Security at Astar

[goastar]

How bad do you think foreign investment will hurt the industry?
Check your PM.

 

[erichartmann]

Dan,

A very well written analysis. It can be summed up by saying "it's all a crap shoot".

 

[Whistlin' Dan]

How bad do you think foreign investment will hurt the industry?

I'm not versed enough in International Finance to make an educated guess about that. If I fell into a coma for the next 10 years then awoke, it wouldn't surprise me to see a number of ACMI carriers on everybody's ramps. It's not just where we as an industry are headed...it represents where we, as a nation, are headed.

Over the last 20 years or so, the overnight express business has seen annual growth rates of 10-15%. "The rising tide floats all ships" as they say. It's hard to make a mistake when everything and everybody around you is going up that fast. About the only mistake you can make is to fail to secure or protect market share...a failing that DHL is trying to rectify through their purchase of ABX. How badly their previous oversight will affect them in the long run remains to be seen.

Eventually, this business, like the pax business and every other business, will stabilize at some level. Growth will slow, yields will diminish, and stockholders will get restless. CFO's will want to know why their companies are paying $250,000/yr for pilots that everybody else is getting for $100,000.

That's when it's going to get ugly...

I think the pilots of ASTAR can expect at least one more "good" contract, UPS and FedEx perhaps two. But after that, we're ALL going to be a bunch of tired old whores, standing on the corner "talkin' 'bout the way it used to be," and flagging down any old John who happens to be drivin' by...

 

[Clipperskip]

The Future

I'm not versed enough in International Finance to make an educated guess about that. If I fell into a coma for the next 10 years then awoke, it wouldn't surprise me to see a number of ACMI carriers on everybody's ramps. It's not just where we as an industry are headed...it represents where we, as a nation, are headed.

Over the last 20 years or so, the overnight express business has seen annual growth rates of 10-15%. "The rising tide floats all ships" as they say. It's hard to make a mistake when everything and everybody around you is going up that fast. About the only mistake you can make is to fail to secure or protect market share...a failing that DHL is trying to rectify through their purchase of ABX. How badly their previous oversight will affect them in the long run remains to be seen.

Eventually, this business, like the pax business and every other business, will stabilize at some level. Growth will slow, yields will diminish, and stockholders will get restless. CFO's will want to know why their companies are paying $250,000/yr for pilots that everybody else is getting for $100,000.

That's when it's going to get ugly...

I think the pilots of ASTAR can expect at least one more "good" contract, UPS and FedEx perhaps two. But after that, we're ALL going to be a bunch of tired old whores, standing on the corner "talkin' 'bout the way it used to be," and flagging down any old John who happens to be drivin' by...

Dear Dan,

Your last two posts illustrate the past, present and perhaps the future of the Airline industry better than any post that I have read on this forum in the past two years. Unfortunately I also agree with you with regards to the future of Airlines and ACMI carriers. The writing is on the wall. In the future I see the possiblility that one ACMI carrier's pilots could be flying for ABX or Astar for three years followed by a few years of flying for Northwest or FedEx. In between could be a few years of Ad Hoc charter. Those of you who think I'm crazy have no further than to look at the present regional airlines and their changes of affiliation over the past few years as to the proof that this is already going on in our industry. The economics of the market will drive the industry in this direction. Do we have to worry about foreign pilots coming in to fly for less, perhaps. Just look at the major maintenance that has been "farmed out" to El Salvador, and South America. A lot of the mechanics, reservationists, and Flight Attendants have already lost their jobs to this phenomenon. Will the pilots be next? One thing is for sure if we do lose our jobs to foreign groups the passengers will not care as long as they can get their 99$ fares. Just remember, we all want Walmart prices with union wages. Unfortunately the two are not compatible!

 

[big_al]

walmart prices with union wages? from what Ive seen, almost everyone wants walmart prices but only THEIR wages should be union, everyone else is just a lazy future welfare slob who should be happy making minimum wage and happy servicing them.

 

[Whistlin' Dan]

walmart prices with union wages? from what Ive seen, almost everyone wants walmart prices but only THEIR wages should be union, everyone else is just a lazy future welfare slob who should be happy making minimum wage and happy servicing them.

"Wally-World prices with Union wages?" Not hardly. I absolutely detest Wally-World, and the "Wally-World-ization of America. So much so that I make a point of NOT shopping there.

However, I DO believe a company should be required to have it's own employees. Especially a company that receives it's charter from, and operates under the auspices of, a Cabinet-level organization such as the Department of Transportation.

Think about the irony in this...we, as pilots, must be trained and certified to standards set by the federal Government. Our trainers must be so certified as well. We have to prove our physical fitness to the Federal Government every six months, and our technical proficiency to them at any time they so deem, but at least once a year.

Because our jobs are so safety-sensitive, we have been asked to forfeit any number of our Constitutional rights. We must now prove to the government, upon their command, that we have NOT committed the crime of ingesting drugs. They own our urine and the by-products of our digestive tract, 24/7.

Pretty heady stuff...

Then along come companies, who create shell companies, who create even more shell companies, and the whole system of accountability is compromised. None of these companies would exist but for the business offered them by their corporate sponsor. Look at the FedEx long-haul truck drivers, the DHL and FedEx delivery drivers, ACMI air carriers, and the guy who hooks up your cable TV. They're all "Independant Contractors" yet all have but one, or at most a couple, of "customers."

The "customer" calls the shots, right down schedules, the color of the equipment and the color of the uniforms their operators wear, yet assumes NONE of the responsibility. "Ees noh my yob..."

"You say one of our 18-wheelers ran you over? Oh no, that wasn't ours. Don't let the paint job fool you...that was one of our subcontractors..."

"You say we are responsible for the fact that one of our planes took a nose-dive into the Everglades? Oh no, it was one of our subcontractors who fouled up. We had nothing to do with it"

I just wish I could pay my Federal Income Taxes with the same degree of diligence and oversight....

"Hello, IRS? You say you didn't get the canvas bag with the $40,000 in it? Well, as far as I'm concerned, I paid them. You'll have to talk to my subcontractor, Juan. I gave the money to him to give to you, which he assured me he would. You can rest assured I will discipline him...if and when I find him."

Even Wally-World, probably the most tight-fisted corporate employer in America, routinely uses "subs" in many of it's day-to-day operations. How low they can go is anybody's guess, but it's just one more reason not to shop there, as far as I'm concerned.

 

[Meat n the Seat]

Ok, the industry is no longer what it once was. Neither are a host of others. Quality has been compromised for price across the board. Pride in a job well done has been replaced by the American Incompetance Movement (AIM). I'm still not convinced the public is ready to strap their collective bottoms into a Walmart Airlines airplane. So what is the solution? What do we do to stop the degredation of our profession? Not an easy task nor an easy solution given the roots of the problem may be simply a symptom of the new American culture. Anyone have viable ideas, strategies or solutions?