Are Flow Agreements Illegal / Anti-competetive?
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Are Flow Agreements Illegal / Anti-competetive?
Good day,
I've thought about this recently due to a curious situation that arose with my wife. She was working for employer (A) a competitor of employer (B). Through a referral she was offered an interview at company B.
Company B told her that they refused to hire her as they had an agreement with company A to not hire each other's employees. I instantly thought that was collusion/illegal between competitors, and with a bit of googling, I found that my opinion was correct.
In the end she got the job, but they actually made her QUIT the first job before being offered the second job so that technically they didn't poach her. Ridiculous, I know - but besides the point.
Now, on to flows.
I believe a flow agreement may have a similar negative outcome on the labor market for pilots. For the following reasons
1) For pilots who work at Jazz, they are guaranteed an interview with AC. The carrot likely incentivizes an employee to take a lower wage in order to achieve working at AC in the future.
2) For pilots outside of the Jazz / AC system, there is less of a possibility for them to work for Air Canada than if there was no flow agreement at all. This blocks certain people from switching companies and reduces the competition for pilots outside of the ac/jazz system because they do not work for Jazz.
3) Overall there is a restriction on the movement of pilots between companies due to hiring agreements between companies and this reduces the competition for labor.
4) Why would you even have a flow agreement in the first place if you're a major airline? You can just hire anyone of the street especially when you have a stack of resumes. Where is the gain for the major airline? In my opinion, the major benefit is the ability to leverage the regionals to lower their wages, it has absolutely nothing to do with skill / competence.
If you do think somewhow skill is involved jazz has a flow with 200 hour guys getting hired and no work history. WJ/Encores is a guaranteed flow as well. There is no filter for skill.
5) The way the flow agreement was leveraged as a bargaining chip at Jazz in the most recent contract negotiations was atrocious. I don't see how you can make contracts at company A that revolve an interview / hiring possibility at company B.
Overall I find it to be anti-competitive and works mostly against the pilot group as a whole. Without flow agreements, I believe the average salaries of pilots would increase.
Just some thoughts.
I used jazz/ac just but the same thing applies for WJ/Encore or any other flow agreement.
I've thought about this recently due to a curious situation that arose with my wife. She was working for employer (A) a competitor of employer (B). Through a referral she was offered an interview at company B.
Company B told her that they refused to hire her as they had an agreement with company A to not hire each other's employees. I instantly thought that was collusion/illegal between competitors, and with a bit of googling, I found that my opinion was correct.
In the end she got the job, but they actually made her QUIT the first job before being offered the second job so that technically they didn't poach her. Ridiculous, I know - but besides the point.
Now, on to flows.
I believe a flow agreement may have a similar negative outcome on the labor market for pilots. For the following reasons
1) For pilots who work at Jazz, they are guaranteed an interview with AC. The carrot likely incentivizes an employee to take a lower wage in order to achieve working at AC in the future.
2) For pilots outside of the Jazz / AC system, there is less of a possibility for them to work for Air Canada than if there was no flow agreement at all. This blocks certain people from switching companies and reduces the competition for pilots outside of the ac/jazz system because they do not work for Jazz.
3) Overall there is a restriction on the movement of pilots between companies due to hiring agreements between companies and this reduces the competition for labor.
4) Why would you even have a flow agreement in the first place if you're a major airline? You can just hire anyone of the street especially when you have a stack of resumes. Where is the gain for the major airline? In my opinion, the major benefit is the ability to leverage the regionals to lower their wages, it has absolutely nothing to do with skill / competence.
If you do think somewhow skill is involved jazz has a flow with 200 hour guys getting hired and no work history. WJ/Encores is a guaranteed flow as well. There is no filter for skill.
5) The way the flow agreement was leveraged as a bargaining chip at Jazz in the most recent contract negotiations was atrocious. I don't see how you can make contracts at company A that revolve an interview / hiring possibility at company B.
Overall I find it to be anti-competitive and works mostly against the pilot group as a whole. Without flow agreements, I believe the average salaries of pilots would increase.
Just some thoughts.
I used jazz/ac just but the same thing applies for WJ/Encore or any other flow agreement.
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Re: Are Flow Agreements Illegal / Anti-competetive?
There's no question that flow agreements are used by all of the major airlines in North America to keep wages low. The carrot dangle is a powerful motivator. The 2 airlines in Canada that employ this tactic, have used it for decades to get highly skilled applicants into some of the lowest paying jobs in our entire industry.
I think we're about to find out what happens when airlines stop honouring their flow agreements.
I think we're about to find out what happens when airlines stop honouring their flow agreements.
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Re: Are Flow Agreements Illegal / Anti-competetive?
Right now it's already evident most float/ 703 employers are struggling.
I've never seen 120K jobs with minimal requirements of a CPL.
Pasco/ Perimeter/ CMA are all in need but are finding almost enough guys, with constant attrition.
If this USA thing becomes real, you're going to see AC and WJ accepting 1500/ ATP pilots as all the talent flows south.
For decades Canadian carriers with the blessing of the federal government have successfully worked together to keep wages down and pilots bound. The only escape was overseas, which many of us did. That time is now up.
Next spring there will be lodges with no pilots, reserve's with no air service and more cancellations of 705 flights than we saw this summer.
Carpe diem kids.
I've never seen 120K jobs with minimal requirements of a CPL.
Pasco/ Perimeter/ CMA are all in need but are finding almost enough guys, with constant attrition.
If this USA thing becomes real, you're going to see AC and WJ accepting 1500/ ATP pilots as all the talent flows south.
For decades Canadian carriers with the blessing of the federal government have successfully worked together to keep wages down and pilots bound. The only escape was overseas, which many of us did. That time is now up.
Next spring there will be lodges with no pilots, reserve's with no air service and more cancellations of 705 flights than we saw this summer.
Carpe diem kids.
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Re: Are Flow Agreements Illegal / Anti-competetive?
Sounds like a great time to be a (experienced) pilot who knows their worth.
Re: Are Flow Agreements Illegal / Anti-competetive?
Jazz and AC aren't competitors, so your analogy fails at the first.
But even if they were competitors, while that behaviour might be illegal in the US; it doesn't appear to violate any Canadian laws:
https://www.mccarthy.ca/en/insights/art ... lified-yes
Someone else can trawl through these regulations and see if there's any other issue with it:
https://www.competitionbureau.gc.ca/eic ... 04582.html
Competition law is there to protect customers, not employees. Nobody who isn't a pilot gives a shit how low pilot wages are, if it means cheaper flights.
DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
- Ash Ketchum
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Re: Are Flow Agreements Illegal / Anti-competetive?
The airline industry here in Canada is pathetic. Even in a labor shortage pay and work conditions still suck. Airline execs should be improving Wawcons enticing pilots to stay instead of dishonoring flow agreements... If I can't get a job flying in the US in the next year I will leave this industry and do a MBA to change careers, just not worth it anymore.