EU Law to ban Airline Bonds!!
Guest
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The fact of the matter is that as long as pilots continue to screw their employers by leaving after getting expensive type ratings, there will be bonding in one form or another.
Tilii may argue that it's the employers that are screwing the employees - regardless of actual numbers, it's very much a case of "he who pays the piper calls the tune" in the most literal sense.
Unfortunately, if someone is prepared to breach their contractual commitments in the first place, I don't see how the suggestion of arbitration can possibly work - as they have already demonstrated that their word is most certainly not (please pardon the pun) their bond. The only viable solution is therefore a financial sanction in the form of an enforceable bond or loan commitment from a bank.
That said, I have made my position clear on extended bonds and bonds where the company asks people to take certain ratings - I don't believe that they are ethical. They need to be fair and equitable and the fact of the matter remains that for the overwhelming majority of people, a bond remains a few pieces of paper and doesn't affect them in the slightest!
Tilii may argue that it's the employers that are screwing the employees - regardless of actual numbers, it's very much a case of "he who pays the piper calls the tune" in the most literal sense.
Unfortunately, if someone is prepared to breach their contractual commitments in the first place, I don't see how the suggestion of arbitration can possibly work - as they have already demonstrated that their word is most certainly not (please pardon the pun) their bond. The only viable solution is therefore a financial sanction in the form of an enforceable bond or loan commitment from a bank.
That said, I have made my position clear on extended bonds and bonds where the company asks people to take certain ratings - I don't believe that they are ethical. They need to be fair and equitable and the fact of the matter remains that for the overwhelming majority of people, a bond remains a few pieces of paper and doesn't affect them in the slightest!
Guest
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Tilii,
I applaud your views and argument on this subject, but I must take you to task for your comments a page or two back suggesting that the ex military have had their licences paid for by the taxpayer.
Throughout my time in the RN I was a taxpayer too, and served my fellow taxpayers in various parts of the world, sometimes at considerable risk to my health.
Upon leaving, I shelled out the best part of £14000 to aquire ATPLs both fixed and rotary. The CAA credited me with nothing but my flying hours. All the exams had to be sat, all the flying tests taken and paid for.
Right now, I find myself in the last six months of a bond for a type to be phased out by my employer, who at present is insisting that a new bond will be required for the upcoming enforced changed type rating.
As you say...immoral and reprehensible. Hopefully a mass refusal to sign such a bond will have the desired effect, but canvassing support from fellow pilots would break other company rules and leave one wide open to yet more wrath from the likes of the Guv.
I applaud your views and argument on this subject, but I must take you to task for your comments a page or two back suggesting that the ex military have had their licences paid for by the taxpayer.
Throughout my time in the RN I was a taxpayer too, and served my fellow taxpayers in various parts of the world, sometimes at considerable risk to my health.
Upon leaving, I shelled out the best part of £14000 to aquire ATPLs both fixed and rotary. The CAA credited me with nothing but my flying hours. All the exams had to be sat, all the flying tests taken and paid for.
Right now, I find myself in the last six months of a bond for a type to be phased out by my employer, who at present is insisting that a new bond will be required for the upcoming enforced changed type rating.
As you say...immoral and reprehensible. Hopefully a mass refusal to sign such a bond will have the desired effect, but canvassing support from fellow pilots would break other company rules and leave one wide open to yet more wrath from the likes of the Guv.
Guest
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Arkroyal,
Yours is a good example of the sort of bully boy tactics professional pilots have to endure. For heavens sake don't sign the new bond, I think you'll find that your old bond has legally expired when you do change types.
Get yourself some legal cover through the IPA, its cheap, its tax deductible and the employment lawyers are first rate.
Good luck!
Yours is a good example of the sort of bully boy tactics professional pilots have to endure. For heavens sake don't sign the new bond, I think you'll find that your old bond has legally expired when you do change types.
Get yourself some legal cover through the IPA, its cheap, its tax deductible and the employment lawyers are first rate.
Good luck!
Guest
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Hang on, Arkroyal - haven't I made my position on subsequent bonding, especially when the type change is requested by the company, clear enough?
I am against it - as you say, it's morally reprehensible. What I'm looking at here is someone joining a company and being trained on type - that's completely different!!
I am against it - as you say, it's morally reprehensible. What I'm looking at here is someone joining a company and being trained on type - that's completely different!!
Guest
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Sorry, Guv
I simply meant that to break other company rules would exercise the management, i.e the likes of you! Didn't make myself clear.
Thanks sapco, I'm a BALPA member, and at risk of opening up the IPA/BALPA argument, they are trying to do something about it, but with the usual success!
I simply meant that to break other company rules would exercise the management, i.e the likes of you! Didn't make myself clear.
Thanks sapco, I'm a BALPA member, and at risk of opening up the IPA/BALPA argument, they are trying to do something about it, but with the usual success!
Guest
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Sapco2
Thanks for the kind support, though please understand that I do not seek to ‘win’ a debate here. What I seek is an equitable solution to a perceived immoral practice. I now believe there is such a solution as posted above, though it remains to be seen whether aircrew have the collective moral fortitude to implement it or whether they are just too selfish to do anything more than they have done (or not done) in the past.
Arkroyal
I intended no general offence in my comments. If you are offended, then I withdraw the remarks and apologise.
As to your situation with regard to bonding, I hope you will look at the advice given above and do what is right in the circumstances.
I presume others share your situation within this airline? If so, you might perhaps get together with them and discuss the wide content of this thread. What on earth do you mean when you say, “canvassing support from fellow pilots would break other company rules”? Surely you are not contractually bound to refrain from discussion, or from free association, with your colleagues?
I think the point here is that, where an employer seeks to protect training investment, there cannot really be any equitable reason for differentiation between doing so on induction type training and doing so when changing a type for pilots already having part served (even served out) a bond on another type. If it is morally justifiable to do so in one event, then why not in the other?
The suggestion made above (that pilots should refuse to sign a bond without inclusion in the bonding contract of a ‘dispute resolution’ clause together with agreement that there must be an independent arbitrator) is, I think, a good way forward. Why not run the proposal past your employer and see what the reaction is? I would be interested to hear further.
Thanks for the kind support, though please understand that I do not seek to ‘win’ a debate here. What I seek is an equitable solution to a perceived immoral practice. I now believe there is such a solution as posted above, though it remains to be seen whether aircrew have the collective moral fortitude to implement it or whether they are just too selfish to do anything more than they have done (or not done) in the past.
Arkroyal
I intended no general offence in my comments. If you are offended, then I withdraw the remarks and apologise.
As to your situation with regard to bonding, I hope you will look at the advice given above and do what is right in the circumstances.
I presume others share your situation within this airline? If so, you might perhaps get together with them and discuss the wide content of this thread. What on earth do you mean when you say, “canvassing support from fellow pilots would break other company rules”? Surely you are not contractually bound to refrain from discussion, or from free association, with your colleagues?
I think the point here is that, where an employer seeks to protect training investment, there cannot really be any equitable reason for differentiation between doing so on induction type training and doing so when changing a type for pilots already having part served (even served out) a bond on another type. If it is morally justifiable to do so in one event, then why not in the other?
The suggestion made above (that pilots should refuse to sign a bond without inclusion in the bonding contract of a ‘dispute resolution’ clause together with agreement that there must be an independent arbitrator) is, I think, a good way forward. Why not run the proposal past your employer and see what the reaction is? I would be interested to hear further.
Guest
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parkfell,
The IPA subs of £5 pm are not subject to tax relief but the legal insurance cover is recognised as a tax deductible expense here in the UK. I pay £19.95 pm gross (£11.97 after tax) for £250,000 of worldwide legal cover.
[This message has been edited by sapco2 (edited 11 June 2001).]
The IPA subs of £5 pm are not subject to tax relief but the legal insurance cover is recognised as a tax deductible expense here in the UK. I pay £19.95 pm gross (£11.97 after tax) for £250,000 of worldwide legal cover.
[This message has been edited by sapco2 (edited 11 June 2001).]
Guest
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For The Guvnor
I had expected you to respond to the question posed in my last post, Guv. Can you explain why you so fervently hold that induction type bonding is totally justifiable on the ground that it is a company’s right (if not duty) to protect its training investment whereas you repeatedly argue that “subsequent bonding, especially when the type change is requested by the company … . [is] morally reprehensible”?
Having already conceded the argument that protection of training investment is reasonable, I find it impossible to hold that there is any recognisable difference between initial and subsequent bonding. It cannot be denied that in both cases a company is digging deep (and you have argued massive costs far beyond what I believe are realistic) to provide type training for its crews. If we are to accept that it is fair that bonding agreements protect such investment, why must we accept that only bonding for initial type training is morally OK?
You say these things are “completely different”, yet it is inescapably true that they are not insofar as they both represent no more than an attempt by a company to protect training investment. If one such an attempt is justifiable, why not the other?
Is it even remotely possible that bonding is actually intended for some other (unspecified) purpose than 'protection of training investment? Is it possible, then, that bonding is really intended to do little more than ensnare a pilot workforce and prevent it from exercising its right to free movement?
If not, please explain why so.
I had expected you to respond to the question posed in my last post, Guv. Can you explain why you so fervently hold that induction type bonding is totally justifiable on the ground that it is a company’s right (if not duty) to protect its training investment whereas you repeatedly argue that “subsequent bonding, especially when the type change is requested by the company … . [is] morally reprehensible”?
Having already conceded the argument that protection of training investment is reasonable, I find it impossible to hold that there is any recognisable difference between initial and subsequent bonding. It cannot be denied that in both cases a company is digging deep (and you have argued massive costs far beyond what I believe are realistic) to provide type training for its crews. If we are to accept that it is fair that bonding agreements protect such investment, why must we accept that only bonding for initial type training is morally OK?
You say these things are “completely different”, yet it is inescapably true that they are not insofar as they both represent no more than an attempt by a company to protect training investment. If one such an attempt is justifiable, why not the other?
Is it even remotely possible that bonding is actually intended for some other (unspecified) purpose than 'protection of training investment? Is it possible, then, that bonding is really intended to do little more than ensnare a pilot workforce and prevent it from exercising its right to free movement?
If not, please explain why so.
