Review of the Civil Aviation Inspector Community at Transport Canada



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6.2 Secondary Sources

A number of secondary sources which addressed the issue of compensation (salaries and benefits) were also examined during this study. These included a number of recent industry-wide salary surveys, both domestic and international, which provide coverage of licensed aviation personnel in several segments of the aviation industry that were not included in the industry compensation survey including: business aviation, flight training schools, and rotary (helicopter) operators. A specific examination of benefits (pensions and group insurance) will follow the discussion on salaries.


The Flight International Pilot Employment Survey – 1998
We reviewed an international pilot employment survey conducted in 1998 by Flight International Magazine that addressed a number of issues relating to the professional pilot’s career including salaries from an international perspective. According to the ‘Work and Rewards’ portion of the survey, pay and allowances differ greatly by region, rank, aircraft rating, and the segment of the industry. These observations are supported by our industry survey.
According to the survey, the average international salary for a pilot is $74,360 (US) as demonstrated in Table 5. Taking averages specific to rank only (disregarding employer category or aircraft flown), management pilots have the highest earnings at $97,650 (US), captains follow with $92,340 (US), flight engineers, at $62,460, are paid more on average then first officers, who earn $55,250 (US) and second officers who are paid $47,710 (US).


Table 5: Annual Current Salary (US $) (Job Title by Area)33


Region

Job Title




Captain

First Officer

Second Officer

Flight Engineer

Total

92,345

55,252

47,708

62,464

United Kingdom

88,256

54,592

-

66,852

Europe

91,807

52,479

42,500

63,069

North America

94,822

58,531

47,614

60,625

Middle East

84,418

64,293

-

42,417

Asia

107,782

76,885

-

68,574

Africa

61,054

41,778

-

28,500

Australia

92,635

54,640

-

73,542

Latin America

85,517

39,794

-

57,500

* Average salary for each job title per region shown where base size is sufficient.

According to the survey, as demonstrated in Table 6, breaking down pay averages by type of employer, pilots working for crew leasing companies had the highest salaries at $86,380 (US) followed by airline crews at an average salary of $78,210 (US). Corporate operators were paid $62,910 (US) on average while air taxi pilots earned the least at $41,640 (US).




Table 6: Annual Current Salary (Main Business Activity)34


Main Business Activity

Average Annual Salary (US $)

Total

74,360

Crew Leasing Company

86,380

Airline

78,210

Corporate Operator

62,910

Armed Forces

55,790

Air Taxi

41,640

Interestingly, the survey noted that benefits and allowances for most pilots do not form a large percentage of total earnings. Some 22% of pilots surveyed reported that they did nor receive benefits while 38% of those surveyed reported that benefits and/or allowances were worth less than 10% of total income.


Business Aviation – 1998 Salary Survey
We also reviewed a survey conducted in 1998 by Business and Commercial Aviation Magazine, which focused on the corporate flight department personnel. The survey noted that a pilots’ average business salary was $65,450 (US) which was an increase of over six percent over 1997’s figure.
Department managers saw an increase of 4.7% in their annual salary to $89,800 (US) not including performance bonuses. Chief pilots overall reported an average wage of $68,000 (US) per year or a 12% increase over 1997’s levels. Those chief pilots who indicated that they had specific management duties had a higher annual salary of $72,000 (US) not including bonuses. The average Captain’s pay was up 10% to $65,700 (US) while first officers’ salaries increased an incredible 30% to $45,600 (US) not including bonuses.
1998 Canadian Aviation Salary Survey
A national salary survey conducted by Wings: Canada’s National Aviation Magazine reflected many of the findings of our industry salary survey and our industry interviews. First, unionized airlines still have the highest salaries, followed by corporate and military pilots, and unscheduled general aviation charter pilots and instruction staff making the least. Second, there is a great variation in salaries depending on job titles, type of aircraft, type of operator, and responsibilities or tasks.
The average annual remuneration35 in 1997 for Captains with regional, commuter and cargo airlines was $59,800 while those Captains working for charter carriers received $44,100. First officers employed by regional, commuter or cargo airlines received an average remuneration of $27,000 while those with charter carriers received $24,600. Helicopter pilots averaged $67,600 while flight instructors had an average annual remuneration of $21,000.
The review of salary surveys undertaken by aviation periodicals reflected that salary levels are often being driven by that segment of the industry in which the pilots are working versus their certification and length of experience. This is the case even if, as for TC CAIs, these individuals required similar certification and experience at the entry level.
Additionally, it was noted that there are significant differences in the responsibility levels of individuals within the industry beyond what their job title indicates and this is reflected in their compensation levels.
Finally, the authors of the survey results concluded that the salary gains of licensed aviation personnel reflect the difficulties that air operators are facing in attracting new pilots when the regional, national and international airlines are hiring at record levels. The findings of the survey also support our conclusions concerning the changes in the career progression model, which have inflated compensation levels at the more senior levels of the labour market.
Group Insurance and Pension Benefits
The discussion concerning benefits and insurance was derived from a review of secondary sources including federal employee benefit documentation and industry benefit data for the aviation industry.
Our appraisal of TC salary and benefits package, as compared with the market, is based on our survey results and on secondary sources of information. For instance, Group Insurance Programs and Pension Schemes were not surveyed. The assessment of TC’s benefits package was based on the analysis of the federal service benefits program as compared to those packages available in the industry.
We reviewed the benefits package provided to employees of TC and compared them to the benefits prevailing in the industry. As the information on industry practices concerning benefits packages is incomplete, we undertook a very broad evaluation and comparison of the benefits package provided by the Department in relation to the larger employers. Small employers will generally provide benefits at a much lower level. The main findings include:


  • Death benefits. The combination of PSSA death benefits and life insurance provides satisfactory coverage. The employer’s share of the cost is low;




  • Disability. The combination of sick leave (we assume they provide the usual credit of 15 days per year) and long-term disability insurance can leave a gap in coverage. But this is a very sensitive matter. Private practice for short-term disabilities is generally to provide salary continuation or weekly indemnity benefits after a waiting period of up to 5 days which may be covered or not by non-cumulative sick days;




  • Health and Dental. The level of coverage is satisfactory as well as at the employer contribution level;




  • Pension. The pension formula (2% of the best six years) is competitive. Employee contributions are very high at 7,5% of salary. Ancillary benefits indexation, earliest age without reduction, survivor pension and disability benefits compensate for it but only partially. Employee contributions generally do not exceed 5% in private sector plans. Retirement benefits in excess of the authorized limits under the Income Tax Act are provided through RCA’s: this practice exists at Air Canada but all other private sector employers may not follow it.


6.3 Industry Interviews




Salary
The interviews indicated that the segment of the industry in which a pilot finds himself/herself employed is the primary variable driving compensation while the length of experience with a specific type of aircraft and in a particular seat (left – Captain, right – First Officer) is a secondary variable. A third variable identified was that the level of responsibility in relation to the job title of the position varied greatly between segments of the industry.
In regard to the flight training schools, the Air Transport Association of Canada (ATAC) indicated that the average class 1 instructor, with delegated authority, would have an annual salary of $30,000. Salary levels varied greatly, with some chief flight instructors receiving $50,000 for larger flight schools and $28,000 for very small flight schools. Again, caution was expressed that often the chief flight instructor was responsible for a number of other roles such as the director of flight operations, company chief pilot, and company check pilot.
The other major difference noted regarding salaries for flight instructors was between provincially recognized colleges versus private flight instructor operators. A flight instructor (aviation and flight technology) at a community college would have an average salary of $51,000 while the chief flying instructor would have an average salary of $55,000.
Benefits
Interview findings on working environment and benefits also vary greatly by the industry segment that the air operator is functioning in. Smaller operators often offer routes or destinations which are very isolated and demanding on the pilot’s skills and experience. The pilot, as an employee, may or may not have medical or dental benefits but often does receive performance bonuses if the company makes a profit.
Larger operators tend to offer generous benefits packages which include uniform allowances, per diems, reduced travel on the operator’s and its partner’s fleets, and a restriction on the number of hours worked. Often, the choice of working hours depends on seniority, but a pilot in the middle of the seniority list can expect as many days off as he/she will be flying.
  1. Conclusions

The economic recovery of the aviation industry and a changing labour market for licensed aviation personnel has introduced new challenges for all employers of licensed aviation personnel with respect to managing recruitment, retention, and compensation. In response to these challenges, aviation industry employers have responded in a variety of ways depending on the size of their operation, the segment of the industry in which they operate, the type of aircraft used and services offered, and if their operation has unionized employees. However, there are a number of significant and industry-wide developments which are noteworthy.


These include:


  • A significant increase in pilot salaries. Between 1995 and 1996 salaries for pilots increased 10.3% according to Statistics Canada’s Civil Aviation Report. According to our survey of compensation practices, firms reported, on average, that they expect a base salary increase of 3% in 1999 for the three benchmarked positions. Finally, a 1998 salary survey of business aviation reported a 6% increase in compensation for pilots between 1997 and 1998.




