Will Major Airline salaries rebound???

[TonyC]

Re: TonyC

I would just love it if all the pilots at majors, regionals, fractionals, cargo, etc, could have a stress free, high wage job. I just look at the tea leaves as showing that it's a different era. Times have changed, and so must expectations. The economics of the industy must rule. As the airlines have no taxing authority for their service, it has to be run in the black, or perish. A lot of people just don't want to grab onto that reality. If the post office charges too much for stamps, people use e-mail and Fed-ex. Compettion makes life a biitch for labor. Just the way it is. It's not right, it's not wrong. It's just reality. Grasp it and adapt, or perish like the dinosaur. (metaphor---not personal)

I empathize with your sentiment, I just don't agree with it, and only time will tell.

Obviously, there are many dynamics to this business, and the dynamics have changed. But, they've changed before, and they'll continue to change. And I don't think any of us are smart enough or lucky enough to predict how ALL of them will combine to produce the airline industry of 6 years hence.

For example, you offer the Post Office and e-mail and FedEx. In fact, price has little to do with switching to either. I submit that most people use e-mail because it's more convenient and faster, rather than because stamps are too expensive. And they use FedEx because they don't trust the Post Office when it HAS to be there tomorrow - - even if the Post Office "guarantees" it for less money. In both cases, price doesn't much matter. One's cheaper, one's more expensive, but people are drawn to both for more important reasons.

I think people will react in similar fashion in the travel industry as well. Much like the Japanese car manufacturers were instrumental in motivating American car companies to get their acts together in the 70's, I think there are a few small airlines that will ultimately bring on an attitude swing among the "legacy carriers." When the industry changes to meet customer desires, revenue will follow. Surely you see that already happening. Even today you can see evidence that price alone does not determine customers' choices.

I remain optimistic.

 

[jarhead]

TonyC

I hope you are correct! But I also hope that you will recognize that something must change the dynamic from what it is now. It does not do anyone a service to just "hope" things will get "better". There must be a catalyst to change things to adapt to the forces that the market and government demand. The strong survive, the weak perish. It's always been that way, and I see nothing out there to change that dynamic. Do You?

 

[TonyC]

It's always been that way, and I see nothing out there to change that dynamic. Do You?

I have no crystal ball, but would you have ever predicted Song and Ted?

 

[jarhead]

No, I guess I would not have envisioned Song, or Ted. This is one way of thinking outside "the box". They were formed to compete with the LCC's. If there were no LCC, I doubt if Song or Ted would have been born. That said, perhaps the jury is still out on those ventures. Could it be, that Song will compete against the Mainline? Will that competition reduce expectations of Delta Mainline, or Ted with United?

What's your read on that?

 

[TonyC]

If there were no LCC, I doubt if Song or Ted would have been born.

That's what I think, too. Just like, if there were no Datsuns or Hondas, Chryslers would still be over-priced, gas-guzzing clunkers that fell apart after 3 years - - like my Duster.

Could it be, that Song will compete against the Mainline? Will that competition reduce expectations of Delta Mainline, or Ted with United?

What's your read on that?

I wouldn't even begin to try to guess. Overall, though, I believe demand will come back, and we'll find the best product to meet the demand, wherever, however that may be. It's not like we have a whole buncha airplanes flying around the country/world empty, yanno?

 

[OakRBust]

I think that maybe you two should get a room!!

 

[jarhead]

"Not that there's anything wrong with that.........."

Seinfeld and Kramer..

 

[enigma]

Wondering what the consensus is on whether or not Major Airline salaries will rebound?

Wages are determined by the supply of available/qualified labor. Wages will climb when the supply of pilots declines enough to allow the remaining pilots to leave low pay in search of higher pay. Employers will have to increase pay in order to maintain profitable staffing levels. The only problem is that as soon as the trend seems only slightly upward, every Tom, Dick, and Harry who ever wanted to be an airline pilot will begin training. In about four years, the supply will have once again overrun demand and wages will fall once again.

That's the economics of the issue. What we need to be looking at to derive an answer to your question is the projected pilot supply. I'm not a detail guy. I'm sure others will have the info to back up their stands, I don't. I'm just flying by the seat of my pants, but I believe that it is possible that we might see a decrease of pilots sometime around 2008/2010. Retirements will be high as the Vietnam era pilots reach 60, the military budget cuts of the 90's mean that fewer mil pilots are available, and even if the military ramps up, the pilots in training today will still have a service obligation in 2008. I believe that the window will not be open long, but wages should be able to recover to the levels seen in 2000. How long they stay up, is a matter to be determined by computer programs much more shphisticated than my feeble greymatter.

There's two cents worth of thought, now if I could only get two cents for it.

regards,
enigma

 

[Mooseflyer]

Re: Re: Will Major Airline salaries rebound???

even if the military ramps up, the pilots in training today will still have a service obligation in 2008.

Don't they wish!! More like 2014 - long time to give your life away.

I think you're on the right track with pilot supply being the driving factor in salary though. Yes, military pilots eligible to separate now (my year group) are comparitively few and far between due to the fact that the military trained so few in the mid '90s. To compound, I think the effects of 9/11 on new pilot training will have an effect as well (i.e. higher airport fences, fewer "airport kids", high training costs, etc. make for fewer new pilots). This, however, will take a number of years to flow through.

 

[Skater]

pilot shortage

I am ex-military and I agree with what you said on the military side. I also think from the civilian side, less people will be interested in spending the money and time becoming a pilot since the payback isn't there and the job security sucks. I have a hard time telling anyone right now that becoming a pilot is a good career choice.