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Tag: American Airlines

Regional pilot bonuses

If there was ever any doubt about the need for pilots, or the need to try and retain pilots, those doubts have been squarely put to rest.

In August, Piedmont, PSA, and Envoy, all of whom fly under the American Airlines banner, announced significant retention bonuses. All captains are to receive $30,000 immediately, first officers will receive $30,000 when they upgrade, all pilots who stick around for the flow to American will receive $70,000, and there will also be $50,000 biannual bonuses available, with the details to be announced.

This is a blatant admission that the pipeline of pilots is drying up. It might also be an admission of sorts by American Airlines that pilots are not sticking around to get the promised flow to the American mainline. While I don’t have the details about how this program will work, or what the catches are, this indicates that the adage that “money talks” is going to be put to a test.

For example, how long will an upgrading FO have to stay to receive and keep the $30,000 bonus? What if that FO decides to bid back to the right seat for personal reasons? What is the structure of the biannual bonus? And, perhaps most important to so many of the pilots at the three airlines: how long do they have to realistically wait to get a shot at American? If the wait is too long, the problem is not going to be solved, as those pilots who are experienced and marketable will apply to Delta, United, Southwest, et al. If I am in management at American Airlines Group, I would be trying to figure out what to say to get them to stay.

It remains to be seen whether Delta and/or United will feel compelled to do something similar. Make no mistake that while the pilots in question are flying RJs, these bonuses are approved and maybe even initiated by management, since they pay the bills. It is clear that they see a shortage on the horizon.

I recently had a pilot from American on one of my flights, and while this wasn’t yet public knowledge, the overall need for pilots is, and we were discussing the state of the industry going forward. Every major airline will tell you that they all have the same 4,000 to 5,000 who are viable candidates in their pool of applicants. What makes this such a challenge is that, for the first time ever, multiple carriers are trying to hire at least 1,000 pilots a year. Delta, United, Southwest all would love to train more than that, and JetBlue is not far behind. UPS, FedEx and the Amazon contractors (Southern and Atlas) all need experienced pilots. While the pay at Southern and Atlas is still below where it should be, there is reason for optimism that the pilots are on the verge of a new contract that will dramatically increase compensation.

It doesn’t take much to see that four airlines hiring 1,000 pilots each will quickly deplete the current pool of available talent. It’s important to realize that these aren’t just pie-in-the-sky numbers either. While the pandemic is not over, travel demand has rebounded, and people are ready to move. Airlines responded to the downturn by offering early retirement packages that helped avoid furloughs. Retirements are not going to slow down, and every carrier is ordering airplanes that will result in a net growth of their fleets. They wouldn’t be doing this if they didn’t have confidence that the business would be there. In fact, in 2022, United will be taking a new airplane every three days. It’s been decades since the majors have seen that kind of movement.

This is going to create an incredible series of opportunities, but it will also put great strains on each company’s training centers. There will be positions open as instructors, evaluators, course content creators, and more. Recruiters will also be in demand. New and more airplanes will also open up opportunities for mechanics, which is another area of great staffing concern. But for us as pilots, this represents an opportunity to try as many different types of flying as you might care to experience. Ultra long haul, cargo, wide body, narrow body, charters, Boeing versus Airbus…it is all on the table. Some pilots will bid aggressively and fly every plane in the fleet, and others will find a niche and settle in for the long haul in one seat or one fleet. You certainly won’t starve.

I am curious to see the gotchas of the American Airlines Group deal with its subsidiaries, but I do think it is indicative of the state of an industry that needs to work hard to make learning to fly more accessible, more affordable, and more attractive. Let’s hope that this is just the beginning!—Chip Wright

The beginning of the beginning of the end

As we enter the second year of the pandemic, there are signs of an ever-so-slow return to normalcy. In the last couple of months, airports are showing more signs of activity, from more crowded terminals to more flights arriving and departing. Airlines are cycling more airplanes in and out of storage, and more importantly, they are bringing some out of storage for good. At three U.S. based carriers—United, Southwest, and American—the Boeing 737 MAX has returned to service.

The three big federal payroll protection program (PPP) grants and loans have gone a long way to help stabilize the industry. Employees who were going to be furloughed are being kept on the payroll. Pilots are being kept current, and those who can afford to take some unpaid time off are being given an opportunity to do so. (Two of these PPP blocks have already been signed into law; the third is currently headed toward the Senate, where it is likely to pass.)

Now that the U.S. FDA has approved a third vaccine, we can pick up the steady march toward herd immunity in the United States while also sending extra supply to other nations that need it. This is critical for helping achieve a return toward normal levels of trade, travel, and tourism. It will take some time for the global economy to rebound, but once that recovery gains traction, it should be a steady improvement. Time will tell.

In the aviation sector, this is all great news. Few industries are as capital-intensive as the airlines with as few direct sources of revenue. A number of airlines have already failed, and more may well follow. But the best news is that several airlines that were talking about having to furlough are now actively spooling up their hiring processes.

During the pandemic, agreements were made with various unions to offer early retirement packages to employees, including pilots, and it now looks like there will be a faster recovery in some sectors than originally anticipated. Leisure travel will recover first, and maybe even fastest, as folks look to get away from home after feeling trapped for so long. Florida is open, except for cruises, and flights to and from the state are full and—for now—usually cheap.

Business travel will take longer to recover, but that might also make it more predictable and easier to manage. The international business community will take longer to return as nations slowly lift their travel restrictions and the vaccines begin to reach more and more people. That said, trade shows, meetings, et cetera, that were postponed or canceled will slowly be returned to the calendar, and advance tickets will be sought, bought, and sold.

All signs point to the beginning of the beginning of the end of the pandemic, with a nation and a globe full of people desperate to return to a more normal, familiar life. If this is indeed the case, the airlines have weathered an incredibly difficult path—one that would not have been possible without federal aid, but still they will have succeeded.

It’s too soon to say if the pilot shortages of 2018 to 2020 will return, or will be as severe, but I think it is safe to say that those who want to find a career in aviation will have the opportunities to do so far sooner than we might have thought even a few months ago, and that is indeed welcome news.—Chip Wright

Scheduling nightmare

As I wrote this, American Airlines was dealing with a crisis of its own making. Due to a computer glitch, they had a scenario in which more than 15,000 flights might not have been staffed between December 17 and January 1—one of the most important travel periods of the year. How, you might ask, does this happen?

Every airline has some form of trip trading, drops, pickups, et cetera, that pilots and flight attendants can use to adjust their schedule when the monthly lines come out. Some airlines are more flexible than others, but all have rules, policies and procedures in place to ensure adequate staffing.

Each airline defines “adequate” differently, and what one company feels would be a razor-thin or negative staffing model might be one that another embraces. Generally speaking, the models are based on known assumptions as well as a few guesses. Companies will use historical data to figure out how many employees are likely to call out sick, how many of those sick calls will come from line holders versus reserves, how many will run into issues with commuting, and how many extras are needed based on potential bad weather. There is also a bit of plain guessing involved.

As long as the computer software shows that staffing will be sufficient, a fair amount of leeway will be given in schedule modifications. Crews can drop, add, and trade based on the rules in a particular union contract. I don’t know all of the details involved in the American fiasco, but somewhere a human being screwed up, and those flights suddenly were understaffed by at least one pilot.

Every union contract has language in it that deals with scheduling snafus after the schedules are awarded, and generally the company has to eat the mistake. This situation, however, is different. Nobody can afford to have thousands, or even hundreds, of flights get cancelled over Christmas. It’s in the best interest of both sides to work out a deal that entices pilots to pick up as much of the flying as possible. Some won’t, as they may never have been off for Christmas or are certain they won’t be home for Christmas next year. But many will come in, especially if a monetary incentive is offered.

