The race to the bottom

Shipping and road transportation has been affected by mishaps lately. Investigations has revealed, (apart from that fact that alcohol has been involved – you get what you pay for), that a new problem has been introduced in both industries. Been around for some time actually, but starting to causing incidents and accidents more and more as time goes by.

It is called by industry officials ”the-lowest-price-possible-syndrom”. So far the airline industry has not officially recognized that it is affected by the same syndrom. It is nothing new for a lot of airline employees, and if you get really frustrated by the trend that is not addressed, you might end up writing a fake dialogue in an effort to open up a few eyes to the many dangers involved. Someone obviously did. Enclosed below. (If you’ve read it before, skip it. That goes for everything that is repeated in this blog, by mistake or intensionally.)

Low cost airlines

Wow, 19 dollars for an airline ticket. Isn’t that great. Luckily not everyone on board paid only 19 dollars. If you booked well in advance you could really enjoy the cheap ride with the new low-cost carrier. If everybody on board paid only 19 dollars, there is no chance in heaven they will stay in business for more than 3 weeks. But it’s still a low cost airline, right? Isn’t that a gift to the flying public? Regular airlines or what was previously looked upon as flag carriers must understand that nobody in their right mind would put up four times or more for the same ride. Boy, am I enjoying myself. Departure, destination, flight time and even the type of plane are the same. This one even smells brand new. Like on a boat fair, kind of. Smell of plastic. After my second 12-dollar drink, having nothing else to do, since I didn’t want to pay 6 dollars for the earphones, which would have had me dish out some 50% more than the ticket itself, I start wondering. How can these guys fly so cheap? Where do they cut costs? Have the airplanes become cheaper? Come on. Even if they got a discount, it won’t cover inflation. Cheaper fuel? No way. Even if they manage some freezed price deals, anyone can do that. Cheaper landing fees? Possibly, if they land at bush airports 70 miles away from the city. Administration? Now there is a possibility. A slimmed head office can account for some small part of it. On board service. There we go. Still, I have decided to enjoy that. I get what I pay for including 20 dollars for each suitcase, the 10-dollar charge for Internet booking and the 5-dollar for the initial phone call, and an extra 15 to change seat. If they start charging a buck to go to the restroom, where nobody been able to rest so far, I will enjoy that too, because I want this budget flying to survive. I spend 5 dollars for a cup of coffee, still enjoying myself, and the caffeine sharpens my senses. I nudge my fellow passenger in the side, because I get talkative after two drinks.

Salaries”, I say.

What?”

Salaries. I’ve been sitting thinking and wondering how these guys can provide a product for a quarter of what the regular airlines do, and it must be that they pay less. Flight and ground crew and all”.

Are you happy with that?” He is not nice and I also noticed he didn’t buy anything from the drink trolley.

With what?”

Your conclusion”.

Well I think I went over all the other corners they can cut and it didn’t amount to much. So I figured it must be salaries”.

And are you happy with that?” Why can’t this guy just agree with me?

It’s a cheap and comfortable ride”, I say to force him to agree on something.

Suppose they pay the pilots a quarter of industry standard, are you comfortable then?”

They can’t do that!”

Suppose they do”.

Well, they can all fly, can’t they? There are regulations and stuff, right?”

The captain might be well paid. The co-pilot might be worse off and I am sure these 25-year-old beauties are paid peanuts. The co-pilot might even pay to fly because he needs to log flight time and get flight training. The guy up there in the right seat in the cockpit might be paying more to be on board than any of us passengers. Thing is, there is a quite often a surplus of pilots and would you be comfortable flying with one of the leftovers after all other better paying airlines have hired. Would you go to a low cost surgeon to have a heart transplant, given a choice?”

I just look at him. He’s just turned talkative without booze.

Have you considered where else they, as you say, cut corners? Have you considered overhaul periods, maintenance, training, duty hours to name a few?”

Aren’t they kind of the same for all airlines?”

