Archive for the ‘Aviation Careers’ Category

Career progression

Friday, October 9th, 2015

Career progression. It’s a huge point of discussion among pilots. But what is it, and what exactly does it mean? It depends on the carrier.

At an airline like Southwest or Alaska, which only flies one kind of airplane, career progression means something entirely different than it does at a carrier that flies multiple fleets. The same principle holds true at the regionals.

At a carrier like Delta or FedEx, career progression generally refers to movement both up the seniority list and up the pay scale. Most airlines pay the same rate for new hires, no matter what equipment they fly. But from Year 2 on, pay usually reflects the size of the airplane, given that larger airplanes produce more revenue, and hence can pay more.

Pilots generally want to maximize salary first, with schedules and quality of life following in importance. In order for that to happen, a couple of pieces need to fall into place.

First, retirement of more senior pilots has to occur in order to open up positions on larger equipment. Second, hiring needs to occur. More specifically, there can’t be any shrinkage or stagnation of the pilot group as those retirements take place. Third, overall fleet growth can significantly help. This is a key part of the equation at single-fleet airlines, because a first officer can become a captain simply by virtue of growth—even if the seniority list consists of relatively young pilots.

This is how I was able to become a captain at Comair in less than three years. In fact, over my 16 years there, I only moved up 500 total numbers because the average age was so low.

The last piece of the puzzle at a multi-fleet airline is the contractual freeze. Every airline incurs a freeze when you bid from one position to another in order to minimize training cycles and get a return on the investment of training you in a new airplane. Those freezes are generally two years, and usually there are substantial roadblocks to bidding backwards.

But not every airline works the same way with regard to pay. It’s becoming more common to have pay “bands,” in which groups of similarly sized aircraft pay the same. United pays the same on the 737, A320, and smaller 757 fleets. The 747, 777, 787, and A350 all pay the same as well. This is designed to take away the incentive to bid up based on pay, and  encourage the pilot to bid based on other factors, such as schedule or preferred domiciles. UPS is a prime example; it pays all captains and first officers the same rate no matter the equipment.

To use United as an example, the airline operates the A320, B737, 757/767, 747, 777, and 787, and will add the A350 in a couple of years. To fly all of them as a first officer while complying with the two-year freeze would take a minimum of 14 years.

But career progression is as much choice and preference as anything else. Most pilots want to fly the best schedule their seniority can hold in the domicile that best suits them—which might be because they live there or because it makes for the easiest commute. There are almost always opportunities to make extra pay that can often make up for the difference in the pay rates from one airplane to another, so pilots will bid fairly selectively. It’s not uncommon to see a first officer fly his or her first airplane for several years, then move on to a wide body for a couple years, with possibly a mid-range aircraft thrown in if the stars align. When the opportunity to fly as a captain comes up, the re-evaluation process starts over. As tempting as the money is, the schedule matters as well. Remember, seniority determines your domicile, the trips you can fly, and the weeks of vacation you can hold. Learning a new airplane is a stressful experience for any pilot, and the training process can be fairly lengthy, which affects the family life.

The same process holds at the regionals. The difference, however, is that regional pilots  tend to bid much more aggressively because of the low first officer pay and because everyone is jockeying to get their pilot-in-command time to move on. Very few pilots go the regionals with the intention of staying.

Progression is an individual definition as much as anything. Often, being able to fly the schedule you want is more important than the increase in pay you might see on a larger airplane. But eventually, assuming your seniority can hold something bigger, the increase in pay becomes too much to ignore.—Chip Wright

The times, they are a’ changin’

Monday, September 14th, 2015

My, oh my, how the times have a’ changed.

I’ve been doing the airline gig now for almost 20 years, more than 16 of which was were the regionals. When I got my first job, it was the norm to have pilots pay for the own training. In my case, it was a check made out to the Comair Aviation Academy, for $10,995, plus another $2,000 in lodging and food during that training. To make things worse, I didn’t officially get hired until after I had passed thecheckride. Instead, I was in an aircraft-specific “training course.” This was a common practice for companies to work around prohibitions in union contracts that forbid—on paper—pay-for-training policies.

