Arrogance and Greed of Airline Management
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Arrogance and Greed of Airline Management
CEOs and upper management continue to increase their salaries, while at the same time, they are laying off staff and reducing the pay, conditions and pensions of those staff that remain.
Just a few examples
Qantas CEO pay rise of 27%. Salary 6.1 Million
Yet he was adamant pilots pay would not increase last year. Hes also started up low cost (ie lower pay for all staff) Jetstar.
http://www.travelmole.com/stories/105691.php
United CEO pay increase and shares 13 - 39.7 Million.
"United Airlines employees have taken their discontent with the disparity between their pay and their CEO's to the company's shareholders — picketing the annual meeting in May 2007. The union leaders protested that while their workers were still being paid the lower wages agreed upon in bankruptcy, United Chairman and CEO Glenn Tilton had negotiated a new contact and even larger pay package reportedly worth $39.7 million. According to THE NIGHTLY BUSINESS REPORT, "during [its] three-year reorganization, the carrier slashed thousands of jobs, scrapped pensions and cut wages up to 50 percent for its hourly workers. The wage cuts United negotiated with its unions last another three years."
http://www.pbs.org/moyers/journal/06082007/profile.html
A third level operator in Aus (Rex) is complaining he cannot get enough pilots. He is also complaining other airlines (that are paying more than he pays) are POACHING his pilots. Arrogance?
He is demanding the Government step in.
These same Airlines managers have taken advantage of pilots for years. They required 1500 to 3000 hours to get a job. Paid rubbish money. Worked the crew as hard as they could. Some even intimdated them with sacking if they didnt do as the airline wanted. Sometimes illegally (not necessarily implying Rex ).
They didnt want Government intervention before to ensure pilots got a fair deal.
http://www.theaustralian.news.com.au...-23349,00.html
There is a shortage now not only because airlines are expanding (mainly low cost), but perhaps because new potential pilots do not see the rewards for the work they would be required to do. Therefore they take their career in a more lucretive direction. They can always hire or buy a small plane to fly to indulge their flying interest and at the same time have a better paid job with more time at home.
Being away from home for much of the year wears very thin once the novelty of flying a big jet wears off.
Incredible how these managers bleet when they cannot retain pilots after screwing them for so many years.
The shortage of pilots is because of these managers screwing the pay and conditions down for so many years. Why invest all that money to start on such a low salary. At the same time watching all these lower paying, low cost carriers taking over, pushing pay and conditions down further.
You can expect to pay for jet ratings now out of your own pocket.
Low cost carriers model is partly based on not using airbridges, no meal, no seat allocation, small luggage allowance etc. The reality is lower pay, increased working hours, fewer benefits and no or little pension.
Once you stop working you have no income. Much like many contract jobs. These contract jobs for expat have also fallen why behind. Pilots have to make enough money during their contract for their retirement as there is no pensions. This is simply not happening.
The current expansion will not last forever. Pilots need significant increases to pay and conditions now to make up for recent years. You can expect further cuts in the future once pilot numbers are met.
Someone made a valid comment. I cant find anyone to cut my grass. clean my toilet. Reality I cant find anyone to cut my grass. Clean my toilet for $2.00 an hour. Pay up or shut up.
Other jobs pay have increased over the last 20-30 years. Airline pays have reduced.
Unbelievable arrogance?
Just a few examples
Qantas CEO pay rise of 27%. Salary 6.1 Million
Yet he was adamant pilots pay would not increase last year. Hes also started up low cost (ie lower pay for all staff) Jetstar.
http://www.travelmole.com/stories/105691.php
United CEO pay increase and shares 13 - 39.7 Million.
"United Airlines employees have taken their discontent with the disparity between their pay and their CEO's to the company's shareholders — picketing the annual meeting in May 2007. The union leaders protested that while their workers were still being paid the lower wages agreed upon in bankruptcy, United Chairman and CEO Glenn Tilton had negotiated a new contact and even larger pay package reportedly worth $39.7 million. According to THE NIGHTLY BUSINESS REPORT, "during [its] three-year reorganization, the carrier slashed thousands of jobs, scrapped pensions and cut wages up to 50 percent for its hourly workers. The wage cuts United negotiated with its unions last another three years."
http://www.pbs.org/moyers/journal/06082007/profile.html
A third level operator in Aus (Rex) is complaining he cannot get enough pilots. He is also complaining other airlines (that are paying more than he pays) are POACHING his pilots. Arrogance?
He is demanding the Government step in.