Guest
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Gentlemen
May I please put another proposition to you all? It occurs to me that there is yet another way of looking at the issue of bonding, as follows:
Sound business practice dictates that it is necessary before embarking upon a proposed business venture that projected profit and loss is estimated through a simple device described as a ‘cash flow forecast’. Indeed, it would be difficult, if not impossible, to obtain finance without such a projection.
Since it is inescapably true that an airline is required by law to ensure that its pilots are trained on the aircraft type it is intended to operate, the cost of such training is foreseeable, easily estimated, and is a true cost that MUST be taken into account. It might also be said that to leave this calculation out of a business plan might be incompetent in the extreme and may, in some circumstances (such as where finance is sought), be fraudulent.
An airline primarily seeks to achieve its cash inflow through ticket sales and/or freight revenues. If an airline intends to generate profit, it is bound to set its ticket prices and/or freight charges at a level sufficient to ensure such profit. If it fails to do so, it is bound to fail.
Whatever the costs of buying (or leasing) and operating an aircraft fleet, those costs can ONLY be recovered through revenue generation. Another way of putting this is that the intended customer must pay for all the costs of the service provided (and let’s not forget that this industry is nothing more than a service provider in the true sense of the definition). A workforce should not be required to become a SOURCE of revenue. Repeat: THE CUSTOMER MUST PAY ...
Notwithstanding the fact that there is a proportion (arguably small) of a pilot workforce that will leave the employer before the cost of type training was planned to be amortised, it remains true that this is a factor that can be accurately estimated and included in the initial cost assessment. If it is true that such pilots exist, then it is true that they can, and should, be taken into account in cost assessment.
Looking at this from the stance of a beancounter, it is probably true to say that training costs were initially seen as a VARIABLE cost, dependent upon the length of service of a pilot after training. And beancounters do not like variables. They see them as potentially bankrupting factors (and rightly so). A perceived solution to this problem of variability of cost is to attempt to make the cost FIXED. Bonding is such an attempt. To have pilots amortise their own training costs through a depreciating bonding agreement is nothing more than to turn a variable cost into a fixed cost. This makes cash flow predictions simpler and more reliable.
However, in dealing with the perceived problem in this manner, the pilot is treated much the same as the company car. The human being becomes the inanimate object. Further, it is unarguably true that handling the problem this way leads to artificially suppressed ticket and freight pricing in that the customer does not carry the full burden of this training cost. The customer is not directly required to pay for the cost. Airfares are being subsidised by the pilot. And this is where the MORALITY of such practice comes into question.
There is, of course, another way to tackle the problem. That is to consider the variable over time in order to obtain the limits of natural variability. Once done, it is possible to make extremely accurate predictions as to the variability and to then factor a ‘mean’ into the estimated cost. But, from a beancounter’s perspective, this would necessitate a good deal more work and would require that the cash flow forecast shows the true cost as amortised by the CUSTOMER (not the pilot) from the outset. In other words, the figures would not look quite so good on the forecast that must be submitted to management, and possibly to shareholders or financiers.
As a beancounter, what would you do? You would take the bonding agreement route would you not, especially when you are cognisant of the fact that pilots are largely of a kind who do the job more from the love of it than for the money? And there is the rub, boys, for we have let them do this. We have given our approval to being treated like the company car rather than as individual human beings. We have lost the status of paid professional.
It is my experience that one will find it virtually impossible to have a beancounter voluntarily factor in a human condition (and where pilots seek to leave an employer for whatever reason, this is a part of the human condition). But it also my experience that the collective will of a determined workforce can move such mountains. Repeat: THE COLLECTIVE WILL ...
So, it remains for us to decide whether we wish to go on being the beancounters’ patsies; whether we are prepared to go on with this inequitable practice of subsidising slightly lower (very slightly lower) revenue prices simply to assist the beancounters in making their cash flow predictions easier; whether we want to be viewed as inanimate objects rather than as human beings … professional pilot human beings.
It’s our call!
May I please put another proposition to you all? It occurs to me that there is yet another way of looking at the issue of bonding, as follows:
Sound business practice dictates that it is necessary before embarking upon a proposed business venture that projected profit and loss is estimated through a simple device described as a ‘cash flow forecast’. Indeed, it would be difficult, if not impossible, to obtain finance without such a projection.
Since it is inescapably true that an airline is required by law to ensure that its pilots are trained on the aircraft type it is intended to operate, the cost of such training is foreseeable, easily estimated, and is a true cost that MUST be taken into account. It might also be said that to leave this calculation out of a business plan might be incompetent in the extreme and may, in some circumstances (such as where finance is sought), be fraudulent.
An airline primarily seeks to achieve its cash inflow through ticket sales and/or freight revenues. If an airline intends to generate profit, it is bound to set its ticket prices and/or freight charges at a level sufficient to ensure such profit. If it fails to do so, it is bound to fail.
Whatever the costs of buying (or leasing) and operating an aircraft fleet, those costs can ONLY be recovered through revenue generation. Another way of putting this is that the intended customer must pay for all the costs of the service provided (and let’s not forget that this industry is nothing more than a service provider in the true sense of the definition). A workforce should not be required to become a SOURCE of revenue. Repeat: THE CUSTOMER MUST PAY ...
