Tuesday, February 18, 2014


Last week I had the unusual (for me, anyways) privilege of flying with a brand new First Officer. I don't mean new to me - I mean brand spanking new to the company and the JungleBus, on his very first trip after Initial Operating Experience (IOE). I shouldn't be so surprised, because there are a ton of new faces on the line given all the hiring NewCo has been doing to replace those of us flowing up or moving on to other majors. But I've been bidding around 14% (from the top) in the MSP Captain category for over three years, and have become accustomed to flying with the same 20 or so senior First Officers. Many of them could hold a junior Captain position on reserve or in our new LAX crew base, but choose to stay in the right seat for the weekends & holidays off, efficient trips, and 18-day-off monthly lines that their seniority provides. All are extremely comfortable with the JungleBus and our system, and their knowledge often surpasses my own. Flying with excellent First Officers who you know makes the left seat a pretty easy gig on most days.

Joe joined the trip in Salt Lake City, replacing the reserve First Officer from Detroit who had flown the first two legs. I'm not sure what happened to the FO who originally bid the trip; I'm guessing he was sick or was able to drop the trip into open time. My first thought when I met Joe was how shockingly young he looked, much like myself when I was hired at Horizon ten years ago. Indeed, he turned out to be nine years my junior, at age 23. Born in 1990, Joe was 10 years old when I started instructing. It makes me feel suddenly old! Incredibly, this isn't Joe's first airline; he spent over a year at Great Lakes, and his experience is fairly instructive of how the pilot shortage has been shaping up so far. He struggled through a year of poverty-level First Officer pay (less than $15,000/yr) and upgraded in the Beech 1900D as soon as he turned 23. By then, Lakes was losing so many First Officers that he ended up flying in the right seat even after upgrading, which at least gave him captain pay but no turbine PIC flight time. When NewCo started hiring, it wasn't a hard decision to jump ship; even our paltry first year FO pay is as much as Great Lakes' captain pay! Six of the ten pilots in Joe's NewCo class were ex-Lakers, and they also made up the majority of the classes before and behind his.

All of Joe's IOE took place in our east coast system, flying in and out of LaGuardia. He had never been to our trip's airports of Salt Lake City, San Francisco, or San Antonio; he had flown in and out of LAX as a Laker, but not from WidgetCo's terminal. I passed along some of the finer points of flying in and out of these cities, though few of these tips actually involve flying. The Jeppesen plates do a pretty good job of presenting all the data needed to navigate one's way to a busy airport; it is mostly on the ground that some tribal knowledge comes in handy. This includes typical taxi routes, which ground and ramp controllers to contact and where, whether operations will respond to your on-the-ground call, which services are available - even something as simple as "The ground power at gate 48 isn't reliable, so leave the APU running." In Salt Lake City, I noted the semi-permanent winter inversion layer and cautioned Joe about the sudden thick fogs that often defy forecasters, suggesting the occasional need for a precautionary alternate. Approaching San Francisco, I explained the Tipp Toe, Quiet Bridge, and new FMS Bridge visual procedures, reviewing the techniques needed to comply with altitude and speed restrictions and still get stabilized by 1000' and sharing tips on avoiding TCAS Resolution Advisories (RAs) when paired up with another aircraft on the parallel approach.

Mostly, though, the trip was notable for just how little instruction was needed. If Joe hadn't told me he was fresh off IOE, I never would have guessed it. His aircraft control was smooth and precise, his procedural knowledge flawless, his automation management confident and fluid. It's worth noting that this is Joe's first time flying a glass, FMS-equipped airplane. I suspect such a transition is much easier for his tech-raised generation than going from a technically advanced aircraft to an old-school steam-gauge bird like the B1900. Our procedures required that I make the landings and takeoffs in San Francisco since it is a special qualifications airport and Joe is "green," but I would have been perfectly comfortable letting him fly at SFO or anywhere else. About the only clue that Joe was new to the airplane was the fact that he started slowing down for approaches a few miles earlier than I would have. This is a smart technique when new to any aircraft, but especially when coming out of the B1900. Its lighter weight and massive drag with props at fine pitch make carrying 250 knots to the outer marker standard procedure. The JungleBus is actually draggier than many jets and its large flight spoilers and high gear and flap speeds making getting down and slowing down relatively easy, but it's certainly no B1900, and it behooves one to play it conservative until intimately familiar with its drag characteristics. Even then, you have to be careful not to leave yourself hot and high, as I discovered with a Fed on my jumpseat four years ago.

