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In this state-of-the-industry episode, host Justin Seals sits down with Dr. Jim Higgins, Professor of Aviation at the University of North Dakota, to break down what's really happening in aviation right now.
They cover:
Whether you're considering a pilot career, navigating the current market, or just curious about where the industry is headed, this conversation cuts through the hype to give you the real picture.
Key Topics: pilot hiring, Boeing, Spirit Airlines, government shutdown, ATC staffing, airline economics, contract negotiations
Pilot to Pilot is the podcast for anyone who flies — or dreams about it. Host Justin Siems sits down with airline captains, bush pilots, CFIs, and everyone in between for honest conversations about the path to the cockpit, the grind of the career, and the love of flying that keeps us coming back. Whether you're a student pilot chasing your first solo or a captain with 20,000 hours, there's a seat for you here. New episodes weekly.
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Higgins, professor of Aviation
at the University of North Dakota.
AV Nation what is going on?
And welcome back to the Pilot
to Pilot podcast.
My name is Justin Seams and I
am your host.
Today's episode is with Dr.
Jim Higgins.
And yes, as you would recall,
that means it is a state of the Industry
episode.
I apologize for not having
these out sooner.
Schedules can be hard to mix
up and life's crazy.
You know, life never stops
being crazy.
But we are also, as pilot the
pilot working on something pretty
cool and pretty big.
I highly recommend you either
follow us on Instagram, go to our
website, sign up to stay up to
date with news that are coming out
because hopefully this time
next month we'll be dropping it.
It's gonna be pretty cool and
I think you guys are all gonna like
it.
But today is the state of the industry.
We talk anything and
everything state of the industry.
We talk Boeing, we talk
airlines, we talk hiring, we talk
everything you want to know.
So go ahead and listen to
this, Share it with your friends,
share it with your dad, your mom.
Who knows, maybe they want to
be a pilot as well.
But AV Nation, I hope you
enjoy today's episode and without
any further ado, here's Dr.
Jim Higgins and the state of the
industry.
Jim, what's going on, man?
Welcome back to the Pilot to
Pilot podcast and the State of the
Aviation Industry podcast.
Always always good to be with
you, Justin, and always good to talk
with your listeners.
Yeah, it's always Good to have
you on.
It's probably one of the most
requested things too.
You know, it's.
When's Jim coming back on?
When's Jim coming back on?
It's like, we try, we try, I promise.
Sometimes it's difficult,
difficult to get schedules going
and just a lot going on.
And there is a lot going on in
the aviation world as well.
You know, Spirit, since last
time we talked, I don't think they
were back in to bankruptcy,
but they are back in bankruptcy now.
There is some movement with
Boeing that we'll touch on where
they're going to go from 38 to
42 jets, which as you said before
we started recording, is a
really big deal.
We're going to talk about
hiring, we're going to talk about,
about just some other cool
stuff that's going on in the industry,
hopefully.
Cool.
And also touch on what you're
worried about, what you're concerned
about.
I did ask on Instagram if you
had any questions for us.
So if we have any time, I will
kind of scroll through my phone so
we see my phone.
I'm not texting someone.
I am actually looking up questions.
I promise, Jim.
I promise.
Or I might be texting someone.
You never know.
But I might fall asleep.
Just kidding.
My students.
Justin.
Yeah, right.
Yeah.
It's nothing no different than class.
Right.
But yeah.
So let's start it off right there.
I mean, I think the number one
topic with everyone right now, with
everyone right now, probably
with your students as well, is they
just see the pullback in
hiring a little bit.
And I say a little bit because
on some airlines end that really
isn't the case.
I mean, I know hiring has
picked back up.
What has changed is the pool
of applicants that's available.
At least that's the way I see
it as a lot of spirit pilots are
kind of full, not necessarily
flooding, but are deciding to jump
ship.
And there is a pool of highly
qualified pilots right there that
have already passed
121training, that already done CQS,
that have flown Airbuses, that
have flown whatever Spirit's doing.
And airlines are kind of like,
oh cool, we'll take them now because
they're already qualified,
know they can pass training.
Spirit, from what I hear, has
pretty tough training.
And they do their check rides
in a very short amount of simulators,
four.
Or six sim sessions or
something like that.
They have, they have a few
more extra cpt.
Yeah, but, but it's, it's
known to be very tough.
Spirit pilots are very good
hires by 121 carriers.
So if you can pass, they are
the way airlines look at it, if you
can pass spirit training, you
can pass our training.
And airlines don't want you to
fail because that's a lot of money
that they're spending and they
want you in there and they want to
make money off you, and they
can't do that if you fail their training.
Right?
Right.
Yeah.
No, that's absolutely right.
Well, let's talk about that
hiring then, just for a second.
So, you know, it depends on
how you look at things, right?
If you look at things
historically, we've actually had
two decent years.
I know it doesn't feel like it
because two years ago, the previous
between four and two years
ago, we had record hiring.
We were north of 12,000 pilots
hired at the legacies, which we'd
never seen before.
And we had two years in a row
of that, which is just crazy.
And then last year and the
year before, we turned to more of
a still historically high
number, but it felt a lot less because
the spigots weren't completely
turned on like we saw the previous
two years.
Now, I will tell you a couple things.
The big uncertainty is the
economy, right?
I mean, things are looking
really good right now.
So I know Delta just came out
and they're estimating a very strong
year up ahead.
I know United's kind of said
the same thing, and so that's good.
We know the retirements
haven't even kicked in en masse at
some of these carriers.
And then on top of that, I
know through internal memos at both
United and at Delta, and I
haven't heard yet on American, but
we have heard that at those
other two that they're going to return
to the hiring levels we saw a
few years ago.
So you're going to see
probably 3 to 4,000 pilots hired
at United and at least 3 to
4,000 pilots hired@ Delta next year.
And those are kind of your bellwether.
And I don't know about American.
I've heard they're going to do
a lot of hiring, too.
But I haven't heard from
anyone that's seen any company memos
or anything like the others
have or any public plans announced.
But it would follow suit that
they would also do a lot of hiring
and those big three, and not
to leave out Southwest, not to leave
out UPS and all the others.
But as those go, we typically
see the rest go because that's where
a lot of the guys and gals
from regionals are pushing towards,
you know, and it just it
causes a really nice churn that allows
people to move on through
their career.
So barring some kind of a
financial catastrophe, you know,
world war outbreak, pandemic,
et cetera, it's looking like the
next couple years are going to
be very, very good.
I don't know if we're going to
quite get back to the 12 to 14,000
hired, but certainly we'll
have a lot more than what we've seen
in the last couple years,
which will be good for everybody.
Just one quick point about Spirit.
You are right.
As the furloughs continue to
kick in there, they're in a double
bankruptcy, which is very unusual.
But as those furloughs kick in
there, those pilots are going to
get fast tracked to other
carriers for all the reasons you
just said.
The Spirit training is known
to be difficult.
I know of people that went to
Spirit didn't get through training
there and they were really
good pilots and they ended up being
sent away.
If you make it there, you're
absolutely in good shape and the
other airlines know that.
And so that could cause a
little bit of an impact in the hiring.
But when you look at the, when
you look at the entire hiring picture,
it's still not going to take
all the slots away.
I know some people might be
wondering that.
Yeah, no, I mean, it won't
take all the slots away.
It might make it a little
harder for your app to be seen because
maybe they're looking for
different things.
And that changes all the time
too, right?
What airlines want at certain
times is different.
You know, they might hire a
ton of 121 guys and maybe either
they leave, they go somewhere
else, they get a little burned, or
maybe they don't pass training.
Like, all right, well, now
we're not going to do a bunch of
121 guys.
Now we're going to focus on
some corporate guys and now they're
going to focus on military.
So they definitely have
different periods.
The only thing that you can
really do is just keep updating your
application and make sure it's fresh.
Make sure that when your eyes,
when there are eyes on it, it is
something that they want to
hit submit.
Because sometimes the hardest
part is just getting your application
in front of their eyes to see,
to hit like, all right, proceed to
the next step.
And that's where you can, you
can get with any kind of recruiting
coaches or any kind of those
programs, they can help you make
sure your resume perfect.
Because, I mean, I've, I know
when I was applying, I applied to
Delta and American.
I remember Delta.
They're like, if you use Delta
and airlines as two words, you would
not get hired.
That's a big deal.
Air lines.
And I was like, big deal.
Same with Alaska.
Yeah, yeah, It's.
It's their airline.
They can call it what they want.
Right.
So no, to your point about
putting your best foot forward, that
that's absolutely important.
I, too, am a big believer in.
In a lot of these services
that are out there, everyone kind
of has their favorites.
I don't particularly have favorites.
I've heard good things about
most of them.
It's well worth it.
It might be several hundred
dollars depending on what you have
them do.
But I know when my wife went
to work at her airline, she sat down
with one of them and they went
through everything.
And I'm not saying it made all
the difference in the world, but
it was shortly after they did
a review of her at the time, airline
apps and a review of her resume.
It was shortly after that she
got called by the airline she works
at now and then also Delta,
which she didn't work out for an
interview.
So, I mean, is it a coincidence?
I don't know.
She certainly was qualified.
But all that being said, I
think that that really helps.
And there will be good
opportunities down the road for all
these carriers and there's
going to be lots of paths.
So I think that's very important.
What's the overall vibe with
your students?
Because when I talk to people
that are either in training or looking
for jobs or even a cfi, they
seem a little bit down because when
they got in the training, they
were promised that this is going
to happen forever.
Right.
The shortage is here.
It's not going to slow down.
This is how it is.
And when you've been in the
industry, you know that you don't
ever kind of listen to forever
or this is going to happen in one
month.
You know, you kind of have.
Have a realistic view.
Like, all right, they say one month.
It's probably going to be six months.
Yeah.
If they, if they say forever,
it's going to be two years.
I mean, the timelines can
differ, but you don't want to hold
on to those words because they
are trying to recruit you, they are
trying to get you to come to
this airline, and they want to make
it sound as good.
And in the moment, that is
what it is.
Are upgrades in 18 months.
But that can change.
It's all fluid.
But there was this, this kind
of like this promise, you know, that
they.
They see all Their buddies go,
maybe they even skip the regionals,
go straight to United, maybe
they are at a regional for a year,
then they move on to Delta,
you know, and now there's a little
bit of stagnation.
And it's harder to get a CFI
job when that happens.
It's harder to get low time
pilot jobs.
That happens because like you
said, the natural progression of
when people get hired, it
opens up other jobs, isn't happening
as much anymore.
Anymore.
That's right.
And I will tell you, amongst
the colleges, and I'm assuming it's
the same way in other places,
there has been a oversaturation of
incoming students, which is
good, but they've flooded the capacity.
But we're also not seeing the
instructors hired that we used to
before.
For instance, at und, I think
they hired, don't quote me on this,
but something about 120
instructors this year.
I'm sorry, 80 instructors this year.
They had 150, 160 apply.
So they're batting about 50%.
I know it's the same at other
colleges as well.
And that's very unusual
because, you know, two years ago,
I'm not going to say we hired
everybody that applied, but you had
a very good chance of getting
hired as a CFI here and that was
the same everywhere.
So you're right, they are
feeling it downstream.
Look to your point, it's 100% correct.
I've said this before on this
podcast, that whenever times are
really, really good and
everyone's getting hired, all of
a sudden people think this is
the way it's going to be forever.
And then whenever there are
people furloughed and no one's getting
hired and it looks like it's
going to, people say, this is how
it's going to be forever.
And you and I both know,
because we've been in the industry
long enough, that the only
thing constant, sorry to borrow cliche,
but is the change.
It's just going to change.
And we're seeing it live out.
Just in the last five years,
we've seen a little microchasm of
that.
We've gone from before the
pandemic, this unbelievable ramp
up the hiring to like boom,
potential furloughs and no hiring
for a while and then boom,
back into this kind of medium upswing
and then to where we're
looking at hiring a lot.
But then you have a carrier
like spirit that's furloughing.
So you're kind of seeing the
whole basket of outcomes in a short
period of time.
And this is A little bit more
like what it used to be in the 80s,
90s and later.
I know your dad was in flying.
My dad was an airline pilot
too, and he started out Northwest,
ended up Continental, then to
ups and he retired now.
But when you look back at his
career, I've mentioned this before,
but about a third of it was
spent on furlough, on strike, you
know, just looking for a job.
So at least it's not back to that.
You know what I mean?
I mean, we're still not seeing
a complete stability, but it's a
lot better than it.
Than it used to be.
Yeah.
And it's crazy how, you know,
one airline can really be struggling
when everyone, not everyone
else, when the majority of other
airlines are having the best
finances they've ever had.
And it just.
Yeah, I mean, I know it does
come down to the type of company
you are and who you're serving
and how you're running that, but
it just seems like right now,
I mean, I brought that up because
you mentioned the furloughs,
because we do have an airline that's
furloughing and it's awful.
Never want to see it, but.
Yeah, it's just.
It's insane.
This, this industry.
There's nothing like it.
I mean, at least I haven't
found anything that is like it.
But it's just, you gotta be
along for the ride.
And when you think, just kind
of have some, some perspective too.
Because if you think it's bad
now, you have no idea what it was
like with the lost generation.
And I'm not trying to minimize
the situation that you're going in,
But I mean, 9, 11, and then
you had a crisis.
I, I have flown with people
that were furloughed for 12 years.
They're like, I was furloughed
for 12 years'.
Took me 12 years to get a call back.
And there's some airlines that
have double furloughees.
Yeah, they got furloughed, got
called back, and then a year or two
later got furloughed again.
Peace.
Yeah.
Yeah.
I mean, talk about a rough.
I don't mean to laugh, but I
don't know what else to do when you
say that.
It's just like, oh, man.
Yeah, it's.
It's insane.
So it does seem like it's
different than what it was two years
ago.
And that is unfair.
I do hear you, but it is, is
going to be a job that you can still
have a very successful career
and you're going to get hired.
It's going to work out.
And I also do want to say, a
lot of times when you get hired,
in the moments when the
industry doesn't look like it's doing
the best, those turn out to be
the best times to be hired.
My buddy, when he was getting
hired in Covid, it was like, oh,
dude, I don't know if you want
to go there.
You know, like, everyone's
like, what are the airlines going
to be like?
What are things going to look like?
And then he finds out he can
upgrade in two years.
Now he's a Delta captain, he's
making a ton of money, and he's got
great seniority, and it was
the perfect time for being him to
be hired and get in with seniority.
He wasn't the moonshot captain
at Delta that was like age 24.
He's probably listening to this.
He's like, how dare you
compare me?
Sorry, sorry.
Well, I mean, I guess that guy
did quite well.
I mean.
But you know, to that point,
if you go back to our very first
podcast that we did together,
it was during the beginning and crux
of COVID if you recall, you
and I discussed this and I even went
as far.
People maybe thought it was a
little bit nuts.
You didn't think it was nuts.
But I said, actually, now is a
pretty good time to come into the
industry because it's going to
take you three to five years to train.
The COVID stuff should be done
by then.
Which it turned out it was
actually done maybe in two and a
half, three years.
So if anything, I
overestimated the impact.
Not by much.
But the point is, those people
that came in in 19, 20, 21, they
timed it perfectly.
But when you first came into
the industry, like no one was hiring
because we were shut down in a
pandemic during that time.
But now look at them.
They've absolutely followed
that trajectory that you mentioned.
And so what we know is in
statistics, we call it, everything
regresses to its mean.
We do know that we will get
these variances, these perturbances,
these disruptions, but over
time, just like a smooth S and P
fund index, over time, you can
smooth it out.
It just always seems to rise
and little variations here and there,
but overall the trend is positive.
And there's no reason not to
believe that we've overcome it.
Everything we've overcome 9,
11, we've overcome the Great Recession.
We actually had a bird flu
pandemic between 01 and 08 that actually
disrupted traffic.
And we overcame that.
We overcame Covid.
I mean, what we've learned is
the industry is pretty resilient.
It doesn't mean that people
aren't having pain like we see at
Spirit.
And just as an aside, I know
I've been kind of vicious on spirit
management.
Maybe vicious too strong.
I've been kind of hard on
spirit management, but I mean, come
on, they were losing money
when everyone else was making money.
And the only people that you
can blame for that, I'm sorry, squarely,
is the management team there.
And they've really let their
people down.
And the other thing that I'm just.
This is, you know, you know, I
have a union background, so this
is kind of easy.
But the other thing that
greatly bothers me there is, you
know, they went through this
bankruptcy stuff and the first round
and they arranged their debtor
and possession, their DIP financing,
which is we've seen in the past.
But then they all paid
themselves, you know, the management
paid themselves pretty good
bonuses there.
And then now we're going right
into a second furlough, you know.
And so, I mean, it's like, what?
Now some people will say, you
know, when there's turbulent times,
who do you want running your operation?
Do you want Michael Jordan or
do you want the person who's willing
to do it for the cheapest
amount of pay?
And I get that a little bit.
But keep in mind this was
pretty much the same management team
that got them to where they were.
So I'm not trying to be mean,
but it wasn't Michael Jordan running
their airline, if you know
what I mean.
It was whoever it was.
And the other thing we have,
we've talked about this once before,
is the low cost carrier
business model been exposed?
Right.
And certainly in the case of
Spirit, you can say yes, but there
are low cost carriers that are
doing just fine.
You know, Frontier and Allegiant.
Now Frontier has slowed its
growth a little bit, but it's still
growing.
Allegiant's doing fine financially.
So, you know, there are
companies that have figured it out.
I know that Scott Kirby's been
out there saying the low cost business
model is broken.
Yeah, yeah.
And it's interesting for him
to say that that hasn't been proven
yet.
Yes, in the case of Spirit,
but that could have just been a management
problem or just some other
external factor.
But you know, these companies.
I don't think the model's been
exposed at all.
But we'll see.
I mean, time will tell for sure.
I don't.
Something stuck in my throat.
I mean, to choke you up on that.
Yeah.
Right.
I don't know if the model has
been exposed per se, but I do think
the bigger airlines have
figured out how to take some of their
customers and I think it
exposed weaknesses in the model and
I think only certain airlines
were prepared for those weaknesses
or they were prepared better
than some of the airlines.
Now can the bigger carriers,
can they find a way to bring, get
more customers and really kind
of hurt the other low cost carriers?
Maybe.
But I agree with you where I
don't think the low cost carrier
model is completely exposed
and completely done with.
But I do think that, you know,
the big airlines, they kind of figured
it out and now they're kind of
teetering like, all right, well,
premium is really hot right now.
It's like, how far do we dive
in the premium bucket versus how
far do we try to take any more
of these customers?
So, yeah, it's kind of an
interesting kind of question that
they have.
And one thing about Spirit
too, and this isn't bashing them
at all, it's just the cyclical
nature which we talked about hiring
also is with companies as well.
There wasn't too long ago when
Delta wasn't doing great.
It wasn't too long ago when
every article, article you read about
United was terrible press, it
was dragging people off airplanes
or it was just unfortunate things.
And now you look at United and
everything that you're reading is
like, oh my gosh, this is the
greatest airline ever.
You look at Delta's profit and
you're like, oh my gosh, this is
the greatest airline ever.
You know, so everything is
cyclical and everything, like you
said, reverts to the mean.
They're going to be up here,
then they're going to go down, then
they're all going to kind of
come back and the top three, and
I don't know as much about
Southwest of the history, but, and
what they're going through is
wild as well.
But the top three, plus
Southwest will say so.
And they all kind of go up and
down, but they seem to ride the same
line over.
You look at it for like a 50
year period.
Yeah, no, that's, that's
absolutely correct.
We have absolutely seen what I
would call a cross pollinization
of business models.
So you've seen the legacy carriers.
What you've really seen is
they now offer this basic economy
product which, you know,
there's no prearranged seats.
There's, you know, you have to
pay baggage fees.
It's very tantamount and
similar to what we see on the low
Cost carriers.
So United, Delta, American,
they now compete like you said, by
offering this lowest piece.
And then like you said, they
also have done very well with the
premium products.
And if you look at some of the
low cost carriers, they're starting
to move into premium a little
bit as well.
So you're seeing this cross
pollinization of that.
One quick note about Southwest.
My big thing on Southwest is
they're juggernaut airline.
They've done really well and
you know, about three, four years
ago they started running into
operational problems.
You know, the big question
mark on Southwest from an investor
point of view has always been
okay, they dominate domestically,
they've got their business
model dialed in, but they don't really
do much internationally.
You know, South America,
Caribbean, Canada, stuff like that's
fine.
They're you know, looking at
Hawaii, some European stuff, but
you know, what about Asia,
what about Australia, what about
the rest of the world?
But you know, they always seem
to be find a way to continue to expand.
Just this last month, I don't
know if you caught that, but they're
going to Alaska.
Now that's new for Southwest.
Yeah, that's a new one for Southwest.
So they're always finding new
ways to get more market share.
And again, you hate to think
of it like this.
It's what we call an airline death.
If for some reason Spirit
doesn't emerge from this second bankruptcy
or its days are limited, that
capacity will be soaked up by airlines
like, well, all the ones we've
talked about.
But Southwest and United and
American and Delta it really well.
And one last point, you
brought it up about Delta.
Delta has just been killing it
on profitability and they just came
out as you noticed, with a new
guidance on it.
And I mean they're making more
money than we've ever seen an airline
make.
So props to them.
You're absolutely right.
Everything's functioning very
well there.
Their optimization on the
revenue management is unlike anything
I've seen.
They control their fuel with
their own refinery.
I mean they've really got this
thing dialed in.
You know, it's taken years to
learn how to do it, but they really
do seem to do it.
It's not to say the other
airlines haven't figured it out,
but there's just no doubt
right now today in terms of just
profitability, not looking at
anything else.
United's really got it dialed
in and yeah, it's looking good for
them.
Yeah.
And I mean just because it's
working today doesn't mean it's going
to work in five Years, right?
Amen, brother.
You never know.
Yeah, you never know.
I do have a question.
I was looking on my phone,
someone brought a very, you know,
it's very out there right now,
the government shutdown that really,
really affects aviation.
What's government contracted
or what's under the government?
Controllers, unhappy
controllers calling out sick.
Pretty sure that's what
stopped the last one from what I've
been reading is that there's a
lot of pressure because no one went
to work.
And if we don't have our
airlines operating, our GDP suffers
considerably.
And the way the comp, the way
the country works just does not work
as well.
And so we need airlines, we
need people in.
So what are your thoughts on
the government shutdown and what
it means for aviation and
aviation safety?
Yeah, great, great question.
As you know, airlines touch
anywhere from estimated 10% of our
GDP.
It's responsible for 10
because it, you know, transports,
logistics, whatnot.
Some have that number as high
as 15%, depending on what study you
look at.
So when it's disrupted, it
absolutely hurts the globe or not.
Not just the United States
economy, the global economy.
So you're right.
So the shutdown, you know, the
ATC system is already stressed because
they don't have enough controllers.
They have to retire at 55, I think.
And you know, it can take up
to three years.
I just saw the numbers the
other day.
It can take up to three years
to get fully position qualified in
a route center tower can take
up to, you know, a year and a half.
That's before.
And by fully position
qualified, that means you're allowed
to be on your own as a
controller and not have a supervisor
if you've ever been flying.
And you hear the second voice
come over the top of the first, that's
a person.
Don't do that, don't do that.
Don't turn.
Yeah, exactly.
And a lot of that's going on.
So it takes about as long to
hatch a full blown controller as
it does a pilot, which we all
know is a long period of time.
So this problem's not going
away anytime soon.
And now when you add to it the
government shutdown, which of course
controllers are exempt from that.
I do have friends in the FAA
that are not.
And what they'll.
Because I do a lot of research
with the faa, what'll happen is during
a shutdown, unfortunately we
have a lot of experience with this.
Now we'll get a message from
our FAA contacts saying, look, I
have not been designated as
safety critical.
Therefore, after this date, if
the government Shut down.
I cannot respond to your text,
I cannot respond to your emails,
I cannot respond to anything.
And that does have an effect
on certain positions if your position's
not deemed safety critical.
Now the air traffic
controllers are deemed safety critical,
but there's still some
secondary and periphery effects.
Some of their support staff,
some of the other things.
And what happens is then is
their job workload increases because
some of the things that they
normally didn't necessarily have
to do or they had support for,
that goes away.
And so it doesn't take much in
an already stressed situation, whether
it's a few key people calling
in sick, whatever the case may be,
it doesn't take much to upset
the system.
And so the government shutdown
certainly is affecting this.
And I think there's been a lot
of articles in the last few days
about how much it's affecting it.
You know, I don't know about
any specific, like sick actions or
whatever, but I could tell you
it's already a stress situation and
there's no way that this
shutdown helps it at all.
Yeah, I mean, I think it was Burbank.
I think Burbank was like, hey
guys, we're not going to have a controller
from this time to this time in
the middle of the night.
I don't, man, I, I don't want
to say airports, but I think there's
one in Tennessee.
I don't think, I don't know if
it was Nashville was having issues
as well.
I mean, and then you look at
airports that already have issues
like Newark.
I mean, this just makes it
even worse.
And it just, it's just really unfortunate.
And then it goes past kind of
the work itself.
It goes also to the psych.
Psychological effects of it.
You're not getting paid for a
very high stress job where you, you
just mentioned you are doing more.
And I'm sure after a while
you're just like, you know, a pilot
makes a mistake, you're just
like, what am I doing this for?
Like, why am I here?
I can't pay my bills with this
because I'm not getting paid to do
this right now.
And I'm just supposed to hope
that my paycheck comes and, and if
I miss a payment on my loan,
like, or my mortgage, whatever it
is, you just hope that they
understand that I'm a government
employee and I haven't been paid.
So it's gonna be okay.
I mean, there's only so much
that a pizza can do to like, raise
morale.
You know, when people buy them
pizzas, it's just you want to see
it stopped, you want to see it
ended because you want to see them
get paid and you want to just
have the safest and the best system
in the background and highly
paid, highly motivated people to
work is going to do that.
And with a shutdown, it's hard
to have highly motivated, highly
paid people because one,
they're not getting paid, right?
No.
Well said.
I mean, irrespective of one's
politics, I think we can all come
down pretty hard on the
political system for letting the
government shut down yet again.
The fact that we can't get
this worked out in this day and age
is ridiculous.
I don't even care who's right,
I just care what's right.
The old CRM idea, don't focus
on who, focus on what.
And right now you're
absolutely right.
I mean, just case in point,
here's a case in point.
If a controller right now
wants to fill, if they want to fill
out an asap, which is
equivalent to a pilot's asap, a reporting
program that, that gives you
some immunity, helps the safety system
increase.
The vendors that handle that,
they can still fill it out and presumably
their protections will still
be there.
But it's not being processed
right now because the contractors
and the folks that do that
aren't doing it right now.
Right.
And so those go into a hole.
So let's say you had like an
altitude incident, right?
And these are just as big a
deals for controllers as they are
for pilots, right.
In some cases, if a controller
gets too many of these things, they
call them deals, they get too
many deals.
You know, it can mean that
they go to remedial training, they
have to re qualify, or it can
even mean, you know, termination.
And so, you know, a pilot has
an altitude deviation, as long as
no one gets hurt, you fill out
your asap, get it turned in, you
know, get blessed by your
event review committee and you move
on.
That doesn't exist right now
and that's just for the controllers.
And that's just one example of
some of these support systems that
aren't available right now.
I mean, I've even heard, I
don't know if this is true or not,
but I mean, just think about this.
It's gonna sound kind of
silly, but like the cleaning crews
for the towers and the, you
know, all that.
So now you're working.
I mean, I know it sounds like
a minor thing, but it's cumulative.
You can't do safety reports now.
Your work area is going to be
a trash no one's vacuuming, you know,
I mean, now are you going to vacuum?
I mean, there's a vacuum in
the closet.
I mean, and, you know, all
these weird, weird things.
Multiply it by probably 10 or
20 other little variables.
That absolutely makes it a
very difficult work situation.
What does this mean?
I mean, this has been thrown around.
This word that I'm about to
say has been, has been brought up
before.
There's been thoughts of it.
But it almost seems like in
these situations, maybe it's not
a bad idea for the
privatization of atc.
Maybe it can protect jobs,
maybe it can make sure they're well
paid.
I don't know.
I mean, there's a lot of other
arguments to it as well.
But at the very least, if this
can ensure that they are going to
have a job during a government
shutdown and that things won't stop
working and won't kind of
degrade in the Swiss cheese model
of safety, is it worth it to
pursue it?
Is it worth it to look at it?
I mean, what are your thoughts
on that?
Well, privatization, of
course, that issue has been around
for a while.
We have some great examples of
it in the world with Canada being
one of the biggest ones.
When they went to nav Canada,
you know, there's pros and cons,
likely.
And the other thing that
there's just a lot of unknown.
You know, Canada is one thing.
When they went to
privatization, you can look at that
and say there's an example.
But the truth is there's
nowhere else in the world that has
the traffic system and the
capacity and the number of operations
that we do.
And you could probably combine
all the others and they won't come
close to us.
If you look at a map anytime
on Flightaware or whatever, we're
a beehive, right?
And other places just have
little trickles relative to what
we see here.
There's certainly some
exceptions to that.
So when we say, well, we
should do what they've done elsewhere,
you are probably comparing
apples to oranges.
But that being said, it still
may be the best thing.
But here's my question for
you, and this is no knock on my friends
in the faa, you know, in order
to pull this off, you know, there's
going to be a lot of
unforeseen outcomes and, you know,
things that happen with it.
And we saw what happened with
next gen and we've seen what's happened
with UAS integration.
It just hasn't gone well.
And so now if we told ATC that
you have to Privatize.
I really think it sounds good
on paper.
I mean, it makes a lot of
sense in some areas, but it's just
the sausage making.
I'm worried of what's going to
happen during the sausage making.
It's like really bad construction.
Right now.
They're having really bad
taxiway construction in Chicago.
And so like, I don't know if
you've seen an ads or not or an as
the X printout of what's going
on there, but it's phenomenally backed
up.
I mean you're looking at
minimum in some cases two hour taxis
just to get, you know, from
one apron gate to another.
It's really bad.
So I would say the same thing
is going to happen during the privatization
piece.
And then the last piece is the
user fees.
When it does privatize, the
only way to really support that is
through full blown user fees,
which is fine.
And the airlines have been
after this for years because they
feel they pay a
disproportionate amount.
But that would have a pretty
significant effect on general aviation.
You could probably, probably
see, I mean, I've seen estimates
that go as high as $20 a
flight hour.
So if you're paying 150 for
your Cessna, 172 for training and
50 for your instructor, you
could probably add on another 20.
You know, I mean it just, it
would, it would add up is the thing.
And so the question is, is
what would happen to our infrastructure
for building new pilots?
I mean, my guess is the
universities would probably figure
out how to absorb it.
You know, the large flight
schools would probably be okay.
I don't know about the mom
pop, FBOs and whatnot.
It could be, you know, I worry
about that.
So long answer, short answer
is I don't know, Justin.
I've gone both ways in the past.
I've been on pro privatization
and I've been against it.
Right now, today my biggest
concern is, I don't know that we
could pull it off without a
lot of pain.
Even if it is a better system.
I don't know if we can pull it off.
Yeah, I mean, anytime you
change things, there's going to be
some kind of pain.
And in aviation,
unfortunately, that pain can mean
lives.
That pain can mean a lot of
bad, bad things or some things.
It's like, oh, we just lost
this one document.
Oh, no.
But no, this is very real and,
and very much about lives.
It is interesting.
Bring up the fact of user utilization.
Like, I mean, does that mean
if I'm flying my airplane, I'm like,
hey, November 524 Bravo whiskey.
I'd like to pick up flight following.
They enter in my tail number.
Like, oh, it looks like you
are out of credits.
We can take a credit card over
the phone or if you want, you can
just put your fingerprint on
your Garmin.
Yeah, there's an app for that.
Yeah, yeah.
But it is very interesting to
think about the cost and will it
mean more people are going to
be flying VFR with no flight falling?
You'd imagine that would be fine.
So.
So think about this for a second.
I do not want to hijack the
podcast, but there's a really interesting
issue developing in this area.
User fees.
I don't know if you've been
following us, but there's some airports
around the country for general
aviation that have started using
ADS B data to automatically,
automatically charge pilots.
And so pilots, you know,
they'll charge it on the number of
landings.
There's some other airports
that use just cameras and they can
take a look.
They can use AI to take a look
at your in number and then they'll
send you, you know, they'll go
to the registration on record for
that.
And, and, and so, and so, by
the way, AOPA really opposes that
because, you know, ADS B was
supposed, you know, the theory behind
ADS B is it was there for
safety and for traffic avoidance
and, and whatnot.
It was never, wasn't
necessarily ever designed for user
fees.
Yeah.
But on the other side of that,
just to provide some counterbalance
on the other side of that, you
know, some of these smaller airports,
they need, they need funds to
pay the taxiways, they need funds
to do the ramp.
So, I don't know, the
government trust fund only goes so
far for a lot of these
infrastructure improvements.
And so, yeah, I mean, there's
probably going to have to be a happy
medium there.
But I get it.
We're one of the few countries
where they call it the freedom to
fly.
I mean, right now, Justin, if
you don't violate airspace, I suppose
you could go out in a lawn
chair and some balloons and get airborne.
And as long as you go through
the experimental process, someone
will probably sign off on that.
Maybe there's no other country
in the world that you could do that
in.
Tomorrow you could go build
your own airplane from scratch and
prove that you built it
yourself, slap experimental on there
and go fly it.
Nowhere else can you do that.
So this freedom to fly is a
pretty important thing.
And so whenever things
interfere with that, I'm not giving
any answers because I don't
have the answers, but it's just something
that has to be really balanced
all around for everybody.
Let's take a break from
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Moving on a little bit.
We did mention that Boeing is
going to produce more airplanes,
which is big news because when
you're limited to 38 and the FAA
says, hey, this is your hard
stop, we don't trust anything over
this number.
When you finally announce that
you can do more, it has to signal
that there's confidence
between the FAA and what is going
on and what they're seeing.
And they have to like what
they're seeing.
So I don't know if it's going
to be an immediate, you know, hey,
we're back to normal,
everything's going to be certified.
But it definitely signals
things are moving in the right way.
No, I, I agree.
So for those that don't know,
during this whole 737 Max, and you
know, Boeing, whatever word
you want to call for it, when the
FAA slapped basically limits
on the amount of production in particular
for the 737s, they said they
were limited to 38 for a long time.
And that was for quality
control reasons.
Just in this last month,
Boeing put out 42, which means then
that they've somehow gotten
permission to put out more.
And now the latest guidance is
that they're going to try to get
into the 70 or their goal is
in the 60s, maybe even the 70s per
month.
And so that would be really
good for the airlines, right?
Ironically, And I'm not a
conspiracy person at all, but I just
read on October 7th.
So just a few days yesterday,
this podcast, airbus overtook the
A320 overtook the 737 with
12,000 and some odd number.
And Airbus right now is
producing more A320s per month.
They're doing 50 plus or minus
10amonth right now.
So they are doing a few more
months, but their goal for next year
is to go over 100amonth and
Boeing doesn't have that.
So it looks like for the
foreseeable future, Airbus is going
to stay ahead in terms of deliveries.
So what is interesting to me
is Airbus overtook Boeing and now
Boeing's allowed to produce
more aircraft.
I'm not saying there's a nexus
there, but it is kind of interesting
that it's always kind of been
a source of pride between the two
manufacturers.
What's the most popular, the
73 or the A320?
And you know, it looks like
it's going to be the A320 for the,
for the foreseeable future.
Yeah.
And then also it kind of goes
back to, we're talking with hiring.
If Boeing is able to produce
more airplanes, that's going to be
more pilots.
They need to fly those airplanes.
And if you've been following
along a lot of the kind of so called
pullback and the pilot
shortage or pullback in the hiring
has been the fact that we
don't have airplanes to fly.
There isn't a mass amount.
We, the whole industry needs
more airplanes and you'll wear airplanes
at every single airline and
engines too.
That's another issue.
Yeah, but there just isn't the
planes to put the pilots in to fly
the people that want to go fly.
So the more Boeing can get
going and the more you hear Delta,
United, Americans say, hey,
we're going to start hiring more,
it's probably because Boeing's
like, hey guys, we're going to have
our airplanes built soon.
That's right.
Getting your airplanes you
ordered a while ago, they're going
to be showing up soon.
So prepare because when you
hired, they're not hiring you for
that moment, they're hiring
you for the next six to nine months.
And they're trying to project
what they're going to be doing and
soon to nine months.
That's right.
The airlines have been caught
flat footed before by not staying
ahead of the hiring curves.
No doubt about it.
All the major CEOs have said
they expect the Boeing deliveries
to return to a near normal.
So they are basing their
Hiring plans on that.
But it doesn't take a
mathematician to figure this out.
There's a backlog of firm
orders for the 737 across all models
of about 725, plus options of
about the same.
So if you're only doing
40amonth, 45amonth, you could see
your years away at this
current production level.
And even if they get to their
goal of 60amonth, you're still probably
a couple years out or a year
and a half out.
So, I mean, it's gonna take a while.
And that's if people don't
exercise their options.
So, I mean, business is good
if they can execute on their quality
control.
That's so much money.
I mean, when you think about
700 times 100 million or whatever
it is to buy 737, I mean, then
you get into the.
I honestly have no IDEA what a
737 cost.
So we'll call it 80, 90
million, maybe.
Yeah, I think that's right.
Yeah.
Who knows?
Someone's going to mess you.
Like, it's actually 130
million since inflation, whatever
it is, it's an insane amount
of money.
You're moving into billions
and then you're moving into, like,
trillions.
If they have to fulfill every
single one of those orders, which
is just.
No doubt cannot compute
astronomical amount of money.
And the price for me and you,
if you and I go and try to buy a
737, it's going to be a lot
different than if American goes.
So, you know, so it will be lower.
And my guess is it's different
based on the number of firm orders
and, you know, timelines and whatnot.
If you want them sooner,
you're probably gonna have to pay
more.
Right.
The airlines didn't
necessarily learn, you know, ancillary
revenue strategies from the.
They've learned it a lot from
places like Boeing were like, oh,
you wanna move up in the line?
Sure, we can get you moved up
in the line for an extra 10 million
or whatever the case may be.
Yeah, it'll be interesting
because I'm sure there have been
some deals through this kind
of downturn of what Boeing's had.
I'm sure they're like, hey,
please stick with us.
You know, if this takes X
amount of every month this takes,
we'll take off this off the.
The bottom or the top end the.
The deal, we'll say, and then
as time comes, maybe they're going
to try to get that money back.
Like, all right, well, hey, we
actually have them in front of You.
So if you want to get this
plane, then you.
If we go back to our original
deal, we'll make sure you have them
when you got them.
That's right.
So it'll be interesting.
Absolutely.
That that went on.
There is no doubt that when
Boeing was in the crux of its problems
and you know, the CEOs were
visiting the factory there of the
major airlines, there's
absolutely no doubt that they were.
What word do I want to use?
Leveraging.
Leveraging for the best
possible deal for these things.
There's no doubt they got
really, really good deals.
The other thing that happened
is there were some airlines during
COVID that and even after that
decided they couldn't take the 737
or the Airbus.
And so they sold those off to
places like United and Delta and
they.
There are plenty ready to take
those, those slots.
We kind of mentioned Spirit a
little bit, but just.
And we don't have to, you
don't have to go into like in depth
details, but do you think
Spirit makes it out of this bankruptcy
or if they do make it out of
this bankruptcy, do you give them
a chance to actually continue
as a profitable airline in the future?
Tough question.
I really hate to say this.
When you go into that double bankruptcy.
Well, this, this will be what
we, we need to see.
Okay, so they went into
bankruptcy the first time we've seen
this.
But before they found some financing.
It's called first position
financing or superior debt.
And so there's companies that
specialize in that.
Right.
And so they put together a
debtor and possession financing package,
convinced a bankruptcy court
that they'll be able to emerge and
make profitability.
And that happened back at the
beginning of the year.
Well, obviously it didn't work out.
Right.
We know that Spirit hasn't
made the money they thought they
would.
In fact, they're still losing money.
So now they've reentered
bankruptcy, which is pretty unusual.
Now, a couple things.
There's three outcomes.
They're able to find a new financier.
It could be the same company
from before that just has more stringent
terms that are trying to
double down and protect their investment.
That's possible.
But the creditors, the people
that are owed money for the aircraft,
the engines, ground equipment,
whatever they may say, boy, I don't
think they're going to make it.
I don't think they have a
viable plan.
And they could try to petition
the court to force liquidation so
they at least recover some of
their assets.
And I hate to say this to
those of you that work at Spirit
or those of you who rely on
Spirit, I do think that that's a
very real possibility.
Or the bankruptcy court could
also just say the trustee that's
looking this over saying, I
don't see a viable plan here, a viable
path forward.
Generally speaking, the
philosophy in business bankruptcy
courts is if the company will
put together a plan, chapter 11,
this is how we're going to
emerge, this is how we're going to
be successful.
And generally speaking, the
trustees and the bankruptcy courts,
because they want to protect
the shareholders, they want to protect
the employees and everyone
else that's interested, they'll give
them a pretty big benefit of
the doubt.
And they certainly got that in
the first bankruptcy.
I don't know how big of a
doubt they're going to get on the
second bankruptcy.
So I don't know.
We'll know soon though,
because if they're forced into a
Chapter seven, that's going to
be announced soon because either
the creditor committee or the
secured creditor committee or they
just couldn't find financing
to emerge, we'll probably know in
the next month or two, if not
sooner than.
But if they are able to emerge to.
Your second question is what's
their long term viability?
Look, they have to figure out
what the problem is.
Their pilots aren't the
highest paid pilots.
Their flight attendants are
not the highest paid flight attendants.
They have relatively fuel
efficient aircraft.
You know, so something.
And they're not figuring it
out like Frontier is figuring it
out and some of the others.
So something's wrong with
their management.
In my opinion.
I'm sorry to keep going back
to that.
In my opinion, if they emerge,
their only real chance is to get
some competent management in
there that understands business plans.
Because clearly their business
model, at least the way they're executing
it with their current, current
management is not working.
And that's also going to work
against them.
My guess is one of the pieces
of emerging from bankruptcy is going
to be some type of control
from the finance.
If somebody comes in and says,
okay, we're going to give you 20
million to emerge from
bankruptcy, but this is what we're
going to need.
My guess is they're going to
have to seed some operational control
and that means they're going
to bring in some experts from other
carriers to maybe run it and
that quite frankly, could be a good
thing.
Again, I hate to keep meeting
up on Spirit management, but they've
already had a few chances and
there's a lot of families out there
that need that paycheck and A
lot of customers out there that need
to go from point A to point B.
And there's a lot of
shareholders out there that have
invested pretty hard earned
money in those carriers.
Yeah, I'm dubious that if they
keep doing the same thing over and
over again that they'll ever
be successful with.
The mergers that were proposed.
Right.
So obviously it was Spirit,
frontier first and JetBlue kind of
came in is like, nah, we're
going to take them.
If either one of those would
have gone through, do you think Spirit
and their assets and what they
did would have brought kind of the
value down?
Because it did seem like it
was just like a train headed down.
Right.
Like it seemed like it was
like a train out of control.
We can look at back now.
Or do you think that what you
said, they just need changing to
figure out what's wrong?
If, if JetBlue or Frontier
would have been able to go through
with the purchase, they would
have been able to be like, all right,
we're actually gonna fully
make it Frontier and we're gonna
operate how Frontier operates
and we're just gonna make money that
way.
Same thing with JetBlue.
Yeah, great question.
Time honored.
Time honored.
Tradition in the airlines,
we've seen it before, the fastest
way to decrease unit cost and
increase profitability is to merge,
is to become bigger.
Because when you become
bigger, you get the economies of
density, economies of scope,
economies of scale, all the things
you learn about an MBA
economics class.
So there's no doubt about that.
The one caveat on that is the
merger has to go well, has to be
managed well.
But you know, the people that
lose their jobs in a merger are almost
always middle management and
upper management.
Because you don't need two
directors of safety, for instance,
you don't need two directors
of soc, you know, you just don't.
And so as long as that process
would have worked, I certainly believe
if one of those mergers was
allowed to have gone through that
Spirit probably wouldn't be bankrupt.
They still might have had to
furlough or right size.
Certainly a lot of middle
management management people would
have lost their jobs in that.
You know, it really depends
who the surviving carrier is.
But there would be people from
both sides that would have had to
go.
So my guess is they would not
be bankrupt at this point in time
because, you know, they
wouldn't be able to rely because
you're bigger now and you can
offset your losses with other parts
of the operation.
Probably still wouldn't have
been, you know, it certainly wouldn't
have been A Delta, like a
profitability juggernaut.
But I don't think they would
have been in bankruptcy.
No, I still, you and I have
talked about it.
I still think the judge that
thought he was doing a solid for
the passengers out there, I
wonder if he ever reads that decision
that he made.
He goes back and thinks, man,
maybe, maybe I shouldn't have interfered.
Maybe, maybe as a federal
judge, I shouldn't have thought I
knew better than all these
airline professionals.
We had that famous line too.
Wasn't like, this is for all
the spirit fires, like this is for
you.
Yeah, that's what he said.
Yeah, did him a solid, he said.
And kind of going off that
statement right there, not necessarily
what he said, but just the
fact that they did say no to a merger.
Do you think that that then
makes it, I don't know how to phrase
this.
Say, let's say there's another
merger that's being proposed.
Do you think that maybe the
person that's on the judge for that
is going to be like, all
right, well, I don't really know
if I can say no because last
time someone said no, they're going
to go out of business.
So here's the thing that has
to happen.
First, the DOJ has to
basically say you can't do it.
And then the companies either
have to sue or the DOJ has to sue
to stop it.
Right.
And that's when it makes it to
the judges.
So under the current
environment, under the Trump administration,
there clearly is a business
friendly environment.
Some of the, for instance,
some of the refund rules that were
in existence under the
previous administration where if
you had like a three hour
delay, you had to receive your refund
in cash within seven to 14
days or whatever, there was rules
of that.
Those are all being paused or
being reversed.
So we are seeing a very
airline management friendly maneuvering
right now.
So because of that, I would
tend to think that to your question,
if a new merger was proposed,
my guess is given the current administration,
it's unlikely that that DOJ
would sue to stop it.
So it may never get to the judge.
The DOJ may step in and say,
well, you have to make these adjustments
so you don't oversaturate a market.
And you know, they're always
looking, as we talked about before,
they're supposed to look at
the effect on the consumers.
Would this merger make prices,
ticket prices go up, go down, stay
the same?
And if they determine in some
markets, you know, it'll be one surviving
carrier, so they'll be free to
charge whatever they may say, you
have to give up some slots
there, or you can only operate X
number of flights, you know, whatever.
So you might see some of that.
But I think the merger would
probably, by and large be allowed
to go through with someone
like that.
Now, if you have like a mega
merger between like, you know, a
United and a Delta American,
probably not.
But if you're talking about
Spirit and JetBlue, the problem is
every time one of these
companies goes for a merger, it costs
them a lot.
It costs them a lot with their
shareholders, but it also costs them
a lot logistically because
they have to pull about a third of
their management teams off to
just work on the merger, the potential
for them, how it would work
and what the plan would be.
And so there's a risk, there's
a, there's an opportunity cost risk
with doing that.
So it's always tough.
I know, I know we're running
out of time here.
We could always talk forever.
But I do kind of have one
question, which is kind of crazy
to think about, but
negotiations are going to start up
again, right?
Like, so I think Delta end of
next year maybe, and then everyone
else kind of follows about six
months after that.
But early negotiations are
starting now.
I don't know if we can see
like, way more like hard money, right?
So, like, I don't know how much.
The pay rates are going to
skyrocket like they did previously.
Now there's probably room for
cover for inflation.
There's probably maybe a
little bit extra, but I don't see
like 20%, 30%, whatever it was
that we saw over four years.
What do you think is going to
be a hot topic?
You have a lot of, you've done
negotiations a lot.
You've been in charge, you've
kind of known what pilots want.
But, but when the money is to
a point where most people are comfortable,
is there always just that
crowd that's like, we need more money,
we need more money.
Or do you start getting, yeah,
or do you start getting more quality
life centric?
Or do you start getting more
like, hey, this is actually really
annoying when you schedule us
like this.
If we do schedule this trip,
you have to pay us X amount this
way.
Like, kind of talk about what
goes, what goes on when, when the
money is, is finally really good.
What is the thought process
of, of negotiating teams and the
pilots themselves and even companies?
So great question.
Historically, the rule of
thumb from a union negotiator perspective
and just from a labor
perspective in general, is when times
are good Economically, pilots
typically go for the money.
They go for the bank account
that day when times are bad, or in
concessionary times, typically
pilots will go for more longer term
job security provisions like
anti furlough or furlough protection,
anti furlough, you know,
retiree benefits, you know, bolstering,
you know, certain work rules
that maybe are a little bit less
onerous on the money the
company has to put.
So you go for scope is a
classic one you really like.
Okay, you can't pay us the
money now, we're gonna really scope
this out then.
Cause that's something you can do.
They'll say, so that's the
general rule of thumb.
Now it's interesting because
you say, well, you know, we've, I
mean, I don't know if you saw
the news.
You keep track of the news
better than I do.
I think it was last week or
the week before.
The average pilot now makes
more than the average physician.
Yeah, in the United States.
That's unusual.
I used to never be that way.
And so to your question, is it enough?
I don't know.
Remember we've talked about
this too.
Pilots are remunerated based
upon the amount of revenue that they
generate for their company.
And so when you have record
profitability, you know, I mean,
think about what a long haul
pilot's gonna make for the company
on a Triple 7 between Atlanta
and Narita.
I mean that's a lot of revenue
just coming in on that one flight.
And so if we're paid based on
the revenue we produce, and by the
way, Delta saying they have
record profits, everyone's like,
wow, that's great.
You know who else is listening?
The negotiating team and the
pilots, they absolutely are.
So I would love to be a
negotiator in those times, but, but
to your point, I do think, and
you don't hear this too often in
the industry and some people
disagree with this, I do think pilots
are generally pretty happy
with their pay.
So I do think you will see another.
Even though it's good economic
conditions and typically you go for
more pay.
I do think to your point,
you're going to see a lot of work,
lifestyle improvements and
you're going to start seeing work
rules that will hopefully
impact in a good way.
You know, maybe you go for
commuting, by the way, that is these
safe commuting things is one
thing, but you know, pilots, some
pilots for years have been
after positive space commuting.
But that's really a, that's
really a difficult issue for the
pilot group because the side
that doesn't commute, which is about
half.
Half of us commute, half of us don't.
The side that lives in base or
can drive to work, they're like,
well, why should I give up
anything for the commuter who they
say made a choice?
Now, do they make a choice to
live where they want?
That's a.
That's a debate you'll hear in
crew rooms, you know, many times
over.
You know, I don't know.
But, you know, when you.
When you do decide to live in
a place that's not in base, you know,
then, you know, should the
other pilots give up something in
negotiations so that you have
positive space also, there could
be a business impact.
So we saw that at some of the
last negotiations, and, you know,
the union was pretty split on
that because they weren't really,
really sure.
The one thing to pay attention
to, Justin, before they go into these
Section 6 openers, even if
they're early openers, the unions
are going to survey their
membership pretty heavily, and they'll
get a pretty good flavor for
where everyone's head is at and what
they're looking for.
Are they looking for
bolstering to the retirement?
I mean, there's not much left
on the retirements.
I mean, the IRS has
limitations on what can be saved
and what can't.
We're now in the mega backdoor
ROTH areas because pilots are making
so much money, so there's not
much left there.
You know, lifetime medical,
maybe lifetime medical for the surviving
spouse.
I mean, you're gonna start
seeing some things that are kind
of expensive, that, you know,
maybe people go for, but.
But the unions are gonna know
because they're gonna.
They're gonna pull pretty
extensively and say, okay, what do
you guys want?
You know, and.
And so we'll see.
It'll be interesting to see
what the.
What.
What they go for.
And my last question, it kind
of piggybacks off this, but it seemed
like during the last
negotiations, you know, once Delta
came out with what they had,
it seemed to just be a race of we
have to be the same, if not a
little bit better.
That's not historically always
the case, right?
A lot of times, like, well,
management's like, let's get on the
crappiest deal that they can
say yes to, like 50 plus 1.
Let's sign them up for
whatever, right?
How long do you think we're
going to be in a scenario or in kind
of this era where airlines
want to have the best pay, they want
to have the best quality of
life, they want to have the best,
whatever it may be, so that
they can get more pilots.
Yeah.
So what you're talking about,
the union calls pattern bargaining.
That's in our playbook.
As someone that's negotiated
pay rates at a regional, I can tell
you this is back when.
This is how old I am.
When Comair existed, I was at
American Eagle, it's now known as
envoy.
When the 145s, the scope
buster, got in.
I'm sorry, the 140s, the scope
busters got introduced, they were
just below the cap that the
American pilots would allow.
When those got introduced, we
had to negotiate a pay rate.
We absolutely patterned it off
of Comair.
At the time we went for Comair
plus 1% because it puts management
in a difficult situation.
They have to either say, we're
unwilling to pay you that even though
someone else has, or we don't
manage as well as the others.
They somehow still say
profitable, but we haven't.
So anyway, so that was
actually something that we argued.
The other thing is when a
company claims an inability to pay
at the negotiating table, they
typically then invite the union.
They typically, during the
process, have to demonstrate that
by opening their books.
And a lot of companies don't
like to do that.
And so it's a real complex
dance on this pattern bargaining.
But the overall philosophy is
exactly that you do try to pattern.
It's an incremental change.
But if Delta gets something,
then United is going to try to get
that plus a little more.
Then American is going to try
to get that plus a little more, and
you're going to absolutely see that.
It's called pattern
bargaining, and it's absolutely in
our playbook.
Yeah.
Do you think that we, for the
next foreseeable future, we're going
to keep seeing where airlines
want to be the ones that pay the
most?
I do about pays.
It pays.
A slightly different question
where you're.
Compensation.
Sorry.
Yeah, yeah.
So where you're going to.
Where you're going to see it
is in like, like, like very nuanced
things, like, for instance,
profit sharing.
Profit sharing has become a
really big deal at a lot of the legacy
carriers at Delta.
It can be pretty substantial.
I mean, we're talking, you
know, 40, 50, $60,000 checks.
Yeah.
If not more, that line pilots
are receiving.
And it's part of the profit
sharing thing.
United, for instance, also has
profit sharing and it has a very
similar formula, but for some
reason, a little less money makes
it than their Delta
counterparts pro rata.
And so the question then
becomes where you're going to start
maybe seeing some stuff is
tweaking that, cleaning up little
things.
What did we miss in the last contract?
When my wife flies, she's
like, doggone it, I guess they can
do this.
I'm surprised.
I'm like, when you do your
survey, put that down.
This is something that can be
cleaned up.
Pbs, the PBS system, they just
did a big upgrade at United, I hear,
to do the bidding there.
But it's still, some people
say it's still not as good as like,
what some of the other
airlines have.
So these are all things.
One classic example of pbs.
And I've been after this for
years for the airlines.
You know, I don't know what
it's like at all airlines, but I
know even some of the
legacies, when you put your bid in,
it can take like a week or 10
days sometimes to get the results.
That doesn't need to happen.
The company just simply has
to, you know, that's based on 1980s
cluster technology.
In 1990s, they could speed
that up.
And so these are going to be
some of the improvements, I think,
because that's a big quality
of life issue.
If you know your schedule for
the next month a week earlier than
what you used to know it, that
means you can plan vacations, you
can plan weddings, you can
plan, you know, you're going to know
things a lot more.
That's a big quality of life improvement.
So.
So those are going to be some
of the things I think you're going
to start.
Start seeing.
Yeah.
Well, Jim, hey, I appreciate
your time.
Thank you so much.
Sorry I went over a little bit
on your time limit, but we appreciate
you and AV Nation appreciate
and looking forward to doing this
again.
We should do it again a little
bit sooner than what the couple months
that it's been.
But I'll see you soon.
Love to be here every time.
Thanks for having me, Justin.
That's a wrap on today's episode.
Thank you so much for listening.
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