Careful What You Ass-U-Me

By: Jason “Emet” Depew, TPN Staff Writer  and Steven “Cheapshot” Chapman, TPN Guest Writer

Greetings TPN! Emet has been working hard to get good information out to the masses to help you make good decisions. He tries to balance his enthusiasm for his company and his personal bias in check by keeping numbers fair and realistic when he does comparisons. And we think he does a pretty great job of it. However, we want to unleash him a little in this article by inviting Guest Writer, Steven “Cheapshot” Chapman to challenge his assumptions and help contextualize what some of these topics might look like through another lens. We hope you enjoy eavesdropping on their conversation as much as we did. – Matt & Adam, TPN Co-founders


Cheapshot: Hey Emet, you know what happens when you assume, right?

Emet: No, what happens?

Cheapshot: It makes an ass out of you and me.

Emet: Ha. Back to your point?

Cheapshot: There’s value in making your estimates conservative. However, you also risk missing out on an outstanding opportunity if you’re so extremely conservative that your numbers are well below what you could see in reality. It’s also important to realize that all paths in life come with risk and that there are ways to mitigate the risk of airline life.

Emet: Oh, come on dude! I can’t be soooooooo conservative that I’m leading people astray, can I? I usually either multiply a given airline’s reserve guarantee by 12 to get the number of hours of pay a pilot can expect. I add to that 401k contributions, per diem, and profit sharing, as appropriate. Sometimes I just use the rule of thumb of 1000 x (Hourly Rate) = Annual Compensation. Those are both pretty close, right?

Cheapshot: Um, no… I told you that after your first article and the second! Let me tell you about where I am and how much I’ve been making. It’s not to brag but it’s the realities of the W2 after a few years in the job. The cold hard fact Emet that it’s really not all that difficult to work more and make more money if you want to. It’s one of the best things about the airline gig and being in a “corporate” job instead of government work. (I will caveat that during the bad years this wasn’t always the case.) Manning at my airline tends to be on the lean side which I have learned creates all sorts of opportunities for people to maximize their income. As a general rule, I try to credit a baseline of around 85 hours a month as a lineholder. Usually, this means that I have to pick up a day or two of flying beyond what I was awarded through the Preferential Bidding System (PBS). If you do the math 85 hours a month is 1020 hours a year. Already we are beyond the conservative estimate of 1,000 hours a year. The reality is that each year I have credited closer to 1200 hours a year without really working that hard.

Emet: Now hold your horses right there Cheapshot. Yes, (1000 x Hourly Rate) is a decent rule of thumb for calculating an airline pilot’s annual income. However, 1000 hours is also a magic number because it comes from an FAA regulation. 14 CFR 121.471 (Flight time limitations and rest requirements: All flight crewmembers.) clearly states that: “No…flight crewmember may accept an assignment for flight time in scheduled air transportation or in other commercial flying if that crewmember’s total flight time in all commercial flying will exceed 1,000 hours in any calendar year.” You’re busted dude! You break the rules…you’re dangerous!

Cheapshot: Dude, relax. The key is the word “Credit,” aka hours paid. If you look at how much I actually fly it’s around 700 hours a year. My current hourly pay is $167hr (year 4 B757/767)…So let’s do some quick math. Base pay at 1200 hrs is $200K, plus profit sharing of around 15% is $30,000. Let’s not forget tax-free per diem yearly of around $7,000. So total cash compensation is roughly $237,000…but we are not done yet. At my airline, we receive a 16% contribution to our 401K based on our flight pay and profit sharing which in this scenario equals $36,000. So for someone in their 3rd year, it’s not too terribly difficult to make a ballpark of $273,000 in total compensation. What’s even better is that each year this number increases through upgrades in positions, longevity ($178/hr in 2019), equipment and new contracts. I will caveat that it can also go downhill quick in a bad economy, but I find that people are overly pessimistic in this area and assign more risk than is probably deserved to the airline job while being overly optimistic about continued military service.  

