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© 2007-11, William Swelbar.

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Wednesday
Mar102010

« Mainline Pilot Scope: Will Regional Carriers Be Permitted to Fly 90+ Seat Aircraft? »

Today I had the pleasure of participating on a panel at the 35th Annual FAA Aviation Forecast Conference, my second consecutive year taking part in one of the breakout sessions.  I shared a dais with the President of the Regional Airline Association, Roger Cohen, and long-time industry consultant, historian and photographer George Hamlin on a panel titled: New Decade......Dawn or Dusk for Regional Carriers?  I had the hotseat – responsible for discussing the reliably controversial subject of mainline pilot scope clauses.

It is my view that there can’t be an honest discussion on the shape or structure of the US domestic airline industry without talking about scope – the contractual clauses pilot unions negotiate to protect certain flying for their members.  I believe that this round of contract negotiations at major carriers will be the most important since deregulation, and scope will play a pivotal role as the airlines take a hard look at economics. And mainline pilot scope agreements are all about economics. 

Today’s industry architecture in which regional carriers fly large numbers of aircraft with 76 seats and less was drawn on the equivalent of vellum paper using compasses, triangles, French curves, triangular scales and protractors.  The working structure did not come about easily. First, earlier era scope clauses were relaxed during the late 1990s and early 2000s to permit carriers to deploy 50-seat regional jets between hubs and markets that could no longer support the economics of a mainline jet.  Delta and Continental had a significant head start on the rest of the industry in using these smaller aircraft because they had few limitations imposed through their pilot agreements.

Other mainline carriers: American, Northwest, United and US Airways, were late to the game.  Scope-relaxed competitors were using the 50-seater to claim traffic that was traditionally the domain of the scope-constrained carriers still limited to feed markets within the turboprop drawn 400 mile radius around a hub.  Now these little jets could overfly hubs, aggressively changing the competitive structure in the US domestic market.

So those carriers that needed the permission of pilots to compete on a level playing field recognized the need to relax restrictive scope clauses that limited what type of aircraft regional pilots could fly.  And that made the scope clause important trading currency for pilot unions that agreed to relax scope protections only in return for improvements in other parts of the agreement.  For example, when United pilots negotiated a new agreement in the Fall of 2000, the union leveraged scope relief to demand a weighted average 23 percent wage increase and two subsequent 4.7 percent increases, as well as a number of other contract enhancements that ultimately contributed to landing the carrier in bankruptcy.

I am convinced that, if not for bankruptcy, we would not be seeing mainline carrier’s regional partners flying aircraft 70 seats and greater in the numbers we are seeing today.  So if today’s architecture was drawn with outdated tools, then tomorrow’s architecture will likely require Computer Aided Design (CAD) software.  That, as old-school architects might say, is equivalent to replacing the pencil with a keyboard -- limiting in that the digital world requires exact inputs rather than the less precise nature of sketching. And that has real implications for pilots and the carriers that employ them. 

Tipping Point

From my perspective this next round of pilot negotiations could be the tipping point for scope:  the critical juncture in an evolving situation that leads to a new and irreversible development.  What if mainline pilots again treat the relaxation of scope as trading currency to make improvements in the collective bargaining agreement? Wouldn’t they ultimately be ceding mainline narrowbody flying in the US domestic market?  I think so. 

This approach would be a mistake for management, too, because scope relief has historically been assigned too much value in bargaining.  There is value in the shift of flying from the mainline to regional partners to be sure.  But the differences in labor rates between the mainline and the regional are nowhere near what they were before the last round of industry restructuring.  Domestic revenues continue to suffer, particularly compared to the revenue environment when values were last ascribed to scope relief.  And with little growth expected in US domestic flying, airlines must question where they’ll find the arbitrage.

I make this projection for domestic flying based in part on a comparison to historic growth rates. Today, the travel spend as a percent of GDP produces $35+ billion dollars less in revenue than did the high water-market in 2001.  Labor rate differentials between mainline and regional carriers are significantly smaller than they were in 2001.  Regulatory oversight of the regional industry will add expense that is not yet known or understood.  Negative media coverage could undermine passenger acceptance and willingness to fly regional carriers.  Most mainline airlines are ordering narrowbody equipment to replace aircraft in their fleets, not expand their fleets. And there are still thousands of mainline pilots on furlough.

