How Much Should Your Pilot be Paid?

At any given moment, day and night, there are 10,000+ passenger aircraft airbourne around the world carrying between One and Two Million passengers. Each plane is crewed by pilots and hostesses and many a gay chap who wishes he could wear the girls' clothes. And if you think that is a bit of a worry I recommend you consider first the worrying levels of pay they all get. The burger-flippers in Maccas often get more.

I quite often get wind of customers arriving at my local airport and watch them winging their way inbound by looking at FlightRadar24.com, a handy site that shows the entire 10,000 going to or on their way from far flung places.  It is a life of glamour and adventure - or it was once. 

https://www.flightradar24.com

(*See note at bottom)

And I marvel at the skills and dedication of so many professional folk who guide them (air traffic controllers) maintain them (techies) and equip all the navigation aids and instruments (leckies). It is the 'transponders' amongst the many items in the aircraft that show the aircraft details on your computer.

The transponders do not tell you how much the pilot takes home each week, nor the meagre pay of the hostesses. But a couple of chaps dropped in for a rest in the Tavern's sumptuous accomodations and gave us the good oil. It caused a bit of spluttering into tankards, I can tell you. There are some quite highly paid pilots, as one might expect for such a complex task and such responsibility for lives. But most crews are paid appallingly.

The first chap, Tyler Durden, spoke about the ladies and wannabes. The Hosties. He had been looking at 'employment' figures.

It Is Seven Times More Difficult To Get A Flight Attendant Job At Delta Than Enter Harvard

One of our preferred "off beat" economic indicators is how many workers apply at any one given moment in time for jobs that are hardly considered career-track. An example of this is the number of applicants for minimum wage line cook jobs at McDonalds, or flight attendant positions at Delta Airlines; conveniently, this is a series which we have tracked on and off for the past 7 years.

 http://www.zerohedge.com/news/2017-10-23/it-seven-time-more-difficult-get-flight-attendant-job-delta-enter-harvard

As regular readers may recall, back in October 2010, the Atlanta-based carrier received 100,000 applications for 1,000 jobs, an "acceptance ratio" of 1.0%. Things appeared to improve modestly in 2012 when Bloomberg reported that Delta had received 22,000 applicants for 300 flight attendant jobs: this pushed the acceptance ratio slightly higher to 1.3%, as by this point the job market had improved somewhat, and there were far better job career options available.

Fast forward to today when things have turned decidedly more grim for the US job market once again, at least based on this one particular indicator. According to CNN, Delta is once again on the hunt for new flight attendants, and has roughly 1,000 open positions for 2018, although this year the competition is virtually unprecedented: so far, Delta has received more than 125,000 applications for this hiring round, which all else equal would result in an acceptance ratio of 0.8%. 

Note, we said "virtually unprecedented" because this year ratio of applicants to open positions is identical to last year, when 150,000 people applied for 1,200 flight attendant jobs, resulting in an identical, 0.8% acceptance ratio.

So what makes it such a tough gig to land?

"You need to not only be a customer service professional, but also a safety expert," said Ashton Morrow, a Delta spokeswoman.

Political correctness aside, you have to be young, relatively good looking, preferably a female (sorry, sexism does exist)...

oh and willing to accept next to minimum wage.

Even so, one would think one is trying to get into Harvard: applicants first submit an application, then chosen candidates submit a video of themselves answering a set of questions. Selected candidates are then asked to come in for an in-person interview. Last year, 35,000 people made it to the video interview part. The candidate pool was then whittled down to 6,000 people for in-person interviews.

The Delta "admissions committee" was happy to chime in:

"After making it through the highly competitive and exhaustive selection process, they put all their previous experience and skills to the test during our flight attendant initial training," said Allison Ausband, Delta's senior vice president of in-flight service, in a release Monday.

Having made it so far through the process, in which the lucky candidate literally has to be better than 99 of their peers, the new hires go through an eight-week training program in Atlanta where they learn how to handle mid-flight emergencies like a fire or a sick passenger. The company describes the training program as "grueling" and that it will "stretch each trainee to the limit" in a video.

Finally, having reached the promised land, what untold wealth and riches await the lucky guy or gal? 

Well... nothing more than minimum wage: average entry-level flight attendants earn roughly $25,000 a year, according to the company. Wait, that's it? Well, there are perks, such as the increasingly more unaffordable - for most - employee benefits which include health insurance coverage, 401(k) with a company match and a profit-sharing program. Workers also get travel privileges for themselves and family member.

Oh, and once hired, forget about having a personal life: "work-life balance can be tricky for flight attendants early in their careers since they don't have a lot of control over their flight schedules."

For any reader contemplating applying, here are the minimum qualifications:

applicants must be at least 21 years old, have a high school degree (sic ?)or GED and be able to work in the U.S. Flight attendants cannot have any tattoos that are visible while in the company's uniform. Visible body piercings and earlobe plugs are also not allowed.

Putting this entire farcical process, which among other things demonstrates the true state of the US job market, Harvard's acceptance rate for the class of 2021 was 5.2%. In other words, it is 6.5x times (round it up) easier to enter Harvard than to get a job at Delta. As an attendant.  And there is your jobs supply-demand reality in one snapshot.

