Will demographics kill IR (Industrial relations)
 

'At the risk of being labelled a pilot-shortage-sceptic, I believe that, before any genuine widespread pilot shortage develops in Australia, various levers remain to be pulled by governments and employers to stave off any such shortage – especially in a country such as Australia, which remains an attractive destination for many overseas qualified and experienced professionals. '


Almost written by Qantas IR that statement, but there are increasingly evident signs that aging workforces are killing the notion that Australia can be viewed in myopic isolation.

• Exactly what levers can an airline like Qantas pull?
• Does it matter?
• Can one watch CASA to see the levers (ie JC and VH registration)

Globalised supply applies to Australian pilot conditions too. Gutting GA in this country, providing lesser returns to pilots who committed huge sums of money and time to gain requisite experience, be it through GA or self funded cadet programs resulted in career paths that were stagnant to non existent with the only hope being that of advancement. IR laughed all the way to the bank as Qantas lost a decade and now JQ looks like it will too.Has the table turned, should pilots simply accept downwards pressure on terms and conditions?

Should Oldmeadow consulting be taken to the woodshed?

No. They'll still need an Instrument Rating! :}

TM, where was the statement you posted originally published? From what I am reading about the U.S pilot shortage, it is very real and concerning for the airlines and the military.

Workplace demographics are profoundly changing.
The Australian Treasury released a paper, 32 pages in total that shows graphically the wave of retirements.

http://www.pprune.org/data:image/png...AAAElFTkSuQmCC
https://demographics.treasury.gov.au...challenges.pdf

Lookleft, the paragraph was written by a former AIPA union president. What strikes me as amazing is that pilot unions do not read these government reports and look at top down macro reality before expressing subjective opinions. In effect union representation is largely confined to responding to company (IR) started brush fires, ignoring economic reality. The statement went on to say;

'While AIPA has previously fought very successfully against the use of 457 Visa programs for pilots and always will, there is no guarantee such schemes will never be exploited. Another option available to airlines is to simply lower entry requirements – whether in respect of flying experience or other assessment criteria. One large Middle-Eastern lowered its entry requirements recently to meet pilot requirements.
Finally, the implementation of programs such as the Multi-Crew Pilot Licence (MPL), which has been given the imprimatur of bodies such as IATA and ICAO, potentially combined with traditional airline pilot cadet schemes, has the potential of supplying a steady stream of new airline pilots at the legal standard required'

In isolation, the statements seem reasonable, but they are terribly myopic.
Pilot supply is global. Whilst Australia may be a better place to live than many, at some point airlines will protect a strategic asset (yes that is a pilot) and offer attractive terms and conditions, commuting contracts and the like if their incremental steps do not attract sufficiently qualified applicants. To also be fair the author did state there are better ways to treat pilots to retain them and that is to offer more generous terms and conditions.

That is the point of this post, IR driving Qantas policy, HR capture of recruiting and an airline the shell of itself, with stagnant careers, Orwellian management and banal uniform policies has had its day.

My former colleagues myself included watched as management went crazy hoping for the birth of a modern IR trojan horse (JQ), sadly with many models the theory never lit off in practice.

Thus given;

• EK need 800 pilots next FY
• Qantas have at least 300+ training moves and continued recruitment to address a demographic shortfall
• Numerous carriers in the Asian region offering increasingly attractive remuneration packages
• A demographic problem growing in size

Can an airline like Qantas continue to allow IR driven crap of divide and conquer? My suspicion is yes as the corporation is captured by HR/IR control. Flight operations collectively left their self respect at the door when taking the corner office and myopic union management has made it all the easier. It however will contact with global supply reality in the nearer future than HR want.


I have been flamed before, and as the union president implied "Australia is somehow different" but is it?

• CASA licence issuance at historic lows
• RAAF applications ordinarily totalling 3,000 per annum lagging at circa 25%

https://www.pilotcareernews.com/trut...ilot-shortage/




Airlines Scrambling to Prevent Pilot Shortage | NBC 5 Dallas-Fort Worth


Pilots say shortages causing cancellations | Stuff.co.nz


The Coming U.S. Pilot Shortage Is Real | Commercial Aviation content from Aviation Week


It will be interesting to see how a dinosaur Chairman and petulant CEO address a new paradigm when every waking moment of their time at the helm has been to denigrate and divide, aided and abetted by faceless IR 'practitioners' :ok:

An interesting discussion for sure. The pilot market might be "global", but just as is true with the Aussie real estate market, there are markets within markets.

