Industry Salary Survey

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					A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                                                                   1


Table of Contents


1     Executive Summary............................................................................................................................................................................. 2
    1.1     The Current Situation in Civil Aviation........................................................................................................................................................... 3
    1.2     The Current Situation in the Civil Aviation Program ..................................................................................................................................... 4
    1.3     Recruitment, Retention, and Compensation Practices .................................................................................................................................... 5
    1.4     The Compensation Survey Results................................................................................................................................................................... 7
    1.5     Conclusions ..................................................................................................................................................................................................... 9
2     Introduction ....................................................................................................................................................................................... 11
    2.1     Objectives and Scope of the Review .............................................................................................................................................................. 11
    2.2     Approach and Methodology .......................................................................................................................................................................... 14
3     The Context of the Review ................................................................................................................................................................ 17
    3.1     A refocused and reorganized Transport Canada .......................................................................................................................................... 17
    3.2     A changing regulatory environment .............................................................................................................................................................. 18
    3.3     A changing labour market for licensed aviators ........................................................................................................................................... 20
    3.4     The airline industry has a unique culture ...................................................................................................................................................... 23
4     The Current Situation in Civil Aviation ........................................................................................................................................... 26
    4.1     The Airline Industry....................................................................................................................................................................................... 26
    4.2     The Labour Market of Licensed Aviation Personnel ..................................................................................................................................... 27
    4.3     The Civil Aviation Program (Transport Canada) ......................................................................................................................................... 28
5     Recruitment and Retention Practices ............................................................................................................................................... 30
    5.1     Department of National Defense ................................................................................................................................................................... 30
    5.2     Transport Canada ......................................................................................................................................................................................... 31
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                                                               2

    5.3     The Aviation Industry .................................................................................................................................................................................... 35
6     Overview of Compensation ............................................................................................................................................................... 37
    6.1     The Compensation Survey ............................................................................................................................................................................. 38
    6.2     Secondary Sources......................................................................................................................................................................................... 42
    6.3     Industry Interviews ........................................................................................................................................................................................ 46
7     Conclusions ....................................................................................................................................................................................... 47



Appendices

Appendix ‘A’

           Bibliography of Secondary Sources

Appendix ‘B’

           Private Sector Interviews and Transport Canada Consultation List

Appendix ‘C’

           List of Data Tables


Survey of Compensation Practices for Three Air Transportation Benchmark Positions



                                                                                                                  In recent years, the aviation sector has undergone significant change
1          Executive Summary
                                                                                                                  driven by economic cycles and the restructuring of the government’s
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                        3



management of Canada’s transportation system. As a consequence,          operators in regards to compensation practices. Finally, PwC has
the role of Civilian Aviation Inspectors (CAIs) who inspect air          suggested a directional approach to assist the Department in
operators, the air navigation system, flying schools, and airports for   addressing the challenges that PricewaterhouseCooper’s review
conformity to government standards and regulations has changed.          identified in regards to the issues of recruitment, retention, and
These changes have also put some significant pressures on the ability    compensation.
of Transport Canada (TC) to manage recruitment and retention of its
CAI population and strengthens the perception among the CAI
                                                                         1.1     The Current Situation in Civil Aviation
population that there is a significant compensation gap between the
Department and the aviation industry.
                                                                         The difficulty of TC to manage recruitment and retention of CAIs
                                                                         has to be examined within the perspective of the evolution of the
PricewaterhouseCoopers LLP (PwC) has thus been commissioned to
                                                                         business environment of civil aviation. From our review, it should
conduct a review of TC’s recruitment, retention, and compensation
                                                                         be noted that both employment and salaries for licensed aviation
practices in contrast to those practices of private operators in the
                                                                         personnel in the civil aviation industry has increased rapidly.
aviation sector that employ licensed aviation personnel who possess
                                                                         Between 1995 and 1996 the number of pilots and co-pilots increased
similar certifications and qualifications required by TC of its CAI
                                                                         by 6.0% compared to an overall increase of 2.4% for all airline
population.
                                                                         employees. During the same time period the salaries and wages for
                                                                         pilots and co-pilots increased 10.3% compared to an overall increase
As part of this review PwC has conducted a secondary source
                                                                         of 7.7% of all airline employees.
analysis of industry literature and databases and has undertaken
numerous interviews with senior management from private aviation
                                                                         The higher growth in both employment and salaries for pilots in
operators and the Department in the Civil Aviation Program.
                                                                         comparison to all airline employees may be a reflection of the
Additionally, PwC has administered an industry compensation
                                                                         increasing demand for licensed aviation personnel and the recent
survey to delineate the differences between TC and private sector
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                              4



stagnation in the number of ‘in force’ aviation licenses in the           Operator (AO)1 distribution rates (Allocation/Strength), derived from
aviation sector. These developments can be attributed to a number         TC TIPS data, the total allocation of staffed AO’s positions for the
of trends occurring in the aviation industry. These trends include:       TC Civil Aviation Program should be at 403 inspectors while total
                                                                          current strength lies at 356.5 inspectors, or at 88.5% of operational
     An increase in the number of passengers carried.                    levels.2 However, the TIPS data examined and our interviews with
     An increase in the number of revenue passenger miles.               staff and management indicate that the level of staffing vacancies is
     A greater variety of aircraft types in the fleet in air carriers.   not comparable across all regions and service lines.
     An increase in the number of aircraft operators.
     An increase in the number of aircraft registered.                   For instance, the CBA branch is at 89.5% of operational allocation

     A decline in the number of private pilot licenses.                  nationally but when the specific programs within the branch are

     The changing demographics of aviation license holders.              examined it was discovered that there is significant staffing shortages
                                                                          in the large air carrier program (7th Region) which is only at 78.4%
     An increase in the enrolment in flight schools but there are
      emerging restrictions, which may affect future enrolment.           of operational allocation. Correspondingly, when certain regions
     The decline in the number of military aviators.                     were cross tabulated with the CBA branch, it was found that the
                                                                          Ontario Region, at 81.8% of allocation, and the National Capital
                                                                          Region (NCR) region, at 80.7% of allocation, were also suffering
                                                                          from significant staffing shortages. In comparison, other service
1.2       The Current Situation in the Civil Aviation Program
                                                                          lines, such as aircraft maintenance and manufacturing and regulatory
                                                                          services, both at 100% of allocation, and general aviation, at 94% of
PricewaterhouseCooper’s review of the current situation in the Civil
Aviation Program at TC does support the management’s concerns in
regards to recruitment and retention of CAIs. According to Aircraft       1 The AO section is the classification group in which the CAI population resides in TC.


