Scope, RJ's and unions

[Raskal]

As an instructor who is watching the infighting among the airlines and their commuters from afar I was wondering where I could go to learn more about the issues. Is there an unbiased site or book anyone can recommend that can give me an overall picture of how all this began and what's happening?

I have a working knowledge of the ALPA/RJDC ordeal and scope, but not enough to really understand the central issues.

 

[goldentrout]

There is nothing unbiased about this issue.

Mainline guys think they need scope clauses to protect "their" flying. They feel cheated when management uses a lower cost option (i.e. regional) to save the company money and increase profitability. They also feel cheated when they have guys on the street while the associated regionals are hiring...since they feel they work for the "same" company. Funny thing here is that when it comes to pilot hiring it's the "same" company...but when it comes to routes it's "their" routes. They could solve many of their problems with "one list," but greed and egos prevent that.

Regional guys think the mainline guys are screwing them with scope clauses, and deals like jets for jobs...where mainline guys with no flow through get to take regional positions and put regional guys on furlough, because, apparently, mainline families and their mortages are more important than regional families and mortages. Realize that regional guys pay their dues to the same union that got the jet for jobs deal for the US Air mainline guys at the expense of their regional ALPA "brothers." This is precisely why there is an RJDC.

As you read through all the comments on this issue, you'll see much emotion about "our routes, our jobs, management screwing pilots" etc. Try to look past that and look at economic realities.

If revenu doesn't meet expenses (of which employee salaries and benefits are a huge part) then eventually a company must declare bankruptcy, where it will a) lower its expenses to match revenu or b) cease to exist.

Many pilots in the industry are willing to risk their company and the jobs of everyone at the company to get "max pay to the last day," because they "paid their dues" over the years and now "deserve" every penny they get. If you ask them why they're doing this, you'll hear something to the effect of "we're preserving the profession for all those who are to come behind us." In fact, the ALPA "brotherhood" stops at the pocketbook, and 9/11 has shown this very clearly, where guys making $200,000-$300,000/yr are unwilling to give up anything to keep the jobs of the junior brothers.

So what's the solution?

Here's my humble opinion:

1. All pilots groups owned by a company need to become one list. This eliminates the "us vs them" mentality, and increases pilot bargaining power.

2. Everyone starts out flying an RJ, and goes from there.

3. There should be (and this is heresy to ALPA), one FO payscale and one CA payscale, no matter what plane you fly. Imagine the training cost savings if every month pilots weren't changing planes to get the next bigger paycheck. What seems fair? I don't know, but something like.

FO's 50K-125K based on longevity
CA's 130k-200K based on longevity

There is precedence for this. UPS has one rate for their FEs, FOs, and CAs. All UPS CAs make about 200K after 10 years, and the FOs make about 130K after 10 years.

4. Base salaries (more heresy) will have to be matched to anticipated revenu (in an average year...not the boom years of the late 90s), which means some salaries for the larger aircraft will have to come down. This will help ensure that even in down times, as we're seeing now, the company will not have to declare bankruptcy. In good times, sure, let's all take part in the wealth with a profit sharing plan. But the company cost overhead cost structure must be able to absorb some bad times, and the employees will just have to live off their base salaries during those times.

5. Elimination of "probation pay." This is nothing more than disguised pay for training.

Now, how do we implement this without "screwing people." Well, if everyone is willing to give a little for the good of the whole, seniority list integration can be accomplished.

As for salary reduction on certain aircraft here's my plan:

On the day the contract is signed, if a pilot is making over the prescribed limits above, he gets to keep his current salary (with cost of living increases) as his max salary until he/she retires, no matter what the aircraft (unless it's an FO upgrading to CA). This way, no pilot is asked to take a pay cut, but he/she sacrifices the future prospect of the "big bucks" for the good of the pilot group as a whole.

It works at Southwest, it works at Jet Blue, it works at Frontier, it works Airtran...all making money or at least not facing bankruptcy after 9/11.

It just comes down to ALPA as a whole having the vision to make fundamental reforms to ensure a stable, strong group of good paying pilots jobs...rather than fighting tooth and nail to protect the excessive pay and benefits of a few, at the expense of the rest of the ALPA "brotherhood."

Good luck finding "unbiased" research on scope. If you do find something, post it her for the rest of us to read.

 

[FL717]

Amen brother!

