Wall Street History

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Wall Street History

10/09/2017

The Airline Industry...Becoming A Pilot

Ireland’s discount airline giant Ryanair has been suffering from a self-inflicted wound.  They carelessly changed the vacation window for their pilots (changed the schedule), which had everyone scrambling to take time off before they lost it, resulting in all the pilots putting in for basically the same time off.

This meant that the airline, looking ahead to the fall, for example, had a severe shortage of pilots, resulting in hundreds of cancellations.  So if you planned a vacation for, say, the Canary Islands (popular for Europeans) around Christmas, you were suddenly told the flight(s) you may have scheduled months earlier were no longer going to be available.  Needless to say, the result has been chaos (though the airline continues to rake in the traffic).

CEO Michael O’Leary, complaining there is a pilot shortage, didn’t make himself any friends aside from the scheduling debacle when he also said airline pilots are “very well paid for a very easy job,” working in a role where “the computer does most of the flying.”

As one pilot told the Irish Independent regarding this last point:

“An autopilot can’t land an aircraft in a storm – a pilot can earn their entire year’s wages in one landing during adverse weather conditions.”

But on the broader issue of the industry and becoming a pilot, I asked a good friend, B.C., who flies for a major commercial airline today after years as a fighter pilot, having graduated from the U.S. Naval Academy, to share some of his thoughts. 

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There is no pilot shortage. There is a pilot pay shortage.

The long answer: No one in their right mind does what pilots do.

Get a college education.

Tack on an additional $150K-$200K of debt while you navigate the tricky shoals of a Byzantine system of flight schools and gaining flight experience and qualifications (all the while being one medical issue or failure on a checkride to being dead in the water), just so you can take a job for $25K a year flying night freight for a few years, just so you can qualify for an entry-level job as a regional airline pilot making $25K a year (they’re paying bonuses right now to attract people, but unwilling to make substantial changes to entry-level pay, which proves my point).

After 4-5 more years in the regionals (rapid advancement and decent pay up to $80K-$100K a year), you are now eligible as a mid-thirties person (still $150K-$200K in debt) to apply to start all over again at a major airline for $50K a year (still passing your annual or bi-annual physicals, and annual checkrides in a simulator WHERE ALL OF YOUR LICENSES ACCUMULATED TO DATE ARE ON THE LINE, something even brain surgeons aren’t required to do).

But, hey, at least when you’re in your late 40s, you get to upgrade to Captain at a major airline, start making enough money to begin repairing your family’s balance sheet and start trying to save for retirement (hoping the company doesn’t declare bankruptcy and take some or most of that), all while going back to being junior in bid status, flying weekends and holidays, missing more birthdays and school plays and kids ball games.

All to then be forced to retire at age 65, just as you’re making good money and starting to consistently get a weekday schedule.

[Or, you can come up thru the military for similar crappy pay, deployed overseas for months (years?) at a time, with the added possible thrill of getting shot at.]

All while the company intentionally stalls your contract negotiations for almost five years (allowed, even encouraged by the Railway Labor Act!), and buys back stock from institutional investors to the tune of over $5B, only to be re-issued as bonuses to company executives in what is little more than an organized/sanctioned money-laundering scheme. And that’s at by far the most fiscally responsible airline in the history of aviation!

Meanwhile, the government and consumers, further exacerbate the problem by flying on airlines like Norwegian, who skirt international aviation rules to incorporate for labor laws in Vietnam so they can scour the world for minimally qualified pilots.

Yes, it’s a glamorous lifestyle.

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Wall Street History will return in a few weeks.

Brian Trumbore

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