                                                                          2 Allocation/Strength levels as of September 21st, 1998.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                5



allocation, seem to be more successful at retaining their staffing                               1.3       Recruitment, Retention, and Compensation Practices
levels at or close to      allocation.3
                                                                                                 Aviation employers have responded in a variety of ways to the

The allocation of staffed CAI positions is characterised by the                                  challenges they face in recruiting and retaining licensed aviation

following trends4:                                                                               personnel depending on the size of their operation, the segment of
                                                                                                 the industry in which they operate, and if their operation is a

    The Department is compensating for staffing vacancies partially                             unionized. There are a number of significant and industry wide
     through the use of overtime.                                                                developments which are noteworthy. These include:
    TC’s AO population is a maturing workforce as reflected by age
     and length of service.
                                                                                                      A significant increase in pilot salaries. Between 1995 and 1996
    There has been a departure of experienced personnel, perhaps                                      salaries for pilots increased 10.3% according to Statistics
     due to individuals reaching retirement age, between 1995 and                                      Canada’s Civil Aviation Report. According to our survey of
     1998.                                                                                             compensation practices, firms reported, on average, that they
                                                                                                       expect a base salary increase of 3% in 1999 for the three
    The departure of experienced personnel has affected some of the                                   benchmarked positions. Finally, a 1998 salary survey for
     regions to a greater degree than others.                                                          business aviation reported a 6% increase in compensation for
    The external recruitment from April 1995 to April 1998 has not                                    pilots between 1997 and 1998.
      kept pace with departure levels, but there has been a recent
      increase in new hires.                                                                          An increase use of pilot retention programs. The DND, a
    The Regions have been relatively more successful than the NCR                                     significant Canadian employer of pilots, has launched a retention
      (headquarters) in recruiting candidates to fill CAI vacancies.                                   allowance program which rewards upwards of $75,000 for
                                                                                                       experienced pilots. Private sector operators have offered profit
                                                                                                       sharing schemes, better training opportunities, and performance
                                                                                                       bonuses.
3 For a complete chronicle of AO distribution rates cross tabulated by region and service line
please see Appendix ‘C’.                                                                              Benefits programs and the working environment have been
                                                                                                       reviewed and enhanced. Carriers with unionized shops have
4 For a complete chronicle of AO distribution rates cross tabulated by region and service line         decreased the number of hours flown by pilots and typically have
please see Appendix ‘C’.                                                                               benefit packages including uniform allowances, per diems, and
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                        6



    discounted travel policies. Often these policies set the standard    Program. This approach to human resource management is the
    for other airlines that may or may not have a union.
                                                                         foremost example of how the Department distinguishes itself from its
                                                                         industry counterparts and, as a result, puts TC at a competitive
In comparison, TC has experienced a long-term wage freeze that was
                                                                         disadvantage in recruiting and retaining licensed aviation personnel.
introduced by the federal government in the early 1990s for all
                                                                         From our review it could be suggested that the service lines which
employees. As a result of the federal wage freeze, the salary gap with
                                                                         are experiencing difficulties in recruiting and retaining licensed
the industry has continued to widen, even taking into consideration
                                                                         aviation personnel, specifically CBA, are a result of the competitive
the fact that TC pays overtime for its licensed aviation personnel
                                                                         labour forces which are occurring in the corresponding private sector
which is an uncommon practice in the industry. Moreover, despite a
                                                                         segments that those service lines regulate.
changing business environment in the airline industry and an
evolution of the role and the service delivery model of the
                                                                         Typically, the private sector compensation model for employers of
Department, TC has continued to use the same human resource
                                                                         licensed aviation personnel reflect the competitive labour forces
management practices around recruitment, retention, and
                                                                         which confront that employer based on its industry segment and the
compensation that it has relied on in the past. Hence, it has become
                                                                         role of the employee in question. While TC recognizes that the level
increasingly difficult for TC to respond to the business cycles of the
                                                                         of technical expertise and complexity of the regulatory environment
aviation industry and to manage effectively the dynamics of the
                                                                         differs between service lines, and hence requires different
evolving labour market for licensed aviation personnel.
                                                                         classification levels, it does not reflect in its compensation practices
                                                                         the differences in the competitive labour market that cross service
More importantly, it should be noted that not all aspects of the Civil
                                                                         lines.
Aviation Program are experiencing the same level of difficulty in the
recruitment and retention of licensed aviation personnel. However,
                                                                         As a result, the Department removes its ability to respond to labour
the Department continues to use a homogenous approach to the
                                                                         market pressures to the same degree that its private sector
management of its human resources across the entire Civil Aviation
                                                                         counterparts for the areas of the industry where the competitiveness
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           7



for skilled and experienced individuals that possess the certification     Tables 1, 2 and 3 reveals that for all three benchmark positions, TC
and the qualifications required by TC is the strongest. Additionally,      is at the lower bound of the market (0th percent rank) 13 times out of
due to the narrowness of salary bands between classification levels,       21 under the correlation that we have analysed. (Three benchmark
there is a perception among inspectors in the Department that the          positions correlated against: (1) all participants, (2) by clustered tiers,
compensation practices of TC are linear and applied homogeneously          and (3) tier by tier.
throughout the Civil Aviation Program regardless of the competitive
labour forces at work. This makes it difficult for TC to promote or        The closest position of TC to a market central trend is the
encourage line staff to move across service lines or to transfer           Superintendent benchmark at the 47th percent rank of the clustered
between regions restricting the Department’s ability to best manage        Tier 3 and Tier 4 participants. However since TC policy is to pay for
and develop its workforce.                                                 the overtime worked while the survey participants do not generally
                                                                           pay for overtime, we could presume that the overall position of TC
                                                                           ought to be better aligned with the market practices.
1.4     The Compensation Survey Results


The detailed results for all participants are presented in Table 1 while
Table 2 reports the survey results by clusters; the first cluster
consists of ‘tier’ 1 and of ‘tier’ 2 participants and the second cluster
consists of ‘tier’ 3 and ‘tier’ 4 participants. Table 3 presents the
clustering of participants by the four ‘tiers’ and reports on the
national exposure of TC to national competition for attracting and
retaining licensed aviation personnel.
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Table 1: Compensation Survey Results - All Participants           Table 3: Compensation Survey Results - By Tier Participants
                            TC Salary      Market    TC Percent                            TC Salary     Market     TC Percent
                                          Average         Rank                                           Average        Rank
All Participants                                                  Tier 1 Participants
Inspector, CAI-03           $61 338      $91 168     24%          Inspector, CAI-03        $61 338     $168 105    0%
Superintendent, CAI-04      $65 263      $99 269     30%          Superintendent, CAI-04   $65 263     $174 598    0%
Chief (Manager), CAI-05 $70 484          $106 139    21%          Chief (Manager), CAI-05 $70 484      $175 105    0%
                                                                  Tier 2 Participants
Table 2: Compensation Survey Results - Clustered Participants     Inspector, CAI-03        $61 338     $106 860    0%
                             TC Salary     Market    TC Percent   Superintendent, CAI-04   $65 263     $131 500    0%
                                           Average        Rank    Chief (Manager), CAI-05 $70 484      $121 000    0%
Tier 1 and 2 Participants                                         Tier 3 Participants
Inspector, CAI-03           $61 338      $137 483    0%           Inspector, CAI-03        $61 338     $86 133     0%
Superintendent, CAI-04      $65 263      $153 049    0%           Superintendent, CAI-04   $65 263     $85 050     0%
Chief (Manager), CAI-05 $70 484          $148 053    0%           Chief (Manager), CAI-05 $70 484      $101 750    0%
Tier 3 and 4 Participants                                         Tier 4 Participants
Inspector, CAI-03           $61 338      $72 642     0%           Inspector, CAI-03        $61 338     $59 151     78%
Superintendent, CAI-04      $65 263      $72 379     47%          Superintendent, CAI-04   $65 263     $59 708     100%
Chief (Manager), CAI-05 $70 484          $85 183     33%          Chief (Manager), CAI-05 $70 484      $68 616     76%
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Assuming that it is the practice of TC to pay 12% of base pay in          safety, and the creation of a competitive compensation and benefit
overtime and taking into account that PwC compared total pay              package that recognizes the forces of a competitive labour market for
indicators5 and not only base pay levels, the current total salary        licensed aviation personnel.
levels of TC are still located at the lower bound of the market 14
times out of 21. Therefore, the survey results indicate clearly for the   In order to begin this process of renewal, TC needs to develop a
three benchmarked positions there is a large gap between the CAI          long-term strategy to provide it’s management with the tools
base salary and those measured positions in the industry.                 necessary for the effective administration of the CAI population and
                                                                          the creation of the required working environment to attract and retain
Other survey results that address non-monetary topics indicate that       a skilled and motivated workforce TC needs. Additionally, it is
overtime paid is not a frequent practice on the market for any of the     essential that TC recognises that the labour market forces that the
three benchmark positions on the market. Additionally, the vacation       Department faces in regards to the recruitment and retention of
schedule generally stops at a 4 weeks maximum. After 1 year of            licensed aviation personnel differ in magnitude across the various
service, the industry standard is to offer is 2 weeks of vacation.        service lines that comprise the Civil Aviation Program.
Finally, most of the industry requires an annual medical exam.
                                                                          The following dimensions should be taken into account when
1.5        Conclusions                                                    developing a long-term strategy:


It must be concluded that TC needs to position itself as an employer         The establishment of a compensation package with greater
who is both attractive and competitive. This can be achieved                  degree of flexibility that would take into account specific labour
                                                                              market pressures in the various segments of the aviation sector.
through the renewal of TC’s human resource practices, the effective           This flexibility would include the widening of the salary bands
promotion of the essential role of the inspector in ensuring aviation         between the different classification levels to distinguish between
                                                                              levels of responsibility and the degree of complexity but also the
5 Salaries + bonuses = total pay
                                                                              effect that these variables have on the competitiveness of
                                                                              compensation within the labour market. The compensation
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                       10



    package must take the Department to a competitive level were               market. All efforts in managing the problem of recruitment will
    the CAI’s role in aviation safety is perceived to be an attractive         fail if management doesn’t have the flexibility to respond to
    alternative to those individuals in the industry seeking a career          potential candidates in a timely manner.
    change. Compensation packages could include measures beyond
    the basic salary structure and can include allowances or bonuses          The Department should consider a strategy of complementing
    that are often found in the private sector.                                ‘off the shelf’ skill sets obtained through experienced industry
                                                                               recruits with the development and sustainment of essential skills
   Develop recruitment campaigns and policies that promote the                internally through a diversified approach. This approach could
    positive factors of a career with TC. These include the level of           include; traditional training provided by the Department, the
    responsibility, the working environment, and the uniqueness of             strengthening of the line-flying program.
    the CAI’s regulatory role. These factors were noted in staff
    interviews as important in making the Department an attractive
    alternative to the private sector while noting the unique culture in
    which the licensed aviation personnel develop their skills and
    experience.

   Target those individuals who have come to a point in their career
    where a senior pilot position on the line or a management
    position with the carrier no longer provides them with the
    lifestyle, working environment, or professional challenges they
    are seeking in their career.

   Strengthen and revise existing exchange programs to again
    encourage exchanges within the Department and with the
    industry at large. Use these exchange programs to support the
    development of a career path for all inspectors that are
    achievable and affordable to the Department.

   Address the hurdles that a manager must overcome in order to
    fill a vacancy. The issue around portraying the Department as an
    attractive and competitive alternative to the industry is as
    important as establishing the tools necessary for management to
    effectively interact with an increasingly competitive labour
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                                                                         time there exists among the CAI population a perception that there is

2       Introduction                                                     a significant compensation gap between the Department and the
                                                                         aviation industry.

In recent years major changes have occurred in the aviation sector.
The aviation sector has recovered significantly from the downturn of     In order to define ways to deal successfully with these challenges TC

the early 1990s. But more importantly, over the past years, the          identified a need to undertake a study for the Civil Aviation

aviation sector has undergone significant change driven by economic      Inspector (CAI) community within the Department’s civilian

cycles and the restructuring of the government’s management of           aviation program. PricewaterhouseCoopers LLP was retained to

Canada’s transportation system. This restructuring has been focused      undertake this review.

on the commercialization and decentralization of government owned
                                                                         2.1       Objectives and Scope of the Review
and operated transportation assets, such as NAV CANADA and
various aerodromes under the National Airports Policy, the economic      This review was intended to bring to light specific issues regarding
deregulation of commercial aviation, and bilateral agreements, such      recruitment, retention and compensation practices that arose from an
as ‘Open Skies’ with the United States.                                  examination of the Civil Aviation Inspector (CAI) community of TC
                                                                         compared to private sector operators that employ people with similar
These changes have led to an important transformation of the             certifications, qualifications, and levels of experience.
sector’s regulatory framework and, as a consequence, the role of
Civilian Aviation Inspectors (CAIs) who inspect air operators, the air   Specifically, the review endeavoured:
navigation system, flying schools, and airports for conformity to             To assess the sources of recruitment and means of retention
government standards and regulations. More importantly, these                  practiced by the Department for CAIs.
changes have put some significant pressures on the ability of TC to
                                                                              To assess the required qualifications and any internal/external
manage recruitment and retention of its CAI population. At the same            training and licensing requirements in comparison to their
                                                                               Department and private sector counterparts.
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    To assess the basic salary and benefits of the Departments CAI’s
                                                                        It should be noted that while there are populations of CAIs employed
     in comparison to their private sector counterparts.
                                                                        by multi-modal organizations such as the Transport Safety Board,
    To document any innovative practices and, more generally, any      these groups were considered outside of the scope of this study and
     emerging issues regarding the supply and demand of the labour
     market that the Department draws upon for recruitment.             are not included in our analysis.


The scope of the review covers issues pertaining to the CAI             As demonstrated in Figure 1: Civil Aviation Organizational
community, currently comprising of approximately 356 inspectors,        Structure, the Civil Aviation Program has eleven service lines at the
employed by TC as part of its Civil Aviation Program and with the       headquarters function, of which seven are mirrored in the five
Department’s aircraft services branch.                                  regional offices across Canada. While the entire population of CAIs
                                                                        was included in our review, the focus of the external interviews and
The Civil Aviation Program and the aircraft services branch have        industry salary survey was on the commercial and business aviation
nearly 1,250 employees located in headquarters, five regional           (CBA) and general aviation (GA) service lines. It is in these service
offices, and numerous service centres, with a budget of $93 million     lines where a majority of CAIs are employed by the Department.
            6
(1997-98) . Headquarters determines the Civil Aviation Program’s
content, policy, and standards while the regions deliver the program.
The notable exception in program delivery is the international and
specialized components of the program, international and national
flag carriers, which are the responsibility of the large air carrier
group (7th Region) co-located with the headquarters function in the
NCR and located across Canada in a number of operational bases.


