Gulf State Airlines Behave like Flying Sweatshops but Elite Flyers Love Them

Gulf State airline cabin crew hail from many nations

Unless you are an international jet-setter or perhaps an airline industry enthusiast, you may not have heard of three relatively new airlines that are taking the world by storm. Otherwise, you may probably be aware of the existence and may even have flown on one of these three airlines. They are collectively known as the Gulf Three and are made up of Etihad Airways, Qatar Airways and Emirates Airlines. Etihad and Emirates are both based in the United Arab Emirates, while Qatar makes its home in Doha, Qatar.

Etihad, Emirates and Qatar, founded in 2003, 1985 and 1993 respectively, have grown from nothing to become global aviation powerhouses in a few short decades. They collectively employ about 112,000 employees and have a collective fleet of 526 aircraft. And they are fleets of big wide body airplanes, not puddle jumpers. Emirates, for example, has a fleet of 60 A380 Superjumbo aircraft, and is the world's largest operator of the Boeing 777 with a fleet of 149 of those widebody aircraft.

These three airlines have been embroiled in a controversy about alleged subsidies they have received from their respective governments which I wrote about here. Leading the charge against the Gulf Airlines is a consortium of US based airlines and their associated labor groups. Their contention is that the governments of Qatar and the UAE funnel billions of government dollars into their hometown airlines thereby allowing them to undercut their competition.

For their part, the Gulf airlines counter that they deliver a far superior product to their customers than do American based airlines. This is the reason, the Gulf airline managements cite, for the competitive advantages they currently enjoy. All the Americans need to do to compete, they say, is to up their game.

And in terms of customer service satisfaction, the Gulf airlines do indeed deliver. The three Gulf airlines routinely wind up at the top of airline customer satisfaction surveys. For instance, the Gulf airlines took second, third and fifth place in the 2015 Conde Nast Traveller Reader's Choice Awards.

In the Skytrax Awards, which bill themselves as "the Oscars of the aviation industry", the Gulf Three placed first, fifth and sixth. Delta, as the top rated US international carrier, came in at a dismal 45th place while United and American placed quite a bit further down the list.

There's Something Wrong in Paradise

So it would seem that the US carriers do indeed need to tighten up their customer service game a bit, but as usual, there's more to the story. Over the past several years reports have leaked out about hiring practices and working conditions for cabin crew at the Gulf airlines and they don't paint a very flattering picture. 

The three Gulf airlines hire their cabin crew from all over the globe including many impoverished areas. For many of these employees, a job with an international airline is a dream ticket into a jet-setting lifestyle. Except that it apparently isn't.

Reports of long hours, low pay and stringently enforced limits on marriage, pregnancy and weight plague the Gulf airlines. A 2014 Wall Street Journal article noted that pregnancy may result in termination at all three Gulf airlines. Flight attendants must also remain single for the first five years of their contracts as well or seek the airline's permission to marry.

Other critics maintain that workers at the Gulf airlines live in a climate of fear for their jobs and are under daily surveillance in their company provided dormitories. The companies insist that strict security is necessary for the safety of their cabin crews. Qatar Airways in particular has a reputation for being quite severe in its treatment of cabin crew. From the Economist:

Allegations of harsh treatment and overbearing scrutiny are commonplace. Many complaints centre on the accommodation provided to cabin crew, where rigid curfews and restrictions on visitors create a less-than-homely atmosphere. Swipe-in door keys and CCTV on the premises have fuelled speculation–warranted or otherwise–that management are interested in more than just their employees’ safety.

Given that even appearing in public without a niqab can be problematic for women in Doha, having extra security precautions for a dormitory full of young, single women far from home in an Islamic country may not be unreasonable.

Union Sour Grapes?

Earlier in 2015, several US flight attendant unions also jumped into the fray when Etihad announced new service to Orlando, Florida claiming that the Gulf airlines had "abhorrent labor standards".

One can't help but notice that many of the complaints about working conditions are coming from labor unions. It should also be noted that unions are illegal in the Gulf states where these airlines are headquartered. It must be teased out, then, whether the conditions are truly as horrid as is being reported or whether the reports contain a measure of union hyperbole.

My guess is that there is a pinch of truth on both sides of this story. Emirates states that it receives over 400,000 applications annually from 143 different nations for jobs across their network so there seems to be no lack of enthusiasm for those wishing to sign on. Conversely, with those types of numbers, it can be easy to see that should an employee have an infraction or be anything less than completely submissive, it is far easier to sack them for a younger replacement.

Hypocrisy of the Elites

Getting back to the popularity of the Gulf Three airlines with elite status flyers, I must confess to being completely amused by the comment sections on the various news and opinion websites which report on this story. Here's a good example (typos and grammar in the original):

Yes the middle east carriers have unfair working practices But I prefer to fly on those airlines than american carriers as the staff in general are rude and not interested in any service what so ever . Plus the middle east carriers have young crews who are either more motivated or scared not to do there job properly so makes for a more enjoyable flight. I think the american carriers have just realised that the gulf carriers are so much better and just jealous thats all

Yes, of course, who doesn't appreciate young, attractive and motivated (scared) flight attendants? This commenter is likely more correct than he realizes: US airline managements are no doubt quite jealous of the freedom their Arab counterparts have to fire flight attendants when they get married, old or overweight...just like it used to be here back in the "halcyon" days of the 1960s.

Who also doesn't have at least a bit of nostalgia for the image that Leo DiCaprio presented in Catch Me If You Can as he traipsed in his pilot uniform through the airline terminal accompanied by half a dozen young, alluring and razor thin flight hosties? One need not look too far into aviation literature to find a paean to the good old days of "coffee, tea or me?"

Well, we are living in the future that we created here in America. Oddly enough, we won't buy tickets on our own airlines, but instead opt to be served by young hotties who can be fired on a whim.

I personally believe that there probably exists some middle ground between what is effectively third world indentured servitude as practiced by the Gulf Three, and the hardened battle-ax ingrates employed with depressing regularity by US airlines who seem to relish bashing into your kneecap with the cart.

Some lessons often need relearning. We should be careful for what we wish, for the aviation gods have a sense of humor and may smite us by granting our wishes.

Do Pilot Unions Have a PR Problem?

Southwest pilots walk the picket line

Last week, the pilots of Southwest Airlines took to the streets outside of the airline's headquarters in Dallas to protest the lack of progress in their current negotiations. The union is not on strike, or even close to it, but is engaged in what is known as "informational picketing" to get their message out. Southwest Airlines' management and the pilots' union have been in negotiations since the pilots' contract became amendable in August of 2012.

If you'll recall, airlines are organized under the Railway Labor Act (RLA). Under the RLA, labor contracts never expire but become "amendable". Labor unions continue to work under the terms of the preceding contract until a new contract is negotiated.

The pilots' union at Southwest (SWAPA) contends that the airline has been dragging its feet in negotiations in order to extend the favorable terms of the preceding contract negotiated in leaner times. This standoff has continued for several years while the airline has been recording record profits. The airline, for its part, points out that a deal was reached with the union's negotiators last summer which included raises totalling 17.6% over the life of the contract. That deal was soundly voted down by the union membership.

So who's in the right? Has the airline been using the RLA to delay paying raises to its pilots, or have the pilots just gotten greedy in turning down a great offer by the company? Well, as per usual, it depends on with whom you speak. Each side passionately insists that their version of events is the correct one and that the other side is obfuscating. And also, as per usual, there is an element of both truth and falsehood in each narrative.

But my purpose here is not to adjudicate the differences between the two opposing sides, but rather to point out that pilot unions have a natural disadvantage when they attempt to take their case to the public though picketing and other public displays. The problem is that while many pilots in entry level jobs at commuter and cargo airlines do in fact make a very modest wage, by the time a pilot gets on board at a major airline, he or she is making decent coin. And on average, pilots at major airlines are solidly in the middle to upper middle class arena.

This presents a PR problem when trying to garner a sympathetic ear from a public who may feel that the picketing pilots' income is likely higher than their own. Taking any dispute over wages and benefits to the public inevitably invites an inquiry into and a judgement of what pilots actually make. And of course, helpful members of the press and airline managements are only all too willing to facilitate the discussion by providing actual numbers for public consumption.

Hence shortly after their picketing event, Southwest pilots were met by this headline in the Dallas Morning News:

 High pay, job security and profit-sharing — and Southwest pilots are picketing?

The article was somewhat misleading but not factually incorrect. But it is the pilots who have the burden of getting across their message that having no cost of living raises since 2012 is causing their real purchasing power to erode due to the effects of inflation. It's not an easy message to convey while trying to avoid the "greedy" label.

Another difficulty is that many members of the public don't understand the nature of the pilot profession. For instance, public perception of a pilot's work week may be that pilots have a lot of time off. Some do, but many in the public may not realize that pilots can be gone for weeks at a time and miss many family events and holidays that someone in a traditional job would not. But as with compensation, taking their case to the public invites kitchen table discussions of what pilots should be paid and how much they should work. These discussions will probably not end up favoring pilot demands for higher wages.

Lastly, many members of the public don't have a good understanding of unions and unionism in general. This is due to the fact that with only about six percent of the private work force being unionized today, very few Americans have any experience with unions. With the high water mark of union membership in the US having been reached back in the 1950s and on a steady decline ever since, unions may be thought of by the public as an anachronism in today's economy.

