It's that time of year again for the annual review of pilot remuneration at EK.
Expectations seem to vary from highly optimistic to nothing at all. What can pilots look forward to, if anything?
As I see it here are the potential elements for change:
- An increase in the Salary Scale. Apart from a 0.5% increase, the basic Salary Scale has not changed since May 2011. An FO joining at Level 1 in 2022 is earning 0.5% more than one who joined after May 2011. (That’s about USD 50 increase in a decade)
- A step of 3%. Originally this was a Step up the salary scale based on loyalty and experience. The Salary Scale has 35 steps in it. Each year a pilot would move up one step. In 2009 the company withheld the Step for 2 years during the GFC and then resumed the steps in 2011. Once again they stopped in 2019. There has been no Step since then.
- Increase in Flying Pay. This has not increased since May 2018 when it was raised by 5%
- Increase in Accommodation Allowance. This was reduced, for the first time ever, by 15% in 2020.
- Increase in Productivity Pay. This was last increased in May 2018 when it was increased by 10%
- Reimbursement of the 50% salary withheld for Company cash flow for 6 months in 2020. A four-week “Ex Gratia” payment was made earlier this year. No explanation was given leading to the assumption by many that this was the first of 3 payments to refund the 2020 deductions. A Fly Dubai payment approximately refunding salary lost seemed to reinforce this theory. However, no further payments followed and queries relating to it went unanswered. One would think that this would be refunded in due course before bonuses and profits were dished out as that would seem the decent thing to do, but hope for this is waning.
- Profit Share. Highly unlikely as there are large losses to recuperate.
- Bonus. These generally only apply to management above a certain level so not likely to be applicable to those who flew into the pandemic and all that risked and entailed.
- Education Allowances. This is largely driven by the costs of schooling in Dubai.
- Return of additional 3% Provident Fund contribution for long-term pilots. This is likely gone forever. It was a remanent from the days when long service was more valued and appreciated.
What will happen remains to be seen but should be announced in the next 2 weeks assuming the May review happens as in previous years.
Inflation is already biting hard in Dubai as it follows the rest of the world. Food prices are soaring leaving many reluctant to spend on travel. Interest rates will rise fast making loans harder to pay and making travel a nonessential expense. Fuel prices are high which is never good for aviation, particularly with a fleet of 4 engine jets. There is a strong chance of recession around the world. China seems to be intent on lockdown forever, disrupting supply chains thereby contributing to the inflationary effects. The fact that the Chinese cannot travel will also dent loads and yields. And of course, the devastating war in Ukraine will have many knock-on effects in relation to energy and food prices.
All in all a grim outlook and IMHO unlikely to foster generosity for a pay review.
While there is a steady stream of resignations, attrition remains below 5% with pilots and on the other side, there is a steady stream of new joiners and rejoiners. Most however have a very short horizon to stay as they look for jobs closer to home or seek to go back to a different life they discovered having been made redundant. Many pilots are simply jaded with the profession, as it offers little security, much fatigue, loss of family life, and ever-diminishing rewards.
In real terms a pilots take home in the Middle East has decreased by 60% in the last 2 decades and the trajectory is ever downwards. Perhaps something to consider before uprooting the family to come here. But then there are not a lot of choices as the trend has been industry-wide. In fact more and more seem to seek an exit from the profession completely.
I know one thing with almost absolute certainty: In a year’s time we will be 5-10% worse off in terms of purchasing power and saving potential than we are before the imminent Salary Review. Nonetheless, we can live in hope that the Review will offer some respite.