Do Some Pilots Earn Too Much?
 

This is going to be a controversial one! :) :)

I've followed with much interest the pay claims of pilots at United, American and Delta - and as can be seen from the thread on take home pay, their monthly after-tax pay is, in many cases, more than the annual pay of some crews flying identical aircraft.

From a corporate standpoint, this is a fast-track to bankruptcy, especially in a recession which it is widely acknowledged we're entering at the moment. Salaries are part of overhead - and high overhead kills off companies when revenues are down.

Not only this, but their agreements limit the number of hours they have to work to ridiculously low levels - the equivalent of just over a working week for an average person per month.

They expect to be paid for training time - regardless of the fact that most professions require training/seminars/conferences for which there is no additional pay.

Benefits - such as concessionary travel - are worth many thousands of dollars (especially for a family travelling first class several times a year); yet this is apparently not taken into consideration.

The pay gap between US crews (and these three carriers in particular) and crews in the rest of the world is vast and seemingly growing out of control. It's very much to ALPA's benefit if other US majors (such as Continental, US Airways, TWA, Northwest, Southwest etc) join them - and ensures for those carriers that are paying their crews high salaries that come the recession, their competitors are in the same boat.

But can these pay levels be justified? I think not. Sure, there are some very high salaries paid to a few - very few - entrepreneurs and senior executives; but by and large almost all of the senior executives at AA, DL and UA are on lower salaries than their captains.

Is there any justification for retaining the old system of paying higher salaries for larger aircraft? An evaluation of the Delta payscales shows that a captain on the B737-200 can currently expect to be paid US$208.30 per hour; yet his colleague on a B737NG can expect US$232.59/hr. If he's on B727s he'll get US$221.83 - yet if he's on B757s he'll get US$239.41. A B767 captain has has six possible pay rates - US$243.92 for a B767-200; US$245.48 on a B767-300; US$248.27 on a B767-300ER flying domestically and US$260.27 flying the same aircraft internationally. If s/he's on the new B767-400, s/he can expect US$269.74 when flying domestically and US$281.74 when flying internationally.

Even the venerable L1011 has four rates - US$262.28 for the longbody on domestic and US$275.28 for the same aircraft internationally; and US$269.33 and US$281.33 for domestic and international operations on the -500.

Highest pay rates are for the B777 - US$285.34 per hour for domestic sectors and US$297.34 for international.

Delta pilots get a US$12 per hour override for international vs domestic operations.

Not only are these rates high; but DALPA wants them to go much higher - with increases averaging over 40%.

Insanity - pure insanity.

Surely a far better way of doing things would be to have a 'normal' level of base pay - and then profit share (perhaps in conjunction with an ESOP) so that if the company's doing well - then the employees do likewise. If it isn't - then they don't get any extra. The benefit to the company is that they can control their overhead by keeping pay at a reasonable level - and employees share in the good times.

Comments?

Do some pilots get paid too little - YES!

During a discussion on a turnaround with my last employer I discovered that the people who were cleaning the cabin were earning rather more than I was. No wonder I left!

You should go to South America , and ask around some salaries... http://www.pprune.org/ubb/NonCGI/eek.gif...the other way (too little) seems to be the rule.... http://www.pprune.org/ubb/NonCGI/frown.gif (and I am not even thinking of Africa...Russia...China...)

Do some pilots get paid too much? Yes!

Surely no pilot is earning too much, come on ;) (just some other pilots not earning enough...)

A few points though:
- pilot market salaries are dictated by the pilots themselves, and not the market! (e.g. if you feel you don't earn enough, join the union NOW)
- if the companies cannot afford the salaries, how come they invite people to fly for peanuts (like in my company, I think we will soon have to pay the pax to come along :mad: )
- why always moan about the high wages of pilots if companies are not even able to increase fares due to Jet A1 and US$ increase. The related increase in fares should be regulation amongst all airlines
- the positive side of the high earning folks is to have somethin' to aim for :)

Have a successful new Millennium you all!

------------------
* cut my wings and I'll die *

[This message has been edited by fly4fud (edited 30 December 2000).]

Guvnor

Your summary of pay rates and comment makes no consideration for the time/money/effort/sacrifice that the men and women lucky enough to fly for a major US airline exert. (In fact 99% of prospective flight crews around the World suffer likewise.)

Even you should understand that we don't just "find" our licences in lucky boxes of Crackerjack (or Jamboree bags!).

