Cost for LIAT in employing pilots goes beyond salaries

Dear Editor,

The LIAT Pilots under their umbrella organization The Leeward Islands Airline Pilots Association (LIALPA) appear to be on a collision course with their employer – LIAT. From the statements made by the LIALPA spokes-man in the media it is clear that despite the worldwide economic situation the pilots are not prepared to settle a new agreement amicably and are prepared to refer the matter to arbitration.  In order for the general public to get an appreciation of the issues there must be an understanding of what is involved in the total cost of employing flight crews, as it is more complex than the salaries. Airlines have to bear a plethora of other costs and a comparison between the salaries of pilots in different airlines is not enough to get a clear picture of the issues surrounding the LIAT pilots’ new agreement.  In short pilots’ salaries, benefits and working conditions vary between countries and airlines. Flight crews are one of the large direct operating costs an airline has to bear, including initial and recurrent training, duty pay and allowances, accommodation, uniforms, health care and the cost per flight hour (FH) which is usually influenced by productivity.

Although there are variations between countries and regulating authorities, the general requirements for commercial pilots are similar.  A pilot joining an airline needs a minimum of a commercial pilot’s licence and instrument rating (CPL/IR) or an air transport pilot’s licence (ATPL) which is usually acquired after a pilot has amassed a total time of 1500 hours.  The number of hours a pilot has when s/he joins an airline varies considerably between airlines.  At LIAT, pilots usually start their career as first officers (FO) and before they can sit in the cockpit of an aircraft carrying passengers, they are obliged to go through weeks of theoretical and practical training.  Promotion for pilots depends on a number of factors, but generally it is through a seniority system.  Airlines have a seniority position for each pilot and a new FO will be given the lowest seniority position in the FO’s list, moving up a position each time an FO above him moves to the captain’s seniority list or a new FO joins at the bottom of the list.  Pilots may be promoted to captains in as little as three years after joining an airline, but in some cases it can take several years or they can work as an FO until retirement.  If a pilot were to move to another airline, s/he would not normally transfer any seniority.  The ‘new’ pilot would go to the bottom of their rank’s seniority list at the new airline and work their way up again.  This was indeed a hot issue when LIAT acquired some of Caribbean Star’s assets, and as a consequence it needed to employ additional pilots. Most of Caribbean Star’s pilots had previously worked for LIAT and had left LIAT high up on the seniority list, but nevertheless they were obliged to accept employment at the bottom of the list on their return to LIAT.

As stated earlier, salary scales vary between different airlines.  In most airlines there is a system of increasing basic salaries for each year of service, usually up to a maximum level.  There are also separate salary scales for each rank so that in LIAT the FO’s are on a different salary scale to the captains.  Airlines also have separate salary scales for each aircraft type in the airline, with the larger types having the higher salaries; however, some airlines have an agreement with their pilot unions where the same salaries are paid to pilots of the same rank and seniority regardless of aircraft type flown.

Training for new type aircraft or recurrent training requires expensive ground and simulator training; this cost is usually borne by the airline. However, many airlines only employ new pilots if they agree to a bond towards their training of two or more years to ensure that the airline is guaranteed some period of service after the large training investment.  In large airlines like British Airways, the cost of initial training is of course far higher than for LIAT, and is usually amortized over the first five years of employment.  Most airlines now deduct some of this cost from the pilot’s salary.  Although LIAT utilized a bond system in the past, the practice was challenged and pilots can now receive training in LIAT and walk away at any time thereafter.  Pilots are paid while on training, and airlines have to also factor in this unproductive ground time and its cost each time a pilot goes on training.

Some of the issues in the LIALPA/LIAT saga brought to light by the LIALPA spokesperson include flight and duty time limitations, overtime pay and premium pay for work done on public holidays.  There are very strict regulations relating to how many flight hours flight crew can provide each year, and there is very little room for overtime.  The regulations which are usually taken from an aviation authority’s Flight and Duty Time Limitations chart relate to how many flight, block, duty hours and sectors a crew can undertake in any one duty period.  It also covers how much rest time pilots are required to have between working shifts, which is influenced by issues such as hours flown, the time of day flown and number of sectors flown.  Additional restrictions are also in place in respect to the maximum number of flight hours in any consecutive seven-day period.  Where overtime is legally possible, a pilot may be paid by the hour, the day or duty type, depending on the particular agreement.  Pilots in some airlines are paid a higher hourly rate for duty over a certain number of hours per month, while other airlines do not pay overtime but guarantee an hourly payment for a fixed number of hours per month. Hours worked in excess of the minimum guaranteed would normally attract extra pay.  LIAT pilots are not paid overtime, but are guaranteed payment for a fixed number of hours per month even if they do not fly those hours.  LIALPA is now claiming that their members should be paid overtime if they remain on duty more than eight hours in a day, regardless of how many hours are actually worked in seven consecutive days.

In addition to a basic salary and duty pay for hours flown, allowances for variations in a planned duty and meals while on duty are also paid; however there are large variations in how airlines deal with the various allowances. Some airlines only give duty pay and cover the cost of meals, accommodation and ground transportation directly with the suppliers when pilots are obliged to overnight away from where they are based.  The most common option is to pay pilots a rate for every hour they are on duty.  A second method of flight or duty pay is to pay a rate per sector flown.  Some airlines also pay pilots a meal allowance. Some airlines give the crews a per diem to cover the cost of meals or include the meals in the accommodation and settle directly with the supplier. The practice in LIAT is for the company to cover the cost of meals, accommodation and transportation and settle directly with the suppliers.  There is, however, no limit on how much cost the crews can incur for meals and LIALPA must approve the properties selected by the company for accommodation.

Generally all passenger airlines offer their employees some level of discounted travel (staff-travel). The flight crews at LIAT are however treated differently to all other categories of employees in respect to staff travel.  Provided the flight crews wear their uniforms, they can travel totally free of cost if space is available on the flight. Other benefits that pilots normally receive include loss-of-licence insurance, health and life insurance.  LIAT also offers a pension scheme to its employees.  In addition to the foregoing, airlines normally pay for any visas crew may need.  The time it takes for the visa to be issued and therefore the potential time the crew cannot fly is indeed a cost to the

airline and should also be taken into account.

The different elements of pilot employment costs are so varied that the structure and the spirit of an existing agreement cannot be ignored.  A new collective agreement must therefore be considered in a holistic manner as a piecemeal approach examining only one or two items, such as the basic salary or whether overtime payment should be made, will undoubtedly be viewed in a skewed manner.  The behaviour of the spokesperson for the LIAT pilots suggests that they are woefully underpaid, but is that really so?  It is my view that both sides (LIALPA and LIAT) should agree to have a three-man arbitration panel with a clean sheet of paper to start the process of examining everything relating to the employment of the pilots with the view to coming up within a reasonable time with a brand new collective agreement that is fair and equitable and, of course, aligned to current best practices in the industry.  I trust that the foregoing will indeed help the public to better understand the LIALPA/LIAT saga and both sides will recognize that the regional integration process depends heavily on a smooth working relationship between the two parties.

Yours faithfully,
Denvil Octave

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