Will the Good Ole Days Ever Return?

[Melon]

I am doing the usual look-ahead that so many of us do. This has got me thinking, will the good old days, i.e. pre-9/11 ever return? We are currently at record fuel prices, only a small handful of carriers are hiring, and there are still thousands of guys on furlough. The jobs they will be recalled to are not what they used to be either in terms of schedule, compensation, etc. Will this employers market ever end? Will the majors be less selective on who they hire and will the regionals be upgrading at 6 months if you have the time?

My thoughts are no to all the above, and I am usually an optimist.

Discuss...

 

[SEVEN]

Until the airlines begin raising ticket prices at the rate of inflation or just to keep up with the current fuel prices I don't see much change either. The legacy carriers need to stick togther against the low-cost carriers and begin to pass those increased costs onto the consumer. You can only take so much from your labor groups. But until then, the regional airlines will continue to pick up more and more flying in the domestic market. NWA mainline has already made it clear that their long term goal is to focuses on international travel primarily in Asia. It's too expensive to fly a DC9 from DTW-JFK with a crew that is making over twice as muck as a regional carrier doing the same flight. I could go on and on but I'll let the next guy give his 2 cents. Peace Out!

 

[radarlove]

My thoughts are no to all the above, and I am usually an optimist.

Discuss...

Sure they will. If you've ever studied macroeconomics, you've seen the cycle effect. Everything in the economy is subject to cycles. That's why it was so funny to hear "the business cycle is dead" during the dot com boom right before the floor fell out.

Oil prices, airline boom/busts, automakers, everything goes up and down.

In the eighties, energy costs were so low that producers were going bankrupt left and right in the south. The idea that any trend is permenant is silly.

That's not to minimize the disruptions from the down cycles, they're horrible and lots of pain comes but there is inevitably an up cycle.

 

[Melon]

Radar,
I hope you are right, and typically I would agree with you. However, there seems to be a new economy. One defiant of the old standards. The RJ has also changed the business model of most of the legacy carriers. I remember just a few years ago USAir had all props, and no RJs. Look what happened to them. Then they started operating RJs and things started turning around (I know there are other variables involved). Hopefully history will repeat itself, but I am still not sold on the idea....too many things have changed and it seems as if airline brass has not made the appropriate changes to remain competitive.

 

[YourPilotFriend]

It could get better, or it could get worse. If we can find someway to control the supply of pilots, we could get those salaries back easy. For that to happen, it may have to get even darker to persuade new pilots to stay away. There are more jobs at the majors than there are jobs at the regionals, but the surplus of pilots is at the regionals to majors transition. There appears to be a shortage of qualified pilots to enter the regionals since minimums have been lowered.

However, larger planes at the regionals such as the E170 have forced minimums to go to ATP levels. But as i've said before the number one goal to get this career back is Brand Scope.

 

[PCL_128]

Sure they will. If you've ever studied macroeconomics, you've seen the cycle effect. Everything in the economy is subject to cycles. That's why it was so funny to hear "the business cycle is dead" during the dot com boom right before the floor fell out.

LOL! Exactly. My personal favorite is "paradigm shift." "It's a paradigm shift! The business will never be the same again!"

To answer the original question, yes, I do believe things will get back to normal eventually. We're seeing the signs of it already. JetBlew is about to start raising fares because their profits have turned to losses, SWA will need to start raising prices to counteract the dwindling hedges, and the majors are all at or near 75-80% load factors. Be patient. Things will get better eventually.

 

[Mamma]

JetBlew is about to start raising fares because their profits have turned to losses, SWA will need to start raising prices to counteract the dwindling hedges, and the majors are all at or near 75-80% load factors.

PCL 128,
That was so funny! I love your quick wit..."JetBlew!" Did you make that up on your own??? I mean, it is spelled "JetBlue" and sounds like "JetBlue" but you saw a different angle on it and spelled it "JetBlew!" That was so funny and intelligent! For a minute I thought you were completely unoriginal and a fraud because I figured you copied it from 32Lt10 or Dave S, but then I figured that could not be the case as you usually write such smart posts that everyone loves to read and learn from! Why are you still at a regional anyway? With smarts like yours you should be flying the whale as captain somewhere! Maybe you just need a little more experience to get there....you can do it!!! Keep up the really witty and funny posts...we are all laughing!!!

your fan,
Mamma

 

[fam62c]

It's tough to be optimistic. High fuel prices, overcapacity (too many airlines), and a surplus of pilots makes it tough. The bottom line is that the good times will never return unless the airlines can make a profit. It's simplistic to say that simply raising the ticket prices is the solution. This can only be done successfully if industry capacity is lowered to reflect the lowered demand for travel that will occur with higher prices. Somebody mentioned scope as a solution and this won't work either. You can't scope out your competitors and "protecting" high-wage positions, although a noble goal, does nothing to make profitability more likely for the carriers that are struggling.

