Virgin America provokes fare wars at LAX

[FlyFastLiveSlow]

No it doesn't prove that pilot pay is not a factor. Maybe that's how you rationalize it, but it doesn't prove that at all.

The bottom line is that VA's pilots are undercutting pilot pay in the industry, and VA will use the money they save on pilots' salaries to subsidize their bottom line. VA management will use the money saved to help support fare wars mentioned in the article at the beginning of the thread- fare wars that the industry DOES NOT NEED RIGHT NOW. VA management will use that money saved to "buy" market share by undercutting the rest of us who are paying their Airbus Captains $120-$130/hr + some sort of retirement (not that those rates are even adequate).

When our pilot labor contracts come up, my management will have a powerpoint presentation with little bars on a bar graph showing industry wide narrowbody pay for Captains and First Officers. VA's bars will be the short bars, and that will be the bar management's negotiators will refer to repeatedly in order to drive our A320 salary demands down.

God knows we don't need another 100 posts about who's driving who's wages down. Stop rationalizing VA's pathetically low pay rates and I won't post rebuttals.

Then why don't you counter with the little graph that shows the following:

Considering 150 PAX on a two hour flight:
$95/hr * 2 / 150= $1.26 per ticket
$130/hr * 2 / 150= $1.73 per ticket

So, my question is.....how much does it really subsidize anything? $0.47 per ticket? I realize there are other factors that might make the spread a little more, or a little less. But, $35/hr split really makes little, if any difference.

 

[redbook]

btw.. don't work for them.. just an aspirant..

As for deliveries, firm are 33, and plans are for 100 inside 4 years.

Are you kidding? After your recent experience, give it a rest with "firm" and "plans" for x number of airplane deliveries.

You seemed to wise up post Skybus and now you sniff VA and you are back to chugging industrial size Kool Aid.

 

[fly4surf]

Then why don't you counter with the little graph that shows the following:

Considering 150 PAX on a two hour flight:
$95/hr * 2 / 150= $1.26 per ticket
$130/hr * 2 / 150= $1.73 per ticket

So, my question is.....how much does it really subsidize anything? $0.47 per ticket? I realize there are other factors that might make the spread a little more, or a little less. But, $35/hr split really makes little, if any difference.

Exactly!

When I was a MD-80 FO and getting 50-60 CENTS per pax/HR I knew it had to be something else!

By the way....TSA charge is $7.50/pax.

Fight about something that matters.

 

[mvedepo]

No it doesn't prove that pilot pay is not a factor. Maybe that's how you rationalize it, but it doesn't prove that at all.

The bottom line is that VA's pilots are undercutting pilot pay in the industry, and VA will use the money they save on pilots' salaries to subsidize their bottom line. VA management will use the money saved to help support fare wars mentioned in the article at the beginning of the thread- fare wars that the industry DOES NOT NEED RIGHT NOW. VA management will use that money saved to "buy" market share by undercutting the rest of us who are paying their Airbus Captains $120-$130/hr + some sort of retirement (not that those rates are even adequate).

When our pilot labor contracts come up, my management will have a powerpoint presentation with little bars on a bar graph showing industry wide narrowbody pay for Captains and First Officers. VA's bars will be the short bars, and that will be the bar management's negotiators will refer to repeatedly in order to drive our A320 salary demands down.

God knows we don't need another 100 posts about who's driving who's wages down. Stop rationalizing VA's pathetically low pay rates and I won't post rebuttals.

Lets compare apples to apples:

Year 1 Captain Diff FO Diff
UAL N/A $32 -37%
VA $95 $44

Year 2
UAL N/A $50 -10%
VA $100 $55

Year 3
UAL N/A $73
VA $105 $60 -18%

Year 4
UAL N/A $78
VA $110 $65 -17%

Year 5
UAL $113 -3% $80
VA $115 $70 -12%

Year 6
UAL $125 $82
VA $120 -4% $75 -8%

After year 6 the difference in pay is nil. Now figure in the upgrade times. At United what are they? 10 years compared to 1 year at Virgin? So in 6 years I would be looking at a pay difference of more then $30 an hour at VA. Doesn't seem like we are killing the industry to me.

Heck with your argument I wonder how SWA feels for what you have done to the 737 pay scale. I bet they will get the "graph" pulled out for them also. And just so you don't have to look for it:


Year 6 Captain Diff FO Diff
SWA $185 $122
UAL $125 -32% $82 -50%

What's the saying?? "Those that live in glass houses..."

 

[ualdriver]

Lets compare apples to apples:

Year 1 Captain Diff FO Diff
UAL N/A $32 -37%
VA $95 $44

Year 2
UAL N/A $50 -10%
VA $100 $55

Year 3
UAL N/A $73
VA $105 $60 -18%

Year 4
UAL N/A $78
VA $110 $65 -17%

Year 5
UAL $113 -3% $80
VA $115 $70 -12%

Year 6
UAL $125 $82
VA $120 -4% $75 -8%

After year 6 the difference in pay is nil. Now figure in the upgrade times. At United what are they? 10 years compared to 1 year at Virgin? So in 6 years I would be looking at a pay difference of more then $30 an hour at VA. Doesn't seem like we are killing the industry to me.

You also forgot to add 16% to all of the UA rates for our B&C fund contributions. Also, if you want a real apples to apples comparison, make sure that you add MORE than 16% to the UA hourly rates because that's a PRETAX contribution. For a guy that's in a 25% marginal tax bracket, that's 21.3% added to his pre-tax hourly rate. Then redo the comparison. But then if you really, really want to do an apples to apples comparison, you would probably have to figure that the UA pilots' rate will be higher in 6 years, assuming we're still in business, which will make the disparity in pay even more glaring.

