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Do Some Pilots Earn Too Much?

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Old 2nd Jan 2001, 16:43
  #21 (permalink)  
Roc
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I live in the New york metro area, Alot of my friends, who barely graduated high school, got jobs on Wall street and easily bring in $200,000 to $300,000 a year, and I ask "for what!" selling and trading stocks!!! my brother-in law makes way more than a 747 Captain, as a lawyer. I ask, when he screws up a case how many people die!! and respectfully Guv, I don't know a single doctor who makes a less than stellar salary. Look at it this way, if you owned a company, and bought a piece of equipment that cost $100 million dollars, how much would you pay a person who has spent 10 years mastering its operation? $50,000 a year? I dont think so! now add the potential loss of life if said operator makes a mistake etc etc. I often say that a typical airline pilot will earn his entire yearly salary on one or two nights per year, what would an airline pay to safely land afew hundred people, versus a catastrophic accident? a pilots salary is a small price to pay
 
Old 2nd Jan 2001, 17:40
  #22 (permalink)  
Airworthiness Directive
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A little brevity required I think
 
Old 2nd Jan 2001, 17:59
  #23 (permalink)  
Airworthiness Directive
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A little brevity required.

Dear, The Governor for someone who supposedly is an owner of an airline; you display a breathtaking lack of understanding for the fundamentals of market forces, supply and demand and the theory of Parato optimality.

I suspect its because you spend to much time reading and writing trivial nonsense on this forum.

Long live the free market!

A. D
 
Old 3rd Jan 2001, 08:13
  #24 (permalink)  
dallas dude
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AeroBoero

Thanks for your comments, here.

I must admit for 20 minutes the G-man had me fooled in to thinking he knew what he was talking about but after scanning through several of his other posts I declare his efforts to be on a par with Sisyphus.

Anyone wishing to turn a large fortune in to a small one should consider investing in his "Fantasy Airline".

As for my money, I guess he'll have to be happy with just being able to impress the odd drunk in his local Pub.

Cheers,dd.
 
Old 3rd Jan 2001, 08:13
  #25 (permalink)  
Stuka
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Gentlemen:
As an underpaid widebody southamerican captain I don't see what's the point in questioning high salaries in the US, first the big airlines management are extremely able people in their fields, so I can assume that they agree to pay those salaries because they CAN, otherwise they'd go into some other line of bussiness. Second they get paid more in the US for the same reason that a doctor or a lawyer gets more than their couterparts elsewhere. Third, I must add that I have a very healthy envy for my US colleages, someone has to keep top wages high so the people earning less for the same Job can aspire to better standards. As pilots we ought not to critizise our colleages for earning too much, but to endeavor to improve our wages based in what they make.
 
Old 3rd Jan 2001, 14:22
  #26 (permalink)  
The Guvnor
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DD et at ... I have been travelling, so have been unable to respond as rapidly as I would ordinarily do.

Turbosheep - a properly constituted ESOP works on an equitable basis - you are eligible/required to purchase x% of your base salary worth of shares at a preferred rate. Too often, though, schemes which are as you pointed out designed to benefit management rather than all stakeholders are mislabelled "ESOPs" - and this devalues the genuine ones, making employees suspicious about management's motives for doing them.

dallas dude - as I said, I was using DOT figures - but, hey, what do they know anyway? I enjoyed your attempt to downplay the argument by selecting one of the smallest aircraft - let's use one of the 'hot' aircraft, shall we?

You like figures - well, here's some for you. These are the median operating costs for the B767-400, sourced from Delta, Continental and Boeing for a 2,000 nm trip, assuming US$0.80/USG:

Fuel: US$6,024
Landing fees: US$2,041
Nav charges: US$4,485
Crew Salaries: US$2,232
Maintenance: US$3,281
Ownership: US$13,309
Hull Insurance: US$693
DOC per trip: US$32,065

Sensitivity Analysis:
Fuel: 18.8%
Landing fees: 6.4%
Nav charges: 14%
Crew Salaries: 7%
Maintenance: 10.2%
Ownership: 41.5%
Hull Insurance: 2.2%

Now, lets see what happens with the sensitivity analysis when we increase the pay rates by the percentage sought by DALPA (31.15%). It has the effect of increasing salary cost per hour to US$2,927 per hour and total DOCs to US$32,760

Sensitivity Analysis:
Fuel: 18.4%
Landing fees: 6.2%
Nav charges: 13.7%
Crew Salaries: 8.9%
Maintenance: 10.0%
Ownership: 40.6%
Hull Insurance: 2.1%

I agree that the incremental increase in overall costs is minimal, percentage-wise - but let's look at the impact on the bottom line. The average gross profitability of a major US carrier (again according to the
DOT) is just 18.9%, with an average net profitability of less than 3%. The astronomical turnovers give some very large profit dollar numbers - but as we all know, you're better off putting your money in the post office than putting it in an airline!

