Understanding Wage Cuts

May 25, 2003

The wage cut proposed for the ACPA pilots is rumoured to be 15% - lumped in with management cuts for some reason. Other employee groups at 10%.

All groups will give it up in other areas of their contracts, so the wage cut numbers are purely optics to make the package more palatable.

The RUMOURED pilot proposal is to create TWO wage brackets, based on the 767 and 737 types.

There can be arguments made pro and con a "forumula pay" system that AC pilots use, but that DOES happen to be the current system. This system is meant to create pay increments, and basically that's all that needs to be understood for this immediate discussion so that I don't get bogged down dealing with that issue. The point that needs to be understood is that the creation of the brackets bypasses a MAJOR portion of the whole pay system - rightly or wrongly - but there IS a major pay consequence to that.

The RUMOUR is also that there will be sustantial layoffs.

In the pilot group, when layoffs occur, without even considering wage cuts concurrently, pilots will have to "downtrain" into lesser paying positions. For example, there will be A320 Captains, "demoted" in effect, to A320 First Officers creating an automatic pay cut of approximately 40%.

Implementing pay bracketing, all A320 pilots will move to the 737 scale - a major cut - LESS 15% on top of that. That same A320 Captain downtraining, mentioned in the previous paragraph, moving to an A320 First Officer now moves B737 pay scale (40% + a decrement to 737 + a 15% decrease).

Likewise, 747, 340/330 captains will be taking major cuts in the bracketing to 767 rates under the RUMOURED proposal with an additional 15% tacked onto the reduction of that 767 benchmark, too.

Each of the other items in the RUMOURED package have a cost attached adding a great deal to that 15% also.

So, the 15% that the press will readily grab onto as an easy figure, and that apparently comparable is purely for optics. 15% is NO WHERE CLOSE to what the actual increase will be in the BEST case, and light years away from people downtraining from Captain to First Officer, or FO to Cruise Pilot.

Of course the greatest wage cuts - 100% decrease - will fall to the group furloughed if the RJ is moved from the mainline to Jazz.

Then there's the pension issues...

My POINT is that bandying about the figures of 10% for one group, or 15% for another are NOT comparable across unions or their contracts, nor in the implications or total impact upon the members.

...imo!

JW

dragon · May 25, 2003

Excellent synopsis Jim. This is a career issue and I am happy to see the ACPA executive approaching it that way.

Now, what is your perspective on the - possible - alternatives.

May 25, 2003

Excellent post JW. We'll never see a fair reduction in costs spread evenly over every employee group, but the impact on the pilots is very severe, especially considering that on a global comparison scale the pilots are very productive and not particularly expensive. That's why the hourly wage cut itself should be identical for all employees. The other factors you mentioned will distort it further, but starting out with a higher percentage cut just puts too much bias on the pilot group, giving too much wriggle room to employee groups on the high end of the global comparison.

LongTimer V · May 25, 2003

I see a demotion also on top of the pay cut,but like you say i'm lucky it won't be to U.I. wages.

From what i understand the pilots pension is the most underfunded of all the plans,where as my IAM pension has a surplus.Don't ask me why this is,but could be because of better investment decisions by the people who run the plan

May 25, 2003

Hi JW,

I agree with your post, it's well written. I've also heard the pay to be lumped into 767 and 737 groupings.

The F/A's concession package also includes lots of little ditties that effectively destroy the fun factor in the job. I think this is intentional to make it no longer a "career" job, but a transient one. They are offering a "photo-negative" package where they can get full pension with normal early out penalties until a certain date, then after that a 10% penalty on all. They are looking for a large number of senior ones to just leave, and they will probably get their wish here. I added a copy of the concession demands.

Little items loom large, like the hotel being decoded by the company, with huge cuts in per diems. I guess it'll be the Super-8 on the edge of town on $24 bucks a day.. A trivia item on this job of ours: A pilot or F/A will spend over 7 years of a 30 year career living in a hotel somewhere on layover! (Including holidays, some sick time, and assuming they don't do many turn arounds. That's a huge reduction in work conditions. I think we are seeing a wip-saw overreaction in the industry that will drastically reduce the numbers of those looking to a career in the Airline Business. Over time it may change back, but that will take a while.

It looks like a Judas style offering by Jazz to grab what they can from mainline. Sad to see such cannibalism in the industry. I had an offer to go fly a 767 out of NRT starting course early July. Sadly, it's more tempting with each passing day. So far I've said no.

The F/A offer almost looks like they want CUPE to say no. I wouldn't have thought this possible before, but a look at the list tends to make you think otherwise.

Nail

Company Requests for Increased Productivity

Eliminate all job security provisions (LOU #23)

Increase maximum monthly limitation from 75 to 90 hours and reduce monthly days off to 10 for all

Increase voluntary extension from 85 to 100 hours per month

Change sick leave entitlement from 12 days/yr to max. allotment of 48 hrs/yr.

No accrual and no carry forward of sick leave

Reduce statutory holiday allotment from 12 to 9 days per year

Change vacation entitlement by 1 week for all employees with over 6 years of service and pay vacation at 2.35 hours/day instead of trip credits missed.

Eliminate all vacation that conflicts with pairings

Eliminate premiums: route, language, in-charge, night flying, draft

Reduce duty period guarantee to ¼ and trip hour guarantee to 1/6

Pay for actual flight time (not the greater of actual vs. scheduled)

Wage scale alteration – eliminate two top tiers of flight attendant scale and create one I/C rate of step on scale for every 12 month vs. current 6 month

Revise pay protection to equal monthly minimum guarantee

Eliminate primary care days

Long range flying: consolidate and amend provisions to eliminate penalties, allow load crewing, use a single I/C, utilize a maximum duty period of 20 hours, etc.

Eliminate paid recurrent training

Union to withdraw all non-disciplinary grievances

Union to withdraw complaints before the Canadian Industrial Relations Board

Reduce pay scale by 10%

Hotel selection using cost efficiency criteria

Eliminate cleaning/footwear allowances

Reduce per diems

Eliminate aircraft restrictions in LOU #24 (ZIP)

Eliminate restrictions to create new classification structure

Alter scope provisions to allow for all CL-65’s to transfer to Jazz

Additional 100 seat regional jets – f/a salary capped at $38.16 per hour

Introduce Preferential Bidding System

Company Requests for Additional Salary Items

Eliminate “Me Too” and “Cola” provisions

Equity/Profit Share Program

Pay increases of 1.0% January 1st, 2005 and 1.5% January 1st, in each of 2006 – 2009

Company Requests for Pensions and Benefits

Employees who retire by July 1st, 2003 would not have their pensions affected

Effective August 1st, 2003, pension benefits for remaining active employees would be reduced by 10 per cent.

In lieu of these pension benefit cuts, employees could take a maximum 7.3 percent wage cut for the 2004-2008 period

The benefits program will be re-designed, with increased employee premiums ($240 per year more for singles, $612 per year more for families).

Other

Collective agreement extended to June 30th, 2009

All new hires subject to lower ceiling on maximum pay rates by category

Layoffs in the range of 2000 – 3000 by the end of August 2003

May 25, 2003

I suspect it has more to do with the date of valuation...

May 25, 2003

'It looks like a Judas style offering by Jazz to grab what they can from mainline. Sad to see such cannibalism in the industry.'

Give it a rest Nail. It is not the fault of JAZZ. Its the sign of the times. Costs must be trimmed and JAZZ has a lower cost structure; now more than ever.

If you want to blame someone blame ACPA.

May 25, 2003

Cpt Rogers,

"It looks like a Judas style offering by Jazz to grab what they can from mainline. Sad to see such cannibalism in the industry."

I'm assuming you are Dave Rogers of "Rogers Sugar" company, Social Credit MLA, and Speaker of the BC Legislature fame. If so, rich comments like the one above must have been crafted in the years spent sitting in the BC Leg listening to the grandiose posturings of Bill Vander Zalm. I'm sure that's where the biblical reference came from. Anyhoo, like most things from the Zalm era, it has style (??) but lacks substance

ALPA was asked the same question ACPA was. Can you come up with solutions to help save this company? Apparently, ALPA took the question seriously and became proactive. It developed a BUSINESS plan instead of a small offering of half-hearted concessions. As the full plan has not been made public, I think it's a little premature (for both groups)to celebrate/despair. Secondly, I think you'll find that it is not ALPA's intent or desire to fly the mediums and heavies under the AC banner. We are a regional company and desire to fly the "regional equipment". Something we have been prevented from doing by the ACPA business model of the past.

Take care!!

May 25, 2003

You don't think that by the time ACPA, CAW, CUPE, and the others have had their turn at the alter that costs wouldn't have been similar? It would appear that Jazz (read ALPA) would go to any milepost necessary to garner any possible gain from Mainline (read ACPA) I wonder how the JAZZ F/A's would feel about taking an equal percentage productivity hit as are the mainline F/A's? I imagine they lack the same "zest" as would ALPA to sell the farm. Time will tell. As they say, if it looks, smells, feels, and tastes like guano, then chances are excellent that is what it is.

Nail

May 25, 2003

"It looks like a Judas style offering by Jazz to grab what they can from mainline. Sad to see such cannibalism in the industry. "

WOW, all those years spent as a Social Credit MLA in BC really paid off. Your ability to spin words hasn't been lost. Nice touch with the biblical reference. Kind of brings back warm memories of Bill Vander Zalm..say hi to him from a once card carrying member !!

Anyways, I think it's a little premature for both sides to celebrate/despair. This is not about ACPA or ALPA winning/losing. This is about keeping a company alive. When the company asked both groups to come up with cost savings solutions ALPA took it seriously. A comprehensive business plan versus half hearted concessions was developed and presented to the company. As someone who comes from a business family, I'm sure you can appreciate that. Secondly,I think you'll find that it's not ALPA's intent or desire to aquire all of AC's aircraft. Our desire as a regional airline group is to fly the regional equipment. That's it!!

Best wishes to all the employee groups, mainline and regional !!

May 25, 2003

>>Why is it that people in the AC family believe they should not be subject to furlough?<<

Where did I leave you with that impression?

Regarding the majority of AC pilots, I DO NOT believe that AC pilots expect that they can not be furlough. I have NO idea where you might have aquired your own rather twisted sense that AC pilots appear to have some sort of entitlement to jobs for life. OF COURSE NOT. It was only about 8 years since the last recall from the last furlough.

The prospect of furlough was there in the early eighties, then later in the eighties as the flying was given over to the, then so called, feeder airlines, and with the removal of the three pilot aircraft, the Gulf War I, the recession of the early '90s, high fuel prices, very high interest rates, etc, there was an actual furlough in 1993 - IF you will remember.

I doubt that any pilot feels that they are immune for pain in the CCAA process, and on the other hand I'm not about to be an apologist for making a decent wage for a the responsibility, either. If any pilot in Canada (of which there are about 7000 commerically licence pilots I believe - some of which will not be active - 3500 with AC mainline and ZIP, 700 approx with Jazz) that does not expect to feel some negative consequences to their overall careers, then they should give their heads a shake - really! This CCAA will change aviation in Canada for a LONG time. I suspect the pension underfunding issue will like faeces into the airconditioning device, as many companies look a major underfunding of pension issues.

>>Welcome to life of a pilot.<<

Yeh, man, thanks. After over thirty years of hands on flying, I'm starting to feel like I have a bit of a clue about all of this pilot stuff

...you assume, and presume quite a lot, imo, unless you were talking in generalities.

...again, only imo!

JW

May 25, 2003

Hi CJRT,

I agree with much that you said, however the Rogers you are refering to is Steven Rogers, former Socred MLA, and now happily retired from Air Canada I'm sure.

I normally find Dave's comments to be very bright, but it's difficult to believe that any mainline or regional pilot still sees developments of this sort as Judas-level betrayal. Not to mention that, as you say, we still don't know what the devilish details are.

neo

May 25, 2003

>>Why is it that people in the AC family believe they should not be subject to furlough?<<

Where did I leave you with that impression?

My impression is that you were talking in generalities, and possibly not to the posting that I had made.

In any case, my sense is that you presume to much. You've presented an obvious bias, about 3500 or so AC pilots, without backing up the statement in any manner. It's tough not to respond fairly agressively to comments such as that. Try to keep an open mind.

Regarding the majority of AC pilots, I DO NOT believe that AC pilots expect, at all, that they can not be furloughed. I have NO idea where you might have aquired, what appears to be a notion, that somehow AC pilots assume some sort of sense of entitlement to jobs for life. OF COURSE NOT. It was only about 8 years since the recall from the last furlough! Everyone hire since has been in the shadow of that. Anyone from CDN - more than 1000 pilots - have likely been furlough, and some furloughed multiple times!

The prospect of furlough for AC was there in the early eighties, then later in the eighties as the flying was given over to the, then so called, feeder airlines, and with the removal of the three pilot aircraft, the Gulf War I, the recession of the early '90s, high fuel prices, very high interest rates, etc, there was an actual furlough in 1993 - IF you will remember.

I doubt that any current AC pilot feels that they are immune from CCAA pain. On the other hand I, and I believe the majority of AC pilots, are not about to be an apologists for making a decent wage for a the responsibility, either.

If any pilot in Canada (of which there are about 7000 commerically licence pilots I believe - some of which will not be active - 3500 with AC mainline and ZIP, 700 approx with Jazz) that does not expect to feel some negative consequences to their overall careers, then they should give their heads a shake - really!

This AC CCAA will change aviation in Canada for a LONG time.

In a more national sense, I suspect the pension underfunding issue will be faeces contacting the airconditioning device, as many companies look a major underfunding of pension issues. So much for Government oversight!

>>Welcome to life of a pilot.<<

Yeh, man, thanks. After over thirty years of hands on flying, I'm starting to feel like I have a bit of a clue about all of this pilot stuff

...you assume, and presume quite a lot, imo, even if you were just talking in generalities and not particularly address my posting.

...again, only imo!

JW

May 25, 2003