Occupational Compe

Occupational Wages
and Employee Benefits

Among Small
Certificated Air
Carriers in Alaska

BY ROBERT W. VAN GIEZEN

Because of vast distances and wilderness conditions in
much of Alaska, aircraft, rather than surface vehicles, are
often used for travel and the transportation of goods through-
out the State. The small certificated airline industry in
Alaska performs much of this work. This industry, which
is portrayed as one of the last arenas of rugged individual-
ism, is as colorful and diverse as the State itself. Not sur-
prisingly, the industry exhibits a wide range of earnings
and wage differences, due to regional variations in pay, the
kind of work performed, and the type of aircraft operated.'

Background

A survey of small certificated air carriers in the State of
Alaska was conducted in July 1994, under contract for the
Employment Standards Administration (ESA) of the U.S.
Department of Labor, for use in administering the Service
Contract Act of 19652. This legislation requires the Secre-
tary of Labor to establish minimum rates of pay for estab-
lishments providing services to the Federal Government
which are valued at more than $2,500.

The survey was conducted on a sample basis, using in-
formation from the Federal Aviation Administration and
unemployment insurance reports filed by employers. This
survey included small certificated air and commuter carri-
ers operating aircraft with fewer than 60 seats or a payload
capacity of less than 18,000 pounds, and establishments
providing air transportation facilities or services (industry
45, as defined in the 1987 edition of the Standard Indus-
trial Classification Manual). Excluded from the study were
establishments employing fewer than five workers.

Robert W, Van Giezen is an economist in the Division of Compensation
Data Analysis and Planning, Bureau of Labor Statistics. Telephone (202)
606-6205,

37 Compensation and Working Conditions December 1996

Survey results

Occupational employment and earnings data for small
certificated carriers were collected for full- and part-time,
seasonal, and temporary workers °. Some pilots were paid
a fixed hourly, weekly, or monthly salary, regardless of the
numbers of hours flown; some were paid only for time spent
operating aircraft or waiting at customers’ destinations; and
other pilots were compensated under a combined fixed/vari-
able pay plan. Because of the various pay systems and work
schedules in the industry, earnings for pilots were calcu-
lated on a daily basis.

Pay for airline pilots of small certificated airlines aver-
aged $147 per day in Alaska in July 1994. (See table 1.)
Average daily earnings for pilots of fixed-wing aircraft
ranged from $127, for single-engine airplanes, to $181 for
multi-engine planes ‘. Helicopter pilots averaged $139 per
day, Earnings encompassed a wide range, due to varying
flight schedules, types of pay plans, and regional differ-
ences. In addition, some pilots were employed full-time;
others were seasonally employed in the tourist industry dur-
ing the summer.

Pilot Earnings

Daily earnings of pilots were calculated by divid-
ing earnings by the number of days worked. Earn-
ings data include: Base pay, salaries, payments based
on reported flight hours, and all other pay directly
related to duty, such as stand-by pay (pay received
while waiting at a customer's destination until the
passenger is ready for a return flight) and off airport
landing pay (for landings in remote areas). Excluded
are: Premium pay for overtime, reimbursement for
meals and lodging, field pay, and nonproduction or
other lump-sum payments.



Hourly earnings for aircraft mechanics averaged $16.06,
ranging from $15.96 for fixed-wing mechanics to $16.20
for helicopter mechanics. (See table 2.) Aircraft servicers,
those workers who fuel and load and unload the aircraft,
averaged $8.55 per hour.

