BA: financially, when is it no longer worth it?
 

Ladies and gentlemen,

I need to do some serious number crunching. Currently at EZY and considering BA. If I was 25, it would be a simple decision. But I'm getting dangerously close to 40 and I'm not sure the numbers add up.

Based on PPJN info, I put a spreadsheet together comparing total income over 25 years (let's assume I'll be 40 when I get in). In my spreadsheet I considered the worst case scenario where HMRC will tax flight and duty pay. They've been doing that at EZY since April, so you never know.

The other factor included in the spreadsheet is pension. EZY contribute 9% and BA 12%, so I accounted for an extra 11% personal contribution for EZY and 8% BA (I want total to be 20%).

Finally, I used Captain income for EZY (including bonus) since I am close to command course). For BA I used command at year 11 for short haul.

The numbers below are my best guess for BA NET monthly income, including flight/duty pay, after pension contribution for 25 years:


1 3318
2 3433
3 3548
4 3663
5 3778
6 3893
7 4008
8 4123
9 4238
10 4353
11 5344
12 5452
13 5560
14 5668
15 5776
16 5884
17 5992
18 6100
19 6208
20 6316
21 6424
22 6532
23 6640
24 6748
25 6856

If I add it all up over 25 years, it gives me £1.55 million. EZY total gives me £1.60 millions, so it's pretty much the same. EXCEPT THAT... my pension would be far better with EZY because I would earn more earlier.

If you work for BA, could you please check your years of service and compare you monthly NET with the figures above? Am I vaguely close to actual numbers? Remember this is with an additional 8% pension contribution.

Best regards,

P

P

You've done the research, so don't have much to add on the ££ numbers.

My only comment would be <<For BA I used command at year 11 for short haul>> I would say that is VERY optimistic. You could easily join BA now at age 40, and never get a SH command :{ At 40 you will be older than most of your fellow DEP/SSP entrants, and there are a lot of BA pilots well <40 now.

If you asked me for a "best guess" I would work your figures again for a SH command at year 15, but be prepared for year 20.

NoD

Permafrost I reckon your figures are about right (at first inspection)
However, can you see yourself living the Easyjet lifestyle for another 20 years? The nice thing about BA is that you can chop and change fleets/destinations and get to see a bit of the world. Whether that is worth the difference in cash is up to you.

Good research P. I don't work for BA but we are very similar;)

If 15 to 20 years to SH command is correct (as per Nigel's post,) then I can assume that the seniority list must be equally as large. In which case you will need to consider having no weekends free for years and flying the bid lines that no one senior wishes to fly as they're not popular trips.

To have researched this so well and thoroughly I'm guessing that you're looking to find where's best to spend the heavyweight earning period of your career. If you're in a position to consider it then perhaps a move to the M.E would suit you better at your age.

If all goes well, there's a high probability to become a skipper on a 330/340/350/380 or 777 within 6-8 years. Although its London prices out there (so nothing new to me) there are very, very few bills to pay with friends of mine earning large sums of tax free money with only a mobile phone and internet charges to pay for as a regular outgoing. (I'm sure you have friends out there as well.)

With the UK coalition govt. cutting middle class benefits, taxes rising and general costs rising like petrol, house and car insurance, it could be a good time to move.

Horses for courses I guess.

65?
 

The other consideration as you approach 'half-life is whether you'll still be flying in 25 years. I retired some years ago however I notice there is a small but significant/growing number of my ex colleagues who wouldn't be able to hold a licence even though they're under 65. There are others who have quit after 60 but not continued to 65.

BA is very much the curates egg. (Other threads discuss whether it's the grail or not). If you have the opportunity for a command pretty soon I'd take it. You'd be more 'saleable' with command hours than with F/O hours should you ever think of moving to another carrier. From my recollection (and this may be out of date now) 'early' (somewhat out of seniority or GSS) commands are sometimes available 'in the regions' with BA, but would you wish to move house/family or commute at age say, 55 for one of those (ie not LHR/LGW) as you see your projections of 15 years ago running awry.

The devil you know, beware what you wish for etc.