I personally don't get too worked up about any of this. My feeling is that the underlying economics more or less determines wage rates. With an ongoing and worsening world wide pilot shortage in progress, wage rates will inevitably increase as the big four major US airlines have to compete to hire from a dwindling pool of prospective pilots to replace huge numbers of retiring Vietnam era pilots.

And on the bright side, informational picketing allows some of the more enthusiastic members of the pilots' union to expend their energies organizing these outings. It seems to help reduce the discomfiture in some pilots which is being made worse by the length of the negotiations. And it actually looks like a lot of fun. Unfortunately, I'll be working.

A Summer of Profits for Airlines but of Discontent for Labor

Second quarter earnings reports are out and there's quite a bit of good news for airlines. This latest earnings season has the big four airlines swimming in black ink. On the other hand, airline labor groups are not quite feeling the love they feel they deserve. Delta's pilots just voted down a tentative agreement for a new contract while Southwest's flight attendants also voted down their recently reached tentative agreement. So what's going on?

Well, lets first take a look at the haul that the airlines brought in this past quarter. United weighed in with an all time record profit of $1.2 billion and this was on reduced revenue. Southwest, the smallest of the "big four", increased their profit 31% to a record $608 million. American Airlines pocketed a record $1.7 billion, while Delta brought home a healthy $1.49 billion on $10.71 billion of revenue.

These airlines are so hip deep in cash that they don't know what to do with it all. The airlines have been under the gun to not flood the market with capacity which in the past has always ended up in brutal fare wars and bankruptcies. Since expansion is mostly off the table, returning the loot to investors through stock buybacks is the order of the day.

American bought back over $700 million last quarter and has announced further buybacks of  $2 billion through 2016. United is just finishing a $1 billion buyback ahead of schedule and is embarking on a further $3 billion buyback through 2017. Southwest recently completed a $430 million buyback and is accelerating plans to buy $500 million more.

First Time Rejection for Delta's Pilots

Yes, times are flush for airlines but airline labor groups are now angling for a larger piece of that pie. As mentioned above, Delta's pilots recently voted down their tentative agreement with the carrier. This was the first time that the pilots at Delta had ever defeated a proposed contract. Chief among the complaints were reductions in profit sharing, changes in sick leave policy and a wish to be made whole after a decade of stagnation at the carrier, especially in light of record profits.

Southwest's flight attendants also voted down their tentative agreement in a lopsided 87% negative vote. The issues centered mostly around work rules which would increase the maximum duty day to 12 hours and minimum work rules which would affect vacation pay. Southwest is still in negotiations with its pilots who recently formed a strike committee and also its baggage loaders.

The pilots at American and USAir voted last January to approve their new contract with the newly combined carrier. This agreement included hefty pay raises over and above post 9/11 concession wages, but they are still looking for improvements. From the APA website:

APA will now focus on further engagement with American Airlines management to address ongoing shortcomings in our contract. Our total compensation will still trail industry-leader Delta, while work rules affecting our pilots’ quality of life need meaningful improvement. There’s a lot of work remaining to achieve the industry-leading contract our pilots deserve.

United's pilots likewise approved their merger contract back in 2013 which included pay increases over bankruptcy contract wages dating from the early 2000's. While the United pilot's contract doesn't become amendable until 2017, rest assured that they will be targeting "industry leading" wages.

Will There Be a Strike?

Unlike most unionized labor forces in the country, airline labor groups and their collective bargaining agreements are regulated under a very old law known as the Railway Labor Act (RLA). The RLA, passed in 1926, doesn't allow for labor contracts to "expire" but for them to become "amendable". This means that on the amendable date, the labor agreement in force just continues until a new agreement is reached. The animus behind this law is that it was viewed that a shutdown of the railways was too economically harmful and therefore work stoppages must be avoided at all cost.

There is a very specific series of events that must occur before any strike can occur under the RLA. The first step is mediation followed by a declared impasse. Once an impasse is declared, a 30 day cooling off period must be observed and only then may a labor group or company engage in "self help" which means a lockout or a strike. No current disputes are even close to any of this happening. So no, it is highly unlikely that there will be any airline strike. Keep in mind that there is always quite a bit of posturing by both labor groups and management in these affairs.

What Next?

The Kabuki dance between labor unions and management will continue. Agreements will eventually be reached and everyone will get on with their jobs. It's Great Circle of Life stuff.

As far as the specific pilot contracts are concerned, my belief is that airline managements will eventually have to open their checkbooks to attract a dwindling number of new pilots to replace the tsunami of retiring pilots. Regional pilots looking for their first major carrier jobs are in the catbird seat, and have the luxury of choosing the major airline with the best pay and best prospects for a quick upgrade to captain. 