6 Transport Canada, Challenge ’98: Civil Aviation Program Overview.
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Figure 1: Civil Aviation Organizational Structure

                                     HQ                                             Regions

                         Assistant Deputy Minister Safety                      Regional Director General
                                   and Security                                       Transport

                                Director General                            Regional Director Civil Aviation
                                 Civil Aviation

                                             Aerodrome Safety                                   Year 1
                                                                                                Aerodrome Safety
                                    Air Navigation Services and Airspace

                                            Aircraft Certification                     Air Navigation Services and Airspace


                                     Commercial and Business Aviation
                                   System Safety                                                  Airworthiness
                                               Air Carrier

                                  Large                           Foreign               Commercial and Business Aviation

                                              General Aviation
                                                                                                   Enforcement
                                            International Aviation

                                       Maintenance and Manufacturing                             General Aviation

                                              Program Services
                                                                                                  System Safety
                                             Regulatory Services

                                               System Safety

                                              Training Services

                                Training Services
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                                                                              Experience. The level of experience, required time, type, and
                                                                               systems.
2.2       Approach and Methodology
                                                                           All of these variables influence compensation levels and, hence,
In order to achieve the assignment’s objectives, first studied the
                                                                           recruitment and retention practices of employers. By using these
labour market in which TC competes for qualified and capable CAIs
                                                                           variables as a basis of comparison, it was possible to ensure the most
was studied. We have used the following framework, as
                                                                           valid correlation possible.
demonstrated in Figure 2: Comparison Framework, was used which
depicts a number of variables within the labour market, and which
                                                                           Once a basis for comparison had been established, a number of
we examined in responding to all the requirements of the terms of
                                                                           secondary sources were reviewed, as listed in Appendix ‘A’, to gain
reference. The comparison framework has allowed the drawing of
                                                                           a better understanding of the trends in the aviation industry and to
valid comparisons between the CAIs and occupations of similar
                                                                           collect supplementary compensation data. The recruitment and
scope and responsibility since multiple variables were considered.
                                                                           retention practices were then documented that have been developed
The variables which were examined included, but were not limited
                                                                           for the CAI community by TC and drew a comparison with other
to:
                                                                           employers in the aviation sector. Issues of recruitment, retention
                                                                           and compensation levels were also assessed through aviation
     Working Conditions. The specific requirements of the job in          industry interviews and a salary survey administered to the industry.
      terms of working hours, schedule, location of work, travel,
      overtime, schedule of vacation;                                      The differences were then delineated. A complete list of site visits
                                                                           and interviews undertaken with TC, private sector aviation operators,
     Job Complexity. The complexity of similar occupations in
      regard to level of supervision, responsibility, effort, and direct   training and instruction organizations is found in Appendix ‘B’.
      consequences of decision-making;

     Certifications. The level of certification required and/or           It should be noted that while the measurement of total compensation
      education level; and                                                 often includes salaries and benefits, it is inherently difficult to assign
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA   15



a net worth to employee benefits as their costs or value depend on
factors such as demographic characteristics (age, gender, and
service) and experience. These factors may vary from one group to
another. An effort was made to document benefits and frame the
comparison between TC and other sector employers with a
discussion of ‘relative value’. The concept of ‘relative value’ refers
to an assessment of the adequacy and competitiveness of the benefits
provided by TC relative to those provided by other employers in the
aviation sector.


A gap analysis among all the factors of this framework led to a
recommendation to TC for a directional approach to improve the
Department’s competitiveness in the labour market and its ability to
recruit and retain licensed aviation personnel and to respond to the
increasing demands of the industry.
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Figure 2: Comparison Framework



  CIVILIAN AVIATION INSPECTOR                                                     PRIVATE SECTOR PILOT
       (CAI) COMMUNITY OF                                                            COMMUNITY AND
       TRANSPORT CANADA                                                            RECRUITMENT POOL



      Demographic Profile                                                                  Demographic Profile
  Age, Gender, Geographic, etc.                     Job                                Age, Gender, Geographic, etc.
                                                 Complexity
      Level of Classification                                                             Level of Classification
        Breakdown of level
            populations                                                                   Collective Agreements
  Classification of level review                                                             Seniority Issues
  results.
     Recruitment/Retention          Working                      Certifications          Recruitment/Retention
             Practices             Conditions                                                   Practices
     Employment trends, staff                                                            Employment trends, staff
     requirements, vacancies                                                             requirements, vacancies

  Compensation and Benefits                                                            Compensation and Benefits
  Compensation band ranges.                                                              Collective agreements.
    Comprehensive list of                                                              Negotiate wage and benefits.
          benefits
                                                 Experience

  Certification and Experience                                                         Certification and Experience
     Certification/technical                                                              Certification/technical
          requirements.                                                                        requirements.
      Length of experience                                                                 Length of experience
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3       The Context of the Review                                          Additionally, with the introduction of the CARS, effective October
                                                                           10, 1996, clearer regulatory guidelines that could be effectively
The context of this study includes the significant issues or               monitored, audited, and enforced were introduced. Finally, with
developments within the civil aviation sector that effect change           bilateral agreements such as Open Skies, recent industry growth, and
within the industry and, conversely, in TC.                                the emergence of new carriers, the aviation business environment has
                                                                           changed significantly over the past decade, prompting the
3.1     A refocused and reorganized Transport Canada                       Department to alter its delivery of services and administration of the
                                                                           national civil aviation safety program. Still, the program aims to
Due, in part, to the status of public finance in Canada, the               fulfil the Department’s mission statement: “To develop and
introduction and implementation of the Civil Aviation Regulations          administer policies, regulations, and services for the best possible
(CARS), domestic deregulation, and bilateral agreements, such as           transportation system.”
‘Open Skies’, the role of TC in the transportation system has
changed greatly. With cost recovery there is a continued focus on the      In response to these challenges and opportunities, the Department
delivery of services which are ‘value based’ and, hence, a demand          has drafted an overall strategy, outlined in Challenge #98: Civil
from industry to deliver those services in the most cost effective         Aviation Program Overview. Briefly, the strategy aims to:
manner possible.

                                                                              Improve ‘big picture’ thinking about safety;
TC has transformed itself from a policymaker, regulator, and                  Find new ways to share our safety commitment;
purveyor of transportation services to a policymaker and regulator of         Rethink our approach to recruitment and training;
the transportation system. The civil aviation safety program has              Improve service delivery;
been in the forefront of this transition with the transfer of the assets
                                                                              Develop measures of organizational effectiveness; and
and the responsibility for the operation of Canada’s civil air
                                                                              Explore new ways to fund the program.
navigation system to NAV CANADA effective November 1, 1996.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                          18



                                                                                             The emerging challenge for the Civil Aviation in the Department is
All of these components play an important role in the transformation                         to balance the demands for greater delegation by the larger airline
of TC into an organization which is better prepared to respond to the                        providers with the need for traditional enforcement and frequent
challenge of balancing regulatory intervention against a backdrop of                         monitoring of very small operators who may operate on the
social, economic, and fiscal realities. This must occur, while                               economic margins of the industry. Delegated authority will allow
ensuring that the use of regulatory powers results in the greatest net                       those air operators with strong regulatory compliance records,
benefit to Canadian society7. The Department’s overall strategy                              advanced safety management systems, and the technical and
reflects the recognition that it must realign its service lines to reflect                   economic resources to manage many components of air safety that
the changes in the industry itself. However, in order for the strategy                       were once directly regulated by the Department.
to be successfully implemented, it is essential that TC realign its
internal processes, including the recruitment, retention, and                                Trained professionals and effective monitoring support this delegated
compensation policies of the CAI population.                                                 authority to industry employees since, ultimately, it is TC which is
                                                                                             responsible for the civil aviation safety program. Current delegations
3.2       A changing regulatory environment
                                                                                             include those to civil aviation medical examiners, company check
                                                                                             pilots, designated flight test examiners, and approved engineering,
The Department continues to delegate authority to trained, qualified,
                                                                                             maintenance, and training organizations.
and monitored individuals in the industry and is moving towards the
use of risk management techniques in its decision-making process
                                                                                             TC is also working towards a risk management model for civil
regarding service delivery and safety regulation.
                                                                                             aviation safety. The Department is dedicated “to using risk
                                                                                             management techniques in decision-making by adopting a structured
                                                                                             process to assist decision-making for front-line and management