Does Scope Produce the Intended Outcome?

In the most simplistic terms, scope is the definition of work for the class and craft of employees governed by the provisions of a collective bargaining agreement.  Its purpose is to provide job security for those employees.  But it is safe to say that most scope clauses produced unintended consequences.  Between 2000 – 2008, legacy carriers reduced the number of narrowbody aircraft they fly by 800, and more than 14,000 pilot jobs have disappeared.

So, one could argue that scope is just another example of protectionism that failed. As economist Henry George, a sharp critic of protectionist policies, once said: “Protectionism teaches us is to do to ourselves in times of peace what enemies seek to do to us in times of war.” 

Scope negotiations have been divisive not only between labor and managements but just as much between the unions representing mainline pilots and those representing regional pilots. Ultimately airlines must determine whether the 90-125 seat flying of tomorrow should go to the mainline or be flown by their regional partners. To arrive at the right economic solution, it is time for organized pilot labor and management to stop putting a Band-aid on problems.

The Boyd Group International recently released an interesting fleet forecast that looks in part at new aircraft orders. So far, the only area of real growth is in the 75-125 seat category.  Orders in other seat ranges are forecast simply as replacements from now until 2015.

Ironically, 2015 is when many regional contracts expire, primarily those for 50-seat flying.  These expirations could eliminate nearly 500 existing airplanes currently under contract between now and 2016; with the lion’s share coming off contract in 2015.  This is a conundrum for the regional industry for sure.  There will be a thirst for new flying.

It Is All About the Economics

Perhaps a better way than scope for pilot unions to think about job protection is to find the economics that will employ the most pilots at the mainline.  That challenge must acknowledge the fact that today’s industry is not the industry of yesteryear.  If the regional industry has been used as currency to cross-subsidize pilots at the mainline; and assuming that the trading currency is not what is was as we engage in this round of bargaining, then something has to give. 

There are two solutions as I see it:  1) relax scope in order to win bigger increases in wages, benefits and working conditions for pilots that remain at the mainline; or 2) embrace the absolute fact that contractual rates, work rules and benefits need to be lower for US domestic mainline flying.  That type of carve out can be negotiated.  Domestic market flying differentials can be the new trading currency used to adapt any pilot contract to the market realities of today.  There is no way to “perfume the pig” here; the mainline did something similar in 1984 in order to average down labor costs to facilitate growth.  When it was decided that the concept was not internally healthy, mainline pilot labor made the regional industry the new vehicle for cross-subsidization of mainline pilot terms of employment.

One trend is clear:  the industry’s pricing structure cannot now support labor rates that keep pace with inflation.  An unpopular message -- yes.  But there needs to be a structure in place that recognizes the different conditions in the US domestic market versus international markets.  This structure must recognize that not all flying is created equal, just as the airlines are coming to appreciate that a one size fits all operation is not financially sustainable.  There is a tremendous opportunity to put in place something better – if only the players at the table can let go of the past and come to terms with a new era in the airline industry.

Where Do I Come Out?

I recently saw a piece by Lori Ranson on the Airline Business blog titled:  “A New Line In the Sand” that cites comments by long-time Raymond James analyst Jim Parker on the future of scope: “As employee groups seek to regain some concessions made early last decade as a host of carriers spent time in Chapter 11, there could be some leeway in the size of jets flown by mainline regional partners,” according to the analysis.  James sees the potential to renegotiate current scope clauses, moving the dial from 70-seats to 90-seats.

I am not one to be on the other side of Parker often, but on this one I am.  I do not believe that the mainline pilot unions can afford to make another mistake.  Their arrogance toward regional jet flying led to their current predicament.  The economics of US domestic flying is simply much more difficult now for the legacy carriers.  If labor can’t let go of their memories of what the industry was 20 years ago to focus instead on where it’s going over the next 20 years, then they will have no one to blame but themselves if they fail to help position airlines – and the pilots they represent  – for success.  John Kennedy once said:  “Change is the law of life. And those who look only to the past or present are certain to miss the future.