You are going to possibly get slammed for that opinion, because people are going to insist that its is alot more complicated than that, but your simplification of the issue is what we desperately need. Egos, hard feelings, and self entitlement within people are the industry problem more so than the economy. Just my observation folks.
And... since I'm also gonna get slammed for voicing my opinion anyway, I'll leave with one more opinion for all to simmer over. Are you ready?? Airline pilots at the top 3 airlines in this country are OVERPAID... just like the Airline pilots at many of the regionals are UNDERPAID. BTW... for clarification.. I have been at AirTran for 18 months and as a regular line holder with 16 or 17 days off a month.. I gross $60,000 a year ($5000.00 a month including per diem based on 90 hrs credit), and yet people will argue that I am underpaid and driving the industry wage down. BULLSH#T!
My final parting shot.... are you ready....I have not been furloughed and continue to earn a paycheck because my companies business model works. Unfortunately my friends and peer group that went to United, Delta etc. earn 50% more.. but can't because they are FURLOUGHED.. and will be for some time.

Back to the original topic, I hope you find that "unbiased" information you seek, because were all biased.

 

[Rvrrat]

Is there an unbiased site or book anyone can recommend that can give me an overall picture of how all this began and what's happening?

Two works not directly aviation related from which clear analogies can be drawn.

The Winter of Our Discontent-John Steinbeck

Atlas Shrugged-Ayn Rand


Works which are directly related to your query

Flying the line: the first half century of the Air Line Pilots Association-George E. Hopkins

The Line Pilot in Crisis: ALPA Battles Airline Deregulation (Flying the Line, Volume II)-George E. Hopkins

The Airline Pilots: A study in Elite Unionization-George E. Hopkins

*personal note* I have yet to find an "unbiased" book or text of any kind; there will always be a view or "spin" the author wishes to forward to the reader.

 

[InHot]

Scope and all that garbage

Hey GoldenTrout,

Where'd you get all that common sense and sound logic? Can you spare some of it and spread it around, say at ALPA national...maybe beat Dwayne Woerth over the head with some of it?

In my opinion (and I could be wrong, but I doubt it) you have espoused what should be the foundation of all future airline labor-management discussions.

Hey everybody, let's nominate Goldentrout as our spokesman to encourage common sense and contract negotiations for the common good.

Carry on.

 

[RJFlyer]

goldentrout: great post, great ideas.

I spoke with a NWA capt who flies 747s all over the Pacific, and he was essentially saying the same thing about one pay rate, no matter which aircraft. He's approaching 60 and to make the big bucks he has to fly the big aircraft, which means long-haul international routes, which are much more exhausting and more physically suited to younger pilots. He was saying that if all aircraft had the same pay rate, the more senior guys would probably bid the smaller aircraft to stay closer to home, and we more junior hotshots could get our kicks flying the 'big iron.'

 

[Raskal]

Thanks for the replies, and goldentrout your post was quite informative. I have heard of the books Rvrrat mentioned (and the Steinbeck reference gave a grin ) so I'll go get off my lazy butt and get them. As someone who's hopefully on the way to the airlines (if I don't take the corporate route more open to me at the moment) I just feel like I should know an awful lot more than I do. Thanks again

 

[FlyDeltasJets]

A few points:

1. I doubt you will find too much "unbaised" scope info. My advice is to talk to knowledgable people on both sides and gain as much factual info (not propaganda) as you can.

2. I would like goldentrout to tell me how we can force mgt to give up their huge cost advantage and combine the lists. He makes it sound like our "egos" are all that is preventing it from happening.

3. The general feeling among the low wage airline guys here is that we are overpaid and should take a pay cut. Have any of you considered that the moment we do, you will have to as well or go out of business? After all, your cost advantage is the only thing enabling your airlines to compete with the major's routes, ff programs, size, etc. Your largest cost savings come primarily from the difference in airline's largest expense: employee wages and benefits. If we were to listen to your repeated suggestions that we give up our salaries, you guys would have no choice but to give up yours. Remember, "$40,000 is better than nothing." Where would it end? The only reason your salaries are as high as they are is that ours are as high as ours are. Perhaps you should thank us instead of criticizing us.

I won't hold my breath.

 

[Typhoon1244]

If we were to listen to your repeated suggestions that we give up our salaries, you guys would have no choice but to give up yours. Remember, "$40,000 is better than nothing." Where would it end? The only reason your salaries are as high as they are is that ours are as high as ours are. Perhaps you should thank us instead of criticizing us.

As much arguing as I've heard about ASA/Delta scope, I've never heard anybody on my side suggest that you guys make too much money. (Maybe I haven't talked to the right people.) I feel just the opposite. The more you make, the more you pull up the pay rates in the rest of the industry. I hope Delta gives you all a million dollars a year...but I suppose that'd put their labor costs a little on the high side.

The only suggestion I've heard repeatedly about anyone "giving up" anything is that we should volunteer to give furloughed guys our seats since they are, as furloughed major airline pilots, much more entitled to my job than I am. Since our seniority lists are completely separate, I can't say I thought much of this idea.