Eg, Sydney and Melbourne house markets are every differen to regional WA, which is also different to the Gold Coast market. By analogy, the world pilot market isn't one homogeneous blob that plays out identically in Asia or the USA to places like Australia. That seems to be the main point being made - along with pointing out that various options may be available to airlines/governments to limit the local effect of any shortage and that pilots relying on an Aussie pilot shortage might be relying on something that isn't so reliable? Maybe the imminent Aussie pilot shortage story that's been around forever won't be the answer to whatever problems we all have? Thought provoking anyway.

Even if Middel East and Chinese carriers offered even more, plenty of Aussie pilots would still not be the tempted.

At this stage the Qantas Recruitment thread on pprune suggests plenty of canidiatee are still missing out for now.

Property is fixed in a geographical market. Pilots (or any labor) can move at next to a whim in comparison. Terms and conditions are an important factor alongside remuneration.
Therefore the pilot market is only constrained by our perception of boundaries. We operate in a global industry. The fleets are relatively common in type and our skills and training are very much transferable.
Acute shortages will be regional and driven by supply and demand alongside terms and conditions.

While property may be fixed, I think the analogy is still very relevant, as the location of the airlines is generally also fixed, apart from a still small number of overseas bases offered by a few airlines. The location of the airlines being generally fixed, as properties are fixed, means that location will will affect demand and prices/terms and conditions.

As I said above, the middle eastern and Chinese-based carriers could offer double what I get at home and I still wouldn't be interested. So,while the pilot market might be global, so long as a sufficed terms are offered in popular places like Australia, the shortage will be much less likely to play out at Australian carriers that remunerate sufficiently.

Or, if that's wrong, then wonderful and I can't wait for this global shortage that's been decades in the marking to provide huge improvements to my QF LH terms.

One of the interesting things in this mix is the size of modern aircraft. In the early 70s there was a glut of pilots as the wide bodies arrived. In longhaul a B747 could replace 2.5 B707s and the same occurred domestically when the A300 and B767s replaced the B727.

For the last 15 years or so,we have watched as the B777, A330 and 787 etc replaced the B747. I'm not including the A380 in this discussion because to a fair degree its an aberration when looking at the numbers of B747,B777 etc produced and the A380 will on work on a limited number of routes with a very limited number of airlines. This is indicated by the fact that there appears to be no second hand market for A380s at present

Avionic improvements also feature in this which has enabled flexi tracking and reduced separation standards. Both of these items were impossible to this accuracy 20 years ago.

So my point is that in the case of future pilot numbers we cant use history to indicate where this is heading and a change in one part of the equation could change everything overnight. For example a rapid rise in fuel price could make aircraft on thinner routes uneconomic and we could see say the B737s on a 10 flights/day route replaced with a wide body 3 x/ day with the obvious employment implications.

Wunwing

Do you have a source for this assertion?

Not really. A 737 Captain in Australia cannot work in Europe without gaining an EASA licence, which takes a great deal of time and effort. This is a major barrier to the free movement of labour. I think designed to protect local jobs. I mean if foreign pilots can fly in to Europe safely on their foreign carrier why then can that same pilot not fly in Europe in a local aircraft? The answer is simple but the reason is nonsense.

If you want to talk about "global" I think of a web designer who can work from anywhere in the world with a good internet connection.

The seniority system is also a major barrier to the free movement of labour. Many from this part of the world don't go because they know they can't realistically get back.

Re -
"The only thing that'll cause a shortage in NZ/AUS is we let GA die and rather than come up with a local solution, allow the Airlines to import "skilled labor". There's not shortage of enthusiasm downunder, just a shortage of pathways to "experience".[/QUOTE]

And all too troo.....

Feds / Turnbull / Shorten / casa... where are U when the GA industry NEEDS a safe 'fostering' / evolvement to grow and supply the future airline pilots..??

Yeah I know..... 'Strict Liability' and 50,000 penalty units..... PLUS a series of 'volumes' containing legislation / rules / instructions...ALL of which COULD BE written within the size of a 'paperback' novel.....
(Did I mention FAA...NZ CAA...??))