These same Airlines managers have taken advantage of pilots for years. They required 1500 to 3000 hours to get a job. Paid rubbish money. Worked the crew as hard as they could. Some even intimdated them with sacking if they didnt do as the airline wanted. Sometimes illegally (not necessarily implying Rex ).
They didnt want Government intervention before to ensure pilots got a fair deal.
http://www.theaustralian.news.com.au...-23349,00.html
There is a shortage now not only because airlines are expanding (mainly low cost), but perhaps because new potential pilots do not see the rewards for the work they would be required to do. Therefore they take their career in a more lucretive direction. They can always hire or buy a small plane to fly to indulge their flying interest and at the same time have a better paid job with more time at home.
Being away from home for much of the year wears very thin once the novelty of flying a big jet wears off.
Incredible how these managers bleet when they cannot retain pilots after screwing them for so many years.
The shortage of pilots is because of these managers screwing the pay and conditions down for so many years. Why invest all that money to start on such a low salary. At the same time watching all these lower paying, low cost carriers taking over, pushing pay and conditions down further.
You can expect to pay for jet ratings now out of your own pocket.
Low cost carriers model is partly based on not using airbridges, no meal, no seat allocation, small luggage allowance etc. The reality is lower pay, increased working hours, fewer benefits and no or little pension.
Once you stop working you have no income. Much like many contract jobs. These contract jobs for expat have also fallen why behind. Pilots have to make enough money during their contract for their retirement as there is no pensions. This is simply not happening.
The current expansion will not last forever. Pilots need significant increases to pay and conditions now to make up for recent years. You can expect further cuts in the future once pilot numbers are met.
Someone made a valid comment. I cant find anyone to cut my grass. clean my toilet. Reality I cant find anyone to cut my grass. Clean my toilet for $2.00 an hour. Pay up or shut up.
Other jobs pay have increased over the last 20-30 years. Airline pays have reduced.
Unbelievable arrogance?
Last edited by DoverRover777; 13th Nov 2007 at 03:02.
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How To Fix It
We learned the hard way in the USA. IT USED TO BE that you could be done in 12 days of work a month, get pay that would buy you a nice house, car, and a couple of divorces.
THEN
Disaster...things fell apart...and there is only one way back.
Be prepared to strike, be prepared to say: FLYING IS JUST A JOB...don't pay me well enough and the airline stops here. I am not in love with flying...keep saying this one over and over.
Also, change the laws in your country. In the USA, the President (an anti union guy who was a marginal air force pilot) can ORDER PILOTS back to work during a strike.
HE CAN"T ORDER the company to pay you what you are worth.
and keep saying: I AM NOT IN LOVE WITH FLYING.
And be sure to picket the Board OF Director's office.
THEN
Disaster...things fell apart...and there is only one way back.
Be prepared to strike, be prepared to say: FLYING IS JUST A JOB...don't pay me well enough and the airline stops here. I am not in love with flying...keep saying this one over and over.
Also, change the laws in your country. In the USA, the President (an anti union guy who was a marginal air force pilot) can ORDER PILOTS back to work during a strike.
HE CAN"T ORDER the company to pay you what you are worth.
and keep saying: I AM NOT IN LOVE WITH FLYING.
And be sure to picket the Board OF Director's office.
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T&C vs money
And in addition to what was already said the low cost managements are degrading this job in such a way, that I can’t imagine where we are going to end up.
Working 14h a day, 7 days in week with 30 minutes turn arounds, no food provided, 2 day off (to pick up clean uniform, paid by your self) and vicious circle….you can start again. (900 hours a year!!!)
I can understand that new pilots are accepting almost any T&C, but you can do it only for few years and than….bye bye medical.
Game is over.
The pilots of low cost carriers should form some global union in this global world and say NO to this management practices!
I’m just a madman…may be time to change job rather than this business.
Working 14h a day, 7 days in week with 30 minutes turn arounds, no food provided, 2 day off (to pick up clean uniform, paid by your self) and vicious circle….you can start again. (900 hours a year!!!)
I can understand that new pilots are accepting almost any T&C, but you can do it only for few years and than….bye bye medical.
Game is over.
The pilots of low cost carriers should form some global union in this global world and say NO to this management practices!
I’m just a madman…may be time to change job rather than this business.
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Airlines who pay peanuts only attract those with limited intelligence, who are prepared to work for peanuts, thus only attracting those of limited intelligence, etc etc etc.
The airlines that pay ok are then forced into the same circle to compete. It'll only end after several monkeys bury an aeroplane. One won't be enough as pax have short memories and shallow pockets.
Just have a look at any of the ryanair threads. Pages and pages of the testimony to the folly of buying a job there, to the tyrranous conditions, to the treachery of management, of how it will suck the life from you, and every now and again some young (and they're mostly young) fool asks how best to join.
