Airline pilots at the legacy airlines have long been well paid professionals. However, that’s currently being taken to the next level. Recently Delta pilots ratified an unprecedented new contract. Now American’s CEO has signaled that the airline plans to match this offer, and that senior captains at the airline will be making $590K per year.
With Delta and American agreeing on similar rates, United will certainly need to match as well. Soon enough, you can expect that senior captains at the major US airlines will be making over $500K per year, while senior first officers will be making over $300K per year.
Obviously airlines feel they have no choice but to offer these kinds of pay rates, both due to the pilot shortage, and due to the competitive landscape. However, I think it’s worth reflecting on the practical implications of this.
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$7 billion in incremental compensation is a lot
Delta is promising that the new contract is worth $7.2 billion in incremental compensation over the next four years, while American is promising that the new contract would be worth $7 billion in incremental compensation over that timeline.
That’s a lot of money. Let’s look at the net profit of both of those airlines between 2016 and 2019 (this is a “best of times” scenario, excluding the pandemic):
- Delta’s total net profit over those four years was just over $16 billion
- American’s total net profit over those four years was just under $7 billion
So yeah, the incremental pay increase is greater than American’s net profit pre-pandemic over four years, and it’s equal to nearly half of Delta’s net profit over that period. That is… a lot of money.
Admittedly costs change over time, and airlines usually manage to figure these things out. They deal with higher oil prices at times and still make a profit. However, this is a new, consistent, fixed expense, which isn’t going anywhere. Airlines can’t just raise fares because costs go up, because they already charge as much as the market can sustain.
Nearly $2 billion in additional incremental expenses every year is huge. I’m kind of surprised that airline stocks haven’t gone down more to the news of this new pilot pay reality, because this very much cuts into airlines’ already small margins.
Higher pay puts Delta at an advantage
American, Delta, and United, will likely more or less have identical pay scales once all is said and done. While higher costs is bad news for airlines, competitively it’s good news for Delta. Delta is able to command a revenue premium over American and United in terms of revenue per air seat mile, so the airline can also sustain higher costs.
I get American probably doesn’t have much of a choice with matching Delta’s pay, but this isn’t a good situation for the airline to be in. American has more debt and lower revenue per air seat mile than its competitors, but its cost for pilots will be the same.
The changing economics of ultra long haul flying
United is by far the most global of the “big three” US airlines, and the airline operates way more ultra long haul flights than American and Delta combined (and then some). I can’t help but point out how significantly higher pilot pay puts United at a disadvantage on these routes.
Flights of over eight hours typically require three pilots, while flights of over 12 hours typically require four pilots. Even though pilots rest for roughly half of ultra long haul flights (when there are four pilots), they’re all getting paid for all hours they’re onboard.
At what point does very high pilot pay starts to impact the viability of some routes? Let’s just use Delta as an example, since this is the first of the “big three” to ratify a contract. Johannesburg to Atlanta is blocked at 17 hours, and requires four pilots, including one captain and three first officers.
Under the new Delta contract that maxes out in 2026, a senior captain would be paid $474.20 per hour, while a senior first officer would be paid $323.92 per hour. So the pilots are getting paid $1,445.96 per hour, meaning the pilots alone would be earning around $25,000 for the one-way flight. That doesn’t factor in any of their other benefits (health insurance, profit sharing, etc.) they’re receiving.
Incrementally, we’re talking about an extra $6,000-7,000 in expenses per direction. That’s not an insignificant amount, especially when you consider that many ultra long haul flights already have challenging economics, and are already only marginally profitable.
This is going to be a much bigger issue for United than Delta and American, as United has a lot more routes than competitors with four pilots.
This will frustrate other work groups
Ultimately pilots generally have the most leverage among work groups at airlines, given that they have strong unions, are hardest to replace, and there’s a significant lead time to training new pilots.
At the same time, I can’t help but imagine that this is going to cause major issues with other work groups at the airlines. For example, Delta recently offered all of its non-union employees 5% pay increases. That’s nice, but those employees probably aren’t feeling so great about that when pilots are getting 30%+ pay increases.
Heck, I have some friends in management at both American and Delta who have expressed frustration about their pay in relation to what pilots are getting under these new contracts. Pilots are now paid significantly better than most management employees, including many senior ones.
