Contract Negotiations and Pilot Shortages

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Seggy said:
Ok, once again, how do you fix it for the no voters to vote yes?
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More money.

Mesa currently doesn't have the money to pay anything more than the miserly pay raises for FOs in our TA (CAs get nothing), so they will eventually have to go back to AA and UA to renegotiate their contracts. They are obviously holding out as long as possible before breaking down to do that.

Mesa isn't currently suffering the staffing shortage that Republic is, but they will in the near future.
 
Really? It seems like we're getting more stuff back from you guys than from RAH.
 
USMCmech said:
The problem is that the regionals are no longer flying regional planes on regional routes. When Mesa was flying 1900s around the southwest and pilots were a dime a dozen 22/hr made sense. But today, we are flying the equivalent of DC-9s on mainline routes and recruiting is scraping the bottom of the barrel to fill classes.

I have a hard time seeing shrinkage overtaking attrition in the near future. There simply are not enough pilots willing to come to work for regional pay to keep up with demand.


To get this thread back to the OP's question.

At my airline, the lack of any real pay raise in the new TA has almost everyone I have spoken to voting no.
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The OPs question can not be divorced from economic realities. If people do not understand these economic realities they are living in la la land.
 
What are the economic realities? Can mainline carriers continue to make record profits without reliable FFD carriers providing feed?
 
uncreative said:
What are the economic realities? Can mainline carriers continue to make record profits without reliable FFD carriers providing feed?
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Monetary profits are a worthless number. They are latched onto by those with little understanding of investments, but otherwise mean nothing. A company can have a "record profit" but be a horrible investment as it has a low ROI (return on investment), or ROC (return on capital). As a simple example, say I guaranteed you a $10,000 profit for investing in my company. Sounds good, right? But what if you had to invest $10, 000,000 to get that $10,000 return. Still a good investment?
DAL, as an example, has about a 5% ROI if I remember correctly. Not that great. It probably needs to be closer to 10%+ to attract investment money. Over the last several years airline ROIs have been horrible. Actually, they have almost always been horrible. This the quip by Branson that to make millions in airlines you need to invest billions (or something to that effect).
 
Seggy said:
Yes. They will continue to cut the FFD Carriers out. They are already doing that.
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Delta with 717's and it seems, EMB-195's soon. United has been grabbing A319's. Everyone is moving toward providing their own 100 seat feed.

My guess is that this will eventually be the smallest aircraft we see on a regular basis to most cities.
 
Sorry, I forgot to attach the link in my last post and it won't let me edit it.
The OP asked about contract talks and the pilot shortage. You can't separate contract talks from the economic realities of the airline industry. The economic reality is that the airlines have historically been a great place to turn a lot of money into a little money. Warren Buffett has called airlines a "deathtrap for investors" and famously quipped, "If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money. But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in. You’ve got huge fixed costs, you’ve got strong labor unions and you’ve got commodity pricing. That is not a great recipe for success."


http://centreforaviation.com/analys...d-to-be-the-poor-relations-of-aviation-117521




http://www.nber.org/papers/w16744.pdf

"Demand and cost shocks have certainly played a significant role in the airline industry’s poor financial results, but there is little reason to think those disruptions will be less frequent in the future. Furthermore, after more than 30 years, it seems unlikely that airline losses are due entirely to a series of unfortunate exogenous events relative to what management and investors should have expected. Throughout deregulation, the legacy carriers have maintained much higher costs than LCCs, but the price premia they have been able to charge have gradually declined over the last 20 years, shrinking by more than 60% over that time. As a result, while the exogenous demand and cost shocks have affected all carriers, the legacy airlines have fared much worse financially, and LCCs have grown steadily.
,,,
The airline financial performance has improved substantially in 2010 and the industry seems likely to be close to break-even on domestic operations for the year. Still, the experience of the last decade suggests that until legacy carriers can either close the cost gap with LCCs or increase the price premium they maintain, they will likely have difficulty earning consistent profits through the typical cycles in the airline business environment."
 
All these places will start having staffing shortages shortly as soon as the whole regional airline shift is done. Flows will go to 7 to 10 years, I bet upgrades hover around 5 years soon. The shortage will be short lived though, as new guys in the pipeline, with no where to go but these places, are not going to just give up on "the dream." Heaven forbid, one of these places goes out of business and puts a bunch of pilots on the street. That's why a lot of these pay increases are bonuses, so they aren't long term.
 
rockman2343@aol.com said:
All these places will start having staffing shortages shortly as soon as the whole regional airline shift is done. Flows will go to 7 to 10 years, I bet upgrades hover around 5 years soon. The shortage will be short lived though, as new guys in the pipeline, with no where to go but these places, are not going to just give up on "the dream." Heaven forbid, one of these places goes out of business and puts a bunch of pilots on the street. That's why a lot of these pay increases are bonuses, so they aren't long term.
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While I agree that the FFD industry will change over the next decade
I've stopped giving specific predictions as so many have been wrong in the past. Not just mine, but those of experts. If you had told me 15 years ago that ACA and Comair would be gone but TSA would still be plugging along I'd have thought you were nuts.
I do agree that, by its nature, the shortage will end and we will then have a surplus of pilots. Companies with fast upgrades will see them turn into slow upgrades. Airlines that were the last place to go might well become the place to be.
 
jtrain609 said:
Delta with 717's and it seems, EMB-195's soon. United has been grabbing A319's. Everyone is moving toward providing their own 100 seat feed.

My guess is that this will eventually be the smallest aircraft we see on a regular basis to most cities.
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Didn't you hear? THEY CANCELLED THAT DEAL BECAUSE OF THE NO VOTE. PEE EEEEE BEEEEE!
 
bLizZuE said:
Really? It seems like we're getting more stuff back from you guys than from RAH.
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That's not because of pilot staffing issues. It had much more to do with an unworkable schedule, no maintenance facilities in DFW, and DFW station operations than anything else. We asked that some flying be taken until the issues could be resolved. AAG has worked hard to resolve the scheduling and maintenance issues and there was some station management shuffling. As a result our performance has improved significantly, so the flying will probably be coming back to us.
 
USMCmech said:
More money.

Mesa currently doesn't have the money to pay anything more than the miserly pay raises for FOs in our TA (CAs get nothing), so they will eventually have to go back to AA and UA to renegotiate their contracts. They are obviously holding out as long as possible before breaking down to do that.

Mesa isn't currently suffering the staffing shortage that Republic is, but they will in the near future.
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Speaking with one of my CA friends last night he said he is looking at a 10% pay raise with the base pay elimination and I've heard that number thrown around by a couple of other CAs too. I am sure some are getting more than others but on average the CAs are actually making out better than the FOs.
 
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