Here's the only undeniable constant in this argument: everybody, from the thirty-year 777 captain to the new-hire Brasilia F/O, wants whatever is best for them and to heck with everybody else...and I'm no different, but I recognize the trend.

 

[FL717]

Hello FlyDeltaJets... I think you make a very valid point. I have read your posts here and in other threads and I agree that the economics of the business are very complicated. I do counter your supposition that low cost carriers would be out of business if your wages were lowered at large majors. I do not feel that a pilot at one of the largest airlines (I will use Delta in this case), should be paid the same as a National carrier ( I will use AirTran as an example). You are entitled to make more than us. Company size does matter as well as equipment capacity. It is just my contention that the salary structure is well out of tolerance both at the botton end (some regional carriers) and at the top (United, Delta etc.). The business model at most major carriers (except Southwest) do not work. Part of this is the outrageous salaries for many employee groups. A second year FO at Delta (if there are any left that haven't been unfortunately furloughed) can make over $100,000 a year.... again that is second year pay potential. That to me my friend is ridiculous. Your business model is subject to constant cyclic employee furloughs. That is also ridiculous since it is almost predictable to the year. (I'm not picking on Delta... just using it for this example).

Just my thoughts. Fly safe and slow to 250 while your at it.

 

[FlyDeltasJets]

As much arguing as I've heard about ASA/Delta scope, I've never heard anybody on my side suggest that you guys make too much money.



--------Please read the second and third post of this thread. I was not in this case referring to the rjdc guys, but rather to a growing group of pilots who seem to think that lower salaries always lead to job security. Please understand that my comments were directed solely at them.


(Maybe I haven't talked to the right people.) I feel just the opposite. The more you make, the more you pull up the pay rates in the rest of the industry. I hope Delta gives you all a million dollars a year...but I suppose that'd put their labor costs a little on the high side.


--------I hope so too! Of course, if every airline pilot fought for a million a year, airlines would no longer compete by underpaying their employees. Caution: The preceding was hyperbole for the ever-present multitude waiting to jump in!

The only suggestion I've heard repeatedly about anyone "giving up" anything is that we should volunteer to give furloughed guys our seats since they are, as furloughed major airline pilots, much more entitled to my job than I am.

-------You certainly have never heard this from me or my MEC.

Since our seniority lists are completely separate, I can't say I thought much of this idea.

-------I can't say I blame you.

Here's the only undeniable constant in this argument: everybody, from the thirty-year 777 captain to the new-hire Brasilia F/O, wants whatever is best for them and to heck with everybody else...and I'm no different, but I recognize the trend.

Very true. Except that in some cases, one's selfish desires might benefit the whole profession. I feel that my wishes for more pay and a prevention of further outsourcing would have such an effect.

Thanks for the reply, although you were not my intended audience. Sorry for the confusion.

 

[Typhoon1244]

Caution: The preceding was hyperbole for the ever-present multitude waiting to jump in!

My instructor tried to teach me how to do a hyperbole while I was working on my CMEL...but I never got it right.


(Sorry. It's late.)

 

[FlyDeltasJets]

Since I am too lazy to figure out the quote function, you will have to make do with my little dashes. Hope you can figure out which parts are mine.

Hello FlyDeltaJets... I think you make a very valid point. I have read your posts here and in other threads and I agree that the economics of the business are very complicated. I do counter your supposition that low cost carriers would be out of business if your wages were lowered at large majors.


----------I never said that they would be out of business. I said that they would have to lower their employee costs a similar percentage or face going out. If our wages were the same, your cost advatage would virtually cease to exist. Please don't take this the wrong way, but do you honestly think that AAI could compete in ATL against Delta if our costs were the same?



I do not feel that a pilot at one of the largest airlines (I will use Delta in this case), should be paid the same as a National carrier ( I will use AirTran as an example). You are entitled to make more than us. Company size does matter as well as equipment capacity. It is just my contention that the salary structure is well out of tolerance both at the botton end (some regional carriers) and at the top (United, Delta etc.).



--------You are only half right. The low end is way too low. I cannot support your assertion that the top end is too high. More on this in a sec.

The business model at most major carriers (except Southwest) do not work.

---------I am not willing to concede this either. We made over $1 billion a year for the four years prior to 2001. I will say that the business model is EXTREMELY cyclical, but I will not go far enough to say it doesn't work.


Part of this is the outrageous salaries for many employee groups. A second year FO at Delta (if there are any left that haven't been unfortunately furloughed) can make over $100,000 a year.... again that is second year pay potential. That to me my friend is ridiculous.