Admittedly the airline industry has never been particularly lucrative for management employees, aside from at the very top. But still, you have some pretty senior folks running major projects who are making a fraction of what captains are making.
Bottom line
Pilots have a great opportunity at the moment to negotiate lucrative contracts. We’ve seen Delta pilots ratify a new contract that’s unlike anything we’ve seen before in the airline industry, and now we can expect that American and United will have to match.
However, at some point you have to wonder how sustainable these pay increases are. The incremental annual pay is more than American’s net annual profit prior to the pandemic. In the case of Delta, it’s worth nearly half of the company’s net profits pre-pandemic.
I suppose if you take a best case scenario look at this situation and hope there’s never another downturn, maybe this will all work out. But we all know that’s not how stuff is going to play out. And without the ability to easily adjust pay down going forward, one has to wonder for how long this will all last. Never mind that other work groups will now likely be looking for similar pay increases (though perhaps with less success).
What do you make of the sustainability of these new pilot pay scales?
Please point me in the direction of your article asking if the Billion dollar stock buy-backs or dividend increases were good business practices at the carriers. Also, adjusted for inflation the Delta pilot pay rates are still lower than the 2000 rates. But sure, labor is the problem.
Author is misinformed and seems to be biased against pilots. I’ll throw out one absolute fact that caught my eye. There are likely other incorrect statements if this significant one went unchecked: the four pilot compliment on JNB service does not consist of one captain and three first officers. There are two captains and two first officers. Although the 1+3 compliment would be “legal” from a regulatory standpoint, that’s not how it’s done. If you...
Author is misinformed and seems to be biased against pilots. I’ll throw out one absolute fact that caught my eye. There are likely other incorrect statements if this significant one went unchecked: the four pilot compliment on JNB service does not consist of one captain and three first officers. There are two captains and two first officers. Although the 1+3 compliment would be “legal” from a regulatory standpoint, that’s not how it’s done. If you want to twist the figures, it could be said there are four captains, as all four pilots are captain rated, but two of them are paid as first officers and hold that status within the company. If you got the 2 + 2 staffing right, youcould have spun it to show even greater pilot costs - seems like that is your objective throughout the “article.”
Advice to the author: if you want to pick apart a complex cost structure component at any airline, get your facts straight! Bias and opinion are not journalism. You might consider breaking down the cost structure of an airline ticket and showing how much of that represents crew compensation, and the difference these pending pilot contracts might impose. If it’s a dollar or two more, do you really think it’s unsustainable?
What United is trying to do is use junior folks (right out of training) on long haul flights to be the relief pilots, that way they are paying 1st or 2nd year pay instead of a topped out salary for FOs to save money. Right now with so many individuals being new to the airlines you wonder if the economics works because of the surplus of 1-4 year pilots that won’t work when they make it up to their 12 year point.
Let me know when any of those middle managers carry one billion dollars of liability 3-4 times a day in all weather, late at night.
Then they can complain about pilots being well compensated professionals. If they’ve still got sour grapes after all that, I know some flight schools that will get them on the path to an airline transport pilot rating.
There is a shortage and besides if these people quit then what are the airlines going to do?!?!
The other workgroups will get a big wage increase: flight attendants, mechanics, ramp workers, ticket counter personnel; without them, pilots CANNOT fly. Let’s remember that.
There’s a shortage everywhere in the airline business; btw, nobody quits in the airline business (you’d lose your seniority starting over).
Everyone needs to chill out about these pilot raises. First and foremost, when Isom quoted $530K for senior widebody captains, he was including 401k and projected profit sharing as "salary". Also, when the author used the example of the Johannesburg to Atlanta flight, he said...
"Incrementally, we’re talking about an extra $6,000-7,000 in expenses per direction. That’s not an insignificant amount, especially when you consider that many ultra long haul flights already have challenging economics,...
Everyone needs to chill out about these pilot raises. First and foremost, when Isom quoted $530K for senior widebody captains, he was including 401k and projected profit sharing as "salary". Also, when the author used the example of the Johannesburg to Atlanta flight, he said...