Flying with Joe was a heartening reminder of how well most airline training programs prepare their pilots for flying the line from Day One, even when it's a big change from their previous aircraft. I myself have a similarly stark transition in my near future, going from the well-designed, modern, highly-automated JungleBus to the decidedly quirky, semi-automated hodgepodge of workaround design from several eras that is the "Mad Dog." It's a little intimidating to think about, but then I remember flying freight in decrepit Navajos single pilot in hard IFR sans autopilot. If I could do that then, I can certainly make it through MadDog school with one of the world's largest airlines' notably thorough training program. Sometime later this year, I'll have the privilege of introducing myself to my first post-IOE captain as the "FNG." Let's hope that I fly as well on my first trip as Joe did!


Friday, February 14, 2014

The End of the Beginning

A few nights ago, on a vote of 5-4, the Master Executive Council of American Eagle's pilot union voted to reject the concessions-for-jets deal that American Airlines Group had been pursuing with the union under the threat of closing Eagle down if concessions were not approved. In rejecting the concessions, the majority cited industry conditions and forces very similar to those I laid out in my essay on the topic immediately below this post. Before the vote, the MEC had been expected to approve sending the Tentative Agreement to the wider pilot group for member ratification. Those opposed to concessions were able to convince one representative to switch his vote.

This development comes several weeks after the pilot membership at ExpressJet Airlines voted against a similar concessionary contract by an overwhelming 83%. Other recent events that may have swayed the MEC include Great Lakes Airlines shutting down their Minneapolis hub for lack of pilots, United announcing that they will close their CLE hub to alleviate staffing shortages at their regional partners, and Republic Airways' statement that they will be prematurely ending 50-seat contracts at their Chautauqua branch in order to by able to staff Embraer 175s currently coming on line for American flying. On the heels of the AE vote against concessions, Republic today announced that they have come to a tentative agreement for a new contract with their pilots after seven years (!) of negotiations. The details are not yet known but Republic stated the contract contains increased pay to help attract new pilots.

All these events are the direct result of a "pilot shortage" that is really only in its infancy - which is to say that for now, there are still plenty of qualified pilots, just not enough who are willing to work for pauper's pay. It's going to be very interesting to see how things progress. I think airline pilots and especially regional pilots will have some great opportunities along the way, and it seems like many are just awakening to this fact. I have no doubt that AAG will attempt to make good on their threat to shut Eagle down - and the Eagle MEC has said they'll try - but I think they're going to have a very hard time shifting that flying anywhere but mainline and finding pilots to fly it. Kudos to the Eagle pilots for recognizing which way the leverage is swinging.

Sunday, February 09, 2014

The Insanity of Concessions in 2014

My next Taking Wing column is coming out in a few days in Flying's March 2014 issue, and takes on the much-discussed (and sometimes disputed) pilot shortage. It was sparked by a string of articles in major newspapers over the past year, cockpit conversations I've had on the subject, and the sudden, inexplicable concessionary environment that has emerged at the regionals. As usual, the column is written mostly for a non-airline, general aviation audience. Therefore I wrote another essay, somewhat on the same subject but written more for an airline pilot audience and addressing the concessions more directly. I posted it to the Airline Pilot Central forums, where it received quite a bit of attention, and it went a bit viral after that, being reposted on various forums and email lists. This essay is copied below. If you like it, check out the March issue of Flying when it comes out. In a few days I'll also write a post containing the retirement and new commercial pilot statistics & analysis used in writing both articles.

The Insanity of Concessions in 2014

It’s just about all that pilots are talking about these days: in classrooms, at flight schools, in cockpits of airplanes big and small, the pilot shortage is on everyone’s mind and everyone’s lips. Mind you, not everyone is a true believer: many of us have been hearing about the pilot shortage our entire careers, even as we were furloughed, stuck on stagnant seniority lists, and forced to start over at poverty-level wages. Much of the loudest hype comes from the flight training industry and others with something to gain. Every time the shortage seems to be gaining steam, something unforeseen comes along and pushes it back another five years. It’s not surprising that so many pilots – regional pilots especially – are so cynical about the current shortage talk.