-------It is only ridiculous in the context of competing with second year guys making half that. People always tell me that the "market" cannot support such salaries. Perhaps that is true, but only due to the fact that the "market" includes low wage airlines. Of course market forces and competition will naturally force costs to the lowest denominator. I think that is something that we should fight. Do you think it inconceivable that another start-up could come along with pilot costs half of yours? You might be having this same arguement in the future, but on the other side of the fence. After all, some may think your $60,000 "ridiculous."




Your business model is subject to constant cyclic employee furloughs. That is also ridiculous since it is almost predictable to the year. (I'm not picking on Delta... just using it for this example).


-------It never was such until the advent of low wage airlines (at least not at Delta, I would agree if we are talking about other airlines.) The "old" Delta would never furlough its pilots. A lot has changed. That's an indictment of the last two CEO's, not any external force or airline.

Just my thoughts. Fly safe and slow to 250 while your at it.

About as fast as I go lately is 65!

 

[FlyDeltasJets]

My instructor tried to teach me how to do a hyperbole while I was working on my CMEL...but I never got it right.


(Sorry. It's late.)

On a related subject:

I still don't know what the hell a "lazy 8" looks like, but I'm here, so I guess I did something close to it!

P.S.
I don't know if the hour is enough of an excuse for your hyperbole thing! That was pretty bad!

 

[goldentrout]

Typhoon1244 says

"Here's the only undeniable constant in this argument: everybody, from the thirty-year 777 captain to the new-hire Brasilia F/O, wants whatever is best for them and to heck with everybody else...and I'm no different, but I recognize the trend."

This is exactly the problem...no one is willing to give a little for the good of the whole.

 

[goldentrout]

Flydeltajets

If you don't like my proposals...what do you suggest to provide for a stable, viable airline industry, where pilots don't live in fear of furlough every time there is an economic downturn?

We probably can't force management to combine lists. However, on the next Delta contract, instead of asking for the typical "less work, more pay" scenario, how about you ask for the following:

a. Stop asking for wage and benefit increases that outstrip the company's ability to pay their bills on a year in/year out basis.
b. Show them the cost savings to be had by eliminating all the overhead required to have separate ASA/Comair/Delta pilot management personnel.
c. Show them the training cost savings of millions of dollars annually from people continunally not changing aircraft in search of the next bigger paycheck.

Yes...the way things ought to be is that all airplane pilots should make well into six figures, work 10 days a month, and we all have an A and B fund, as well as profit sharing and a company funded 401K, with 100% medical, vision, and dental coverage.

Reality is that employee overhead is crushing the major airlines.

It's not that "complicated." It doesn't take an economics major to figure out that if revenu doesn't match overhead, a company cannot survive. The reality of market economics is currently proving my point. We can all bury our heads in the sand, or we can take proactive measures to try and secure decent (read market based) wages, benefits, and job security.

And as for egos...I personally have been told by many a major airline pilot that they have serious "concerns" about combining lists...there are "reasons" why regional guys have never made it to the majors...horsecrap! Anyone who makes it to CA at a regional is certainly capable of becoming an FE/FO at any major airline. I know this because I'm a RJ FO, but I've been a B-707 CA, and flown with many a CA both at the regional and major airline level. I have the utmost confidence that any of the Dornier 328 and RJ CAs I've flown with can handle any FO seat on any aircraft at Delta mainline.

 

[goldentrout]

One last comment and then I'll stop...because I really do have better things to than sit at my computer.

I just happened to be looking at the ALPA "Code of Ethics" today.

It states,

"An airline pilot will not falsely or maliciously injure the professional reputation, prospects or job security of another pilot,"

All major airline pilots...please explain to me how scope clauses and jets for jobs does not "injure...prospects or job security of another pilot."

 

[bayoubandit]

"An airline pilot will not falsely or maliciously injure the professional reputation, prospects or job security of another pilot,"

All major airline pilots...please explain to me how scope clauses and jets for jobs does not "injure...prospects or job security of another pilot."

Not trying to start an arguement, but look at it the other way. Isn't the explosion of the RJ taking prospects and job security at the majors?

 

[~~~^~~~]

Better binding language can be found in ALPA's Constitution:

Article 1, Section 6 B 1: ....To provide representation for all members of the airline piloting profession; to promote the interests of that profession; and to safeguard the rights, individually and collectively, of its members.

Article 1, Section B 9: To provide a means of participation by the members of the Association in the resolution of issues that affect the piloting profession

Members can be thrown out of the union for violations of Article VIII. Including number (10) - "Doing any act contrary to the best interests of the Association, or its members."

Article XVIII states "Any contract, letter of agreement or letter of understanding that, in the opinion of the MEC, substantially affects the pay, working conditions, retiement, or career security of member pilots will be subject to membership ratification...The MEC will...ballot the membership of their airline to determine if it is their desire to have membership ratification.

