NW + DL Merger Mania Update... A little birdy tells me

[PCL_128]

Originally Posted by ElyJs

Why does that 737 pilot make more? These are the answers I am searching for.

The domestic 737 pilot makes more than the domestic RJ pilot because he produces more revenue. A small 737 has anywhere from 100-140 seats, while a large RJ has anywhere from 70-86 seats. That's a big difference in revenue producing capability. It isn't about skill required, it's about revenue produced.

[kellwolf]

How about a shortage of QUALIFIED pilots. The 250 hour guys should make less than the 1000 hour guy. He's got 750 hours less experience. But the CAs that fly with the 250 hour guys should make MORE in a lot of cases since they're the ones that are having to cover the difference in the experience gap. That doesn't happen, though.

If airlines followed the traditional model of economics, they would raise pay when the qualified applicants dried up. Instead, they lower the minimums. What happens when businesses are running low on talent? They offer more in compensation. They don't go out and say "Well, you only need a HS diploma to act as an exec in my company." Those that do get those jobs without advanced degrees often have experience to back it up. Getting hired at a regional as an FO now is the equivalent of taking a HS grad and putting him directly in as exec VP of a small branch of a large business. He might know a bit from the econ class he took in HS, but odds are he doesn't know a whole lot about managerial techniques and how to run a staff. A 250 hour FO might have some book knowledge from stuff he studied for FAA writtens (and he MIGHT have actually taken the ATP written), but odds are he's weak in CRM skills and the experience in making decisions on his own.

[ElyJs]

I see the revenue point of view, but it makes me a little nervous to depend on the goodwill of management to share revenue with the pilots. It seems like the union negotiations have more ground to stand on.

In the end managements goal is to get customer from point A to point B for the lowest cost and highest price possible. What is stopping Virgin America from operating A320's and paying RJ wages? The only thing I can think of is fear of the pilots organizing. How many embry-riddle or ATP grads wouldn't go fly that A320 for RJ wages?

In a business that exec is paid more because the experience he/she brings allows him to make more for the company. In the airline industry the 250 hour pilot flying the 737 produces the same amount of revenue as the 5,000 FO flying the 737. This is until he makes a smoking hole in the ground, then he costs a lot.

-Jason
www.flyboulder.com

[kellwolf]

Originally Posted by ElyJs

I see the revenue point of view, but it makes me a little nervous to depend on the goodwill of management to share revenue with the pilots. It seems like the union negotiations have more ground to stand on.

That's true. At least with a union negotiated CBA, you know what you're getting. Anything else is left to the whim and mercy of management. If you hit lean times, there's nothing preventing management from altering a profit sharing deal in order to "re-invest" that money in the airline (or management's pockets).

In the end managements goal is to get customer from point A to point B for the lowest cost and highest price possible. What is stopping Virgin America from operating A320's and paying RJ wages? The only thing I can think of is fear of the pilots organizing. How many embry-riddle or ATP grads wouldn't go fly that A320 for RJ wages?

That and no insurance company in their right minds would cover them with that lack of experience. What they might save in labor costs they'd lose several times over in insurance premiums assuming they could find a company that would give them hull coverage and liability insurance.

In a business that exec is paid more because the experience he/she brings allows him to make more for the company. In the airline industry the 250 hour pilot flying the 737 produces the same amount of revenue as the 5,000 FO flying the 737. This is until he makes a smoking hole in the ground, then he costs a lot.

Like I said. Lack of QUALIFIED pilots.....

I just finished up a trip with one of the CAs that does checkrides in the sim for both CAs and new hire FOs. He was telling me some of the stuff people bust their checkrides on and.....well, damn. Some of those guys I wonder how they got this far.

[ElyJs]

That and no insurance company in their right minds would cover them with that lack of experience. What they might save in labor costs they'd lose several times over in insurance premiums assuming they could find a company that would give them hull coverage and liability insurance.

This makes sense to me, but again, how much harder is an A320 to fly than an RJ? How long before the insurance companies figure this out and either charge more for the RJ or less for the Boeing or Airbus? Don't you think there is a management position lobbying for this change right now? I guess the insurance to cover losing 150 people is a lot more than losing 50 people. This is what is true at the GA level. That 6 seat twin comanche costs more than the 4 seat version.

I could also see the theory that they wash out less pilots, leading to lower training costs.

I hate to play devils advocate, I really appreciate the constructive answers you have given me. I just want a better understanding.

-Jason

[Doug Taylor]

First rule about the real world, t'row all them books out. Makes great bar talk, but that's just about it.