"Incrementally, we’re talking about an extra $6,000-7,000 in expenses per direction. That’s not an insignificant amount, especially when you consider that many ultra long haul flights already have challenging economics, and are already only marginally profitable." When you divide that cost by the 300 people on board, you only need to raise the ticket price by $2.00. TWO DOLLARS!!!! Instead of getting all up in arms about pilot salary, you should be asking where all the other money is going in your high-priced tickets.
So wait. Ben S is mad that pilots are making more than mid-level management? The pilots that put their lives on the line and actually make the airline function??? How dare they make more than management working behind a desk.
There’s a shortage everywhere in the airline business; btw, nobody quits in the airline business (you’d lose your seniority starting over).
All airline personnel is needed: pilots cannot fly a plane without the work of the other workgroups.
Matt, please re-calculate. 6,000/300 = 2? You work as a controller for united, i guess.
This will tie the airlines over until AI takes over and pilots are no longer required in 11 years. Short term pain. With pilots gone in a few years, won’t be an issue
You’re going to put your family on an airplane flown by AI? You’re going to trust the AI to handle an engine failure, depressurization, and expedited diversion? No thanks. I’ll take two humans in the cockpit any day.
Lol, Dude, 11 years is your wise estimate, huh? You clearly do not understand the complexity of what aviators actually do and the unbelievable amount of dynamic context it would require AI to perfectly understand AND obey to perform this kind of work. Also, It's a security and liability nightmare for any company. In probably 30-40 years, perhaps we might remove ONE pilot from the flight deck, IF they can vet AI and prove the...
Lol, Dude, 11 years is your wise estimate, huh? You clearly do not understand the complexity of what aviators actually do and the unbelievable amount of dynamic context it would require AI to perfectly understand AND obey to perform this kind of work. Also, It's a security and liability nightmare for any company. In probably 30-40 years, perhaps we might remove ONE pilot from the flight deck, IF they can vet AI and prove the security risks are mitigated. But no one is gonna take those kinds of risks right now on a grand scale (companies or passengers).
Well considering after 9/11 a majority of these airlines filed bankruptcy and froze pensions for all airline employees. So with that being said, they are pretty much flush with money at the time being to reward these pilots major wage increases. However, I really feel sorry for the other rank and file unionized employees ( with exception: flight attendants usually 10 -15% increases ) that are still going to be continually offered three to five...
Well considering after 9/11 a majority of these airlines filed bankruptcy and froze pensions for all airline employees. So with that being said, they are pretty much flush with money at the time being to reward these pilots major wage increases. However, I really feel sorry for the other rank and file unionized employees ( with exception: flight attendants usually 10 -15% increases ) that are still going to be continually offered three to five percent increases in their contracts, while later on down the road, the pilots well again negotiate another 30% increase after their contract expires. Hopefully the airlines will still be in business by then and that filing for bankruptcy again. Too much money is being handed out too quickly. Next will come to the bankruptcies as in it was in 2012.
Delta pilots haven’t had a pay raise in something like 8 years. All the other work groups have had multiple pay increases in that time frame.
The avg pilot is only getting paid for 75-85 hours per month. Lots of time spent away from home and not being compensated for it.
Bankruptcy is always a possibility in the airline business; the other workgroups WILL get their money; without them, pilots CANNOT fly. It’s that simple.
We all went to the same presentations on career day. If you want to make money then take out the over $100k student loans and find your trade whether it’s medicine law aviation or whatever.
Only time will tell if it's sustainable. Kudos to the union for negotiating this with Delta. In other industries, one way to get the best employees of one company to move to yours is through raises and matching benefits. With Delta's new pilot contract, if AA and UA does not match it, somehow I doubt those pilots will suddenly start interviewing with Delta. Either way, I hope it all works out. I have noticed airfares are getting more expensive nowadays.
Yes, if CEOs and upper management actually do their job to justify their pay.
The implications of this is that ticket prices will be going way up.
Delta currently charges more than American. Expect that gap to narrow as Delta increases their prices and American goes up more. If ULCC have to raise their pilot salaries, it reduces them as competition.
The fact of the matter is that there is a shortage of aircraft world-wide. The pandemic and the 737 grounding took out a lot of production out...
The implications of this is that ticket prices will be going way up.
Delta currently charges more than American. Expect that gap to narrow as Delta increases their prices and American goes up more. If ULCC have to raise their pilot salaries, it reduces them as competition.