Alrcraft Mechanic and Servicer Earnings

Hourly earnings of mechanics and servicers con-
sisted of straight-time pay, excluding overtime pay
for work on weekends, holidays, and late shifts. Also
excluded were performance bonuses and lump-sum
payments,

Earnings and employment growth

BLS first conducted a survey of this industry in June
1987.5 Since that survey, employment has increased nearly
50 percent, from 2,376 to 3,493 jobs in July 1994. Over
this 7-year period, earnings for pilots increased nearly 25
percent, from $119.50 to $147 per day. Ground personnel
showed smaller gains, as earnings for aircraft mechanics
increased 5 percent from $15.21 to $16.06 per hour; air-
craft servicers’ earnings, which averaged $7.06 per hour in
1987, increased 21 percent, to $8.55 in 1994. In contrast,

Table 1. Daily eamings of airline pilots, Alaska, July 1994

Occupation Number | Mean Median
of workers! earnings | earnings

748 $147 $149

565 149 149
293 127 135,
162 181 177
181 139 150

* Includes data for pilots not Identified by type of equipment.

wages and salaries for private sector workers nationwide
increased 27.5 percent from June 1987 to June 1994.6

Employee benefits

Nearly three-fifths of all Alaskan certificated airline pi-
lots and seven-tenths of aircraft mechanics and servicers
received paid holidays, averaging approximately 6 days for
those workers receiving this benefit. (See table 3.) Paid
vacations, after qualifying periods of service, were provided
to about 7 out of 10 pilots and 8 out of 10 mechanics and
servicers. Typical vacation benefits were: 1 week after 1
year, 2 weeks after 5 years, and 3 weeks after 15 years’
service, A majority of these workers received health,’ life,
and dental insurance. For all insurance benefits (except life),
a majority of workers were in plans requiring some em-
ployee contribution to aid in the financing of these plans.

Retirement plans (in addition to Social Security) were
provided to more than 4 out of 10 workers, with defined
contribution plans covering nearly twice as many workers
as defined benefit plans. All workers in defined benefit
plans had benefits completely financed by the employer. In
addition, 8 out of 10 workers covered by defined contribu-
tion plans were in employer-only financed plans. (See table
3 for additional information.)

Table 2. Stralght-time hourty earnings of aircraft mechanics
and servicers, Alaska, July 1994

INumber of} Mean | Median
‘Occupation workers | earnings} earnings
Aircraft mechanics' 546 $16.06 | $16.21
Fixed-wing aircraft M2 18.96 | 16.10
Helicopters ..... 114 16.20 | 15.80
Aircraft servicers ....... 522 $8.55 | $8.00

“Includes data for mechanics not Identified by type of equip-

Compensation and Working Conditions December 1996 38

WW


Table 3. Selected benefits offered to pilots and aircraft mechanics and servicers, Alaska, July 1994

Benefit tem

Pilots

Percent of workers receiving paid holidays...
‘Average number of pald holidays (where provided)

Percent of workers offered:

58 70
6

10 10
15 15

2a

RlaaK&s BR KL &B
Blazes VS YB

‘The median number of days provided to all covered workers.

—Endnotes—

An article on wages and benefits in the large certificated air carrier in-
dustry was published in Compensation and Working Conditions, September
1996, Bureau of Labor Statistics, Pp. 11-18.

2 Occupational Compensation Survey: Pay and Benefits, Alaska Air
Transport, July 1994, Bureau of Labor Statistics, December 1994,

3 Classification of workers was based on a uniform set of job descriptions
designed to take account of inter-establishment variations in duties within the
same job. The job descriptions used in the survey are available upon request.

“The majority of fixed-wing aircraft flown by small carriers in Alaska
‘were single-cagine piston aircraft. However, these carriers also operated vari-
‘ous makes and models of two-engine piston and two-engine turboprop planes,

39 Compensation and Working Conditions December 1996

TO

See FAA Statistical Handbook of Aviation, Calendar Year 1993, Federal
Aviation Administration, pp. 5-4 through 5-6, and 5-13 through 5-16.

5 Air Transportation Wage Survey, Alaska, June 1987, Bureau of Labor
Statistics, November 1987.

* Employment Cost Indexes and Levels, 1975-1995, Bulletin 2466,
Bureau of Labor Statistics, October 1995, p. 66.

7 Health plans include hospitalization, surgical, and medical insurance
(HSM) plans which provide, at a minimum, partial payment for: Hospital
room charges; inpatient surgery; and doctors’ fees for hospital, office, or home
visits, HSM's typically cover other expenses, such as outpatient surgery and
Prescription drugs.