This story is a big deal because of the scope of the problem and the time of year, but it’s by no means unique or unheard of. I was at Comair in 2005 when the scheduling software failed, and more than 1,100 flights were cancelled (also over Christmas). I’ve also seen other issues come up that threatened scheduling integrity, and I’ve learned that the software that handles all of this is incredibly complex, and sometimes, a problem comes up because of a hole in the code that simply needed the right circumstances to become known.

I’m sure American will power through this, but it’s a lesson all can learn from: Take nothing for granted, and when it comes to the holidays, always ask for them off. You just never know when something will work in your favor.—Chip Wright

Buying a new fleet

The Paris Airshow just wrapped up, and as usual, the various manufacturers jockeyed for some large orders. Virtually all orders that are announced at Paris and Farnborough are in place before the airshows, but the airlines and the manufacturers use the events to make a big splash, and this year was no different.

In the U.S. market, United announced an order for 100 new 737s and four new 777s. There was some hand-wringing over the UAL deal, because Scott Kirby, late of America West/USAirways/American, is known to be an Airbus guy, and there were rumors that UAL was going to announce a larger order of A320s and A321neos. So what happened?

Buying an airplane is a major decision for any airline, and for a global carrier like UAL or Delta or American, the narrow-body fleets are the backbone that support the global system. There are three major cost considerations. The first is the actual unit price. As with cars, this is negotiated. Nobody pays sticker price. However, this price is significant nevertheless, and it becomes the starting point for everything else moving forward.

The second major cost consideration is the operating cost for the airplane. This covers everything from fuel to scheduled maintenance to crew costs, and it also takes into account warranties on the airplane as a whole or on the various parts. Somewhere in every airline, there is a bean counter who has broken down to the penny the actual cost of each airplane under consideration, taking into account more variables than most of us can imagine.

The final cost to consider is the long-term cost, which includes the cost of integrating the airplane into the current fleet—especially if it’s a new piece of equipment or represents a departure from the current norm.

In the case of UAL, the bulk of the domestic fleet is the 737. The A320/321 fleet is much smaller and much older. Bringing in new Airbuses would have led to a dramatic increase in training for pilots, and would have negated much of the advantage of the larger 737 fleet, which operates from Saigon to the Caribbean, and from Alaska to Central South America. There will be a high parts commonality between the 737s in use and the new MAX versions on order. Both are known quantities, and both Boeing and Airbus no doubt made compelling pitches to UAL. If everything was truly equal, it may have been as simple as “Buy American.” But it’s almost never that simple.

Delta, on the other hand, will be introducing a new narrow-body soon when it takes delivery of the Bombardier C-Series. Taking on a new aircraft type is not without risk, as United learned a few years ago with the battery problems on the 787. New airplanes are frequently slowed by unexpected bugs, and the C-Series is not likely to be any different. Further, everything about the program is new: new parts, a new engine, new simulators, and new training programs for pilots, flight attendants, mechanics, dispatchers, and gate agents. A new airplane is expensive, and it takes time for the return on the investment to pay off. With luck it does. Today, UAL is ecstatic with what the 787 has been able to do, and the markets it has opened.

New airplanes are critical to get right, as the decision is one that will affect airlines and their passengers for decades.—Chip Wright

A (very) brief explanation of ticket prices

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

Your aviation inspirations, Part I

Thanks to all who provided your aviation inspirations, both on this blog and on our Facebook page. Many of these names are familiar, but some aren’t (to me, anyway)–and researching them for this blog was a treat. There was so much historical information to relay that I decided to break this blog into two installments by alphabetical order. Here’s the first group.

Aviators of the 1920s and ’30s: As Denny Kotz noted, these pilots are the ones “who figured all of this stuff out. It is one thing to be taught how to fly–it is another thing to have to figure it out on your own. They wrote the how-to-do-it book.”