The fact of the matter is that there is a shortage of aircraft world-wide. The pandemic and the 737 grounding took out a lot of production out that would help now. There is also a shortage of pilots, at least until technology permits the plane to be flown with one pilot, which will probably not happen anytime soon.
As for United: they fly more of their international routes than Delta or American. Both of the latter use code sharing to fill in their maps. Since foreign pilots are paid far less than domestic, this trend will continue. United will be left with those passengers who will pay up to fly a US carrier abroad.
United's codeshare network is larger than Delta or American's. They just happen to fly more widebody aircraft.
But they also have the least fuel efficient widebody fleet and they have also been willing to fly significant parts of their network at a loss.
And, Delta has more new generation widebody aircraft coming online in the next 2 years than United. (as far out as United details its fleet purchases by fleet type)
IF...
United's codeshare network is larger than Delta or American's. They just happen to fly more widebody aircraft.
But they also have the least fuel efficient widebody fleet and they have also been willing to fly significant parts of their network at a loss.
And, Delta has more new generation widebody aircraft coming online in the next 2 years than United. (as far out as United details its fleet purchases by fleet type)
IF there is genuine opportunity for US airlines to make money, United will not be the only airline growing - and other airlines will be doing that growth from a stronger financial position than United.
As for the 737MAX, Southwest just said today that it does not expect to be able to put the MAX7 into service in 2023 - a simply stunning level of incompetence on Boeing's part.
Given that United's NEXT plan is heavily dependent on the MAX 10 which won't be certified before the MAX 7, United won't be growing near as much as it thinks it will. Boeing simply cannot switch all of UAL's orders to the MAX 9 in part because there are MAX 10s which have already been built for UAL and cannot be delivered.
The demand for pilots at UA and WN won't be what they had hoped for in 2023 - which is good news for AA and DL.
The implication of this should be obvious: ticket prices are going way up. There is already a shortage of aircraft as the pandemic and the grounding of the 737s took out a lot of production. If ULCCs have to raise prices to pay competing salaries, it makes them less competitive.
American has lower ticket prices in general than Delta. Expect to see that gap narrowed as Delta goes up in price and American goes up...
The implication of this should be obvious: ticket prices are going way up. There is already a shortage of aircraft as the pandemic and the grounding of the 737s took out a lot of production. If ULCCs have to raise prices to pay competing salaries, it makes them less competitive.
American has lower ticket prices in general than Delta. Expect to see that gap narrowed as Delta goes up in price and American goes up more.
As for United: Delta and to a lesser extent American depend on code sharing for a large part of their international travel. Since non-US pilots cannot be hired, code sharing is the next best thing. United flies more of its own routes. It will be at a disadvantage.
I think that pilots and doctors etc should be paid more. But the top range is a bit excessive, as it will only go up after a few years. Sure higher prices will affect poor families but all across I see all flights full. Difficult to reconcile. What happens with companies like Ryanair for example. The other thing to note is also all the industry got a big bailout or super favourable treatments from most...
I think that pilots and doctors etc should be paid more. But the top range is a bit excessive, as it will only go up after a few years. Sure higher prices will affect poor families but all across I see all flights full. Difficult to reconcile. What happens with companies like Ryanair for example. The other thing to note is also all the industry got a big bailout or super favourable treatments from most governments and can expect the same in the future. But so did banks!
Two considerations. One, how long before pilots at the ULCC start demanding much higher wages when contracts come up for renewal? And what does that do to the ULCC price model which caters to particularly price conscious consumers?
Second, when and if we get this deep recession US domestic airlines are going to feel it quite a bit. Not just lower demand for flying but specifically less partner revenue, credit card at the top of...
Two considerations. One, how long before pilots at the ULCC start demanding much higher wages when contracts come up for renewal? And what does that do to the ULCC price model which caters to particularly price conscious consumers?
Second, when and if we get this deep recession US domestic airlines are going to feel it quite a bit. Not just lower demand for flying but specifically less partner revenue, credit card at the top of that list. I see the potential for another round of Chapter 11 and all those pay hikes will go poof as airlines march into bankruptcy court and have the agreements set aside.
They have been talking about a recession for a while. You can't realistically use a future recession as an excuse not to pay market wages today, especially when you are charging market prices today.
I don't understand why we see so much hand-wringing on behalf of employers having to pay market wages.