It took me TEN YEARS to make it. During those TEN YEARS my friends earned real salaries, bought nice houses, drove nice cars (and didn't have to constantly troll the car park seeking a friendly soul for a jump start).
Add to this, the CAA and it's various "friends" took pretty much all the money I had.

In reality we're just playing "catch up".

Do you have ANY IDEA how many folks have to drop out of aviation because they simply can no longer afford to participate?

Talk about pushing a pea uphill with your nose!

Roy Keane can make $70,000 (rough conversion) a WEEK. Who am I to tell him he's overpaid?

Profit sharing is all well and good but you go ahead and name the top airline execs that you'd gamble YOUR life on. Short list isn't it? My airline has 11,500 of them (pilots) and you can count on EVERY ONE!

All markets support the expenses of the best providers in their industry, whether that's for surgery, financial advice, advertising, whatever.

Sorry you have your reasons NOT to be a crew member for the US majors. That's your choice, though.

Cheers,dd.

I don´t that I earn enough anymore...

JJ

Here is a different view on pilot salaries from a Miami Herald article a couple of weeks ago:


"Very few people in the United States, in any given field, have $150 million in company assets and 400 lives in their hands,'' said Frederick "Rick'' Dubinsky, chairman of the United pilots council within ALPA. "So I don't think we're paid too much. They should double or triple it. I'm not apologizing."


I think he makes a lot of sense!

dallas dude;

That was something I think most of us have in mind. Our time/money/effort/risk to be in the cockpit.
Time - You can be "lucky" , and do a fast track...that is on the house of 1,5 to 2 years from nothing to "Frozen" ATPL.(I mean really working for an airliner or a decent biz outfit.) But that if you are lucky.And aside from EU and some countries in Asia ,there isn't the "sponsor" program in the rest of the world (that I know of anyway - someone correct-me if I am wrong , please). So it can be 2 to 10 years..who knows.

Money - No need to be explaining much here.Most fo us know how aviation likes our money...and I mean really likes money.And its getting more and more expensive.Again , some are lucky to be accepeted in sponsor schemes and have some "certainty" in the future , others do not and get real problems with that. And there is the difference in training methods(how to suck our money out).I was a little surprised that here in the EU (at least here in Holland) you need to pay landing fee (and that includes Touch&Go's) and sometimes a lot of others hidden fees. To use Brazil for comparsion (I know the US too), there the plane from a school don't pay landing fees and radio/nav fees , to stimulate low prices and therefore atracting people in to flying(and make an already expensive career a little more affordable). I think I have no need to speak about the US as there is widely known to each one how it works there.

Effort - It's the sum of all.Your effort is great , and so it remains during your "hunt" for the ultimate goal - a "real" job (read an Airline- or a good biz outfit to others).You know what you have been trough till now and what maybe you still have to go.

Risk - Life is risks ,but then we are being constantly reminded how our careers can end without even getting started sometimes. You start with the Medicals. Each year (and after twice a year) you go to the AME to see if they let you go another round. I have seen people been kicked out rightfully (and sometimes not) , and bam...from one day to another bye flying.And if you are in your mid-forty's (i.e.), you have a problem ,what will you do/learn at this stage of life?Not to speak how your body will be suffering with non-routine , changing day-by-night and vice-versa(I know that that was in the profession when I started - but you can't not feel it - is there so we need to cope with it) and jet-lags for some others crews.
After that , are those wonderful check-rides (exams here). Fail there , and get in trouble too. Always hoping not to get an instructor/examiner that hasn't had a good night so you're the guilty one...and therefore you should pay the price....with your career if necessary.
And to sum to all that , an Airline is nothing more than business , pure and simple.So the "boss" always thinks you're gaining too much and he is profiting too less...so you should pay the price to get the company (and the dozens of executives) more wealthy.Or worse , they can decide that you won't be necessary and show you the way to the street.(If the the company don't go to bottom too - then is even worser).
And I did not even talk about the loss of life ,as I think this can happen when we are flying or having dinner at home.

So Guv , nothing personal , but I think that we think execs are paid too much as execs think pilots gain too much.There will always be this discussion.