Stupid and also clearly illiterate.
The profession has been dumbed down to an unbelievable degree, the calibre of entrants is substantially lower than in the past and only when they wake up will we have any chance.
The airlines that pay ok are then forced into the same circle to compete. It'll only end after several monkeys bury an aeroplane. One won't be enough as pax have short memories and shallow pockets.
Just have a look at any of the ryanair threads. Pages and pages of the testimony to the folly of buying a job there, to the tyrranous conditions, to the treachery of management, of how it will suck the life from you, and every now and again some young (and they're mostly young) fool asks how best to join.
Stupid and also clearly illiterate.
The profession has been dumbed down to an unbelievable degree, the calibre of entrants is substantially lower than in the past and only when they wake up will we have any chance.
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And back on thread, Ryanair made, according to the BBC, a 12% rise in profit over the past three months.
The Irish firm made 43.8m euros (£31m) during April, May and June, in line with expectations.
Now hands up all those who think any of that will be shared with those who helped create it!!
The Irish firm made 43.8m euros (£31m) during April, May and June, in line with expectations.
Now hands up all those who think any of that will be shared with those who helped create it!!
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Quit complaining
Regarding Ryanair or whoever else, as pilots - face it - you can do little in the grand scheme to bring added value to the company. This is why we are remunerated in the way we are. If you'd like to share in the profits of the company it'll entail either some self-improvement that permits you a job that is worthy of such, or alternatively, you risk your own personal capital, invest in your company, and through your own (hitherto unrecognised) efforts, increase the value of the stock.
Last edited by Caudillo; 13th Nov 2007 at 22:56.
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Caudillo, I think you will find that if the pilots stayed home, precisely zero value would be added to the company for the duration of the stay. If the management team did the same, what would change? Well, not much, for a while anyway.
Even more importantly, pilots have the unique ability to subtract value by not being safe and burying one. An incompetent pilot is far more likely to subtract value in this manner. Ergo, airlines should employ, and remunerate accordingly, such pilots.
Unfortunately neither the industry nor the regulator care about safety, it's cheaper to lose a few than pay enough to lose none.
Even more importantly, pilots have the unique ability to subtract value by not being safe and burying one. An incompetent pilot is far more likely to subtract value in this manner. Ergo, airlines should employ, and remunerate accordingly, such pilots.
Unfortunately neither the industry nor the regulator care about safety, it's cheaper to lose a few than pay enough to lose none.
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Fraid not. It's important not to mistake not dropping the ball for adding value. Not crashing is hardly akin to say, engineering a takeover, stealing a march on ones rivals or delivering earnings above expectations.
You said it yourself, what we can do is subtract value. Leeway to perform in the opposite sense is, well, I was going to say non-existent, but I'll be kind and go for limited.
The industry and the regulator do care about safety. If nothing else, a lack of it would mean the end of viable business and our core position within it. Time to drop the beer and sandwiches approach to all this I think.
You said it yourself, what we can do is subtract value. Leeway to perform in the opposite sense is, well, I was going to say non-existent, but I'll be kind and go for limited.
The industry and the regulator do care about safety. If nothing else, a lack of it would mean the end of viable business and our core position within it. Time to drop the beer and sandwiches approach to all this I think.
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It depends on whether you are discussing Value Added or Added Value, and then on your viewpoint and how much you value labour or not.
With regard to the former, the modern neoclassical economic approach to Value Added explains that labour is a contribution to Value Added. With this approach, Value added refers to the unit price of a product, relative to the unit cost of the intermediary products used in the production of the final product. In relation to the aviation, the final "product" is a pax flown from A to B. The intermediary products are, amongst other things, the aeroplane. In this case, the pilots add value as without the pilots, the aeroplanes don't fly, thus precluding the production of a unit of "pax from A to B."
Regrettably, this economic analysis is essentially macro and rather different to the financial analysis of Added Value. This, of course, is Sales-capital costs-materials costs-labour. No staff here fare too well, including management. Thus one must consider, when analysing the issue in relation to the question posed, if, and by how much, the pilot not crashing is more or less important than the sales manager selling a few more cups of coffee.
Essentially, what we are asking is this, bearing in mind that a managers salary is as much a cost as a pilots: is the improvement in revenue, or the reduction in costs, generated by a manager, in relation to his/her salary greater or less of an asset to the business than the savings generated by a pilot not crashing the aeroplane are in relation to his/her salary?
Answering this question will tell us what the relative value a pilot adds to the company is.
