The view of the airline industry from an outsider's point of view

[Freight Dog]

The airline industry is only in a deplorable condition from the point of view of it's employees.
The public can still fly anywhere there is an airport. Ultimately, they don't care what name is painted on the airframe, as long as they can get from point A to point B in a reasonably timely and affordable manner. Since the airline industry doesn't even follow Business 101 basics of charging the cost of services + a little more for profit, the flying public isn't even suffering from the rise in fuel prices that they are fully aware of every time they fill up the tank of their car. Additionally, the public has no sympathy for pilots' concerns about wages, pension plans, etc. If you do a search on any major internet site for 'top salaries by profession,' pilot is always in the top two or three. From the pilots' point of view, you correctly perceive that your compensation, benefits, and lifestyle are rapidly diminishing compared to previous generations of pilots. The public watches movies like 'Catch Me If You Can,' where the pilot makes huge bucks and lives an almost 'movie star' lifestyle, revered by the public as a hero. They don't understand this is a fading era for pilots. Relative to the general public, the pilot has it pretty good, even post-911 renegotiations. The public knows flight/gate/ticket counter attendants exist because they interact with them, it only vaguely realizes that something must happen behind the scenes for their baggage to end up where they do, or that something or someone keeps the aircraft fixed and flying. Unless they have an aviation background, they don't understand that an aircraft requires a little more attention, effort, and expense than the occasional oil change their automobile requires.

From a business point of view, it's not all about making a profit. Profits get taxed. Management and the wealthy population that have large stakes in ownership of airline assets are interested in maximizing their bank accounts. The more they can document as a business loss, the less profit shown on paper and therefore the less taxes they have to pay. Ideally, the business that 'breaks even' is perfect - no taxed profit, but if it is a viable business, the value is reflected in the value of the stock rising, which isn't taxed unless the owner sells the stock. Under economic boom times, if the airline is doing so well that it can't help but show a profit (and obviously the stock value would also be very high during these times,) then the company will consider giving concessions to employees. Not because they care, or want to share the joy, but because the concessions thereby decrease the amount of net income back towards the breakeven point of not losing money to taxes. The owners are meanwhile benefitting from the high stock values. Management works for the owners, period. Good management gets the employees involved in a positive way; if the company does well enough then the employees will benefit in a smaller proportionate way also. Bad management struggles with company vs. employee issues. Either way, ultimately it is the agenda of the owners that prevails. On a higher level, the truly wealthy owners may have bought in on an airline knowing full well that they commonly struggle, because they are trying to balance a taxable profit elsewhere in their portfolio. In this case, the owner doesn't even WANT the airline to do well, they just want it to maintain it's stock value but show a deductable loss.

From the government point of view, things are going along okay. In some cases, too well. As discussed previously, the public is pretty happy with pricing and availability, and fully recognizes the tradeoff between having better security and the annoyance of actually going through the security procedures. Business is business, airlines come and go, expand and contract, but in general commercial aviation is thriving. The government is dealing with headaches such as how to REDUCE the amount of traffic to O'Hare. Hawaii is predicting all-time record tourism for 2005. This 'deplorable state' of the industry only exists for airline industry employees.

Unions. Ah, unions. Once a very needed thing, now self-perpetuating bureaucracies. I read ALPA's newsletter; it's pretty entertaining. You realize, I hope, that they collect your dues whether they do anything for you or not. They take credit for every victory and blame every loss on 9/11, management, government, or the economy. For every victory on paper, other than something immediately tangible such as pay, they are not very successful in actual enforcement (as they briefly alluded to in the journal, but quickly pointed blame elsewhere.) No other professional organization charges students or trainees MORE for membership; your union fosters and perpetuates the 'awe' and 'status' of membership to further itself in your eyes, while not actually being helpful. Explain to me WHY the union is bringing up the issue of 'over 60 flying' now? I'll tell you - they are trying to distract you from your falling lifestyle they are unable to save, while making it sound like they are trying to help you. Why would you want to increase the pool of available pilots right now while so many are still furloughed? Any pilot nearing the age of 60 should have adequately planned for his or her retirement by now. If they say they need to work for financial reasons, then you can bet that they have been living large over the years. Their failure to plan is not your problem, and as pilots about to retire, they are not interested in what state they leave the industry. They too can blame it on 9/11, management and the economy. These older pilots are the ones making the high-end incomes. It doesn’t matter that they don’t represent the majority of pilots; management quotes the highest income in the press as to why they need pay cuts. The public sees this and has no sympathy. Pilots themselves perpetuate this with the ‘I paid my dues, now you do too’ by allowing younger pilots to have pitifully low incomes. As a non-pilot, why would anyone hire or pay old pilot X a six-figure income when you can hire young pilot Y a five-figure income? If the youngest pilots make a really low five-figure income for the same routes and airframes and meet all of the same industry certifications and qualifications, why are you paying the higher five-figure income? Either they are equally safe and qualified to fly or they aren’t. Why pay more? By allowing your new-hires to be paid such despicably low payscales, your union has completely devalued your skills and profession, while giving management ammunition for degrading your professional lifestyle. Meanwhile, career union representatives certainly aren’t suffering along with its fellow pilot members. Has ALPA National made any staff furloughs in the past five years?

So, pilots, here you are, furloughed or looking at a significantly lower career-long lifestyle. The public is happy, business is happy, government is happy and your union is happy. What are you going to do?

 

[miles otoole]

What are you going to do?

Not quit SWA.

 

[PHXFLYR]

Like you clowns won't feel the affect of what's going on in the industry when the hedges run out... give us a break,will ya'?

PHXFLYR

 

[miles otoole]

You just made the list

 

[JohnQ]

So who is the "outsider" that penned this article? While there are some good points, there are some stupid ones, such as...

From a business point of view, it's not all about making a profit. Profits get taxed...The more they can document as a business loss, the less profit shown on paper and therefore the less taxes they have to pay.

So stupid a statement as to defy the imagination. Using that logic I suppose the less income we all make the better. After all, income gets taxed!

Ideally, the business that 'breaks even' is perfect - no taxed profit, but if it is a viable business, the value is reflected in the value of the stock rising, which isn't taxed unless the owner sells the stock.

And how does the value of the stock rise if the company never makes a profit?
While stock values can be very irrational in the short term, a stocks long term outlook is dictated by earnings growth--or lack of it. A business which only breaks even will not have "stock rising." Economics 100 here.

Under economic boom times, if the airline is doing so well that it can't help but show a profit (and obviously the stock value would also be very high during these times,) then the company will consider giving concessions to employees. Not because they care, or want to share the joy, but because the concessions thereby decrease the amount of net income back towards the breakeven point of not losing money to taxes.

So the goal of mgmt is to NOT make a profit--even in good times? What drivel.

The owners are meanwhile benefitting from the high stock values. Management works for the owners, period.

The high stock values only exist because of INCREASING profits--the very thing that business supposedly does NOT want. So what precisely do "the owners" want?

In this case, the owner doesn't even WANT the airline to do well, they just want it to maintain it's stock value but show a deductable loss.

Another brilliant insight. Any highschooler taking rudimentary economics will tell you that no business shows "a deductible loss" and maintains its stock value. That is the nature of stock price vice earnings.

Explain to me WHY the union is bringing up the issue of 'over 60 flying' now? I'll tell you - they are trying to distract you from your falling lifestyle they are unable to save, while making it sound like they are trying to help you. Why would you want to increase the pool of available pilots right now while so many are still furloughed? Any pilot nearing the age of 60 should have adequately planned for his or her retirement by now. If they say they need to work for financial reasons, then you can bet that they have been living large over the years. Their failure to plan is not your problem, and as pilots about to retire, they are not interested in what state they leave the industry.

There is a lot of editorial commentary here--far too much to be from an "outsider." Who are you, "outsider?"