In my opinion ALPA already has the rules in place to fix the problems. The major problem is that ALPA will not enforce the rules on 5 MEC's. Even our conflict of interest would not exist if ALPA would enforce its own merger and fragmentation policy.

Mergers are never popular, that policy exists because our leaders in the past knew that difficult decisions had to be forced for the good of the union.

 

[dashtrash]

Goldentrout,

You said that anyone that can make it to Capt. at a regional can make it in the majors.

I say HORSECRAP!

 

[surplus1]

goldentrout,

Some interesting ideas and, as to be expected some interesting comebacks.

From my perspective, when you refer to ALPA and wonder why it does this or that and doesn't do this or that, you all seem to overlook something, i.e., who and what is ALPA?

The entire organization is owned, operated and run by pilots from the major airlines and their support staff. Yes, "other" types of airlines are members of ALPA, but they really have nothing to say about how ALPA is run or what ALPA does or doesn't do.

If you look at ALPA from the perspective of the folks that run it, then its doing just fine. It belongs to major airline pilots and is operated for their benefit. That's all there is to it.

And by the way, the people that are in power are not junior major airline pilots. They are senior and will take care of themselves first.

 

[Kaman]

Hello,
I have to disagree about the premise that the major airline business models (UA,DL,AA,etc...) aren't flawed. If the premise is made that the airline travel industry is highly cyclical, would it not be logical to design a corporate strategy that allows an airline to survive and grow it's business and marketshare. The airlines have lived by the motto, "Grab what you can now, because labor is going to kill you later on". All businesses go thru ebbs and flows that affect the bottomline. However, airlines seem unable to adjust quickly enough or even appear to have a strategic vision in down times that will still yield a consistently profitible business.
I do have a theory though. Just like California real estate in the 80's, the airline industry is overvalued. The amount of infrastructure that exists simply cannot be supported with the current traffic levels/revenue/cost structure. Labor costs are also out of line with the wages in other sectors of the economy. I am not bitc#ing, but the wage and compensation in the so-called "mainline" airlines are huge compared to what I make. Seems like the same thing is going on with the pilot group. I cannot for the life of me see how ALPA can justify 100K/ annum for a 100-seat jet when a 50-seat CRJ pilot might make about half that. The same argument holds true for the top pay of CSRs at $22.00/hr at mainline vice 12.00 at the WO(top pay). Both are doing the same job, and to top it off it takes a heck of a lot longer to make it to top dollar...HOWEVER, just like the pilots the regionals are still hiring CSRs, pilots, etc...mainline is facing lay-offs of ground personnel and you can forget about them hiring full-time CSRs off the street for like, oh the next century at least where I work.
I think the gentleman that said that we are all out for what we can get for ourselves and protecting what we have is accurate, it's basic human instinct (fault?) to do so. I don't know whats going to happen in the end, but rest assured that the pain is not nearly over and this business is NOTHING like it was when I began in it 23 years ago. After working for 2 years (EAL 78-80), serving 20 years in the military. Returning to the airlines in the midst of this mess has been a culture shock. It's a great thing to fly, but I think I'm going to leave aviation professionally (full-time anyway) and try something else...

Good luck,

ex-Navy rotorhead

 

[Rvrrat]

history repeated

Not trying to start an arguement, but look at it the other way. Isn't the explosion of the RJ taking prospects and job security at the majors?

The current conflab over the RJs appears analogous to the '46 strike against TWA. In the same way that the strike was partially precipitated by old animosity, so then is todays anti RJ scope precipitated by....money. It seems to be no secret that the higher wages of the mainline pilots has put more $ in the union till.

"ALPA's principal concern in the immediate postwar years lay in writing new employment contracts to cover operation of the new four-engined aircraft, which had been perfected during the war, and which were entering domestic service by early 1945. The airlines were vigorously advertising travel by four engined aircraft, and Behncke, with an eye to publicity, believed that a strike over higher wages for flying the new aircraft would not only win public approval but also shore up his shaky relations with the rank and file.
Partly because he harbored ancient resentments against TWA from ALPA's early organizational days but mainly because TWA was operating more four-engined aircraft than any other airline, Behncke singled it out for a strike."- Epilogue, The Airline Pilots- A Study in Elite Unionization; George E. Hopkins

 

[goldentrout]

Here's an intersting tidbit.

RJs being flown at Air Whisky, ACA, Comair, etc. are the highest cost per seat mile jet aircraft to operate based on current crew pay rates.

However...if the airlines fill those planes up...or even half fill them up...they are making money. Now there might be a lower cost per seat mile for a full 737/757/Airbus, etc...but if you can only get 40-50 people consistently on a route, then that 737/757/Airbus is actually losing money, even though the cost per seat mile is lower.

