Monday, January 30, 2006

On... Compensation

Another irritating day spent commuting. A day wasted; 10 or 12 or 14 hours (or more) spent just getting into position to do my job. I can't complain too loudly about the pitfalls of having to negotiate free rides on airplanes to and from my domicile, when most people would kill for free plane rides. This commuting business is how airline life works; a majority of airline pilots commute, and this is how it's done. As a non-paying passenger, I fly as the lowest possible priority, my trip paid for only by the professional courtesy of another airline and its crews, who likely rely on the same courtesy by others (like my humble self). It's also my choice not to live in my domicile, from whence a fair proportion of my workdays embark. That--living in domicile--would solve probably 30-40% of these days.

But what I CAN bitch about--again (and yet again)--is the ridiculous mayhem into which the passenger airline business has descended in the past half decade, a history for which everyone seems immune from being held concretely responsible, a history which seems to have a life of its own, an economic and business tsunami wreaking its havoc while we all watch helplessly.

Well I don't buy it. It pisses me off, and I'm amazed we're not all, at the end of our trips, ready to axe murder every non-TSA person we encounter (and the TSA too except that they can make your non-flying life as miserable as your flying experience was). Like a man who, faced with the temptation of an alluring one-night stand, chooses a fork in the road from which redemption is nigh unto impossible, the airline industry has been severely tested these past few years and has chosen the wrong fork.

My standard caveat: I have no training in business, and I've no management of others in my work history beyond the management of my flight crew as an airline captain. So I'm aware that there are more things in heaven and earth than I see from the cockpit and airport waiting lounges. Still, while I'm not absolutely convinced the business world is entirely a house of cards, an ugly white-guy circle jerk that drags the rest of us in a tiny, swamped lifeboat in the wake of glorious management compensation, I'm very nearly there.

From the standpoint of the lowly traveler, what we are seeing is a proliferation of 50-seat regional jets where there used to be larger airplanes at (possibly) slightly lower frequency. This has several effects, positive and negative: it serves to reduce the total number of available passenger seats, thus helping to solve what is said to be an overcapacity problem; it can claim to result in an increase of service since the replacement of a single 135-seat airplane with two trips on a 50-seater involves a claimed doubling of the flight frequency; it results in a greater and greater proportion of travelers moving about the country on smaller and less accommodating aircraft; and, most crucially, it replaces legacy airline jobs with people at considerably lower salaries, people who are either hoping to use these jobs to move up to better, legacy airline jobs, or people without aspirations to make a career out of the field.

My own history is in the regional airlines, and I have great respect for the skills and professionalism of the men and women who ply this trade. My complaint is not that the workers are less skilled or that the general public's safety is somehow greatly compromised, though an argument can be made that the greater number of aircraft required to haul the same number of people will have the effect of increasing the chances for mishaps. No, my complaint is that the problem with the industry was not properly identified, and the current strategy thus does not get to a solution to that problem. And meantime, the workers are being forced to bear the brunt of this mismanagement, first of the industry into a crisis state, and now of the misdirected recovery. Airline after airline has forced its employee groups to give back very substantial portions of their salary and benefit packages under the duress of the airline's very tottering existence. (I must angrily note that no similar reduction in management standards of living have been effected--on the contrary, we keep hearing about secret plans to reward large bonuses and stock options to management even as the grunts are made to bleed.) And yet we find ourselves in pretty much the same perilous situation as we were in four years ago; the deep cuts have not saved anything; perhaps they will, but it will involve a remaking of the industry into something else.

And that's my beef: this has all become very much like Greyhound. Services and comforts have been sacrificed to enable everyone to travel for $99. And still the airlines bleed red ink, strikes loom, further cuts are threatened.

I will also say this: I have struggled for a long time with the business of trying to suss out justice in compensation, and I must admit I've not found any bedrock in my search so far. What determines a person's compensation? Is it market forces? Is it the value of the thing or service produced? Is it the difficulty of the job in question (say, the training or experience required to do the job)? Who is the high water mark, and will we all agree? Does Celine Dion warrant a $500 million contract? Or A-Rod? Does a surgeon warrant a $400,000 yearly salary? If so, why? What about an attorney? Does it matter if an attorney is able to win multi-million dollar settlements?

The position of airline pilot is changing. The job isn't changing, but evidently the esteem in which the public holds the profession is bending under the same weight that keeps us shopping at Wal-Mart even when we know it's a poison that kills our communities. My perspective from inside the profession (like anyone's from their own desk, I'm sure) is changing over time: this is a job that took me 15 years of my life and a huge financial sacrifice to attain, and where I am given regular charge of 150 tons of machinery that flies at 500 mph. The consequences, at least from some mishaps, can be catastrophic. And I'm witnessing that profession being dragged thru the muck. I have my reservations about a lot of things, but especially from a starting point in 2001 that is considerably less in adjusted dollars from what we were earning in the '70s, I abhor the attempted salvation of a badly managed industry out of the hide of my profession (among others).

In the words of the immortal Esbee: Harumph.


Joshua said...