Just a thought.......

What a complete WASTE..!!!!!!!!!!!!!!!!!!!!!!

No Cheers, Nope NONE at all.....:yuk:

I think this may be where the action is at if the global shortage starts to bite.
I have watched as Chinese carriers have gone from $17k a month to $24k a month and from two roster choices to nine in just a few short years. People like myself and Tuner 2 won't move even if it gets to $34k a month, but we might be tempted if we could earn more money, live in our home town, and sign a contract to do two out and back duties a month. If Tuner stayed in Sydney or Melbourne ( not sure where you live ) and signed up with Vietnam Airlines to do two return trips to Ho Chi Minh a month , or with China Southern to do two Shanghai returns a month, it would solve a problem for the Asian carrier and be quite a nice lifestyle for Tuner. If things get really tight in China or the US it could hit the Australian Airlines hard if these sort of contracts are offered.
It would work quite well, when Tuner gets off after his return trip to Asia I'll jump on and do the whole thing over again :)

[QUOTE=Tuck Mach;9732949][COLOR=#202020][FONT=Arial] [I]'At the risk of being labelled a pilot-shortage-sceptic.../QUOTE]

Tuck Mach,

Thanks for posting the articles. As a jack leg student of the subject (and no expert by even the loosest definition), I try to read every article I can find.

So far, they all appear to repeat the same fuzzy theme: there's a "shortage", with that word lacking a consensus definition upon which all discussion participants can make their cases. Anecdotal info must be set aside.

While the situation in the USA may be somewhat different from other parts of the world, there appears to be a common issue regardless of geography: lack of hard, independent, objective data about supply & demand. There's no unbiased (lacking economic motivation) central clearinghouse for supply/demand data.

The issue is an incredibly complex puzzle with several moving parts. A static analysis is merely a snapshot and therefore inadequate over time. I'm not sure a dynamic analysis is even possible.

And at some point, in addition to unbiased or even anecdotal data, clairvoyance is required. The world is never far from the next black swan event which can turn the situation from scarcity to surfeit.

As for me, I remain a skeptic.

There are so so many impediments to Australian pilots taking up foreign contracts, particularly in Asia and the middle east.

Simply raising the pay will not cut it for many of the reasons already outlined. Nevertheless this does all go favourably for Australian pilots because the money on offer is indeed continuing to rise which will always be a factor come EBA negotiating time.

Firstly there was never any defined pathway in Australia. It has always been a crapshoot. Those with connections tending to get through the tougher parts quicker.

Secondly the issue of the way that endorsements are now viewed in isolation is a real problem. For example a company could fly SAABs, have a 1000 applications from ATR/Dash 8/EMB-120 endorsed pilots and still go to the government claiming there are no suitably qualified applicants.

Well given that most of Europe has little to no GA for new pilots to have a "pathway to experience' but European airlines fill the right hand seat with 250 hour pilots and they seem to cope with this system, why would the Australian government not accept that system here?

That is exactly the point of the post. It will be a supply side issue that drives the change, but it will change.

A pathway for pilots restores respect for the role they play in an airline, gives the airline some supply chain advantages and undoes decades of abuse by airline management with an focus on labour unit cost at the expense of all else.

http://www.pprune.org/data:image/png...AASUVORK5CYII=http://www.pc.gov.au/research/completed/ageing-australia/ageing-australia.pdf

Given the wave of retirements Australia's taxation system faces, 'entitlements' are under pressure, the economy lacks sufficient eco boom workers to replace the retired. Treasury, the ATO and the Productivity Commission all draw the same conclusions: Demographics are destiny. Every western economy faces a similar predicament and aviation, although subject to state limitation is not excluded.Airlines still in state control from Singapore to the Middle Eastern Three will find the regulators working with the government to source supply. No country is immune though, supply is global.

Generally, whilst the demographic issue was not evident as those majority of workers were nowhere near retirement, airline IR used the business cycle to drive down terms and conditions, holding out until the cycle has peaked before concluding a deal. The business cycle has about a 5 to 7 year reversal. There is substantial literature outlining airline IR practice.