That's why we are seeing the explosion of RJs...because that's what the many markets can support. A full 737, even at mainline pay rates, is more profitable than a full RJ. If management could put a 737 on a route and make money...they would!

The problem with ALPA is that they consistently blame management for the financial woes of the airlines, and deny the fundamental market realities of the airline industry. Yes, in the past, I'm sure some airline managers have made dumb decisions and cost airlines millions. But the post 9/11 reality is that the airline market is radically different than pre 9/11.

Until ALPA faces this reality...all of us are going to suffer...except the senior, major airline guys, who run ALPA, and who have virtually no chance of being furloughed...unless of course their companies no longer exist...and they're even willing to risk that at the expense of the possible demise of their companies...unbelievable.

 

[csmith]

The problem with ALPA is that they consistently blame management for the financial woes of the airlines, and deny the fundamental market realities of the airline industry. Yes, in the past, I'm sure some airline managers have made dumb decisions and cost airlines millions. But the post 9/11 reality is that the airline market is radically different than pre 9/11.

This has been hashed many times over on just about every board imaginable. I will concede that 911 was an undeniably THE premier tragic event in aviation. More than the event itself, however, are the events which have arisen in the aftermath. Govt bureaucracy, the recession strengthening, and imminent war have contributed to the down cycle which rears its ugly head every 5-10 years. In my opinion, it is this which has sparked the business traveller's abscence--as it ALWAYS does. Management has grasped this opportunity, as it ALWAYS does, to increase the downward pressure on wages, keep the laborer down, and yet find the $$$ to give themselves large bonuses while keeping their outdated pricing models intact.

Is the market THAT radically different? That is the question which only time will answer. The rumblings say no, it isn't. My personal opinion is no, it isn't. People are back, and even more are showing up. When times are good, as always, the business traveller will be back. The budgets will once again allow for the travel, and upper management will get their perks again afgter the 15 minute hoopla is gone. There is NOBODY on these boards, myself included, who I consider a reputable source in airline economics.

Until ALPA faces this reality...all of us are going to suffer...except the senior, major airline guys, who run ALPA, and who have virtually no chance of being furloughed...unless of course their companies no longer exist...and they're even willing to risk that at the expense of the possible demise of their companies...unbelievable.

What reality is ALPA not facing? Salaries are inflated? Says who? Mr. Mullin has not come to the Delta MEC asking for anything. He has furloughed. Again, however, the rumblings indicate that this furlough has limited life? I ask you, as objectively as you can muster, as a furloughee would you want to take a year off with no pay and have the very job you left to come back to? Or would you rather your union offer to gut the contract to which the company agreed in order to "save" X amount of jobs. I can tell you what EVERY furloughee I have talked to has told me. If the airline is overstaffed, it is overstaffed. As it turns out, the airline is not overstaffed. In fact, the manager of crew scheduling has gone on record as saying that he cannot staff the airline should the company hold its word on the number of furloughs.

Or are you speaking of the scope limitations, lawsuits, dissention among the different groups in ALPA? All I can say is that this has been hashed numerous times. As far as the Delta pilots go, I am very happy with the way things have been handled to this point. Without the insight of what is actually happening behind the scenes with regard to recent activity within ALPA, I'm afraid that people are just shooting from the hip with accusations, judging via press releases, and are forming opinions without having real insight of confirmed information from the source itself.

CS

 

[Rvrrat]

Without the insight of what is actually happening behind the scenes with regard to recent activity within ALPA, I'm afraid that people are just shooting from the hip with accusations, judging via press releases, and are forming opinions without having real insight of confirmed information from the source itself.

CS, oft-times the weight of public opinion regarding an issue is greater than the actual language contained in a bill/law/contract/directive. The need for containment/secrecy of specifics is understood and has been written about quite directly with eloquence in another thread by a man who has earned my respect. Even so, the public discourse on any subject will continue while specifics of an issue are hammered out. Where ALPA is concerned, precious little unadorned factual content has been presented to the public at large; therefore, one who is outside of the actual process is prone to making use of the information available.

 

[goldentrout]

Csmith

I'll admit I'm not an airline economics expert. However, I believe ther are a few things that make this downturn very different than the previous downturns.

1. RJs. The advent of RJs...especially the 70 seaters (already on the property) and the 90 seaters (they'll be on the property soon), has already and will continue to change the employment picture for airline pilots. These aircraft from 40 - 90 seats fit perfectly (and profitably) into many markets that were previously money losers or marginally profitably with 727s/737s, etc. At my regional company, we've taken over many big city shuttle routes previously flown by mainline shuttle routes. The regional offers the same speed in a jet, but much more frequency of flights, at a lower overhead cost to the company. That's where the growth is now, and based on projected aircraft orders for the next 5-10 years, that's where the major growth is going to be. If I'm in charge of ALPA, I'm trying to see how I can get in on some of this action, rather than keep my boys on furlough tyring to "preserve the profession."