It won’t be easy for pilot union leaders to find a solution for a problem that they helped to create.  Just as the US Airways East scope clause defines small, medium and large regional aircraft, it is time to define small, medium and large narrowbody equipment necessary to profitably serve the domestic market. 

Once again, a call for pilot union leadership.  My view is that management is indifferent as to which pilot group does the flying.  I am thinking we are at that critical juncture in an evolving situation that leads to a new and irreversible development – mainline legacy carrier pilots performing narrowbody flying in the US domestic market 20 years from now – or NOT.

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Reader Comments (27)

Boring. Hackneyed. "It's all the unions' fault." Restructuring means screwing with the employees. Always has. We have seen all of this before. No wonder the pilot shortage is coming.(See currenbt issue of WATS magazine). What we need is huge Union gains, not "concessions to the new reality." If the moeny isn't there, then executive bonuses should be a thing of the past, wouldn't you say?

Just more of the ususal nonsense. The fact that it is in DC and at a conference doesn't change the essence of the remarks, only the packaging.

03.11.2010 | Unregistered CommenterPeter Dunn

Huh?

Brilliant comeback. Defining problems, looking for solutions. Does the current system really work for you?

03.11.2010 | Registered Commenterswelbar

Really...seriously...there will be pilot shortage because apparently making an average of 135,000k a year is not enough. The average pilot makes enough money to put them in the top 10% of the income bracket. The airlines simply cannot afford the contracts that are requested. Take AA for example...roughly 80,000 employees...we'll include management, eventhough they don't make up a substantial portion of the group. If each member of the organization received a $1/hr raise the math comes out to...

$1/hr x 40hr/wk x 52wks/yr x 80,000 employees = $166,400,000

Last year the top executives at AA received all stock bonuses...so as to give them a stake in the future of the company (so no immediate compensation), and made a whole lot less than $166 million. Listen to Swelbar here, the current economics are unsustainable, they will not keep an industry afloat, and outside of a "come to Jesus" moment by national governments around the globe, that leads to mass consolidation and the tearing down of foreign ownership restrictions, that is not going to change. It stinks, yes, no body is questioning that, but you have to deal with reality. To everyone who thinks that airline executives should be let go and strung up by their heels, I have one question for you, and its a good one that you should think about, and not just reem me for...

How would you have done things differently?

Mistakes have been made, but if you honestly believe that you could have done a better job, then let everyone know what you would have done...but remember before you do that hindsight is 20/20.

03.11.2010 | Unregistered CommenterBA

If a company needs to fly a 100 seat airplane. Why not just leave it at the mainline? You said the pay-rates are getting closer. The only time a company need relief from scope is when they want relief from paying a decent wage(and work rules) for the aircraft. Nothing is limiting them from purchasing the aircraft and if it make no difference who flys them then why have a regional at all?

Don't you think someone at the front end of a multi million $$ machine moving at 500 mph with the responsibility of 90 people on board should make more then my mail-man? 135k is not attainable at one of these outsourced companies. The more pilots shifted to the second tier lower wage scales the farther away that 135k number is. Add in $40k-60k worth of the necessary training and years of earning <$40,000 while that debt accumulates interests and your 135k a year is crumbled away. I am not even including the decay in retirement and quality of life that all pilots as a whole have been subjected to.

"focus on airline labor cost restructuring"

Same old management BS. Taking advantage of labor thats locked in due to the seniority system. Hope Roger Cohen didnt get any bronzer on you.

03.11.2010 | Unregistered Commenterreally?

Airline economics are largely shaped by government and domestic policies and practices, not just fuel and labor contracts. If US airlines wanted to improve their financial bottom lines and the QOL of their workforce, they'd raise ticket prices across the board. Most US passengers would revolt, however, and so ticket pricing today is as it was 20 years ago. Now whose living in the past?

Whether or not regionals or legacy carriers ply domestic routes is irrelevant. There will always be contention between management and labor over contracts and compensation. Scope clauses are only the smallest piece of a much larger and complicated puzzle. A look at industry, government and consumer roles in the whole of US aviation will reveal a sordid tale of dysfunction.