Hey, they still look glamorous  (in the adverts) and the myth goes on. But we might be somewhere near an explanation for the reduction in standards. The young, svelt, shapely hostess is almost an era past, and it ain't just affirmative action demanding that 60 year olds have to get a look in. 

But are things not far better at the pointy end of the plane? Well, you might be surprised: you may even be shocked. Jeff Friedrich was on his feet with a pint tucked into his chest for the next bit of a telling.

How We Ruined Airline Jobs

Working in aviation has lost its glamor. 

It happened because the law gave carriers every advantage over their workforces—and because we demanded lower airfare.

 http://www.slate.com/articles/business/metropolis/2017/09/how_we_ruined_airline_jobs.html

Nobody wants to be a pilot anymore. 

As the airlines tell it, a so-called pilot shortage has made it impossible to staff their fleets, forcing them to cancel flights and park hundreds of airworthy planes in the desert. One airline ventured to blame its 2016 bankruptcy on its inability to hire enough pilots, and even at always-profitable and carefree Southwest Airlines, the challenge of recruiting millennial aviators keeps middle management awake at night. “The biggest problem,” a Southwest executive told Bloomberg, “is a general lack of interest in folks pursuing this as a career anymore.”

Airline execs tend to make the shortage seem more mysterious than it is, as if something in the contrails is fueling this “general lack of interest” in the profession. 

That’s evasive. Rather, the shortage is best understood as an obvious manifestation—and perhaps the nadir—of a long-term deprofessionalization of what was once a solidly middle-class career: 

We made the pilot occupation so unattractive, so tenuous and poorly paid, that people stopped wanting to do it.

The degenerating passenger and pilot experiences aren’t separate phenomena but in fact are intimately related, both resulting from policy choices that have propelled a decades-long, ongoing makeover of the national air-transit system. The difference, perhaps, is that we are more conscious that we, the passengers, are getting a raw deal.

 But there is more to the pilot shortage than just pay. Industry representatives are pushing Congress to address the rising cost of pilot training, which can exceed $100,000 after requirements became more stringent in response to a 2009 crash. Competition for pilots has also gone global, causing many young pilots to leave the U.S. to chase more exotic opportunities with Emirates and other Middle Eastern carriers. 

And there are class-conscious obstacles to recruitment—flying has become less glamorous.

But at the regional airlines where the effects of the pilot shortage are most acute, even management seems to have finally acknowledged that pay matters, as evidenced by their recent efforts to raise starting salaries that paid first-year pilots as little as $15,000 to $20,000. And although many jobs have gotten worse in the past few decades, pilot wage stagnation distinguishes itself in several respects.

First, airline jobs appear to be caught in a steeper free fall. Before President Carter and a Democratic Congress deregulated the airlines in 1978, few industries paid higher wages. In the 1990s, a number of studies reviewed deregulation’s impact on airline wages, attributing decreases in the range of 10 to 20 percent for pilots, and more for flight attendants. While many observers hypothesized that wages would stabilize as the shakeout from deregulation attenuated, wages never managed to find a floor in the decade after 9/11. According to a Government Accountability Office analysis, pilots’ median weekly earnings fell another 9.5 percent from 2000 through 2012—lower wage growth than 74 percent of the other professions included in the GAO’s review.

Regional airlines are having the hardest time hiring pilots. These companies, where most pilots now begin their careers, operate almost half of all domestic flights on behalf of major carriers like Delta, United, and American. 

The regional industry grew as a strategic response to the downturn after the Sept. 11 terrorism attacks. The airlines’ losses were unprecedented. Through 2005, the airlines lost more than $50 billion and received more than $5 billion in direct government aid. Four major carriers went bankrupt, and the industry shed more than 100,000 jobs, around 15 percent of its entire workforce.

If the unions refused to renegotiate their contracts, the airlines threatened to declare bankruptcy.

The 50-seat regional jet played a key role in the industry’s recovery. Until about 1998, smaller airports were served either by larger jets, which were oversized for these markets, or turboprops, which flew slow and not as far. As the airlines attempted to stave off bankruptcy, they began buying a repurposed corporate jet manufactured by Bombardier, the CRJ200. The plane allowed the airlines to better match their smaller markets with demand, which in turn allowed them to redeploy larger planes to more lucrative international routes. The jets could also reach markets that were beyond the reach of the turboprops, allowing airport hubs to expand their customer base.

At first these planes were operated in house or through wholly owned subsidiaries, but after a time the flying was outsourced to independent companies. That strategy was initially constrained by the pilot unions, because collective-bargaining agreements typically limited how much flying could be outsourced.

A standard response emerged: If the unions refused to renegotiate their contracts, the airlines threatened to declare bankruptcy, where they might be judicially absolved from the commitments they had promised to workers. Forced to make concessions, the unions allowed more outsourcing to avoid options that would hurt their current members more, like additional layoffs or pay cuts. Because of these dynamics, every major airline had secured permission to fly more regional jets by the mid-2000s. As a result, regional jet capacity grew by 97 percent between 2000 and 2003, suddenly making these planes an integral part of the system.