They too can blame it on 9/11, management and the economy. These older pilots are the ones making the high-end incomes. It doesn’t matter that they don’t represent the majority of pilots; management quotes the highest income in the press as to why they need pay cuts. The public sees this and has no sympathy. Pilots themselves perpetuate this with the ‘I paid my dues, now you do too’ by allowing younger pilots to have pitifully low incomes. As a non-pilot, why would anyone hire or pay old pilot X a six-figure income when you can hire young pilot Y a five-figure income? If the youngest pilots make a really low five-figure income for the same routes and airframes and meet all of the same industry certifications and qualifications, why are you paying the higher five-figure income? Either they are equally safe and qualified to fly or they aren’t. Why pay more? By allowing your new-hires to be paid such despicably low payscales, your union has completely devalued your skills and profession, while giving management ammunition for degrading your professional lifestyle. Meanwhile, career union representatives certainly aren’t suffering along with its fellow pilot members. Has ALPA National made any staff furloughs in the past five years?

Well, this is hardly an "industry observation from an outsider." It comes across as a very personal, angry, diatribe. I can only say, "this too shall pass."

 

[twgordy]

yaaaaaawn!

 

[canyonblue]

Like you clowns won't feel the affect of what's going on in the industry when the hedges run out... give us a break,will ya'?

PHXFLYR

The hedges run out?

 

[miles otoole]

The hedges run out?

They can be re-filled at the clown store next to the big red shoes.

 

[Freight Dog]

JohnQ... my wife wrote that article. Here's her response for you:

Hello-
I did not at all mean it to sound like an angry diatribe, but that's one of the limitations of the internet. I wrote this in response to a pilot in another forum who was complaining about what he called the deplorable state of the airline industry. Several others have read it and suggested I post it here.

As a pilot's spouse, I am very concerned about what is going on. As a doctor (I'm a flight surgeon, recently returned from Iraq,) I'm trained to identify the true source of a problem in order to (hopefully) fix it. I see and hear pilots talking to each other, wondering why goverment or union or somebody doesn't 'see what's going on' and intervene. As an outsider I am trying to help you as pilots take a step back and see yourselves from a different perspective. The simple facts are: your professional lifestyle in terms of pay, benefits, and workrules are declining. Not in all companies, but taken as an industry, they are; and, nobody else cares except for you.
The first step is to recognize this. Now that the problem is identified, what can you do about it? I was quite critical of ALPA in the first post, and I stand by what I said. That is not to say, however, that ALPA can't be effective. Your union can be a fantastic tool to support your profession, but it is up to you, the members, to give them the focus and the impetus to help solve the problem.
What can ALPA help you do? They can help you with PR. As previously described, no one outside of the industry sees any particular problem. They need to be educated. How about a media blitz? How about some infomercials? ALPA should be conducting a serious PR campaign, and link your industry's issues to other issues currently of public concern. For instance, outsourcing of US jobs is a fairly common media topic in business news. How about a PR campaign on the outsourcing of aircraft maintenance? It addresses the larger national concern of the US losing jobs to other nations, then ALPA can reveal the logistical difficulty of quality control inspections (comparing the stats of inspection rates in country vs. out of country, how they drastically differ yet still check the box for meeting regulatory requirements), which can be shown to be a huge safety issue. This is a maintenance and not a pilot issue, but it is an airline industry issue. It's okay to coordinate the PR campaign in cooperation with other airline industry unions. You are all facing the same difficulties, after all. Safety is a huge public concern, and I bet each union representing the different aspects of the airline industry can demonstrate safety concerns raised by recent cutbacks.
What else does the public need to know to be sympathetic? The public is well aware of the years of blood, sweat and tears it takes to become a doctor, thanks to popular television shows. This 'education' helped the public understand why limiting resident hours to 80/week was necessary for patient safety. Without the television shows, I doubt too many people truly understood the sheer number of hours that a resident worked, or for how many years. I doubt too many laymen understand the sheer amount of time that it takes for the majority of pilots to build flying time to make it to the 'big league', let alone for what low pay or under sometimes incredibly poor conditions. Most working people understand a 40-hr work week; few understand that 40 flying hours is a dramatically different time commitment, let alone the complexities of crew rest and other guidelines you are all so familiar with.
When I first met the man I am now married to, he was a pilot flying a Dash 8. As an outsider, I was appalled to see that this pilot with the responsibility of flying over 35 people in a major metropolitan area was paid such a low wage that he and two other pilots in the same company all had to share a small apartment, share a car, and were sleeping on air mattresses living on ramen just to make ends meet. (This probably sounds familiar to a lot of you.) I might have guessed this as living conditions for students, but not for a company with a national airline logo painted on its tail. I have yet to meet anyone who is not in, or related to someone in the airline industry who realizes this. All I (and I am representing the general public) see are you walking through the airport in your uniform wearing your wings and pulling your bag, making a few announcements over the PA, or politely greeting/thanking passengers during the brief moments the cockpit door is open while passengers are getting on or off the aircraft. The public must understand you before it will be sympathetic to you.
Of course, that just demonstrates career progression issues. Once the public sees how difficult it is to achieve your status as an airline pilot, they can understand your concerns about maintaining your professional lifestyle. Now teach them the catchphrase 'human factors'. Again, airline safety is a public concern. Human factors in regard to safety in any industry is a relatively new concept, but can be demonstrated as a general problem that the public can relate to, then use airline industry examples as demonstrations. Show how aircrews and their families are affected by the cutbacks, and relate these distractors as safety issues. Same with increased workrules, etc.
Now, I'm just throwing this out there as a starting point. I AM an outsider, after all. I'm sure all of you can come up with much better ideas. If you nitpick the details of what I am saying, then you are missing the point. You have a profession in decline, but nobody sees it or cares but you. Some of you need to look beyond the state of whatever company you currently belong to and look at this problem from the perspective of the industry as a whole; to do otherwise only divides you as a group. Many a furloughed pilot today once thought he 'had it made.'