Improvement in any one of those roles will lead to improvement in the others. But which airline is going to charge a fare on par with the actual expense of the flight? Which government agency is going to relinguish their share of the tax burden on US airlines and passengers? And which passenger is going to pay up for what their flight costs and/or agree to three flights a day between San Diego and LAX on a major as opposed to the nine offered on regional affiliates? What neighborhood is going to allow for new or expanding facilities and which environmental group is going to stop blocking those projects? The list of dysfunction is endless, and goes well beyond scope.

03.11.2010 | Unregistered CommenterPW

I remember when I was told . . .

"Regional jets allow service to smaller markets that are uneconomical to serve with mainline aircraft."

"Regional jets will foster mainline growth by increasing feed to the hubs from new destinations."

After a thirty percent pay cut, loss of benefits, loss of pension, and flying more days than ever, I'm being told . . . .

"Economic realities prohibit mainline pilots from flying regional jets."

03.11.2010 | Unregistered CommenterAM

Hey BA,

Where did you get this number of $135,000 a year?

I made $40,900 last year as a captain on a SF340 flying passengers in some of the worst weather and most congested air space in the United States. I'd be happy to send you a copy of my W-2 if you don't believe me. Of course, I fly a lowly turboprop (without an FMS or other computer gadgetry), but there probably isn't a single regional airline guy out there making $135,000. I don't even think that Sullenberger was making that much, by the way, as a senior A320 captain at US Air.

Also, pilots don't get paid for 40 hours a week. They get paid when they're in the cockpit and the plane moves of the gate. They stop getting paid when the plane parks at the gate. I usually just get paid 75 hours a month, the minimum guarantee, because I'm on reserve most of the time. This despite the fact that I may be gone 15 days a month.

It's bad enough that my kids qualify for reduced-cost lunch, but to read that I "actually" make $135,000 a year is a bit much.

03.11.2010 | Unregistered CommenterRon

AM

You have done your homework and so will I.

Swelbar

03.11.2010 | Registered Commenterswelbar

my first time reading your blog and i have comment. you think that major airline domestic rates need to come down and yet the passenger airline pilots with the highest pay rates fly for southwest, which, is domestic only.

03.11.2010 | Unregistered Commenterairwolf

I am a currently on furlough from a major us carrier. At this carrier I made less than 35,000 on first year pay, and then I made 6 months of second year pay before being kicked to the curb. 2nd year reserve pay, at my major airline job, would have amounted to approx 56k. 56k is what I could have made, at a U.S. major airline, after 11 years of experience as a professional pilot.

Before being hired at this major, I had gained experience for 7 years at a regional airline earning an average of 48k per year over that period. First year reserve pay at the regional airline was just over 16k. That was a hard year, but that's all that a guy with a 4 year degree, an ATP and 1500 hours is worth to a regional airline.

Now, of course, my story is nothing special; in fact its ordinary. There are many thousands of pilots on the street right now with very similar encounters with the profession of aviation. Will there be a pilot shortage? My guess is yes there will be. Why would anyone who still has a choice choose to get into this business? I sure wouldn't do it again if I knew what this industry would become. Most guys I talk to wouldn't do it again. Whenever I talk to someone who is young and dreaming about flying jets for a living, I do my best to try and save them from this mess and I tell them to run the other way. In fact, I know lots of guys with similar views who do their part to warn people away from aviation. So, yes I think there will be a pilot shortage.

I could earn 56k per year, 11 years into an aviation career, where I've had no periods of unemployment and worked for two airlines that have better than average pay. I won't make 135k/ year until I'm a captain at the major airline from which I'm currently furloughed. My guess is thats at least 10 years from now, probably more, and that will mean a minimum of 21 years is required to reach that pay level so I think its HIGHLY misleading to use the 135k number like its the norm for the average guy. The average pilot a passenger may see walking through the terminal could just as likely qualify for food stamps, especially if he's got a family, as he could make over 100k. Only captains at major airlines make pay in the 135k range and it takes a very long time and a lot of luck to get into one of those seats.