Once I got on line, I was making $16.79 an hour, with a 75-hour guarantee. My first full calendar year (1997) saw me make $14,605 dollars—which included a $7-an-hour raise for the final six weeks of the year—a net pay for the year of less than $1,000.

For years, first-year pay at the regionals was an embarrassment, and while the percentage increase in years two and three were substantial, it was still pretty lousy, especially if you were the lone bread winner. Today, the regionals are reaping what they (and their major airline partners [both management and pilots]) have sown: the long-awaited pilot shortage is finally here, and it’s hitting the bottom line. Flights are canceling, and airplanes are getting parked for a lack of crews.

The airlines are responding. Understand that the regionals can’t just raise pay for two reasons: Union contracts must be collectively bargained, and a regional gets its revenue from its major partners. Even if they have wanted to raise pay, they can’t do so until they get assurance from their major affiliates that they will be reimbursed for the added costs. Only when both of these provisions are met can pay raises be implemented.

Of late, the solution has been for regionals to offer some sort of bonus to new hires. This gets them around the collective bargaining issue, and it also allows them to dictate the terms of the bonus.

Loan repayments also are an option. For instance, Envoy offers both $5,000 and $10,000 bonuses, depending on whether or not you are coming from an affiliate flight school. However, the bonuses require the pilot to agree to a two-year commitment. Even Skywest, which took over Comair’s position as the regional of choice, is offering a $7,500 bonus. In fact, Skywest has recently been doing a lot of recruitment-by-mail, sending post cards to pilots on the FAA registry in the hopes that they might be interested in a job. They are casting such a wide net that they are even recruiting some of their own pilots!

The result of all of this has been a dramatic effect on first-year pay. According to ATP’s website, the average first year pay is now more than $30,000, and in a couple of cases, it approaches $40,000. It’s by no means a king’s ransom, but it’s a vast improvement over days gone by. There is still a long way to go to get pilot pay where it needs to be, especially considering how many pilots the industry needs to attract and convince to make the investment in a flying career over the next couple of decades.

But this is a start.—Chip Wright

Disability insurance

Thursday, September 10th, 2015

When you’re in your 20s and 30s, it’s hard to imagine that your health will ever be seriously affected by anything. It’s bad enough to imagine getting cancer or a sleep disorder, but what about something less serious, such as a broken bone (or two or three)?

Pilots are unique in that our health affects both our direct and our legal ability to report for work. Something as simple as back pain can keep us at home. We are bound by the terms of our medical certificate to be of sound mind and body. If you work in an office and break your leg or your arm, you can still come to work. You may even be just as productive and as efficient with the injury as you are without it.

Not so with flying. If you break a leg skiing or an arm playing softball, you’re grounded until it heals. Further, if your medical expires during your injury, you will likely need a flight physical to return to work. If you don’t have sufficient sick time in your leave bank, you could face a financial strain. Most airlines only allow a sick time accrual rate of a few hours a month.

I don’t want to sound like a salesman, but I’ll take the risk. If you get hired by an airline, opt into whatever short- and long-term disability insurance the company and/or the union offers. Rates are based on age, so it’s cheaper when you’re younger, which is also when you’re not so well paid. It’s an investment that is worth making in yourself.

Over my career I’ve seen young and old pilots be out of work for extended periods of time through no fault of their own. One, in his late 20s, was out over a year because of a severe automobile accident. One was out for two months with a broken leg that was slow to heal. Another was out for nearly two years with a form of liver cancer. A number have been incapacitated by mental health issues and/or alcoholism. In the last couple of years, the FAA has attempted to crack down on overweight pilots. If they ever succeed in doing this, a large percentage of us will be looking at long periods of time off while we try to shed the extra weight.