OK, that's her response. Now I'm kicking her off the computer and back to the kitchen.

 

[MiniMeGotWings]

Recall Duane Woerth and elect Janine for ALPA Prez!!!!!!!! Finally someone hit the nail on the head. No one cares about us (just as long as the fare from Denver to Eugene remains $59). We all whine and complain to each other, but has it ever helped? Surely ALPA could put some of their vast resources (my 1.95%) into producing some media spots that highlight our collective plight instead of helping that ol' crusty goat in the left seat who is about to turn 60 and just bought a boat with the proceeds of his third mortgage he took out on his beach house, since his A-fund is solvent and he now wants to work until he's 65. C'mon people... I'm going to invoke the inverse of the "I did it, now you do it" arguement.... i'm paying my dues, now you retire and QUIT paying yours. What kind of "brotherhood" is it that supports changing a federal law to let the senior folks earn a little more now (since they obviosly didn't prepare for thier futures) while we have folks furloughed? Must suck to know your dues are going towards keeping you out of work longer, huh?

 

[JohnQ]

JohnQ... my wife wrote that article. Here's her response for you:

Thanks for the clarification. I appreciate the response.

I did not at all mean it to sound like an angry diatribe!, but that's one of the limitations of the internet.

Hey, we've all been there!

As a pilot's spouse, I am very concerned about what is going on. As a doctor (I'm a flight surgeon, recently returned from Iraq,) I'm trained to identify the true source of a problem in order to (hopefully) fix it.

Hey, my wife's a psychiatrist. You and she no doubt share a common outlook.

As an outsider I am trying to help you as pilots take a step back and see yourselves from a different perspective. The simple facts are: your professional lifestyle in terms of pay, benefits, and workrules are declining. Not in all companies, but taken as an industry, they are; and, nobody else cares except for you.

The first step is to recognize this. Now that the problem is identified, what can you do about it? I was quite critical of ALPA in the first post, and I stand by what I said. That is not to say, however, that ALPA can't be effective. Your union can be a fantastic tool to support your profession, but it is up to you, the members, to give them the focus and the impetus to help solve the problem.

What can ALPA help you do? They can help you with PR. As previously described, no one outside of the industry sees any particular problem. They need to be educated. How about a media blitz? How about some infomercials? ALPA should be conducting a serious PR campaign, and link your industry's issues to other issues currently of public concern. For instance, outsourcing of US jobs is a fairly common media topic in business news. How about a PR campaign on the outsourcing of aircraft maintenance? It addresses the larger national concern of the US losing jobs to other nations, then ALPA can reveal the logistical difficulty of quality control inspections (comparing the stats of inspection rates in country vs. out of country, how they drastically differ yet still check the box for meeting regulatory requirements), which can be shown to be a huge safety issue. This is a maintenance and not a pilot issue, but it is an airline industry issue. It's okay to coordinate the PR campaign in cooperation with other airline industry unions. You are all facing the same difficulties, after all. Safety is a huge public concern, and I bet each union representing the different aspects of the airline industry can demonstrate safety concerns raised by recent cutbacks.