That overall increase in operating costs - a mere 2.17%, if applied to all the majors - would have the effect of wiping out their average profitability. That's a sobering thought, surely.

Roadtrip - Under UK companies law, directors are required to reveal in their annual accounts their total remuneration package value, including all shares and options held. I'm not sure what US law is, but if that isn't the case there then I certainly feel it should be.

I agree with you that bad management decisions are a major contributing factor to the survival of an airline - but what I'm specifically talking about here is overall costs.

How many senior managers are there in say American Airlines earning the same as, or more than, say a 767 captain? Then how many 767 (or larger) captains are there in American? Sure, you'll find that at the very top of the food chain there are one or two individuals earning telephone number salaries. As was pointed out earlier, the cream of any profession can - and do - earn substantial amounts. That said, I certainly do not think that it is right that these people should be awarding themselves huge salary increases and/or bonuses and at the same time telling the employees that they have to tighten their belts - I believe the term for that is BOHICA, right, dd?

Roc - high salaries may be the norm for the US but I can assure you that 18-24 hour shifts and pay below the minimum wage is the norm for many interns over here who still hold people's lives in their hands. It would be interesting to compare UK pilots pay with that of their medical counterparts; and do the same exercise with US pilots and doctors.

[This message has been edited by The Guvnor (edited 03 January 2001).]
 
Old 3rd Jan 2001, 16:22
  #27 (permalink)  
iomode
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Hi Guv
I think you just supported dd's point...crew costs are a minimal part of the total operating cost of a new aircraft.
What surprises me is the nav. charges, twice that of crew cost. What hides behind that 14% ?

------------------
keep it up until the mission is complete.

[This message has been edited by iomode (edited 03 January 2001).]
 
Old 3rd Jan 2001, 22:27
  #28 (permalink)  
aviator
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Looking at the same things...

Why is it that crew cost is the only subject to adjustment (read paycut) and all other expenses appearently not questionable?

Travel agent commisions - have heard stories for years of 25-30% commisions paid out in Asia for the agencies to sell your ticket. It seems to make crew cost dirt cheap.

Landing fees - surely this already tax payer paid piece of property is negotiable.

Same with nav fees.

Lastly, assuming all figures make sense, shouldn't world's (non US) airlines be making heaps of money since they already have a pay structure (read low pay) that management wishes for the US pilots?

Do you get the feeling that the employees are the easiest ones to jump on?

[This message has been edited by aviator (edited 03 January 2001).]
 
Old 3rd Jan 2001, 22:59
  #29 (permalink)  
Roc
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Guv,

First your comparing a medical intern with a regular surgeon, of course interns make "squat" they make next to nothing here in the US as well. Then you compare Englands form of socialized medicine with the US's free market system, so again its apples and oranges. Bottom line Pilots should be one of the highest paid professions in any country based on the high levels of skills, abilities, and intelligence. If you guys think US pilots are overpaid, its more likely you are underpaid!! and if you want equitable pay scales for all professions, ask the Cubans and North Koreans, they have a very equitable system, and see how far thats got them.....
 
Old 5th Jan 2001, 00:32
  #30 (permalink)  
dallas dude
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Here's my last effort on this subject, I think I've made my point.....

Guvnor.....Your original claim was to the effect that "if D-ALPA was allowed the pay raise they're asking for pilot salaries would account for 70% of Delta's costs and that's plane crazy".

Magnificently, you then provided figures that show the real initial labour cost (read investment) to be around 7% and AFTER the raise a WHOPPING 9% !

So you were only off by a factor of nearly EIGHT.

You then added that "of course, although the airlines gross 18% the poor folks only get to "keep" around 3%".

You don't think that's anything to do with smart accounting, do you ? Even I can manipulate a set of figures to show only what I want and "hide" the difference.
I'm not suggesting for one second I have the mental capacity to run an airline. I can fly an aeroplane , that's it. But I do know that while the people that run my airline may have been born at night, it wasn't last night!