7 Transport Canada, Safety Oversight of the Civil Air Navigation System – A Framework, Air
Navigation Services and Airspace, 1997.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                        19



operations, regulatory change, program priorities and policies, and                       Additionally, an essential component of risk management is
by providing training in risk management.”8                                               communication at all stages of the approach to risk management and
                                                                                          decision-making. “It is important in addressing stakeholders’
Risk management introduces the idea that the likelihood of an event                       perceptions of risk – perceptions which often differ and must be
happening can be reduced, or its consequences minimized. Effective                        taken into account in determining the best course of action for
risk management seeks to maximize the benefits of risk taking                             minimizing risk.”12
(usually a reduction in time or cost) while minimizing the risk itself
through the process of identifying risks, assessing their implications,                   In this context of adopting a risk management approach, the role of
deciding on a course of action, and evaluating the results.9                              the CAI is not the same as it was in the past and the type of skills
                                                                                          which will be required by CAIs in the future will need to follow this
The focus on risk management is a significant “departure from a                           evolution. These changes in the required skill sets may include:
traditional, more prescriptive approach to the management of a
regulatory-based safety program.”10 As such, CAIs will no longer                              While most CAIs have excellent technical skills and are
                                                                                               extremely familiar with CARS, there will be a greater emphasis
exclusively act as ‘policemen’ enforcing the ‘letter of the law’ but as
                                                                                               on safety management skills, which allow the CAI to more
‘safety systems managers’ involved in undertaking ongoing                                      efficiently evaluate, measure, and ensure that safety standards
                                                                                               are met.
assessments of the risks associated with their respective operational
environments and make determinations regarding the degree of                                  CAIs will increasingly become ‘specialists’ rather than
regulatory intervention required at any given time.11                                          ‘generalists’ while continuing to enhance their ability to manage
                                                                                               an increasingly dynamic environment.

                                                                                              Finally, the communication of the reasons behind decisions will
8 Transport Canada, Challenge ’98: Civil Aviation Program Overview.                            require special skill sets since decisions regarding safety often
9 Transport Canada, Risk Management and Decision-making in Civil Aviation, 1997.               arouse strong responses, specifically economic ones raised by the
10 Transport Canada, Safety Oversight of the Civil Air Navigation System – A Framework,
1997.                                                                                     12 Transport Canada. Risk Management and Decision-making in Civil Aviation, 1997.
11 Ibid.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           20



      operator. Ultimately, the Department’s credibility as an effective   to in-command (left seat or captain) vs. non-command (right seat or
      risk manager depends on its ability to be a good communicator.
                                                                           first officer). Most of the regularly scheduled airlines require at least
                                                                           1,500 hours of flying time, preferably in multi-engine aircraft, to be
TC will have to take into account and incorporate these new skill sets
                                                                           considered for first officer positions in most of the aircraft they
requirements in its future recruitment practices.
                                                                           operate. On average, the typical new-hire at regional airlines has over
                                                                           2,000 hours while the average new-hire at the major airlines has
3.3       A changing labour market for licensed aviators
                                                                           almost 4,000 hours.14 TC, itself a regulated operator, is no exception
The career progression model in the industry has changed over the          to this rule.
past five years due to the reduction of licensed aviation personnel
(lower enrolments, higher costs of education, demographics,                The traditional career progression model would be summarized as
increased demands of the industry and technological advances in            moving through four levels of pilot licenses: student, private,
aircraft and simulators). Since TC has undertaken the practice to          commercial, and airline transport. Additionally, except for the pilot
recruit from a pool of experienced people with an airline                  holding only a student license, a license holder may have different
transportation pilot license (1,500 hours)13, an instrument and a          ratings or types of certification. A pilot may have ratings for single-
multi-engine rating, they are greatly affected by any change in the        engine, multi-engine, land, sea, helicopter and/or instrument flying.
career progression model in the industry.


                                                                           A type rating for the specific model is required before a pilot may fly
In aviation, experience is judged in two ways: ‘hours of flying and        an aircraft that attains a maximum speed of 250 knots or more,
the kind of flying. The kind of flying refers to the type of aircraft      and/or that requires a two-pilot crew15. Therefore, type ratings and
(single engine vs. multi-engine) and if that flying experience relates

                                                                           14 Air Line Pilots Association. Airline Pilot Career Information.
13 Minimum and often more is demanded.                                     15 Ibid
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                        21



pilot licenses work in tandem and form the core of the career
                                                                           flying schools providing training on a variety of aeroplanes and
progression model.
                                                                            helicopters.

Another aspect of the career progression model is the segment in
                                                                        It should be noted that many operators might provide multiple
which the pilot’s airline is operating. The type of equipment, scope
                                                                        services that may cross a number of segments in the industry. For
of services (regional, national, international - scheduled or charter
services), and the type of operator license granted by TC often         instance, many flying schools also provide air taxi operations.
                                                                        Additionally, there are many interpretations of the variable used to
determine the segment of the industry. Briefly, the industry
                                                                        divide the industry into various segments and any segmentation
segments typically include:
                                                                        should be used with caution.
   foreign operators such as Lufthansa and British Airways;
                                                                        Traditionally, most pilot’s careers begin at a flight instruction school
   airline operators, such as Air Canada and Air BC, providing
    scheduled and charter services using aircraft having 20 or more     and, after an accumulation of hours, commercial and airline transport
    passenger seats;
                                                                        licensing occurs and once an opportunity opens up with a private,
   private operators using privately registered and owned aircraft     commuter or air taxi operator, he will ‘graduate’ to the next segment
    that vary in size but are used for corporate or business purposes   in the industry. Again, by accumulating flying hours and
    and the operators are granted a private operator certificate;
                                                                        endorsements on different types of aircraft, the pilot is able to
   commuter operators, such as Bearskin Airlines or Ontario            eventually move to a regional airline as a first officer that is typically
    Express, providing scheduled and chartered services using
    aircraft having 10 to 19 passenger seats;                           affiliated with one of Canada’s two flag carriers: Air Canada or
                                                                        Canadian Airlines International.
   air taxi operators providing scheduled and charter services
    using aircraft with 9 or less passenger seats;
                                                                        Once the pilot obtains pilot-in-command experience as a captain with
   aerial work operators specializing in aerial spray, forest
    fighting, mapping, etc.; and                                        a regional operator, he may move to the affiliated carrier, to the
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                     22



