Inflation Inflation! EK what to expect?
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Across the UAE prices took a sudden rise over the new year.
Many retailers increased prices of stock over the new year to deal with their increased costs. Most of it is subtle, a few dirhams here and there but in percentages the range is 30-80% over a large number of everyday items. Obviously this will be reflected in the final bill for multiple items.
Many services also increased costs for 2008. E.g. Maid services went up by Dhs 5 with many companies. This represents about a 20% increase.
Does anyone have any idea as to whether we will get a preview of salary increases in Jan or Feb as we did last year or was that a one off?
Many retailers increased prices of stock over the new year to deal with their increased costs. Most of it is subtle, a few dirhams here and there but in percentages the range is 30-80% over a large number of everyday items. Obviously this will be reflected in the final bill for multiple items.
Many services also increased costs for 2008. E.g. Maid services went up by Dhs 5 with many companies. This represents about a 20% increase.
Does anyone have any idea as to whether we will get a preview of salary increases in Jan or Feb as we did last year or was that a one off?
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If we're lucky we'll probably get a revision on the flight pay
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The 3% is pretty much certain as this is a yearly step ostensibly for loyalty, years of service etc. We used to have a schedule on this. Does anyone know if it still exists?
The flying pay will approximately double. This gives about a 17% rise at the bottom of the F/O scale which attracts new joiners depending on how the company spins it.
At the top end of the Captain's scale the increment is about 9.5%. This is approximately in line with published inflation figures for the UAE. No captains on the top scale will leave as its difficult to match the package elsewhere.
If the cycle is repeated for 5 years with flying pay adjusted to keep the total pay increase in the region of 10-15% then flying pay will represent approx 50% of the total monthly pay package.
The total increase for Provident Fund, ERP etc obviously only goes up by 3% which means over the years they can decrease it to negligible levels. If it goes up by 3% for 5 years while inflation stays in the 8-10% bracket this would represent a 30% devaluation of company contributions.
Again the company indirectly recovers cost when employees are on leave or are sick.
Flying pay was a definitive step toward a scheme of a basic retainer and pay for productive work while diluting other company package contributions. Pilots are no-longer considered professionals but simply hourly wage earners.
The flying pay will approximately double. This gives about a 17% rise at the bottom of the F/O scale which attracts new joiners depending on how the company spins it.
At the top end of the Captain's scale the increment is about 9.5%. This is approximately in line with published inflation figures for the UAE. No captains on the top scale will leave as its difficult to match the package elsewhere.
If the cycle is repeated for 5 years with flying pay adjusted to keep the total pay increase in the region of 10-15% then flying pay will represent approx 50% of the total monthly pay package.
The total increase for Provident Fund, ERP etc obviously only goes up by 3% which means over the years they can decrease it to negligible levels. If it goes up by 3% for 5 years while inflation stays in the 8-10% bracket this would represent a 30% devaluation of company contributions.
Again the company indirectly recovers cost when employees are on leave or are sick.
Flying pay was a definitive step toward a scheme of a basic retainer and pay for productive work while diluting other company package contributions. Pilots are no-longer considered professionals but simply hourly wage earners.
Join Date: Feb 2004
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And this from the pilots club..
INCREASE IN MEMBERSHIP FEES: Beginning February 2008, the EPC Membership fees will be increasing. This increase was approved at the AGM, held in December 2007. Single membership will now be AED75pcm, and Couple membership will be AED150pcm.
Is that a 50% increase as I am not sure what they pay now?
Dirt.
Is that a 50% increase as I am not sure what they pay now?
Dirt.
Join Date: Feb 2007
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No problem with EPC. It's great value, thanks guys.
whereas...
Unfortunately i have to agree. But as long as the competition in the region is managed by junior league clowns, backed by silly and ignorant owners, there's not much more in it for us. The poor pilots from these laughable outfits are constantly knocking on EK's door. Why should they up the package then? To replace those defectors, the clowns recruit the more inexperienced or desperate. But even these guys realise, that after a short while, and after increasing their hours, they can knock at this same door .... and the story repeats itself.
Pilot shortage is not that much of a problem for the best in the league. It only stops when the influx stops and this will only happen after a smoking hole when the affected outfit then raises the conditions etc. etc. (see GF tragedy). As cynical as this sounds, it has been proven over and over and no one seems to learn.
So we have to brace for more erosion of our conditions. Which, and i repeat myself, are still pretty good, just as the ops. But that's not a reason to simply accept such an erosion as long as the owners increase profits. Allthough i am out of ideas on how to defend ourselves, i have to admit ......
GMDS
whereas...
Pilots are no-longer considered professionals but simply hourly wage earners.
Pilot shortage is not that much of a problem for the best in the league. It only stops when the influx stops and this will only happen after a smoking hole when the affected outfit then raises the conditions etc. etc. (see GF tragedy). As cynical as this sounds, it has been proven over and over and no one seems to learn.
So we have to brace for more erosion of our conditions. Which, and i repeat myself, are still pretty good, just as the ops. But that's not a reason to simply accept such an erosion as long as the owners increase profits. Allthough i am out of ideas on how to defend ourselves, i have to admit ......