Emet: Wow, that’s a lot more money than I’ve been quoting to people. I would have said to expect about $174K in annual income for someone in your position using the 1000x rule of thumb. Even a more sophisticated spreadsheet I have only estimates your pay at $215K per year. I always try to be conservative when I show people numbers to avoid accusations of bias or manipulation. I always assume a worst-case scenario where a pilot will only ever fly the monthly reserve guarantee (the number of hours the airline is required to pay a reserve pilot, whether she flies or not.) I think a lot of military pilots looking at the airlines use reserve guarantee as well. It’s easy to find this number for each airline on airlinepilotcentral.com. It’s tougher to figure out what a lineholder gets paid at each airline. Is it not valid to assume a pilot will only fly the number of hours in the reserve guarantee for his or her entire career?

Cheapshot: Yes, that’s completely invalid!

Emet: I can’t argue with that. I guess that I personally will probably make less than you because I try not to work very much. Don’t you have to be gone all the time to make this kind of money?

Cheapshot: Absolutely not! I still get more time at home with my family than I did on Active Duty, and I’m still in the Reserves. You have to be intelligent about how and when you work. That old adage about working smarter not harder is very true. It has taken me a little time to figure this out and each airline has its own intricacies, but here is my strategy: Some months I might choose to pick up an extra day or two of flying at single pay to help reach my baseline of around 85 hours or more. I have learned that I should always be careful of what trips I pick up because some are more efficient than others. I look for trips to pop up that might be above the daily guarantee of 5:15 hours and maybe credit 6-8 hours a day. It might just be a one day turn with a deadhead from LAX to DTW  that pays almost 9 hours. It’s an easy way to make some extra $$ while minimizing my time away from base (TAFB) or time away from home and family. Trips like that usually are not part of the normal bid package, but when people call in sick or there are wx disruptions, our scheduling system tends to break up trips or create “inefficient” trips for coverage (read profitable for the pilot).  

So an efficient trip is cool and all, but what I try to do is be smart about when I might have the opportunity to get double pay…yes double pay for trips. At my airline we call these beauties “green slips.” Think for a second about that last time a military scheduler asked you to fly an extra student sortie or assigned you that SOF shift on a Friday night when you were supposed to be on a date with your wife. What was the extra pay worth?…you know the answer “Service before Self!”  Welcome to the real world where extra work in my case now pays $336/hr. Miss the date but take your wife on a vacation instead!

There are times where it’s just luck to be available and get awarded a green slip. However most times its pure strategy of how you set up your schedule and make yourself available to take advantage of these opportunities. For example, the month of May is always very profitable for me. At my airline the sick leave system resets on June 1st, which means that for some funny reason many pilots are very sick in the month of May. I guess it’s just a strange coincidence, but I’m more than happy to profit from it. I bid back to back trips trying to fly most of my schedule in the first two weeks, leaving myself a week or two off at the end of the month to be available. It hasn’t failed me yet to get one or two green slips in this month, making my 120-140 hours of pay easily. Remember that trip I talked about earlier to DTW? I actually had that last May and for one day’s worth of work credited almost 20 hours when it was all over. Yes I worked one extra day, but that one day paid me almost as much as 4 days of regular work. Again…smarter not harder.

I have also found that if I bid off the first few days of the month and the last few days of the month, especially in the summertime, it’s a great time to get premium trips. Before the company will put out a green slip they will usually try to fill trips with reserve pilots. By the end of the month, reserve coverage is far less to possibly non-existent. They are out of reserve pilots and then premium trips are offered to the line pilots at a higher rate. 

Emet: Right, because our contract limits how much the company can make reserve pilots work each month. In a busy month, most reserve pilots will hit their limits long before the month is over leaving the company short on pilots to cover contingencies for the rest of the month.

Cheapshot: Exactly! That means for those of us available, excellent monetary opportunities await! Other big times are around any holiday, the super bowl, mother’s day or other events that might keep a pilot from making it to work and creating a shortfall that needs to be covered. It is not difficult to average 100 hours a month (aka 1200 hours a year) by strategically working a few extra days that pay very, very well.

Even reserve pilots at my airline can partake by flying green slips on their off days which provide pay above the reserve guarantee. There are times where reserve pilots have to fly into a scheduled day off where they are awarded pay back days. Pay back days can be very lucrative in dropping trips for pay and opening up opportunities for other green slips allowing a pilot to double dip and more. If managed perfectly it becomes a strategy called “Rolling Thunder.” People allude to Rolling Thunder all the time, but I think it ends up sounding more complicated than it is. Would you care to spell it out for us, Emet?

Emet: I’d love to! Let’s look at a hypothetical reserve pilot’s schedule. In the charts below, an “X” means a day off. (We call them X-Days.) RES means long-call reserve – the company has to give you at least 12-hours of notice when they assign you a trip. (This can be converted to short-call reserve a few times a month, but that’s a discussion for another day.) GS is, of course, a lovely little Green Slip where you get paid double to fly. PB stands for Payback Day, and we’ll see shortly why those are important.

So, let’s say I’m on reserve and I stacked 10 of my 13 reserve days at the start of the month. It’d be nice to take 10 days off, but mama just said, “Show me the money!” I put in for and get awarded a 4-day Green Slip on the first day of the month. I get paid double for flying on my X-Days, but something awesome happens. The schedulers award me four PB days on the 11th through the 14th. That’s our contract preserving my X-Days as part of the Green Slip good deal.

At this point I’ll get paid the reserve guarantee for the month, probably about 78 hours, plus I’ll get paid an extra 21 hours for my GS. That’s 99 hours of pay for the month…times $149/hr…plus 16% 401K contribution…all times 15% profit sharing last year…plus per diem…and we’re only 4 days into the month.

Hopefully, you can already see how you can keep this rolling, but here’s an illustration of how it could go a few more rounds:

As you see, every new GS yields a bunch of extra pay, plus the PB days just get pushed later in the month, meaning you still get 13 days off no matter what. You’ll notice that I burn a few of my X- or PB-Days throughout the month. Sometimes there just aren’t any GSs available. In Round 3, I intentionally sat at home for three days to enjoy a weekend with my family. Even with only stacking 10 of 13 available X-Days at the start of the month, this hypothetical pilot was able to rack up a lot of extra pay.

Cheapshot: Nice illustration, Emet. We should note that this is only a hypothetical example. It would be pretty epic to get this many green slips in one month. Most people will get 2 or 3 and call it good. Also, some fleets tend to only give out green slips in the form of those inefficient trips from broken rotations I already mentioned. You might be able to get four days worth of green slip, but you’d more likely burn an extra payback day between two shorter trips. Green slip availability also varies by fleet, staffing levels, and even time of year. If you plan to work this strategy hard, you need to be careful deciding which aircraft to bid for. You’ve also mentioned how living in base is almost a requirement for strategies like Rolling Thunder. (https://community.thepilotnetwork.org/posts/give-a-hoot-dont-commute-part-1 

Emet: Awesome. I’ll admit that I just learned one or two new strategies for making money. I’ll be testing them out in the very near future. Is it common for pilots at your company to exploit these kinds of opportunities, or are you uniquely educated on how to do this?

Cheapshot: I’m about average among the pilots I know. One of the easiest ways to free up your schedule to have more time off or open yourself up for more premium trips is to bid with line check airman. When a new pilot has to check out on an aircraft, they will fly several trips with an instructor conducting Operational Experience, “OE”. You don’t need 3 pilots usually so you get to stay home and get paid for the trip. You are then able to be available to fly more. In a simple scenario let’s say you got “bought off” a 4 day trip worth 21 hours. You then pick up a 2 day green slip which pays 21 hours. In one fell swoop you got paid 42 hours to fly 2 days. Even if you didn’t get a green slip you could stay home and play golf all while collecting 21 hours! Pilots play this game all the time, there is no guarantee that you will get bought off of a trip, but with as much training is happening right now it’s a good bet it will happen more than you think. We have pilots this year due to extenuating circumstances on the A-350 who are approaching 7 figures by taking advantage of this opportunity. I have also watched a lowly F/O on the 717 in LAX who routinely did this and credited an average of 130 hours a month only working 10-12 days a month. 

Emet: So, what kinds of assumptions do you hear people incorrectly using to try and compare airline pay to the military?