I think I have made this argument in this space before, but I think it may come down to government subsidies. It seems to me that until the government takes the airlines off welfare, they have no incentive to operate out of the red, at all. (I typed "in the black" first, but that just sounds like cinemax). So the CEO can make 500,000, and everyone on his board almost as much, and they can still charge 99 bucks, because good old uncle Sam is giving them a dollar for every one they come up with themselves.

Meanwhile, we have become so dependant on the airlines, that everything I just wrote is a pipe dream, and cannot actually become reality, because too many people would bitch if they had to pay twice as much and fly half as often (as is most liekly the case under a fair business model)

Jetpacks for everyone, that's the onyl real solution.

Kate said...

No doubt our priorities as a country are all screwed up. Celine Dion....please. (She said with disgust.)

Anonymous said...

Good point with the RJ issue. I take it you had one of those barely off welfare jobs with the regionals? Its a bit unnerving to think that the guy in the front might be making 15K a year...not to mention he is riddled with debt from flight school.

RJs will continue to clog up the airways. Their pilots will make less and less. And since there does not appear to be any rush to build new looks like we will continue to be on a ground hold for the next decade.

Next discussion topic: RVSM- good or bad?

wunelle said...

Yeah. Celine Dion. $500 million. Hmmm.

I did in fact do a seven year sentence in the regionals. And you're right, I didn't even address the question of the clogging of places like ORD and ATL, which are operating at capacity to begin with. Now we double the number of airplanes to carry the same number of people: you do the math. And you're right again, with no new airports, we better plan to do a lot of waiting for our uncomfortable ride.

RVSM. I guess all modern airplanes have performance and autopilots which should make this no more an issue at 410 than it would be at 250. But with an autopilot malfunction up high that leaves you with little margin. But hell, we couldn't run into someone if we tried, so I suppose it won't come to anything bad! ;-)

Sue Ellen Mischke said...

your readers are much more mature than I, because I can't get past...

"circle jerk"

hee hee

Esbee said...

I miss Piedmont. That was a great airline.

mango said...

I have thought the same about huge salaries as well. I mean, once you get to a certain point, all the numbers are essentially meaningless. Celebrity aside (cos they exist in a weird Hollywood vacuum), a surgeon or someone getting $400,000 a year - I just can't comprehend it, or why it's necessary. I'm sure they could live just as comfortably on half that, a quarter.

Anyway, I think money breeds desire for more money, which is creepy. Sure, every now and then I fantasise about marrying an oil sheik and living a Champagne lifestyle but the truth is I don't know if I could handle that kind of waste.

Ho hum. What's your take on the situation in London, where there are planes flying out of Stansted etc almost constantly, and you can find flights offered for one quid plus taxes - ?? I know that some of those flights have mental turn-around times, like seven minutes, at the end of each trip. That blew my mind - talk about greyhound!

Mandy said...

Very interesting post - as someone who has been spending a ton of time on airplanes lately with little to no knowledge of what's behind the curtain, do you think that deregulation was the start of these kinds of problems, or is it more embedded than that? Like I said - totally ignorant here, just curious what you think. Hope you reached your destination safely, with sanity intact!

wunelle said...

Mango--I never really got to my point about salaries, but I agree that at some point a line is crossed and material comfort and well-being are definitely abandoned and it becomes about something else (status or acquisitiveness or whatever). I can more easily grasp a surgeon at $400K by far than I can sports stars or entertainment celebrities (I mean, a million bucks per star per episode for Friends?! Give me a break! All they have to do is frickin' look good and remember their lines. But, again, the show makes bazillions for somebody... So what to do?).

As for the Stanstead thing, I'm not familiar specifically, but it plays right into what I'm thinking. That really IS Greyhound (and more specifically, my job is being turned into a bus driver, which, given what is involved, is unacceptable to moi).

Mandy--It's my own view that while deregulation may not be the source of the problems exactly, it has taken regular market pressures and contributed and amplified everything into the morass we currently see. Airlines are allowed to compete with each other even in ways that are unsustainable and which will cause great havoc. I think it's pretty much universally acknowledged that the current crisis is actually a question of who has the most cash on hand to "out-wait" the other airlines while EVERYONE has priced themselves below what they need to to sustain operations.

One of my pet peeves is that airlines operating under bankruptcy protection do not have oversight of their practices, at least not enough to keep them from using their "protected" status (wherein they cease paying pensions and have drastically cut health care and wages) to charge even LOWER prices, hoping to take their neighbors' passengers away. This is their "competitive strategy." This has the effect of forcing solvent companies to compete with people who are universally not meeting their financial obligations--and this is seen as a fair course of business! True to form, the only major passenger carrier not currently in bankruptcy (or very recently emerged) is American, and they are squawking that everyone else's costs are lower than theirs. You can see where they're headed: give us the same concessions or we'll declare and TAKE the concessions.

I just think that if this is what it takes for the market to regulate the industry, the cost is simply too high--in pain and suffering and human misery for thousands and thousands of families. I have so little faith in government, but in this case I think the market is just too cruel to be the sole regulator of such a volatile industry.