What happened to the airline industry?

November 8, 2009

I am a certified private pilot finishing up my instrument rating at a part 141 flight school. By the end of all of my training it is going to cost me $40,000 and in return when I get hired by a regional they will only pay me $20,000 at most. I remember piloting used to be a highly respected job, and personally I think it should still be. But airline pilots are being furloughed, getting treated like crap by management, the FAA, Air Traffic controllers, etc. Now being a pilot is my dream job, but there are so many contributing factors that seems to take the joy out of an airline job. Any pilots out there or any one in the industry that can give me some feedback please?

I can tell you what happened first hand, son. I was there!….right in the middle of it!……….The Airline Deregulation Act of 1978!….that’s what happened!
Back then, some egg-head economists and politicians (and, behind the scenes, believe-it-or-not not a few airlines; American and United, specifically) put their collective "intellects" together, got the ears of Congress and the President and decided that a U.S. industry that was a crown jewel in the world of Commercial Aviation, would somehow operate more efficiently and competitively than it did, so efficiently, for YEARS, under government regulation of the route systems and ticket prices.
Almost overnight, new airlines were born; all you needed were airplanes, crews, money and the desire. Want to fly from Dallas to Honolulu? Go right ahead, sir. No prior approval needed…..Never mind that Braniff International, one of the greatest airlines ever to see the light of day, already had the route and was doing quite nicely with about 80% to 90% load factor. Enter American airlines with THEIR 747 and a daily flight. Well, you might be able to fill up ONE Boeing 747 out of Dallas, but you sure as heck can’t fill up TWO of them.
Now, just imagine this same scenario on any number of routes and think of the bottom line effect free entry into the route system would have on an airline’s profits.
This is only one example…..think, also. of new airlines coming in without the cost of union labor contracts…Airline Pilots Associations…Teamsters…etc. that ALL the established carriers had to deal with. They were able to price their seats at levels the established carriers couldn’t match. (very clever way to break a union no?…….now I’m not saying that’s what some front offices may have had in mind, BUT makes you wonder doesn’t it?)
Now, you’re going to think, "well, golly, if ONE airline can compete on my route, I can do the same thing to him, can’t I?" Sure you can! If you hadn’t already taken out a bunch of mortgages on new airplanes to build those profitable routes, you could have competed with, say, American, on her L.A. to N.Y. routes…..the bigger, well-established airlines such as American, United etc. could handle deregulation..they had big war-chests of money…the smaller, growing airlines like Braniff couldn’t do it.
Anyway…..the years passed by with upstart airline’s (Southwest et al) 737s stuffed full of sweating, passengers thrilled at having paid $100 round trip to fly from Dallas. to L.A…..
Meanwhile, as losses mounted on several established carriers: Braniff, Eastern, Pan American, Continental, Ozark, Frontier, the CEO’s got progressively bolder in their contract negotiations. "…sorry, fellas, gonna have to take a pay cut…fly longer hours…more days in the month…less off-duty time at your layover stop..etc. etc…….it’s either that or we’re closing the doors!"
I could go on and on here, but it would really take a book to tell the whole story….bankruptcies, firings, furloughs, the whole 9 yards…progressively evolving into a system that, just a few months ago, produced an airliner, full of people, waiting, due to weather, on the ground for take-off for what was it…14 hours?? …Continental Express, I think…so, sue me if I’m wrong….
I’m not here to list horror stories….look ’em up….nor do I have an axe to grind….I was lucky….yeah, I lost my job, but I went overseas to Asia and Europe and flew over there…….Now, I live in Italy and you know what?…..Deregulation just failed Alitalia!…..maybe I’m carrying a virus and don’t know it……

Comments

10 Responses to “What happened to the airline industry?”

  1. Mad Jack on November 8th, 2009 1:43 pm

    Two things. With the crappy economy people are flying less. Airlines are reducing the size of their fleets and number of flights. It is more cost effective to fly a full plane than a half empty one.

    Also, the high cost of fuel is making them reduce costs. Again, reducing the number of flights to keep the remaining aircraft full.

