But I'm coming to think that maybe I'm managing my blood pressure badly. Certain, shall we say, lifestyle choices may be working at cross purposes to my health goals. I'm not referring to my 50 extra pounds, though that's certainly a fair topic for discussion. No, I'm referring to my regular acquaintance with the USA Today. If I didn't read the damn newspaper, I'm convinced that my blood pressure would be just fine.
Today, for example. Two articles conspire to drive me c-c-craaaaazzzyyyy.
Exhibit A: Airline Problems Keep Worsening, Study Shows.
WASHINGTON (AP) — More airline passengers bumped, more bags lost and fewer on-time flights. For the third year in a row, those problems grew worse for the industry, according to an annual study that rates airline quality.
"They just don't get it yet," said Dean Headley, an associate professor at Wichita State University and co-author of the study being released today.
An industry spokesman does not expect travel troubles to improve anytime soon.
"We're going to see more delays, and those delays translate to cancellations, mishandled bags and unhappy passengers," said David Castelveter, spokesman for the Air Transport Association, a trade group for the major U.S. carriers. "It's not a pretty picture."
Now, god knows I'm not trying to set myself up as an apologist for the airline industry. I believe I've vented my issues here before. And indeed I'm not disputing the study's findings. No, I'm disputing the premise that anybody has any business expecting any other outcome from this business model. Acting like this is an unexpected state of affairs is like pricking your finger and calling it "bleeding disease." If we cater to supposed consumer demand for $150 tickets, and if we meet this demand by putting everybody on a 50 seat jet flown by an airline subsidiary, a subsidiary which is not a legitimate career destination for its workers, as surely as the sun will rise in the East tomorrow we will find ourselves with sub-professional performance. If you take airports and an air traffic control system which are running at and beyond capacity and replace every 150-seat airplane with THREE 50-seaters, your congestion problem has just tripled. No informed person has a right to be surprised at this.
So that story rather darkened my skies a bit. But it was nothing like the cloud of toxic volcanic ash produced by Exhibit B (or maybe we sould call it Exhibit A1) from the paper's Moneyline section: Northwest Details Executive Awards.
Each of Northwest Airlines' top 400 executives will get an average payout worth $955,000 in company stock when the airline emerges from Chapter 11 bankruptcy this summer, the company said Friday. The shares, in the form of restricted stock and stock options, have an estimated value of about $382 million, based on the company's preliminary $7.8 billion valuation. Northwest expects to emerge from bankruptcy by June 30. Executive compensation has been a flash point among Northwest's unionized employees, who swallowed $1.4 billion in cuts to keep the company afloat. Northwest says the percentage of equity that top managers will receive is below average for companies emerging from Chapter 11.
Man. Kafka meets Dick Cheney. Unless you were one of those 400 people, I can't imagine not wanting to go into board meetings or upper management seminars at this company and mow every single fucker down with an Uzi. Even if you grant that the stock and stock options are not money taken out of anyone's hide, what has the management of the bankrupt company done to deserve any bonus whatsoever? Imagine what their bonuses would be if the company was turning a profit! A billion each! Why not give those assets to the people whose pound of flesh was used to purchase the airline's very existence? Only last week a judge barred Northwest's flight attendants from striking over pay and benefit cuts amounting to some 40%, plus work rules that the union had rejected. I can't help thinking that if I were a line worker at Northwest I would refuse to lift a finger until those bonuses were retracted and the unions were granted full access to the company's books, judge or no judge.
I wish it were the only ugly airline blemish currently in the news, but a week ago I read about American Airlines' pilot union protesting the company's top five executives' pending receipt of $21 million in stock payouts. (At least American is turning a profit.)
In a related soul-sapping story, a friend of mine sent me a newspaper article from the St. Paul paper about the flight school where I learned to fly, the same school I was privileged to instruct at for a couple years enroute to my first airline job. Once the biggest flight school in Minnesota, it was shutting its doors in April, bankrupt. The flow of students, once so steady with the promise of a good career at the end of a long and expensive training regimen, had slowed to a trickle. The school's owner, and my former boss, Brian Addis, is looking for work at age 61 after 30 years of being probably the biggest factor in flight training in Minnesota (no small feat with a major airline in town).
"For the past four years, the number of people interested in being a pilot has diminished to almost nothing," Addis said. "All of the information now that people have about the potential for a good stable flying career has disappeared. It doesn't appear to be stable any longer, it doesn't pay any more and there's no future for retirement. The young people just aren't interested in it."
6 comments:
I thought that the quote from the author of the study - that "they have no clue" was right on, even though it is not clear who he is referring to.
The airline industry management has no clue as they manage their business into the ground (figuratively) and the customers have no clue. Customers shop for the lowest price above all else, and then don't seem to understand when that absurdly cheap fare comes with lousy service and poor performance. What do they expect? Management seems to be in a no-holds-barred race to the bottom to see who can sell their seats for less - why are they not surprised that at some point they can no longer pay their bills?
We can only hope that both parties will wise up and the industry can once again sell reasonable service at reasonable prices.
The bit about the NWA execs (how can there be 400 of them??) getting nearly $1Million apiece in stock and options is truly appalling. They justify their outrageous salaries by saying that they are responsible for the success of the business, but then they manage to avoid taking credit when the ship runs aground. Given the losses that all of the NWA shareholders had to endure, and the pay cuts that all of the employees had to take, it is REALLY that the execs would get a handout like this. All the shareholders should have been given the same fraction of company ownership that they had when the bankruptcy occurred and all of them could have then hoped for the share values to rise again.
To further worsen the whole situation I saw another news item today that NWA has formed a subsidiary airline to fly 50-seat jets on their regular long-haul routes. They couldn't work out an arrangement with their pilots and with Mesaba's pilots to fly these jets on these routes, so they just circumvented the whole process and made their own airline (called Compass). As you pointed out, moving to all of these small jets will just worsen the congestion and delay problems, but that seems to be the way the airlines are moving. This seems to be a case of joint stupidity between the airline management and the pilots unions. The only real reason for airlines to move to these smaller jets is because they will pay the pilots of these jets less to fly them, making them a more economical mode of operation. Ignoring pilot pay, it would seem that fewer larger jets would be the more economical way to go, even if they can't quite cater as much to the customers' desires for flights when they want them. Rather than working out a mutually beneficial arrangement for pilots to fly the most appropriate planes at a reasonable wage the two groups work against each other and come up with this sort of crap.
My guess is that the airline industry is very much like any other industry (especially ones that are heavily regulated and dominated by unions), and this case is just more obviously screwed up because you are more intimately familiar with it. Once you introduce artificial criteria into a system (things like - airplane with more seats requires pilot earning higher wages) the system becomes irrational and before long irrational outcomes are to be expected.
I'm sure the economics bear out to a degree, but I just have a hard time believing that three RJs--with their 6 pilots and 3 flight attendants at reduced salaries--constitute such an industry-saving financial advantage over one 757 at the old salaries.
I do agree that the 50 seat RJ enables smaller cities to be served, which is surely a good thing. But I had to ride an RJ a couple days ago out of Knoxville, which is a pretty good sized city. Hard to imagine there aren't enough people to warrant a DC-9 or a 737 or smaller airbus.
So is it all just an exercise in union-busting? I'm not necessarily sure that union-busting isn't sometimes necessary, but in this case I only see malevolent corporate practices. In this case, the unions seem to have failed to apply the pressure needed to prevent industry meltdown. Instead, weak protests are made at these corporate excesses but, like with the Bush administration, no one seems to be able to sway the course.
If the RJs were being used mostly to serve smaller cities, then that would make sense, but I don't think that is what they are up to.
I think their whole motivation must come down to cost savings and more scheduled flights to the same destinations. Maybe the cost savings isn't due to the wages being so much lower that 3 pilots cost less than 1, but due to making those three flights at three different times all with the same pilot (roughly). There are surely limits that they will run into with regard to the number of hours worked by the pilots, but somehow I will bet that it does work out to be lower cost overall.
I know that I have heard lots of wailing and moaning from the NWA pilots who did not want NWA using RJs on their cross country flights. It was seen a nothing more than a move to replace expensive experienced pilots with new inexpensive pilots.
Like so many things in life, I imagine this will swing like a pendulum. We had strong major airlines with big salaries up thru 2000 or so, and then 9/11 knocked the wind / excess capacity out of the industry. The recovery has been funded by cutting salaries in the readiest way: shift the flying to guys already making substantially less (and if you can cut THEIR wages, so much the better). But eventually--maybe--the public will decide that this isn't really how they'd like to get around. For my part, I'm grateful that the RJs exist, but I don't find them very comfortable as the regular way to get around by air. The industry recovers, makes more money, wages rebound, services improve. But I think the old world is gone, never to return.
We'll see if that comes to pass. It's interesting that the newest Embraers and Canadairs are about the same capacity as the smaller DC-9s and original 737s, but the airlines have managed to get them classified as "RJs", with salaries following accordingly. Air Wisconsin for years had the 737-sized BAE-146, but they were the anomaly in the industry: United pilots HATED that a "regional" carrier was flying a mainstream-sized airplane. And, of course, the pay scale at Air Wisconsin was about 1/2 of that at UAL for the same airplane. Now what is the purview of the major airline seems to have shifted toward heavy jets only.
I have run across a similar story from a completely different realm:
A while back Circuit City converted from a commission-based sales staff to a salaried one. In order to continue to reward the more effective sellers they set everyone's salary according to what they had been making on commission.
Lately, while searching for ways to cut costs, management realized that they have some expensive employees. Even if those expensive employees were 'better' than the others the cost of having them around just looked like an excessive expense. So, management selectively dismissed their highest paid staff and has hired new staff at the bottom of the pay scale. As you might guess, this was not a move that was well received by those 3400 employees, roughly 8% of the sales staff, and the rest are probably scared too.
I heard this too. Ugh. The difference here versus, say, a pilot or mechanic at NWA, is that these latter jobs are specific career destinations which take years to train for and to gain experience necessary to attain. The raw injustice is the same, but the actual job at Circuit City may not be so precious (though to the person being fired I imagine it's exactly the same!).
I'm afraid the equalizing of vastly different economic systems will supply a ready stream of these ugly stories for our lifetimes and beyond.
Post a Comment