So, in light of the previous discussions, will you be looking into your crystal ball for the phrase " maybe they aren't overpaid" or will you be busy preparing to open your first Post Office?

Cheers,dd.
 
Old 5th Jan 2001, 06:44
  #31 (permalink)  
flufdriver
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Folks,....

There really can only be one point to this whole topic and that is the fact that many, if not most commercial Pilots are grossly underpaid.

I'm sure that it was the Guv's intent (in his own way) to draw this fact to the attention of the non-Pilot readership of this Forum. Since Pilots know this already.

Otherwise, I think, it would be very counterproductive for an entrepreneur who intends to start up an airline, to publicly pose a question and then answer it himself in the way in which he has, since he would then be recognized as a person who would seek to exploit the Pilots of his (future)airline and thus prevent top quality aircrew from considering employment with him.

The best safety device on any aircraft is a well trained and well paid Pilot!

Or am I missing something?
 
Old 5th Jan 2001, 15:36
  #32 (permalink)  
The Guvnor
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Flufdriver - actually, you're quite right. As you can see from our website, our proposed pay rates are indeed somewhat higher than the norm - but bearing in mind that the primary focus of the company will be ACMI leases, I believe that the increased pay compensates for the flexibility required from our crews.

We will be implementing some of the things discussed here - including an ESOP and executive pay increases capped at the percentage increase in overall corporate profitability; and profit share/bonus for all.

Even so, our base packages for our L1011 captains come in at just under half that proposed by DALPA assuming 75 hours duty per month. That's what I'm getting at when I posed the question: Do Some Pilots Earn Too Much?
 
Old 6th Jan 2001, 03:34
  #33 (permalink)  
The Guvnor
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Red face

Delta Air Lines Says 4Q Results Will Be Sharply Below Estimates


(1/5/01 2:53:23 PM PT)
ATLANTA -- Delta Air Lines Inc. warned its fourth-quarter earnings will miss analysts' expectations,
citing significant flight cancellations due to crew shortages and severe weather.

The nation's third-largest carrier said Friday it expects earnings for the quarter to come in between 55
cents and 65 cents a share, excluding noncash accounting adjustments.

The mean estimate of analysts surveyed by First Call/Thomson Financial called for earnings of 97
cents a share in the latest quarter. Delta (DAL) reported earnings of $175 million, or $1.24 a diluted
share, excluding items, on revenue of $3.71 billion in the year-earlier period.

For the latest fourth quarter, the airline said it expects to report revenue some $65 million to $75
million lower than previously anticipated. The company canceled approximately 7,500 flights during
December.

Earlier this week, Delta said it will cut its available seat miles by about 1% in January, 4% in February
and 3.5% in March. It cited an anticipated pilot shortage. Seat miles are calculated by multiplying the
number of seats available times the number of miles flown.

The carrier canceled more than 500 flights a day Sunday and Monday because of a crew shortage,
compared with normal levels of one or two such cancellations a day, according to spokesman Russ
Williams.

Delta took the Air Line Pilots Association and individual pilots to court in November, complaining that
they were coordinating a no-overtime campaign to pressure the company in current labor contract
negotiations. While acknowledging the sharp rise in the number of pilots refusing to fly overtime,
ALPA spokesman Gregg Holm said the union isn't promoting any concerted job action. The union
represents Delta's 9,400 pilots.

Under their labor agreement, Delta pilots are free to decline to fly overtime. But Delta, as well as other
major carriers, relies on overtime flying to complete part of its schedule.

Final results for the fourth quarter will be released on Jan. 18, the company said. Delta recently
switched its accounting from a fiscal year, ended June 30, to a calendar year, ending Dec. 31.

Separately, Delta said its December traffic rose 1.5% to 8.39 billion revenue passenger miles from
8.27 billion last year.

A revenue passenger mile is one paying passenger flown one mile. Load factor, or percentage of seats
filled, was 68.1%, compared with 65.5% in December 1999.

For the calendar year, Delta flew 113 billion revenue passenger miles, an increase of 3.9% over last
year's 108.7 billion. Load factor for the year was 72.9%, compared with 71.9% in 1999. Delta said
system capacity fell 2.3% because of the bad weather and reduced flying time by some pilots.

Copyright (c) 2001 Dow Jones & Company, Inc.

All Rights Reserved
 
Old 6th Jan 2001, 03:58
  #34 (permalink)  
RRAAMJET
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Guv:

you should make your comparisons between professors, lawyers, Doctors, who have been with the same firm for 15-plus years, IN THE US ONLY. I think you'd find that the 15 year Capt is not way over the top, rather about the same.