For example, the combined crew cost on a flight is, maybe €170k p.a.. The cost of a crash would be something astronomical, in the order of at least €250m (based on hull costs and €1m comp. per dead pax, never mind lost forward bookings).
A good manager might cost €100k and generate €5m more revenue p.a.
Which is better value? Obviously in accounting terms the manager is, as his achievements are quantifiable whereas the pilots are not. The actuary and economist by contrast would choose the pilot. How else, indeed, would the insurance business exist?
It is important not to assume that if an added value can not be accurately quantified it doesn't exist. Obviously no manager will publicly agree with this assessment, but it would be nice if a few more pilots understand its implications and stopped selling themselves short.
The next question, of course, is what the relationship between pilots salaries and competence is. I doubt studies have been carried out into this, but anecdotal evidence would suggest that the lowest paid jet pilots in Europe (Ryanair) have had a lot of serious incidents in the last couple of years. While I doubt anyone will consciously take more care if paid more, the fact remains that better paying jobs will attract more applicants, thus allowing the airline to choose better people, that axiom holds true for any industry. I also suspect a certain "can't be bothered" attitude would creep in over time if one felt undervalued.
I'm afraid not, as they undermine it at every opportunity in the name of cost cutting. Don't forget that MOL has bragged he can get away with 2 hull losses. Safety starts from the top down and an attitude of this sort will negatively permeate the entire company.
With regard to the former, the modern neoclassical economic approach to Value Added explains that labour is a contribution to Value Added. With this approach, Value added refers to the unit price of a product, relative to the unit cost of the intermediary products used in the production of the final product. In relation to the aviation, the final "product" is a pax flown from A to B. The intermediary products are, amongst other things, the aeroplane. In this case, the pilots add value as without the pilots, the aeroplanes don't fly, thus precluding the production of a unit of "pax from A to B."
Regrettably, this economic analysis is essentially macro and rather different to the financial analysis of Added Value. This, of course, is Sales-capital costs-materials costs-labour. No staff here fare too well, including management. Thus one must consider, when analysing the issue in relation to the question posed, if, and by how much, the pilot not crashing is more or less important than the sales manager selling a few more cups of coffee.
Essentially, what we are asking is this, bearing in mind that a managers salary is as much a cost as a pilots: is the improvement in revenue, or the reduction in costs, generated by a manager, in relation to his/her salary greater or less of an asset to the business than the savings generated by a pilot not crashing the aeroplane are in relation to his/her salary?
Answering this question will tell us what the relative value a pilot adds to the company is.
For example, the combined crew cost on a flight is, maybe €170k p.a.. The cost of a crash would be something astronomical, in the order of at least €250m (based on hull costs and €1m comp. per dead pax, never mind lost forward bookings).
A good manager might cost €100k and generate €5m more revenue p.a.
Which is better value? Obviously in accounting terms the manager is, as his achievements are quantifiable whereas the pilots are not. The actuary and economist by contrast would choose the pilot. How else, indeed, would the insurance business exist?
It is important not to assume that if an added value can not be accurately quantified it doesn't exist. Obviously no manager will publicly agree with this assessment, but it would be nice if a few more pilots understand its implications and stopped selling themselves short.
The next question, of course, is what the relationship between pilots salaries and competence is. I doubt studies have been carried out into this, but anecdotal evidence would suggest that the lowest paid jet pilots in Europe (Ryanair) have had a lot of serious incidents in the last couple of years. While I doubt anyone will consciously take more care if paid more, the fact remains that better paying jobs will attract more applicants, thus allowing the airline to choose better people, that axiom holds true for any industry. I also suspect a certain "can't be bothered" attitude would creep in over time if one felt undervalued.
The industry and the regulator do care about safety.
Last edited by Visual Calls; 14th Nov 2007 at 00:20.
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FOK?
Originally Posted by FlyingOfficerKite
... and without MOL there would, arguably, be no modern day Ryanair?! Just a Bandit operating across the Irish sea. Whether you like Ryanair or not, a lot of people are earning a living out of the dynamism and vision of the current management.
So whether you like it or not arrogant and greedy people are the ones who run airlines and the meek moaning ones who cannot organise themselves into a Union let alone run a successful business are the people who fly the aeroplanes!
Now who keeps the airline going and deserves all that cash?!
FOK
So whether you like it or not arrogant and greedy people are the ones who run airlines and the meek moaning ones who cannot organise themselves into a Union let alone run a successful business are the people who fly the aeroplanes!
Now who keeps the airline going and deserves all that cash?!
FOK
Look we as pilots and unions need to reach out to the young of today. If we do what our predeccesors did which is only care about the top tier we are degrading the industry beyond any reasonable doubt to an all time low.