GMDS
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Well lets face it, technology is making up for eroding flying skills, communications and centralised operations management make up for lack of command skills. Hence it requires less and less ability to be a professional pilot.
Airlines recognise this and hence true salaries have decreased over the past 3 decades. Sure demand will go up but so will supply. The supply will be of a generally lower quality and experience level but nonetheless adequate to fulfil the task except on relatively rare occasions.
Given the scarcity of these occasions it boils down to economic risk management. Occasionally hulls will be lost but if catered for in the planning, the risk may be acceptable.
As aircraft technologies and airports improve the remuneration for flying can only go one way.
Airlines recognise this and hence true salaries have decreased over the past 3 decades. Sure demand will go up but so will supply. The supply will be of a generally lower quality and experience level but nonetheless adequate to fulfil the task except on relatively rare occasions.
Given the scarcity of these occasions it boils down to economic risk management. Occasionally hulls will be lost but if catered for in the planning, the risk may be acceptable.
As aircraft technologies and airports improve the remuneration for flying can only go one way.
Thread Starter
Join Date: Mar 2005
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What about the level of responsibility? Bigger airplanes, more people, more problems, more rules, more destinations, more risks, no protections... It's not about skills, it's about responsibilities. How much do you need to get paid to go to work being the last slice of cheese...
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My prediction is: Inflation rate here is gonna be unacceptable (Just like the last few years).
In today's press:
Business (Gulfnews)
Economy
Inflation hits Gulf business confidence
By Cleofe Maceda, Staff Reporter
Published: January 10, 2008, 00:55
Dubai: Business confidence in the Gulf has dipped with businesspeople complaining about inflation, the fourth quarter 2007 HSBC Gulf Business Confidence Index shows.
Read the whole article on this link:http://www.gulfnews.com/business/Economy/10180719.html
In today's press:
Business (Gulfnews)
Economy
Inflation hits Gulf business confidence
By Cleofe Maceda, Staff Reporter
Published: January 10, 2008, 00:55
Dubai: Business confidence in the Gulf has dipped with businesspeople complaining about inflation, the fourth quarter 2007 HSBC Gulf Business Confidence Index shows.
Read the whole article on this link:http://www.gulfnews.com/business/Economy/10180719.html
Join Date: Oct 2007
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INFLATION - WHAT TO EXPECT ?!?!?!
Are you kidding?
Over the new year prices rocketed in Dubai. Inflation for January is now over 20% PA.
US has no choice but to cut interest rates to prevent or at least mitigate recession. Bernake stated as much today. The dollar is going down futher and with it the Dirham. If you are getting ERP you are probably peaked at the cap so your salary will now go down in tandem.
Along with this so will your Provident Fund if you are in US Equities or cash.
Standby for rampant inflation this year, with a dwindling salary. It all means one thing. LESS DISPOSABLE INCOME or LESS SAVINGS.
If you are in any doubt look at the Gold and Oil prices in Dollars or Dirhams. They tell the truth as they are tangible commodities. If you thought 2007 was harsh you aint seen nothing yet.....
Are you kidding?
Over the new year prices rocketed in Dubai. Inflation for January is now over 20% PA.
US has no choice but to cut interest rates to prevent or at least mitigate recession. Bernake stated as much today. The dollar is going down futher and with it the Dirham. If you are getting ERP you are probably peaked at the cap so your salary will now go down in tandem.
Along with this so will your Provident Fund if you are in US Equities or cash.
Standby for rampant inflation this year, with a dwindling salary. It all means one thing. LESS DISPOSABLE INCOME or LESS SAVINGS.
If you are in any doubt look at the Gold and Oil prices in Dollars or Dirhams. They tell the truth as they are tangible commodities. If you thought 2007 was harsh you aint seen nothing yet.....
Join Date: Jan 2003
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I agree with Schismatic. The price increases after the New Year have been
incredible. Almost every tag displaying the prices on the supermarket shelves
have been manually altered and increased. I think I could conservatively say by 20%.My local car wash is now 30dhs up from 20dhs and the super duper one at the defense round about is now 35 up from the usual 30.(although I must say this is still great value).Now those "happy pilots" amongst us may say this is also occurring in the 1st world. True however my fear is that coupled with the de-valuing US$ and the previous steep inflation in Dubai we are in for a hard year in the hip pocket.EK will address the problem with the usual 3% and perhaps a increase in flight pay of lets say 5%.However,they will get it back in productivity. Certainly factoring will again raise its ugly head along with 24hr layovers in IAH,SFO,YVR and LAX.I wont even mention what will happen with the allowances down-route. My guess is an overall package reduction in relation to the rest of the world of 15% after the review in March.
incredible. Almost every tag displaying the prices on the supermarket shelves
have been manually altered and increased. I think I could conservatively say by 20%.My local car wash is now 30dhs up from 20dhs and the super duper one at the defense round about is now 35 up from the usual 30.(although I must say this is still great value).Now those "happy pilots" amongst us may say this is also occurring in the 1st world. True however my fear is that coupled with the de-valuing US$ and the previous steep inflation in Dubai we are in for a hard year in the hip pocket.EK will address the problem with the usual 3% and perhaps a increase in flight pay of lets say 5%.However,they will get it back in productivity. Certainly factoring will again raise its ugly head along with 24hr layovers in IAH,SFO,YVR and LAX.I wont even mention what will happen with the allowances down-route. My guess is an overall package reduction in relation to the rest of the world of 15% after the review in March.
