“NOT” paying your dues was not the concern most of us on here have… The issue at stake is “working” for one of the “pay to work” operators. Where you pay them $X XXX and they put you on commercial runs. The Issue here is how an operator like that effects the rest of the industry on a microeconomic & macroeconomic scale. Now without busting out graphs on deadweight loss, social benefit, demand and supply functions etc… think about it in a very simple sense.
Say there are three companies. Company A,B, and C. A and B are normal businesses; all three compete with one another. All three have to pay expenses such as insurance, fuel, rent, advertising, financing charges, maintenance, wages, etc… This being aviation, margins are very tight compared to other industries. Say for example A,B, and C are making 10%. Now imagine that company C starts searching for pilots who are willing to pay to fly. Company C now no longer has to pay wages, they don’t have to pay for company training, AND they have an alternative source of income. As a result they can fly that same contract than A, and B were fighting over for substantially less than anyone else. Because the world revolves around the lowest cost bidder, A and B loose the work to C. This forces A and B to further lower price in an attempt to compete with C. As a result margins decrease evermore; putting pressure on everyone affiliated with A and B. B decides that they can no longer compete in this market, so they leave. A and C pick up the left over work from B. C continues to be able to underbid, A has to tighten their belts more and more; they start to cut back on as many expenses as they possibly can; until one day while on a run to YVR my buddy Wess has his plane blow up because of a $10 gasket. Company C now after defeating all the competition has the ability to become a monopolistic competitor; and starts to raise prices; which go into the shareholders pocket.
Now there are definitely other issues involved here too that may very well be pertinent: Such as one could argue company C may also be a somewhat shady operator if they are willing to treat their workers like that in the first place. To keep a steady flow of “paying” pilots after someone has their 300 hrs it would be beneficial for the company to “let them go” so they don’t have to start paying their workers. This results in having a glut of inexperienced pilots behind the wheel, simply because there is no financial incentive to keep anyone experienced around.
NOW to my knowledge no “pay to work” business has actually ever been brought up on charges for a section 50 violation of the Competition act (Predatory Pricing.) However I bet that has to do with the fact that aviation is probably the ONLY sector where something so stupid could ever come into existence in the first place. But just for all the OTHER operators out there, ill give you a little nugget of gold:
http://www.competitionbureau.gc.ca
The Competition Act (4)
Part VI
Offences in Relation to Competition
Illegal trade practices
50. (1) Every one engaged in a business who
(a) is a party or privy to, or assists in, any sale that discriminates to his knowledge, directly or indirectly, against competitors of a purchaser of articles from him in that any discount, rebate, allowance, price concession or other advantage is granted to the purchaser over and above any discount, rebate, allowance, price concession or other advantage that, at the time the articles are sold to the purchaser, is available to the competitors in respect of a sale of articles of like quality and quantity,
(b) engages in a policy of selling products in any area of Canada at prices lower than those exacted by him elsewhere in Canada, having the effect or tendency of substantially lessening competition or eliminating a competitor in that part of Canada, or designed to have that effect, or
(c) engages in a policy of selling products at prices unreasonably low, having the effect or tendency of substantially lessening competition or eliminating a competitor, or designed to have that effect,
is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.
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These laws have been created for a reason, and that reason is to protect the economy AND society… If you want to pay for training then please do, but if you pay for 300 hrs in a kingair you better not be flying paying passengers around during that time; because id hedge a bet if anyone ever wrote the competition bureau; you’d have the RCMP busing down your door taking your computers and paperwork away…
FYI the CB is used to protect competition and the economy… If someone is in violation of part of the act it does NOT require those being harmed to do anything more than report the violation. This is because this is NOT a case of civil law; rather a violation of the act is handled under criminal law… IE if you feel someone is in violation of the act all you have to do is have you and two of your compatriots send a total of 3 (three) written letters to the CB and they are bound by law to launch an investigation.
Now if anyone feels that iv missed a point here please let me know; I may be young and nieve to many things, and perhaps I really DON’T know how things work, but the way I see it, pay to work operators only damage the economy. YES granted they DO fulfill a market for those willing to pay to work; but I would argue that the NB (net benefit) derived from that is not even remotely close to the NC (net cost) that society(aka the economy) experiences as a result of their operation. Now just to put out a tiny bit of clarification, this rant is NOT a result of me being upset that others have an advantage over me. I am lucky enough that should I so choose I too could “buy” 1000 hrs on an turboprop…. However would it be morally reprehensible to???? Personally I have decided it would be….
-walk