Cheapshot: We have talked about a few of them already like using way too conservative standards like the 1,000 hour a year rule or reserve guarantees. I constantly fail to see people adequately assess the risks of a military career in a monetary sense. Everyone assumes that they will get to 20 and receive a pension. I will readily admit today that it is very likely with the current pilot shortage, but in my career, I have gone through several RIF’s and you and I were victims to wonderful personnel schemes like  “TAMI 21.” (Both Emet and Cheapshot spit on the floor…and get yelled at by their wives. TAMI strikes again!) People will base pay and retirement off of making 0-5 or above when there is no guarantee. I have seen 20 year O-3 captains and you know that their financial numbers are way different.  Also, how do you account for extra deployments (hopefully most 365’s are gone..but they are always a threat), assignments that you might not want or PCS locations your spouse absolutely does not want to live in. I fail to see people account for the loss of control of their lives and essentially freedom when you are under contract. That comfy security blanket of military life comes with some heavy handcuffs.

I also see people place great weight on a pension, but completely fail to address Time Value of Money (TVM) for a retirement account that begins to accrue very quickly in the airline job with Defined Contribution (DC) plans. With the higher income levels of the airline job I find I have more disposable income for investing, filling up my 401k and contributing to other retirement accounts like backdoor Roths. 

Probably the biggest mistake I see in military guys making valuation comparisons is calculating the effect of seniority. Much of what I I described earlier in this article is based on having some relative seniority in your category.  You have to account for the loss of 5 -10 years of seniority staying in versus starting today in this robust hiring and retirement environment. Seniority is difficult to comprehend but it is by no means intangible. There are several issues in seniority calculations that people gloss over. First is longevity on the pay scale. Most airlines top off at 12-15 year of longevity. When you decide to stay in, compared to when I got out, I will be at the top of the longevity pay scale when you are just starting.  If we were both first officers on the 7ER you are looking at a pay difference of $60-90 an hour.

Now let’s be realistic, based on today’s data in 10 years or less a person hired now will either be a narrow body captain or widebody FO with some good seniority. With retirements happening as fast as they are, a decision to stay in another 10 years probably means a career mostly as a first officer with an opportunity to upgrade maybe in the latter part of a career. 2nd year 737 pay is $130 vs 12 year Capt pay of $275. At a minimum, you are talking a pay difference of $145K a year. Let’s say that your O-5 retirement pension provides you $55,000 a year. That’s still a $90K differential of income that year. Sure that gap will get a little smaller over the years, but then I will upgrade to a Widebody Captain and at age 60 we are even because I will get close to that same military retirement from the reserves. The point is that my earning power over time much like TVM is higher and compounded at a higher rate today because of upcoming retirements and the best opportunities in seniority this career has had in decades.

Emet: Good point on military retirement becoming a moot point at age 60. A reserve retirement isn’t quite as big a check as an active duty retirement, but I still advocate that this is the ideal career path for a military pilot! (https://community.thepilotnetwork.org/posts/ideal-military-pilot-career-path-spelling-it-out-part-1)

Cheapshot: You’re absolutely right. Seniority just doesn’t stop with pay rates, with longevity comes additional benefits like vacation and sick time. I will always enjoy an extra 2 weeks of vacation during the year. Add that up and that’s around 40 weeks of pay over 20 years…almost a full calendar year’s worth! Sick leave is also important especially as we get older. At our airline we max out at 270 hours a year at 20 years. When you first start you get 50 hours which increases to 240 by your 9th year. Now, not everyone uses their full sick leave benefit each year, but if you have to go out on a medical issue or just have a bad year, you have coverage for 3-4 months before having to touch disability. 

Lastly, I hear people list “job satisfaction,” “loving the mission,” “loving your job,” etc. as good reasons to stay in. Those are great reasons to stay in. All of us have served and/or continue to serve out of a love for our country and have taken great pride in the missions we fulfilled. It’s difficult to know if you will like the airline job or find the same type of satisfaction from it that you do in military service. I will offer that I for one have not felt that I am missing something in the list above. Flying for a passenger carrier I enjoy the interaction with passengers and the opportunities I get to help them in their journey. It might be high fives and fist bumps with the kids as they leave the airplane or letting them visit the cockpit to inspire the next generation of aviators. It might be the emergency divert to save a woman’s life who stopped breathing. Or recently getting our ground team together and having our High Value Customer (HVC) Porsche at the gate to make sure a customer in economy could make her next flight to see her dying grandmother with only hours to live after we had an extended ground delay. Her tears as she left the airplane and got in the car knowing she was going to make it said it all. There is plenty of job satisfaction, it is different but nonetheless, if you choose to be involved you get the chance to make big impacts in people’s lives. 