Your mistake is to compare the US with the UK, where the average pay is ludicrously low for the 4th richest nation in the world, and the distribution of wealth is centuries out-of-date ( I'm a Brit BTW ). The middle -income bracket in the US is much wealthier than in the UK, and far more "professional" positions are held by working moms, with the result that in my neighbourhood ( not many pilots ), my pay is not remarked upon. The other professionals around me with the same company experience get as much or more, but we are "middle income". I think I represent a much larger % of the major airline pilots ( middle seniority ) than the the top 1000 or so that get your "too much" award.

I think that you speak from the position of one who is trying to start an airline, but in todays hiring market, with all the heavy-jet-timers with no "history" being snatched up, you are worried about where you are going to get your L-1011 experienced crews from. You can't compete with the package at the top 10 carriers, so you critique it. (NWA/UsAirways/ ALA/ UPS/ FedEx gets pretty much the same as me for similar equipment. You should do some basic research before you hammer just 3 airlines - continuously ).

Interesting post, though. The only thing is, we get told precisely who much we are of the cost ON EACH FLIGHT PLAN.
 
Old 6th Jan 2001, 14:59
  #35 (permalink)  
The Guvnor
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RRAAMJET - as I said, by UK terms our proposed salary package isn't too bad - even more so for the guys working offshore and therefore being paid gross. In any case, I don't think we'd be employing too many Americans - we require UK/JAA licences for a start.

My interest in this is therefore largely academic: I am very concerned at the underlying pressure that will be placed on other carriers by both ALPA and the three majors that have or are considering paying their people these remarkably high salaries.

As with merchant bankers earning seven figure packages (including bonuses); and many US doctors, attorneys etc earning similarly excessive sums, I'm just wondering where it will all end? The gulf between the 'ordinary working man' and the 'upper middle classes' is widening - and from a social viewpoint, that has to be bad news.

I'm not advocating a communist system where everyone gets paid the same - but social unrest is caused, in large part, through situations such as this.
 
Old 6th Jan 2001, 15:12
  #36 (permalink)  
Bird Strike
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Gov,

I may be thick here, but does 'Crew Cost' in your figure include the costs for cabin crew, or is it just for flight crew? Just curious.
 
Old 9th Jan 2001, 07:05
  #37 (permalink)  
MachOverspeed
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Hey Guv,

OK, let me get this right, your assertion is that some major airline pilots are overpaid.

Well, I figure that you may, in a very few limited instances be correct. To be fair, one could claim, with a reasonable level of accuracy, that there are some individuals in ANY type of work who are over paid. (example: Deon Sanders when he was with the Cowboys) In my view an example of a CLASS which could be considered over paid would be politicians...but most assuredly NOT airline pilots.

Your view reminds me of Ted Kennedy, et al, who shriek of the "rich" not paying their "fair share" and how we don't need a tax cut etc... I wonder if old Ted has ever felt guilty about being so rich, and then decided to add a couple of thousand extra dollars to his tax payment on April 15th?

I don't fly for a major, not yet. But I have certainly darn near starved to death struggling to get there. Among other things. Along the way I have been on fire three times, had several engines quit, blown one engine to pieces, flown when sick and when the ducks were grounded, flown in the ice with no boots and lost a prop COMPLETELY OFF a Queen Air. I have suffered duty days over thirty hours and have been lied to by EVERY aviation manager/aircraft owner I have ever worked for (not to mention the FAA). I have been yelled at, screamed at, had my job threatened for questioning safety or regulations and have been called every name in the book except for "white man" by simple minded managers who suffered from extreme tunnel vision. I could go on and on...

I have, and so have a great many other professional aviators, suffered through all this (and more) because we needed the experience. We needed the experience to "move up the food chain", hopefully all the way to the top, God willing. And SOMEDAY, by God, when and if I do make it to a major, there will have been others there before me. Others who perhaps suffered more than I. Who realize the value of determination, and the true cost of "success", and who have fought for pay and work rules so that others would strive to join them in the cockpit of a major. If and when I get there, I aim to be well paid. I've earned it! And for those who may come after me, I want them to do even better.

