Capt. Cloudbuster:
Lets assume a "fat cat" QF legacy Captain lazily earns $350 000.
$60 000 pa extra divided by 900 hrs = $66 per hour
$66 divided by 250 pax = 26 cents per pax per hour
Is it really your contention our industry depends on lower pilot wages as people will choose not to travel because of an impost of $1.82 per 7 hr flight !
No! No! No! You have got it bass ackwards! That is not how bean counters think!
Let me give you a purely theoretical Profit and Loss Statement:
Revenue..................$200,000,000
Less:
Fuel........................$40,000,000
Pilots and CC............$60,000,000
Maint. + Spares........$25,000,000
Other DOC's............$15,000,000
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Contribution margin..$60,000,000
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Corporate + Int. Tax.$48,000,000
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Profit ......................$12,000,000
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Guess which the biggest cost is?
So the chief Muppet goes to the bean counter Muppet and says "If you can cut 10% out of crew costs, we will raise profits 50%!!!!"
.and away they go.....
Then of course there is the "serious money" concept: If I ask to borrow Five dollars off you, you will most likely say "Yes". If instead I asked you for Five Thousand, you would tell me to eff off. The difference is that one amount is trivial in our minds, the other is "serious money".
There would be people in QF who would be thinking: "Why should
anyone who is not a board member or senior manager be paid $350,000 per annum?
Nobody who is a mere employee should be paid THAT much!" ie: It's "too much" (ie serious) money.
We often see this behaviour in managers who start bonus schemes for employees, usually salesman. They expect that an average salesman will make $50,000 and then get another $30,000 in commissions which they are happy to pay.
The scheme works well until Joe Supersalesman lands a "Whale" of a client and instead of paying out $30,000 as a bonus/commission to Joe he is suddenly paying $500,000. The normal reaction for the boss is to then decide that $500,000 is "serious money", and either welsh on the deal, or cap the scheme or install a sliding scale to the general demoralisation of the sales force.
IBM studied this phenomenon in detail in the 1960's and realised what a danger it was to sales performance. They went against that trend and even organised parties to celebrate handing out million dollar bonuses to successful salesmen.