I think someone from the outside of FR needs to create and union and once that happens its all but over for MOL and the SSTR's, and horrible wages. (I dont care about pay too much if there are benefits added in. As an American one question is about socialized health care and how do I get it if I work for a EU carrier? BecauseI need to work anyway until I get lucky and find a women; work is but one level of possibility, plus if I'm going to commute?)
It enrages me though to see newbies like myself not being taught that flight instructing is the easiest and simpliest way to go to get that job. That being a FI allows you to have a new love of flight and gives you that final test.
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Management is paid to ensure that shareholders earn compensation for their investment. There is a market for good management who can do so, and few who are able. The pay of the able therefore tends to rise.
Pilots are a commodity - many people want to do it, many pay to do it, salaries decline when there is a greater willing supply than demand (just look at the excess of licence issues over available jobs).
The answer is to advertise to the world how boring the job is, discourage the young, make the job tedious, with early reports and late finishes.
Just maybe, one day soon, the sheen will come off the flying job - and the compensation may just rise in future...remember - tell every dreamer who dreams of flying what a goddam awful existence it is first.
Don't be envious. Management are people - just like you, they look out only for number 1.
Pilots are a commodity - many people want to do it, many pay to do it, salaries decline when there is a greater willing supply than demand (just look at the excess of licence issues over available jobs).
The answer is to advertise to the world how boring the job is, discourage the young, make the job tedious, with early reports and late finishes.
Just maybe, one day soon, the sheen will come off the flying job - and the compensation may just rise in future...remember - tell every dreamer who dreams of flying what a goddam awful existence it is first.
Don't be envious. Management are people - just like you, they look out only for number 1.
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Just maybe, one day soon, the sheen will come off the flying job - and the compensation may just rise in future...remember - tell every dreamer who dreams of flying what a goddam awful existence it is first
-EJetSet
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I was once one of those young airline dreamers. How great would it be to be up their in a big jet flying to all these amazing destinations.
Reality is I could care less for another all night longhaul flight and all that time sitting in a hotel room where I do not want to be. great for a young single man. But remember you will get older and possibly even attached.
I still love flying. Just not airline flying. Id rather fly for fun.
The hours I work now and the time off at home is beyond what can be sustained safely. The management of my airline know this but care less.
To think young pilots would want to do this for their 40 year working life. Do you really think you can work the hours required by airlines now for 40 years and keep your medical.
Safety is way down on airline managements agendas now and the CAA, FAA and governments are too blame for allowing it.
Ive been doing it for over 20 years and have had enough. The problem is finding a new direction after all my life in aviation.
I have considered flying smaller jets. Shorter sectors. No all night flights. But they are only a little better off as the number of sectors they do.
This encompasses much of airline flying now, not just a few Lcc.
Reality is I could care less for another all night longhaul flight and all that time sitting in a hotel room where I do not want to be. great for a young single man. But remember you will get older and possibly even attached.
I still love flying. Just not airline flying. Id rather fly for fun.
The hours I work now and the time off at home is beyond what can be sustained safely. The management of my airline know this but care less.
To think young pilots would want to do this for their 40 year working life. Do you really think you can work the hours required by airlines now for 40 years and keep your medical.
Safety is way down on airline managements agendas now and the CAA, FAA and governments are too blame for allowing it.
Ive been doing it for over 20 years and have had enough. The problem is finding a new direction after all my life in aviation.
I have considered flying smaller jets. Shorter sectors. No all night flights. But they are only a little better off as the number of sectors they do.
This encompasses much of airline flying now, not just a few Lcc.
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First you go for a LBO (Leverage buy out) simulation at a Bank considering the actual value of your airline.
Second you go to see the management telling them you (I mean the whole pilots) want to buy the majority of the stacks.
Third if the price is too high or if the management doesn't want to consider your offer you go on strike.
Then the price is decreasing at a high rate.
When they abort you just buy the business and hire a good manager witch is paid accordingly to his results.
Alternatively you keep screaming on PP forums witch is far more easy.
If i am not mistaking United pilots bought their Airline in the mid 90's.
Good luck
Second you go to see the management telling them you (I mean the whole pilots) want to buy the majority of the stacks.
Third if the price is too high or if the management doesn't want to consider your offer you go on strike.
Then the price is decreasing at a high rate.
When they abort you just buy the business and hire a good manager witch is paid accordingly to his results.
Alternatively you keep screaming on PP forums witch is far more easy.
If i am not mistaking United pilots bought their Airline in the mid 90's.
Good luck