All of that I said to preface the numbers I'll give you from my current job. When I lost my job in the U.S., I was fortunate enough to be hired at major foreign carrier. First year pay will work out to approximately 85,000 U.S. dollars. The captains make much more than 135k. At my job in the U.S., I flew on average 85 hours per month to earn my much lower salary. At this carrier I've never flown more than 45 hours in a month. What this means is that my hourly pay is nearly three times more than I was being paid for the same job in the states. The carrier I fly for is very profitable and has been for a long time. When I hear people put out pure drivel about pilot wages being responsible for carriers economic problems I can only laugh and get mad. Airline's business problems are not our fault and to insist otherwise ignores clear examples of carriers who do exceedingly well while compensating their pilots appropriately and at rates multiples higher than in the U.S.. The solution to U.S. airline's problems is not lower pilot wages.

03.12.2010 | Unregistered Commenterfurloughed

The fundamental issue affecting airlines today, are that they have taken out such ludicrous amounts of debt They are debt addicts. When times are good, well, they last forever, right? Times are good; let's go take out more loans so that we can expand! Can a balloon ever expand too far? When times are bad,lets take out more loans to pay off the old loans. After all, we can always use our gates, airport slots, and spare engines as collateral.

Let's just remind our selves that it was the major pilots protectionism that opened up new competition, they only have to blame themselves for their hubris. Lets just remind ourselves that passengers pay insanely low amounts to travel, due to competition and too much capacity. Lets just remind ourselves that the company you fly for can't renegotiate the price it pays for the debt it has, insurance, fuel, and overhead; therefore, they must take their financial axe to the employee.

What a ridiculous load of nonsense this all is! Where I am going is here: Until legacy carriers stop running like the state department and start running like mom and pop, ie: paying off loans, putting money into savings, and learning how to eliminate waste; we will never see the type off pay we want or deserve.

03.12.2010 | Unregistered CommenterRegional FO

You are right, the $135,000k number is unfortunately drastically overstated for many pilots out there, and that is not right; but imagine...if you make $50,000/yr, imagine how much someone flying a 777 from JFKLHR makes a year. The system is strictly based on seniority, something that labor created, and that is unfair. It should be merit based, just like most of the working world. As long as the primary mode of promotion is seniority, then everyone lower on the totem pole gets screwed. It turn, you feel like the company is the one that is doing it, when in reality, it is the hierarchial system that has been set up by labor itself. I have great respect for regional airline pilots, I've spent 15 years as a recreational pilot, flying planes ranging from a Piper Cub to a Cessna 185 w/ floats, and I can't imagine the effort and exhaustion that it takes to work that much and get paid that much. For your plight, I am sorry. Management will always work to stay competitive in a market environment, so as long as someone else will do a comparable job for cheaper, then the price will continually fall; also unfortunate, but a fact of free markets. As far as foreign carriers, they can afford to pay more, because they are traditionally not exposed to the same competitive forces as the U.S. domestic airline industry. Open Skies treaties are a brand new thing, and have exposed many of these foreign carriers to the competitive forces much closer to the U.S. industry. Below is the link to where I got the salary that I quoted...if you have a different one, please let me know, I'm not saying that you're wrong, just that the markets in a deregulated environment are a fact of life.

http://www.airlinefinancials.com/uploads/2008_WEBSITE_AA.pdf

Also, I have to pose the question again, "What would anyone have done differently over the last several years?"

03.12.2010 | Unregistered CommenterBA

To answer that question: How about not treat the employees like the enemy?? How about emulate the few successful carriers? How about slash management numbers and pay when the company doesn't perform well? How about treat safety and service as true priorities? How about not hedge fuel at the wrong price and then not take responsibility for their own mistakes? I could go on and on but since the author of this blog gets his bread buttered by the ATA and management he is not about to look at things without a management slant.

03.12.2010 | Unregistered Commenterjohn doe

Doe, how about you take a look at things without your union slant? I'd love to see it, but I doubt you will be able to, since its often that it is the union mentality that perpetuates the us vs. them mentality you accuse others of. In fact, I'd love it you posted quotes with sources of these instances where employees are treated like the "enemy". Do we get to count some of your posts, too?

If you really feel that pilots are not making enough money, then by all means suggest some feasible revenue sources where those additional dollars could come from. BTW, management's pay is not a credible response...

I'm eager to hear your response and please avoid answering a question with a question. I know it will be hard for you.

