a young/old thing. Old guys did that. By not looking out for the career. The only difference between then and now is that the small jets aren't flown by the majors w/ strong unions and experienced aviators voting- they are flown by carriers that will never have enough leverage to vote in good contracts.

WHO VOTED TO RELEASE SCOPE?
WHO CONTINUES TO, TIME AND TIME AGAIN?

Old major airline pilots do- that's who. And then they blame guys struggling to make this into a career. I call bullsh!t on your whole line of logic- Depending on how old you are- you just don't want to admit that you're responsible for the failings of this career.

But it's not over. Do what the usair east guys did w/ the 190, and just say that any new airplane, regardless of size will be flown by us-- it's that simple. Are their 190 rates crap- yeah... but at least they are on the correct list. I love them for "getting" it regardless of my take on usapa. Then you can have young guys line up for that job- and pilots would now get furloughed in the proper order.

 

[cjdriver]

would you give up that easily in an emergency, CJ?

No, I'll be voting democrat this year.

 

[milky]

...
The point is, when this job was at it's greatest, it was very difficult to get. When the RJ explosion proved that you can throw a 300 hour guy into a jet and they don't come falling from the skies, it meant that experience was overpriced and unnecessary.

...

That is exactly correct. The bloom is off the rose. Apparently the world thinks that the safety repercussions of inexperience in the cockpit is a risk worth taking. With two pilots in there and one of those two being pretty experienced usually, maybe you don't need experience as an F/O. Either way, commercial pilots' market value has definitely gone down in the past 10 years. Will it go back up? Probably only if the supply of low hour pilots willing to work for poverty wages goes down. Since flying is the 'dream job' of a lot of people, I guess that will probably not change.

 

[BoilerUP]

That is exactly correct. The bloom is off the rose. Apparently the world thinks that the safety repercussions of inexperience in the cockpit is a risk worth taking. With two pilots in there and one of those two being pretty experienced usually, maybe you don't need experience as an F/O. Either way, commercial pilots' market value has definitely gone down in the past 10 years. Will it go back up? Probably only if the supply of low hour pilots willing to work for poverty wages goes down. Since flying is the 'dream job' of a lot of people, I guess that will probably not change.

The market value of airline pilots may have gone down...but that doesn't hold true for other sectors like cargo, fractional, or 91.

We also have to look at the causes behind airline pilot "market values" decreasing: company financial weakness and poor business planning, a good supply of new labor, and most importantly, pilots themselves...allowing outsourcing of increasingly larger small jets to former "commuter" pilots and the acceptance via ratification of increasingly concessionary contracts subsidizing those aforementioned financial weaknesses. IMO pilots are the primary reason because, as you say, many people wouldn't want to or couldn't see themselves doing anything other profession which would match even their concessionary QOL and income.

Although flying is a desired profession and many people wish they were professional pilots, the lower the expected lifestyle and compensation (and the higher the cost of training) the fewer pilots are interested in pursuing aviation as a career. This trend is reflected in decreases at flight schools across the country, as well as reduced applications at many colleges with aviation programs.

 

[Bringupthebird]

Thank you management grumpy-
I don't mean to make this a young/old thing. Old guys did that. By not looking out for the career. The only difference between then and now is that the small jets aren't flown by the majors w/ strong unions and experienced aviators voting- they are flown by carriers that will never have enough leverage to vote in good contracts.

WHO VOTED TO RELEASE SCOPE?
WHO CONTINUES TO, TIME AND TIME AGAIN?

Old major airline pilots do- that's who. And then they blame guys struggling to make this into a career. I call bullsh!t on your whole line of logic- Depending on how old you are- you just don't want to admit that you're responsible for the failings of this career.

But it's not over. Do what the usair east guys did w/ the 190, and just say that any new airplane, regardless of size will be flown by us-- it's that simple. Are their 190 rates crap- yeah... but at least they are on the correct list. I love them for "getting" it regardless of my take on usapa. Then you can have young guys line up for that job- and pilots would now get furloughed in the proper order.

You losing me wave. You say that pilots at the majors aren't looking out for your future career because they traded a loose grasp on payrates in exchange for decimating scope. So would you prefer that the major pilots bought scope protection by taking wage cuts so that the job you look forward to isn't much better than the one you have. That's just what the US pilots did. Now there's both less incentive for regional pilots to leave their jobs to come to US and the pilots have admitted that they aren't really worth what the airline had paid a pilot to fly a 90-100 seat jet, so why not demand concessions?

Again pitting young against old doesn't solve the problem (unless the problem is you want somebody to blame). The regional pilot should demand more for his services. The old-timer can't do anything to stop him. Should we hold an intervention in the HR office at Mesa when a newly minted San Juan College grad goes in for his interview? Are RJ's dangerous career weapons in the hands of an ambitious, but misguided young pilot? If I said that I'd be eviscerated, but that is what you're implying.

Look at the guys at Midex and what they're facing. They are being extorted into working for RJ wages by a loan shark called TPG and Republic. Will the Republic pilots show up and refuse to fly the jets assigned to them? I don't think the Midex guys can hold much hope for that. Like all of us dogs, we eat the kibble that's put in front of us.

Most dogs aren't cannibals, though.

 

[waveflyer]

I'll say it then.
RJ's are dangerous career weapons in the hands of ambitious, naive, and misguided young pilots. They don't know the realities of the airlines yet. It's just about getting to the "utopia" called the majors.
But there's more to it- once they "get it"- they won't have the leverage b/c if they get too strong collectively- their flying is transferred to the next up and coming "best" regional.

The reason there is downward pressure on wages is b/c it's price elastic... well= news flash- it's always been that way.... We won b/c we stood together... You outsource some of your flying- and you can't stand together. And that's the real problem... and again-- it's not blame- it's responsibility- Major pilots took the concessions to save their jobs- and voted for outsourcing to save their jobs- We simply didn't want to start over at the bottom someplace else- management knew it- and we did more to damage our career than a liquidation would have ever caused us individually.

Going forward- i just want to stress that the we need to get scope back under the umbrella- and it's worth striking over. EVERY RJ under the mainline brand- no matter who likes it