Contract Negotiations and Pilot Shortages

[Itchy]

Then you don't understand the difference between "shortage" and scarcity.

"A shortage occurs whenever quantity demanded is greater than quantity supplied at the market price. More people are willing and able to buy the good at the current market price than what is currently available. When a shortage exists, the market is not in equilibrium. At equilibrium, the quantity demanded equals the quantity supplied at the market price.

The term 'shortage' can be easily confused with scarcity, which is one of the underlying basic problems of economics. The easiest way to distinguish between the two is that scarcity is a naturally occurring limitation on the resource that cannot be replenished. A shortage is a market condition of a particular good at a particular price. Over time, the good will be replenished and the shortage condition resolved."

A shortage occurs whenever quantity demanded is greater than quantity supplied at the market price"
Meh. Semantics. I stand by what I wrote.

The industry can not continue on the model it used in the past. Something will have to change. I'm hoping it's pay.

 

[mastermags]

I don't see the problem. If that happens, then negotiate better rates in the next contract. MD/737/A319 flying has the same relationship with 757s and A321's as RJ's have with MD's. What's to prevent DAL from going to a single-type fleet and doing nothing but ETOPS 737's? Mainline buying regional jets and flying them with mainline pilots seems like an infinitely better scenario than the current sweat-shop arrangement.

It almost reads that you want to socialize mainline pay to bring rates on RJ's up. 'Let them negotiate better rates', etc. Is that what you are saying?

 

[mastermags]

Then you don't understand the difference between "shortage" and scarcity.

"A shortage occurs whenever quantity demanded is greater than quantity supplied at the market price. More people are willing and able to buy the good at the current market price than what is currently available. When a shortage exists, the market is not in equilibrium. At equilibrium, the quantity demanded equals the quantity supplied at the market price.

The term 'shortage' can be easily confused with scarcity, which is one of the underlying basic problems of economics. The easiest way to distinguish between the two is that scarcity is a naturally occurring limitation on the resource that cannot be replenished. A shortage is a market condition of a particular good at a particular price. Over time, the good will be replenished and the shortage condition resolved."

All assuming a free market, which the airline industry is not, of course.

 

[pete2800]

It almost reads that you want to socialize mainline pay to bring rates on RJ's up. 'Let them negotiate better rates', etc. Is that what you are saying?

Political buzz-words aside... no. I'd just much rather pay rates for aircraft be negotiated with similar leverage from top to bottom, rather than separating out the undesirables as CPA carriers and letting them flounder against one another.

 

[chrisreedrules]

I truly don't think that regional's are going anywhere. I think the only "stability" that can be depended upon at the regional's is instability. Someone who posted on the first page (I think) said that things are becoming stable and that the shuffling around of regional pilots is coming to an end. I present to you GoJet. It would be so easy for the powers at be to create another airline to keep labor cheap. I'm not saying that that is what they will do specifically, but what I am saying is that they hold the cards. They pull the strings. And they are way better at it than we are. I would not expect any meaningful permanent changes in the next few years. But I will say now, more than ever, it is important to fight for every inch of contract and pay improvement possible. Interest rates are going to start rising and inflation is going to set in for several years to come. That same dollar you make and spend now isn't going to stretch nearly as far a year from now. If every regional raised first year pay to $40 /hour tomorrow (like so many of the naive were touting republic's offer) every first year FO would still only be making $36,000 /year (at a 75 hour /month guarantee). $36,000 is still paltry pay to be flying around in 50+ seat jets with this amount of responsibility. And that same $36,000 just won't be that great in anther 4 or 5 years. Fight for meaningful changes that will last for years to come.

 

[pete2800]

Fight for meaningful changes that will last for years to come.

This is exactly what we're inhibited from doing when we have this perpetual instability. Contractual gains cannot last when we have rapid growth, shrinkage, and shifting of flying. If you continue to attempt to move the flying back to mainline, that's when the negotiating for the future can begin.

 

[chrisreedrules]

This is exactly what we're inhibited from doing when we have this perpetual instability. Contractual gains cannot last when we have rapid growth, shrinkage, and shifting of flying. If you continue to attempt to move the flying back to mainline, that's when the negotiating for the future can begin.

I don't disagree with you. I don't have the answers and in my year flying 121, I have never been so frustrated with my career. It takes a lot to persevere in this industry and it is often disheartening. And I've had it good compared to most who came before me. Gives one a lot of respect for guys who have been slugging it out at the regional's for the past decade.

 

[bLizZuE]

When I got in the business, you could finish all of your ratings through CFI for $20k. Now I think ATP is charging something like $70k for that. And financing is a lot harder to find nowadays than it was when I was going through, when they'd throw money at anyone.

I took a finance class that told me I shouldn't train in a field where I expect to make less in the first year than the total amount of debt amassed by my education. Oops.

 

[SlumTodd_Millionaire]

I took a finance class that told me I shouldn't train in a field where I expect to make less in the first year than the total amount of debt amassed by my education. Oops.

Probably not a perfect rule of thumb, as we'd never have any doctors or attorneys. But it is food for thought. Spending $70k on ratings (not to mention the additional on a degree) for a job that pays less than $50k for numerous years at the start of a career is not good financial planning.

 

[mastermags]

The evidence that higher pay can help in hiring exists. Just look at Endeavor. They stated issuing bonuses and they went from barely getting 2 people in a class to filling classes very month. Delta tried a flow and everything. Only money is what got people to walk through the door.

It probably has more to do with the fact that the 'flow' only happened if one could be a Captain for two years, which was not plausible with the ETD deal. Now that the Captain thing has been waived, people are buying in. The 20K doesn't hurt, but it's career progression people want, and at this point, 9E has the best track to DAL in the regionals.