As captain upgrade is driven by retirements (and growth, which is not happening), looking for the airline with the best upgrade prospects means finding the airline with the most retirements. Currently all three of the largest major airlines, American, United and Delta have huge numbers of upcoming retirements. Replacing these pilots will drive wage demands. Southwest, which has a relatively young pilot force, and hence upgrade times topping 15 years, may have a specific challenge attracting new talent.

I don't personally get too excited about union politics as things always seem to have a way of sorting themselves out.

Mideast Insurgents Invade America

There is an invasion of America in progress emanating from the Arabian peninsula. No, I'm not talking about ISIS nor al Qaeda; this invasion consists of airlines. Flying under the radar of popular opinion, three Persian Gulf based airlines, Etihad, Emirates, and Qatar Airways have been growing like weeds while invading American and European markets. They have now grown large enough to become serious competitors to established American and European carriers who claim the three upstarts are abusing provisions of international accords known as "open skies" agreements.

All three of these airlines, Etihad, Emirates and Qatar are relative youngsters having been founded in 2003, 1985, and 1993 respectively. But in spite of their youth, these airlines have quickly grown to join the ranks of some of the largest international airlines. Etihad, for instance, has over 17,000 employees and reported over $6 billion in revenues for 2013. Emirates boasts over 56,000 employees and is the third largest airline in the world based on passenger-miles flown, while Qatar employs over 19,000 and was the first airline in the Mideast to fly the Boeing 787.

All three of these airlines operate the Airbus A380, the world's largest aircraft, and collectively serve over 480 destinations. By way of contrast, American Airlines employs about 94,000 after their merger with US Airways and reported $42 billion in revenue for 2014. Weighing in for Europe, Lufthansa employs 118,000 and reported revenue of over €30 billion (about $33b) for 2014. So while not threatening to eclipse the largest US or European carriers, the three Arabian entrants have grown large enough to become noticed.

And noticed they have become. At this point the story simply reads like the disruption of established market players by more nimble or better managed interlopers. In any other industry that might be the case, but the international airline business is a completely different animal.

Fulfilling roles as objects of national pride and diplomacy while acting as both cultural ambassadors and political footballs, international airlines, or flag carriers, have historically never enjoyed free markets. The international airline market has always existed as a tangle of pacts and alliances subject to protectionist impulses, political manipulation, backdoor subsidies and labor strife.

Dating back to the postwar years when passenger aircraft first became capable of crossing the oceans, the world's nations have simultaneously worked to untangle this Gordian knot of international air travel while also protecting their own flag carriers from competition.

The Quest for Open Skies

Signed in 1944, the Convention on International Civil Aviation (the Chicago Convention) first provided a framework through which individual nations could enter into two-way or bilateral agreements for international air travel. Among other things, this agreement defined various "freedoms" which might or might not be allowed in international air commerce.

One point of contention has always concerned the "fifth freedom" as outlined in the Chicago Convention otherwise known as "cabotage". In this scenario, an airline from country A flies to country B whereupon it picks up passengers from country B and takes them to either country C or another destination in country B. You can see how the government and airlines of country B might object to this "invasion" of their airline market by the airline from country A. As a result, cabotage is generally prohibited in most international airline agreements.

Other provisions in these agreements might involve schedule frequency, pricing, specific airport slots and even ownership limits. Taxes, code-share arrangements, and antitrust issues had to be addressed. Since many countries may have only one national airline, government subsidies to hometown airlines were also a consideration.

A continuing goal of international airlines has been to progress beyond individual two-way agreements towards multilateral or "open skies" agreements. Under such an agreement, airlines from all participants would be free to serve markets to each other's countries. Pricing and schedules would be at the discretion of airline managements with few restrictions. Cabotage was generally still prohibited, but otherwise there would be no quotas. The economic chips would fall where they might.

The 2008 EU-US Open Skies Agreement was considered a triumph of this effort and provides for unlimited competition between all airlines in the European Union and the United States. Likewise, the first open skies agreements between the US and Gulf States such as UAE and Qatar were signed in 1999. Fast forward to today and attitudes about at least some of these agreements are changing.

Illegal Subsidies or Better Product?

US airlines have always been at the forefront of efforts to pass open skies agreements. While an image of ruthless efficiency may not immediately come to mind when thinking of US legacy airlines, they could easily out compete the high cost national airlines of smaller countries and were able to offer connections to many desirable US destinations through extensive domestic networks. A foreign competitor might only be able to offer service to a US gateway such as Dulles or JFK after which a change to a US domestic airline would be required.

