Some news reports are announcing that a maintenance technician shortage is looming shortly because of the so-called emergence of the industry from a long-term recession. There is some doubt about this. Just take a careful look.
We are all familiar with those laid-off technicians seeking employment in other fields which pay better and offer more security. And, of course we know of the recently announced 4,600 or so technicians who will go out the door along with 400 pilots in a total of 13,000 odd total planned layoffs in the American Airlines bankruptcy filing. (AMR has 130,000 employees.) We can only wonder where all the technicians will go. Oh, and incidentally, American “reassured” its employees on their pensions. But, it terminated its defined benefit pension program only recently. It has since handed it over to the Pension Benefit Guarantee program … funded by the pension sponsors and most likely taxpayers as backup, because the PBGC is running out of money.
The government operates the PBGC, which routinely will pay only a small part of what is owed. American on Feb. 1 announced that it will lay off the 13,000 total employees but was still interested in plans from their unions to ameliorate this result (early retirements, voluntary termination, etc.). The union contracts are canceled in the court proceeding. They also said that they intend to outsource 40 percent of their aircraft maintenance activities! (USA, China, South America, Europe?) There is no doubt that there will be further consolidation in the airline industry which means more layoffs will probably come. (For info on pension crisis in U.S. generally see: JackDean@PensionTsunami.com.)
General aviation and avgas
General aviation activities are at all time low … fuel costs going to between $6 and $15 a gallon in the near future … depending on who you believe. Private and business owners have curtailed their flying substantially and will continue to do so as the costs rise. Flight schools will come to a halt as the spike in av-gas prices continues.
Speaking of fuel you should have noticed that Chevron, Exxon, BP, and other major brands have stopped their brand retailing in California and perhaps other states to come. They all have sold the retail market for av-gas to distributors so that they no longer appear as the seller. Pretty soon, if not by the time you read this, only one distributor of av-gas in the U.S. will handle sales of all the av-gas. You should know what this means: The major brands will still provide the fuel, but who knows for how long and at what cost? By the way, jet fuel will not be affected directly since it has no lead. Av-gas from China or Canada may be in our future … As usual, we have the environmental people, among others, to thank for this because of Prop. 65 in California, which relates to lead in aviation fuel. All of the principal fuel people and some FBOs have been sued and the case is presently winding its way through the courts of California. This will raise the bar on fuel costs once more to whatever the traffic will be able to bear … If this should occur, general and other piston business aviation could come to a halt. Technicians will be affected naturally since no flying means no maintenance work…
And, finally, of course, the coming election poses the specter of more taxes, user fees, and the like, from our present leader, if he is re-elected. I think it’s time for further tightening of your seat belt, until we see what will happen in November. It’s going to be bumpy and by then, it won’t be pretty.
Some commentators have suggested that you can earn big technician salaries overseas. This of course requires that you give up your family and homes and move, in most cases. You can take short-term employment to fill your money gaps but on the whole they will require longer term commitments. There are some tax advantages in working overseas, so long as the local taxes are reasonable over there.
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