Contract Negotiations and Pilot Shortages

  • Thread starter Thread starter Flying Saluki
  • Start date Start date
F

Flying Saluki

Guest
Just perusing some copies of the ALPA magazine, and came accross a couple of articles that struck me.

The first was a blurb saying that Air Wisconsin pilots just reached a TA for a two year deal...after 5 years of negotiations. That seems like a...waste. If it was only for two years, why'd it take so long to agree on something? Conversely, if it took that long, why not negotiate something lasting?

The second was an article on the "pilot shortage". A recent summit of industry professionals concluded that the issue was airlines don't pay enough. This makes no sense to me. The majors don't have problems filling classes. The regionals pay a lot more than they used to, but regional work was never about pay. If it were, we'd have seen a shortage when the regionals operated turboprops and pilots made $35K a year.

I have my own thoughts on these subjects, but I'd be interested in other viewpoints.
 
Flying Saluki said:
The first was a blurb saying that Air Wisconsin pilots just reached a TA for a two year deal...after 5 years of negotiations. That seems like a...waste. If it was only for two years, why'd it take so long to agree on something? Conversely, if it took that long, why not negotiate something lasting?
Click to expand...

Well the contract doesn't go away after two years. It becomes amendable. The short time frame is likely due to many factors. One involves AWAC not flying planes anymore in a little more than 2 years. They used an option to extend their contract with US Airways for their CRJ-200s but AAG may not want to extend again. Especially for an aging fleet of 50-seaters.

Flying Saluki said:
The second was an article on the "pilot shortage". A recent summit of industry professionals concluded that the issue was airlines don't pay enough. This makes no sense to me. The majors don't have problems filling classes. The regionals pay a lot more than they used to, but regional work was never about pay. If it were, we'd have seen a shortage when the regionals operated turboprops and pilots made $35K a year.
Click to expand...
It is a different time. The regionals have far eclipsed the commuters of the past in size and equipment yet pay scales for FOs have not improved until recently. The demand for pilots at the regional level is way higher than in the commuter days when the "regionals" of the time were composed of T-Props.

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.
 
Last edited:
Flying Saluki said:
The second was an article on the "pilot shortage". A recent summit of industry professionals concluded that the issue was airlines don't pay enough. This makes no sense to me. The majors don't have problems filling classes. The regionals pay a lot more than they used to, but regional work was never about pay. If it were, we'd have seen a shortage when the regionals operated turboprops and pilots made $35K a year.
Click to expand...

It is most certainly about pay. When regionals were flying turboprops that 35K went much further than it does today. Add to that the "cover charge" to get in the door is much, much higher today, and pilots, rightly so, are seeking other pastures where the return on investment is much higher.
 
Flying Saluki said:
Just perusing some copies of the ALPA magazine, and came accross a couple of articles that struck me.

The first was a blurb saying that Air Wisconsin pilots just reached a TA for a two year deal...after 5 years of negotiations. That seems like a...waste. If it was only for two years, why'd it take so long to agree on something? Conversely, if it took that long, why not negotiate something lasting?
Click to expand...

The term of a contract is typically negotiated from a strategic standpoint. If you believe that the bargaining environment will be better in a couple of years, you'll want to be negotiating again quickly. If you believe the bargaining environment is going to suck for a long time, then you want to negotiate a long term agreement with modest pay raises already locked in.

The second was an article on the "pilot shortage". A recent summit of industry professionals concluded that the issue was airlines don't pay enough. This makes no sense to me. The majors don't have problems filling classes. The regionals pay a lot more than they used to, but regional work was never about pay. If it were, we'd have seen a shortage when the regionals operated turboprops and pilots made $35K a year.
Click to expand...

This is one of those rare occasions that I disagree with ALPA's position. It started with Moak, and was a complete shift from the prior administration. The prior administration acknowledged that a pilot shortage was coming. When Moak showed up, he changed it to a "pilot pay shortage." That's great rhetoric and all, but it's not reality. As @mastermags pointed out, the problem is that there aren't enough people entering the profession due to cost. 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. So the flight schools today are filled with foreign students who are heading back home after their training, and Americans going through to become airline pilots are few and far between. Raising the pay isn't going to fix that, either. The airlines are going to have to start subsidizing basic pilot training.
 
ATN_Pilot said:
This is one of those rare occasions that I disagree with ALPA's position. It started with Moak, and was a complete shift from the prior administration. The prior administration acknowledged that a pilot shortage was coming. When Moak showed up, he changed it to a "pilot pay shortage." That's great rhetoric and all, but it's not reality. As @mastermags pointed out, the problem is that there aren't enough people entering the profession due to cost. 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. So the flight schools today are filled with foreign students who are heading back home after their training, and Americans going through to become airline pilots are few and far between. Raising the pay isn't going to fix that, either. The airlines are going to have to start subsidizing basic pilot training.
Click to expand...
I respectfully disagree. If the pay provided adequate incentive, people will beg/borrow/steal enough to get the training done. It's not only the pay that's the issue, though. It's the general poor quality of life, lack of lateral mobility, lack of stability, and continuous downward pressure in addition to the poor pay that that makes the regional airlines so undesirable for those people who are undertaking schooling to pursue a profession.
 
pete2800 said:
I respectfully disagree. If the pay provided adequate incentive, people will beg/borrow/steal enough to get the training done. It's not only the pay that's the issue, though. It's the general poor quality of life, lack of lateral mobility, lack of stability, and continuous downward pressure in addition to the poor pay that that makes the regional airlines so undesirable for those people who are undertaking schooling to pursue a profession.
Click to expand...