The consolidation of Europe into one large market along with code-share arrangements has blunted both of these advantages. And now with the rise of the three Gulf State juggernauts, misgivings about open skies has turned into full-throated protest by the largest US airlines. They claim that the three Gulf airlines are not playing by the established rules.

Foremost of the complaints is that Etihad, Emirates, and Qatar have been subsidized to the tune of billions of dollars by their governments. With this cash windfall, the allegations state, they have been able to purchase an ultra modern fleet of aircraft with which they dump seats into European and US markets thereby gaining market share.

The Tiff Goes Public (and Ugly)

Naturally, the managements of the three Gulf airlines disagree with the charges of being subsidized by their governments even though they are all government owned. Their arguments consist of two prongs consisting of  "no we aren't subsidized", and "US airlines are subsidized too" through bankruptcy protections, fuel tax waivers and post 9/11 payments by the US government to some airlines. Websites have been set up and a public food fight has commenced.

Earlier this year, Delta airlines CEO Richard Anderson, in a CNN interview, stated that the Gulf airlines shouldn't complain about US government payments to airlines following 9/11 considering that the attack had origins in that region of the world. Predictably, this blew up the internet with protestations of outrage being hurled back and forth. Anderson later apologized for his remarks but the incident serves to showcase the emotions that are flowing just beneath the surface.

On the domestic front, all three CEOs of the big three US airlines have petitioned both the US Commerce and Transportation department heads to request that the existing open skies agreements be opened and renegotiated. The CEOs of the Gulf airlines retort that opening these agreements up would throw the entire framework of open skies into question by setting a precedent of renegotiating agreements when one side can't compete, as is their contention.

And the protests against the incursion of the Gulf airlines are not just US based complaints either. Countries such as the Netherlands and Canada have recently decided to consider restrictions against the Gulf Three. This fight is even raging in places like Australia where Emirates is complaining that it is being discriminated against through charges for air traffic services.

So What's Really Going On?

My feeling is that it's a little bit of all of the above. Having just an inkling of how business is done in the Middle East certainly makes it plausible that the meteoric rise of the Gulf Three has been assisted by oil money. Why build anything when you can buy it? I find it humorously ironic that the names of the three Gulf CEOs: Sir Timothy Clark (Emirates), James Hogan (Etihad) and Akbar al Baker (Qatar) don't sound particularly Arabic. At least Mr. al Baker took a proper Arabic first name, though he may well be a descendant of a storied nomadic tribe of al Bakers. (al Candlestickmakers?)

That said, it also sounds as if the US based airlines doth protest just a little bit too much. It is true that the Gulf airlines have a well placed geographic hub between East and West which no doubt increases their global competitive reach. New long range aircraft help them to bridge continents without stopping for refueling. There is also no doubt that the Gulf airlines offer a product superior to their American competitors based on customer surveys. And therein lies another irony.

We Got What We Wanted

It's been remarked far and wide that the early years of commercial aviation were the glory years. And by the early years I mean the postwar era up until perhaps 1970. Flying was glamorous, people dressed up, the service was impeccable and it was a classy experience. It was the era of "coffee, tea, or me". Flight attendants had to be female, young, thin, and single. Rightly or wrongly, a change in any of those categories was grounds for termination. The food was gourmet, the wine vintage and the silverware real. Oh, and it was crazy expensive.

Thirty years of "progress" has left us with the air transportation system we have today. And it is exactly what we have asked for nay demanded. 

US employment law now forbids discrimination in any of the above mentioned categories. The demand for lower fares resulted in "cattle car" boarding and knee-chewing seat pitch. Management-arranged bankruptcies for the purpose of abrogating union contracts have left a workforce of bitter employees who seem to delight in slamming the jetway door in the face of running passengers. Or they might revel in "slopping the pigs" with an inedible simulacrum of latex flavored food before disappearing for the remainder of the flight. Getting your private parts fondled by a surly TSA agent is just the cherry on top of this nasty confection.

But then again, in 1967, no one but the truly wealthy were flying to Chicago to see a playoff game over the weekend. It is now de rigueur. But we somehow threw the good service baby out with the high fare bathwater. Perhaps the two are mutually exclusive, but perhaps not. 

What Happens Next?

Given the facts in the case, one might be led to believe that the US based carriers have a pretty solid case against the Gulf Three. That their petition to restrict further access by these carriers into the US market would get a sympathetic hearing from US officials. That realizing that the Gulf carriers are not playing by the rules would lead the US flying public to shun the interlopers in favor of the home team. That would be a mistaken belief for a number of reasons.

As I mentioned above, the Gulf carriers consistently get better customer service grades from the flying public. Remember, this is the same flying public that has come to hate the US airline business nearly as much as their cable provider. In spite of widely popular laws requiring the employment of grumpy, middle aged and bitter employees, young attractive employees seem to carry the day.