When you have long haul flights that require different number of pilots in each direction what happens?
Take EWR-TLV. It's 10 hours ewr-tlv and 12+ hours on the way back. Does united just staff both directions with 4 pilots?
Yes, that's exactly what happens. The alternative would be to deadhead the extra pilot one way, which would both cost the same for pilot pay and take a premium cabin seat out of inventory.
How skilled is this job, realistically? Is this a case of artificial barriers to entry?
500/hour is pretty astonishing. The comparison is made on here with lawyers and management consultants, but the hours are significantly longer and the pay per hour substantially lower. Much higher ceiling, admittedly. And yes, I realise the pilots are in some sense working when off duty, but in a much more real sense to most people, they’re just relaxing.
Quick reading around suggests the lure of these prestigious jobs at the top supports an entire industry severely underpaying at just about every other level and route to the job. I guess the union and the practical impossibility of handling a strike is what keeps the aspiring pilots in the feeder jobs from stepping in to keep the salaries at market rate?
I know a pilot would hate to be called a glorified bus driver but the reality is they are simply operating an expensive piece of equipment - they are not scientists or engineers. Interestingly enough in Guatemala bus drivers are also referred to as pilots
Stewart,
Pilots get paid for what they do, but more importantly, they get paid for what they can do. A superior pilot uses their superior judgement to avoid situations requiring their superior skill
Very true.
My reading of the tea leaves is that AA, DL and UA pilots will all reach similar contracts and the airlines will adapt now and during economic downturns with cuts in service, elimination of less profitable routes and furloughs like they always have. And the flying public will pay more.
You stated "And the flying public will pay more." You should have also stated that The US taxpayers will likely have to pay out again the next time things do not work out according to ideal, rose tinted plans.
These kinds of salaries are not sustainable but it is not the big 3 legacy carriers that cannot sustain them but rather the low cost carriers. The big 3 carriers - as well as Alaska - have a much better ability to pass along higher costs to consumers through their premium cabins, higher fare structures, and loyalty programs. The big 3 had higher margins that low cost carriers in the 4th quarter even excluding the...
These kinds of salaries are not sustainable but it is not the big 3 legacy carriers that cannot sustain them but rather the low cost carriers. The big 3 carriers - as well as Alaska - have a much better ability to pass along higher costs to consumers through their premium cabins, higher fare structures, and loyalty programs. The big 3 had higher margins that low cost carriers in the 4th quarter even excluding the massive charges Southwest took for its operational problems and that margin advantage for the legacy carriers is expected to continue into 2023. about 40% of US airline capacity is carried by low cost carriers including WN and their margins will be pressured by higher costs far more than the big 3 global carriers.
As for the Delta advantage, yes, Ben is right. But it isn't just because of Delta's passenger revenue premium but also because of its higher non-passenger revenue including from Skymiles and Amex and its MRO (contract maintenance operations). In addition, Delta pays less per gallon for jet fuel than any other carrier except WN and DL's fleet including its regional jets is more efficient than AA or UA's. Delta is reaping the benefits of starting to replace its regional jets w/ small mainline aircraft which are more fuel and labor efficient esp. given the high salaries that regional carriers are having to pay.
Regarding international, it is not the ultra long haul flights that put UA at a disadvantage but rather because UA has the highest percentage and number of 50 passenger regional jets and also the largest 777-200/ER fleet, the least fuel efficient aircraft in the US widebody fleet on a per seat basis. ULH flights make sense if that is how far the passenger wants to fly - and it still takes 4 pilots to fly any flight over 12+ hours as it does to fly a 16 or 17 hour flight.
Also, the A350-900 for Delta is larger than the B787-9 which means more efficient distribution of higher costs. Delta has 16 of the most capable A350-900s coming into the fleet in the next 3 years while they have only 2 of them right now. DL will be joining the ULH game but the DL's A350 fleet already flies the longest average stage lengths of any US carrier fleet. DL is also expected to order the A350-1000 which will be even more capable and the most cost efficient ULH aircraft along w/ more A330-900s which are as cost efficient to operate as the B787-9.