And yet, the numbers are incontrovertible. The three remaining legacy megacarriers (Delta, United, & American) will see a huge pilot retirement spike in the coming years, peaking in 2023 and not really easing until another decade after that. In the next five years alone, they will lose 5098 pilots to mandatory retirement. By 2023, that number increases to 15,235; by 2027, the number is 23,850, or 64% of the current seniority lists. Add in FedEx and UPS, and the 14-year total is 28,450. The national and non-legacy majors add thousands more.

Now, there is still a lot of flight training infrastructure in this country, and we certainly have the capability to train 30,000 new pilots in the next 14 years. The problem is that historically low numbers of people are investing $80,000 or more in training for a career and industry whose troubles have been widely publicized in the general media. The FAA issued fewer commercial certificates in the last three years than any other period since the early 1980s, and a large portion of these were issued to foreign nationals who plan to return home to fly for their national carriers. Even if the pilot shortage publicity sparks a renewed wave of flight training, there will be a 3-4 year lag before these new entrants are qualified to fly for an airline, by which time the effects of the shortage will be very deeply felt and rapidly multiplying.

Of course, these effects will not be felt equally by all sectors of the industry. The three airlines retiring the most pilots will be almost entirely unaffected. They know that their pay and benefits will attract enough pilots from the military, corporate world, lower-paid national carriers, and regional airlines to easily replace their retirees. In fact, the regionals alone have over 21,000 pilots, most qualified to fly for the major airlines and many planning to do exactly that. It is who will replace these regional pilots that is the real problem – especially since the modern regionals represent such a large share of the major airlines’ domestic networks. Already, with the shortage barely underway, the lowest-paid regionals like Great Lakes have been absolutely crippled by a dearth of qualified pilots willing to work for them, and more established regionals like American Eagle are already offering signing bonuses of $5000 or more to meet their rather modest demand for pilots. In the very early stages of major airline hiring, airlines like Endeavor are already losing many more pilots than they can entice to show up for class. If you look at the retirement numbers discussed above, it becomes clear that the later effects of the shortage will be far, far more pronounced.

Any first-year Econ student could tell you that in this situation, with a shortage of qualified labor, one can expect wages to rise. And yet, here we have a peculiar example of an entire industry defying the laws of economics, for the very opposite is presently true: there is strong downward pressure on regional pilot wages. This is because the newly emboldened mega-legacies are treating their erstwhile regional partners much like Walmart treats its suppliers: smaller, vulnerable targets to be bullied into submission and forced to slash costs, even to their own detriment, because the alternative is annihilation. Regional management has grown increasingly desperate, having seen their peers unsuccessfully attempt branded flying (ACA, ExpressJet), merging with other carriers (Pinnacle, ASA), or diversifying their partnerships (Mesa, Republic) in an effort to survive the storm. They are now willing to slash costs no matter the consequence, even if it eventually robs them of pilots to fly the airplanes, so long as it lets them live to fight another day. To do this, they are preying on their pilots’ insecurities about their careers, forged in the turmoil of the post-9/11 era and not yet attuned to the opportunities of a labor shortage.

Pinnacle was the first to do this, with Delta pulling the strings and assisted by a bankruptcy court. They were able to convince their pilots that rejecting concessions would result in an even worse contract being imposed by the court, Delta slashing capacity at the airline, and the loss of many jobs. This was the stick; the carrot was a promise of future mainline jobs. Together it was enough to lure the pilots into massive concessions only a year after securing a very hard-won contact that took years to negotiate. PSA was next. Outside of bankruptcy, they were able to convince their pilots that their 50-seat exposure spelled eventual doom, and only voluntary concessions to secure 76-seat flying could save them. And now American Eagle, the second-largest regional airline in the nation, is telling its pilots that they must endure a second round of draconian concessions only 18 months after approving the first round – or be shut down as Comair was. This, even while they offer $5000 signing bonuses to attract new pilots! The sheer nerve of it is breathtaking.

