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Airline pilot remuneration: A conceptual framework and empirical analysis of airlines in Australia

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  • Lambeth, Daniel
  • Lei, Zheng
  • Cheung, Tommy

Abstract

This research analyses the structure of pilot remuneration and assesses the implications of structural change for pilots and airlines as they rebuild competitiveness in the wake of the COVID-19 pandemic. A review of the literature reveals a significant gap to be filled regarding the structure of airline pilot's pay and the way in which it has changed due to the pandemic. To explore this subject further in the context of the crisis, a conceptual framework is developed and an empirical study in the context of Australia is conducted. It is found that within Australia there has been a shift towards more productivity-based pilot remuneration strategies recently, with Virgin Australia opting for significant structural changes in how pilots are paid. A move to more productivity-based pay need not necessarily penalise pilots in the long-term but can provide significant savings in the short-term. For countries with highly unionised pilot workforces such as Australia, it is recommended that a pay structure to cater for a drop in demand is considered even during negotiations in good times.

Suggested Citation

  • Lambeth, Daniel & Lei, Zheng & Cheung, Tommy, 2022. "Airline pilot remuneration: A conceptual framework and empirical analysis of airlines in Australia," Transport Policy, Elsevier, vol. 126(C), pages 34-42.
    • Handle: RePEc:eee:trapol:v:126:y:2022:i:c:p:34-42
    DOI: 10.1016/j.tranpol.2022.07.002
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