Finally, the idea that AA is weaker than UA going forward is backward. AA is reducing its debt faster while UA is spending far more on fleet than the cash it is or can generate meaning its debt will go up even as AA's goes down. UA also will be spending more on new pilots because it is replacing regional jets w/ mainline aircraft. It is not a surprise that AA is ready to sign a new contract - even if not as rich as its pilots want - while UA's pilot union told its pilots that it is still far apart.
Also, I am pretty sure that Delta is the only US airline (passenger at least) that uses 2 captains and 2 first officers on any 4 pilot crews.
United also uses 2 captains on their 4 crew member required flights.
As sustainable as CEO bonuses
With all respect, where are you coming up with the $590k? At full contract maturity in 2026, a top of scale 12 year 777 (as well as A350, A330, 767-400) captain will be making $474 per hour. At an average of 83 hours per month, that comes out to just over $474k. Sure some months can be better than others and, if a pilot chooses to bust their hump and be away so much that...
With all respect, where are you coming up with the $590k? At full contract maturity in 2026, a top of scale 12 year 777 (as well as A350, A330, 767-400) captain will be making $474 per hour. At an average of 83 hours per month, that comes out to just over $474k. Sure some months can be better than others and, if a pilot chooses to bust their hump and be away so much that their kids don’t remember who they are, sure… They may be able to hit closer to your claimed annual pay. But, that’s certainly not normal or average.
People often forget about inflation when it comes to discussing the airlines. Sure, pilot salaries look amazing on paper, but it is still below historical averages when accounting for inflation. Only now are pilot salaries beginning to catch up to pre 9/11 levels in terms of actual value.
For those commenters concerned about the pass through cost and what it will do to airfare, keep in mind that airfare is still at historical lows when factoring inflation. It’s unfortunate that the price of everything is going up, but it is. Considering the increase in the total cost of an average trip to the grocery store, airfare is actually holding pretty reasonably. The ironic part is that this blog, and others like it, are full of readers who come here to learn how to get something for nothing in their travels. How do you think those “free” flights, “free”upgrades, or “free” hotel stays get funded? Pass through costs. It may be free to you, but it’s not free as a whole. How about those “free” checked bags on Southwest? If you don’t utilize that offer then you are paying for a service you didn’t use. It’s like going to a restaurant and being charged for an appetizer you didn’t order and didn’t eat.
The point is, nothing in life is free and the cost of everything goes up every year. More in some years than others. If your own income isn’t able to support your cost of living then it may be time to re-negotiate your own income rather than complaining about those that are.
“With all respect, where are you coming up with the $590k?”
Uh, right here:
https://twitter.com/cbs11doug/status/1633290362566344704/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1633290362566344704%7Ctwgr%5E3f78ba9ddf940c25c03276b91d4fcda62b1d4b7b%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fviewfromthewing.com%2Famerican-airlines-set-to-pay-pilots-up-to-590000-per-year%2F
Well I have to admit that I made a mistake and thought Ben was saying that AA wants to match current Delta rates that will pay $590k/yr. My apologies.
That said, I’d be very shocked if that actually happened at AA. I’m a captain at another airline so I’m very well versed on what’s realistic and what isn’t. As I said, is it *possible* to hit 590 annual pay at Delta? Sure. Is it going...
Well I have to admit that I made a mistake and thought Ben was saying that AA wants to match current Delta rates that will pay $590k/yr. My apologies.
That said, I’d be very shocked if that actually happened at AA. I’m a captain at another airline so I’m very well versed on what’s realistic and what isn’t. As I said, is it *possible* to hit 590 annual pay at Delta? Sure. Is it going to be average or even common for all topped out captains? No. Not even close. The best way to determine what “average” will be is to take the hourly rate and multiply it by 1000. That will put you in the ballpark of average annual income across the board for a particular seat, category, and longevity. The current Delta top out on the highest paying airframes at full contract maturity is $474/hr. To hit $590/k average annual pay, AA would have to pay 590/hr for topped out 777 and 787 captains. I just don’t see them leaping that far above Delta in the pattern bargaining process. As a pilot at a competing airline still waiting for a contract I would love to see it happen, but that’s just not realistic. I’d bet a months pay that Delta, AA, and UAL will all end up within a couple percent of each other. The pipe dream 590k is nearly 20% over delta’s new rates. Also, keep in mind that Delta’s contract has what’s called a “snap up clause”. Whatever UAL or AA negotiate above current Delta rates, Delta will snap up to as well.
