Support for other pilots and Simple Math

[Andy]

That was a painful read.
For starters, it's FARE, not fair.
Your thesis is overly simplistic and shows a lack of understanding of airline economics.

 

[AC560]

Accept it or go get an MBA and make those decisions yourself.

Great point. Management has small brains and big salaries so it should be relatively easy for anyone to do better, you often wonder why more don't jump at the opportunity.

 

[scoreboardII]

Everyone is missing the point here. My point is that in the big picture pilot pay is a very small percentage of an airlines operating cost. Mangement trys to convince us that our salarys are the problem but that isn't the case and I laid out the overly simple math to prove it. The larger point is that when any of us say or believe that the top earners salary is "unsustainable" or cheer another unionized pilot groups loss we are hurting the profession. In the end they will pay us what we think we are worth and can negoitiate. With capacity, demand, and prices at their current levels we as a profession have the ability to recapture some of the staggering losses we have suffered in the last decade. We need to support each other in that effort no matter what our union pin reads or what the paint job on our plane says. They can in fact afford to pay us more and lowering our expectations doesn't help our cause.

sorry, no one who disagrees with you misses the point. your point misses the logic test based on economic reality.

 

[The Prussian]

That was a painful read.
For starters, it's FARE, not fair.
Your thesis is overly simplistic and shows a lack of understanding of airline economics.

:laugh: One of my biggest fares...oops...'ahem'...fears!...is that the more I visit flightinfo, the worse my spelling, grammar, and critical thinking skills will become, until I are one of them...

 

[Dan Roman]

Unfortunately beech 's premise kind of shows why pilots should fly airplanes and managers should manage. If you pay a pilot, say 10% more per hour, it's not just the pilot flying that get's it, everyone is getting 10% more. The pilot sitting at home not making min guaranty the pilots on sick leave, the pilots on vacation etc. So.....if you give the pilots a 10% percent raise and your pilot payroll is 500 mil per year, it costs the airline 50 million a year.
Beech you work for SWA, you guys succeeded because of the consumer that puts saving a few dollars as a very high priority. People will often times go to the cheapest no matter what the airline. You of all people should understand LCC economics.

 

[ultrarunner]

AND FU###ING DELTA is planning to cut ANOTHER 2-3% next year. I would love to Punch Anderson in the teeth. Airports are SLAMMED, planes are stuffed like a college dorm room closet and these dipsh!ts continue to cut capacity when there is a MARKET DEMAND for more capacity....

Only demand for cheap tickets. At some point, capacity will be reduced to the point that EVERY SEAT SOLD generates a profit!

Keep reducing that capacity, price goes up, profits go up....

I'm ok with that!

 

[GhettoBeechjet]

I get the economics. Consider the following.

1. For the first time maybe ever the entire airline industry is being run like a real business. Despite a crappy economy and oil in the 90-100 range the industry is profitable.

2. The high fuel costs are acting as a bar to new competition. Cheap labor from a start up doesn't provide enough of a CASM advantage to offset high start up costs.

3. Load factors across the industry are in the 80 percent range.

4. Industry productivity per employee and airframe is at a very high level.

5. The industry carrier to carrier CASM is in a historically tight range.

6. Short haul is basically already dead. Customers that are within practical driving range of destination are driving.

The above all combine to give the industry pricing power it has never enjoyed in the past. There isn't enough excess capacity or even the ability to create that capacity quickly to greatly affect any carrier's market share. This is why the vast majority of recent fare increases have "stuck" and have been matched industry wide.

 

[Dan Roman]

I get the economics. Consider the following.

1. For the first time maybe ever the entire airline industry is being run like a real business. Despite a crappy economy and oil in the 90-100 range the industry is profitable.

2. The high fuel costs are acting as a bar to new competition. Cheap labor from a start up doesn't provide enough of a CASM advantage to offset high start up costs.

3. Load factors across the industry are in the 80 percent range.

4. Industry productivity per employee and airframe is at a very high level.

5. The industry carrier to carrier CASM is in a historically tight range.

6. Short haul is basically already dead. Customers that are within practical driving range of destination are driving.

The above all combine to give the industry pricing power it has never enjoyed in the past. There isn't enough excess capacity or even the ability to create that capacity quickly to greatly affect any carrier's market share. This is why the vast majority of recent fare increases have "stuck" and have been matched industry wide.

I agree with you here and you are right. The game of musical chairs in this industry is finally coming to a halt. All the airlines left no longer have to fight over market share as the seats out there are all in demand. There is no room left for any airline to liquidate like in the old Braniff, EAL PanAm etc days when one airline could pick up the slack if another disappeared.

AA can't go away, to much demand for what they fly. At worst, if they hypothetically couldn't come up with a reorganization plane, their planes and employees would have to be deployed somewhere (merger). AA/USAir is the only option left for any real kind of consolidation. May or may not happen, but the bottom line is every airlines routes and equipment are now in demand.

 

[pilotyip]

Unfortunately beech 's premise kind of shows why pilots should fly airplanes and managers should manage. If you pay a pilot, say 10% more per hour, it's not just the pilot flying that get's it, everyone is getting 10% more. The pilot sitting at home not making min guaranty the pilots on sick leave, the pilots on vacation etc. So.....if you give the pilots a 10% percent raise and your pilot payroll is 500 mil per year, it costs the airline 50 million a year.
Beech you work for SWA, you guys succeeded because of the consumer that puts saving a few dollars as a very high priority. People will often times go to the cheapest no matter what the airline. You of all people should understand LCC economics.

Nice touch of airline reality, the only thing that will really raise pilot's wages is for pilots to refuse to fly for the present wages. However considering most pilot in the majors are in the upper income brakets of US wages earners there will be lot of people looking at those high paying wages.

BTW we could always go back to regulation. 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 therefore reduce the number of pilots needed. But it would be good for a few senior guys and bad for everyone else.

 

[GhettoBeechjet]

So what does the above mean to us as labor? In short that there is room for us to take back some of what has been taken from us in the last 10 years. Basically in the present environment if carrier x raises fares to cover higher labor costs carriers y and z will most likely raise match those raises because it will more positively effect their bottom line than selling what few seats they have left at the old lower price. This of course has some rational end because at each increase a few will choose not to travel at all.