They’re becoming more and more so because the giants have to cut costs too. I will tell you what has happened to the industry with the advent of cheap airlines, which coincides with the deregulation of the industry. Before that, full service airlines could charge pretty much what they wanted. Some even made money. Almost all had flight crews organized in unions. The unions managed, not without great effort, to secure some of that profit in the form of constantly raised salaries. So your salary idea is not to be disregarded. The thing was, the unions had severe concerns for more than money. To the frustration of many CEOs they worried just as much about flight safety, since money without a life is kind of useless. The CEOs liked to state flight safety was their priority number one also. They didn’t add ‘as long as you could afford it’. Aviation authorities have rules covering every conceivable aspect of aviation safety and that should be sufficient, shouldn’t it? So why should pilots worry about so much. Didn’t we pay them enough to shut up and fly? The problem was that aviation authorities made rules so lenient you might think the mail must get through no matter what. I will give you an example. When NASA got wind of the new duty time regulations suggested by the joint European authorities, pushed and applauded by most airline managers, they had one of their best collective laughs since Armstrong farted live on TV. ‘Do you not even care about all your aircraft’, was their sentiment. What pilots in most flag carriers did through their unions was negotiate, sometimes desperately, for shorter duty periods than allowed by JAA, getting it down from 16 to somewhere between 10 and 12. They sometimes had to sacrifice salary demands in those negotiations to achieve this, thus buying safety for their own money from strangely uncomprehending CEOs. They sometimes traded money for better retirement benefits or better vacations but that’s another matter.”

I have a hard time concentrating now. He’s really taken off. I try to figure out when he breathes between all the words.

To the frustration of many head offices, pilots poked their nose into areas like maintenance and training, where it to the flying public must be inconceivable that everybody was not in agreement. Anyway, a lot of things have changed. It took some time before the big ones saw the threat. For good reason. They saw low cost airlines as a different product altogether. These emerging budget guys did little more than fly passengers from A to B. They found numerous ways to charge for extras. Guys like you don’t notice that, do you? What you also don’t know is that if this flight is delayed and you miss your connection, there is no help from these people, whereas a regular airline still is obliged to get you onto another connection, find you a hotel, compensate you or whatever. If you check into a low cost and the flight is cancelled they pretty much give you the finger, whereas the regular guys spend enormous sums on rebooking all passengers. Now since the public is short-sighted, the competition grew and the high-cost guys eventually realized they had to do something. They had to lower their fares to stay in business, and to lower their fares they had to lower their costs. What to do? There you go with your salary idea”, he said and caught his breath.

I was silently wondering if he was going to be violent, so I refrained from comments, not that I had any. I had noticed this guy used the word ‘guy’ a lot which wasn’t worth mentioning. He was to me a very, very strange guy. He soon got into gear again.

They couldn’t even come close to the salary levels for these crews, after all the years of establishing benefits. True especially for the cabin crew, where the low-cost could get pretty and willing girls right off the street, give them two weeks training and have them work for a quarter of the best paid regular ones. The pilots were another matter, since pilots are a world market product with sometimes limited supply, and paid accordingly. The problem with the pilots was their unions who fought harder for their privileges, the more the pressure and competition increased. For the low cost, mentioning a pilots union or any other union for that matter at headquarters was like swearing in church, and any pilot suggesting one was fired on the spot. Eventually the big ones made their unions see the light and salary increases stopped and soon they also started to decrease together with extended working hours. It was called increased productivity.”

Who is this guy, I wondered, and immediately came to think of Butch Cassidy. How can he know so much, I thought and was reminded of a washing machine commercial.

Now what else could they do while still bulldozing productivity upwards. They thought little of the fact that there is no way in hell an already streamlined airline can cut costs without affecting safety. Overhaul periods were extended. Duty times were finally extended to the by NASA ridiculed JAA/FAA limit. One airline on the American continent doubled their pilots’ salaries to make them fly 16 hours with only two pilots, making that particular union loose its credibility forever. Training was another matter. It was reduced to a minimum. Training, especially simulator training, is a very precious thing. Not only are the pilots not producing revenue. Simulator time cost enormous sums. The number of simulator sessions was cut drastically, pilots got CDs to study at home and safety was maintained basically by the pilots will to survive. One European airline with its own flight academy stuffed with simulators for most commercial aircraft showed how desperate things had become when they decided to sell all daytime simulator time to external customers, forcing their own pilots to train at night, their flight operations office totally losing the trust of their pilots in the process. Many fun stories described instructors finding pilots sleeping, pilots finding instructors sleeping, and occasionally everybody slept. Money was saved here and there in the industry and pencil sharpeners were in big demand in head offices all around the world. Someone noticed that the low cost airlines didn’t have a mechanic around the aircraft at departure anymore, and that was for some strange reason actually approved by the authorities. ‘Now there’s something we have to adapt to. Who will be doing the pre-flight check, then? Well, the pilots of course. Why haven’t we thought of that before and how do we solve that? We give them a folder with all the things they have to know including pictures of tyre wear, give them a one day run-around the aircraft and have them sign that they have adequate training. Modern aircraft seldom break down anyway, do they?’”

He caught his breath again, looked out the window for several seconds, and then back at me. I could tell he wasn’t finished by a long shot. He waited a few seconds more, probably to let everything he had said so far sink in. I could have told him I was fascinated, had he taken the trouble to ask. He seemed very agitated.