It remains to be seen what will hapen when the reorganized legacy carriers get out of BK and start competing with each other and the discounters. I feel that the industry has too many players for everyone to stay in business and make money. Something has to give, sooner or later the creditors are going to have to cut their losses and stop bankrolling the continued operation of every company that fails. At this point about all you can do is pray for cheap fuel and an awesome general economy because that's what made the "good times" of the 1990's possible.

 

[xcr600]

JetBlew is about to start raising fares because their profits have turned to losses, SWA will need to start raising prices to counteract the dwindling hedges, and the majors are all at or near 75-80% load factors.

PCL 128,
That was so funny! I love your quick wit..."JetBlew!" Did you make that up on your own??? I mean, it is spelled "JetBlue" and sounds like "JetBlue" but you saw a different angle on it and spelled it "JetBlew!" That was so funny and intelligent! For a minute I thought you were completely unoriginal and a fraud because I figured you copied it from 32Lt10 or Dave S, but then I figured that could not be the case as you usually write such smart posts that everyone loves to read and learn from! Why are you still at a regional anyway? With smarts like yours you should be flying the whale as captain somewhere! Maybe you just need a little more experience to get there....you can do it!!! Keep up the really witty and funny posts...we are all laughing!!!

your fan,
Mamma

Go Stewie Go!

 

[Publishers]

While cyles do occur and there are constant mini cycles, oft times there is a new nomal. The good old days were rarely as good as depicted and we will not go back to regulated days which set a good many of the policies that are still lived with today.

 

[Tref]

JetBlew is about to start raising fares because their profits have turned to losses, SWA will need to start raising prices to counteract the dwindling hedges, and the majors are all at or near 75-80% load factors.

PCL 128,
That was so funny! I love your quick wit..."JetBlew!" Did you make that up on your own??? I mean, it is spelled "JetBlue" and sounds like "JetBlue" but you saw a different angle on it and spelled it "JetBlew!" That was so funny and intelligent! For a minute I thought you were completely unoriginal and a fraud because I figured you copied it from 32Lt10 or Dave S, but then I figured that could not be the case as you usually write such smart posts that everyone loves to read and learn from! Why are you still at a regional anyway? With smarts like yours you should be flying the whale as captain somewhere! Maybe you just need a little more experience to get there....you can do it!!! Keep up the really witty and funny posts...we are all laughing!!!

your fan,
Mamma

"Me thinks the lady doth protest too much!"

 

[Cpt. Underpants]

Wake up "dudes"...

These ARE the "Good Old Days"!

It's going to get much, much worse.

 

[81Horse]

My pessimist's view: America as a whole is experiencing what happens to the reservoir when the dam breaks. In a global economy, it's ludicrous to imagine we can maintain high water on our side -- because the dam has been breached already.

We are losing our middle middle-class. The piloting profession is falling below the dividing line between the upper- and lower-middle classes. I don't believe we're going to see the bar coming up again for pilot hiring -- I predict the bar, will in fact, slip down. Piloting is going to be a skilled trade, not a prestigious (and highly-paid) profession.

And the vast, unwashed, coupon-clipping public doesn't care. Flying has become a commoditized form of mass transit; the experience, the service, the amenities, all show it -- and soon, the pilot workforce will, too. And then Pilotyip will be right -- you really won't need a college degree to be an airline pilot.

When college-educated, expensively trained and rated pilots walk away from the industry -- as they are already doing -- it's not going to bring pay up; it's going to send hiring criteria down.

I'm really hoping my kid will become an orthodontist.

 

[Huck]

When my dad started in 1968, things immediately went to sh!t. He went on strike (NWA) three times in the seventies, people were laid off everywhere, the best quarters NWA had were when they were on strike and the fleet was parked.

When my uncle (UAL 570'er) started in 1985, things immediately went to sh!t. He was fired for striking and lost his job for three years until a judge (and bad old ALPA) got his job back. During that time he flew a King Aire for $30k a year. My dad at NWA took a 25% pay cut and started looking for a place to go if they went under. This with three kids in college.

When I started in 1991 things were already in the sh!t. There were over a HUNDRED Eastern guys in Birmingham with bills to pay, looking for corporate flying. I had twenty year airline pilots (two of them) look me in the eye and tell me to stay out of this profession.

