May 1, 2016

 

Republic Airways Pilots’ 2015 Contract: A Comparison

 

At its unveiling, there were industry-wide reverberations concerning the Republic Pilots’ Collective Bargaining Agreement, the virtues of which have been extolled in many crew room and message board discussions. Without a doubt, the RAH contract is volumes better than their previous and it is a step in the right direction for the industry. Polishing away the fine emerald patina of pay rates reveals much to be desired though; the contract lacks in many major areas. We’ve said it 1,000 times and we’ll say it 1,000 more; the contract must be taken as a sum of its parts and not judged by one particular provision. A common refrain from airline managers that we’ve all heard many times goes something like this: “Sure, I’ll agree to pay you $1,000.00 per hour, but we get to write the rest of the contract.” One of our own managers has claimed that, if it was up to him, he would gladly give us the RAH deal in a heartbeat. That should cause us to take pause and reexamine our premises. When negotiators across the table are willing to accept a deal with such alacrity, one must ask themselves, “how much are we leaving on the table?” Let’s examine the RAH deal a little closer, peering into the substantive sections, scrubbing away the thin veneer of first-year and longevity rates that are temporarily and marginally better than what we are currently working under.

 

Before we delve into the big ticket sections, let us preface this comparison with what this X-Ray is not; this document is not meant to say “look at how good you have it, now accept less in the next contract.” The Committee is well-aware of what it’s going to take to achieve a contract and we have a keen understanding of what the collective pilot body wants. This assessment is, however, meant to put the Negotiating Committee’s bargaining challenges into perspective and, more importantly, to demonstrate that there is more to a contact than pay and first-year rates.

 

Pay

 

As demonstrated from the table below, Republic’s rates are definitely on the high side of the current industry and they outpace us, but only by a sliver. If our company has no interest in putting more into the next contact and consequently we are still working under our current CBA for years to come, our yearly 1.5% pay increases will put us back on the top within 2 years. First-year rates at RAH are among the highest in the regional segment of the industry. First year pay is important in bargaining because the company wants and needs higher first year wage rates as a recruitment tool and the Association seeks to increase all wage rates, including first year pay.

Take a closer look at the tables below for a comparison of RAH and ARW hourly rates at various longevity steps, as well as expected yearly salaries at 88 hours of credit per month.

 

Yearly Salary - @ 88 Hrs/Month (does not include any retention or signing bonus monies)

10-Year Captain (50-Seat RJ)

5-Year FO (50-Seat RJ)

Republic

$92,368

Republic

$48,576

Industry Average

$86,581

Industry Average

$43,761

ARW

$92,136

ARW

$47,615

 

Rigs, Premium Pay, Per Diem and Cancellation Pay

Š      RAH now has parity with ARW on duty and trip rigs.

 

Š      Premium pay is 150% at Air Wisconsin, while Republic may offer 115%, 130% or 150%, depending on how badly they need a trip covered.

 

Š      At a $1.60 per hour, our per diem is definitely lacking and is even lower than the federal rate. ARW per diem is also lacking as compared to Republic, whose pilots currently enjoy $1.95 per hour. Here is an example of a provision where   a pattern to bargain towards exists and better rates are achievable.

 

Š      RAH now has cancellation pay.

 

Vacations and Bidding

 

Depending on longevity, senior pilots at AWAC can have up to 5 weeks of vacation, with 3 designated as primaries. A 5-year pilot at AWAC will have 3 weeks of vacation and 1 primary. Republic accrues their vacation, sick, and many other leaves into one bank. This bank is called PDO or Paid Days Off and is a monthly accrual based on years of service. The sick accrual table below outlines 10-year Captains and a 5-year FOs, which is 8.05 hours and 5.60 hours per month, respectively. This equates to approximately 3 weeks of PDO for FOs and 4 weeks for Captains in the aforementioned longevity categories. Republic does not have trip touching, nor do they have a solid, stand-alone vacation bank.

 

Deadheads

 

It is well-known that RAH pilots do not enjoy 100% pay on deadheads. They receive 75% for deadheads and a mere 50% when ground transport is necessitated. The perverse incentive on management to deadhead a pilot all over their system is greater and it is also difficult to quantify. Anecdotally, we all recognize and observe that RAH deadheads their pilots to a greater degree than other carriers and we could venture a guess as to what effect that has on the pilot’s bottom line. We couldn’t easily access significant data on how many deadheads a pilot can expect per 4-day trip. Based on a conversation we had with a long-time Republic pilot, say RAH deadheads their crews 2-4 hours per 4-day trip. This would equate to a loss in pay of 0.5 to 1 hour every four-day, as compared to ARW’s CBA. At 4 trips per month, that’s 2 to 4 hours lost pay per month and 24 to 48 hours of pay per year. The RAH deadhead pay provision really adds up to some real dollars over a year’s time!

 

Retirement

 

The retirement section of our contact is where we really start to see a divergence between our CBAs. Of course, one has to partake in the 401(k) to reap the benefits, but they are indeed stark. The table below describing 401(k) company match is self-explanatory, so we’ll spare the added reading.