03.12.2010 | Unregistered CommenterRichard R.

Doe,

To answer you questions to my question...there is alot less management and the bulk of them make less than the average mainline pilot...so cutting their numbers and pay isn't going to get you far. The few profitable carriers over the last few years have been low-cost, strictly domestic, carriers with a pt-pt route structure...I'm sure that it wouldn't be expensive at all to completely rework your entire route and equipment structure, I'm betting that, that would have cost more jobs and money than maintaining the status quo. Safety and service tend to be a concern of management, that is probably why the current rate of fatal incidents on western built airplanes are at some of the lowest levels of all time. As with service, the union are the front line of the airlines, so quality of customer service is at least partially on them. I can't resist, I have to ask a question to, "Could you legitimately predict that the price of oil was going to up to $150/barrel, and then consequently back down to under $40/barrel in less than a year?" If you could, I suggest you get Goldman on the phone, millions of dollars are waiting for you. Southwest hedged earlier because they actually had the money to do it, they had a much stronger balance sheet compared to most other carriers, not because they were smarter or savvier about the price of oil.

03.12.2010 | Unregistered CommenterBA

I am not the supposedly all knowing highly paid management team that claims to worry about brain drain if we cut their (upper execs) salaries. I also could not have predicted the price of oil rising, but then again I am not being paid millions of dollars for my wisdom in making such decisions. I do know if I made a mistake that cost the company a lot of money (hedging oil that cost over a billion dollars) I would be fired? Why has no one paid with their job in management for said decision? I also think the pilots, mechanics, flight attendants and others have more to do with the safety record since they actually operate the flights. The management in the ivory tower that is far removed has been an economic barrier to safety lately. Ask any line pilot about the number of times they have refused an airplane that management thinks is airworthy over a maintenance deferral. Are you actually familiar with line operations or do you just speak from "consultant" experience??

03.12.2010 | Unregistered Commenterjohn doe

We're taking it back!!!! No more scope relief!!! You think you're going to see the regionals flying 125 seat aircraft? NO WAY!!!! Over my dead body!!!! They don't like it, shut it down.

03.12.2010 | Unregistered CommenterBob

Just for grins and giggles, what would be the estimated market value of each legacy carrier's frequent flyer program? Maybe some of that equity needs to be "unbundled" and used for general corporate purposes. Eliminating some debt on the balance sheet and the costs associated with servicing that debt could make substantial labor contract improvements economically feasible.

Also, I'm not a finance guy but shouldn't we scrutnize non-labor unit costs, at the very least, just as much as labor unit costs?

03.12.2010 | Unregistered CommenterAM

Oh really Bob, it is that exact hubris which allowed regional airlines to prosper and dominate your career to begin with. Rewind to 1984, when every mainline union said "No, we do not want our entry level buddies flying turboprops." Therefore a new industry was born, and most of you still havent caught on to that fact. It is time you realize that their is now absolutely no difference between me and you, except timing and luck. You think you actually deserve to fly the heavy? Well guess what, even the millitary and university pilots are going to the regionals now.

I am fine with that, most narrowbody mainlines fly just as heavy schedules as we do now. The pay at mainlines is comparative per ASM to the regionals now. And all I hear from your unions is a bunch of high ho hum.

If you REALLY want to keep your pay up without sacrifice do this:
Get your union and company to agree to add an additional surcharge to the ticket price... for crew. A simple surcharge of a few bucks per passenger per scheduled hour and presto, your now making a half million a year, depending on equipment. Just make sure that the company guarantees a certain capacity and we all win.

The regionals will have to get theirs as well, since it is all booked on mainline websites and then we all get payed what we want and deserve.

03.13.2010 | Unregistered CommenterRegional FO

Let me propose a hypothetical scenario: What if we extended the downward trajectory of pilot wages to the point of everyone working for free, but the downward trajectory of fares also continued, resulting in airlines still losing money? When are we going to stop with the red herring of "blame greedy labor" and admit the real long term problem is chronic overcapacity, incompetent management, and internet fare wars? It's really getting old. Really.

