Outsourcing Pilot And Fa Jobs?

[Rob]

Boeingboy, I think (and hope) that we are a LONG way from approving cabotage, except in those rare circumstances when US airlines cannot perform, e. g. Volgadniepr's monster cargo planes. I don't think either political party is in favor and, secondly, I don't think the EU has anything close to an equivalent carrot to offer.

Ancient history: when Germany was split into four occupied zones, the US, Brit, and French sectors had their respective national airlines fly to Berlin in the Soviet sector. Only Panam was able to make money on it, so when AF and BA dropped their flights, Panam took over all of them.

 

[Bear96]

At IKEA, Shell, and your VW dealer, you have Americans working, not foreigners. Same principle. There will NOT be foreign workers on US-operated aircraft, it is a US-based business. Think of the BMW factory in North Carolina, or Honda building cars in Indiana. Those are American workers in there, making US dollars, paying US taxes! And this is somehow bad for them?

...

- Better pay. With more airlines operating, demand for your services goes up (pilot, FA, mech, etc). This is the last industry to not join the global economy, ironic since it is global by its very nature.

We already HAVE foreign workers on US-operated aircraft. At UA we have had non-US F/A bases in LHR, FRA, CDG, NRT, and HKG (and until recently, SCL and TPE) for years. While there are some Americans at those bases, the majority are foreign citizens who do NOT have the right to work within the US (they can only work on segments that begin and/or end outside the US-- as in, our most lucrative, high-paying positions). These are jobs on a US flag carrier that should be staffed, many would argue, by Americans. It will get only worse with cabotage.

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BETTER PAY???!!! Once Air Zimbabwe begins to operate hourly from LGA-ORD with Zimbabwean crews, our pay will have to go down to match that. Demand for airline employee services may go up, but the supply of cheap, foreign labor will go up much more quickly.

Cabotage is probably inevitable and may lead to a healthier global airline industry in the long run, but the truth is, US airline workers will most likely see their pay and benefits and other compensation decline as a result.

 

[deltawatch]

If all star alliance partners are allow to do this with every flight couldn’t U be converted into a little commuter (MDA) airline, with star partners flying the big stuff.

 

[BoeingBoy]

Rob,

I didn't intend to inply that I favored cabotage. Merely pointing out that 1) the EU wants it badly, and 2) that the "byzantine rules" that one poster referred to are what keeps this a US-based industry.

Jim

 

[PITbull]

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Cabotage is probably inevitable and may lead to a healthier global airline industry in the long run, but the truth is, US airline workers will most likely see their pay and benefits and other compensation decline as a result.

And that is never good for United States workers.

 

[deltawatch]

Any time you hear the word global get ready for a pay cut. CNN reported that one CEO recently stated publicly that all American workers are egotistical, under educated and over paid and that every company would be better off outsourcing their work to more highly educated and grateful workers abroad. That even includes middle mgt postions now.

 

[mweiss]

It was overstated a bit, but there's certainly a grain of truth in the statement. 'Course, the same applies to CEOs...

 

[The Gopher]

No one has yet explained to me why the airlines should have these type of rules, while auto manufacturers, oil companies, and even cola makers have no such restriction.

And Air Zimbabwe flying ORD-LGA hourly? Well, if they have the money to do it, and be licensed as a subsidiary by the DOT, why not? They would have to hire US pilots, US flight attendents, source gate/ramp/maintenance jobs to US employees, and pay US taxes! All of this demand for labor pushes wages higher. How is that a bad thing again?

More entrants to a market = more demand for labor of all kinds. Thus wages increase.

 

[Bear96]

And Air Zimbabwe flying ORD-LGA hourly? Well, if they have the money to do it, and be licensed as a subsidiary by the DOT, why not? They would have to hire US pilots, US flight attendents, source gate/ramp/maintenance jobs to US employees, and pay US taxes!

If it is indeed only the coporate ownership that is "foreign," that wouldn't be so bad. Unfortunately, that is not what is envisioned, from what I understand. They will be free to use their own crews. At least for pilot and F/A crew (though it would probably be different for ground crew), Air Elbonia could schedule them to work Elbonia-JFK, layover, then fly JFK-LAX-JFK or some other domestic tour of the US, then back to Elbonia, if the airlines have their way.

 

[jimntx]

And Air Zimbabwe flying ORD-LGA hourly? Well, if they have the money to do it, and be licensed as a subsidiary by the DOT, why not? They would have to hire US pilots, US flight attendents, source gate/ramp/maintenance jobs to US employees, and pay US taxes! All of this demand for labor pushes wages higher. How is that a bad thing again?.