The problem here is that the turmoil and stagnation of the last 13 years, coupled with a seniority system that traditionally ties a pilot’s career to the health of his airline, has made it very easy to convince pilots that the death of one’s employer means the death of one’s career. In the context of the regionals and the pilot shortage from 2014 forward, it’s simply not true. First off, the major airlines are not looking to reduce system capacity. Their yields are consistently high, they are making record profits, and they have begun ordering airplanes. While they will continue to shift capacity from the regionals to mainline, they will not cut overall capacity. Coupled with the massive retirements at the majors, this means ample job opportunities for regional pilots regardless of how long individual regional airlines survive. Secondly, any shutdown of a regional airline – due to lack of concessions, or more likely, due to other industry conditions – will necessarily be long and drawn out, as Comair was. Delta taking possession of Pinnacle in bankruptcy rather than risk a shutdown, at a time Delta was actively trying to get rid of 50-seaters, shows that they could not afford to cut or shift that capacity suddenly. If Eagle is shut down – with or without concessions – I expect it will be drawn down at roughly the rate of pilot attrition, not with massive furloughs sending starving FOs to the unemployment dole. Thirdly, it’s not clear where capacity could be shifted to, if not mainline; few regionals can easily staff their present flying, to say nothing of growth.

The reality is that concessions will not save the regional airline industry; they will only prolong its demise. The regional business model of the past 20 years is essentially dead. It was always based on cheap fuel, a cheap and plentiful labor supply, low employee longevity, new airplanes with inexpensive maintenance, expensive and unproductive mainline pilot contracts, and nearly endless growth. None of these conditions apply anymore. The pilot shortage is the final nail in the coffin. Going forward, the industry will slowly return to its roots of the 80s and early 90s: a niche player in small markets where high yields can justify high costs. It benefits none of us to prolong this process, keeping more of us at the regionals longer. It benefits none of us to put downward pressure on wages of airplanes that will likely end up at mainline in the long run. It benefits none of us to accept smaller paychecks at a time that our skills are becoming increasingly valuable.

Finally, regional pilots of all people ought to recognize the moral repugnance of freezing pay for newhires who will work for the regionals after we’re gone, consigning future pilots to even worse wages than the ones we’ve spent so much time lamenting. How many times have we decried major airline pilots selling scope and creating a C-scale? And yet there are many of us prepared to do essentially the same thing to those who follow in our footsteps! It’s utterly shameful, and given current industry conditions, more than a little insane. The only thing that can prompt us to do something so illogical – the only tool in management’s toolbox these days – is fear. The pilots of ExpressJet are to be commended for taking a clearheaded look around the industry, realizing that there is nothing to fear but fear itself, and making a stand for their chosen profession. It is my sincere hope that the pilots of American Eagle will heed their example, reject the poisonous whispers of the fearmongers, and make us proud. 

Friday, February 07, 2014

On The List

Ask a regional pilot what his or her career goals are, and about 75% of the time they will answer "to fly for a major airline." This can mean many different things. They may mean simply that they wish to fly a mainline-sized airplane, and a national carrier like Allegiant or Spirit might fit their plans quite nicely. They might mean a large airline with thousands of pilots and multiple crew bases, making domestic majors like jetBlue and Southwest worthy destinations. The designation could include freight companies like FedEx and UPS, or overseas airlines like Emirates. Niche majors like Alaska or Hawaiian may be tempting targets. But for many, the ultimate goal is to be hired by one of the remaining consolidated legacy carriers: Delta, United, or American (still in the process of merging with USAirways). These airlines offer good payrates, a variety of equipment, a mix of domestic and overseas flying, and significant career progression due to older pilot groups that will retire en masse in the next 15 years. Alas, there has been precious little pilot hiring at these companies over the last 13 years. Until now, getting hired at one has been akin to winning the lottery.

When I got hired at NewCo in 2007, I was aware that there was a flow-up/flow-down agreement between NewCo and the company I then called RedCo. This was a product of RedCo's bankruptcy and the compromise they reached with their pilots' union in order to form NewCo. At the time RedCo had thousands of pilots on furlough, and it was believed that many of them would staff the JungleBuses at NewCo. Therefore, NewCo pilot slots were reserved for current and future RedCo furloughees. In return for this measure of career uncertainty, off-the-street NewCo pilots were given flow-up rights whenever RedCo was hiring: 20 pilots a month, up to around 100 pilots a year, only after upgrading and completing 30 months of service at NewCo.