Airline IR practitioners HOLD out for a cycle correction then drive through the agreement. At Qantas that was evidenced with a long drawn out SH agreement taking years to settle, versus a hastily agreed to LH 787 deal. Does anyone stop to wonder why? (I may have my opinion on the appropriateness of the deal, but my point is the time taken to conclude the agreement) Other airlines do exactly the same thing, they all go to the same IATA conferences. :hmm:

Demographics overwhelm the business cycle, they are a long term bet but they will drive forced change. It won't happen with little Alan and Dorothy the Dinosaur (Clifford) but Oldmeadow ought be taken out back

My UK airline puts 250ish hour cadet pilots into the RH seat of an A320 straight out of the Training Organisations. Obviously with mandatory defined supervisory route flying initially.
Previous years saw the same movement onto Trident, B737. B757/767 with no safety problems, and we don't employ Cruise Only co-pilots (Second Officers I think you call them), all are trained for two pilot ops.
Its the training that counts not the hours. The USA FAA 1500 hr min, which could be instructing in a Cessna 150, is probably inferior!!

The only demographic in play here is the spreadsheet loving, MBA waving, office dwellers. If they had any idea what they were doing, they may actually start running the airline from the front line back rather than the board room "down". IR wouldn't be an issue if they stopped trying to fvck everyone over for a bonus.

Every few years Air NZ tries to add pilot to the Skills Shortage List by sponsoring articles which claim commercial aviation is about to collapse through a lack of pilots.

One of the NZ aviation advocacy groups has documented their repeated failed attempts to "predict" a chronic shortage and claim that the ONLY resolution is to import skills rather than actually invest in the country's population.

Aus/NZ airlines: how about you put your money where your mouth is and fund the gap between 250 and 1500 hours then you wouldn't have this problem. Stop trying to get someone else to pay for it. It's the cost of doing business.

And it looks like VA are restarting their cadet program as well:

Virgin Australia Pilot Training at FTA | HOME

Whilst a sustainable way to run an airline and a win/win for all, unfortunately it will never happen.

Airlines in this part of the world seem pretty well obsessed with running multiple airlines within their own airline. There are various reasons for this and whilst it is very inefficient it seems to be their modus operandi. But it does provide more management roles than otherwise necessary so it must be a good idea.

As long as that concept is around there is NEVER EVER going to be a career path. You will be siphoned off providing no real career or options. Just the hope of a new type if you take a x% pay cut.

This is now also exacerbated by the ridiculous ATPL requirements put onto pilots which will also work in companies favour. You are basically beholden to them to upgrade your license and prevent FO's from going anywhere until they can get a command and hence their ATPL.

So if things start going bad for companies they will just turn to the large expatriate pilot workforce and flush out all the major overseas carriers.

Failing that they will then go to the government and get in foreign pilots.

After that point, if it ever comes, they will have a problem.

Don't think that will work the aviation market keeps expanding as it has for the last 8 years. If the major overseas carriers are also feeling the pinch ( for Captains) they will have to provide the terms and conditions to maintain their workforce.

I'll be willing to bet that if QF bought some new iteration of a 777 and placed it on a wet leased outsourced crew arrangement, offering DE commands based in Australia, they would be inundated with type endorsed applications.

That is what you are dealing with. It would take some absolutely massive offers from overseas airlines to stop people leaving for that.

What about the same money, same city, but guaranteed two returns to Beijing per month plus a sim in Beijing every six months is all that's asked of you? Which would provide the best Australian lifestyle?

Whilst I totally agree that IR would love to try it on how exactly could they do it?


Fair Work Act prohibits it
Contract prohibits it
Call the airline 'terminal' again?


They will play the same two card trick with the 737 replacement; the usual cry of 'A320 to be crewed by the Botswana second XI on food stamps or Jetstar (insert subsidiary) etc. However it would be really interesting to see the argument in court on a transfer of flying 'no disadvantage' Fair Work Act test. Will the pilots believe the sky is falling again?? :ugh:

Furthermore, the 777 would largely replace the existing LH fleets, so I would say go ahead and try it, it is an idle threat. Redundancy payments alone are staggering and for what purpose to deny a career path? There are plenty of career paths outside the group, Qantas is a spent force and idle rhetoric may not hold sway much longer

As framer correctly asserts, there is a tipping point and for many pilots a commuting contract is becoming an increasingly viable alternative to waiting for the formless ( don't spook the market) 50 aircraft Qantas order...

Do you have to make redundancy payments to pilots who choose to go and fly for another entity?