S:hmm:

There are no opportunities with BA for regional commands really. It's Heathrow or Gatwick only. Possibilities with GSS in Standstead as well as openskies.

Also, I would say 15 years to a shorthaul command is VERY pessimistic!! Up until the recession hit, it was 7 - 8 years. What it will be in two years times nobody knows. That depends on retirement/expansion etc... Certainly won't be as long as 15 years though!!

Surely by age 40 you have realised that there is more to life than money and quality of life is much more important.

P,

As one who did it in the late 1980s (left the RAF, joined BA at age 38, retired at 55 - 6 months "too old" to stay :{, now in a well-known LoCo until 65 :eek: ):

It was worth it for me - I had a command at LHR in 9 years and could have had one at LGW after 3 years as a result of the Dan-Air acquisition if I had bid for it. I could also have had a 744 command for my last 3 years if I had bid for it.

However, if the current situation vis-a-vis the pilot demographic profile had pertained then I would not have joined which means, of course, I wouldn't do it now if I was magically 38 again.

I think you'll have a far more rewarding and progressive career if you don't join BA - assuming that you wish to go for promotion beyond being a line captain.

Timing is all. Now is not the time for mature joiners IMHO.

Thanks to all for the feedback so far, keep it coming :ok:

Because it's not impossible I would have to wait 15 years even for SH command, plus the issue of compound interest vis-a-vis the old pension fund, it's likely that I would be worse off financially with BA.

Craggs, financially I can't fault your sand pit argument. But I just don't want to live there. I did the expat thing for a few years in my twenties and got fed up with it eventually. Most people do. Been there done that. Wife likes her job, kids like their school. I know what you mean about what lies ahead in the UK though :{

Sygyzy Something that's definitely at the back of my mind. With BA I will very much rely on age 55-65 to bring me the highest income. Dangerous.

Bingofuel, you've gone to the heart of the issue. It's NOT all about the money. In my previous career, I found out the hard way on two occasions that a more lucrative job can also make you miserable when you hate the job.

So let's hear it from previous EZY->BA shifters. Is the grass greener?

P

LH -

Aircraft are great, new fleets coming in with the 380, the 787 and (possibly) the A350 XWB.

Varied destinations when you are senior enough to bid!

Hotels are excellent. Most city centre and quiet

Rosters are getting tighter but not too tight yet, will have to see when all of the Colgen Air mud settles and the FAA/EASA FTL agreements get hammered out.

Very stable.

SH -

Busy but fun.

Great hotels, great destinations. Most hotels are city centre well away from the airport.

The length of the night stops can run short sometimes. However this can be balanced by standover days and lengthier stops if bid for. Sometimes its just nice to switch the jet off and go look around where you've flown to!

If you get in at the start of a recruitment phase you can gain control of your roster quite quickly and thus your time off and your variable pay.

Very stable.

Is it about money? If that is your primary driver then as you have intimated BA is probably not going to be the thing for you. If it is about variety, the ability to mix SH and LH and the ability to look around the places you fly to then possibly, yes BA could do it for you.

Time to command is a variable feast as NOD states. IF the company expands (bear in mind there is very little space at LHR) then TTC could come down. There has been little movement for the past 5 years mind you which means there are many, many SFO's awaiting their turn which will slow things down for current joiners. The pension changes might be having a fairly dramatic effect at the moment though as those on the top find they can't syphon off excess into AVC's as they used to.

Food for thought.

Second you might want to consider is time away from home. BA is doing a lot of nightstops, you might like it, you might not. When you are commuting it could be great, but if you only live in close distance from the airport, being home almost every night could be invaluable as well.

I have considered applying, but this was one of the main reasons for me to stay at easy.

I am surprised that no one so far has said my estimated figures were a bit low. Like I said, I assumed tax on full flight and duty pay (in case it changes).

That's why I initially posted my estimated figures here. I had often heard that after 8 years or so at BA you would end up with a salary similar to EZY captain. Not by a long shot according to my spreadsheet! If you include the 15% bonus, I make it about 5,500 a month for EZY vs 4,123 for BA. That's not small change!