03.13.2010 | Unregistered CommenterMD

MD

Let me propose something. That you and pilot union leadership accept that you are as much to blame as the airlines for allowing this current construct to be in place. The talk at the FAA Forecast Conference that was the catalyst for this blog piece, and most things I write, is less about greedy labor and more about forgetting about the way it used to be and the need to reconstruct how pilots work and how they are paid. If you want to continue to work inside a system that only works when there is growth - then accept the consequences.

Step up and stop making inneuendos that I think you should work for free. I am tired of that red herring too.

Swelbar

03.14.2010 | Unregistered Commenterswelbar

Hey John,

Ok, first, let's all please stop lumping the term "management" to include everyone who works in HQ. When labor refers to anyone who is "management," you are referring to about what let say 10 people. It is ridiculous to believe that through all of this, no one in actual management groups of 2-3 thousand people has lost their job, or had their salary frozen. I agree, the pilots, FAs, line mechanics, all have a great deal to do with safety, so if they've stepped up the job at every airline, I applaud them for it. If management are economic barriers to safety, then the unions are vying to become the very same thing. It is a testament to both management and labor that safety rates are at their current level, but if cost is at all an issue with deferring maintenance, which it is, because now days cost is a substantial driver behind many things, then won't it just get worse if the airlines add hundreds of millions of dollars (that they don't have) to the expense sheet? If we wish to say that management has their ivory tower, then we must also speak to labor's ivory tower. The idea that in a contracting industry, no one will lose their job is pretty ridiculous. Reasonable raises would be possible, just change it to a merit based system, and let the company purge itself of those who do not perform. If you believe in that kind of a system for management, why not labor as well?

03.15.2010 | Unregistered CommenterBA

I would never actually accuse anyone of demanding that people work for free, but I think the point was clear. We've seen massive pay concessions and outsourcing post 9/11, only to result in overcapacity, plummeting fares, and failure once again. Obviously there is a more systematic problem. I'll leave you with an entirely possible scenario: What if average pilot compensation slipped to what we'll call the "market rate", i.e. there were barely enough minimally qualified applicants for the job openings available. If we kept repeating this cycle of over-expansion financed by labor concessions, followed by more unprofitability, what would the airlines do? If they cut compensation again, too many would start leaving for other careers. That's why we need to concentrate on the real problems. Suggesting compensation needs to decline (even if through inflation at best) is a band-aid on borrowed time.

03.15.2010 | Unregistered CommenterMD

Would it be possible to adjust the site settings so that the "print" option picks up the comments as well as the post? Often the back and forth in the comments is also informative and/or entertaining.

really? is brutal on Roger Cohen and the bronzer.

03.16.2010 | Unregistered Commenterbdbd

'If labor can’t let go of their memories of what the industry was 20 years ago to focus instead on where it’s going over the next 20 years, then they will have no one to blame but themselves if they fail to help position airlines – and the pilots they represent – for success"

Most powerful statement of the article. As an airline pilot I constantly here pilots talking about the good ole days and how we need to get back to a deregulated era. Sorry folks, its not 1975 anymore. Labor and management need to throw their egos aside, and come up with a pay structure that allows the airline to profit, and protect mainline jobs at the same time.

03.18.2010 | Unregistered CommenterLeo

Labor is practically the only variable available in the fight to stay economically viable. Obviously, you don't tell Exxon you're not paying their prices. That said, as the price for labor (which includes work rules) at the regionals rises to meet the legacies, there is no longer any justifcation for two groups. It really comes down to union busting in the final analysis. Jacking the house up works the other way too when one airline receives a concession then all follow suit.
What is missing in this discussion is that we appear to be in a normal downturn in capitalism that will last for years. Most gains are garnered in the "summer" years when profits flow freely and the "house is jacked up." Adjustments are to be expected in the "winter" years of the cycle. I am afraid that these commentaries see things as "jacked up."

03.23.2010 | Unregistered CommenterMike

I would also like to know why Boyd used 75 seats in his numbers when the most accepted division is set at 76 seats for regional jet classification. I would like to see the numbers w/o the 76+ seats from the Q400 thrown in as well. His choice at 75 makes him highly suspect to me and I would want to ferret that out before using him as a source.

03.23.2010 | Unregistered CommenterMike

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