As a professional pilot, take nothing for granted—especially your health. Get the STD/LTD coverage early, and keep it. With any luck, you’ll never need to thank me for it. But if you do, at least you won’t have to worry about coming up with the money for a stamp.–Chip Wright

Mining the message boards

Tuesday, September 1st, 2015

Forums.jpgThe internet has become a repository for just about any sort of information you care to find. Some of it is even true. A great example is the glut of information forums, aka “the web boards.” If you’re interested in aviation, there is no shortage of such sites to choose from. One of the most famous in the airline world is Airline Pilot Central. PPrune (short for Professional Pilots Rumour Network) is another, and there are way too many others to list.

How much credibility should you give these sites? That depends. While many are fairly organized, they all contain a tremendous amount of negativity. Further, if you’re new to them, you will find yourself spending hours scrolling through old posts looking for good information. Once you are up to speed, you can navigate them quickly and easily for the intel you need.

There are a couple of downsides to these sites. First, as noted, people hide behind a screen name, and many show a decided lack of maturity in their postings. This leads to a lot of bickering. Second, the overwhelming majority of these posts are written by a very small number of people, which means that the opinion of a few may be presented as the opinion of the majority, even if such is not the case. The actual sample size is fairly small. Third, much of the “information” is speculative only, as it is based on rumor and heresy, if not flat-out lies.

However, if you spend enough time filtering the boards that you are most interested in, you can get good information. You can also figure out which of the posters are level-headed, honest, and objective. When you notice these people, write down their names, especially if what they are posting pertains to the arena of flying you are interested in; it’s even better if they are working (or have recently worked) for a company that you are pursuing.

Once you’ve made note of a few of these folks, initiate personal (“private”) conversations with them. See if they are willing to spend some time on the phone with you. Ask your questions; write down their answers; and ask follow-up questions. Do this with several pilots in each category or forum. You may get conflicting information, but that isn’t necessarily bad. You can assume that many people have different experiences to draw from, and that in and of itself can be good.

One of the problems with being new to these discussions is that you sometimes don’t realize what you don’t know, which can only add to your confusion. The lingo can be new and overwhelming. It’s hard at times to understand how pilots—who clearly love to fly—can find themselves unhappy in their jobs. Some of this is self-inflicted, and some is caused by circumstances they didn’t predict. Your job is to find out which is which, and then try to understand what it is that you would personally have difficulty with, and find a way to avoid a similar fate. Not always easy, but it can be done.

The internet forums can yield significant good information, but you need to know how to find it, and you need to know how to source it. APC is a wealth of great info about the airlines. But it’s only a part of that information. Actually talking—by phone and in person—to pilots who are living the lifestyle you are interested in is another major part of that information.—Chip Wright

Familiarity versus unfamiliarity

Monday, August 24th, 2015

There’s a saying that familiarity breeds contempt. Unfamiliarity can do the same thing. In aviation, we see the familiarity side of things when we throw caution to the wind (or worse). We ignore checklists. We rush. We do…dumb things. Most of us have been guilty of this. Examples abound: forgetting to turn off the master switch in the FBO’s Cessna, only to get a phone call later; forgetting to untie (or tie) the tiedowns; forgetting to lower the landing gear.

It’s natural to let your guard down when you’re in a comfortable environment. The good news is that you are comfortable in a place where you don’t really belong. The bad news is that you are prone to making mistakes because “it could never happen to me.” That’s probably what you said the last time you locked your keys in your car. In fact, such a dumb, easy mistake has forced the automobile manufacturers to idiot-proof cars as much as possible to try to avoid this, but people still find a way to validate human idiocy.

When you are overly familiar with something, either it’s time to force yourself to re-adapt the good habits, or it’s time to change your habits. Take the car keys. Once you’ve made this mistake, you quickly learn to check that the keys are in your pocket/bag/purse/suitcase/whatever before you close the door. You’re still looking to make sure that they aren’t in the car, but instead of looking to see if they aren’t where you don’t want them, you’re looking to see if they are where you do want them. The goal is the same, but the process is different.

With the master switch, an easy way to fix the problem is to always leave the anti-collision light on. That way, if you walk away from the airplane and see the beacon on, you’ll know that the master switch is on.

