July 05, 2007

The important of pilot salary

The salary of every pilot is one of the important thing that should to be handle by airliners. The pilot should to get the suitable salary as it will increase the loyalty, dedication for the airline itself.

Although it will make the airliner bucket to increase, but the result is good for the airline or airways.

As reported by Arijit Banerjee and Rumi Dutta Hardasmalani in their article: Airlines are now leasing manpower, that an airline doesn't need some pilots, it keeps them on its roles but leases them out to other airlines who pay them higher salaries. The case in point is SpiceJet, with some other airlines expected to follow suit.

For example, SpiceJet has given six pilots to Oman Airways airlines for 12 months. GoAir has sent back three planes during this lean season, thereby releasing around 12 - 15 pilots for other airlines.

Many airlines have their pilots hired, but is this as good as if the pilot is only work for them than just hired?

If pilot hired by other airline, that pilots will get an international experience. This is the good news. But how about the income for the airline and the pilot himself?

Arijit Banerjee and Rumi Dutta Hardasmalani also has write that airlines are not only looking at the commission they earn by hiring out pilots. They have turned it into an incentive scheme for their pilots, while the pilots promise to stay on with airline as their parent company allows them to earn that extra buck by flying on international routes.

To hire or purchase will still back to the airline itself.

If want to hire, how to hire or purchase?

Samar Srivastava in the article: Buy or Rent? has write that in many ways, purchasing marks the maturing of an industry is a logical progression from leasing to owning the asset.

For the airlines, price is obviously critical. Negotiations between manufacturers and airlines are a collaborative process. Discounts are given based on order size, future prospects of the airline and the prospects for the aviation industry in the operating country. Manufacturers also throw in some training for pilots and maintenance staff.

In the long run (over a 12 year cycle) owning an aircraft works out cheaper than leasing, as it saves the airline from paying a premium to the leasing company. On the other hand, in the event of a downturn in the industry, an aircraft can become a liability on the airlines balance sheet. This is where a plane on lease is an advantage, because leasing companies are generally amenable to renegotiating lease rentals. A mix of owning and leasing the fleet is how most airlines prefer to hedge their risks. Out of a fleet of 51 aircraft, Jet Airways has 27 on an operating lease and the rest on hire-purchase leases.

Another option for purchasing is a sale-and-lease-back. This is done when an airline buys a plane. Before that plane is paid off, be it less than one year or even six years down, the airline sells it to a leasing company, who then makes all the remaining payments. The leasing company leases back to the airline immediately, and becomes the eventual owner.

Why all this trouble? For one, planes can depreciate faster than expected and a sale-and-lease-back can protect against this loss of value. Also, if the market plummets, any planes that are held on sale-and-lease-back agreements can be given back to the leasing company. DVB Bank, a German bank that specializes in transport finance, has assisted Jet Airways in the past with such transactions on aircraft engines.

No comments: