The Air Canada split.

[trey kule]

I guess I dont understand "Rockie. I thought that there would be a wage gap between the replacement pilots moving up and the senior pilots moving on..I did not realize that everyone was making the same wages at the senior end...

[Rockie]

That's true to a small extend in the smaller, less paid airplanes. But after 12 years the pay is 100% according to equipment and seat. Unless they change those there is no change in salary costs.

[trey kule]

Sorry to belabor the point, but am I to understand that the person sitting in the right seat who would move over is making the same as the person in the left seat that they would replace?
Or that they would immediately go to the same wage as the person in the left seat on the transfer

I am not disagreeing with you at all. Just trying tounderstand how it works.

[Understated]

[A]m I to understand that the person sitting in the right seat who would move over is making the same as the person in the left seat that they would replace?

Here is a short summary of how the AC pay system works.

Pilots are paid by "Position." Position is defined as Base, Aircraft, Status. New hires are placed in the "Position Group," with each pilot in the group earning equivalent pay, regardless of Position, for a number of years. Position Group pay rates are much lower than the rates of pay for pilots who are out of the Position Group, i.e. on "formula pay."

Pilots receive "base pay" increments, as part of their formula pay, for each year of service, up to 12 years. After a pilot has accrued 12 years on the property, his or her wage rate for any "Position" is constant. Also, there is no pay differentiation for base. Hence, the YVR B777 Captain is paid the same as the YYZ or YUL B777 Captain.

When a B777 Captain retires, everyone junior to him or her moves up by one seniority number, and a vacancy is created on the Position Assignment List on the base where that pilot held his or her Position. Whereas a university professor making top dollar may be replaced by a younger professor making an entry level wage, the B777 Captain is replaced by someone making exactly the same wage, because the pay for the Postion is determined by the Position, not by the characteristics of the Person awarded the Position (again, after 12 years in the company). The net change in payroll is therefore zero.

However, to train a pilot to occupy a new pilot position, Air Canada, according to its witness’s testimony at the Tribunal, must spend approximately $40,000, on average, per pilot training course. That covers the cost of taking someone off the line for approximately two months to attend ground school and simulator training, as well as the contractual costs of the simulator and the instructor, plus indirect wages, such as pension and vacation accrual etc, plus hotel and per diem expenses, as required.
.
But the real cost is much higher. The B777 Captain must be replaced by an A330 Captain. He in turn is replaced by a B767 Captain, and so on. Air Canada’s evidence before the Tribunal is that for every B777 Captain that does not delay his retirement for one year (from age 60 to 61), his retirement costs the company 10 courses, or $400,000.

So even though the payroll cost after the training is completed is identical, Air Canada is necessarily out $400,000 to make the change. Hence the question, why is Air Canada fighting to maintain mandatory retirement?

Air Canada is currently force-retiring approximately 120 pilots per year. If only 10% of those pilots stayed employed for only one year, the company would save $400,000 x 12, or approximately = $5 million. Two years: $10 million.

Please explain to me, then, what’s in this for Air Canada to pour that kind of money down the drain?

[Rockie]

Sorry to belabor the point, but am I to understand that the person sitting in the right seat who would move over is making the same as the person in the left seat that they would replace?
Or that they would immediately go to the same wage as the person in the left seat on the transfer

I am not disagreeing with you at all. Just trying tounderstand how it works.

Understated's summary is exactly correct, but the pay system is more involved than that because there are I think four different elements that go into it like navaid pay (holdover from the dark ages), night rate and base pay. Very complicated and enough to confuse Stephen Hawking.

Think of it in these simpler terms that seems to work for me. Each seat in a particular aircraft has its own unique rate of pay with 12 levels. If someone moves out of that seat it creates a vacancy that other pilots can bid for, with the senior pilot bidding awarded that seat. When he goes to that seat he now receives the pay for that seat depending on his years of service, the highest being twelve. Most seats in this airline are occupied by pilots having 12 years or more service, which means most pilots on this airline are getting the highest possible rate for the seat they currently occupy.

If a 777 pilot retires, their seat is filled again by another pilot who will then receive the same pay as the guy who just left. But now there is a vacancy lower down that must be filled by another pilot, then another one below that that must be filled and so on. Each one requires a course, which as understated has mentioned is very expensive. A single guy leaving at the top can trigger huge training costs for the company which dwarf the salary for a new pilot for several years.

From a cost perspective a company should want pilots to stay as long as possible and never move from one airplane to the next for the length of their career. That's why it is a real head scratcher why Air Canada (the company WOXOF, not the pilots) is fighting mandatory retirement. I don't get it.

[swordfish]

Those 2 posts from Understated and Rockie are very informative, in addition to being a logical read in plain language.

It sure helps us ordinary plebeians understand the system better. Thanks to both of you.

[hairdo]

In light of recent points, would insurance costs change for AC if the pilots age exceeds 60? I can't think of any other reason for them to fight it other than, perhaps, having to re-instate pilots... (more training costs to bring them back online, seniority issues).

[Rockie]

In light of recent points, would insurance costs change for AC if the pilots age exceeds 60? I can't think of any other reason for them to fight it other than, perhaps, having to re-instate pilots... (more training costs to bring them back online, seniority issues).

Good question. I don't know if insurance rates would be higher for a pilot over 60 or not, but it doesn't seem to be an issue anywhere else in Canada or the world because everywhere else has already gone beyond 60.

[.......]

Reading the depth of animosity between the two groups in the Air Canada age 60 discussion is becoming more and more difficult to believe.

Hopefully it does not reflect the thinking of the majority..if it does it will be a very unhappy work place for decades.

Geez, Cat... See what you've done?

[skat0r]

66 65
68 63
70 59
75 50

[trey kule]

Thanks for the two informative posts. It was a bit enlightening for me.

If you question why AC is taking the position they are with regard to retirement, I have no idea.

.

[bcflyer]

That's why it is a real head scratcher why Air Canada (the company WOXOF, not the pilots) is fighting mandatory retirement. I don't get it.

This is about far more than the pilots. If it becomes the new norm then all the staff at AC will be clamouring for the same thing. Imagine 75yr old F/A's, CSA's and Rampies. They all have B scales for their new hires, so unlike the pilot group, when a senior person retires they are replaced by a lower paid worker. The longer the old staff stay the more it costs the company.

If I was the company I'd be fighting it too......

[Stu Pidasso]

bcflyer has got it right.

It is all about precedent, the Airline doesn't what to become a nursing home for the service staff (F/A's and CSA's.)

Not to mention, the majority of Pilots still want the ability to 'get the hell out' at 60 (or better yet...earlier.)

[c170b53]

Oh boy... Its all about the pension!!!!. If a guy sticks around after normal retirement, he f8@3-up in his planning. Pension payouts actually go down, the deferred payments, plus additional contributions all provide the company with a boost, it's all the company cares about. This isn't a nursing home, it's a funny house.