 

[BEEF SUPREME]

Then you don't understand the difference between "shortage" and scarcity.

"A shortage occurs whenever quantity demanded is greater than quantity supplied at the market price. More people are willing and able to buy the good at the current market price than what is currently available. When a shortage exists, the market is not in equilibrium. At equilibrium, the quantity demanded equals the quantity supplied at the market price.

The term 'shortage' can be easily confused with scarcity, which is one of the underlying basic problems of economics. The easiest way to distinguish between the two is that scarcity is a naturally occurring limitation on the resource that cannot be replenished. A shortage is a market condition of a particular good at a particular price. Over time, the good will be replenished and the shortage condition resolved."

"A shortage is a market condition of a particular good at a particular price. Over time, the good will be replenished and the shortage condition resolved"

The next Asian pig-bird-dog flu, Zombie outbreak, Durka Durka Jihadist terror attack on XYZ airline, dot-com/housing-bubble/stock-market collapse/world economic-failure, or ATC infrastructure failure WILL result in all of those happy people with "lifetime" positions at a major back on the street, taking back the regional/91/135 jobs they just left.

We will be right back where we were in 2008 or 2001 etc, etc, etc...

Never mind age 68 or 70 or whatever redonkulus crap ICAO is about to dish out probably perfectly timed with whatever economic disaster plays out in the next 6 years.

No mo' shortage. I'll be laughing from my front porch happy to be out of the mess if all goes well (for me anyway). I'm leaving aviation maybe for good January 1st.

 

[Blackhawk]

I took a finance class that told me I shouldn't train in a field where I expect to make less in the first year than the total amount of debt amassed by my education. Oops.

My wife's first-year income as a resident was far less than the total debt amassed in her education. Care to guess what she can demand as an orthopeadiic surgeon with a foot/ankle fellowship?

 

[Blackhawk]

All assuming a free market, which the airline industry is not, of course.

Umm... no it doesn't. Look at any socialist/communist country and you will see shortages. Heck, in Venezuela you can't even get toilet paper.

 

[Autothrust Blue]

The issue is that because there would be no scope, Delta/United/American could buy 500 CRJ700s. Sure, they'd be replacing all the regional flying with higher paying mainline flying, but they'd also be replacing a fair amount of MDXX/737/A319 flying with much lower paying flying.

Scope choke works up until a point.

"We don't want that little airplane"

 

[Blackhawk]

A shortage occurs whenever quantity demanded is greater than quantity supplied at the market price"
Meh. Semantics. I stand by what I wrote.

The industry can not continue on the model it used in the past. Something will have to change. I'm hoping it's pay.

In spite of you being raised in the relativism generation it most definitely is not semantics. Get them confused in an economics class and you will receive an F. There have been numerous shortages of pilots over the generations. As cost/supply comes back into line the shortage goes away and we eventually find ourselves at the other extreme with a surplus of pilots. Again, that is one way you can tell there is a shortage versus a scarcity.

 

[Blackhawk]

The idea that all RJ flying will be replaced with 717s and 319s is a fairy tail. If that were the case all the airlines would be running 777's on every route. Cost/seat/mile is only one way of costing a route. The other is cost/leg. For example, a 777 has a lower cost/seat/mile than a CRJ-200. The CRJ-200, however, has a much lower cost/leg. The economics of what is used depends on the route. Delta use to run L-1011's from ATL-MCO. They were full so it made economic sense to run the L-1011. CRJs were used on some longer runs that were more thinly traveled, however.
Eventually if the costs go up enough lower margin routes/cities are dropped. This happened when turboprops went away. It is happening now with many cities as the 50 seats go away, though the cost of fuel has delayed this.

 

[bLizZuE]

My wife's first-year income as a resident was far less than the total debt amassed in her education. Care to guess what she can demand as an orthopeadiic surgeon with a foot/ankle fellowship?

It's not my advice, it was advice given. I think it's a rule of thumb like "i before e" - doesn't work all the time.

 

[BobDDuck]

"We don't want that little airplane"

That's not what I was saying. More that it would be tough to have a Delta 717 captain who is making $200 an hour drop down to CRJ wages because they replaced half the 717 fleet with CRJs. Sure they are on a mainline seniority list which is great, but reducing the number of $200/hr jobs isn't so great. If they were pure "growth" it would be fine, but they wouldn't be and that's where the problem lies.

 

[Autothrust Blue]

That's not what I was saying. More that it would be tough to have a Delta 717 captain who is making $200 an hour drop down to CRJ wages because they replaced half the 717 fleet with CRJs. Sure they are on a mainline seniority list which is great, but reducing the number of $200/hr jobs isn't so great. If they were pure "growth" it would be fine, but they wouldn't be and that's where the problem lies.

Oh, no sir. I know that you would never be so fatuous as to utter such a thing.

 

[Blackhawk]

That's not what I was saying. More that it would be tough to have a Delta 717 captain who is making $200 an hour drop down to CRJ wages because they replaced half the 717 fleet with CRJs. Sure they are on a mainline seniority list which is great, but reducing the number of $200/hr jobs isn't so great. If they were pure "growth" it would be fine, but they wouldn't be and that's where the problem lies.

The numbers obviously change based upon costs, but they are not necessarily going to replace 717s with RJs. Sometimes it is the other way around- Manchester, NH was initially started as an RJ route alternative to BOS. Eventually the loads became high enough to support MD's and they replaced the RJs. I can think of many cities I use to fly to in an ATR/CRJ that are now almost exclusively served by mainline (VPS/ECP come to mind). In some cases RJs did replace 717s/320s, but in many of those cases it is either the RJ or nothing as the route is too thin. Think Muscle Shoals, now exclusively served y Seaport, I think.