Notwithstanding the fact that there is a proportion (arguably small) of a pilot workforce that will leave the employer before the cost of type training was planned to be amortised, it remains true that this is a factor that can be accurately estimated and included in the initial cost assessment. If it is true that such pilots exist, then it is true that they can, and should, be taken into account in cost assessment.
Looking at this from the stance of a beancounter, it is probably true to say that training costs were initially seen as a VARIABLE cost, dependent upon the length of service of a pilot after training. And beancounters do not like variables. They see them as potentially bankrupting factors (and rightly so). A perceived solution to this problem of variability of cost is to attempt to make the cost FIXED. Bonding is such an attempt. To have pilots amortise their own training costs through a depreciating bonding agreement is nothing more than to turn a variable cost into a fixed cost. This makes cash flow predictions simpler and more reliable.
However, in dealing with the perceived problem in this manner, the pilot is treated much the same as the company car. The human being becomes the inanimate object. Further, it is unarguably true that handling the problem this way leads to artificially suppressed ticket and freight pricing in that the customer does not carry the full burden of this training cost. The customer is not directly required to pay for the cost. Airfares are being subsidised by the pilot. And this is where the MORALITY of such practice comes into question.
There is, of course, another way to tackle the problem. That is to consider the variable over time in order to obtain the limits of natural variability. Once done, it is possible to make extremely accurate predictions as to the variability and to then factor a ‘mean’ into the estimated cost. But, from a beancounter’s perspective, this would necessitate a good deal more work and would require that the cash flow forecast shows the true cost as amortised by the CUSTOMER (not the pilot) from the outset. In other words, the figures would not look quite so good on the forecast that must be submitted to management, and possibly to shareholders or financiers.
As a beancounter, what would you do? You would take the bonding agreement route would you not, especially when you are cognisant of the fact that pilots are largely of a kind who do the job more from the love of it than for the money? And there is the rub, boys, for we have let them do this. We have given our approval to being treated like the company car rather than as individual human beings. We have lost the status of paid professional.
It is my experience that one will find it virtually impossible to have a beancounter voluntarily factor in a human condition (and where pilots seek to leave an employer for whatever reason, this is a part of the human condition). But it also my experience that the collective will of a determined workforce can move such mountains. Repeat: THE COLLECTIVE WILL ...
So, it remains for us to decide whether we wish to go on being the beancounters’ patsies; whether we are prepared to go on with this inequitable practice of subsidising slightly lower (very slightly lower) revenue prices simply to assist the beancounters in making their cash flow predictions easier; whether we want to be viewed as inanimate objects rather than as human beings … professional pilot human beings.
It’s our call!
Guest
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To Tilii's first recent posting, may I deign to answer on Guvnor's behalf.
My view on the moral justification of subsequent new type bonding for existing employees is that it depends entirely on whose choice this is.
The initial agreement between employer and pilot on joining company is that employer bears the cost of training but requires employee to give him reasonable return on this investment by sticking around for a while. Employer requires bond to ensure employee sticks to his side of the bargain.
Once employee has stuck around for a period, employee has provided the return on employers investment and everyone is happy.
Now lets say employer removes type from employees base or from whole company. In this situation it is the employers choice to remove the potential benefit from his initial investment. The employee does not gain (or at least has not sought to gain) from the change and presumably would have been quite happy carrying on on his old equipment type. In this circumstance I believe that the employer has made the decision and caused the need to retrain, hence he should not seek to bond the pilot on this type.
If however the pilot chooses to train for a new type, e.g. prop captain upgrades to jet
where he could have continued to fly the former type, my view is that this is a very different situation. The pilot is asking the company to invest in him and in that situation (if you accept the principal of the bond in the first place) co. is I believe then entitled to insist that the pilot being invested in at the pilots choice guarentees the return on investment.
I think your second posting goes back to questioning whole basis of bonding. I have covered my views on this on about page 3 of this, so I'll leave others to debate this one.
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Minogue
Thanks for the reply, although I would have been happier to see The Guvnor make his own reply without the benefit of borrowing from your argument.
I follow your reasoning, and it is certainly well put. However, I feel it is based on a false premise, as explained in my latter post above to which you do not respond, as follows:
You say the employer “requires [the] employee to give him reasonable return on this [the training] investment”. Can you explain why you feel that an employer is justified in seeking a return on investment from an employee? Surely, this issue is the very nexus of the whole debate. I hold that there is no justification for it, for the simple reason that return on investment should be sought from the revenue source, viz. the targeted customer, the consumer of the product or the service, in this case the passenger or the freight forwarder.
It seems to me that it is irrelevant whose CHOICE it is that an airline changes or upgrades its aircraft type, or that a pilot be promoted from turboprop to jet, or to another fleet, or from F/O to skipper. Surely the objective of such change is always the commercial one of making, or continuing to make, profit for the company. This premise, I think, holds true whether viewed from the perspective of the employer or the employee. For example, it may well be of benefit to a pilot that he/she is promoted to a bigger and better type, or from F/O to Captain, but the same change must also, and always, bring benefit to the employer otherwise the promotion simply would not happen.