Unfamiliarity also can create problems, especially when the change from one piece of equipment to another is fairly drastic. For example, at my old airline there was a famous story—true—of a captain who transferred out of the turboprop and into the jet. Without getting bogged down in details, he was forced to leave an engine running after pulling into the gate. That by itself is no big deal; it happens all the time. Generally speaking, within a few minutes, he would be able to shut it down. Well, a few steps in the chain weren’t completed, and he was new to the airplane, so he was out of his comfort zone. Further, in the turboprop, a running engine could be easily seen (the spinning propeller) and heard (it was right next to the cockpit window). With a tail-mounted jet, you don’t see anything, and you don’t hear much more than anything.

He found out that he had left the engine running when he got a call from the station after he had arrived at the hotel. He had to talk the ground folks through the shutdown over the phone. In the end, nobody was hurt, but the lesson was learned: Try to know what you don’t know.

Familiarity and unfamiliarity can both be dangerous, but for different reasons. If you find your normal routine is not working, change it to one that does.—Chip Wright


Monday, August 10th, 2015

It’s early on in your academic training these days when a teacher refers to the GIGO principle. Simply stated, if you are using a computer, it doesn’t matter how great the machine or the program is if you input bad data. If you put in garbage, it will give you garbage results. Garbage in, garbage out: GIGO.

In flying this is a very real concern, particularly when it comes to programming a GPS. It’s one thing if you inadvertently put in a wrong fix that’s close to the right one, but that’s rare. What’s more likely to happen is that you put in the wrong fix or the wrong piece of performance information, only to suddenly find yourself asking what is going on. When the airplane makes a turn you aren’t expecting, you’ll be scrambling to figure out where the mistake is. It’s great if it happens on the next fix. That usually becomes readily apparent. It’s not so great if you programmed in the wrong fix several legs down the road.

This is an easy mistake to make on a GPS that is programmed with a knob, and it’s an easy mistake to make in a crew environment. I’ll give you an example: I was in a simulator event, and I had the airplane doing exactly what I wanted it to do. Trying to stay ahead of things, I decided to program the climb performance, not registering that the performance I was asking for was for the cruise climb. Asking the airplane to change its profile would cause all kinds of problems on the departure procedure. Following our prescribed procedure, I asked the captain to verify what I was getting ready to do. He did. I hit the button and executed the new plan. To my horror, the airplane began to accelerate and climb like it had a date with Mars.

I quickly turned off the autopilot and autothrottles, and I asked the captain to reprogram “the box” while I hand-flew and kept us out of further trouble. In my peripheral vision, I saw the instructor smile and write furiously. In the debrief, we got kudos for catching the problem immediately and fixing it, but we also got a reminder that GIGO can happen at any time, at any place. It was a great lesson, and it happened in the sim, where nobody could get hurt.

I’ve flown now for more than 20 years, and I have a litany of such GIGO examples—some mundane, some not so much. What I can say is that I don’t tend to make the same mistake twice, but I’ve learned that I am never going to be immune to this kind of error, which is good, as it keeps me on my toes.

But if you want to see how catastrophic GIGO can be, just look at the report for American Airlines Flight 965, which crashed into a mountain in Colombia in 1995 because of a flight management system programming error. It’s a stark reminder of how quickly things can go wrong, even for an experienced crew.—Chip Wright

Where are they?

Monday, August 3rd, 2015

womens-pilot-shirts-MZMy first real aviation boss, who also became one of my instructors as I added ratings, and later a friend with whom I argued feverishly at times. One former girlfriend (and her mother). Two of my students. A small number of my first officers, and only two of the captains I flew with at my first airline, and so far, none at my current one. Only a few of the pilots in my current base, out of a total of nearly 200.

And that pretty much sums up the majority of women I’ve known in aviation. There just haven’t been that many of them. Supposedly, the FAA register of pilots is made up of around 600,000 pilots, depending on how you do the math. Of those, only 30,000 or so—a measly 5 percent—are women. Five percent! That’s an abomination. It’s also a huge marketing opportunity for general aviation, flight schools, et cetera. The ratio at major aviation colleges often isn’t much better.