Emet: Great points. I can’t emphasize enough the idea that Seniority is Everything! (https://community.thepilotnetwork.org/posts/seniority-is-everything)

Beyond basic monetary comparisons, you really have to look at Quality of Life. I don’t know about you, but I couldn’t help working hard when I was on Active Duty. When I enjoyed my job, I worked hard because I loved what I was doing. Even when I didn’t necessarily love my job, I ended up getting extra responsibilities because I was good at what I did. As a result, I spent a lot of time at work, and I’m not talking about my 8 deployments.

“Living the dream,” as it were, in a military job even takes a toll on a day-by-day level. I remember getting home well after my wife did most days. By the time I walked through the door, we were all hungry for dinner. Before we knew it, it was time to wrap things up and get the kids ready for bed. I really didn’t get much time with them…and that was during the tiny portion of my career that we were assigned less than 150 miles away from each other.

Cheapshot: Exactly! When you were home between deployments and TDY’s you were home at night. But how much time did you actually get to spend with your family or doing things you wanted to do? I might be gone 10-14 days a month, but the rest of the time I am home with no “job” responsibilities, no emails or phone calls…absolutely nothing! I have found the quality and length of my time home is night and day from active duty. My 18 month old daughter actually knows who I am and I have seen so much more in her development that I didn’t get to experience with my other 3 kids while on the deployment train. 

I also have a schedule a month in advance that I get to bid for. We can make plans and not worry about how the schedule at work might change or how a world event might send us spinning up to deploy. Our world is far more predictable and stable. We can take vacations without being on leave or vacation time with just schedule management. The freedom we have now is truly mind boggling. 

Emet: Okay, I get it. Things are better for you and your family now that you work for a major airline. This could just be a fluke though, right? Maybe this is just what works for your family. It’s possible to have a good family life while on AD, isn’t it?

There is absolutely a great career path in both the military and the airlines.

Cheapshot: Fair enough. I feel like there’s more to discuss here, but this is a good place to leave things for now. Specifically, I feel like we could go into greater depth on the concept of risk and how military pilots perceive risk with respect to a civilian job. Maybe that’ll be Part 2 of this article.

Emet: For now, I’ll absolutely concede that the numbers I’ve been using to estimate airline pilot pay represent the very lowest-end of what you can expect to earn. Based on what you’ve said, I’ll even admit that my numbers run the risk of being inaccurate. I think it’s pretty significant that airline pilot pay (and overall career compensation) rapidly out-paces military pay (and overall compensation) using my numbers. For someone who lives in base and is able to use some of the strategies you’ve mentioned here, military pay and benefits start to seem almost laughable.

I’m glad you’ve also supported my ongoing assertion that it isn’t all about the money. I love the fact that you’re able to make so much money while still enjoying far more time at home than you used to get. You’re massively out-earning your peers while still basically spending as many days at work as they get off from work each month. That time to spend with your family and do as you please would be priceless, even without the pay difference.

Cheapshot: The bottom line here is that if you’re a military pilot and you’ve been assuming that the military can do anything resembling the lifetime compensation of an airline career, you’ve been using flawed assumptions. Unless you love your military job more than anything else, and you’d be truly unhappy as an airline pilot, the same goes for Quality of Life. When you sit down with your family, do yourself the favor of making sure you’re referencing valid data in your decision making. We don’t get a bonus if you bail on the military – we just want to make sure that you don’t make a decision you’ll regret based on bad or lacking info.

Emet: Thanks Cheapshot for taking the time to join me and provide a fresh perspective on this decision-making calculus. Maybe we’ll do it again sometime.

ps. CS and I enjoyed working on this post together, and I feel like it turned out pretty well. I know for a fact that Matt & Adam are open to anyone who wants to submit a well-written, well-supported article to be published on TPN. However, it seems like a lot of people I know are either apprehensive about writing, or just think they don’t have the time to do it.

TPN would love to collaborate with you on a post and help get your valuable info out to the rest of the Network. In most cases, you and I can chat for a few minutes and I can have an outline for our post set up in a day or two. Then, we spend a few days, or even weeks, filling in the details, as your schedule allows.

If you have some great information to share, let’s get it out to the Network. Let TPN help your voice be heard!

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