You see, GUV, if young people are not drawn to the airlines to fly "your" airplane, then who you do think it will be that will fly "your" pax/cargo that in turn pays "your" salary? What about the minor carriers and the FAR 135 night freighters? Does ANYONE believe that a young person would just volunteer for that abuse without first having determined that it was, temporarily at least, necessary for the furtherance of his/her career? I guarantee you that if the majors were to cut their salaries, you would see general aviation (in the USA at least) and the commuter airlines shrivel up and die on the vine. NO YOUNG PILOTS. The death of an entire industry.

Any rational person knows that a company exists to make a profit. But no company can make a profit for long if it does not share its wealth with its employees.

I guess your choice is simple. You can make a lot of money all at once, or you can make even more money for a long time.

Seems simple enough to me.
 
Old 9th Jan 2001, 16:21
  #38 (permalink)  
The Guvnor
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MachOverSpeed - I think you've misconstrued things a bit. My position is that the majority of pilots should be paid more (but still within reason); and that the recent salary awards by UAL, AA and (upcoming) DL are insanely high.
 
Old 9th Jan 2001, 18:29
  #39 (permalink)  
Petergozinya
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Fine. Thats your opinion. Now go away.
 
Old 10th Jan 2001, 13:26
  #40 (permalink)  
The Guvnor
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Petergozinya - dear boy, can one assume you currently work for a US major? Such as TWA?

Recalling your postings on the Atlas thread - where you felt it was perfectly all right to steal the bread from UK/EU crewmember's families' mouths, I'd say there will be a great lack of sympathy to you - and those that think like you - on this side of the pond.

Perhaps you might get lucky and someone might sponsor you...

<font face="Verdana, Arial, Helvetica" size="2">Help Feed Delta Pilots
---- ---- ----- ------

It's just not right. Thousands of pilots in our very own country are living at or just below the six figure salary line. And if that wasn't bad enough, many of them may go several weeks or months without a paycheck if they are forced by Delta Airlines management to strike.

But now you can help. For about three hundred dollars a day (that's less than the price of a 25" television set) you can help keep a pilot economically viable during their time of need.

Three hundred dollars a day may not seem like a lot of money to you, but to a pilot, it could mean the difference between a vacation fishing in Florida or a Mediteranean cruise.

For you, three hundred dollars is nothing more than half a month's rent or mortgage payment. But to a pilot, three hundred dollars a day will almost replace his or her salary.

Three hundred dollars a day will enable a pilot to upgrade his or her home computer, buy that new 100" television set, trade in the 6 month old Lexus for a Ferrari, or enjoy a dinner (with champagne) at The Mansion.

"HOW WILL I KNOW I'M HELPING?"

Each month, you will receive a complete financial report on the crew member you sponsor. Detailed information about his or her stocks, bonds, 401K, and real-estate holdings will be mailed to your home. You will be able to watch your pilot's net worth grow. You'll also get information on how they chose to invest their 1.2 million dollar lump sum they get upon their retirement.

"HOW WILL THEY KNOW I'M HELPING?"

Your pilot will be told that he or she has a SPECIAL FRIEND that just wants to help. Although the pilot won't know your name, he or she will be able to make collect calls to your home via a special operator in case they need more funds.

-------------------------------------------------------------

I want to help!! In the event of a strike by the Delta Pilots, I would like to sponsor the crew member listed below. I would like to sponsor (circle your selection/s):

___CAPTAIN MEMBER
___AN ENTIRE FLIGHT CREW MEMBER
___FIRST OFFICER MEMBER
___NAVIGATOR
___727 CREW MEMBER
___737 CREW MEMBER
___767 CREW MEMBER
___MD-11 CREW MEMBER
___L-1011 CREW MEMBER

___Please apply my donation to the crew member most in need.

Please charge the account listed below $326.25 per day (or $350.29 for MD-11 crew members) for the duration of the strike. Please send me a picture of the crew member I have sponsored, along with a set of "wings" and my very own "new" red S.C.O.P.E. badge (while supplies last)

&lt;&gt; Mastercard &lt;&gt; Visa &lt;&gt; American Express &lt;&gt; Diner's Club &lt;&gt; Delta Card &lt;&gt; Discover Card Account

Number:________________________________

Exp.
Date:_____________________________________
Signature:_____________________________________

Send Completed Forms to the Delta Pilots Assoc.

Or, Enroll By Phone: (97X)-988-3188

Note: Sponsors agree not to contact the crew member sponsored or their families in person or by other means including, but not limited to, phone calls, letters, email, or third parties. Contributions made are not tax deductible. In the event of no strike action taken, sponsors agree to a one time administration charge of $500.00 to cover administration costs of this program. </font>
 


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