I have two daughters, and they have grown up with me being a pilot. They have traveled with me (and because of me), and they’ve seen the benefits of aviation, both in the practical sense and as a means of making a living. If I had to buy all the seats we’ve used, my bill would be triple the national debt. They’ve sat in my cockpits and ridden on my flights for fun, out of convenience, and out of necessity. They have both at times talked of following in my footsteps—maybe not to fly for a career, but to take advantage of the opportunities that being able to fly offers. They often don’t understand why more people don’t fly more often.

They’ve also asked me why more women don’t fly. It’s rare enough that they definitely notice when they have a female crew member. When they recently rode on a 747 with a female captain, they thought it was the “coolest thing ever”—but it also made them mad that there aren’t more of women commanding 747s and 380s.

It bothers me, too. The female pilots I’ve flown with have been among the best I’ve flown with, male or female. One of them, who is one of my best friends and can fly circles around most other pilots, is on the short list (four or five) of people I’d like to have in my airplane in the direst of emergencies.

We need women in aviation. It’s hard enough to be involved in an activity of any sort when it is as expensive and time-consuming as flying. If you don’t have the support of the people in your life, it becomes a dream that can quickly die on the vine. For many of us, those people include or spouses, mothers, daughters, and girlfriends. That alone should be reason enough to involve them.

But it’s more than that. Women are more frequently earning more money, and they need a place to spend it, and they need goals to pursue. Why are we not doing more to entice them to learning to fly? They don’t all need to be on the track to be airline pilots or G-V pilots for a Fortune 500 company. They can fly sport planes, or ultralights, or a Cirrus to visit Mom and Dad. We just need to get them to the airport and introduce them to what we already know, and then let them fully embrace it on their own terms.

Two of the best aerobatic pilots in the world are women. One you’ve heard of: Patty Wagstaff, who can do things with a, airplane that would make most of us sick. The other is Katie Higgins, the first woman to fly with the Blue Angels. Women have commanded the space shuttle and spent months on the space station. At small airports, however, too many are relegated to working at the counter, and not enough are flying or working on the airplanes. Oh, I should mention: Two of the best mechanics at my first airline were ladies.

Women I’ve spoken to have told me that they have a few reasons for not flying: If the airlines are the issue, they are conflicted by the schedules and time away from the kids they want to raise. If it’s general aviation, they are often afraid that they will be treated the same way they often are when they need to get their car fixed (ripped off, played for dumb, sexually harassed, and assumed to be out of their element); and they often don’t have a mentor to guide them. Their perceptions may not be accurate, so it’s up to us to prove that those perceptions are wrong, and make them feel welcome.

We can all do more, and we need to. If we had as many female pilots as male pilots, the pilot population would more than double. Think about the opportunity that presents. Think about opportunity, period. As a group, let’s find a way to provide it to the women in our lives that might enjoy aviation, and let’s do it the same way we want it done for ourselves: honestly, respectfully, and with open arms.—Chip Wright

Scheduling cancellations

Monday, June 29th, 2015

This is the last in a short series of blog posts that covers just a few of the business practices employed by the airlines. In the first two I discussed ticket pricing and oversold flights. In this one, we’re going to cover another headline-making topic. It happens every year with snow storms in the winter and thunderstorms (or worse) in the summer: Airline flights get cancelled by the hundreds. How do the decisions get made?

The process has changed a bit because of two relatively new rules. The first was the Airline Passenger Bill of Rights. This is the law that arose because of the JetBlue delayed-flight fiasco in 2007. Passengers were stuck on planes for more than 10 hours, and years of frustration finally bubbled over. The rule that was eventually passed assessed fines of as much as $27,500 per passenger for delays exceeding three hours for domestic flights and four hours for international flights. Many predicted that the new rule would lead to far greater numbers of flights being cancelled ahead of bad weather. Those predictions have been borne out.

The second rule that has changed the way airlines handle cancellations is FAR 117, the new airline pilot duty and rest limits that came out of the Colgan Air 3407 crash in Buffalo, New York. Pilots are much more limited in what they can legally do when delays begin to build up. Further, they are required to have more rest, and more importantly, more rest “behind the door”—that is, rest that is computed based on actually getting to the hotel. There is no more any resting during the van ride to the hotel. This has had huge implications on operational practices.

Taking into account these two rules, the airlines study a number of factors in determining which flights to cancel. Cost is always the bottom line.

“Cost” is measured several ways. High-revenue/high-value customers (or flights) are protected as much as possible, whether domestic or international. Airplane maintenance schedules play a much bigger role than most would imagine, whether it is schedule maintenance or getting the plane in place to fix a single item that needs repair (not every type of spare part is kept in every location). International flights also get a premium because of the expenses involved in accommodating so many people. Also, the rules for inconveniencing passengers vary by country, and in several, the rules are much more passenger-friendly than in the United States.

As you might imagine, having aircraft and crews out of position plays a major role the decision-making process. As weather changes and airlines are forced to deal with diversions, they are sometimes caught between the proverbial rock and a hard place because the weather frequently determines whether or not it is best to continue the flight to the original destination, or to move the airplane to another location to help recover the schedule.

A number of factors go into this kind of decision: airport curfews; crew legality; airplane legality (maintenance again); the availability of alternate transportation for passengers; the availability of hotel rooms; even the availability of fuel.

The overwhelming majority of these decisions are handled by sophisticated computer programs that automatically rebook passengers. However, sometimes the decisions are manually manipulated or controlled. Even when you work in such an environment, it’s easy to scratch your head and ask, “Why are they doing it this way?” Often, there is a big picture involved, and you have no idea how all of the pieces will fit together. You just find yourself hoping that your own inconveniences are minimized!—Chip Wright

Oversold flights

Thursday, June 18th, 2015

In my last blog post, I said that I was going to deviate a bit from my normal career advice in order to cover a few points in the actual business of running an airline. After all, if you’re going to work for one, it helps to understand the how’s and why’s of some of what airlines do. This time, I’d like to delve into another not-clearly-understood practice: overselling flights.

There is no question that it is one of the most frustrating business practices in the United States. Airlines routinely sell more tickets than they have seats (except for jetBlue, which makes a point of not doing this).

This doesn’t happen anywhere else, or at least not by design for a time-sensitive product. It’s one thing for Apple to run out of new phones or tablets because demand exceeds production capability. But those products are not as subject to meeting a need based on a time factor.

A seat on an airplane, however, is about as time-sensitive as it gets, especially if it’s important. And let’s face it, it’s always important to the person getting—or about to get—screwed. I can’t help you feel better when it happens to you, but I can at least give you a bit of insight.

Airlines oversell for one simple reason: because they can. Generally speaking, they know that a certain number of people are not going to show up. We’re not talking about missed connections; we’re talking about the traveler—usually a business traveler—who doesn’t show for one reason or another. Those travelers make up a percentage of the seats on a given airplane, and it is that percentage that is usually—but not always—oversold.

If an airline has data that says that 10 passengers on flight 123 from ABC to XYZ don’t show up on a consistent basis, they will oversell by (usually) no more than that number, and often by less than that number. On the days when everyone shows, they then figure out what to do.

So, how do they determine who is going to get stuck? Each carrier has its own formula to follow, but it usually consists of some mix of the following (not necessarily in this order, and not limited to this list): last ticket sold; cheapest ticket sold; connecting versus non-connecting passengers; vacation package bought from the airline; the last person checked in; does the person getting bumped live locally (thus saving the airline a hotel room)?

The airline may also take into account that the next person who should be losing a seat may be part of a group of passengers, yet they only need to lose one passenger total. Unfortunately, you’ll never know. One thing you can count on: Unaccompanied minors are almost never denied boarding.