 

Company 401(k) Match + Other Company Retirement Contribution (if applicable)

10-Year Captain (50-Seat RJ)

5-Year FO (50-Seat RJ)

Republic

4%

Republic

4%

@ 75 Hours Per Month

$3,149

@ 75 Hours Per Month

$1,656

@ 88 Hours Per Month

$3,695

@ 88 Hours Per Month

$1,943

Industry Average

5.62%

Industry Average

4.27%

@ 75 Hours Per Month

$4,147

@ 75 Hours Per Month

$1,593

@ 88 Hours Per Month

$4,866

@ 88 Hours Per Month

$1,869

ARW

8%

ARW

8%

@ 75 Hours Per Month

$6,282

@ 75 Hours Per Month

$3,247

@ 88 Hours Per Month

$7,371

@ 88 Hours Per Month

$3,809

 

Sick Time

 

Let’s take a look at sick accruals and how well we are covered under our CBA vs. what happens when a Republic pilot calls in sick. At Republic, they use a sliding scale to bank between 4 hours per month for a new hire, increasing to 8 hours per month for a senior Captain. An important point to keep in mind is that Republic links all of their leaves (sick, vacation, personal) into this bank, calling them PDO’s or Paid Days Off. Unlike at AWAC, Republic pilots calling in sick will credit 4 hours of pay, regardless their original line credit value. For instance, if a Republic pilot had 7-hours of credit on her original schedule, after calling in sick they would receive 4 hours pay for that day. If a Republic pilot calls in sick for 2 four-days in a one-year period, she will credit 32 hours. Assuming an AWAC pilot does the same, he/she will typically credit closer to 40 hours (or more) over that same period, a gain to the paycheck of a 10-year Captain equating to about $698.

 

Sick Accrual & Pay (for a 4 day 20 hour Trip)

10-Year Captain (50-Seat RJ)

5-Year FO (50-Seat RJ)

Republic

8.05

Republic

5.60

Industry Average

3.29

Industry Average

3.81

ARW

3.50

ARW

3.50

Sick Pay (for a 20 hour Trip @ 5 & 10 Year Hourly Rate)

Republic

4.0 Hrs per day = 16 Hours Sick Pay Credit

 

$1,400

 

$736

Industry Average

Average is Trip Credit Missed = 20 Hours Sick Pay Credit

 

$1,640

 

$829

ARW

Trip Credit Missed = 20 Hours Sick Pay Credit

 

$1,745

 

$902

 

Insurance Premium Share

 

Costs to our pilots regarding individual insurance plans vary with the plan selected and the participation level (employee, employee plus one, employee plus family).  Our contractual medical insurance plans are arguably the richest in the industry, easily eclipsing most major and regional airlines (including RAH).  Below are approximate average premium cost share dollars in comparison.

 

Approximate Insurance Premium Cost Share Percentage

(total dollars based on ARW plan assumptions)

Republic

35% Premium Share per year

 

$3,574.00

Industry Average

31% Premium Share per year

 

$3,165.00

ARW

25% Premium Share per year

 

$2,553.00

 

Other Labor Protective Provisions

 

Both ARW and RAH have “no alter ego” provisions. Where ARW diverges from RAH is in the fact that the number of Captains cannot contractually fall below 305.

 

PBS vs. Line Bidding

 

Republic utilizes the Preferential Bidding System on their property. The downside to the PBS system is that a pilot loses vacation trip touching. An example under PBS would be preference bidding for trips that start on a Tuesday, with morning shows. PBS can be a boon or a bane depending on how it is implemented.

 

Summary of Economics

 

The comparison below is intended as an illustration only and uses averages and selected monetary elements. The values associated with line bidding vs. PBS, vacation trip touching, deadhead pay, open time pay, and many other Air Wisconsin benefits are difficult to factor in, and only serve to raise the ARW contractual value, perhaps even by a significant margin. See below for a very rough comparison of monetary value between ARW and RAH, based on calculable values.

 

 

Air Wisconsin

Republic

10-year CA

5-year FO

10-year CA

5-year FO

Pay (based on 88 hrs/month)

$92,136

$47,615

$93,368

$48,576

Retirement (based on 88 hrs/month)

$7,371

$3,809

$3,695

$1,943

Sick Leave (2 trips per annum)

$3,490

$1,802

$2,800

$1,472

Insurance Premium Share

-$2,553

-$2,553

-$3,574

-$3,574

Per Diem (based on 305 TAFB average at AWAC)

$5,856

$5,856

$7,140

$7,140

Comparison

$106,300

$56,529

$103,429

$55,557

 

Conclusion

 

Republic’s deal is a step in the right direction for the industry as a whole, although it remains to be seen what the outcome of the bankruptcy will be. Historically, CBAs do not survive bankruptcies intact and we can expect some of their gains rolled back. Upon a closer look, we find that our current contract has much more to offer in terms of QOL, total compensation, and benefits. In addition, our pay rates alone will surpass RAH in 2 short years, as a result of the 1.5% increases. Lastly, it is difficult to put a dollar value on working for a company that, at least compared to its peers, treats its pilots well.

 

Our industry is more dynamic than ever and the Negotiating Committee wouldn’t be surprised to see other carriers making strides in their CBAs, hopefully leapfrogging our contract by a large margin. Having a pattern to bargain against provides us with a ladder in front of us to readily climb. ALPA President Tim Canoll can be oft-quoted as taking about the three factors that must be present to get a deal that sticks. These factors are:

 

1.        a pattern to bargain against,

2.        the airlines’ ability to pay, and

3.        pilot unity.

 

Arguably, the only factor that is missing from our equation is a significant pattern to bargain against, but somebody has to break the glass ceiling, right?

 

Your Negotiating Committee