"The Real Reason for Jetstar"

[Alan in CBR]

I'm not sure what the pay discrepancies between Qantas and Jetstar staff are (from what I've heard they are in the order of $50 to $100K for the captain) - but if they are of a reasonable size, surely that means you get lower quality people? I know where I work , we've had tremendous trouble recruiting good people since they cut the wages in one area. (IT Software Engineers)

(my bolding)

Not necessarily. There's a real oversupply of qualified pilots. Even the good ones are really lucky to end up in an airline. Most work in General Aviation, or leave the industry altogether.

By the way, we have trouble getting good Software Engineers too. But I find it's not the salary being offered (we pay pretty well), it's just that there aren't enough good ones around. But maybe that's getting a bit too off-topic.

 

[Mish]

Well I'm not sure about you, but I don't think it's the best idea to hire a Cessna pilot because your 747 pilot with 20 years experience left to fly with United Airlines because they pay twice as much. (probably have to pay less tax too in the US!)

Yes there is a shortage of software engineers. It's the pay that's the problem , not the shortage. To take it to an extreme, if your (or my) company paid $1 million a year do you think we'd have a problem getting good quality software engineers? Of course not!

 

[N860CR]

The way things are going, there's going to be a real shortage of pilots in the not too distant future. Most of you wouldn't believe how bad the pay and conditions are in general aviation. I know some flight instructors who will some weeks work 6 days, 12 hours a day and pull in less than $100 a week.

Pilots used to tollerate it because the knew that if they worked hard enough for it there would eventually be a $250k airline job at the end of the road. With carriers like Jetstar wiping $100k pa off the average pilots salary, do you think anyone would tollerate 5-10 years in GA to eventually end up on public servants money... probably not.

The estimation is that when the current crop of experienced pilots retire (5-10 years time), there won't be enough new pilots around to replace them.

 

[Alan in CBR]

Well I'm not sure about you, but I don't think it's the best idea to hire a Cessna pilot because your 747 pilot with 20 years experience left to fly with United Airlines because they pay twice as much. (probably have to pay less tax too in the US!)

(Using United happens to be a bad example, but that's not important.)

How do you think they get 747 pilots in the first place? They hire experienced commercial pilots and train them. And no, we're not talking about someone who has 200 hours in a Cessna 150. There are really good pilots with thousands of hours twin turboprop experience who cannot get a job with an airline. Actually lots don't want to work for airlines (it's not the be all and end all of flying), but there are always far more who do want to work in airlines than there are airline jobs available.

Yes there is a shortage of software engineers. It's the pay that's the problem , not the shortage. To take it to an extreme, if your (or my) company paid $1 million a year do you think we'd have a problem getting good quality software engineers? Of course not!

I disagree. Your example of paying $1 million dollars for each software developer (which would drive any company broke) is not the point. Lets say I wanted to get a really top team together, without bankrupting the company. So I research the industry pay scales and make it known that we pay 25% (or maybe even 30%) above that. I'll be able to pick up some good people, but then what happens? Some other good people (particularly the really, really good ones) let their current employer know about me, and they get a counter-offer to stay put.

Then a few other companies see that they are losing good engineers and so adjust their payscales accordingly. Suddenly I'm paying a bunch more than I did previously, but still can't get a perfect team, and I may not even be able to retain the ones I got in the first place.

That's how it works when there is a shortage of particular skills. In the past the airline industry has been an anomoly - no shortage of pilots, but still very high pay. That's purely because the initial training costs for the airlines were so high. Staff retention becomes very important in that situation, so airlines were prepared to pay. The industry has changed though, largely due to the low cost carriers. The poster-child for LCCs, Southwest, won't hire a pilot without a 737 type rating (see here for a cite). They still get plenty of suitably qualified applicants, and since they save on training costs they can pay less because staff retention isn't so crucial.

The traditional airlines (such as Qantas) still pay very well and still provide costly up-front training. I won't get into the union debate but the diminishing power of the unions, partly assisted by strategies such as starting new wholly owned subsidiary airlines such as Jetstar, will continue to erode the traditionally very high income of airline pilots. For better or worse.