This is an analysis of the negotiation and everything needs to be said to understand the situation. In almost every airline negotiation with pilots, airline ma

This is an analysis of the negotiation and everything needs to be said to understand the situation. In almost every airline negotiation with pilots, airline management has a far greater position in the negotiation, except in the case of Virgin where the pilots probably still have a worse position, but a much more equal playing field! Here is why: There is something that is EXTREMELY important to understand about the economics of being a pilot at an airline. Pilots cannot switch airlines without starting at the very bottom. They cannot leave the airline they are with! If they do, they will go from $100-$150K to $30K. Pilots are not promoted based on how good they are, they are promoted by seniority which means that if a pilot is a captain with Virgin and they switch to whoever is hiring now, they will never make their previous salary for the rest of their career. There is a second piece of airline economics that is EXTREMELY important. If the pilots strike, the losses an airline would take while trying to replace them will easily bankrupt any airline. The fixed costs, long training time and lack of trained pilots in the market makes a strike an airline killer. When you combine these two factors, you would normally say that both management and pilots are both in really bad positions to negotiate and MUST come to an agreement or they will both loose badly. But, the reality is that pilots loose far worse than management… Why? Well, management can take their skills to a different company whereas pilots cannot transfer their skills for the same money. This puts the negotiation power directly in management hands, with one exception… Richard Branson. He is getting involved and trying to get everyone together because he knows that if the pilots strike, management cannot afford their demands and the airline will be bankrupt. If this occurs, he takes a capital loss which will suck, but the real blow is to his ego and the Virgin brand. No other airline management is in this position. A lot of airlines will be facing strikes over the next few years, great management will bridge the gaps, talk to both sides and keep the airlines running. Terrible management will allow them to fail and move on to the next company.