Finally, I aver that my second above post does not so much go back to the whole basis of bonding as it challenges it from a new perspective as far as pilots are concerned. I would appreciate your eminently well-reasoned views if you have the time to respond.
Thanks for the reply, although I would have been happier to see The Guvnor make his own reply without the benefit of borrowing from your argument.
I follow your reasoning, and it is certainly well put. However, I feel it is based on a false premise, as explained in my latter post above to which you do not respond, as follows:
You say the employer “requires [the] employee to give him reasonable return on this [the training] investment”. Can you explain why you feel that an employer is justified in seeking a return on investment from an employee? Surely, this issue is the very nexus of the whole debate. I hold that there is no justification for it, for the simple reason that return on investment should be sought from the revenue source, viz. the targeted customer, the consumer of the product or the service, in this case the passenger or the freight forwarder.
It seems to me that it is irrelevant whose CHOICE it is that an airline changes or upgrades its aircraft type, or that a pilot be promoted from turboprop to jet, or to another fleet, or from F/O to skipper. Surely the objective of such change is always the commercial one of making, or continuing to make, profit for the company. This premise, I think, holds true whether viewed from the perspective of the employer or the employee. For example, it may well be of benefit to a pilot that he/she is promoted to a bigger and better type, or from F/O to Captain, but the same change must also, and always, bring benefit to the employer otherwise the promotion simply would not happen.
Finally, I aver that my second above post does not so much go back to the whole basis of bonding as it challenges it from a new perspective as far as pilots are concerned. I would appreciate your eminently well-reasoned views if you have the time to respond.
Guest
Posts: n/a
I always wondered who was sad enough to have nothing better to do at 5am in the morning than to log in here. Still the blessing of sleep appears to be denied me today as I worry over an employee issue so I may as well do something vaguely constructive. My apologies if my arguements now are even less coherent than usual.
I think that ultimately it is shareholders funds that supply all investment but for the purpose of this post I will accept your reasoning that it is end customers. I think the arguement still stands.
The customer is prepared to commit his hard earned money to the airline. He expects I think fairly the cost of his ticket to be the lowest possible given the requirement of the airline to fund its direct costs its investment requirement and make a reasonable profit. If the investment is say a new aircraft, customer A will hope to see a return either directly to himself thru new services or indirectly as prospective new route will hopefully prove profitsble and hence allow fares to customer A to reduce. Either way customer A makes a return on the investment he has funded. Pilot training is I think the same issue. Customer has the right to expect to be given a chance to earn a return on his investment in the trainee pilot by ensuring that the pilot is around to
operate services for a while.
In essence the whole debate centres on one simple point. Does a reasonable employer acting reasonably have a right to require that an employee gives him a return on the large amount of money invested in him before disappearing to pastures new. I have to say i think he does and if you accept this arguement bonding is a necessary evil as the way the industry is at present there are always greener grass over the horizon to attract a pilot with a valuable qualification paid for by his previous employer. If you do not accept the proposition then there is no place for bonding as reasonable employer is not entitled to a return on investment. I have to say that I believe a pilot who accepts training froma reasoable employer then walks out after a few months is acting unreasonably.
IF you accept the above proposition then I think the arguements in respect of new type training in a previous posting stack up.
I agree that there is a place for some protection against an employer acting unreasonably and hence I think your suggestion of some sort of arbitration in contentious cases is a reasonable one and in my view a better one than asking the poor old customer to bear the cost both of pilots acting reasonably ( fair enough) and unreasonably (not so fair)
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Minogue
I appreciate your response, though I did not expect you to post it at such an hour. Good luck with the '‘employee issue” troubling you. I presume, then, that you are a manager or employer, so it is extremely interesting to hear your views.
As you say, shareholders’ funds do supply investment, but is not that investment usually for initial start-up or to fund expansion? Once a company is up and running, shareholders then look for the return. Such return, as we all know, comes from the company’s ability to generate profit, and profit is found in revenue. Revenue, in the case of an airline, comes from ticket sales, freight sales and other, related, sales sources. Those sales are made to customers or, to be more precise, consumers of the product or service marketed by the company. I presume that we so far agree with each other.
Where we appear to diverge is in the way we view consumer motivation. You say the customer: “is prepared to commit his hard earned money to the airline”; “will hope to see a return”; and “makes a return on the investment he has funded”. With respect, I believe you confuse an investor with a consumer or, at least, you attribute an investor’s motivation to a consumer. Rarely does a consumer take any interest in the economics of an airline. For example, purchase of a ticket for the purposes of travel from A to B is, of itself, the extent of the consumer’s interest or motivation. It is certainly true that the consumer seeks value for money in the purchase of a product, and it is possible that a consumer has an interest in the continued availability of the product. Beyond these considerations, I seriously doubt whether the average airline customer even begins to think about ‘commitment’ to an airline, or about a ‘return on investment’ beyond the value for money in the individual ticket purchase.
Further, you say that the “[c]ustomer has the right to expect to be given a chance to earn a return on his investment in the trainee pilot by ensuring that the pilot is around to operate services for a while”. This attributes far more to the airline customer than any I have ever met. With respect, I think it is quite absurd to suggest that an airline customer has ever considered his ticket purchase as an investment in the training of a pilot upon which there must be a return to the customer in any way. Again, this is surely attribution to the consumer of investor characteristics and is therefore an entirely false premise.