2. The extent of the "downturn" is much greater than before. According to the book "Flying Through Time," American Airlines lost 240 million and 475 million in 1991-1992. Last quarter, AMR lost 495 million in one quarter! Even adjusted for inflation, 495 million in one quarter is an astronomical loss.

3. There are many upcoming and strong lost cost carriers against which the big three must compete, which were not around during the last downturn (1990-1993) Frontier, Jet Blue, etc. These competitors will put a big crunch on ticket prices/revenues, which, in my opinion, will force the big four to compete using the lowest cost option available...i.e. RJs. I've heard the president of my company say it more than once, "passengers loads are up...but revenues are down."

I just checked Orbitz for round trip MCO/LGA, 23-26 Sep. You can do on Spirit airlines for $195. You can do it on AirTran for $223. AMR wants $275. All the others want $300 or above. This is for a trip leaving less than seven days from now, without a Sat. night stay. Normally the majors would be charging 700-800 dollars, maybe even a $1,000 for such a ticket. Now they only charge $300-$400. There's no way the major airlines can sustain their business model charging $300-400 for tickets that a year ago were $700-$1,000 dollars. That's why you're going to see many, many more RJs which can make money at those ticket prices. With AirTran, Southwest, Frontier, Jet Blue, etc. around, the days of gouging the business traveler are pretty much ended.

4. If you look at the yearly profitability of Southwest, they've never had a "downturn." They've even made money since 9/11. They're hiring and expanding. Why? Because while their top pilots make $150,000 or so a year, they don't have exorbitant employee overhead which crushes their profitability, and they operate planes which fit the markets they go into.

Just seems to me that this downturn is more severe and more pronounced than many of us want to believe. If things are getting better, why have AMR, Delta, and Northwest annnounced more furloughs?

True, I don't know what's going on behind the scenes, but I firmly believe there is no magic solution out there that is going to fix the plight of the major airlines/major airline pilots on furlough.

Your thoughts?

 

[9rj9]

things are much worse

you are right, things are much worse than anyone wants to admit.
Its not just a downturn, the industry is changing. ALPA better get their shiet together.

 

[~~~^~~~]

I just checked Orbitz for round trip MCO/LGA, 23-26 Sep. You can do on Spirit airlines for $195. You can do it on AirTran for $223. AMR wants $275. All the others want $300 or above. This is for a trip leaving less than seven days from now, without a Sat. night stay. Normally the majors would be charging 700-800 dollars, maybe even a $1,000 for such a ticket. Now they only charge $300-$400. There's no way the major airlines can sustain their business model charging $300-400 for tickets that a year ago were $700-$1,000 dollars. That's why you're going to see many, many more RJs which can make money at those ticket prices. With AirTran, Southwest, Frontier, Jet Blue, etc. around, the days of gouging the business traveler are pretty much ended.

I agree with everything else you wrote, but you misunderstand the economics of the RJ. Many people do.

The aircraft is not a low cost solution. Costs per seat mile are as high as a 737-200, or 727, even higher on short routes. What the RJ does is increase yield per seat mile because there are fewer seats to sell. Based on supply and demand, the RJ limits supply on a given route, increasing demand. The business travellers still fly and the excusion fares either drive, or fly a low cost carrier.

The RJ is not a threat to a mainline jet given a constant revenue per seat mile. The mainline jet has lower cost per seat mile and many more seats to generate revenue.

All this talk about mainline jets returning to routes when the loads justify bigger equipment is true - management is telling us straight about that.

What ALPA needs to figure out is that there is no practical difference between a revenue seat mile produced by me in a CRJ700, or produced by mainline in a Boeing jet. We are operationally identical as far as the company and the consumer are concerned. If ALPA wants to promote disparities in our profession, management is only too happy to exploit ALPA's flawed thinking.

 

[csmith]

1. RJs. The advent of RJs...especially the 70 seaters (already on the property) and the 90 seaters (they'll be on the property soon), has already and will continue to change the employment picture for airline pilots. These aircraft from 40 - 90 seats fit perfectly (and profitably) into many markets that were previously money losers or marginally profitably with 727s/737s, etc. At my regional company, we've taken over many big city shuttle routes previously flown by mainline shuttle routes. The regional offers the same speed in a jet, but much more frequency of flights, at a lower overhead cost to the company. That's where the growth is now, and based on projected aircraft orders for the next 5-10 years, that's where the major growth is going to be. If I'm in charge of ALPA, I'm trying to see how I can get in on some of this action, rather than keep my boys on furlough tyring to "preserve the profession."