But, if they "have to hire" US pilots, f/as, etc., that is not cabotage. What the foreign airlines want is to fly point to point in the U.S. with their employees making wages far below U.S. wages.

Are you sure about that statement of those foreign airlines paying U.S. taxes? What about the U.S. companies that the Bush administration has allowed to move their corporate registrations to Bermuda; so that they now pay no U.S. corporate income tax. They do all or most of their business in the U.S., but by dint of major contributions to the Republican party and a corporate registration in Bermuda, they are no longer subject to U.S. tax laws. Stanley Tools is one.

More entrants to a market = more demand for labor of all kinds. Thus wages increase

Yes, very good. Labor Economics 101. However, in the second semester class (LE102) you will learn that if there are more people out of work than at any time since the Great Depression, then labor supply outstrips labor demand and wages remain low. Also, if you get more companies providing a given product or service than the market can support, some of those companies go out of business and their employees lose their jobs. More employees + fewer jobs = lower wages.

Increased competition does not automatically mean an expansion of the market or the labor demand where the competition occurs. Look at the movie theater industry. When I was growing up, every neighborhood had its own movie theater. Well, the companies, like AMC, started building the megaplexes. Did that result in an increase in employment in the movie theater industry? Not that I can tell. Seems to have reduced it. All the neighborhood movie theaters who hired different people to work the cashier booth and concession stand and to usher are gone. At my nearest AMC (which I have to drive over 10 miles to get to), the cashier booth has 6 or 8 stations. Regardless of the length of the line waiting to buy tickets, I have never seen more than 3 people working the booth at any one time--usually, it's only 2. The concession stand is fairly well staffed, but instead of 25 cent popcorn, the smallest bag costs $3.25. Oh, and they have 6 high school students to look after and clean 24 different auditoriums.

 

[mweiss]

More entrants to a market = more demand for labor of all kinds. Thus wages increase.

First order result. However, does the demand in the market increase? Generally, yes, in the short term, because of price wars causing increased demand due to lower prices. In the long run, however, the prices tend to return to close to their old levels, thus returning demand to close to the old levels...which means that the oversupply disappears as the less-efficient players exit the market.

The upshot? Generally close to the same number of employees as before, because the slightly greater demand, caused by the lowered prices, is served by a more efficient workforce. And wages tend to be lower than before, because the demand for labor was unchanged, but the supply went up because of people who entered in that brief period of heavy competition.

 

[E-TRONS]

Cabotage?? Could it be??

I worked for EL-AL at JFK in the mid 80's (part time) and their pax flights in the USA would routinely travel JFK-LAX-JFK after arriving from Tel Aviv or Amsterdam. And in the winter season a few pax aircraft were converted to freighters and flew all over the USA after originating in Europe.

All of these flights were manned with Israeli crews and the operation was run by all Israeli management. Even the security force was comprised of college students from Israel.

There were only a handful of full time mechanics on the payroll. The ramp and cleaners were all contracted out to low paying firms.....employing mostly immigrants.

So much for all the jobs created by foreign carriers operating in the USA.

 

[mweiss]

That's not cabotage, unless the same pax or freight were both loaded and unloaded within the US without a stopover outside the US.

 

[TOGALOCK]

Gopher,
Your theory about the auto industry is interesting. Please explain what leads to the reality of the shipping industry. There are no U.S. flagged ships and very few U.S. workers in that industry worldwide. I think that is a lot more plausible outcome than the retail and manufacturing industries you site.

 

[jimntx]

Cabotage?? Could it be??

I worked for EL-AL at JFK in the mid 80's (part time) and their pax flights in the USA would routinely travel JFK-LAX-JFK after arriving from Tel Aviv or Amsterdam. And in the winter season a few pax aircraft were converted to freighters and flew all over the USA after originating in Europe.

All of these flights were manned with Israeli crews and the operation was run by all Israeli management. Even the security force was comprised of college students from Israel.

There were only a handful of full time mechanics on the payroll. The ramp and cleaners were all contracted out to low paying firms.....employing mostly immigrants.

So much for all the jobs created by foreign carriers operating in the USA.

Foreign flag cargo jets have always had more leeway that passenger jets. I bet El-
Al was not selling any JFK-LAX or LAX-JFK tickets. If they did, they were violating U.S. law. If they had a passenger board in Tel Aviv or London and fly through JFK en route to LAX, that is allowed. A passenger bound for London or Tel Aviv can board El-AL at LAX and make an intermediate stop at JFK.