I am encouraged by your expressed support for protection against “an employer acting unreasonably” and for my suggestion with regard to an arbitration process. However, I would firmly hold that, at least with regard to a commercially successful company, it is the consumer who MUST bear the cost of absolutely everything (including pilot training), as well as provide the profit to be returned to the investors in that company. The “poor old customer” is surely neither poor nor old, but is simply a purchaser of product or service of his/her choosing. And the price of the product is only one factor in such choice, as is currently demonstrated by the successful change of direction in British Airways’ marketing of its product.
I appreciate your response, though I did not expect you to post it at such an hour. Good luck with the '‘employee issue” troubling you. I presume, then, that you are a manager or employer, so it is extremely interesting to hear your views.
As you say, shareholders’ funds do supply investment, but is not that investment usually for initial start-up or to fund expansion? Once a company is up and running, shareholders then look for the return. Such return, as we all know, comes from the company’s ability to generate profit, and profit is found in revenue. Revenue, in the case of an airline, comes from ticket sales, freight sales and other, related, sales sources. Those sales are made to customers or, to be more precise, consumers of the product or service marketed by the company. I presume that we so far agree with each other.
Where we appear to diverge is in the way we view consumer motivation. You say the customer: “is prepared to commit his hard earned money to the airline”; “will hope to see a return”; and “makes a return on the investment he has funded”. With respect, I believe you confuse an investor with a consumer or, at least, you attribute an investor’s motivation to a consumer. Rarely does a consumer take any interest in the economics of an airline. For example, purchase of a ticket for the purposes of travel from A to B is, of itself, the extent of the consumer’s interest or motivation. It is certainly true that the consumer seeks value for money in the purchase of a product, and it is possible that a consumer has an interest in the continued availability of the product. Beyond these considerations, I seriously doubt whether the average airline customer even begins to think about ‘commitment’ to an airline, or about a ‘return on investment’ beyond the value for money in the individual ticket purchase.
Further, you say that the “[c]ustomer has the right to expect to be given a chance to earn a return on his investment in the trainee pilot by ensuring that the pilot is around to operate services for a while”. This attributes far more to the airline customer than any I have ever met. With respect, I think it is quite absurd to suggest that an airline customer has ever considered his ticket purchase as an investment in the training of a pilot upon which there must be a return to the customer in any way. Again, this is surely attribution to the consumer of investor characteristics and is therefore an entirely false premise.
I am encouraged by your expressed support for protection against “an employer acting unreasonably” and for my suggestion with regard to an arbitration process. However, I would firmly hold that, at least with regard to a commercially successful company, it is the consumer who MUST bear the cost of absolutely everything (including pilot training), as well as provide the profit to be returned to the investors in that company. The “poor old customer” is surely neither poor nor old, but is simply a purchaser of product or service of his/her choosing. And the price of the product is only one factor in such choice, as is currently demonstrated by the successful change of direction in British Airways’ marketing of its product.
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Your first paragraph is correct my dear holmes.
On rereading not sure my analogy on customers really worked. Never mind, it was early.
Let me have another go at trying to articulate my thoughts. It is my job as a manager to maximise the long term (note the word longterm its important) profits and returns to my boss the shareholders.
The word long term is crucial in this. In the short term I can maximise profits by if I may use the term shafting the employees. However the impact of that in the long term is that I get at best demotivated and at worst ex-employees and this will result in lower long term profits.
Now the long term profits I can generate are self evidently the difference between the revenue I can earn from my customers and the costs I incur to run my services.
Now whisper this quietly but if I could screw my customers for more revenue by putting up the fares i would, more lovely lolly for my boss the shareholders and a much deserved company porsche for me. sadly the customers are wise to this and i have already set the fares at the highest level I believe I can sustain in the long run.
Now the airline industry is not a highly profitable one. In fact shareholder returns are pretty dismal. With revenue effectively already maximised and costs already to close to revenue to provide shareholders with a good return, i have to ensure that all money I invest will provide the business and therefore the shareholder with an acceptable return.
My pilots are a vital commodity to me. I am happy to invest significant sums in their future to train them. All I ask in return for this is the opportunity to earn a reasonable return by sticking with me and using this valuable training for the benefit of my business rather than just disappearing off to pastures greener. Sadly the evidence on the ground in my business is that I need bonding to ensure that some pilots who have agreed to give me the opportunity to recoup my investment deliver on their promise when I have met promises made to them.
I accept of course that there will be times when exceptional circumstances mean that pilot acting in good faith cannot now fulfill his promise. In such circumstances I believe the bond should be waived. Up to now I would use my own judgement as to whether exceptional circumstances exist but I am prepared to concede that other operators may be less moral and yes I have to confess that I am less than perfect and perhaps at times pilots in my business who are bonded may reasonably consider that they have been less than perfectly treated. In such circumstances an independant arbiter of reasonableness as you suggest is perhaps not a bad idea.
Arguement for subsequent employee bonding follows from this. If I choose to make it impossible for pilot to meet his promise to give me an adequate return by taking his type away, he should not be expected to promise me an adequate return again on the next lot of training.