Anyway, I’ll believe it when I see it. Sorry again for my misread and the confusion. The rest of my post about pass through costs still stands, however.
I don't see these raises as being sustainable in the long term but i could work out in the short term.
There's still huge demand for travel after the pandemic and prices are much higher than Pre-Pandemic (atleast in Germany and Europe). Don't forget that these airlines had hugely reduced staff and new employees are earning less. So they'll come out on top with an ticket price increase of say 30%. Right now we're...
I don't see these raises as being sustainable in the long term but i could work out in the short term.
There's still huge demand for travel after the pandemic and prices are much higher than Pre-Pandemic (atleast in Germany and Europe). Don't forget that these airlines had hugely reduced staff and new employees are earning less. So they'll come out on top with an ticket price increase of say 30%. Right now we're seeing 20%+
How long until their european peers start leaving their airlines for the US? Or the permanent strikes we see so often?
This isn't a let's compare what pilots make to other careers/industries. This a simple no, those pay levels are not sustainable. Low margin biz, who y'all think costs are gonna be passed on to?
Consumers will bear the costs - and rightfully so. It is pretty amazing average consumers can drive to an airport in Fort Lauderdale and end up in Phoenix, Denver, etc for a couple hundred bucks in a few hours, and do it safely. Airfare has dropped dramatically over the decades in real term. Time for us to pay up.
I don't think it's rightfully so. Experiences and items have a cap and that cap will be different for everyone. I don't sneeze much at airplane ticket costs, it's hotel costs that are out of control to me. Should we be paying $1000 one way to fly from JFK-LAX in economy because it's safe and only takes 5 hours? No. If the US had proper and efficient rail options, airlines wouldn't be charging what they do today.
You’re correct. Let’s not compare pilots to other industries. No one else does what pilots do. Pilots spend lots of hours away from home uncompensated. They only get paid once the brake is released, preflight, cockpit setup, post flight, travel to and from the airport, spending the night at the hotel etc….all uncompensated time. That $475/hour is per block hour which means they are on average being paid for 75-85 hours per month.
Also,...
You’re correct. Let’s not compare pilots to other industries. No one else does what pilots do. Pilots spend lots of hours away from home uncompensated. They only get paid once the brake is released, preflight, cockpit setup, post flight, travel to and from the airport, spending the night at the hotel etc….all uncompensated time. That $475/hour is per block hour which means they are on average being paid for 75-85 hours per month.
Also, Delta pilots had not received a pay increase in something like 8 years. Other work groups at Delta have received multiple pay increases in that timeframe. The Delta pilot pay raise doesn’t even account for inflation over that 8 year timeframe.
Air travel is not public transit. It’s not an entitlement. Pay up or stay home.
You’re correct. Let’s not compare pilots to other industries. No one else does what pilots do. Pilots spend lots of hours away from home uncompensated. They only get paid once the brake is released, preflight, cockpit setup, post flight, travel to and from the airport, the night at the hotel, etc…are all uncompensated. The average pilot is only getting paid 75-85 hours per month.
Delta hadn’t had a pay raise in like 8 years, this...
You’re correct. Let’s not compare pilots to other industries. No one else does what pilots do. Pilots spend lots of hours away from home uncompensated. They only get paid once the brake is released, preflight, cockpit setup, post flight, travel to and from the airport, the night at the hotel, etc…are all uncompensated. The average pilot is only getting paid 75-85 hours per month.
Delta hadn’t had a pay raise in like 8 years, this contract doesn’t even cover inflation over that time frame.
I'd argue the opposite here and suggest American is in worse shape than United with these raises. American has a long history of struggling to make longhaul flights work due to economics. Anything to Asia seems to be terrible for them along with some of their seasonal European routes. United has a route network that helps utilize their widebody fleet 12 months out of the year which American does not have.
Another argument could...
I'd argue the opposite here and suggest American is in worse shape than United with these raises. American has a long history of struggling to make longhaul flights work due to economics. Anything to Asia seems to be terrible for them along with some of their seasonal European routes. United has a route network that helps utilize their widebody fleet 12 months out of the year which American does not have.
Another argument could be that newer planes burn less fuel and so they are sharing some of those savings into pilot pay.
It reminds of me of Richard Branson’s quip, when asked how to become a millionaire, “It’s easy. Start as a billionaire and buy an airline.” They provide an important service tho.
Let's look in context across the broader economy. Pilots are trained, specialized professionals in an industry that is vital to economic growth in the country. If lawyers, doctors, management consultants, mid level Fortune 500 executives, all kinds of 30 year old finance folks, and others make 300K to 600K or higher, there is no reason why pilots shouldn't be in that group. Heck, I would prefer more people with the intellect / skill that lawyers...
Let's look in context across the broader economy. Pilots are trained, specialized professionals in an industry that is vital to economic growth in the country. If lawyers, doctors, management consultants, mid level Fortune 500 executives, all kinds of 30 year old finance folks, and others make 300K to 600K or higher, there is no reason why pilots shouldn't be in that group. Heck, I would prefer more people with the intellect / skill that lawyers require choose a career as a pilot instead.
@ Anthony -- I hear you, but...
a) Management consultants are making an average of $300-600K per year?!
b) The issue is that airlines are extremely low margin businesses; lawyers and folks working in finance aren't working in very low margin industries with high capital costs, and heavily unionized workforces where pay can't easily be adjusted to reflect the economy, short of filing for bankruptcy
c) Shouldn't management employees at airlines with...
@ Anthony -- I hear you, but...
a) Management consultants are making an average of $300-600K per year?!
b) The issue is that airlines are extremely low margin businesses; lawyers and folks working in finance aren't working in very low margin industries with high capital costs, and heavily unionized workforces where pay can't easily be adjusted to reflect the economy, short of filing for bankruptcy
c) Shouldn't management employees at airlines with important roles be making this kind of money as well then?
a) *Senior* management consultants certainly make 300K to 600K per year. Starting consultants make well over 100K in bonus and base compensation at 22 years old. While collar jobs earn a lot of money.
b) That may be true, but it is the job of airline management to deal with the rising cost of their specialized labor pool. Airlines are low margin; maybe they should try to improve margins my driving higher pricing.
...a) *Senior* management consultants certainly make 300K to 600K per year. Starting consultants make well over 100K in bonus and base compensation at 22 years old. While collar jobs earn a lot of money.
b) That may be true, but it is the job of airline management to deal with the rising cost of their specialized labor pool. Airlines are low margin; maybe they should try to improve margins my driving higher pricing.
c) Maybe - but there is probably surplus of talented management executives out there relative to the the slots in the economy. On the other hand, pilot availability is limited. Maybe it is artificially limited due to some of the training requirements, but I would guess the flying public supports high training requirements for pilots. And in addition, a lot of motivated people over the past 20 years gravitated towards desk jobs over things like being a pilot. We actually need pilot pay to go up to balance things out.
c.)
You know the answer-- supply and demand. There are more people qualified to be middle management than there are to be pilots. I always tell people, if you are upset with your pay, then either a.) change employers in your exisiting field to earn more money if you can't get a raise with your current employee, or b.) acquire a skill outside of your current field that will earn more money.
...
c.)
You know the answer-- supply and demand. There are more people qualified to be middle management than there are to be pilots. I always tell people, if you are upset with your pay, then either a.) change employers in your exisiting field to earn more money if you can't get a raise with your current employee, or b.) acquire a skill outside of your current field that will earn more money.
At the end of the day, without pilots, airplanes don't move and airlines go broke. They are more essential than middle management and they are harder to find. That's why they get paid more.
Another thing workers can do if they are upset with their pay is organize to enhance their leverage and then collectively bargain with their employer for higher wages.
One factor to consider is that most of the career professionals that you mentioned are not generally unionized. There is no artificial protection when you mess up and endanger people. The pilots want and have career protection like a unionized assembly worker yet the pay approaching a top attorney.
When the overleveraged airlines operating in a cyclical industry go bankrupt next, Congress will give them billions in free taxpayer funded bailouts. the unions jobs will be preserved. Rinse and repeat.
Pilots should hold out for $1 million a year. Zero downside for anyone but taxpayers.
Lots of worry about the pilots, but how about the leadership team? Isom clocked in at 7.5 million last year?
The salary of just over eleven pilots.
This exactly. Celebrate the profits as a sign of the free market working right. Subsidize the losses because airlines are a necessity. Best business plan ever!