GAO Report on the pilot shortage...

Pilot's pay is less that 2% of the entire gross revenue of the airline. The airlines are fighting over 2%. If the airlines got rid of all of the pilots the most they would save is 2 cents out of each dollar they collect. They are cutting expenses in the wrong category.

On the other hand fuel represents 35% of the gross of the airline.

Maybe it's time to get some real business people running these airlines that can identify the expenses that can be cut. If those executives are so focused on the less than 2% that the pilots make then they obviously are not qualified to run an airline.

Paying professional employees poverty wages is not good business any way you add it up.

Professional pilots should not be expected to subsidize multi million (or multi-billion) dollar corporations.

Joe
 
JOEFRIDAY2 said:
Pilot's pay is less that 2% of the entire gross revenue of the airline. The airlines are fighting over 2%. If the airlines got rid of all of the pilots the most they would save is 2 cents out of each dollar they collect. They are cutting expenses in the wrong category.

On the other hand fuel represents 35% of the gross of the airline.

Maybe it's time to get some real business people running these airlines that can identify the expenses that can be cut. If those executives are so focused on the less than 2% that the pilots make then they obviously are not qualified to run an airline.

Paying professional employees poverty wages is not good business any way you add it up.

Professional pilots should not be expected to subsidize multi million (or multi-billion) dollar corporations.

Joe
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They have focused on other areas. They do focus on other areas. Costs are discussed in every. Single. Meeting.
 
JOEFRIDAY2 said:
Pilot's pay is less that 2% of the entire gross revenue of the airline. The airlines are fighting over 2%. If the airlines got rid of all of the pilots the most they would save is 2 cents out of each dollar they collect. They are cutting expenses in the wrong category.

On the other hand fuel represents 35% of the gross of the airline.

Maybe it's time to get some real business people running these airlines that can identify the expenses that can be cut. If those executives are so focused on the less than 2% that the pilots make then they obviously are not qualified to run an airline.

Paying professional employees poverty wages is not good business any way you add it up.

Professional pilots should not be expected to subsidize multi million (or multi-billion) dollar corporations.

Joe
Click to expand...


Get real MBA's running the show and the regionals would be parked while they go buy Greyhound buses. If the numbers don't work the numbers don't work. The mainlines can only price the tickets so high. After that, elasticity of demand takes over.

Simple fact: the current model is broken. The current cost are too high to put somebody in the right seat from 0 hours AND then pay that new pilot a wage that is appropriate. So they keep those pilots they have longer (70 rule), find a cheaper way to fill the seats (MPL), or outsourse the flying to an even cheaper opertor (foreign carriers).
 
JOEFRIDAY2 said:
Paying professional employees poverty wages is not good business any way you add it up.

Professional pilots should not be expected to subsidize multi million (or multi-billion) dollar corporations.

Joe
Click to expand...

It works in this industry, because we put up with it.
 
ATN_Pilot said:
First, gross revenue is irrelevant. All that matters is net profit. Second, your number is BS. It's actually closer to 10%.
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How is gross irrelevant when comparing costs as a percentage... of gross? Obviously net is king but for his point it doesn't matter.
 
Year's ago, while working part-time at UPS in college, I learned a lesson about unions. They don't always protect the interests of all of their employees equally. In my experience, I saw the union make concessions that applied to non-voting part-timers and (future) first-year full-time employees.

To what extent is this seen in regional contracts?

Will we likely to see a flattening of pay across the spectrum to address a shortage of rookies in future contracts?
 
AA34 said:
How is gross irrelevant when comparing costs as a percentage... of gross? Obviously net is king but for his point it doesn't matter.
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Because the other costs are fixed. So the only thing that matters is how the variable costs affect profits. If labor is 10% of costs, you have a 2% profit margin, and labor wants a 20% increase in their compensation package, it doesn't matter that that increase is only going to be 2% of gross expenses, because it completely eliminates your entire profit margin.
 
ATN_Pilot said:
Because the other costs are fixed. So the only thing that matters is how the variable costs affect profits. If labor is 10% of costs, you have a 2% profit margin, and labor wants a 20% increase in their compensation package, it doesn't matter that that increase is only going to be 2% of gross expenses, because it completely eliminates your entire profit margin.
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I see what you're saying and completely agree. I just think he was drawing a comparison.
 