The unions went over the roof on that one. ‘The last bastion of safety is a skilled mechanic,’ they hollered, even demeaning their own possible contribution. The fight lasted for years, but today Pilots Flight Inspection or PFI is a reality. Do you think a non-union pilot puts a technical remark in the aircraft log, severe enough to ground the aircraft before repair is made, at any other station than on his home base, if repair cannot be made on the turn-around station? There are hundreds of cases where a mechanic, they still exist you know, just by chance has come by, seen something the captain has overlooked and managed to stop an aircraft ready for departure. Oil leakage hard to spot, once a broken wheel axis, any odd thing. At one time a captain didn’t notice that the complete forward slat section on one wing had jammed in extended position. Had he gone up in the air, he would have flipped over on his back when he retracted the slats on the other wing! Do you want me to continue?” he asked.

I nodded sheepishly, just to keep him stable.

Fuel. Fuel was next. Flight operations managers were pressed from above for better results, and the authorities, of course, opened up for less stringent rules. Alternate airport requirements were in some cases disregarded and the need for fuel reserves were lowered. Fuel on board corresponded to kilos and kilos cost fuel to transport. The more fuel remaining after landing, the higher the fuel consumption for that particular flight. A extra kilo on top of gross weight cost approximately 4% per hour to transport. If you could lower the remaining fuel by a ton on 100.000 short haul flights a year an airline could make a fortune, or more precisely 20 million USD at half a buck a kilo – or the equivalent of 10 captains salaries I one of the better paid airlines. Keen Chief Pilots were patted on the back by their superiors for supporting these kinds of fuel savings, even though it meant less safety. The debate in the flight planning rooms was fierce. ‘They’re trying to save peanuts’, some claimed. ‘Every bit counts’, said others.

But it is safety we are scarifying. A ton gives us another 30 minutes we might need if there is a problem with the aircraft or with the weather or with the airport.’ ‘It’s never been needed.’ ‘Ha, tell that to the guy who ran out of fuel over New York, killing himself and everyone else on board and even a few on the ground.’ ‘But he planned like an asshole.’ ‘Hell he did, he planned like his chief pilot ordered him to and like our joke of a chief pilot is suggesting.’

The older the pilots, the more fuel reserves. One old-timer muttered ‘the only time you have to much fuel is when you are on fire’. Do you know that this airline we are flying with has had at least two occasions where they have flamed out during roll out after landing due to fuel starvation? They had to be towed in. They simply hadn’t enough fuel to hold for a while in bad weather.”

I have now finally realized that this guy is a big time bitcher. There is almost nothing he is happy about when it comes to flying. I think I know why. He is scared of flying. Normally you compensate that by being aggressive. I want to tell him that I think he is exaggerating. I am too late.

What would you say if you know that these two jokers up front already now have been working for fourteen straight hours, one possibly with the flu and the other with a headache since they can’t afford to call in sick and loose money or risk being fired since they don’t have a union, and when we arrive after two more hours find the airport closed due to thundershowers, have to wait for half an hour, finds out they don’t have fuel for that, have to divert to another totally unfamiliar airport with not so good weather either and no ILS, feels the pressure so much that the captain has a heart attack, the co-pilot with minimum hours on the aircraft type, who has a hard time finding the men’s room at a strange airport, has to land in marginal weather and finds out during final approach that he has lost one engine. Then, are you happy with your 19 dollar ticket?”

Now I get aggressive too. I try to stay calm, though. He is a big guy.

That’s unfair. That’s a ridiculous scenario. Why should so much go wrong at the same time? That never happens.”

It happens during the simulator training. Do you happen to think an airline accident is caused by one thing only? It is always a number of things interacting, and when you pile up more and more problems, eventually one little sometimes insignificant thing caused death and destruction.”

Now I know he is scared of flying.

I still thing the flying public deserves as cheap transportation as possible,” I venture.

Now listen carefully, please. Airlines are expensive things to run. They must make a lot of money to run a safe operation. And to stay in business. Since staying in business is a key objective, they must either make money enough, or cut corners. Since authorities like IATA, ICAO, FAAs and CAAs don’t put their feet down, regular and pretty-penny airline managers alike get away with that safety reducing corner cutting. That’s why cheap airlines like these are a real menace, since they force regular airlines into a budget squeeze. And that’s why you have an eternal battle between management and pilots. I know that for a fact. Name one airline with happy pilots and I’ll buy you your next twelve-dollar drink. And I mean happy with their management.”

I realize I will have to skip that drink or pay myself.

Why do you sit here then, if you’re so negative about this kind of operation?”

Money, what else.”

Now he surprised me big time. He smiled.

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