A letter to X Airlines, and ALL Regionals for that matter.

[block30]

I agree also. I don't think many of the outlets would give it a honest look though. They are too big into advertising for the big flight schools and it would be a conflict of interest. The USA today or WSJ would be the way to go.

Did you see the full page ad RAH's union (Teamsters) took out in AOPA Pilot about two/three months ago?

 

[hook_dupin]

I'll go look this one up an report back. I suspect AMR had $4B in short-term assets, but still had a massive debt load.

Back with the report:

On the September 2011 quarterly report, AMR had $6.8B in short-term assets (including $4B in cash). They also had $29.6B debt at the time. The fact that they were able to get lenders to fork over another roughly $4B in debt while the company was in bankruptcy is insane to me.

 

[Firebird2XC]

The AMR quarterly report: http://www.sec.gov/Archives/edgar/data/6201/000000620113000089/amr-10qx2013930.htm

It doesn't obviously state that AMR owed the world $34B. If you add up all the liabilities (page 5), you get $34B. The AMR asset base was $26B. Shockingly, AMR had $-8B in equity from a $4.4B initial float. It's extremely rare to see negative equity....much less double the size of the initial investment.



I'll go look this one up an report back. I suspect AMR had $4B in short-term assets, but still had a massive debt load. They had $10B in current assets at the close of the last quarter, but it was still bloody ugly because they also had $34B in debt. The debt-holders were looking at 29 cents on the dollar ($10B/$34B) at best had the company been liquidated in chapter 11 on 30 Sept, 2013.



Not exactly... the debt-holders, in exchange for agreeing to concessions (i.e..debt reduction) during the bankruptcy process, will become share-holders in the new merged airline. Here's who really got screwed: previous share-holders in AMR. They're set to get 3.5% of the new company because the debt-to-equity deal completely diluted them (of course, they would have gotten nothing had AMR been liquidated ...so they probably got more than they expected). The debt-holders will get a 68.5% equity stake in the new company.

This is straying far from the initial discussion... I can take a walk through AMRs quarterly report and post that somewhere if folks find that valuable. I believe strongly that most pilots don't understand the macro business side of their operation well enough.

You might be right- I am far from the type that reads company financials. But wasn't most of the standing debt for that massive order of new airframes? If the monthly mortgage payment is going to be made by the item for which is owed, can you really call that a debt?

We might do well to make another thread on this- anatomy of a bankruptcy and whatnot.

 

[Firebird2XC]

Back with the report:

On the September 2011 quarterly report, AMR had $6.8B in short-term assets (including $4B in cash). They also had $29.6B debt at the time. The fact that they were able to get lenders to fork over another roughly $4B in debt while the company was in bankruptcy is insane to me.

I admit the macro economics are more or less new to me, if not a bit above my head, but I feel it a bit disingenuous to simply say that AMR's liquid/debt ratio drove it all.

What were those debts really for?

 

[zmiller4]

I disagree about the killing the messenger. there was no sarcasm in that email I sent. there was no angst towards her for doing her job. it was addressed to her as a reply in the hope of the small chance it gets brought up to a supervisor in a meeting when they discuss attracting new pilots. the hope that others might be replying similarly. to seed the notion that pilots are demanding higher starting pay.

I understand that it's therapeutic to elucidate exactly why an airline position doesn't work for you, but does anyone think that airline HR departments don't know exactly why they're having trouble finding new FO's? It's why there's a rash of bonuses for new-hires and attempts at raising first-year pay during every hiring boom.

Writing letters may make us feel good, but let's be clear--it's highly unlikely that HR is going to say anything differently in a board meeting because they got one or a hundred letters detailing how low their pay is.

 

[MikeD]

I understand that it's therapeutic to elucidate exactly why an airline position doesn't work, but does anyone think that airline HR departments don't know exactly why they're having trouble finding new FO's? It's why there's a rash of bonuses for new-hires and attempts at raising first-year pay during every hiring boom.

Writing letters may make us feel good, but let's be clear--it's highly unlikely that HR is going to say anything differently in a board meeting because they got one or a hundred letters detailing how low their pay is.

Agree. Well stated.

 

[Itchy]

Awesome letter, nice job. Just the fact that this letter can even be conceived is fodder for any "shortage" argument.

 

[derg]

Writing letters may make us feel good, but let's be clear--it's highly unlikely that HR is going to say anything differently in a board meeting because they got one or a hundred letters detailing how low their pay is.

Yup! But it sure feels good.

 

[Seggy]

I think the allure of the 121 life is that top-end earning potential. The problem (to me) with pursuing 121 is that you likely won't see that kind of meaningful return for many years. And many people (especially young people) don't look ahead to retirement. Two words: compounding interest. It is far better to make more money up front in a career and invest for retirement than it is to only make enough to scratch by for several years and not save/invest much. For this reason, 135 and 91 jobs appeal more to me. The regionals to me seem to be a young man's game... If I was 21, fresh out of college and had my ATP... Sure, I'd go for it. But I'm 26 with a house, family to take care of, and finances to manage. I don't even consider myself that old but maybe too old to jump into the 121 world now. Just something to consider guys. It is far better in the long term to make more up front but to top out sooner than it is to make very little up front but have great earnings for the last 5 to 10 years of your career. Add to that the 80 to 100K of debt most people start this career with and the numbers just don't add up. Unless they increase FO compensation for the first few years I see the pilot supply becoming smaller and smaller.