But anyway......... let me get this straight.......You're saying that 90/hr. Airbus Captains who go to 1st year Captain pay after their upgrade is GOOD for the industry? You think those Virgin 1 year upgrades are going to go on forever? When the upgrades DO slow, and a 6 year VA F/O goes to first year Captain pay, that's OK too? Are these your points? It's OK for an airline to pay 90 bucks an hour with no retirement for an Airbus Captain? You're defending that?


Heck with your argument I wonder how SWA feels for what you have done to the 737 pay scale. I bet they will get the "graph" pulled out for them also. And just so you don't have to look for it:

I guess they feel the same way we did when they massively were undercutting the rest of the industry in the 90's and early 00's. Perhaps your memory is short and selective, but it was just a few years ago when people LEFT SWA to come to airlines like UAL, DAL, NWA, etc., because the pay, retirement, and QOL didn't measure up. Don't act like the SWA guys actually did any heavy lifting to get the rates they have now. Everyone's else's rates just came down to JetBlue/Airtran/Frontier Year 2002i-ish rates.

What's the saying?? "Those that live in glass houses...

Yeah, you have plenty of criticism for the UA rates, but not the VA rates? Sounds a bit biased to me. And at all the legacies, a mechanism is in place to get rates up where they need to be. When that happens, pilots at airlines like VA will fall even further behind. But thankfully, that will allow them to undercut the industry even more, steal more market share, and keep those upgrades to 1st year Captain pay coming!!

 

[mvedepo]

I guess they feel the same way we did when they massively were undercutting the rest of the industry in the 90's and early 00's. Perhaps your memory is short and selective, but it was just a few years ago when people LEFT SWA to come to airlines like UAL, DAL, NWA, etc., because the pay, retirement, and QOL didn't measure up. Don't act like the SWA guys actually did any heavy lifting to get the rates they have now. Everyone's else's rates just came down to JetBlue/Airtran/Frontier Year 2002i-ish rates.

What's the saying?? "Those that live in glass houses...

Yeah, you have plenty of criticism for the UA rates, but not the VA rates? Sounds a bit biased to me. And at all the legacies, a mechanism is in place to get rates up where they need to be. When that happens, pilots at airlines like VA will fall even further behind. But thankfully, that will allow them to undercut the industry even more, steal more market share, and keep those upgrades to 1st year Captain pay coming!!

Well looks like things worked out pretty bad to SWA didn't it?

And as for criticism, YOU are the one came here and criticized VA's pay rates even though your very own "legacy" pay rate is only a hair better.

 

[ualdriver]

Then why don't you counter with the little graph that shows the following:

Considering 150 PAX on a two hour flight:
$95/hr * 2 / 150= $1.26 per ticket
$130/hr * 2 / 150= $1.73 per ticket

So, my question is.....how much does it really subsidize anything? $0.47 per ticket? I realize there are other factors that might make the spread a little more, or a little less. But, $35/hr split really makes little, if any difference.

You, too forgot the 16% B&C fund pre-tax contribution as well for a UA pilot. Plus, you're looking at it wrong. As I posted several months back (I think) you have to look at pilot costs for each airline. They're available at the BTS.gov website, I think Form 41.

Pilot costs do matter. Why? Because that cost is large enough to impact an airline's bottom line, especially at airlines that, in the BEST of years, may make NET margins of only a few percent. When an airline's total pilot costs are 1/2 of another's, that alone can take away, say, 1% of an airlines total NET profit. In a real company, not a big deal. At an airline, you may be taking away 33-50% of that airline's NET profit for the year if the more expensive airline has to match an airfare, all other costs being roughly equal. That becomes a problem.

And as pilot costs go, so do flight attendant costs. So do mechanic costs. So do CSR costs. So now you have an entire airline, like VA, with it's second largest cost only a fraction of what everyone else pays. That becomes a VERY LARGE advantage. It allows an airline like VA to undercut "legacy" fares and steal market share with employees subsidizing the difference.

So we wouldn't be able to "counter with a little graph" because you know what- they're right! And if more airlines like VA come along with their crappy wages and grow and undercut, guess what? It starts to look like 2000-2001 all over again as the rest of the industry scrambles to get their labor costs in line with the VA's and the Skybus' of the world. I saw that movie in 2002. I don't like the ending.

 

[ualdriver]

Well looks like things worked out pretty bad to SWA didn't it?

And as for criticism, YOU are the one came here and criticized VA's pay rates even though your very own "legacy" pay rate is only a hair better.

Are you kidding me? A hair better?

Don't kid yourself about SWA. The ONLY reason they're able to keep their rates where they are is because of excellent managment of their fuel costs. Their management (or whoever does their hedging) is doing an outstanding job, and that's what's paying for their pilot, flight attendant, and mechanic contracts right now. Hopefully they will continue to be able to do so.

 

[mvedepo]

Are you kidding me? A hair better?

Don't kid yourself about SWA. The ONLY reason they're able to keep their rates where they are is because of excellent managment of their fuel costs. Their management (or whoever does their hedging) is doing an outstanding job, and that's what's paying for their pilot, flight attendant, and mechanic contracts right now. Hopefully they will continue to be able to do so.

So let me get this straight. 10 years ago you hate SWA for undercutting UAL and taking away market share. But now they are a phenomenal company that you hope will continue to do well. Interesting.

 

[ualdriver]

So let me get this straight. 10 years ago you hate SWA for undercutting UAL and taking away market share. But now they are a phenomenal company that you hope will continue to do well. Interesting.

They are a phenomenal company. They're probably the best managed airline in the industry. What am I supposed to do, talk trash about them because I'm a UA pilot?

Whether they do well or not is not my concern. My hope is that they do well enough to keep average narrowbody wages up. We need an airline to be on the high side to "average up" wages that are on the very low side, like VA's pilot rates.