[PCL_128]

Originally Posted by ElyJs

I see the revenue point of view, but it makes me a little nervous to depend on the goodwill of management to share revenue with the pilots.

I'm not talking about "good will." No such thing exists with management. I'm just talking about the reasoning that unions use when determining payscales. ALPA, and most other pilot unions, use revenue generation potential as the justification for demanding higher pay for larger equipment. In the early days, ALPA used aircraft speed as a metric for determining payscales, but that quickly changed to aircraft size. The union for the UPS pilots prefers to use a blended scale that has a single payrate for all aircraft types. I actually prefer this method, but the IPA is the only union that I'm aware of that uses it.

[bike21]

Originally Posted by PCL_128

I'm not talking about "good will." No such thing exists with management.

Not true. I have a lot of respect of your viewpoints, but you seem to be quite jaded against management in general. Have you ever been management or had good friends/family in management? They are not all evil ya know

[ElyJs]

First rule about the real world, t'row all them books out. Makes great bar talk, but that's just about it.

Not true. I have a lot of respect of your viewpoints, but you seem to be quite jaded against management in general. Have you ever been management or had good friends/family in management? They are not all evil ya know

Nope, I am bright-eyed bushy tailed CFI right out of college doing my best to learn more about the real world. I do not have any friends or family in the airline industry besides the people I have met at the airport or since I started flying. All of my family are business execs . I do not think management is evil at all, actually just he opposite. They operate in a very logical way to maximize profits by all possible means.

JC so far has been a great place to start my real world education. I am here to learn...and question.

-Jason

[bike21]

Jason, that post was quoted to PCL_128...not you

[PCL_128]

Originally Posted by bike21

Not true. I have a lot of respect of your viewpoints, but you seem to be quite jaded against management in general. Have you ever been management or had good friends/family in management? They are not all evil ya know

No, I've never been management. I actually have a soul, so I'm disqualified.

Seriously, though, you're right that they aren't all evil, but 90% of them are. SWA management seems to "get it," but that's the exception rather than the rule. Most of them are so blinded by ego and greed that they aren't even aware of the difference between right and wrong. My father was in management at Detroit Diesel for many, many years. He sat in on meetings where senior management plotted some anti-union activities that most people wouldn't even believe. He eventually had to leave management altogether because he simply couldn't stand being around it anymore.

P.S. If you think your management at Skywest has any good will, then you're dreaming. They've given you nothing that wasn't based on the ulterior motive of keeping a union off the property. Truly benevolent management doesn't hire union-busting lawfirms like Ford & Harrison. Truly benevolent management like SWA actually welcomes unions and strives to work with them.

[DZERO]

I know SWA pretty much has the business model pegged that allows it to make $$$ even in todays industry. Their relationship with labor is great too. I wonder though if their attitude would change if they started hemoraging cash like the legacies were. Relations always seem great when times are fat, but when the times get lean everything seems to go to crap between labor and mgmt.

[Velocipede]

Originally Posted by ElyJs

This makes sense to me, but again, how much harder is an A320 to fly than an RJ? How long before the insurance companies figure this out and either charge more for the RJ or less for the Boeing or Airbus?

Again, its not a question of diffculty. You can make the same comparison with a Cessna. Its invalid.

What the insurance company looks at is the number of individuals who certainly would file lawsuits in the event of an accident/incident. That's what they base their rates on. And if you start putting low time pilots in 747s, the insurance premiums would be prohibitive.

Don't you think there is a management position lobbying for this change right now?

You might be surprised to learn exactly how shortsighted management is. For instance, when fuel prices started going up, our pilot group told our managers that they needed to install winglets on the 737s to reduce fuel burn. Their answer? "Not economically valid." Well, along come the fuel spike and one of them thinks, "Hey, what about winglets?" Now, its the greatest idea since sliced bread. Unfortunately, several of the jets THEY ordered are not configured to accept winglets.

Not a lot of long term thinking in headquarters. They're too busy protecting their fiefdoms, counting their stock options and conspiring to reduce labor costs.

I could also see the theory that they wash out less pilots, leading to lower training costs.

Training failures are a cost of doing business. When there are a lot of experienced pilots available, they have hoops like pre-hire sim checks. And Regional Airlines don't put 250 hour F/Os in airplanes.

However, that's where we are today. Some major airlines are even hiring F/Os with ZERO PIC time. Can't wait until some of those guys try to check out.

[Minnesota_Flyer]

Originally Posted by PCL_128

No, I've never been management. I actually have a soul, so I'm disqualified.