  • An increased use of pilot retention programs. The DND, a significant Canadian employer of pilots, has launched a retention allowance program which rewards upwards of $75,000 for experienced pilots. Private sector operators have offered profit sharing schemes, better training opportunities, and performance bonuses.




  • Benefits programs and the working environment have been reviewed and enhanced. Carriers with unionized shops have decreased the number of hours flown by pilots and typically have benefits packages including uniform allowances, per diems, and discounted travel policies. Often these policies set the standard for other airlines that may or may not have a union.

In comparison, TC has experienced a long-term wage freeze that was introduced by the federal government in the early 1990s for all employees. As a result of this wage freeze, the salary gap with the industry has continued to widen, even taking into consideration the fact that TC pays overtime to its licensed aviation personnel, which is an uncommon practice in the industry. Moreover, despite a changing business environment in the airline industry and an evolution of the role and the service delivery model of the Department, TC has continued to use the same human resource management practices regarding recruitment, retention, and compensation that it has relied on in the past. Hence, it has become increasingly difficult for TC to respond to the business cycles of the aviation industry and to manage effectively the dynamics of the evolving labour market for licensed aviation personnel.


More importantly, it should be noted that not all aspects of the Civil Aviation Program are experiencing the same level of difficulty in the recruitment and retention of licensed aviation personnel. However, the Department continues to use a homogeneous approach to the management of its human resources across the entire Civil Aviation Program. This approach to human resources management is the foremost example of how the Department distinguishes itself from its industry counterparts and, as a result, puts TC at a competitive disadvantage in recruiting and retaining licensed aviation personnel. This conclusion is evident in the following discussion of the Department’s specific challenges regarding recruitment, retention, and compensation.
Nationally, external recruitment of CAIs from April 1995 to April 1997 had not met the pace of CAI departures (attrition) from TC.
PricewaterhouseCooper’s review of the current situation in the Civil Aviation Program at TC does support the management’s concerns in regards to recruitment and retention of CAIs. According to Aircraft Operator (AO)36 distribution rates (Allocation/Strength), derived from TC TIPS data, the total allocation of staffed AO’s positions for the TC Civil Aviation Program should be at 403 inspectors while total current strength lies at 356.5 inspectors, or at 88.5% of operational levels.37
However, it should be noted that this trend has not been the case for all regions or service lines. In fact, some of the regions and/or service lines have been relatively more successful in filling vacancies and managing attrition. For instance, the CBA branch is at 80.7% of operational allocation nationally but when the specific programs within the branch are examined, it was discovered that there are significant staff shortages at the large air carrier program (7th Region) which is at only at 78.4% of operational allocation.
Correspondingly, when certain regions were cross tabulated with the CBA branch, it was found that the Ontario Region, at 81.8% of allocation, and the NCR region, at 85% of allocation, were also suffering from significant staff shortages. In comparison, other service lines, such as aircraft maintenance and manufacturing and regulatory services, both at 100% of allocation, and general aviation, at 94% of allocation, seemed to be more successful at retaining their staffing levels at or close to allocation.
From our review it could be suggested that the service lines which are experiencing difficulties in recruiting and retaining licensed aviation personnel, specifically CBA, are a result of the competitive labour forces which are occurring in the corresponding private sector segments that those service lines regulate.
Typically, the private sector compensation model for employers of licensed aviation personnel reflect the competitive labour forces which confront that employer based on its industry segment and the role of the employee in question. While TC recognizes that the level of technical expertise and complexity of the regulatory environment differs between service lines, and hence requires different classification levels, it does not reflect at a sufficient level in its compensation practices the differences in the competitive labour market that cross service lines.
As a result, the Department removes its ability to respond to labour market pressures to the same degree that its private sector counterparts for the areas of the industry where the competitiveness for skilled and experienced individuals that possess the certification and the qualifications required by TC is the strongest. Additionally, the narrowness of salary bands between classification levels makes it difficult for TC to promote or encourage line staff to move across service lines or to transfer between regions restricting the Department’s ability to best manage and develop its workforce.
Other employers of licensed aviation personnel expressed similar opinions about TC’s benchmarked position in the aviation labour market and have distinguished between the different segments of the industry, covered by TC’s various service lines within CBA and GA, when addressing issues of recruitment, retention and compensation.
It must be concluded that TC needs to position itself as an employer who is both attractive and competitive. This can be achieved through the renewal of TC’s human resource practices, the effective promotion of the essential role of the inspector in ensuring aviation safety and the creation of a competitive compensation and benefit package that recognizes the forces of a competitive labour market for licensed aviation personnel. In order to begin this process of renewal, TC needs to develop a long-term strategy to provide it’s management with the tools necessary for the effective administration of the CAI population and the creation of the required working environment to attract and retain a skilled and motivated workforce TC needs.
The following dimensions should be taken into account when developing a long-term strategy:


  • The establishment of a compensation package with a greater degree of flexibility that would take into account specific labour market pressures in the various segments of the aviation sector. This flexibility would include the widening of the salary bands between the different classification levels to distinguish between the degree of complexity but also the effect that these variables have on the competitiveness of compensation within the labour market. The compensation package must take the Department to a competitive level were the CAI’s role in aviation safety is perceived to be an attractive alternative to those individuals in the industry seeking a career change. Compensation packages could include measures beyond the basic salary structure and can include allowances or bonuses that are often found in the private sector.




  • Develop recruitment campaigns and policies that promote the positive factors of a career with TC. These include the level of responsibility, the working environment, and the uniqueness of the CAI’s regulatory role. These factors were noted in staff interviews as important in making the Department an attractive alternative to the private sector while noting the unique culture in which the licensed aviation personnel develop their skills and experience.




  • Target those individuals who have come to a point in their career where a senior pilot position on the line or a management position with the carrier no longer provides them with the lifestyle, working environment, or professional challenges they are seeking in their career.




  • Strengthen and revise existing exchange programs to again encourage exchanges within the Department and with the industry at large. Use these exchange programs to support the development of a career path for all inspectors that are achievable and affordable to the Department.




  • Address the hurdles that a manager must overcome in order to fill a vacancy. The issue of portraying the Department as an attractive and competitive alternative to the industry is as important as establishing the tools necessary for management to effectively interact with an increasingly competitive labour market. All efforts in managing the problem of recruitment will fail if management does not have the flexibility to respond to potential candidates in a timely manner.




  • The Department should consider a strategy of complementing ‘off the shelf’ skill sets obtained through experienced industry recruits with the development and sustainment of essential skills internally through a diversified approach. This approach could include; traditional training provided by the Department, the strengthening of the line-flying program.

1 The AO section is the classification group in which the CAI population resides in TC.

2 Allocation/Strength levels as of September 21st, 1998.

3 For a complete chronicle of AO distribution rates cross tabulated by region and service line please see Appendix ‘C’.


4 For a complete chronicle of AO distribution rates cross tabulated by region and service line please see Appendix ‘C’.


5 Salaries + bonuses = total pay

6 Transport Canada, Challenge ’98: Civil Aviation Program Overview.

7 Transport Canada, Safety Oversight of the Civil Air Navigation System – A Framework, Air Navigation Services and Airspace, 1997.

8 Transport Canada, Challenge ’98: Civil Aviation Program Overview.

9 Transport Canada, Risk Management and Decision-making in Civil Aviation, 1997.

10 Transport Canada, Safety Oversight of the Civil Air Navigation System – A Framework, 1997.

11 Ibid.

12 Transport Canada. Risk Management and Decision-making in Civil Aviation, 1997.


13 Minimum and often more is demanded.

14 Air Line Pilots Association. Airline Pilot Career Information.

15 Ibid

16 Wings Magazine, Job Hopes Brighter for Next Wave of Pilots, Feb/Mar 1997.

17 Ibid

18 Ibid.

19 Ibid.

20 The AO section is the classification group in which the CAI population resides in TC.

21 Allocation/strength levels as of September 21, 1998.

22 For a complete chronicle of AO distribution rates cross tabulated by region and service line, please see Appendix ‘C’.


23 For a complete chronicle of AO distribution rates cross tabulated by region and service line, please see Appendix ‘C’.


24 PNR- Prairie and Northern Region

25 NORAD – North American Air Defense Command

26 Wings Magazine, Canadian Air Force: Lean and Functional, Aug/Sept 1998

27 Ibid.

28 Ibid.

29 Ibid.

30 Transport Canada, Challenge ’98: Civil Aviation Program Overview.

31 The notion of "percentile" has a similar meaning as the notion of "percent rank". It is generally used to identify the distribution of market values than the term "percent rank".

32 Salaries + bonuses = total pay

33 Flight International Magazine. The Flight International Pilot Employment Survey – 1998.

34 Ibid.

35 Wings Magazine. Keeping Scores on Salaries, 1998.

36 The AO section is the classification group in which the CAI population resides in TC.

37 Allocation/Strength levels as of September 21st, 1998.


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