    The bottom line is that pilots are not in demand.
    References :

  2. Otto on November 8th, 2009 2:19 pm

    The industry as a whole has taken some serious "hits". 9/11 and most recently the economy have taken a hefty toll on the number of jobs and their pay levels. Ths position is still respectable but you can’t expect to jump in at a high pay rate. Get some hours and then shop around for something better. You are also competing with former military pilots that have built up time while serving. Good luck.
    References :
    Former Aircrew Member

  3. Warbird Pilot on November 8th, 2009 2:30 pm

    The industry has been going downhill since the early 60s. The Rickenbackers, Trippes, et al were strong leaders who took care of their "baby". After they retired the bean counters got into it and ruined it.

    Airline management today is definitely third rate and has been faces with some real need to manage, something they proved incapable of doing.
    References :

  4. WRG on November 8th, 2009 3:18 pm

    What everyone else said plus…

    Starting pilot jobs have always been very low pay.
    References :

  5. Rob G on November 8th, 2009 3:35 pm

    Starting pay at regional airlines has always been horrible. The current state of the airline industry has nothing to do with that.

    As far as everything else goes, well, this isn’t the 1950/60s where flying is something that only wealthy people experience. Flying is part of everyone’s lives. The public only cares about one thing when they fly these days… making sure they can get the cheapest price possible (and I don’t blame them). Thus, airlines are driving each other’s prices lower and lower. Given that and the fact that it is so incredibly easy to become certified to work for an airline, you get bad working conditions at airlines. The airline industry has been going downhill ever since airline deregulation in the late 1970s and it will never go back up.

    These days, flying on an airplane is like taking the bus. It is something that is only there to get you from point A to point B. Long gone are the days where pilots were highly respected. IMO, most people view airline pilots as blue-collar glorified bus drivers. Why should they feel any different? Almost anybody with enough money can get a job doing it. It’s not like becoming a doctor where it is hard enough that only small percentage of the public can become one.

    It’s all about supply and demand. As long as there are tons of pilots willing and able to do the job, working conditions will never get better. You are a perfect example (no offense). You are willing to spend all that money to start out at $20,000 / year and possibly spend the rest of your career at a regional. So, why should airline management pay you any more if you are willing to do the job as it is now?

    If you really love to fly, then go for it. The flying is great, however, the job sucks. Have a backup career.
    References :
    I used to be an airline pilot and got out so I could fly for fun and have a normal job.

  6. Techwing on November 8th, 2009 4:00 pm

    What happened is that the people running airlines today are only interested in money, not in aviation.

    In every industry, things deteriorate as soon as the overriding concern for management becomes the making of money. Many industries have been damaged or destroyed because of this.

    The obsession with making money arises when a company is owned by large numbers of anonymous stockholders whose only concern is to make as much money as possible from the company in the shortest possible time. The policies that produce the highest profits in the shortest period are usually destructive to a company over the long term, but since these stockholders will sell their stock and jump ship as soon as profits decline, they don’t care about the long term. These shareholders elect corporate officers who will make lots of money quickly for them. They do not care about the fundamental business of the company—the business that actually generates revenue—so the company slowly dies.

    The early pioneers of aviation owned their companies, they weren’t just managers. There were no anonymous insurance companies or greedy shareholders to please. These pioneers loved aviation and knew how to build and sustain a business around it, and aviation prospered for a time with them running the show. After airlines were gradually sold to those anonymous shareholders, things deteriorated. In the case of the aviation industry, deregulation made things worse.

    You’ll find that in any industry the leading companies tend to deteriorate and fold once the founders and owners of the company sell out to public investors. Once the company is owned by millions of shareholders who care only about a quick and generous return on their investments, the company eventually goes under. Thousands of examples of this could be cited. The airline industry is not immune to the phenomenon.
    References :

  7. Kevin on November 8th, 2009 4:43 pm

    Blame it on the cheap ass passengers who don’t want to pay full price or extra fees!!!!!
    References :

  8. pilota300b4 on November 8th, 2009 4:50 pm

    I can tell you what happened first hand, son. I was there!….right in the middle of it!……….The Airline Deregulation Act of 1978!….that’s what happened!
    Back then, some egg-head economists and politicians (and, behind the scenes, believe-it-or-not not a few airlines; American and United, specifically) put their collective "intellects" together, got the ears of Congress and the President and decided that a U.S. industry that was a crown jewel in the world of Commercial Aviation, would somehow operate more efficiently and competitively than it did, so efficiently, for YEARS, under government regulation of the route systems and ticket prices.
    Almost overnight, new airlines were born; all you needed were airplanes, crews, money and the desire. Want to fly from Dallas to Honolulu? Go right ahead, sir. No prior approval needed…..Never mind that Braniff International, one of the greatest airlines ever to see the light of day, already had the route and was doing quite nicely with about 80% to 90% load factor. Enter American airlines with THEIR 747 and a daily flight. Well, you might be able to fill up ONE Boeing 747 out of Dallas, but you sure as heck can’t fill up TWO of them.
    Now, just imagine this same scenario on any number of routes and think of the bottom line effect free entry into the route system would have on an airline’s profits.
    This is only one example…..think, also. of new airlines coming in without the cost of union labor contracts…Airline Pilots Associations…Teamsters…etc. that ALL the established carriers had to deal with. They were able to price their seats at levels the established carriers couldn’t match. (very clever way to break a union no?…….now I’m not saying that’s what some front offices may have had in mind, BUT makes you wonder doesn’t it?)
    Now, you’re going to think, "well, golly, if ONE airline can compete on my route, I can do the same thing to him, can’t I?" Sure you can! If you hadn’t already taken out a bunch of mortgages on new airplanes to build those profitable routes, you could have competed with, say, American, on her L.A. to N.Y. routes…..the bigger, well-established airlines such as American, United etc. could handle deregulation..they had big war-chests of money…the smaller, growing airlines like Braniff couldn’t do it.
    Anyway…..the years passed by with upstart airline’s (Southwest et al) 737s stuffed full of sweating, passengers thrilled at having paid $100 round trip to fly from Dallas. to L.A…..
    Meanwhile, as losses mounted on several established carriers: Braniff, Eastern, Pan American, Continental, Ozark, Frontier, the CEO’s got progressively bolder in their contract negotiations. "…sorry, fellas, gonna have to take a pay cut…fly longer hours…more days in the month…less off-duty time at your layover stop..etc. etc…….it’s either that or we’re closing the doors!"
    I could go on and on here, but it would really take a book to tell the whole story….bankruptcies, firings, furloughs, the whole 9 yards…progressively evolving into a system that, just a few months ago, produced an airliner, full of people, waiting, due to weather, on the ground for take-off for what was it…14 hours?? …Continental Express, I think…so, sue me if I’m wrong….
    I’m not here to list horror stories….look ’em up….nor do I have an axe to grind….I was lucky….yeah, I lost my job, but I went overseas to Asia and Europe and flew over there…….Now, I live in Italy and you know what?…..Deregulation just failed Alitalia!…..maybe I’m carrying a virus and don’t know it……
    References :
    Airline pilot 30 years.

  9. Caretaker on November 8th, 2009 4:55 pm

    First off considering your cost of education, you’re still ahead of folks who’ve plunked out a few hundred thousand for their education only to find they’ll get only about 30,000 to 50,000, not all but most.

    Secondly pilots30 is right regarding domestic flights, There are no ‘open skies’ for international flights, but the current crunch is International.

    Third as to the current situation, while it’s true the economy has reduced the number of pleasure passengers the real hit came with the huge reduction of business and first class passengers which is where the airlines make the most profit. Coupled with the reduction of business travel based on reduced needs, the internet and video conferencing has caused companies to rethink executive travel. Why lose a key player out of the office for several days when you can often get the same answers in real time with even more participants privy to the information with no loss of productivity.
    References :

  10. JetMech on November 8th, 2009 5:30 pm

    "What happened to the airline industry?"

    Two words….."Southwest Airlines" happened to the airline industry. Southwest has suceeded in cutting everyone’s throat in a race to the lowest possible common denominator. Southwest and all of the Southwest-like-clone low cost airlines.

    Now, Southwest is the high cost airline with mechanics that make $45 dollars an hour. Can you imagine a mechanic making $90,000 dollars per year BASE WAGES in this economy? Now that Southwest has busted all of the unions at the competition and CRUSHED decent wages there, the next target is the $45 dollar an hour mechanics at Southwest.

    Soon they will be down to the "new reality" wages that THEY created for the rest of us. Soon they will join us down at the very rock bottom….all the best years of our lives ruined forever. Each God forsaken day worse than the one before it. 53 years old with no house, no pension and too old to ever catch up….the math is undeniable because retirement savings depend on compounding interest over time….and unless they’ve invented a time machine, I don’t have enough time left to save for retirement after the company stole my pension. Again, the math is undeniable. I am a walking dead man. D.O.A. at retirement. The airline industry murdered me.
    References :

Got something to say?