Monday, July 15, 2013

Lowering the bar

I just don't get it. I think it's because I went to a small University versus somewhere like Harvard or Yale.

The regional airline industry was looking good for a bit. There was a lot of consolidation. Skywest bought up Expressjet and ASA (and has since combined the latter), Trans States bought up Compass, and Pinnacle got in bed with Colgan and Mesaba. Fewer players should have increased the pricing power. Should have.

Then Pinnacle (now Endeavor Air...but most know it as Pinnacle) went bankrupt. During the restructuring they got a crap sandwich of a contract. Really low pay and work rules. One thing I really don't care for is the pay when upgrading to Captain.

At most airlines pay is tied to years of service. For example in October I will be on year 7 pay (I will have been here 6 years). If I upgrade to Captain before October 2014 I will get year 7 Captain pay.

At Pinnacle a First Officer who upgrades to Captain will start at year 1 Captain pay. What's the difference?

My year 7 First Officer pay is about $42 an hour. Year 7 Captain pay is $76 an hour while year 1 Captain pay is $64 an hour. That $12 an hour is huge, amounting to over $15,000 a year when overtime, 401K and premium pay comes into play. Fifteen thousand dollars is a good used car!

With the really bad Pinnacle contract Delta has a new card in it's hand. Delta has the ability to "reset" pay to ALL other Delta regionals. Everyone gets the pressure to lower cost.

Next up is what's going on over at American Eagle.

They are in bankruptcy along with American Airlines. American Eagle was hit for cost cutting like every other part of AMR (parent company of American Airlines).

Now that American Airlines is merging with US Airways, the new President of US Airways Doug Parker wants MORE money for American Eagle. The reason? Deltas new card.

The new President wants American Eagle to implement a "B" scale. A "B" scale is essentially a lower pay rate for any new hire going forward. A "B" scale really hurts the industry and lowers the bar further.

Ironically a "B" scale was used in the 80s by Bob Crandall at American Airlines. Further Irony? Parker was in management at American Airlines under Bob Crandall at the time.

The "B" scale really hurt the mainline contracts when it was implemented. I remember reading about the whole process in the book "Hard Landing".

Regional airlines are already a "B" scale. My job flying a regional jet is much the same as flying a 737 or 777. I go from point A to point B safely. Pay should not be tied to home many passengers are in the back. We are all professionals.

I hope American Eagle doesn't vote in the "B" scale. There is a carrot that , if they vote it in, they will get new, larger regional jets. If they vote it out the jets will go to another airline.

Oh and click on an ad or buy that book from the link as it helps pay for this site....I am a regional pilot after all ;-) .


1 comment:

  1. I didn't think it could get any worse for people starting out in this industry.. I thought pay would only go UP from here on out. Maybe they are trying to screw as many as they can before the actual "pilot shortage" starts, then hopefully they won't be able to get away with this perpetual screwing over the employee anymore. Just add 1 friggen dollar to the ticket price and they can pay everyone a livable salary. I can't beleive they get away with this shet. I can't believe people take these jobs for so cheap either, with all the debt required to get started. I guess it sucks to be born at all if you don't have rich parents to pay for your schooling. How frustrating, and I don't even work in the industry. I'm sorry, but a helpdesk guy should NOT be making more than an airline pilot, or even a flight instructor. It just makes no sense.


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