If however he chooses to ask me to invest in him again to further his career I think it is entirely appropriate to ask him to pormise again to give me an adequate retrun on the new training. If he doesnt want to do this, I am more than happy for him to stay on his old type. I really dont see why I should pay for him to be trained out of my money for him simply to hike his new found skills to another operator for his own benefit.
Wow a marathon post. Off to bed to catch up on some much needed sleep. Oh by the way employee issue solved to all sides agreed benefit. Hooray a win-win, always the aim in any employer/ee issue.
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minogue.
read your article with interest. I have repaid a bond in the past and honoured my obligation but it left a bitter taste in my mouth. No airline has invested as much in my training as myself. I obtained a frozen ATPL and could not bond an airline before I started aforementioned training or get a job guarantee! Bonding contracts are written by airlines for airlines.They are also disproportionate in cost when compared to salary. Every other profession can be studied at university with state aid and the end product is free to move about the employment market looking for the best contracts. Pilots should be no different.
read your article with interest. I have repaid a bond in the past and honoured my obligation but it left a bitter taste in my mouth. No airline has invested as much in my training as myself. I obtained a frozen ATPL and could not bond an airline before I started aforementioned training or get a job guarantee! Bonding contracts are written by airlines for airlines.They are also disproportionate in cost when compared to salary. Every other profession can be studied at university with state aid and the end product is free to move about the employment market looking for the best contracts. Pilots should be no different.
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Minogue
Looks like your ‘analogy’, then, was little more than an early morning saunter along the path of fantasy. After all, you say it didn’t work!??
For my part, I’m not sure your latest approach ‘works’ either, in that it is sprinkled with emotive, if not derogatory, phrases such as: “screw my customers” and “shafting the employees”. Further, phrases such as: “more lovely lolly for my boss … and a much deserved company porsche for me” do not do you credit in what is otherwise a post that suggests you are an eminently fair and reasonable employer.
Let’s face it, this latest missive is little more than the already advanced argument that employers have a God-given right to seek to ‘protect their investment’ through the pilot bonding process.
Personally, I find statements such as “I am happy to invest significant sums in their [the pilots] future to train them” quite hollow. I respectfully suggest that this is far from the truth in that the true purpose behind such investment is no more noble than the fact that the employer has absolutely no alternative other than to type train the pilots due to the legal requirement imposed. And bonding is an ignoble attempt to defray that cost by its imposition upon the pilot workforce by way of guarantee.
Having said that, I am encouraged by your acceptance of the need for an arbitration process in the current (bonding agreement) environment and am thus led me to feel that you are possibly a fairer employer than most.
If you are truly interested in the “longterm” (and you repeatedly say that you are), I suggest you take a careful look at the post by ‘twinjet’ above. Note that twinjet speaks resentfully of the ‘bitter taste’ left by imposition of a bond. In the long-term interest, then, may I suggest that you be the first employer to throw out bonding of your pilots. Ignore the odd dishonourable employee who abuses your trust and concentrate instead on those who do not. Look instead to good relations founded on a mutual trust. Do away with the ‘us and them’ mania that festers within almost every UK company. The long-term future, I think, will be rosy indeed for whatever airline it is that you manage.
Looks like your ‘analogy’, then, was little more than an early morning saunter along the path of fantasy. After all, you say it didn’t work!??
For my part, I’m not sure your latest approach ‘works’ either, in that it is sprinkled with emotive, if not derogatory, phrases such as: “screw my customers” and “shafting the employees”. Further, phrases such as: “more lovely lolly for my boss … and a much deserved company porsche for me” do not do you credit in what is otherwise a post that suggests you are an eminently fair and reasonable employer.
Let’s face it, this latest missive is little more than the already advanced argument that employers have a God-given right to seek to ‘protect their investment’ through the pilot bonding process.
Personally, I find statements such as “I am happy to invest significant sums in their [the pilots] future to train them” quite hollow. I respectfully suggest that this is far from the truth in that the true purpose behind such investment is no more noble than the fact that the employer has absolutely no alternative other than to type train the pilots due to the legal requirement imposed. And bonding is an ignoble attempt to defray that cost by its imposition upon the pilot workforce by way of guarantee.
Having said that, I am encouraged by your acceptance of the need for an arbitration process in the current (bonding agreement) environment and am thus led me to feel that you are possibly a fairer employer than most.
If you are truly interested in the “longterm” (and you repeatedly say that you are), I suggest you take a careful look at the post by ‘twinjet’ above. Note that twinjet speaks resentfully of the ‘bitter taste’ left by imposition of a bond. In the long-term interest, then, may I suggest that you be the first employer to throw out bonding of your pilots. Ignore the odd dishonourable employee who abuses your trust and concentrate instead on those who do not. Look instead to good relations founded on a mutual trust. Do away with the ‘us and them’ mania that festers within almost every UK company. The long-term future, I think, will be rosy indeed for whatever airline it is that you manage.
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sorry if you didnt like my earlier phrases. It was an attempt to inject a little of my humour, which I admit is an acquired taste.