Demographics will kill IR.

Young people don't feel an emotional connection to the red roo anymore. The world has gotten a lot smaller in the last 20 years. Working abroad and not paying obscene amounts of tax in Australia is attractive to a large percentage of people. Then you take into account how expensive Australia is and how it is near impossible for a young person to buy in Sydney and the decision is basically made for you.

Asia is only 7 hours away. These commuting contracts will be a real worry for those who need to fill control seats here.

Money talks.

Exactly, a state owned carrier needing pilots for purposes of actually running and building and airline will find the regulatory path smooth.Not all pilots will consider it, but look at it holistically and they have induced a strategic risk to their business entirely of their OWN making. New pilots need to be sourced, and trained, they tried to send 787 pilots to the UK and NZ as they do not have the capacity internally and the pilot workforce continues to age. What happens if Australia's Property Council Treasurer does something to Superannuation that induces 30 additional retirements? Am told the 737 system is bursting too!

Qantas has done this to itself. It is labour cost focused. It has been at internal war with itself since privatisation.

JQ was the Trojan horse, an IR nirvana, management fell over themselves to allegedly lower unit cost and whilst JQ has merit on limited scale, it has more aircraft than the parent, who despite management's best efforts refused to die. Have a look at the aircraft counts, ever wonder why they choose not to break out JQ International and JQ Domestic? They decided to tell the world in 2012 just how bad Qantas International was and report it as a separate segment.JQ International conveniently hidden, as are the funding structure for their so called minority investments in Asia.....

Little Alan did as ordered and gave it a big shake, achieving little beyond personal riches. Treating people as they do, pilots included was penny wise, but pound very foolish and demographics show them up: Qantas is simply a bigger fish in a small pond, there are increasingly broader horizons.

Denied a career path for the lost decade pilots are Qantas will be watching, as an observer am glad that the rhetoric will fade.

Time to head off to the US , green card lottery or grab a wife , affordable housing ,the list goes on !

The commuting contracts to China are not going to be that appealing to anyone with school aged kids. For older Captains it's a good way to retire early. If you are in your early 40's with kids at school living overseas or commuting to Asia is not going to be as favourable as being based here. Personally I don't think that they will be that popular on the whole as their are alot of negatives for people who are looking at 10+ years to go in the industry. For younger FO's or SO's getting the actual experience to qualify for contracts is going to be hard here.

Without getting into a prolonged debate over IR legislation I would have thought that having National Jet, Jet Connect, QantasLink and Network Aviation already doing Red Tail flying what difference would a another entity make? If Boeing or Airbus came out with a ultra long haul aircraft which could do direct anywhere, I think QF will have the leverage in the negotiation. The threat of bringing home the expats would be enough to drive down the wages once again.

Having recently chatted to someone who has just left one of the major recruitment companies I am not so sure. Another bird flu, SARS, 9-11, GFC will change it all but if something like that doesn't come along.......

What a lot of pilots fail to understand is that the Jetconnects etc were established under Howard's Workchoices. This made it easier From an IR perspective to establish Jetconnect. As Geoff Dixon said AIPA did nothing when Jetconnect started anyway! It was only later a case was pursued. The worst Qantas managed was a couple of 737s flying between NZ and AUS.
They didn't manage to Crew the A330 or the A380 with offshore or different crews.
The Labour government then made even more restrictive rules under the Fair Work Act. The Fair work act still stands. Pilots don't know the difference so allow bar room or crew room chat to form an incorrect opinion.
Section 318 3(e) and 313 provide protections from this occurring. If you want to go to JQ you actually breach the FWA so have to sign a waiver that's time limited. That protection didn't exist under Workchoices.
There was a bulls$&@ rumour going around by many that Peter Wilson and others were trying to start a contract company for the 787. All False.
Friends who know Peter personally and have recently flown with HOFO have told them this was false. Captain Wilson was busy preparing to be the Chief Pilot and director of flight operations for Tiger. Good rumour but only a rumour.