Regional airline pilots and flight attendants have always made less than their mainline counterparts, but before 2000, the regional airline workforce was much smaller. In 1978, regional aircraft flew approximately 5 percent of all domestic departures; in 2000, 16 percent; in 2015, 45 percent.

Through outsourcing, the major carriers effectively introduced a permanent secondary scale. The result is that today’s young pilots are embarking on careers that look markedly different from the ones their senior colleagues began a generation ago. 

Though it’s still possible to make $200,000 flying international routes at a top airline, new pilots must now progress through a regional pay scale before they begin their ascent of a major’s scale, meaning it will take them longer to get to top pay, and their lifetime earnings will ultimately be lower. 

This helps explain why more than $100,000 in income now separates the top-earning 10 percent of pilots from the lowest-earning decile, a wage differential matched by few occupations.

The airline industry has no formal minimum wage because the Fair Labor Standards Act exempts transportation workers. Because of that, unions are it—the de facto wage floor. The problem is that America’s uniquely permissive bankruptcy laws have undermined the strength of unions.

Most other countries’ bankruptcy courts do not work this way. Canada does not let bankrupt companies tear up labor contracts.

When I interviewed for my flight attendant position at Pinnacle Airlines in 2010, the hiring manager slid a piece of paper across the table and told me, as if issuing challenge, “That’s how much you’ll make in your first year” 

—a fairly cinematic way of telling someone their salary is $15,500, though at least she was candid. 

It compelled me to justify myself, to explain to my interrogators how I planned to live in New York City on so little—less than minimum wage after accounting for the cost of my uniform and unpaid training time.

After I convinced them, I was soon working with pilots who were making about $20,000. Some of them had worked for one or even two failed regional airlines before landing at Pinnacle, where they’d once again found themselves at the bottom of the pay scale.

Nonetheless, when Pinnacle went bankrupt in 2012, a victim of what my CEO termed “a race to the bottom” among the regional carriers, labor became the focus of attention, just as it does in all airline bankruptcies. A judge agreed that the company’s pilots were paid “substantially over market,” granting approval of a reorganization plan that included a 9 percent reduction in pilot pay, plus smaller cuts to flight attendant pay and employee benefits.

It’s always been tough to make a buck running an airline. In general, the fixed costs of operating any airplane are high, but bigger planes tend to have lower costs per passenger. We have airline hubs because very few pairs of cities are large enough to sustain a high frequency of service using large airplanes. The hubs allow airlines to assemble enough passengers to fill a larger plane, allowing them to profitably increase service between two cities. The academic and former airline executive Michael Levine, one of intellectual forefathers of deregulation, has described hubs as “factories [that] manufacture route density.”

Southwest and other low-cost airlines have famously scorned hubs. They operate as point-to-point operations, mostly flying lucrative routes between major cities, and only as often as they can fill an airplane. By comparison, operating hubs is considerably more expensive and complex. Hub operators—these days Delta, United, and American—have historically recouped these costs by operating as “everywhere to anywhere” airlines. Through the cross-subsidization of routes, consumers paid a premium to access a comprehensive network that could get them from Bemidji to Bamako.

As more low-cost airlines began competing on the lucrative routes between major cities, it was harder for the hubbed operators to charge the premium they required to recoup their higher operating costs. In short, the point-to-point business model was compromising the sustainability of the network model. That competitive pressure motivated the hubbed carriers to use outsourcing and the market power they acquired from consolidation to continue pushing regional wages down, even while they earned huge profits.

The pilot shortage is the limit of that strategy—pay got too low, so people stopped wanting to do the job. 

The airlines could try to charge more money to the passengers flying from smaller airports, but that has its own drawback—at some point those passengers will opt to begin their trip by driving to a larger city. Consolidation has also made it less essential for the hubbed airlines to worry about smaller markets. As the airlines consolidated, more traffic is being handled by the largest hubs. This means airlines don’t need to reach as deep into the country to fill a large plane that’s bound for Paris or New York. In some ways the hubbed airlines have become more like Southwest.

Pilot crash-pad, Ft Lauderdale.

Essentially, we have made a consumer-welfare trade-off, swapping a more comprehensive system with somewhat higher fares for a more limited one that can deliver the best value on the country’s most popular flights. The winners of the trade-off are people who make frequent trips between New York and L.A. The losers live two hours outside of Memphis, or work entry-level jobs on the flights that would serve those communities.

He had a lot more to say about the airline industry in the USA and I recommend you hear all of it by following the links. I have little knowledge of the pay in other nations, so tell me if you do.

Meanwhile tired and underpaid pilots who have to 'slum-it' in low cost, shared accommodations, living like frat boys, does not bode well for safety let alone passenger comfort.

When you next fly, perhaps tip the hostesses and the pilot.

Buy them a drink or tell them to come to the Tavern where it is free.

Pax 


*Note. For FlightRadar 24, just click on the link beneath the second picture from the top above. You can scroll in and out to see specific places (right down to aircraft landing and taking off and taxiing) or out to see the entire fleets. Chose an aircraft and click on it. It will turn red. Its details will be on the left side of the page - owners, callsign, where it is from and going to, its height and speed etc.