Sunday, February 5, 2012
Airline Industry
In 2009 Delta and Northwest decided to come as one. According to Delta's website it took $500 million in investments to make this happen. Challenges that occurred during this process included painting over 80 Northwest Aircraft combing the hubs. Northwest hubs were Detroit, Minnesota among others, were combined with Deltas hubs of Atlanta and JFK. Delta is the worlds largest airline and according to Deltas website employees over 70,000 employees worldwide. Some challenges from the pilots perspective, is Delta and Northwest pilots did minor things differently, such as items on the checklist. I have spoken to many old Northwest pilots who believe that Northwest was more strict as an employer. But that could be just a bias answer. In my opinion the benefits outweigh the consequences between the merger.
United and Continentals merger is one very similar to the one between Delta and Northwest. Its a major shift in the airline industry as two of the major legacy carriers combine into one. The United/Continental merger happened in 2010, and like most mergers the first decision must be made as too which name to use. Usually the name chosen is the one with the best reputation (which is everything in aviation). The most difficult part for the pilots in the merger is how there seniority will be infected especially for the Continental pilots. According to iam141 the seniority for the airline is by the date you were hired no matter which airline you got hired by, whether it was United or Continental and implement them together. Like the Delta/Northwest merger I also believe that the United/Continental merger will eventually be a beneficial one.
The future of American Airlines is not looking too bright at the current moment. In November of 2011 American Airlines filed for Chapter 11 Bankruptcy. The thing that lead to bankruptcy for American Airlines is just bad business. American Airlines has a very old fleet and very old flight crew. According to Aviation Blogs Dallas News the average age of American Airlines pilots is 51.6 years old. American has 560 pilots that are over the age of 60, and with the new FAA rules of mandatory retirement at 65, American is really going to be a shortage of pilots in the next 5-7 years. Theirs rumors rumbling around the industry and maybe merging with Delta or merging with JetBlue. I predict that American is in just such a huge financial whole that they will eventually merging with somebody if not more than one airline. I think that due to the age of their pilots and airplanes, they will have to make some type of merger or they will be in a world of hurt.
I believe these mergers throughout history will have a huge affect on our future. As a pilot standpoint I think all these mergers maybe hurting the pilots now with all the adjusting going on in the industry, but once all the smoke settles down and all the airlines get settled down, I believe it will strongly benefit pilots and management students. With the 65 year old mandatory retirement and such senior crews on American and Delta, in the next 5-10 years airlines will have to a hire a ton of pilots, which is great for us!
Subscribe to:
Post Comments (Atom)
Mandatory age retirement along with the crew rest rules, and mergers should help the pilots. At least I don't foresee mergers hurting pilots' job security that much for future pilots. The reason that I say this is because despite the mergers and financial issues of airlines, they still are flying more and more. So the need for pilots is going to continue to increase. Even if an airline goes away as so many others have (ATA, Eastern Airlines, etc.) other airlines will pick up their traffic. The mergers and bankruptcies could have an effect on senior pilots and new pilots. Senior pilots may be furloughed to save money, and new starting salaries may be reduced severely under a bankruptcy hearing. Regardless, if an airplane flies from point A to point B, it will need at least two pilots regardless if the airline has merged with another airline or sought out bankruptcy.
ReplyDeleteSome words have been exchanged in the media fearing we are loosing competition with the airlines merging and consolidating. I think you make a good and dangerous statement by saying when the airlines get settled down. Simply because we know the airlines will never settle because it was set up in this country to continually be competitive. I do agree with you about the benefits of the students future within the industry.
ReplyDeleteI would also have to say that a merger with American would be difficult for any airline. The costs and burdens would be huge. It would be a risky gamble that the party insiders can hopefully read better than we can. While the age 65 rule will be huge for pilot hiring, I have to wonder if there will be as many jobs available with the consolidation in the industry than if some of the latest mergers or projected mergers didn't/don't happen.
ReplyDelete