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Tuesday, May 17, 2016

That's the way it is.

There were three cycles in our business in Orlando.  It was like a wave, building up to a peak, three times a year.  The first wave build up of the year was Spring Break.  The passenger count would build slowly after the first of the year, until the spring frenzy was over.

The next peak was during summer.  The loads would begin to build until late in August, then drop precipitously.  The third wave built up until Christmas, then there was another big drop.  We had three frantic periods, then three periods during which we could take a breather.

The problem for the managers of our little airline was staffing.  If they staffed for the peaks, they had too many people for the valleys.  If they staffed for the slow time, we would be overwhelmed during the busiest times.

Staffing in other departments had issues also.  For example, the agents and mechanics in Orlando were very busy when the planes were on the ramp in a bank, but things were snoozy after they left.

In experimenting to find the best level of staffing, the company let things get a little thin and expected the pilots to pick up the slack.  They started calling us on our days off to come out and fly.  Some of the pilots bought answering machines and screened their calls.  Some decided to just say they could not fly when called.

One very busy day, when several pilots had refused to come in on a day off, Director of Operations, Captain Al Frink was in the crew room, where dispatch and scheduling were located.  He lost it and said, "Fire the next pilot who refuses to come in."  You may recall, Jim, the guy who ran dispatch and scheduling at Pacific Express and then came to Florida Express in the same capacity.  When he heard what Frink said, he said, "Wait a minute.  We have a problem with not enough pilots and you want to start firing them?  Why don't you offer them money to come in?"  They did and it worked and this was the beginning of the end of our lousy salary system of pay.

The pilots had been hanging in with the company, flying tough schedules and junky airplanes and making it work.  It was time to find a way to reward their loyalty.

The first attempt was to offer a bonus based on fuel consumption.  There were comparisons of the fuel burns of all the pilots on all the various legs and those who had the lower burns were given a bonus.  It didn't take long to understand the pitfalls of this process.  Pilots were beginning to experiment with techniques that had dangerous potential.  Just one example had to do with what is known as "stabilizing" an approach to land.

Jet engines are a little slow to "spool up" from idle to an engine speed that produces significant thrust.  The conservative way to fly an approach is to slow the plane, extend the gear and flaps, establish the correct speed for weight and conditions, then adjust the power setting to maintain all that on the correct glide path to the runway.  Everything is stable and most airlines require this to be done by 500 ft. above the runway.  This can be done earlier, which is more conservative, but uses more fuel.  It can also be done later, which is less conservative and saves fuel.  The problem with the latter, is that if something which requires a go around occurs, there may not be enough time for the engines to spool up, before the plane contacts the ground.

With all the variables, it is far more complex than that, but I think that gives you an idea of where some of the folks were trying to get that bonus money.  The good thing about our little company was that we could see things like this happening, bring them to the attention of the chief pilot and get them corrected quickly.  The company was pretty good about letting the pilots run the flight operation side.  They had learned to trust that we were doing what was in the best interest of the company.

After the fuel conservation pay program was broken up, the company came up with one that paid a bonus for flying extra hours each quarter.  It is not easy to explain and I probably don't remember it as well as I could, but essentially, if a pilot flew 25 extra hours each quarter, there would be a bonus paid.  

I talked to my friend, Warren, who was holding some position in pilot management at the time, and he gave me all the details and answered all my questions.  The thing about pilots is, that they are really good at figuring out ways to work a pay system.

After getting the fine points of this system digested, I took a pencil to it and determined that I could make an additional $10,000 per year.  To confirm my thinking, I called Information Victor and he agreed with me.  It would be rather easy for a pilot to make an additional 10 Grand.  We had more than 100 pilots at the time.  10,000 times 100 equals a million bucks.  I called my friend Maurice (also known as Pepe Le Pew, because he was French and he was always chasing the womens), explained the deal to him and asked him if he thought he could do what was necessary to make the 10 Gs.  I picked him, because he was sharp with the $s and he was about midway on the seniority list.  He said he could do it.

So, within a few hours of knowing the details of the pay plan, 3 pilots had determined that it had the potential to cost the company a million dollars or more.

Maurice and I went to the pilots who were currently managing the flight operations department and asked if they would like us to monitor the system and maintain a howgozit view of it.  Dixon was taking a break from management and went "back to the line", to just fly the airplane for a while.  The new guys said no, there was a new computer system tracking everyone's time and they would just wait until the end of the year and total it all up for the bonus.  We said, "Oh", and just kept track of how we were doing as individuals and we were on schedule all year to do what we thought we could do.  We actually wondered what we might be missing.

At the end of the year, our CEO had another pilot meeting.  He announced that we would not be doing the bonus for time plan the next year, because it cost more than $ 1 million and they did not expect it to be that expensive.  Information Victor, who was never bashful, stood up and told the boss that a few of us dumb pilots had gotten together as soon as the plan was announced and calculated that it would cost the company a million bucks, so why didn't management know that.  The boss said, "Well Victor, I guess you are just smarter than us."  He was right.

There was one guy, who was even smarter than we were.  We all flew our butts off each month.  This guy saw that all you had to do was fly your butt off one month each quarter, then goof off the other two, to get the 25 extra hours each quarter and 100 for the year.  This was what the bosses were mad about and probably the main reason they decided to cancel the program for the future.  If we had been allowed to monitor the process, as we requested, we would have seen what he was doing and what the group was doing and given them a heads up, but NOOOO!  They had a computer doing all that. 


  1. Incentives often have perverse and unanticipated side effects. great post.

  2. Yep, there are several lessons in this one.