I agree with those who said that lifestyle if worth sacrificing some income. But I still need to pay the mortgage and put the kids through school and university!

P

Permafrost,

As you asked I would suggest that, dependent upon working patterns and taking into account the pay cut we all took, you are about £750-£1000 adrift on your net income figures.

Based on my personal figures anyway.

As other posters have made clear, there is far more to a shift to BA than £££. But since it is the title of the thread, let me expand on "Time to Command".

Factors one needs to assess/determine to make an educated guess:

1. Age Profile of current BA pilots. Essentially max 58, then guess maybe an ~even distribution down to ~25.
2. Average Retirrement age of BA Pilots. Hard to say, but I'd guess at ~62 - majority go on as long as possible, balanced by a few going earlier, voluntarily or involuntarily. But if the retirement age increases further :=
3. Change in pilot numbers. Has not changed much over last 15years, and not BA's aim/ability to "expand" much. Slight increase in aircraft numbers coming up, but if they get painted white/orange and red not a lot of use for BA Pilot numbers :(
4. P1 v P2 ratio. Substantially <50%, and with any expansion more LH orientated, will further reduce.
5. How many P2s do not take a Command when they could? Desire for LH / Commuting means this is good number - but pay / tax / Pension implications could affect it.
6. Take up of Part Time. Likely to increase, and hopefully by P1s :ok:
7. IB factor ???? Do not forget there is not really an airline called "BA" now... it is a subset of IAG, and who knows what, if any, the implications will be for the "BA Pilot Seniority list/numbers" :ooh:

I made an analysis / best guess before joining BA in 1996, and came up with 7-8 years, and was lucky enough for the numbers to make it 6.5. But when I joined, a new LHR Capt on the then "junior fleet" (757/767) was ~22yrs.

NoD

BA: financially, when is it no longer worth it?
When you decide to join their BA Cityflyer ops. Sorry, just couldn't resist... ;)

You can't just add the figures up can you...you need a NPV analysis as the value of £6500/month 25 years from now isn't what its worth today.

Let some of the old guys tell you what their cash was worth 25 years ago?

Of course if you assume your pay rises keep pace with inflation then the "real" value of the cash is maintained.

But that certainly isn't the case with my pay packet over the last 10 years!

Lastly, but not leastly, if you're able to pay your £400K/20 years mortgage off 10 years early by earning earlier in your career rather than later, you'll save yourself...about £125K if the interest rate is 5%.

At 10%, you'll save yourself £289K.

Statistically, with health issues being more likely to rear their ugly head in later life, earning early in your career in such an uncertain world has got to be a good thing.

If the break-even point was age 50, rather than age 60, different ball game.

FWIW.

Not exactly finance related, but can anybody tell me about the healthcare plan provided by BA? How would this work for somebody living outside the UK (Mainland Europe)?

Thanks again chaps.

NOD, let me have a got at your algorithm..

Very few retirements for next four years, since max age 58 and average retirement 62.

Even spread from 25 to 58, giving 33 years. So plus four, that's 37.

Hard for me to gauge the whole ratio of SH/LH migrations, as well as P1/P2 ratio, but I'm going to make a blind guess that the decreasing P1/P2 ratio might be compensated for by the amount of P1s going part time and P2s not taking SH commands.

So 37/2= 19-ish. To that I will apply what seems to have been the spread between SH/LH time to command: 7 years.

Final guess for SH command 19-7=12. Minimum, of course.

Like you said, it's not all about the money. But I need data for financial planning. My house is paid off but I have two young children and a wife who is considering starting a business. When did it all get so complicated? :rolleyes:

Cheers,

P

You do know that easyJet new Captains in Rome and Milan are taking home net of tax €9,000 a month every month and sometime more if busy? That's more than the BA SFO net 25 year point in Sterling. I mean if the sun the skiing and la dolce vita is putting you off then I fully understand why you'd prefer to stay local to the M25...

Spain is pretty much the same.


WWW

Yes but can the Milan chaps fly 5 four sector days in a row for 25 years?