The good thing for all pilots is the market is rising globally particularly in China where 25k USD net a month is the worst a CPT can do if sufficiently qualified.
Many QF 737 SH captains are getting up to 50k net per month. That's over $500,000 a year after tax.
With commuting contracts on the rise and the shortage growing it's only a good thing for all pilots.
What is certain and no matter what, you will get the same fools talking down their own profession, living in fear of phantom pilots just waiting to sign up for their jobs at an imaginary start up company that they heard about in a crew bar.
Getting their panties in a twist over a silly white hat or a marriage equality issue.
Never mind defending the hard fought protections to keep safe, healthy and able to execute a flying job till age 65.

To make $50,000 after tax you'd need to do about $80,000 pre-tax - or at about $300/hr, more than 250 credit hours per month. Either a new world record or wrong. $50k after tax might've been done by someone in that one month the 9 or 10% bonus was paid.

That only talks about 'transferring' of flying. If the flying doesn't exist and the current staff stay on the same routes on the same pay scale and QF open up direct everywhere with a subcontractor it will make for an interesting court case.

Network, Jetconnect and National Jet are already doing this and to an even greater degree than my proposal.

One thing such an endeavour would do is put some pressure on ME and Asian Airlines which may lead to some better deals for pilots.

My time at Qantas a 'lost decade' too,

Neville: completely agree subsidiaries have already been set up creating group industrial leverage, but my point is to consider a paradigm shift.

IFF demographics are really biting, then the 'Adversarial IR approach" which sets up greenfield operations to drive terms and conditions (in real terms) downwards has had its day.

I would respectfully suggest an attempt to circumvent the LH award (I agree management would love to try it-Joyce more than most) may actually been seen for what it is; circumventing FWA ratified contracts and undermining workplace conditions, something even a Freehills loaded FWA commission would struggle to approve.

Given Qantas' stubborn resistance to a Group Opportunity List, I consider their 'Group impact recruiting model' with respect to releasing pilots from Qantas Link et al to mainline, 'subject to operational requirements' a tacit admission that their play book is out of date.

As Keynes said:

'The difficulty lies not so much in creating new ideas, as in escaping from old ones

-John Maynard keynes

Tuner 2.

Apologise for not being more specific. Contract 737 CPTs working in China are earning between $25,000-$50,000 AFTER tax per month.
Domestic Captains in Australia no where near that despite their hourly rate being high. Not going into specifics here, however It's more than anyone makes in QF by a significant margin LH or SH.

Many Check and training Captains are leaving Emirates to work for different Chinese Carriers. Not only because of pay but due to being treated poorly and working too hard.
Crossing multiple time zones at night and wrong times of the day isn't good for you. The science is catching up with evidence of how dangerous it is for ones health, however you don't need to ask any Emirates pilot how bad it is at the rate they are doing. Most are above 900 hours and they look exhausted.
The quality of Airline in China varies however the pay rates are extremely favourable in LH ops, much of the flying is 4 pilot and the workload and FRMS in LH cases is considerably better than in EK and others. Commuting a huge bonus too.
What will make many Aussie pilots valuable will be the comparative high experience level. What is the average now to command in QF SH. 20 years to the East Coast for a 737? Just the reality of QF now.
As someone mentioned earlier the quality US Airlines are having to pay good money and bonuses. With lower taxes and cities that are significantly cheaper than Sydney/Melbourne. Shame a green card is so hard.
Think it's great to see pilot wages and contracts rise higher.
A rising tide should lift all boats. Sadly I think pilots are their own worst enemy.
You'll hear boogieman stories from a guy at a bar who heard Pete Wilsons(insert names) Aunty is starting a secret contract company with 457 visa workers, trained at the ready if pilots say no to any deal.

Very true Gordon.
The same swarms that tell pilots to work weekends, holidays and all the rest, are educated administrators generating not a dollar of revenue. They also are all enjoying a long weekend. How many LSL slots were available for my colleagues still there? Don't forget admin headcount have to be paid for from flying people and planes...

Joyce has created additional layers of bureaucracy not seen since Napoleonic times, whilst simultaneously shedding airframes and getting lucky with fuel prices :rolleyes:

On another note, not just here but alas another western economy showing a demographic problem:

Stop-Loss an Option for Air Force to Keep Departing Pilots

Could be worse. According to Flight magazine, Nigerian carrier Aero Contractors has an employee to aircraft ratio of 500:1.

Thanks Captain Dart,

Qantas is getting up there in the 'back office negative efficiency stakes' Staff to aircraft ratio is on a tear to compete with Nigeria!

:ok: