Big-iron pilots flood corporate market

 - December 21, 2006, 6:24 AM

Pilots of large-cabin jets who work as independent contractors complain that former airline pilots and young pilots willing to work for much less are undercutting their normal daily rates. To learn more about this issue, AIN interviewed three contract pilots and Raymond Stebler, director of staffing solutions for Jet Professionals, which helps companies hire qualified aerospace professionals, including pilots, maintenance technicians and flight attendants.

“We have heard similar comments from our pilots,” said Stebler. “The main cause is pilots trying to break into the business with low hours and new type ratings, and they are competing with the pool of experienced pilots. It is tough to break in, so they will offer their services at a very low price to clients.”

Gulfstream pilot Jeff Beck said, “Youngsters want to see us old graybeards get out of here. That’s fair. But they haven’t grasped the concept I’m promoting, that this is a business and you have to run it like a business.”

He said that in the last year daily contract pilot rates for large-cabin Gulfstreams have dropped by $200 to $500. When Beck first began flying as a contract pilot in 1994, he would have to log 36 to 42 days to cover his yearly nut, including training expenses, health insurance, taxes and retirement savings. Now it takes Beck 72 working days flying for an average of $1,000 per day in the Gulfstream IV and GV/550 to cover yearly expenses.

Training Costs Rise
Part of the reason he has to fly more to cover annual expenses is increased training costs. A five-day recurrent course for the GV is about $20,000 including expenses, he said. New entrants in the contract market don’t consider the recurring expenses, he explained. “The newbie airline guys forget it needs to be like a business. They’re going out cheap not figuring out what it takes for training.”

Not all ex-airline pilots are bad for business aviation, Beck noted, and he has flown with some well qualified and customer-oriented former airline pilots. “Some of them are converting and doing a damn good job.”

But, Beck added, “The majority of them sit there in the right seat, they’ve been captain for the last 15 or 20 years, and he hates it and he hates you. It’s a disturbing atmosphere in the cockpit where you get airline and corporate guys in there. At times, there’s an effect on safety.”

Another Gulfstream contract pilot, who wished not to be identified, agreed with Beck’s assessment. “Airline pilots wanted the union to stabilize wages, and once that fell apart and screwed up their world, they want to screw up ours,” he said. “They don’t understand that if the boss calls and needs a case of wine carried from the airplane, they have to do it.”

This pilot said he has seen daily rates drop by 20 percent in the last four years, mostly due to retired airline pilots wanting to continue flying because of insufficient retirement investments. Some of these former airline pilots understand the business of running a contract pilot operation, he said, adding, “It is only about 30 percent that are clueless.”

Another consideration is the insurance requirements for pilots flying large-cabin airplanes. “If a person is willing to undercut the market,” he explained, “I believe that they would also lie about their flight time.”

Average daily rates for Gulfstream pilots should be about $1,400 per day, he said, if they had kept pace with inflation, but they are hovering around $1,000 to $1,200. “Pilots of all backgrounds should honor the price structure that is in place,” he said.
Paul Richardson, a Falcon contract pilot, estimates that he loses about six days of work per month due to low-balling new contract pilots. “The domino bankruptcies of the last four years have dumped many pilots with no nest eggs on the corporate [aviation] employment markets,” he explained. “Many have some early retirement or lump-sum payments and have purchased a GIV, GV, G550, BBJ or Falcon 900 type rating and offer themselves out as so-called independent contractors. Many of these same folks have contacted me for leads on employment, and some have low-balled my fee, which is part of this business.”

In Richardson’s experience, new contract pilot entrants from the retired airline pilot ranks and even young pilots don’t charge enough to cover expenses and run a proper business. Worse, the cost of recurrent training is causing some dangerous moves, he added. “Some are not current anymore and now have to pony up the $30,000 to $50,000 for a simple 61.58 recurrent. A few I have seen provided forged documents, such as dates of training changed, and had recent experience issues.”