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Inflation, Currency Movements, Salary Increases etc. We can debate for hours.
Simple Fact: If you look at a comparable EK salary e.g. Joining F/O or 5 years with the company Capt, the salary has dropped dramatically when measured against almost anything.
Forget the numbers; take the salary and see what it bought in terms of Gold, Property, Oil, Grain, Labour etc. and the depreciation is huge.
EG A Starting EK FO in 1997 earned 12 Ounces of Gold. Today he earns 6.2 Ounces. Try it with oil, wheat, whatever you like and the ratios will be comparable. Same for an EK captain.
Little wonder the employees are cynical. Being told you are worth less every year hardly buys loyalty.
The "its not so bad" brigade make me laugh. Sure if they came from a worse circumstance then things are better. If anyone has been here for some time however then they naturally would feel unappreciated given the EK profits over the same periods have risen when measured against the same benchmarks.
Simple Fact: If you look at a comparable EK salary e.g. Joining F/O or 5 years with the company Capt, the salary has dropped dramatically when measured against almost anything.
Forget the numbers; take the salary and see what it bought in terms of Gold, Property, Oil, Grain, Labour etc. and the depreciation is huge.
EG A Starting EK FO in 1997 earned 12 Ounces of Gold. Today he earns 6.2 Ounces. Try it with oil, wheat, whatever you like and the ratios will be comparable. Same for an EK captain.
Little wonder the employees are cynical. Being told you are worth less every year hardly buys loyalty.
The "its not so bad" brigade make me laugh. Sure if they came from a worse circumstance then things are better. If anyone has been here for some time however then they naturally would feel unappreciated given the EK profits over the same periods have risen when measured against the same benchmarks.
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True - In fact in many areas the true salaries have fallen dramatically in the UAE, squeezed by companies, a declining dirham and the associated inflation.
Unfortunately most people get focused on the numerical amount and its percentage increase when they get a raise. A 15% salary raise, for instance, is hardly exciting, if the currency drops 10% and inflation runs at 10% as it has over the last year. And these figure are conservative!
The goverment realised this when it gave their employees a 70% rise. It was simply putting their comparitive earning power back in line with what is was some years ago. Of course this move will in itself fuel inflation as someone has to pay the bill. Standby for large increases in any government service. I believe DEWA costs are to go up in the next month.
Anyone joining an airline in the region should simply check the trend of salaries against some tangible asset before making choice to move here.
EK salaries have undeniably fallen considerably over the past decade. And there is no magic bullet of pilot shortage that will remedy this. EK have sucessfully navigated this hurdle before and still kept lowering the real costs of the employees.
The downward trend has never been broken.
Unfortunately most people get focused on the numerical amount and its percentage increase when they get a raise. A 15% salary raise, for instance, is hardly exciting, if the currency drops 10% and inflation runs at 10% as it has over the last year. And these figure are conservative!
The goverment realised this when it gave their employees a 70% rise. It was simply putting their comparitive earning power back in line with what is was some years ago. Of course this move will in itself fuel inflation as someone has to pay the bill. Standby for large increases in any government service. I believe DEWA costs are to go up in the next month.
Anyone joining an airline in the region should simply check the trend of salaries against some tangible asset before making choice to move here.
EK salaries have undeniably fallen considerably over the past decade. And there is no magic bullet of pilot shortage that will remedy this. EK have sucessfully navigated this hurdle before and still kept lowering the real costs of the employees.
The downward trend has never been broken.
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Pixy you are correct the banks here want it both ways ( they do all over the world but not quite on the same scale as here!) I now keep NO spare cash in this beautiful place everything goes into a decent currency crap exhange rate or not!
On the subject of the declining dollar for those sending money to the UK the pound has weakened dramatically against the dollar over the last two months and looks set to continue this trend with many currency traders predicting a $1.70 to the pound by the end of this year.
On the subject of the declining dollar for those sending money to the UK the pound has weakened dramatically against the dollar over the last two months and looks set to continue this trend with many currency traders predicting a $1.70 to the pound by the end of this year.
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Time to Name and Shame
Does anyone know of any banks that HAVE cut mortgage rates?
I know my bank HSBC have done nothing at all and say they do not intend to do so.
Yeah Greed is Good but ultimately it will be your undoing. What happened to Gordon..
Does anyone know of any banks that HAVE cut mortgage rates?
I know my bank HSBC have done nothing at all and say they do not intend to do so.
Yeah Greed is Good but ultimately it will be your undoing. What happened to Gordon..