How can you fight back if it happens to you? It helps if you can argue persuasively that your travel plans will be unduly disrupted. For instance, if you are trying to make a cruise, you may be able to avoid being pulled. Likewise if you are connecting to an international flight, especially one that doesn’t run every day. Otherwise, you’re at the airline’s mercy.

There is one exception to the above rule of overselling by the number of no-shows, and that is the issue of performance. Sometimes, the airplane isn’t necessarily oversold, but the flight can’t meet performance requirements (usually related to single-engine climb) because of hot temperatures/short runways or runway contamination (snow or standing water).

Other times it may be because the flight is carrying an abnormal amount of fuel for the alternate, or because it’s overweight because of excessive bags or mail. As sharp as the airline reservation computer programs are, they often can’t take such random events into account well enough to try to control sales and loads.

One last trick: If you want to know if a flight is oversold, go through the act of buying a ticket on that flight the day before or the morning of, and see if one is available on the airline’s website. And then just hope that if it is oversold, it isn’t your number that comes up.—Chip Wright

A (very) brief explanation of ticket prices

Thursday, June 11th, 2015

I’m going to stray a little bit from my typical career advice, and I’m going to discuss a few of the airline business practices that tend to drive everyone crazy. One of those is the issue of ticket prices.

As most of you know, airline ticket prices can vary wildly even on the same flight. It’s very possible to have two passengers sitting next to each other who paid a difference of hundreds of dollars for their tickets. What gives?

512px-NWA_Airline_Ticket_JL2703First of all, it helps if you think of an airplane as a venue for a concert or a baseball game. When you buy tickets to a game, you expect to pay more for a better seat, such as one behind home plate or along one of the baselines. You expect to pay less to sit in the “nosebleed” section.

Flights are similar. First class, business class, and seats with extra legroom demand a higher fare because of the benefits or added comfort of sitting in those seats. That’s simple enough. But what drives the rest of the pricing differences?

American Airlines, under Robert Crandall, perfected the use of modern pricing algorithms (it’s actually a trick he learned working for, of all places, Hallmark). With today’s computerized reservations systems, airlines use sophisticated computer models to adjust the pricing of every seat as soon as a seat is sold. This is one reason why it costs less to buy a seat well in advance of the flight.

The airline already knows what the basic cost of a flight will be, and therefore how much it needs to sell each seat to make money on that flight, which allows it to set the basic fare.

Next, it needs to collect all of the various fees and taxes that might be required—landing fees, passenger facility charges, security fees, et cetera. These can easily add more than $100 to the price of a ticket.

As soon as seats begin to sell, prices begin to change. (In fact, if you use the same computer to check the prices of a flight several times, the website can [and often will] use the cookie it has placed on your computer to gauge your interest and raise the fare.) Prices also change as the date of the flight gets closer.

Because airlines get most of their revenue from business travelers, the prices go up quite dramatically within 14 to 21 days of a flight, since this is when business travelers buy most of their tickets. This is similar to the concert or ball game analogy: Supply has diminished, and demand often rises. The airline is, in effect, scalping its own seats, and it is doing so to its best customers, because roughly 5% of the passengers provide almost 95% of the revenue.

Something else is at play as well. The airline doesn’t collect nearly the revenue from leisure travelers as it does from business travelers on a per-seat basis. So, if the mix gets slightly out of whack, ticket prices will move, especially if the “out of whack” portion of the equation means that more leisure travelers are buying tickets than usual. In addition, if passengers are using frequent flyer miles to buy the seat, either prices will increase or the number of seats available for redeeming miles will decrease or even disappear (think of Hawaii).

Just like a concert or a ball game, there can be a last-minute deal, and it can be great one for the consumer. The Yankees may sell a few tickets in the second or even third inning, but an airline can never sell a seat on a given flight once that flight has left the gate, and even the Yankees won’t sell tickets after the fourth inning or so. Therefore, sometimes they will offer steep discounts just to fill the seat at the last minute.

Ticket prices are maddening at times, but there really is a method to the madness, and a madness to the method. Or something like that!—Chip Wright