[AR] Re: Rocket Labs

  • From: Norman Yarvin <yarvin@xxxxxxxxxxxx>
  • To: arocket@xxxxxxxxxxxxx
  • Date: Thu, 17 Sep 2015 23:47:43 -0400

On Thu, Sep 17, 2015 at 02:05:54PM -0700, justin corwin wrote:

I have to say, that article is not very convincing. It reads more like a
bitter "junior pilot" complaining about his superiors he believed treated
him badly and got unevenly rewarded because of union seniority. The few
references he makes overall about pilots union effects on airlines are
speculative or just straight extrapolation, most of it is just about the
disparity between senior and junior staffers, which is maybe unfair, but
meaningless to overall cost to the airline if they balance out. The
'positive feedback' effect he proposes exists in all industries, you just
swap out 'senior pilots' for 'management', no evil unions are required to
ensure that expensive powerful people are protected at the cost of junior
expendables.

Most "management" consists of people who can be fired at will. An
exception is CEO pay, which indeed is somewhat scandalous.
(Shareholders theoretically can fire a CEO, but it doesn't happen
easily.) But the number of people in such high positions is small,
and the world does notice when they suck up the entire corporate
profit.

The numbers don't quite work either. Even if an airplane is staffed by
super senior pilots($300k/yr), who are making only that flight that day,
their salaries amount to 821 dollars a day, so even three of them would
hardly make a dent in the average take on a flight cross country ($54k).

Oh, that's a dent. (It's 4.5%.) And that's as a percentage of take
(revenue); it's an even larger percentage of the profit.

Particularly when compared to the fuel costs ($34k right now for a 767),
which fluctuate in value more than the three super senior pilots salaries
put together in an average year in one such fill up according to
http://www.indexmundi.com/commodities/?commodity=jet-fuel .

Airlines commonly hedge their fuel purchases to deal with fluctuating
fuel costs. In the long run (when the hedges run out), they adjust
their ticket prices, which they can do since their competitors face
the same fuel costs. Neither of these strategies apply to an airline
which is overly burdened by expensive pilots.

By the way, though the author of that article flew for an airline for
a few months as a junior pilot, it's safe to say that he was not in it
for the money.


--
Norman Yarvin http://yarchive.net/blog

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