ATN_Pilot said:
First, gross revenue is irrelevant. All that matters is net profit. Second, your number is BS. It's actually closer to 10%.
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If you will actually read and study the financial statements then you will see and understand that the pilot pay for the airlines represents around 2% of the gross revenue of the airlines.

Pilots are not the only labor at the airline. You can not charge ALL labor costs at the airline to the pilots.

It takes around 70 employees +- per aircraft to keep an airline flying. Out of those 70 employees, 15 would be classified as pilots.

I believe you will find that, in todays economy, total labor cost represents around 20% +- of the gross revenue of the airline.

However the pilots pay only represents 2% of the gross revenue which could be also be considered 10% of the total labor costs if you follow the math.

The 10% (piece of the labor pie) figure you give is really not relevant because in the end the pilots really only make 2% of the gross revenue. Pilots do not make 10% of the gross revenue of the airline.

Joe
 
ATN_Pilot said:
First, gross revenue is irrelevant.
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That is the most bizarre statement that I have seen in quite a while. Try telling that to anyone that runs any business of any size, form or shape.

In order to get to the net you must have the gross. How you manage that gross determines what the net will be.

Joe
 
An employee's take home PAY is only part of the cost. BENEFITS and their associated costs are part of that, too. Medical, life, loss of license, workmans comp, per diem -- all of these are part of the overall cost to employ a person.

AOL's CEO that got raked over the coals for mentioning "distressed babies" as a reason for cutting retirement benefits. The pay is the tip of ye ol' iceberg.
 
JOEFRIDAY2 said:
If you will actually read and study the financial statements then you will see and understand that the pilot pay for the airlines represents around 2% of the gross revenue of the airlines.
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I really don't know what to tell you other than you're just dead wrong. I've been looking at airline financial statements (including under confidentiality agreement) for many years. I can tell you without a shadow of a doubt that your numbers are so far off it isn't even funny.

Pilots are not the only labor at the airline. You can not charge ALL labor costs at the airline to the pilots.
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I'm not. Not even close. But clearly you don't understand just how significant a portion of the company's costs are labor costs. Total labor costs of the average airline are at about 35%, just a bit below fuel, which is usually around 35-45%, depending on how the fuel is fluctuating that month. Of that, the pilot payroll is a huge chunk. About 7-15% of total expenditures is what you can usually expect. You have to keep in mind that we're talking payroll here and not just net compensation paid to pilots. It includes company paid social security and medicare, retirement contributions, insurance, disability, sick pay, etc.
 
ATN_Pilot said:
I really don't know what to tell you other than you're just dead wrong. I've been looking at airline financial statements (including under confidentiality agreement) for many years. I can tell you without a shadow of a doubt that your numbers are so far off it isn't even funny.



I'm not. Not even close. But clearly you don't understand just how significant a portion of the company's costs are labor costs. Total labor costs of the average airline are at about 35%, just a bit below fuel, which is usually around 35-45%, depending on how the fuel is fluctuating that month. Of that, the pilot payroll is a huge chunk. About 7-15% of total expenditures is what you can usually expect. You have to keep in mind that we're talking payroll here and not just net compensation paid to pilots. It includes company paid social security and medicare, retirement contributions, insurance, disability, sick pay, etc.
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Please list the airlines that have a 35% labor cost.

Please list the airlines have have a 45% fuel cost.

I'll be happy to look these numbers up for you once you furnish the names of the airlines requested.

Joe
 
Children, children, arguments are sooooooo much more plausible with facts (and pictures)!!!

Thanks for callin' the Heavy Hitter in. Now, where was I?

Ah, yes, pictures!!! Let's use Delta 2013, shall we?

delta2013.jpg

For 2013, "salaries and related costs" was 20.4% of gross revenue. In terms of expenses, "salaries and related costs" represents 22.5% of the total expenses, with jet fuel being 33% this year for Delta. For those keeping track at home, Delta says they have 78,000 full-time equivalent employees. I will leave it up to you to determine how many are pilots.

Now, with tools in hand, you may continue your arguments! Carry on.
 
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