Sounds like you are justifying your decision to not go the 121 route instead of offering substantive advice.

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[derg]

Career earnings, I could reproduce my retirement and present earnings in anything other than 121 @chrisreedrules.

Certainly in terms of days off and job stability, no way.

 

[A Life Aloft]

I think the allure of the 121 life is that top-end earning potential. The problem (to me) with pursuing 121 is that you likely won't see that kind of meaningful return for many years. And many people (especially young people) don't look ahead to retirement. Two words: compounding interest. It is far better to make more money up front in a career and invest for retirement than it is to only make enough to scratch by for several years and not save/invest much. For this reason, 135 and 91 jobs appeal more to me. The regionals to me seem to be a young man's game... If I was 21, fresh out of college and had my ATP... Sure, I'd go for it. But I'm 26 with a house, family to take care of, and finances to manage. I don't even consider myself that old but maybe too old to jump into the 121 world now. Just something to consider guys. It is far better in the long term to make more up front but to top out sooner than it is to make very little up front but have great earnings for the last 5 to 10 years of your career. Add to that the 80 to 100K of debt most people start this career with and the numbers just don't add up. Unless they increase FO compensation for the first few years I see the pilot supply becoming smaller and smaller.

And this little graph perfectly shows how faulty the mentality of I'll starve for several years and be able to make it all up later on in my career is:

How much can one truly save for retirement at a regional in your first 5 years there? And what about loan re-payments, a wife- a wife who may not work, kids, perhaps a mortgage payment, etc.

 

[Seggy]

How much can one truly save for retirement at a regional in your first 5 years there? And what about loan re-payments, a wife- a wife who may not work, kids, perhaps a mortgage payment, etc.

Depends.

Most regionals do match at least 4% of what you put in years 1-5. Plus better than average health insurance.

With the other expenses, are the majority of other 20-30 years olds making upwards of $45,000? Yes some are, but I'd guess the majority are not.


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[A Life Aloft]

If by some miracle, one could save 500.00 a month or 6,000.00 a year (which I don't see how you can based on the average pay) the carrier is chumping in a whopping 240.00. a year.

 

[Seggy]

If by some miracle, one could save 500.00 a month or 6,000.00 a year (which I don't see how you can on the average pay) the carrier is chumping in a whopping 240.00. a year.

If you put in 4% of your salary the company matches the other 4%, you are saving 8% of your gross. How did you get your numbers?


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[A Life Aloft]

Sorry, I missed the word "matches". I still don't see how a pilot at any regional is going to be able to save any decent amount of money, let alone have a liquid emergency fund.

 

[Seggy]

Sorry, I missed the word "matches". I still don't see how a pilot at any regional is going to be able to save any decent amount of money, let alone have a liquid emergency fund.

Do you happen to know the average salary of 21-30 year olds? How do you think that compares to regional wages?


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[derg]

If by some miracle, one could save 500.00 a month or 6,000.00 a year (which I don't see how you can based on the average pay) the carrier is chumping in a whopping 240.00. a year.

$240 > $0

Every little bit counts and you're further reducing your tax liability.

I've done fairly good just by contributing to my 401K, having a financial advisor and forgetting the money is even there. I just treat the contribution like another tax on my pre-tax line.

Retirement, either forced, early or scheduled comes earlier than one thinks.

 

[Screaming_Emu]

$240 > $0

Every little bit counts and you're further reducing your tax liability.

I've done fairly good just by contributing to my 401K, having a financial advisor and forgetting the money is even there. I just treat the contribution like another tax on my pre-tax line.

Retirement, either forced, early or scheduled comes earlier than one thinks.

I've done what I think is pretty good for retirement saving. Been here 6 years and my 401k is just over $20k.

It's been a challenge, but I made sure to start contributing right away so that I wouldn't miss it.

 

[A Life Aloft]

$240 > $0

Every little bit counts and you're further reducing your tax liability.

I've done fairly good just by contributing to my 401K, having a financial advisor and forgetting the money is even there. I just treat the contribution like another tax on my pre-tax line.

Retirement, either forced, early or scheduled comes earlier than one thinks.

I understand all that obviously but regional pilots with a 1 to 5 year employment income there are not at your level of income, have not worked as long as you and have not earned what you have in say the last 10 years. I thought that was what we were discussing.

 

[A Life Aloft]

I've done what I think is pretty good for retirement saving. Been here 6 years and my 401k is just over $20k.

It's been a challenge, but I made sure to start contributing right away so that I wouldn't miss it.

Does your wife work? Do you have student loan debts? You've managed then to save and with their contributions, 3,333 a year. Considering what you are earning it is good but I find it sad on the other hand that the pay is so terrible.