They have made amazing strides in soul removal. It's now an out-patient procedure and relatively painless. Lasers, man!!

[Doug Taylor]

HSA covers that now?

[PCL_128]

Originally Posted by Minnesota_Flyer

They have made amazing strides in soul removal. It's now an out-patient procedure and relatively painless. Lasers, man!!

Hey, if they can make a laser that can remove Seggy's back hair, then I'm convinced lasers can do just about anything.

[777forever]

Read in the USA today yesterday that management and ALPA came to a new contract agreement that will help pilots regain their Pre-9/11 pay! I would think thats a lot of money the pilots are giving up by fighting over seniority.

[PCL_128]

It's not pre-9/11 pay, but it's a big improvement. But pay doesn't mean much if you lose your seniority. Seniority is everything. I can understand the parties holding off until things are completely worked out. Nobody wants another AAA/AWA situation.

[Doug Taylor]

USAToday was incorrect.

Which occurs often. Who was that Flight Simmer named Eric (something) that was an airline analyst for a few years?

But they have some awesome colorful factoids about minutia!

[WalterSobchak]

Originally Posted by ElyJs

Does a domestic narrowbody take any more skill to fly than a RJ? The only reason that 737 pilot makes more is because of scope clauses negotiated by unions, at least the way I see it. This I will debate with you. Why does that 737 pilot make more? These are the answers I am searching for.

The laws of economics do apply. You cannot escape them. They are fact. I will debate many things and am here to see and hear other viewpoints. I will not debate whether or not the laws of economics apply.

-Jason

Because the RJ shouldn't exist? Not at the regional level. We are farmed out labor with the motherships logo on the side. If those at the mothership would scope out jet flying all together then there would be an adjusted payscale and bye bye to the majority of RJ's at the regional level.

Why does a 747 400 CA make more than a DC-9? Was does and RJ CA make more than a Saab CA? The amount of responsibility in back with the amount of cargo(pax) you carry. The insurance, I think some one was getting to the same point as me. My cousin is a bus CA at NWA he has been there for 25 years(and hes 48) he laughs about how the more money you make the easir the flying is. For example a A320 vs a PA 31 with no AP.

[PCL_128]

Originally Posted by WalterSobchak

Because the RJ shouldn't exist? Not at the regional level.

Oooh, I like that answer!

[Doug Taylor]

Productivity. Weight + Speed + Other.

[bike21]

Originally Posted by PCL_128

No, I've never been management. I actually have a soul, so I'm disqualified.

Seriously, though, you're right that they aren't all evil, but 90% of them are. SWA management seems to "get it," but that's the exception rather than the rule. Most of them are so blinded by ego and greed that they aren't even aware of the difference between right and wrong. My father was in management at Detroit Diesel for many, many years. He sat in on meetings where senior management plotted some anti-union activities that most people wouldn't even believe. He eventually had to leave management altogether because he simply couldn't stand being around it anymore.

Good to hear that, my parents run a construction company and certainly aren't evil And get this...they actually WANT to be unionized. SWA does certainly seem to 'get it', but as DZERO said I wonder how things will be in lean times. I would put the 'evil' rating much lower to about 10%, misguided/power/money hungry 70%, clueless 10%, benevolent 10%

P.S. If you think your management at Skywest has any good will, then you're dreaming. They've given you nothing that wasn't based on the ulterior motive of keeping a union off the property. Truly benevolent management doesn't hire union-busting lawfirms like Ford & Harrison. Truly benevolent management like SWA actually welcomes unions and strives to work with them.

Truly benevolent? Nope. Decent guys trying to run a solid business? Yep. While I certainly disagree with the company's non-union stance and some other issues, we do have some solid folks running this show. Heck, our new president is even getting his PPL in an effort to understand pilot needs more. Now there is something you don't see everyday.

[PCL_128]

Originally Posted by bike21

I would put the 'evil' rating much lower to about 10%, misguided/power/money hungry 70%, clueless 10%, benevolent 10%

Eh, I consider power/money hungry to be the same as "evil." So I'll compromise and say 80% evil.

Heck, our new president is even getting his PPL in an effort to understand pilot needs more. Now there is something you don't see everyday.

Careful with that. Phil Trenary (aka, Phildo), CEO at Pinnacle got his Private also. He used it to claim that being a pilot "really isn't that hard."

[MQAAord]

Yeah, AMR's "boss" is a pilot. And I've no respect for him at all. A pilot's license doesn't make an airline pilot.