I recently perused the comments section of relevant articles in several US dailies to get a very unscientific feel for the public's opinion of this fight. The comments were mostly in favor of the continued presence and expansion of the Gulf airlines. The common theme expressed is that the US airlines need to up their game. I'm also guessing that news of illegal subsidies from Arabian Peninsula oil kingdoms is not entirely unwelcome either. People may feel they are getting some of their gas money back.

And don't forget that there are other constituents in this country who don't necessarily mind the success of the Gulf airlines one bit. That would be the Boeing Corporation and its 165,000 employees who happen to do billions of dollars of business with the gulf airlines. In fact we not only sell jets to rivals of US airlines, we loan them the money through our Ex-Im bank at favorable rates. We are great friends indeed. And by we, I mean you, the US taxpayer.

In one sense, this international corporate food fight is really no different than what happens in any global commodity market. It will sort itself out one way or another. But if it goes badly for US airlines, I'm told that Dubai has great weather most of the year.

   

So Why Do They Close the $%!# Door So Early?

Well the obvious answer to that question is so that the airplane doesn't leave late. But who cares when the airplane actually leaves the gate? Or takes off?

As far as a passenger is concerned, the only time that matters is the time the jetway door closes. Why, in the interest of customer service doesn't the airline publish that time? And why do all the airlines seem to use a random number generator to decide how far in advance of the "departure" time that the jetway door closes. Sometimes it's five minutes, sometimes ten, sometimes earlier if you're not checked in at the airport. 

(And don't get me started on the agents who seem to relish slamming the door on you. It's like some kind of weird fetish.)

Well, there actually is someone who is watching for when the aircraft actually leaves the gate. The US Department of Transportation keeps and publishes statistics on individual flight departure times. Any flight which leaves (or arrives) more than 15 minutes past the scheduled time published in the computer reservation system is considered "delayed", but all late departures no matter how small are tallied and available for comparison.

Departure and arrival times are logged automatically by sensors on the aircraft. It's not specifically when the door closes, but rather when the pilot releases the parking brake with all the doors closed. And there are quite a few things that have to happen before the brakes can be released.

In the back of the aircraft, the flight attendants have to make sure that all passengers are in their seats. Even though every passenger travelling through major airports like Denver, Dulles, Vegas and Sacramento travel on fast moving trains while standing, the FAA considers it dangerous to have passengers standing on an airplane during pushback. Go figure. Southwest even fought (and lost) a lawsuit against this restriction years ago.

The boarding agent is not even permitted to close the aircraft door until everyone is seated and all luggage is properly stowed. Only when that happens can the front door be legally closed.

When the back end of the aircraft is all set, the lead flight attendant will notify the pilots and close the cockpit door. Since 9/11 it is illegal to start the engines unless the cockpit door is closed and locked.

Up front the pilots are rather busy at this time as well. All airlines have slightly different procedures but are doing roughly the same things. Last minute checklists and takeoff data need to be taken care of and contact needs to be made with the ground crew who operate the pushback tug. The ground crew is also busy making sure all the cargo doors and other hatches are closed which are also verified by lights in the cockpit.

When all of that is done, radio contact needs to be made with ground control for pushback clearance. If there's an aircraft taxiing behind your parking spot or some other delay, you may need to sit at the gate waiting for a while for clearance.

The way most airlines pay their pilots is by flight hours. And flight hours are defined as the time between brake release at the origination and shutdown at the destination gate. So the captain, to an extent, gets to start the payclock by releasing brakes as soon as possible. 

Now there are some other details such as minimum pay rigs (rules) which mean a few minutes of released brakes hardly make a difference in pay. But if the gate agent asks me if I'd mind pushing off knowing I'm ground delayed, but she needs the gate for an inbound flight, I'm properly incentivized to agree. And everyone hates waiting for a gate after landing so I like to help them out as well.

But remember that releasing the brake is a necessary but not sufficient element of an early departure. If I release the brake but the door is still open, the clock doesn't start. (The airplane won't roll because it's connected to the tug by now). Of course, once the door is closed, no one else is coming aboard so I don't have the ability to wait for anyone. All I get to do is delay brake release for a few minutes if the agent is being a horse's rear end thereby giving him a delay just to pimp him. (No, not really. That would be unethical).

Economics Again

No the real reason the airlines like to leave early is the hypercompetitive nature of the airline business as expressed through product differentiation. And blame the internet too.

Airlines, like cellular carriers are in a unique position of having to sell nearly the exact same product as their competitors. All airlines fly to the same government run airports, through government controlled airspace and all their customers go through the same government run grope masquerading as security theater.

All commercial airliners are now built by one of only two global aircraft manufacturers whose products are difficult to tell apart except by airplane geeks. The weather and air traffic delays are generally the same no matter which airline you fly.

So like laundry detergent or cell service, airlines need to emphasize the differences in their products, of which there are precious few. While pricing can be a major selling point, increasing fuel costs act a great leveler. As the price of fuel eats an ever larger piece of the cost pie, individual efficiencies which competent airline managements bring to the table are diminished in the overall cost picture.

While the high costs of the remaining big three legacy carriers, United, American, and Delta were shed through the cycle of bankruptcies in the post 9/11 years, the costs of the low cost airlines have increased to where there's not a great deal of cost advantage for anyone. Spirit Airlines, as an outlier, has managed to keep its costs low, but the service is so spartan that it's not clear whether their model will scale.

Airlines have even tried to be clever by charging separately for bag fees and also by breaking out the government taxes and fees but the DOT has required that those taxes and security fees be added into the total price shown on their reservation sites.

Back to the DOT

Other metrics used to differentiate airline service are the statistics kept by the DOT.  Those are customer complaints, lost bags, and ontime performance. Think of those as RBIs or error stats for a baseball player. They make or break you. 

Southwest distinguished itself last year, and not in a good way, by rearranging their schedule to make better use of their airplanes. It didn't work and their ontime performance plunged to dead last in the industry lineup. Highly embarrassing to their marketing strategy of a being a no-frills yet dependable airline. They have since made amends.

It is the wide dissemination of airline performance statistics through the internet which has gotten airline managements focused like a laser on early departures. In the pre-internet days, only true travel geeks would hunt down these stats. Now everyone sees them with a mouse click. Gate and boarding agents themselves have been threatened with sanctions or even termination for having too many late departures to their credit. 

And as Vinnie, the gangster from Risky Business famously said, you never f--k wit a man's livelihood!

So could there be a solution to all this? Maybe, but it would require a universally adopted new standard of when "departure" actually happens. I totally get that even if the DOT and airlines were disposed to change this system why they'd be reluctant. The devil is always in the details and should the system be changed, there is little doubt that some clever MBAs up in the executive suite would be figuring out clever ways to game the system to their advantage.

So in the meantime, get to the gate early. Or drive.

The Pilot Shortage Meets Econ 101

As the current pilot shortage worsens, two of the players, commuter airline managements and labor unions are turning up the rhetoric on what is actually happening and who is to blame. A recent article in Business Journals placed the blame squarely on "miserly airlines":

The nation's big airlines want you to know that there's a dreadful pilot shortage and they apologize profusely if their commuter-carrier partners cancel flights to your hometown airport due to the debilitating shortfall. 

The nation's big airlines don't want you to know that their commuter carriers, which operate half of all the nation's commercial flights, often pay pilots so little that it's often financially wiser to drive a truck or flip fast-food burgers than fly a plane.

And in addition, what the author of the article also doesn't want you to know it that he doesn't understand basic precepts of economics (which is kind of embarrassing being a financial reporter).

As we've explained previously, a not insignificant part of the commuter airline pilot's compensation is the flight hours he receives in the course of doing his job. Those highly coveted hours, like passes caught or RBIs for ball players, are the stock and trade of aspiring airline pilots. Without the minimum number of hours required, they cannot even apply to a major airline for a pilot job where the real money is.

In fact, were it not for the quest for flight hours, pilots would never even consider working for the admittedly low wages offered by the smaller cargo and commuter airlines. It is an unstated deal that young pilots stay with commuter airlines only until such time as the pilot gains enough hours to move up to a major airline.

The other half of the equation is that since commuter airline managements know their valued pilot employees have no intentions of making a career at their podunk airline, but are there only to gain hours, there is simply no point in paying any more than is necessary. A basic economic tenet of staying in business is to pay your employees only what it will take to retain them and no more. Not miserly, just common sense. It's not a charity.

Doing that is apparently also some sort of crime according to social justice warriors masquerading as online business 'zine reporters who conflate a profit making enterprise with a social cause.

Normally taking between six and ten years to gain the required hours to join a major airline, commuter airlines might be thought of as a minor league for the major airlines. You may have noticed that minor league baseball doesn't pay much either.

Commuter Airline Managements Have a Problem 

This gentleman's agreement of low wages in exchange for flight hours has now been put in jeopardy by several new government regulations mandating hugely higher hours requirements to even get a commuter pilot job. These flight hours must now be purchased and this raises the entry bar to many tens of thousands of dollars to get that still very low paying job. This effectively destroys the calculus young pilots count on to start their careers.

It also throws a wrench into the business plans of commuter airlines who now complain that they don't have enough pilots to fill their cockpits. Their sweet deal of paying pilots food-stamp qualifying wages is also coming to an end. Pilots will now be required by government regulations to purchase their own hours to qualify for any flying job, and will need to service their flight school loans with higher wages.

This whole process begs the question of why huge numbers of hours are needed to qualify for a major airline job anyway. Around the world there are countries without large commuter airline establishments from which to draw pilots, such as Japan. These countries have what are called ab-initio aviation programs which take a pilot from novice to the right seat of a major airline in about a year with only several hundred hours of intensive instruction.

The US military effectively operates such a program with it's undergraduate pilot training, placing pilots in their 20s with only several hundred hours experience into the cockpits of widebody airliners. If this is the future of US aviation, the commuter airline managements may well have a real problem on their hands. The future may be pilots taking out huge loans for ab-initio programs and leapfrogging commuter airlines straight to a major airline job.

So why don't the 'miserly' commuter airlines simply up the pay of their pilots to attract and retain them in sufficient numbers? It's simple: they can't (and expect to stay in business). Their economic models are built on the assumption of cheap pilot labor and their margins are so thin that increased pilot salaries make them into money losing operations at current fare levels.

So why don't they just raise prices to cover the higher salary costs? A trip back into the Econ 101 textbook reveals that for a demand elasticity curve which is not vertical, a higher price will result in less demand for a given product. In English this means that if the already high price of a commuter flight goes even higher, maybe it'd be easier to just watch the game on TV rather than fly to see it. Or perhaps the businessman doesn't have to attend the meeting in person but rather by Skype. (These are called substitute goods). People will fly less and the business will shrink or cease to exist.

And as airlines must sell their product in prepackaged amounts, (the number of seats on their aircraft), below a certain level of demand, service to a particular city becomes a money loser at any reasonable price. It is well known that smaller aircraft have higher per seat costs to operate, which only makes the problem tougher. Time to sell.

Labor Wakes up on Third Base (And Thinks They Hit a Triple)

Right on cue, labor groups have been crowing that the lack of pilots to staff commuter airlines is just desserts for stingy airlines due not to increased government regulation (which labor itself championed), but rather that managements have paid sub-par wages for too long and pilots just woke up one morning deciding not to take it anymore.

Alpa, the largest airline union, calls the shortage imaginary, instead choosing to call this a pay shortage. Well, semantics aside, if you one day go to the grocery and find that your customarily priced $3 bottle of orange juice suddenly jumped to $12, it is doubtful that your first impulse would be to think that gee, I've been paying too little all these years! No, you'd probably think that an early freeze caused a shortage which caused the price to jump.  

Labor is realizing that a shortage labor-supply mismatch may in fact work out in their favor. That is, in favor of pilots who already have an airline job. The new federal regulations, which quintupled the flight hours needed to get an entry level commercial pilot job, are what's known in economic terms as a barrier to entry. 

Barriers to entry are popular with already established members of a particular profession or business as they serve to limit competition and thereby drive up wages or profits. It's been said that the toughest part of becoming a doctor is getting into medical school and that the difficulty serves only to enhance doctor wages. In fact most professional credentialing has some element of this going on.

The taxi and car-for-hire business is being disrupted to great consternation by mobile-paged car services such as Uber and Lyft. They are being ferociously fought by taxi companies and the urban regulatory bodies which profit through control of outrageously priced medallions or licensing requirements.

So this is all well and good if you already have your airline job and are far enough up the list to avoid a furlough should your airline need to shrink to profitability. No where in any economic text book does it state that any particular service should exist and be generally available to the public at a reasonable price. The commuter airline business model may just find that given current fuel and increased labor costs, the service simply can't be provided as a mass commodity.

One need only think of the fledgling space taxi business. We have the technology to routinely fly passengers into space, but with only the occasional billionaire dilettante as a willing passenger, the demand for space plane pilots is small.

Commuter airlines may shrink into a boutique or air taxi operation for very wealth clients in the model of the current fractional ownership of private aircraft, at least for many smaller cities. That would mean the pilot shortage solves itself on the demand side with commuter pilots being furloughed or shrinkage of the industry through attrition.

The winner in all of this? Well, not the small city customer who, when he can even find a commuter flight, will pay through the nose. And certainly not aspiring pilots who will now need to borrow tens of thousands of dollars just to get their first job. And perhaps not even existing commuter pilots who find their companies shrinking due to decreased demand.

Who wins? Flight schools may see an uptick in students who now have to purchase (at about $120/hr) their experience. Probably lending institutions making loans to these aspiring pilots. And most certainly the politicians who get to claim that they "did something" for the aviation industry.