You raise some excellent points, and I can assure you that many within ALPA have discussed publicly raising these points, both at the MEC and national ALPA level. Many times it is generally determined that in the big picture the public truly doesn't care, and it is not worth the money and effort. That is not to say that that is the correct conclusion--just that that is what it is.

What else does the public need to know to be sympathetic? The public is well aware of the years of blood, sweat and tears it takes to become a doctor, thanks to popular television shows. This 'education' helped the public understand why limiting resident hours to 80/week was necessary for patient safety. Without the television shows, I doubt too many people truly understood the sheer number of hours that a resident worked, or for how many years. I doubt too many laymen understand the sheer amount of time that it takes for the majority of pilots to build flying time to make it to the 'big league', let alone for what low pay or under sometimes incredibly poor conditions. Most working people understand a 40-hr work week; few understand that 40 flying hours is a dramatically different time commitment, let alone the complexities of crew rest and other guidelines you are all so familiar with.

You are correct, but as a doctor surely you acknowledge that the physician profession, while still prestigious, has declined in terms of both prestige and compensation over the years. After you have lose 1/3 of your sleep in your 20s pulling all sorts of outrageous hours as a medical student and then resident, you don't pay off your six-figure medical school student loans until your mid-30s (at the earliest). So finally, in a best-case scenario, you finally start actually keeping your money by the time you are 35, all so you can pay outrageous liability insurance premiums. In fact in 2003 my wife only made $27000 because she stayed home a lot due to the birth of our youngest child. For that salary (which by the way earns her zero benefits, because she is considered an "independent contractor" for tax purposes, NOT a salaried employee) she paid $6000 in liability insurance premiums--nearly one-fourth of her pretax salary paid out as insurance, and she is a pschiatrist!

So my point is that your profession has indeed also taken some serious hits over the years, compared with the "good old days." So what are YOU doing about it?

When I first met the man I am now married to, he was a pilot flying a Dash 8. As an outsider, I was appalled to see that this pilot with the responsibility of flying over 35 people in a major metropolitan area was paid such a low wage that he and two other pilots in the same company all had to share a small apartment, share a car, and were sleeping on air mattresses living on ramen just to make ends meet. (This probably sounds familiar to a lot of you.) I might have guessed this as living conditions for students, but not for a company with a national airline logo painted on its tail. I have yet to meet anyone who is not in, or related to someone in the airline industry who realizes this. All I (and I am representing the general public) see are you walking through the airport in your uniform wearing your wings and pulling your bag, making a few announcements over the PA, or politely greeting/thanking passengers during the brief moments the cockpit door is open while passengers are getting on or off the aircraft. The public must understand you before it will be sympathetic to you.
Of course, that just demonstrates career progression issues. Once the public sees how difficult it is to achieve your status as an airline pilot, they can understand your concerns about maintaining your professional lifestyle. Now teach them the catchphrase 'human factors'. Again, airline safety is a public concern. Human factors in regard to safety in any industry is a relatively new concept, but can be demonstrated as a general problem that the public can relate to, then use airline industry examples as demonstrations. Show how aircrews and their families are affected by the cutbacks, and relate these distractors as safety issues. Same with increased workrules, etc.
Now, I'm just throwing this out there as a starting point. I AM an outsider, after all. I'm sure all of you can come up with much better ideas. If you nitpick the details of what I am saying, then you are missing the point. You have a profession in decline, but nobody sees it or cares but you. Some of you need to look beyond the state of whatever company you currently belong to and look at this problem from the perspective of the industry as a whole; to do otherwise only divides you as a group. Many a furloughed pilot today once thought he 'had it made.'