Ultimately, by the time NewCo started flying RedCo had recalled most of its furloughees, with the result that only four RedCo pilots ever flew for NewCo; the rest of us were off-the-street hires, and were given flow rights to RedCo. For some, this was the entire attraction of NewCo. I was more skeptical. The history of flow agreements between regional and major carriers had not been promising; they tended to only work in the downward direction. I correctly suspected that a merger was in the works, and thought there was a much better chance of me being furloughed due to flow-downs than of me flowing up to RedCo or its successor company. It was a risk I was willing to take because I figured I would get a JungleBus type rating and 1000 hours of turbine PIC before that happened, and the alternative was indefinite stagnation at Horizon. When the merger was announced and the bottom fell out of the economy more or less simultaneously, I started looking into well-paid JungleBus jobs in China pretty seriously.

But a strange thing happened: the combined airline never furloughed. They were seriously overstaffed for years, and came perilously close to furloughing several times, but their new joint pilot contract preserved both flow-up and flow-down, and the training costs of flowing their pilots down to NewCo were huge. By 2010, traffic had recovered sufficiently that they decided to hire 300 pilots; 60 of these were NewCo flows. Just before they left, NewCo was sold off to the company I call Osage Holdings, again endangering the flow. The agreement was in fact cancelled for future NewCo hires, but all pilots then on property retained flow rights. The movement afforded by the 2010 flows gave me excellent seniority the last few years while we've all been waiting for [the major airline] to hire again.

Within the last two years, [nameless major airline] has really started to hit its stride and reap the benefits of industry consolidation: restraining capacity, rightsizing equipment in each market, elevating yields, and ultimately raking in record profits. They began shifting capacity from regional carriers to mainline as industry conditions rendered the regionals increasingly irrelevant. Along the way, their pilot overstaffing evaporated even though few pilots left during the 2007-2012 retirement freeze. Many people thought they would hire in 2012. They didn't, and ended up seriously understaffed on several categories over the summer of 2013.

I was in a bar in Cape Town when I got the news on July 15th: [nameless major airline] had announced pilot hiring would commence in the fall. The wait ever since has seemed endless. The hiring moved to January as hundreds of military leave and deferred-return furloughees filled the autumn classes. I got my flow letter in October while at the Interline Regatta in the British Virgin Islands. I received a FedEx envelope with newhire paperwork to be completed just after Christmas. I got a class list with a choice of aircraft and bases to bid at the end of January. And finally, this last Monday, February 3rd, I became pilot number 11,648 on a 11,649-pilot seniority list. It's still hard for me to believe after all that has happened. I do indeed feel as though I've won the lottery. [Nameless major airline] is expected to hire at least 300 pilots this year, and it's likelier the number will be closer to 600. Absent another economic meltdown or 9/11-type event, mass retirements mean they will continue to hire for another 15 or 20 years.

It's not time to break out the champagne just yet, though. Due to one of the provisions of the flow agreement, NewCo is retaining me for "operational necessity" until April or May, at which time I'll be released to Basic Indoc training. After that I have ground school and then simulator training on my awarded aircraft, the "Mad Dog". After six and a half years of Junglebus automation, passing Mad Dog school will take a lot of hard work and knocking the cobwebs off my old freight-dog skills. Then its off to IOE ("Initial Operating Experience), learning to operate the old girl within the new system. After that I'll be commuting to reserve in New York City, and will be on probation until February of next year. During this time I am essentially an at-will employee. My greatest fear is that [nameless major airline] will take exception to my blogging or my writing for Flying Magazine; they're famously protective of their image. I'm not willing to stop either if I can help it, so I'll just keep writing professionally, objectively, and as honestly as I dare, and if it causes problems we'll cross that bridge when we come to it. Other than that, all I can do is work hard to learn my aircraft and the system, and try to make a positive impact on everyone I work and fly with. It's going to be an interesting year!

In honor of my next aircraft, an interesting video of some of its features and quirks: