Tuesday, November 22, 2005

Flying Careers Part 5: Making Bank (or not)

Nothing gets a good debate going like a discussion on pilot pay. In the red corner: Your average Joe working his butt off for $40k/year, thinks pilots are grossly overpaid for the work they do. In the blue corner: Your average airline pilot - worked hard for years at low pay, furloughed twice, just took a 30% paycut - is livid that anybody would begrudge him his $120k/year. Let the brawl begin.

Although I personally think pilots are worth every penny they can negotiate, that's an argument for another post. Today, the focus is on how much pilots actually make, not what the public thinks they make. Really, a detailed post could go on for many pages, so I'll try to keep this simple. I'll start off with an explanation of how pilots are paid, and then move on to typical pay rates for various jobs.

In a broad sense, pilots are either salaried employees or they are paid based on work performed, usually by the hour. As we'll see, minimum guarantees and complicated pay rigs make "hourly" wages anything but.

Rather few pilots are paid an annual salary; the majority are corporate or fractional pilots. A few flight schools and aviation universities salary their employees; so do some Part 135 freight and charter operators. Although a few airlines used to salary their pilots (including Horizon), there aren't any left in the US that I'm aware of. A salary is good in that it provides for stable income when the flying drops off. Of course, the exact opposite is true: you may end up doing a lot of extra flying essentially for free. Some operators like Ameriflight salary their employees, but pay more for extra flying.

Most flying jobs are technically paid by the hour, but at only some of these does one hour's work equal one hour's pay, and even here the definition of "hour" varies. At most flight instructing jobs, you will be paid the number of hours of ground and flight instruction you bill to students. Some freight and charter operators pay you based solely on block or flight time. A few jobs are paid based on hours on duty. These distinctions are important and must be considered when looking at pay rates.

As a general rule, airline pilots are paid by the block hour (ie departure to destination, including taxi time). That's a rule with many exceptions, which pilots have negotiated for over the years:
  • Minimum guarantee is an important pay rule that provides the chief advantage of a salary, income stablity. It is usually expressed in a number of hours per month. If an airline has a 80 hour min guarantee, every pilot will receive a minimum of 80 hours' pay for that month, no matter how much flying they actually do. If they fly more than the minimum guarantee, they are paid for what they actually do. Min guarantee tends to be around 75 hrs/mo at regional airlines and 60-70 hrs/mo at the majors.
  • Pay Rigs ensure that pilots still get paid when schedule inefficiencies result in an inordinate amount of time on duty or on a trip while not flying. An example pay rig (mine) awards a pilot the greater of block time flown, or 1/2 the time on duty, or 1/4 the time away from base, on a trip-by-trip basis. Today I spent 8 hours on airport reserve but did not fly, so I was paid 4 credit hours (1/2 of 8 hours' duty). In airline pilot lingo, our contract has a 2:1 duty rig and a 4:1 trip rig.
  • Override Pay can dramatically increase your payrate under certain conditions. You may be paid 150% or 200% your normal payrate for flying on a day off; a few contracts also include override pay for working a holiday like Christmas. At jetBlue, every hour over the 70-hr guarantee is paid at 150%.
  • Per diem is an extra stipend to help cover expenses while away from home, such as the additional cost of eating at restaurants. It is paid on time away from base, and is usually $1.50-$2/hr.
Pay rules merit close examination not only for pay but also for lifestyle. As an example, my comany's 4:1 trip rig means that it's fairly cheap for the company to build long trips with lots of time sitting in hotels; many of our pilots are away from home for 350+ hours each month. A better trip rig (3.5:1, perhaps) would force the company to build more efficient trips that'd provide our pilots with more days off per month.

Sick time, vacation time, etc, will also affect pay but they belong more in my next post on benefits.

So how much do pilots actually make? Probably less than you think. Regionals and most stepping-stone jobs have always been fairly low-paid. Major airline payrates have taken a major beating over the past 4 years, with no sign of relief. That said, captain's pay at the majors still puts them in the top 5% of earners in the US, so it's not quite poverty wages yet. Really, what it comes down to for a potential career pilot is whether your "dream job" pays enough to make the training costs and years of lower pay worth it. I've posted a number of typical payrates below, starting with traditional time building jobs, to help you crunch the numbers.

Flight Instructor - major aviation college - $9/hr*
Flight Instructor - large flight school - $10/hr*
Flight Instructor - freelance/self employed - $30/hr*
Banner Towing - Southern CA - $400/week
Ameriflight (cargo)- Piston Twin captain - $24k/yr salary
Ameriflight (cargo) - Metroliner captain - $55k/yr salary

*Per instruction hour billed.

Note: To get income range for airline jobs posted below, multiply rate by minimum guarantee for lower end; use 95 hrs/mo as top end for regionals and 85 hrs/mo for LCC/Legacy airlines.

Regional First Officer:**

Great Lakes - Be1900 (19 seat turboprop):
1 year FO: $15/hr
Mesaba - SF-340 (34 seat turboprop):
3 year FO: $31/hr
ExpressJet ERJ-145 (50 seat jet):
3 year FO: $34/hr

Regional Captain:**

Mesaba SF-340:
5 year CA: $50/hr
Horizon Q400 (74 seat turboprop):
8 year CA: $81/hr
Skywest CRJ-700 (70 seat jet):
6 year CA: $65/hr
Mesa CRJ-900 (90 seat jet):
6 year CA: $69/hr

**75-76 hr/mo minimum guarantee - per diem not included.

Low Cost Carriers:+
Airtran B737
2 year FO: $56/hr
5 year CA: $120/hr

jetBlue A320
2 year FO: $56/hr
5 year CA: $121/hr

+ 70 hr/mo min guarantee - per diem not included.

Legacy Carriers: ++

American MD80
8 year FO: $97/hr
16 year CA: $154/hr

American B777
12 year FO: $133/hr
12 year CA: $196/hr

Northwest A320
8 year FO: $86/hr
12 year CA: $137/hr

United B737
6 year FO: $79/hr
10 year CA: $126/hr

++ 64-65 hr/mo min guarantee. Payscales top out at 12 years. NWA rates reflect Nov 14 interim agreement including new 24% cut.

Freight Carriers:

FedEx B727 - 74 hr/mo min guarantee.
5 year FO: $104/hr
8 year CA: $168/hr

Kitty Hawk B727 - 43 hr/mo min guarantee
5 year FO: $89/hr
8 year CA: $133/hr

UPS - All aircraft types - 81 hr/mo min guarantee
5 year FO: $97/hr
10 year CA: $184/hr

Corporate/Fractional Operations:

FlightOptions Midsize Jet
3 year FO: $4333/mo salaried
7 year CA: $6126/mo salaried

NetJets - All Types
3 year FO: $2470/mo salaried
7 year CA: $5630/mo salaried

Intel Corporation Flight Department
4 yr FO: $51,000/yr salaried


I would suggest going back & looking at the career progression post, reviewing how long you could expect to stay in each type of job, and how long you'd be at FO payscales vs. CA payscales. As a beginning instructor, you could be making $15k/yr or less. You will probably be a regional captain or fairly senior at a FAR 135 operation before breaking $50k/yr. And you may well upgrade at a major/national airline before exceeding the $100k/yr mark, which could easily be 10-15 years after you start out. When counting the cost, keep in mind that you will incur $20k-80k in training costs before your first instructing job (more on this in another post). If you are a potential career changer, subtract this amount from the money you could expect to earn over the next 15 years and compare it to your earnings expectations for that time period in your current job.

Of course, pay isn't everything. There are a lot of other factors in play, some of which we'll explore in the next few posts. Next post: benefits and retirement expectations.


SFND said...

Just think, the guys on the other end, controlling you guys are making twice or three times as much. In their fourth year they can make between $37,224 and $155,175, and that is without locality pay added.

Anonymous said...

Nice post. However, Intel is not really an example of a corporate flight department-- their operation is much more like an airline (although I don't know how their pay works).

One big difference between airline and corporate operations is that since seniority is much less of an issue in corporate flight departments, it is possible to get hired straight off as a G-V captain, especially if you were already a G-V captain for some other operator.

Anonymous said...

I still believe starting salaries are way too low, while high-end salaries are way too high.

Sam said...

I still believe starting salaries are way too low, while high-end salaries are way too high

I agree on the former but not on the latter. Why that is, I'll argue another time. But from a practical standpoint, you will never see them come closer, they always move together. In the 90s when major airline pay was good, it brought regional pay up. Now that the majors have taken severe cuts, it is driving regional pay downwards. I'm happy when there are senior guys at the majors making obscene amounts of money - it ups the chance that the regional guys will make a liveable wage. Of course, there is a point at which you kill the golden goose, and that's a discussion for another time.

Private Pilot said...

Happy Thanksgiving! Your blog is awesome, offering great insight into the world of aviation!

Aviatrix said...

Not everyone has a pay rig or a minimum guarantee, either.

Aircraft serviceability, customer demand, and weather delays all hurt my paycheque.

Flygirl said...

Great post Sam...Thanks! :)

Anonymous said...

Great post! I appreciate the effort you put in to help others understand this. I am 14, desperately wanting to be a pilot, and have yet to take the exams, but I intend on following through. Flying sounded all nice and simple until I was told of grave salaries on the small regional jobs. That, though, was the worst case senario. Investigating and reading internet posts only increased my confusion.
Again I thank you for the clarity and straight up answers. Hopefully things will work out. If others did it, so can I.

Anonymous said...

55K for a metro driver at Ameriflight? Are you MAD? As a fellow tube driver, we make NO WHERE near that. Try 40K. The rumor is out of the bag however, Ameriflight is "considering" a pay raise in 2010. I'll believe it when we see it!
Nice blog btw.

Sam said...

Anonymous 4:07, that number was based on my recollection from when I flew for AMF back in 03-04, but I never flew the SA227 so I'll take your word for it, I apparently just remembered incorrectly! In either case, you guys deserve a whole lot more than you make...that is a beast of an airplane to be flying around single-pilot! Respect, your job makes mine look easy!

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