I think if you reread "twinjet" post, it was the fact of having to repay a bond that left the bitter taste not the initial imposition. Presumably only had to repay cos he left his employer shortly after employer had invested a pile of money in him. Presumably alos joined and left the employer knowing the rules. To be honest I have little sympathy.
I read your last paragraph (my apologies if I have this wrong) to suggest that you regard pilots leaving shortly after training to be "dishonourable" and abusing "employers" trust. This really is the point of bonding.
Bonds have no effect on people serving the airline for a reasonable time fter training. Bonding arrangement simply expires at no cost to employee. I dont think it unreasonable for company to protect itself from the "dishonourable" while not imposing on the honourable. The exception to this is the dishonourable employer or "acts of God" which render it impossible for an honourable employee to meet his commitment. This is where your idea of arbitration can come in.
I suspect ultimately we will not agree on this. I am away now for a few days so need to withdraw now. Good luck in your court case. I hope that if you have been badly treated that you will win (assuming you are not an ex-employee of my company!!). Thanks for an enjoyable debate, four pages or so of arguement with different views by two sides without either resorting to personal abuse. Surely this is a record for pprune!!!!
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Minogue
My mistake. What I meant with regard to twinjet’s post was that the ‘terms’ of the bond were imposed. While you have little sympathy, it seems that twinjet did honour the bonding agreement and repaid it. And one is left to ponder the reasons why twinjet departed the employment and whether or not the absence of a bond might even have caused a rethink for reasons of honour and unwillingness to betray. Perversely, one might argue that the mere existence of the bonding agreement gave twinjet a licence to leave without the departure being dishonourable.
Yes indeed, in SOME circumstances I would regard pilots ‘leaving’ shortly after type training as both dishonourable and a betrayal of trust. But leaving is somewhat different to being, or even feeling, forced to leave by circumstances beyond one’s influence or control. I would limit the circumstances I believe are dishonourable and a betrayal of trust to those where the employee walks away merely to please him/herself or to advance him/herself. I can think of many more reasons than merely ‘dishonourable employer’ or an ‘act of God’ that might justify such conduct. In fact, I can envisage circumstances where such conduct might be described as so honourable as to be positively heroic.
To say that “[b]onds have no effect on people serving the airline for a reasonable time after training” shows a certain degree of single-mindedness and is far from true. Many would hold that the effect of the bonding agreement is to have a threat hung over one’s head with which one must live for virtually the full period of the bond, no matter what. Further, it is a threat that speaks of total mistrust and lack of regard.
It does seem that we will not agree on this issue, minogue, but I too have enjoyed the constructive and intelligent debate. I am a little saddened that other PPRuNers by and large stepped back and left it to you and me. I hope it was apathy, and not merely indicative of short attention spans or unwillingness to read a post of more than just a few, often abusive, lines on a page.
By the way, I am not directly involved in a court case, though I am very interested in one. And I am pleased to say that I have not been badly treated by my employer. In fact, I have been extremely well treated indeed. And I have never been asked to sign a bonding agreement, which is a damned good thing because I would be honour-bound to refuse.
Thank you for your effort and the manner of your responses. I suspect you may be right about the PPRuNe record.
[This message has been edited by tilii (edited 13 June 2001).]
My mistake. What I meant with regard to twinjet’s post was that the ‘terms’ of the bond were imposed. While you have little sympathy, it seems that twinjet did honour the bonding agreement and repaid it. And one is left to ponder the reasons why twinjet departed the employment and whether or not the absence of a bond might even have caused a rethink for reasons of honour and unwillingness to betray. Perversely, one might argue that the mere existence of the bonding agreement gave twinjet a licence to leave without the departure being dishonourable.
Yes indeed, in SOME circumstances I would regard pilots ‘leaving’ shortly after type training as both dishonourable and a betrayal of trust. But leaving is somewhat different to being, or even feeling, forced to leave by circumstances beyond one’s influence or control. I would limit the circumstances I believe are dishonourable and a betrayal of trust to those where the employee walks away merely to please him/herself or to advance him/herself. I can think of many more reasons than merely ‘dishonourable employer’ or an ‘act of God’ that might justify such conduct. In fact, I can envisage circumstances where such conduct might be described as so honourable as to be positively heroic.
To say that “[b]onds have no effect on people serving the airline for a reasonable time after training” shows a certain degree of single-mindedness and is far from true. Many would hold that the effect of the bonding agreement is to have a threat hung over one’s head with which one must live for virtually the full period of the bond, no matter what. Further, it is a threat that speaks of total mistrust and lack of regard.
It does seem that we will not agree on this issue, minogue, but I too have enjoyed the constructive and intelligent debate. I am a little saddened that other PPRuNers by and large stepped back and left it to you and me. I hope it was apathy, and not merely indicative of short attention spans or unwillingness to read a post of more than just a few, often abusive, lines on a page.
By the way, I am not directly involved in a court case, though I am very interested in one. And I am pleased to say that I have not been badly treated by my employer. In fact, I have been extremely well treated indeed. And I have never been asked to sign a bonding agreement, which is a damned good thing because I would be honour-bound to refuse.
Thank you for your effort and the manner of your responses. I suspect you may be right about the PPRuNe record.
[This message has been edited by tilii (edited 13 June 2001).]