These are all outstanding points, and I certainly hope things improve. We may be a profession in decline, but right now we are an industry in financial meltdown, which makes it very difficult for labor to take hardline positions. Where you will REALLY be right is when the industry eventually rights itself and all the deplorable pay and workrule conditions you highlighted remain in place.

Cheers, and I'm off to sleep.


OK, that's her response. Now I'm kicking her off the computer and back to the kitchen. [/QUOTE]

 

[cforst513]

OK, that's her response. Now I'm kicking her off the computer and back to the kitchen.

Man, that's a great way to sleep on the couch for a week...

 

[dash8driver]

FD,

get back to the kitchen and make me some cevapi!

 

[sluminginpit]

Can anyone say denial?

I must commend you on your understanding of the industry. This career has been, and will continue to decline. It's simple factors of supply and demand. The unions are uneffective in stopping this decline due to the fact that pilots want so badly to do this they are willing to "whore" themselves out so they can make the "big time". It's gone, if your lucky your carrier won't go out of business towards the end of your career leaving you broke.

I don't see how we as group can't feel bad for the "crusty old man in the left seat"! How would your financial future look if you lost all or half of your income? Just bought a boat or new car, to bad? Why? You worked hard to afford that boat and 2nd or 3rd house. Why live in fear of losing it all. I make 84K a year as a regional captain and feel petrified to buy a new home. I now live in a apartment, to stay mobile for this career. Enough!!!!!!!!!!!!! If my airline goes broke, I'm done!

 

[Phaedrus]

d-lete

 

[Green]

Did anybody else read the Wall Street Journal article on Air Traffic Controllers about a week ago? They quoted the current AVERAGE compensation for a controller at 161k/year. I would bet the average airline pilot salary is well below 100k/year. Even if you exclude the regionals I would think that the average major airline pilot makes significantly less than the average ATC guy/gal. Hopefully in the not too distant future we'll reach parity with ATC.

 

[SWA/FO]

Our hedges are running out? I thought we bought more? I didn't realize that it was a one time deal.

 

[smellthejeta]

Did anybody else read the Wall Street Journal article on Air Traffic Controllers about a week ago? They quoted the current AVERAGE compensation for a controller at 161k/year. I would bet the average airline pilot salary is well below 100k/year. Even if you exclude the regionals I would think that the average major airline pilot makes significantly less than the average ATC guy/gal. Hopefully in the not too distant future we'll reach parity with ATC.

The "average" controller makes $161k just like the "average" pilot makes over $200,000... You have to be using very narrow criteria to define the "average" controller. Funny thing is, controllers wanted pay parity with pilots... Now pilots want pay parity with controllers??? You could say the average senior controller at the average high level facility makes an average of $160k, but what I want to know is which facilities pay BETTER than $160k. That's where I want to work. I've heard of guys pulling down $180k, but that's with loads of overtime.

 

[Green]

smellthejeta,



No I think the article meant the average controller made 161k last year. They did not narrow the "criteria" they took every controller in the country and averaged out their earnings. This was not a study of the average controller at New York it was a country wide study. The TOP controllers (New York) supposedly earned over 200k, I think somewhere around 230. I don't know where you could ever find a study that said the average airline pilot makes 200k, even when you had a few making 300k, the vast majority of us were making well below that level. It doesn't seem like there are many controllers making below 100k...

 

[Purpledog]

WHY the union is bringing up the issue of 'over 60 flying' now? I'll tell you - they are trying to distract you from your falling lifestyle they are unable to save, while making it sound like they are trying to help you. Why would you want to increase the pool of available pilots right now while so many are still furloughed? Any pilot nearing the age of 60 should have adequately planned for his or her retirement by now. If they say they need to work for financial reasons, then you can bet that they have been living large over the years. Their failure to plan is not your problem, and as pilots about to retire, they are not interested in what state they leave the industry. They too can blame it on 9/11, management and the economy. These older pilots are the ones making the high-end incomes. It doesn’t matter that they don’t represent the majority of pilots; management quotes the highest income in the press as to why they need pay cuts

Good point on the over 60 rule. My sentiments exactly. All you young ALPA members that want to upgrade and get out of the pits, it's time to take the ALPA survey and let them know your position on not extending the age 60 rule. I think the survey opens today.