The article below ran in today’s New York Times. It’s worth a read. One important insight isn’t mentioned, though. While the article states top salaries have been whacked by 1/3, the dollar has simultaneously inflated significantly.
I recently did some pay analysis to get a feel for what has really happened with airline pilot salaries. Using comparable calculation techniques and CPI data, I came up with a very grim picture. In the late 1970’s, top pay at the majors was well over $500,000 per year in 2007 dollars. After 9/11 but before the pay cuts started kicking in, top pay at United (just to cite an example) was back up to ‘just’ $375,000 in 2007 dollars. Now, using those same calculation methods, it’s under $190,000. So while ‘absolute’ dollar pay rates may have decreased by 30-40%, in inflation adjusted dollars, it’s been closer to 50%.
At World, the picture has been different (and would also be at Cargo carriers like FedEx and UPS). While the legacy carriers were undergoing substantial pay cuts, we have been getting pay raises. The gap between their pay and ours has closed from around 120% (as recently as 2003) to about 20% (a 6-fold reduction). Despite absolute dollar pay raises, our inflation adjusted pay has actually decreased by over 5% just since 2002. Those pay cuts don’t take into account the further injury of the dramatic decline in the U.S. Dollar against foreign currencies, which we’re required to spend during much of our time at work (we haven’t had a per-deim raise since 2002).
With that backdrop, enjoy this article (not sure I got the paragraph’s right):
For Pilots, Dreams Run Into Reality
By JEFF BAILEY
Published: April 10, 2008
IRVING, Tex. — Among the jobs little boys dream of — policeman, fireman, bulldozer driver — airline pilot long held the added virtue of satisfying grown-up dreams: pay that reached $300,000 a year, 20 days a month off work, the prestige of one day commanding a $200 million airplane, and a lush retirement at 60.
But the airline industry’s financial collapse this decade did away with much of that, leaving thousands of young men — and increasingly women — chasing a dream toward a disappointing reality.
“My wife thinks I’m nuts,” said Jason Captain, 32, of Fort Worth who left the Navy last November, walking away from $75,000-a-year lieutenant’s pay for flying military brass in and out of Guantánamo Bay. He started training last month to fly a 76-seat regional jet for a Northwest Airlines subsidiary and expects to make about $21,000 his first year. Like most airline pilots, Mr. Captain had his heart set on flying “ever since I was a little kid,” he said. “I can’t see myself in an office.”
In recent years, he and his wife, June, were in the odd position of saving part of his military pay so they and their two sons could afford to have him work in the private sector. It could take him a decade to work his way back up to his former income.
He hopes, of course, to jump ultimately to the big jets at Northwest Airlines, where the most senior pilots can still make more than $150,000 a year, but there is no guarantee he will get there. And, with the airline industry ready to go into another swoon because of high fuel prices, Mr. Captain and other junior pilots could find themselves furloughed.
“You’re much better off going into plumbing, from a purely financial perspective, ” said Ed Grogan, a financial planner in Gig Harbor, Wash., who has pilots among his clients.
The military is turning out fewer pilots, so aspiring aviators increasingly attend private flight schools, emerging with as much as $150,000 in student debt. Student loan payments can exceed $1,000 a month.
After Sept. 11, 2001, the biggest domestic airlines reduced their fleets by hundreds of planes, so they needed fewer pilots. And through actual and threatened bankruptcies, airlines managed to cut pilot pay by 30 percent or more. Many pilots lost big parts of their pensions. Work hours increased.
Certainly, top pay of $200,000 a year at the biggest airlines, down from $300,000, is still a nice living. But cuts at big airlines were just the beginning of the decline in pilot careers. Regional airlines, which pay far less than hub-and-spoke carriers even after the pay cuts, expanded to handle much of the flying that bigger airlines had abandoned. Many new pilot jobs are like the one Mr. Captain is taking, with a rock-bottom starting wage that creeps slowly toward $100,000 a year. Poor pay and fewer big-airline jobs to move up to have led to fewer applicants, creating a pilot shortage that is most acute overseas but is also felt here.
Regional airlines have had to reduce hiring standards drastically. Earlier this decade, they could insist on a candidate’s having at least 1,500 hours of total flight time before an interview. Today, that minimum is 500 hours at many regional carriers. The decline is contributing to safety concerns among some experts.