It's like Gore Vidal says, there's no good old days, just days.

By the way, in the eighties, the last time fuel got high, they were trying to hang props on MD-80's. I don't think the RJ's have the efficiency to be around forever. The turboprops will be back. And like Pancho Barnes said, some sonofab!tch has got to build ém, and some pudnockers got to get in and fly ém.

 

[Big Slick]

Personally, I think the "Good ol' Days" when 777 Captains made $300k a year for working 10 days a month are gone for good. Being an airline pilot will still be a great job, just not ridiculously great. When I started working at AA, I thought to myself, "This is too good to be true!" Sure enough it was.

Here are a couple of variables that make the current situation different than the past:

1. Fuel costs. The cost of fuel is going to stay high until we run out. Fuel is a finite resource and the cost will only go up. Maybe after we win the war on terror, the cost will go down. (LOL) In the short term, things might get better in 2008 when SWA does not have as large of an advantage. In the long term, however, everyone is in a sinking boat.

2. Globablization. You think Southwest and jetBlue charge low fares? Wait until Ryan Air or some company from Mexico starts flying domestically. It is entirely possible for someone to out-LCC the LCCs. How about paying their pilots $35,000 a year to fly a 737? I guarantee people would take that job. Someone from Mexico would for sure.

Wait until Emirates starts flying discount international flights worldwide. The legacies will be losing money domestically and internationally. Globalization will do to the airlines what it is doing to the auto industry - it will wipe out the middle class. In our case, the upper-middle class.

If you can settle for an airline job where you make about $100,000 max and fly 80 hours a month, then this is the career for you. If you expect to still make $300,000 a year for doing almost nothing, this is not the career for you anymore.

The sooner we accept our new reality, the sooner we can all stop complaining and dreaming of the "Good ol' Days."

My two cents...

 

[StaySeated]

Cycles

The only thing that occurs in cycles are furloughs as capacity lags behind the direction of the overall economy. The effort to lower labor costs has not been cyclical, it has been a constant downward trend that really picked up steam in the 80's with the concept of a "b" scale. The obvious split of a single seniority list did not prevail, but the end result has been achieved with wholly owned subs and whip saw feeds. Combine the fact that "small jets" will eventually completly replace narrow bodies and the ultimate coup de tat, elimination of defined benefit plans and I can say with little doubt that no, this industry will never be what it once was. Call it a paradigm shift or fundamental change in the business model or a total crock of sh1t, regardless, if you think you are going to make 1999-2000 coin any time in the next 20 years I believe you are very wrong. I am not even talking about adjusting for inflation, the pre-concession UAL/DAL contracts are dinosaurs.

 

[turn&pull]

"If we can find someway to control the supply of pilots, we could get those salaries back easy."

Pilot wages have nothing to do with supply and demand. In todays environment the airline revenue is just not there. When airlines do well, the pilots usually get a piece of the action.

I do believe that it will get better. The question is when? Hopefully the fed will be able to stave off inflation and keep us from going into a recession but I think that is unlikely.

Our economy is more tenuous than it has been in decades. The treasury is hurting for money and they are already taking steps to make loaning us money more attractive. Interest rate increases are inevitable and if something catastrophic happens we could be looking at the worst recession in several decades.

Our economy is hanging on by a thread, and until it becomes more in balance with the world economy, our jobs in this country are nowhere near secure and the airlines is no exception.

Unless we get some better fiscal policy, this is going to be a long ride.

 

[Melon]

Leaving the overall state of the economy out of it (tough to do but just for grins) what do you guys think? My main thought is it will always be, in the short-term (10 years) an employer's market. After that who knows. Fuel costs, IMO, are not going to decrease although I know some MBA types whose opinion differs.

 

[GogglesPisano]

Too many pilots, too many airlines, too few dollars. It's simple economics. We are feeling the effects of deregulation 30 years later, internet clearing house ticket sales and leasing companies wanting to flood the world with airplanes.

It's only going to get worse.

Ryanair will be flying ORD-LGA with pilots captains making $50G and FO's making $30 within 10 years. And Kit will still be talking about a pilot shortage as dollar bills overflow from his briefcase as he walks out the Air Inc seminar lobby.

 

[captjim]

Yes the good old days are gone for good. Political correctness will keep the old, fat, and gay FA's with us forever; meaning, no sex with hotties. Gas will never be 30 cents a gallon. LCC carriers are here, good old days are gone for good.