I agree with you to the extent that the 40-90 seat jet market reset demand in the way that people get a jet over a turboprop, but the RJ is just another tool. I don't know what you are getting at exactly when you are talking about 90 seaters on the property soon. While your people may be telling you one thing, I wouldn't put a whole bunch of faith into their remarks. The management of DCI is probably barely in the loop at best. The union officials along with the RJDC folk are in a big recruitment drive at the current time. Delta management has publically admitted that they are actively searching for a >70 jet which will be flown by mainline pilots. It just so happens that I spoke with one of those in charge of ALPA yesterday. It would appear that the premier growth is going to be in the >70 seat market, and yes the Delta pilots will be in on that growth. "Keeping our guys on furlough" is a petty statement. It makes for an interesting cheap shot, but that's about it--especially as these guys will come back with full longevity, retirement, medical, etc. Our position, fully supported by the furloughees by the way, is to give them a great job to come back to. Some interesting things ae in the works as we speak. More to come.

2. The extent of the "downturn" is much greater than before. According to the book "Flying Through Time," American Airlines lost 240 million and 475 million in 1991-1992. Last quarter, AMR lost 495 million in one quarter! Even adjusted for inflation, 495 million in one quarter is an astronomical loss.

I agree it is astronomical. Nobody is saying it isn't. What I am saying is that we are all taking losses, and when airlines take large losses they account in such a manner to make them seem even larger--in order to give labor their beatings. The more times you go through this, the more you realize. Don't believe me, go ask an accountant. Delta's labor costs are high, I don't dispute that. Somebody has to be in the lead. Again in speaking with DD, #2 at ALPA, taxes, surcharges, and other governmental expenditures are what is killing this industry. He was quoted as saying every quarter on the dollar goes to taxes or surcharges for our enhanced security. Fuel has crept back up. There are many other factors which play into this whole equation, and affect it more, than pilot costs. Did you know that back in your 91-93 time period, the Delta pilots could have flown for FREE and Delta STILL would have lost money.

3. There are many upcoming and strong lost cost carriers against which the big three must compete, which were not around during the last downturn (1990-1993) Frontier, Jet Blue, etc. These competitors will put a big crunch on ticket prices/revenues, which, in my opinion, will force the big four to compete using the lowest cost option available...i.e. RJs. I've heard the president of my company say it more than once, "passengers loads are up...but revenues are down."

Passenger loads are down a bit and revenue is definitely down. Do you know the market share of Frontier and Jet blue? Minimal. Southwest is a biggie. Southwest pilots are going to be a bit closer to Delta when their contract matures in '05, but Southwest has the built in efficiencies, which make them profitable when others are not. It's NOT about pilots compensation and it's way too much to go into unless you want me to go on for 4 pages. Nonetheless, it would seem that Delta is coming up with a competitive model--at least for the southeast. It largely has to do with planes larger than currently on express.

4. If you look at the yearly profitability of Southwest, they've never had a "downturn." They've even made money since 9/11. They're hiring and expanding. Why? Because while their top pilots make $150,000 or so a year, they don't have exorbitant employee overhead which crushes their profitability, and they operate planes which fit the markets they go into.

You said you were not an economics expert and I believe you. Pilot costs do not crush the airline. As I am no expert, but have spoken to a few experts, I can tell you that this is not a true statement. Would Delta like to get its pilot costs down? Of course. They also want to get their fuel costs down. Every one of our groups is the most highly compensated in their field and we are the LEAST unionized of the majors. Does that tell you something? Delta is furloughing pilots because of several reasons: cost containment, union bashing, control, and not the least of which uncertainty. The situation is changing so rapidly, that most of our leadership is confident that there is not more than a 2 or 3 month business plan right now. Furloughed pilots can be brought back within time periods with minimal training. Cuts are coming in other areas as well--including inflight, and ACS. The control issue is huge. Our union officials have seen the proposed code share agreement. Although they could not reveal what it contained, they did say that the new "circumstances for which the company has no control" definitions, AKA Force majeure, were about a page long. Tells me that this time the company wants to cover their bet a bit more. Many, many factors are at play here.

Just seems to me that this downturn is more severe and more pronounced than many of us want to believe. If things are getting better, why have AMR, Delta, and Northwest annnounced more furloughs?

Delta signed this contract knowing full well we were going into a recession. Yes, I agree it's bad. Other things are in play here. Even not paying ticket agents. These businessmen are forced to go online now to find tickets. Why wouldn't they take a few extra minutes and shop around a bit. Sometimes Delta cuts off their nose to spite their face. At any rate, the union leadership has the information, and they have determined that now is not the time to offer up concessions. Do you think they are doing to see just how close we can get the company to bankruptcy? I highly doubt it.