Expert: D. Norkus - 4/2/2008

Question
Hi Dottie,

Is airline pay so low because there isn't a lot of demand? Why the low wages?

Answer
James

Since the 'old days' portrayed in Catch Me If You Can, the compensation for airline pilots has decreased quite a bit. Pay is lower than in years past because of a few factors.

Pay scales are negotiated between the company and the pilots union. At pay negotiation time, the airlines start out low and the pilots start out high and hope to meet at a figure somewhere in between. Kinda like buying a house and using comps for the area. A starting point for asking pay rates is what the other airlines pay for similar equipment. If one airline pays less, than the negotiating airline will be sure to use their low rate as a starting point. Over the years, as this business has become more and more competitive and costs have increased, management asks their labor groups to take pay cuts or demands them at labor contract negotiation time. The pilot group may even give wage concessions to keep other benefits of their contract in tact. This is how the pay scales themselves get lowered from higher rates.

Why do the pilots agree to such low rates? At the major carriers, many used the post 9/11 economic fallout to get significant pay cuts from pilots. It seems in the media pilots are portrayed as being greedy while management suffers to pay them because people have the impression that they still "make a lot of money". Well, that is very relative to the airline you work for, equipment you fly and most importantly how long you have worked there. Here is a link with many interesting and informational pay related documents created by the American Airlines pilot union: http://www.apanegotiations.com/HotItems/Documents/tabid/72/Default.aspx

Note "1992 vs. 2007 Pay Comparison" document. Pilots at AA now make LESS than they did 16 years ago in 1992!

Also, like anything else, it comes down to supply and demand. This is the reason why starting pilot pay at the regionals is so low. An airline pays low wages? So what. If you don't like it you can quit because there is a line of people behind you who want your job. The lower they pay, the more attractive a regional can be to a major as they are cheaper than competitors to provide feed to the major, thereby reducing the major airlines costs.

Hope this can shed a bit of light on the subject,
Dottie