The seniority system — a new pilot starts at the bottom at most airlines, earning the lowest pay and getting the worst shifts — limits job-hopping. So choosing the right employer the first time around is crucial. Moving from first officer, the right seat, to captain, the left seat, brings the biggest leap in pay and status. Thus, Mr. Captain, who looks forward to being called Captain Captain, turned down a job at American Eagle Airlines, the regional division of American Airlines. It initially paid better, but the wait to upgrade to captain is six and a half years. At the Northwest regional carrier, Compass, which is growing, he could make captain in as little as one year.
But things change. Network carriers like United Airlines and Delta Air Lines hire regional carriers, which are separate companies, to fly feeder routes from smaller cities into hub airports. But the big airlines renegotiate contracts every few years, often switching carriers to reduce costs. That means today’s fast-growing regional
airline could be laying off pilots tomorrow.
“It’s a nightmare,” said Kit Darby, who retired a year ago as a United pilot and runs a pilot job fair business, Air Inc. Some pilots leave the business. Paul Rice, a vice president of the Air Line Pilots Association, a pilots union, said that in previous decades nearly 100 percent of furloughed pilots came back when temporary layoffs ended. Since Sept. 11, 2001, though, 30 to 35 percent did not
return when offered their old jobs.
At Mesa Air Group, a big regional carrier, 784 pilots left last year, some moving up to hub-and-spoke network carriers, some moving laterally to other regional airlines and about 10 percent leaving the business altogether, said Michael Jayson, until recently the pilots union chief at Mesa. Turnover is high at some other regional airlines, too.
Todd Lehmacher, 39, learned to fly as a teenager and worked a variety of airline jobs in crew scheduling and as a ticket pricing specialist and flight attendant while accumulating the flying hours to be a pilot. “It was something I just had to do,” he said.
He was hired by Mesa in August 2005, but long hours and unpleasant
relations between pilots and management wore on him. He sometimes slept on the plane during late shifts — “camping trips,” pilots call them — that required him to fly again early the next morning. He said he often worked a 13-hour day to get in five hours of flying time, the only hours pilots are paid for.
Mr. Lehmacher quit last September and runs a travel agency in Phoenix that sells cruise trips to airline workers. Mesa officials did not return phone calls seeking comment.
Samantha Negley did not get the flying bug until a boyfriend took her up in a four-seat Cessna in 1999. It was a bright day in San Luis Obispo, Calif., and they flew over farms, across the beach and over the ocean. “He let me take the controls. It was amazing,” said Ms. Negley, who is now 30.
She graduated from college that year with a journalism degree and spent four years working odd jobs — tending bar, substitute teaching, tutoring — to save money for flight lessons. Landings were her favorite part.
In an essay for a $1,500 scholarship she won to supplement her flight school costs, Ms. Negley said she planned a life around flying. “In five years, I plan to be a captain at Mesa Airlines,” she wrote. “In 10 years, I plan to be a first officer with a major airline, awaiting my chance to upgrade.”
She was accepted at a New Mexico flight school that feeds pilot candidates to Mesa and was hired in 2004. “The day I found out was like the best day ever,” she said. Making about $15,000 initially, and saddled with $50,000 of school debt, she moved in with her sister in Washington, flying out of Dulles Airport.
A typical day had her up at 5 a.m., at the airport by 8 a.m., and making three flights spread out so that the last one landed about 10 p.m. Then it was wait for a hotel shuttle; sleep; get up again at 6 a.m. She also worked overnight shifts, sleeping across a row of seats and being awakened by a gate agent in time to brush her teeth in the plane lavatory and tuck her shirt in before passengers came aboard. “It was crazy,” she said.
“I was enjoying the landings. I was living my whole life for those three minutes a day.” Otherwise, she thought, “this is the worst life ever.”
She quit last July and went to work at Mattel, where she writes copy for packaging of Hot Wheels and other toys. She makes more money and has whittled her student debt down to $30,000.
She knows she will be home every night in Long Beach to walk the dogs. She plays beach volleyball. And became engaged in February. “Normal job. Normal life,” she said. “I know I made the right decision.”