Richard Ira Bong holds the title of the United States’ highest-scoring air ace. He shot down 40 Japanese aircraft in World War II and conducted all of his aerial victories in a P-38 Lightning. He eventually became a test pilot for Lockheed, and died in 1945 while conducting a test flight of a P-80 Shooting Star. Suggested by Doug (no last name).

 

 

 Col. John Boyd. An Air Force fighter pilot and later a Pentagon consultant, Boyd was dubbed “Forty Second Boyd” because, as an instructor pilot, he had a standing bet that, beginning from a point of disadvantage, he could beat any opposing combat in air combat maneuvering in fewer than 40 seconds. Suggested by Randall Tilley.
 
 
 
Gregory “Pappy” Boyington. The World War II Marine Corps officer was a fighting ace who flew a Vought F4 Corsair. During his squadron’s first tour of combat duty, he shot down 14 enemy aircraft in 32 days. Suggested by Randall Tilley.

 

 


Gen. James “Jimmy” Doolittle.
I could easily devote an entire blog to Doolittle, but here are a few of his accomplishments: test pilot, record setter, aeronautical engineer, air racer. He was the first to perform an outside loop (previously thought to be a fatal maneuver). He developed instrument flying. Oh, and during World War II, he carried out a successful bombing raid on Tokyo, Kobe, Yokohama, Osaka, and Nagoya utilizing 16 B-25 bombers. That raid was considered a major morale-building victory for the United States. Suggested by Kayak Jack.

Amelia Earhart.  I could devote another entire blog to Earhart, who was the first woman to fly solo across the Atlantic Ocean. The 16th woman to be issued a pilot’s license, Earhart was a founding member of The Ninety-Nines, the International Organization of Women Pilots. (She and several other competitors in the first Women’s Air Derby formed the Ninety-Nines because they enjoyed the opportunity to meet and commune with other women pilots.) She was a huge promoter of aviation and the role of women in flying. In 1937, during her second attempt to fly around the world, Earhart and her navigator, Fred Noonan, disappeared en route to Howland Island in a Lockheed Electra. Suggested by Gena Gonzales and Kayak Jack

Carl Ben Eielson became a pilot in the U.S. Army Air Service in 1917. The war ended while he was still in flight training, and he wasn’t willing to stop flying, so he and some friends formed the Hatton Aero Club and later flew air mail in Alaska. He is credited with flying the first airplane across the Arctic Ocean, with Australian explorer Hubert Wilkins in 1928. Suggested by Doug (no last name)

 

Roger Fernandez. Don’t look for Roger in Wikipedia–he’s the CFI who signed off Steven Warren for his private pilot checkride at Tullahoma Airport 20 years ago.

Gen. Roy S. Geiger. Geiger has the distinction of being the first Marine to lead an army during World War II. He became a naval aviator in 1917, and commanded a squadron of the First Marine Aviation Force during World War I. Suggested by Randall Tilley

Heli-rescue pilots. As Darrell O’Sullivan says, “They fly at all hours and in weather that is best observed from an armchair on the front porch.”

Howard Hughes. The wealthy entrepreneur–the subject of numerous books and even a movie or two–dabbled in Hollywood film production, but his aviation legacy soars. He set multiple world speed records and commissioned aircraft like the Hughes H-1 Racer (and set a landplane airspeed record of 352 mph in 1935). Later, he designed and built a heavy transport aircraft constructed from wood. Dubbed “The Spruce Goose”–a name he hated–it only flew once, in 1947. Hughes also owned a majority of Trans World Airlines, which eventually merged with American Airlines. There’s much, much more to the Howard Hughes legacy, and I urge you to look him up yourself. Suggested by Robert L. Rhyne III.

In the second part of this blog I’ll relate the rest of the heroes, including some names you can probably guess and some others who won’t be as familiar to you.—Jill W. Tallman