And I bet it won't be long for someone to come in here and say that pilots complain too much and work too little , that we should look at another professions and be grateful etc.etc... Sorry , but as much as we (most of us anyway) love flying, everybody needs to have a life too...eat/drink have a house..those sort of things (and pay the training back!). I wonder what would be the argument ,let's say , from a football(soccer) player when someone said he earn too much (millions for some "blokes")?? :rolleyes:

[This message has been edited by AeroBoero (edited 31 December 2000).]

Some excellent responses there!

Aeroboero is right. Why should he in Brazil, earn less than his counterparts in North America or Western Europe? He's presumably gone through similar training and hour building as people here - yet a Brazilian pilot probably earns less in a year than a DL captain earns in a month, flying the same aircraft.

Whilst, as Fly4fud says, at certain companies the pilots have tried to dictate to the market (rather than the other way round) this is a short term plan that generally ends up in tears. It wasn't that long ago that AA stood up to their pilots - and they backed down.

The reason that fares are so low is because of competition. There are a lot of seats chasing not all that many bums - and the only way the market can be stimulated to create higher demand (and thus more bums) is to reduce fares. This can only be done effectively if costs are also low - we've seen what happened when high cost carriers attempted to create low cost operations. The moment an airline increases its fares, demand falls away - this is basic economics.

High overhead + low yields = bankrupcy.

dallas dude - there are an awful lot of other professions where people have to go through similar amounts of training and low pay. A doctor/surgeon would be one such example - and the pay rates in the UK for NHS surgeons are certainly nothing to write home about! Accountants, lawyers, dentists, vets, scientists, professors ... really all the true 'professions' involve long periods of training/indenture and much sacrifice. What makes pilots any different?

As for your analogy of putting your life in other people's hands - what about train or bus drivers? Ships captains? Taxi drivers? A cruise liner captain has responsibility for considerably more people - and a much more valuable asset - than an A380 pilot ever will! On the ALPA formula of bigger + more pax = more pay, the captains of the new cruise leviathans should be earning hundreds of thousands of dollars a month!

As you say, the top of the crop in any profession can expect to earn more than their less able colleagues. Does this mean that you're saying that AA, DL, UA etc employ the best of the best - and that there are no second rate pilots in there? If so, that's incredibly naive - and arrogant. I have no doubt that there are many pilots around the world who are at least as good as the best at the US majors - in many cases, probably better; yet they get paid a lot less.

Of course, at the other end of the scale one has the sports players, actors and pop stars earning millions. And you've got merchant bankers (investment bankers for our US friends) and attorneys earning truly staggering sums of money - the value that they are putting into society and the economy can well be debated! :) :)

Very well said guvnor! Can`t agree more to what you`ve written. It really anoys me everytime I hear that crab from someone in a major, about how he deserves the high salary because he put such effort in getting the job. I also spent several tough years to get the good job(in a major) I have now. It is always a big matter of luck where you end in and everyone on the bright side should be a bit more grateful for what he achieved.
It is not(only) a matter of talent!

Guvnor

Let's both understand something from the get-go. I get paid well not because of what I "do". I make good money because years ago union folks fought for decent pay and working conditions. I have the good fortune to have inherited the spoils from their hard won battles. Sorry to disappoint you but I'm not about to return part of my check beacause of guilt pains. I'm no Red Robbo but it's my (and the other 11,500+) union affiliation that will leave this place better for my successors than even I found it! My company is making near record profits (and I hope they kick everyone elses' butt doing it!) but pilot salary's are small potatoes to other expenses in this industry. I have figures available and know exactly how much it costs my airline to get a pax from A to B.
They are not a charity and you and I wouldn't expect them to be.

I think you make a mistake comparing Europe to the US regards air travel or even general transportation for that matter. You "claim" that more bums on seats equals more money. Not necessarily true, otherwise why would American REMOVE rows of seats?

Here in the US there is such a huge market for the flying public that niche carriers (and I mean no offense) like Southwest or Spirit Airlines etc will always find plane loads of folks who don't mind paying for their type of service. Conversely, there are folks who want/expect a little bit more and they have their airlines of choice. (Please note as far as I'm concerned what we do up front is equitable no matter what symbol is painted on the tail !)

I appreciate your twisting the point of my previous post regarding "making it after 10 years". If you or anyone thought that after 6 or 7 years of crappy paying flying jobs I suddenly became Jesus in flying boots when I joined AA you're going to be disappointed.

The best flying I ever did was in ragged out freighters with multiple MEL items, VERY questionable weather radar and a couple of owners who'd lie to your face if they could screw you out of a dollar. Oh and if you got hurt in the process no problem - the POS aeroplane's insured ! Like all owners who are happy to take advantage of the fact that folks like me are/were building a career and use these experiences as stepping stones you don't see people, you see dollar or pound signs. The salary you offer HAS NOTHING to do with ability. You do it because you can get away with it!

All those who've been there/done that (and those that still are) - nod your heads.

In closing, you mention American and ALPA in the same breath. American has not been part of ALPA since 1963.

You also mentioned that "American got tough with its pilot group". Please explain this comment. I'll be happy to share the facts with you.

Cheers,dd.

dallas dude - I have the DOT figures as published for each airline in the States. As a proportion of overall costs, salaries make up by far the greatest amount - anywhere between 30% and 50% of overall costs. If, as DALPA wants, those costs are increased by a further 40%, you'll have up to 70% of all costs attributable to employment.

And that's just (plane) crazy!

If I was to gaze into my crystal ball, I'd see hard times ahead for UAL and any carrier (such as DL and AA) that emulates their insane pay scales. I see major layoffs - and probably industrial action - which will devastate once fine carriers.

We've seen it this past summer at UA - and a couple of years back at your own employer, AA - where the damage caused by such action is both severe and long term. I'd hate to think how many tens of thousands of once loyal customers United has lost over the actions of its pilots (and intransigence of management, to be fair).

You're quite right about more bums on seats not necessarily making more money - I was responding to Fly4fud's posting when I said that.

AA, and its OneWorld partner BA, have (in my view correctly) opted to concentrate on the high yield market rather than simply playing a numbers game. This means that they will fly fewer pax - and have got themselves smaller aircraft as a result - but will charge higher fares to pax for a quality service.

That's fine as long as the pax are prepared to pay - but as we saw in the last recession, corporate travel budgets are one of the first areas to be cut. This leaves carriers - such as AA, UA and DL - with very high overheads (new aircraft, high salaries)in a very precarious situation.

Live it up for now, dd - but at the same time, think of the hundreds of (formerly highly paid) pilots who have never returned to the air after the bankruptcies of carriers such as EA and PA.

Guvnor - I am a little puzzled at excactly what you think is proper compensation in any given profession.

Do we use third world countries as a base line? Do we use rate of inflation -
that is what United got (3.8% per year from 1993) and that is after taking a 23,8% CUT for 6 years?

If being competitive means getting paid less than your competitors we all will be looking at African/Russian/South-American salaries before long.

As for PanAm and Eastern - I think you know that their demise was caused by a multitude of factors - the least of which was pilot wages.

Look at TWA - they are among the lowest paid pilots of any sizable carrier.

I am continually astonished at how airline managers look to their employees to subsidize their poor management skills. And yes - those skills do matter. While the USA is being poo-poo'd for paying the pilots too much, the US ticket prices are on average much lower than, say, in Europe.....

Guvnor

Your point about passengers being treated as pawns is absolutely correct. Unfortunately, over the years the pilot group has done such a good job of telling the travelling public how great aviation is and projecting the image that pilots are on a par with Doctors, Dentists, Lawyers etc., that few members of the public have (and fair enough) ANY sympathy for us "poor" hourly paid employees.

What you fail to take in to consideration is the fact that in UAL's case, UAL sold tickets on flights that it KNEW it could not operate because the pilot group had been telling management for EIGHTEEN months that they weren't hiring enough pilots to work these flights. UAL management, in its arrogance, ignored these warnings and as a result the pax lost out and once again it's the greedy pilots' fault ( I don't write a letter of this for sympathy, I write it because it's the TRUTH). How could you expect to run an airline (or any business)properly if your published schedule is totally reliant on employees working mandatory overtime? As usual incompetent management runs to their friends in the press
and the Government ( they make HUGE political contibutions-wonder why ?) and make everyone but themselves out to be responsible for the debacle! If I ran a business like this I'd be accused of fraud!

Ok that's got me warmed up. Would you like the lesson on EAL now?
Ever heard of a guy named Francisco Lorenzo ?
This piece of work ran rings around the labor laws (with considerable skill I might add) and picked off the carcass of EAL to add to his considerable fortune. The pilots at EAL could have worked for $2.50 an hour and Lorenzo would have tried to reduce that to $2.49 etc. The staff at EAL ,many of whom saw their life's work ruined, were left with nothing except the prospect of starting over.