The pay that would be required to provide enough incentive is not realistic.
 
It absolutely is about pay.

The industry just has not accepted that yet.

Compared to the glory years 2 or 3 decades ago, the flight training nationwide has slowed to a trickle. The industry has made this bed based on the model from back then, when the pool was very deep. It's not so deep now. As I see it right now, (and you have heard said many times, here and elsewhere) there is not a pilot shortage. There is a shortage of pilots willing to work for less than professional pay. So @ATN-Pilot, I think over time a professional wage for a professional position would cure that. In the meantime, parked planes.

I am intensely curious to see what the landscape for this issue is going to look like in 3 to 5 years. Something is going to have to change. Regional airlines (which of course are not so regional anymore), 135 passenger and cargo, even pt 91 operations. I don't think mainline operations are going to be affected so much, but everyone else is either starting to feel the pinch, or will be shortly.
 
ATN_Pilot said:
The pay that would be required to provide enough incentive is not realistic.
Click to expand...
I agree. Which is why the regional airline idea as we know it is not sustainable. Other ideas will have to be tried.


I still don't see why a CRJ-700 can't just be the junior airplane at DAL/UAL/AMR etc... You wouldn't even have to touch the pay scale.
 
pete2800 said:
I still don't see why a CRJ-700 can't just be the junior airplane at DAL/UAL/AMR etc... You wouldn't even have to touch the pay scale.
Click to expand...

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.
 
Career outlook in the airline industry has never been better (except maybe the 1960's) and many regionals are paying near double what they payed 15 years ago... Yet no one is learning to fly.

I think people are giving young college kids too much credit. There is an abundance of kids willing to take on crippling federal loans to get useless art degrees. The job outlook for people coming out of college these days is pretty poor. If flight training were easier to finance, people would be lining up out the door. They always have.
 
BobDDuck said:
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.
Click to expand...
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.

What's our goal? Is it higher average pay and working conditions across the board, or is it preserving a few precious few top-end jobs at the expense of the bottom half of the industry?
 
Itchy said:
Well, what should the pay be? What should a new shiny jet FO make? And why would that not be realistic?
Click to expand...

I would say it would probably take somewhere in the $60k per year range to get people motivated enough to pay what it takes to get those ratings and put up with what's required today to get the necessary experience to get hired at a regional. Those wages simply aren't sustainable for a 70 seat aircraft.
 
ATN_Pilot said:
I would say it would probably take somewhere in the $60k per year range to get people motivated enough to pay what it takes to get those ratings and put up with what's required today to get the necessary experience to get hired at a regional. Those wages simply aren't sustainable for a 70 seat aircraft.
Click to expand...
Unless a ticket cost a bit more.


Which needs to happen.
 
I think the next year or two will really tell if there is a pilot shortage or not. The regional aircraft shift is almost done, and options for quick upgrade are almost done. People are going to have to once again go to place where they are ok with being an FO for a few years.

I personally don't believe that there is a huge shortage, and if there is, it won't last. I think that is exactly what the regionals are banking on. Look at those that have offered wage increases to FO's, it's always in the form of something that can be taken away as soon as things become stagnant again, i.e. a bonus. They aren't willing to pay anything good, because when things stagnate again, they'd be stuck.

The 1500 rule did nothing but create a short term slow in hiring. Guys that could not be hired when it started, now have it. Mean time, ATP has been opening flight schools all over the country, and I don't know of one major university program that has closed due to lack of students. So there are people in the pipeline.
 
Itchy said:
It absolutely is about pay.

The industry just has not accepted that yet.

Compared to the glory years 2 or 3 decades ago, the flight training nationwide has slowed to a trickle. The industry has made this bed based on the model from back then, when the pool was very deep. It's not so deep now. As I see it right now, (and you have heard said many times, here and elsewhere) there is not a pilot shortage. There is a shortage of pilots willing to work for less than professional pay. So @ATN-Pilot, I think over time a professional wage for a professional position would cure that. In the meantime, parked planes.

I am intensely curious to see what the landscape for this issue is going to look like in 3 to 5 years. Something is going to have to change. Regional airlines (which of course are not so regional anymore), 135 passenger and cargo, even pt 91 operations. I don't think mainline operations are going to be affected so much, but everyone else is either starting to feel the pinch, or will be shortly.
Click to expand...

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."
 
BobDDuck said:
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.
Click to expand...
If that were true US Airways would've had a much larger fleet of E190 aircraft rather than just 20...
 
The big 3 cannot and will not lose their cheap feed. The whipsaw is what keeps their costs in check. Period. Regionals are here to stay - ATL, DFW and ORD will make sure of it.
 
You must log in or register to reply here.
Back
Top