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Active member
Looks like Hard Times are here. They won’t be ending anytime soon – if I had to guess I’d say 5 years + at this point.
The mainstream media has been feeding us the bad news in small chunks – and doing a pretty bad job of analysing the situation IMHO. The present losses are between 500 and 600 Billion Dollars. According to some the total losses could reach 2 Trillion Dollars (yes you read that correctly). I think there’s a pretty good chance the US Banking system will collapse completely – the effects will be Global.
The Airline industry is not just facing high fuel prices but a Global recession. Expect demand for air travel to drop off dramatically next year.
Some important things to remember:-
• No Airline is “too big to fail”. When the money runs out the doors will close.
• This will affect everybody (even Airlines that survive will have to cut back dramatically).
• There is nothing you can do about it – you’re just along for the ride!
So with this in mind I thought it might be useful to list some survival strategies for those of us employed in the industry.
I hope others will also offer their thoughts/tips.
Make yourself marketable
This is pretty simple in theory but harder in practice. Some Type Ratings are better than others. Too many people focus on “bigger is better”. This is flawed thinking as there are less large aircraft in service vs. A3XX/737 family.
Going onto A3XX/737 may also allow you to upgrade to Commander faster. Right rating + Command hours = marketability. Last time I checked the Flightjobs website there were twice as many vacancies for Commanders as there were for F/O’s.
Pay down your debt
This increases your disposable income (lower payments) which you can use for other things (see below). Tax benefits are over-rated IMHO. Debt is still debt – you’ll have to pay it off at some point. You want to avoid the situation where losing your job will ruin you financially (cant meet the payments). Future jobs will be overseas – you’ll lose any tax benefits at this point. Tax free salary + paying off debts will dramatically improve your financial position.
Delay buying “big ticket” items
Not much point buying a house/car/boat/TV etc. at the moment when they will all be cheaper in the future. We’re already seeing a “property bust” in the UK and Spain – I don’t doubt it will spread to the rest of the EU. The future is frugality. I think conspicuous consumption will no longer be socially acceptable.
Create a financial buffer
Make a monthly budget. Now cut this down to the minimum you need to survive and multiply this by 24. Have this money in short term safe investments or Gold/Silver so you can access it if needed. If you lose your job you will at least be able to survive. This should be mandatory – but I’ll bet very few of us are in this position.
Job Hopping
Bad idea. Best option IMHO is to stay put and hope you can ride this out. It’s LIFO (Last In First Out) at most companies so the last place to be right now is at the bottom of anyone’s list. Start-ups are a bad idea as well – stay clear unless there is no other option.
Buying a Type Rating
Another bad idea IMHO. Look what happened at the EAG where people paid them for a rating and the company went bankrupt. No job/no rating/no money – talk about getting screwed!
Bond
Be careful. Make sure you have something on paper about what happens if you get laid off or the Airline goes under. I know of one case where the company was deliberately kept alive until everyone with a bond quit – then it went under and people had to pay.
Second Career
Perhaps an option until things improve. Stay or go? Tough choice either way.
One final thought:-
If you do lose your job then keep things in perspective. It’s not the end of the world – it’s just a job. I’ve had colleagues tell me they’ve had sleepless nights over the state of their Airline. I always sleep well – I don’t waste my time worrying about things that I have no control over.
On a positive note:-
Every time that I’ve lost my job I have always been able to improve my financial position or further my career.
The mainstream media has been feeding us the bad news in small chunks – and doing a pretty bad job of analysing the situation IMHO. The present losses are between 500 and 600 Billion Dollars. According to some the total losses could reach 2 Trillion Dollars (yes you read that correctly). I think there’s a pretty good chance the US Banking system will collapse completely – the effects will be Global.
The Airline industry is not just facing high fuel prices but a Global recession. Expect demand for air travel to drop off dramatically next year.
Some important things to remember:-
• No Airline is “too big to fail”. When the money runs out the doors will close.
• This will affect everybody (even Airlines that survive will have to cut back dramatically).
• There is nothing you can do about it – you’re just along for the ride!
So with this in mind I thought it might be useful to list some survival strategies for those of us employed in the industry.
I hope others will also offer their thoughts/tips.
Make yourself marketable
This is pretty simple in theory but harder in practice. Some Type Ratings are better than others. Too many people focus on “bigger is better”. This is flawed thinking as there are less large aircraft in service vs. A3XX/737 family.
Going onto A3XX/737 may also allow you to upgrade to Commander faster. Right rating + Command hours = marketability. Last time I checked the Flightjobs website there were twice as many vacancies for Commanders as there were for F/O’s.
Pay down your debt
This increases your disposable income (lower payments) which you can use for other things (see below). Tax benefits are over-rated IMHO. Debt is still debt – you’ll have to pay it off at some point. You want to avoid the situation where losing your job will ruin you financially (cant meet the payments). Future jobs will be overseas – you’ll lose any tax benefits at this point. Tax free salary + paying off debts will dramatically improve your financial position.
Delay buying “big ticket” items
Not much point buying a house/car/boat/TV etc. at the moment when they will all be cheaper in the future. We’re already seeing a “property bust” in the UK and Spain – I don’t doubt it will spread to the rest of the EU. The future is frugality. I think conspicuous consumption will no longer be socially acceptable.
Create a financial buffer
Make a monthly budget. Now cut this down to the minimum you need to survive and multiply this by 24. Have this money in short term safe investments or Gold/Silver so you can access it if needed. If you lose your job you will at least be able to survive. This should be mandatory – but I’ll bet very few of us are in this position.
Job Hopping
Bad idea. Best option IMHO is to stay put and hope you can ride this out. It’s LIFO (Last In First Out) at most companies so the last place to be right now is at the bottom of anyone’s list. Start-ups are a bad idea as well – stay clear unless there is no other option.
Buying a Type Rating
Another bad idea IMHO. Look what happened at the EAG where people paid them for a rating and the company went bankrupt. No job/no rating/no money – talk about getting screwed!
Bond
Be careful. Make sure you have something on paper about what happens if you get laid off or the Airline goes under. I know of one case where the company was deliberately kept alive until everyone with a bond quit – then it went under and people had to pay.
Second Career
Perhaps an option until things improve. Stay or go? Tough choice either way.
One final thought:-
If you do lose your job then keep things in perspective. It’s not the end of the world – it’s just a job. I’ve had colleagues tell me they’ve had sleepless nights over the state of their Airline. I always sleep well – I don’t waste my time worrying about things that I have no control over.
On a positive note:-
Every time that I’ve lost my job I have always been able to improve my financial position or further my career.