The low cost/low paid carriers Lorenzo started (helped I might add by fools who did not see the big picture) only made a select few VERY WEALTHY. Clue, it wasn't the "greedy" pilots.

Pan Am ,sadly, were victims of US de-regulation rather than any "greedy" group of pilots. In effect,for years Pan Am was happy to have the domestic carriers provide feed to their international operation. When the 'cuffs came off in 1978 and the Delta's, United's, American's etc were able to compete for routes with Pan Am as well, the passengers' were ALREADY on their aeroplanes so why hand them over to Pan Am ? Very weak domestic feed = bye,bye Pan Am.

You claim WHEN Delta (go boys and girls!) attain their new pay-rates that 70 % of the expenses will go to labor costs. Nonsense.

Simple math here, let's use a two hour (600 mile to be conservative) domestic flight for example. We'll say the aeroplane seats 89 passengers. The Captain makes $ 200/hr, I make $100/hr = $600 (We don't, these rates are inflated for the purpose of this example). Three flight attendants (highly underpaid!) add $150 for a crew total of $750. The aeroplane we fly costs $6400/hr to operate. This allows for every other employee who is "touched" by the flight and the gas, amortization, etc so right now our 2 hour flight has expenses of $12,800, plus $750 for the crew. NOTE, $600 for us is not even close to the percentages you claim.

The aeroplane has an average load factor of 70% so we'll say there are 6 folks in first class (@ $550 per seat) and 57 folks in coach (@ $350 per seat). First class contributes $3300, coach adds another $19950 for a total revenue of $23250. Just to be fair let's say there are 10 non-revs aboard filling up 10 more seats. The cost per seat mile to the airline is 9 cents/mile. So, as we said the 2 hour distance is 600 miles, these seats "cost" the company $540. $23250 less $540 is $22710.

I believe the above figures I've used for seats are reasonable averages at AA. I've used the F100 at AA.

As anyone can see, these are MONEY MAKING MACHINES ! This trip generated over $9000 profit. Now imagine that multiplied by over TWO THOUSAND departures per day! Then explain me why the company can't afford its pilots?

I suppose Bob Ayling is worth the money he was paid, eh? Now that MAY be worth complaining about!

Cheers,dd.

Correcto Dallas dude...

When I travel domestic US Coach, I prefer AA as they have more legroom than most domestic narrowbody 1st classes have.

JJ

dallas dude;

I agree with all that you've said.
On my above post, I mentioned about getting the "real" job. I use an airline as example , as from where I came from , this was viewed like a "real" job. You got more "security" and other benefits. But I know very well that being in a airline doesn't necessarily mean a dream job.
Also it is difficult when the Union don't work that well.In the US and EU is more "easy" to have Union taking care of the matters. That's not so simple out that axis (aviation side).And some people up here don't understand that too. Let me give an example ; last year the then second or third major in Brazil , to avoid trouble, fired all the crew that were in the head of the pilots union. A "simple" way to get a message through.

And just to add to your example in the above post. I think you should have included paying cargo.


Guv;

Normally if the crew isn't the cheapiest part of the flight , they are very close to it. And as I said before , is easy to say pilot's "gain" too much. But is that really the case?







[This message has been edited by AeroBoero (edited 01 January 2001).]

Guvnor,
Are you trying to get into the management's good book ?
Or are you in management ?
We all know that for every share option that the pilot gets, the managements will get many times more, so ESOP is just window dressing for all I care.
I prefer the cold hard cash anyday.

Well said Dallas Dude.

Guv - Crew costs don't kill airlines. Incompetent managment, bad leadership, and fuel costs do. Do the math and don't rely on some bogus opinions. The idea that captains are making more than senior execs is laughable.

You're worth what you negotiate. Do you think the senior managers at the major airlines don't negotiate for their salaries and working conditions???? Maybe some people have some sort of socialist idea compensation, but it usually only applies to other people, not themselves. By the way Guv, are you going to publish your real compensation level to your employees when your airline starts up??

Guvnor

You've had 24 hours to respond to the FACTS.

Your silence is deafening.

Cheers,dd.

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

A little brevity required I think

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

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.

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.

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).]

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).]

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).]

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.....

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.

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?

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?

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

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.

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.

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.

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.

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.

Fine. Thats your opinion. Now go away.

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... :) :) :)