charter industry, or even abroad to a foreign operator into the ‘right      especially the case with formal flying with charter or business time,
seat’ or first officer position in an aircraft. Typically, for an           which allows them to quickly move to the flag carriers. In fact,
ambitious and well-placed individual, the career progression model          previous graduating classes from Seneca or Sault Colleges averaged
could take a decade or more with no guarantee of reaching the               30 to 35 percent of graduating students finding flying positions
ultimate goal of flying as a captain with a national flag carrier.          within a year. Now the placement rate is approaching 80 percent of
Often, a pilot’s career ends in the ‘left seat’ or captain position of a    graduates.16
regional airline.
                                                                            Fred Jones of the Air Transport Association of Canada (ATAC)
Recently, a new career progression model is emerging due to the             states in a recent Wings magazine article on the flight training
tremendous growth of the industry. Now it is taking less time than          industry: “A renewed interest in general and commercial aviation
ever for pilots to fly increasingly larger aircraft for the flag carriers   and a return to profitability by many of Canada’s air carriers bodes
or charter operators. However, advancement increasingly occurs              well for aspiring new pilots. We are starting to see very promising
from positions in the ‘right seat’ not allowing the pilot to accumulate     telltale signs that the hiring in our industry, as far as pilots are
command time, and management experience, as quickly. This                   concerned, is about to explode.” 17
command time is essential for the airline transport pilot’s license.
                                                                            As always, rapid growth of the flag carriers affects all employers of
While the majority of new pilots still find flight instructor positions     licensed aviation personnel in the aviation sector, including TC. In
as their first job, they do not stay there long. Flight schools are         the end, it is the major air carriers that drive the demand for
complaining of a shortage of flight instructors because the regional        commercial pilots all the way through the ‘supply chain’.
airlines and/or large commuter operators pick them up very quickly.
It now takes three to four years after graduation to find employment
with the regional operators and the prospects have never looked
                                                                            16 Wings Magazine, Job Hopes Brighter for Next Wave of Pilots, Feb/Mar 1997.
better for those with 1,000 to 1,500 hours of flight time. This is          17 Ibid
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                               23



In the same article, Roger Burgess-Webb of the Canadian Airline               The increasing competition at the senior levels of the industry
Pilots Association agrees and says there will be continued demand             directly effects TC, as it is this segment of the pilot population from
for entry-level pilots well into the next century. He noted that the          which it recruits. This is primarily the result of the requirements for
demand for pilots is fueled by the pilot age distribution – where a           an airline transport license, command experience, and a multi-engine
growing portion of pilots are now in their fifties approaching                and instrument rating. This exposes TC directly to the competitive
retirement age. According to Mr. Webb, “The major airlines alone              nature of the labour market.
will have a requirement for at least 800 new pilots just to meet
current demands - if you add the factor of early retirement, expansion        3.4        The airline industry has a unique culture
and increases in airline traffic, that figure increases exponentially.”18
                                                                              The occupation of a pilot is seen as being similar to that of a ship

The net result of rapid industry growth has been a rapid alteration of        captain. As an individual, they are in the unique position of being in

the career progression model for pilots. The overall pool of pilots is        direct control of a piece of equipment worth millions of dollars and

not growing at the same pace as demand. Thus, there is a tightening           of the lives of hundreds of people. Additionally, in order to enter this

of the labour supply at the entry point to the industry and a more            profession, there is a high cost with regard to training and time spent

competitive market at the senior levels of the industry, which has            on different types of aircraft. Pilots pay this cost because of the

driven compensation levels higher. And, according to industry                 desire to fly above all else. This is the dynamic that all employers

observers, this will prove to be the case in the future. “The recent          must deal with in the industry.

resurgence in general and commercial aviation doesn’t include
certain sectors of aviation, but all facets of it, and is here to stay well   There is a common perception among the general public that

beyond the year 2000.”19                                                      licensed aviators are overpaid and unnecessarily pampered by their
                                                                              employers. Recent strikes at major carriers across North America,
                                                                              including Air Canada and Northwest Air, attest to the growing

18 Ibid.
                                                                              19 Ibid.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                         24



demands of pilots regarding to compensation and benefits, especially      to fly is a challenge many airlines face when they attempt to move
in light of the recent recovery of the industry after a decade of         line pilots into management positions.
downsizing and wage rollbacks.
                                                                          The challenge that employers of licensed aviation personnel,
Interestingly enough, pilots are well aware of the public’s disdain       including TC, is to take note of this culture if it is going to continue
and have battled back through a number of public relations efforts        to employ licensed aviation personnel. For instance, TC may have to
that have centred on these key points:                                    alter its ‘bureaucratic’ reputation and make the position as
                                                                          challenging as possible as pilots are not inclined to look at TC as a
   The tremendous responsibility that pilots take on every time they     viable career alternative to flying with an airline.
    begin their day – primarily through the responsibility he or she
    undertakes for the safety of others;

   The cost of becoming a commercial airline pilot is tremendous
    and growing – excluding the cost of a college or university
    degree, a pilot’s career, on average, $30,000 to obtain an airline
    transport license, and a multi-engine and instrument rating;

   The time invested in becoming a pilot to ultimately reach the
    command position of a large aircraft with a flag carrier –
    traditionally a decade or more;

   The age and medical restrictions on the length of a pilot’s career
    may restrict the potential earning period of a pilot.

The foremost characteristic of pilots is the desire to fly at any cost.
They have trained their entire lives for the opportunity to fly modern
and technically challenging aircraft and to leave behind this ambition
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA   25
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                       26



                                                                         The increasing demand for licensed aviation personnel may be
4       The Current Situation in Civil Aviation
                                                                         attributed to a number of trends occurring in the aviation industry.
                                                                         Most notable is how sudden and recent the industry turnaround is
This section will attempt to summarize current trends regarding
                                                                         and how significant that turnaround has been.
employment, the number of operators, the number of licensed
                                                                         These trends include:
aviation personnel, fleet size, and salary levels. All of the data
referenced here are reproduced in table format in Appendix ‘C’.
                                                                            An increase in the number of passengers carried. According
Three segments of the overall issue are examined: the airline                to Statistics Canada, Aviation Statistics Centre, the number of
industry, the labour market, and TC.                                         passengers carried by air carriers, Tiers I-IV has increased from
                                                                             31.8 million in 1991 to 39.4 million in 1996 with the majority of
                                                                             that increase occurring between 1994 and 1996.
4.1     The Airline Industry
                                                                            An increase in the number of revenue passenger miles.
                                                                             Between 1991 and 1996 the total revenue passenger miles flown
According to Statistics Canada’s Civil Aviation Report, both
                                                                             by the industry, air carriers Tiers I-IV, increased from 36.1
employment and salaries for licensed aviation personnel in the civil         billion to 49.7 billion with a majority of that increase occurring
                                                                             between 1994 and 1995.
aviation industry have increased rapidly. Between 1995 and 1996
the number of pilots and co-pilots increased by 6.0% compared to an         Greater variety in the fleet. The profile of the airlines’ fleets
                                                                             continues to change and modernize. Between 1995and 1996,
overall increase of 2.4% for all airline employees. During the same
                                                                             according to Statistics Canada’s Civil Aviation Report, the
time period, the salaries and wages for pilots and co-pilots increased       number of jet aircraft increased by 9.7%, the number of
                                                                             turboprop aircraft has fallen 1.3%, while the total piston aircraft
10.3% compared to an overall increase of 7.7% of all airline
                                                                             has fallen 0.8%. Between 1995and 1996 the number of rotary
employees. The higher growth in both employment and salaries for             aircraft declined 1.4%.
pilots in comparison to all airline employees may be a reflection of
                                                                            An increase in the number of operators. According to the
the competitiveness of the labour market leading to an overall               Canadian Transportation Agency, the number of air operators
tightening of that market for licensed aviation personnel.                   continues to increase both domestically and internationally. The
                                                                             number of commercial carriers has increased from 959 in 1979
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                     27



      to 1,021 in 1995. The number of foreign commercial carriers       decrease of 0.40% in the total number of pilot licenses, a decline of
      operating in Canada has increased from 734 in 1979 to 913 in
                                                                        0.10% of commercial pilot licences, and a decrease of 0.40% of all
      1995.
                                                                        aviation licenses.
     An increase in the number of aircraft. According to the
      Canadian Civil Aircraft Register, the number of registered
      commercial aeroplanes increased from 4,553 in 1993 to 4,756 in    The stagnation in the number of ‘in force’ aviation licenses may be
      1997. Additionally, the number of registered commercial
                                                                        attributed to a number of trends occurring in the aviation industry.
      helicopters increased from 1,143 in 1993 to 1,256 in 1997.
                                                                        These trends include:

4.2      The Labour Market of Licensed Aviation Personnel
                                                                           A decline in private licenses. The shift away from private to
                                                                            commercial pilot and airline transport pilot licenses may be an
When measuring the size of the labour market for licensed aviation,         indication of a significant industry uptake of license holders.
one must look at the number of licenses in force or currently               According to TC, Civil Aeronautics, between 1993 and mid-
                                                                            1998 the number of private pilot licenses fell from 30,392 to
registered with TC. According to TC’s Aviation Forecast (1996-              27,698, the number of commercial pilot licenses rose from 7,829
2009), the trend of insignificant growth in the total number of             to 9,055, and the number of airline transport pilot licenses rose
                                                                            from 8,707 to 10,426.
licenses will continue. Specifically, between 1982 and 1995 there
was a decrease of 0.80% in the total number of pilot licenses, a           The changing demographics of aviation license holders. It
increase of 0.70% of commercial pilot licences, and a decline of            appears that there are fewer individuals under the age of 30
                                                                            holding a private pilot license then those individuals holding a
0.30% of all aviation licenses.                                             commercial pilot license possibly reflecting a change in the
                                                                            career progression model. According to TC, Civil Aviation, the
                                                                            age bands for private pilot licenses in 1998 were: 17% are under
Between 1995 and 2004 it is projected that there will be a decrease         30, 22% are between 30 and 39, 26% are between 40 and 49,
of 0.80% in the total number of pilot licenses, a decline of 0.20% of       21% are between 50 and 59, and 14% are over the age of 60. For
                                                                            commercial pilot licenses: 32% are under 30, 26% are between
commercial pilot licences, and a decrease of 0.80% of all aviation          30 and 39, 23% are between 40 and 49, 13% are between 50 and
licenses. Between 1995 and 2009 it is projected that there will be a        59, and 6% are over the age of 60. For airline transport pilot
                                                                            licenses: 9% are under 30, 35% are between 30 and 39, 32% are
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                     28



      between 40 and 49, 19% are between 50 and 59, and 5% are over             According to Aircraft Operator (AO)20 distribution rates
      the age of 60.
                                                                                (Allocation/Strength), derived from TC TIPS data, the total
     The enrolment in flight schools. While there now appears to be            allocation of staffed AO positions for the TC Civil Aviation Program
      a relative boom on flight training, there are a number of
                                                                                should be at 403 inspectors while total current strength lies at 356.5
      restrictions on how many pilots will emerge from the flight
      training industry. The three significant restraints include:              inspectors, or at 88.5% of operational levels.21 However, the TIPS
                                                                                data examined and our interviews with staff and management
         the chronic shortage of Class 1 flight instructors;
         the lack of provincial government support in providing                indicate that the level of staffing vacancies is not comparable across
          funding for colleges to expand the number of funded spaces
                                                                                all regions and service lines.
          in the flight instruction program;
         a lack of air operator participation in training programs; and
         an end to the funding of a student pilot’s training through the
                                                                                For instance, the CBA branch is at 89.5% of operational allocation
          Canadian Students Loan Program.
                                                                                nationally but when the specific programs within the branch were
     The decline in the number of military aviators. The air force             examined it was discovered that there are significant staffing
      has been traditionally a prime source for experienced
      replacement pilots for the airline industry as well as other              shortages in the large air carrier program (7th Region) which is only
      government departments, including TC. But due to ongoing                  at 78.4% of operational allocation. Correspondingly, when certain
      defence budget cuts which has affected training throughput and
      the attractive salaries of the airlines, the air force is currently 243   regions were cross tabulated with the CBA branch, it was found that
      pilots short of the current, downsized mandate strength, and              the Ontario Region, at 81.8% of allocation, and the NCR region, at
      expects to lose a further 25% of its current 1,371 pilots to
      attrition.                                                                80.75% of allocation, were also suffering from significant staffing
                                                                                shortages. In comparison, other service lines, such as aircraft
4.3       The Civil Aviation Program (Transport Canada)                         maintenance and manufacturing and regulatory services, both at
                                                                                100% of allocation, and general aviation, at 94% of allocation, seem

                                                                                20 The AO section is the classification group in which the CAI population resides in TC.


                                                                                21 Allocation/strength levels as of September 21, 1998.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                 29



to be more successful at retaining their staffing levels at or close to                                There has been a departure of experienced personnel,
allocation.22                                                                                           perhaps due to individuals reaching retirement age, between
                                                                                                        1995 and 1998. In 1995/96, according to TC TIPS data, 33 AOs
                                                                                                        left the Department with a mean age of 52.8 years and 18.5 years
                                                                                                        of experience, while in 1996/97 29 AOs left the Department with
The allocation of staffed CAI positions is characterized by the
                                                                                                        a mean age of 55.3 years and 26.8 years of experience. Finally,
following trends23:                                                                                     in 1997/98 44 AOs left the Department with a mean age of 50.8
                                                                                                        years of age and 20.2 years of experience. Total departures
                                                                                                        between 1995 and 1998 was 106 or a loss of 26.3% of total
    The Department is compensating for staff vacancies partially                                       allocated strength. The mean years of service for those inspectors
     through the use of overtime. Those regions with the highest                                        departing during this period was 21.8 years.
     staff vacancies have the highest average overtime. According to
     overtime levels for the Civil Aviation Program (FYR 1997/98),                                     The departure of experienced personnel has affected some of
     derived from TC TIPS data, approximately 69.5% of AOs have                                         the regions to a greater degree than others. In 1995/96,
     claimed overtime hours with an average cost of $5,170. Ontario                                     Headquarters suffered the highest losses with 11 followed by
     had the highest level of overtime claims with approximately                                        Ontario with eight, while in 1996/97 the NCR (headquarters)
     75.6% of AOs claiming overtime hours with an average cost of                                       again suffered the highest losses with 12 followed by PNR24
     $6,473. At Headquarters, approximately 62.3% of AO have                                            with 8. Finally, in 1997/98 the NCR (headquarters) lost 17 AOs
     claimed overtime hours with an average cost of $7,848.                                             while the Pacific region lost 10. Between 1995/96 and 1997/98
                                                                                                        the NCR (Headquarters) lost a total of forty inspectors, by far the
                                                                                                        highest of all the regions, with the Ontario region following with
    TC’s AO population is a maturing workforce as reflected by
                                                                                                        19 during the same period.
     age and length of service. In 1996/97, according to TC TIPS
     data, the average age of TC’s AO population was 48.5 years.
     Additionally, the average length of service was 16.5 years, while                                 The external recruitment from April 1995 to April 1998 has
     in 1997/98 the average age was slightly higher at 48.6 years and                                   not kept pace with departure levels, but there has been a
     the average length of service was slightly lower at 15.2 years.                                    recent increase in new hires. According to TC TIPS data, in
                                                                                                        1995/96 five AOs were recruited with a mean age of 40.3 years,
                                                                                                        in 1996/97 ten AOs were recruited with a mean age of 40.1
                                                                                                        years, and in 1997/98 47 AOs were recruited with a mean age of
22 For a complete chronicle of AO distribution rates cross tabulated by region and service line,
please see Appendix ‘C’.
                                                                                                   24 PNR- Prairie and Northern Region
23 For a complete chronicle of AO distribution rates cross tabulated by region and service line,
please see Appendix ‘C’.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                      30



    43.3 years. Total hires between 1995 and 1998 was 62 or the         fair and independent manner at all times, including in their retention
    filling of 58.5% of vacancies resulting from departures during
                                                                        recruitment practices.
    the same time period.

   The regions have been relatively more successful than the
                                                                        5.1     Department of National Defense
    NCR (Headquarters) in recruiting candidates to fill CAI
    vacancies. Between 1995/96 and 1997/98 the NCR region was
    only able to fill approximately 35% of vacancies resulting from
    departures during the same time period. In contrast, the Quebec     However, TC isn’t the only government organization facing
    region was able to add two new positions beyond the                 challenges relating to the recruitment and retention of licensed
    replacement of vacancies and the Pacific region was able to fill
    approximately 94% of vacancies resulting from departures            aviators. The other primary government employer of aviation
    during the same period. It should be noted that the Ontario         personnel is, of course, Canada’s military and it is facing many of
    region also experienced difficulty in filling vacancies through
    recruitment, filling just over 52% of vacancies during the same     the same challenges that the Department is. However, the
    period.                                                             Department of National Defense (DND) has undertaken measures to
                                                                        address issues of attrition and has stepped up its recruiting and
                                                                        training efforts.
5       Recruitment and Retention Practices

                                                                        According to a recent interview in Wings Magazine with Major
As demonstrated in our overview of the context of the review and the
                                                                        General Lloyd Campbell, Commander of the 1st Canadian Air
current situation in civil aviation, the challenges relating to
                                                                        Division/Canadian NORAD25 Region, pilot attrition is a significant
recruitment and retention are shared by all employers in the aviation
                                                                        issue facing Canada’s military. Historically, pilot attrition has been
sector, including TC. Of course, government organizations do face
their own unique challenges of being a public entity that is
responsible to not only its immediate aviation clients but to the
general public as well. As such, TC must appear to be acting in a
                                                                        25 NORAD – North American Air Defense Command
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           31



between four and six percent or 100 to 110 pilots a year, but last year     The attrition program has two major components:
more than 140 pilots left the air force.26
                                                                                 Those pilots with less than nine years of service are eligible for
                                                                                  $25,000; those with at least nine years but less than 18 years of
Some sectors such as fighter and transport have been hit hard with                service are eligible for $50,000; and those with at least 18 years
                                                                                  of service but less than 23 years are eligible for $75,000.
attrition levels as high as 15% which has major implications for
operations. Pilot attrition is a concern to any commander as it can              In each case the retention allowance is divided and paid out once
cost taxpayers up to $4 million to train a single pilot, depending on             a year in a lump sum over a three-year period.

the aircraft type and role. In the interview Campbell states “…
                                                                            Campbell notes that while the military’s powers of persuasion are
aspirations for higher pay and more stable lifestyles in the
                                                                            limited and it is ultimately up to the individual involved to make
commercial sector continue to lure large numbers of pilots away
                                                                            career decisions, the military must act proactively and make the
from the air force.”27
                                                                            occupation as attractive as possible. “I’ve always believed that we
                                                                            shouldn’t hope for a downturn in the economy to solve our problems
In order to address pilot attrition, DND has realigned pay allowances
                                                                            of pilot retention.” 29
to better compensate individuals in three key target areas where
pilots are eligible to leave the air force after serving an obligatory      5.2        Transport Canada
terms of service. “We have just initiated a retention allowance which
is intended to compensate individuals … pilots who are eligible for         TC has traditionally relied on the air force for CAI candidates and
the pilot retention allowance must sign up for an additional five years     has often ‘poached’ aviators looking for a more stable lifestyle. Air
of obligatory service.”28                                                   force pilots have proven to be a reliable source of recruits in the past
                                                                            since retired officers can transfer their pensions directly to TC
                                                                            without a penalty. Additionally, they have proven to be strong
26 Wings Magazine, Canadian Air Force: Lean and Functional, Aug/Sept 1998
27 Ibid.
28 Ibid.                                                                    29 Ibid.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           32



candidates as all have staff officer experience which has prepared           demands for services. TC is losing skilled and qualified individuals
them well for drafting regulations, reporting violations of                  to the industry at the very same time the industry is demanding more
compliance, and managing resources as part of the Civil Aviation             regulatory services. In such an environment it is essential to better
Program. With the significant downsizing that has occurred in the            predict when industry surges will create a greater demand for the
Canadian military, the rich recruiting pool that the air force once          Department’s resources and to better reflect those changes internally
provided cannot be relied on as a source of eligible candidates for          within the Department. As demonstrated, industry surges often
TC in the future.                                                            correspond with an increase in employment opportunities for
                                                                             licensed aviation personnel and a corresponding increase in
While the DND approach of offering retention bonuses is not a                compensation as the recruitment pool of qualified individuals draws
unique approach to difficulties with attrition rates, the policy itself is   increasingly shallower.
a realization that old recruitment and retention practices are no
longer applicable to the new environment of aviation in Canada. As           Figure 3: Staffing Resources vs. Service Demands
Campbell noted, governments have tended in the past to rely on
downturns in the economy in order to secure a highly skilled
                                                                                                                Level of Demand
workforce by providing a ‘recessionary proof’ occupation which
does not expose pilots to the uncertainties of the aviation business.         G
                                                                              R
This has proven to be an ineffective recruitment and retention                O
strategy, as it is not designed to serve the organization’s long term         W
                                                                              T
strategic goals.                                                              H
                                                                                                                       Staffing
                                                                                                                       Levels
As illustrated in Figure 3: Staffing Resources vs. Service Demands,
TC’s inability to manage its recruitment and attrition challenges                  Year 1           Year 2    Year 3      Year 4       Year 5

results in an inverse situation regarding available resources and
                                                                                              PERIOD IN THE BUSINESS CYCLE
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                             33



                                                                          address issues of rising attrition and the difficulty of TC to attract
                                                                          qualified candidates.
It was also noted in interviews with TC management that a
homogeneous human resource strategy is not the most effective             For example, many managers noted that exchange programs with the
method of addressing ‘chronic’ staff vacancies that are specific to a     industry were thought to provide a ‘win-win’ situation for both TC
branch and/or a certain operational region. It was suggested that         and the participating air operator. It was thought that by providing
initiatives tailored to the specific components of the program would      these exchanges, TC would be able to offer CAIs the opportunity to
be required in order to address the difficulties some regions, such as    maintain or update their technical skills and gain a better
Ontario, and service lines, such as CBA, were experiencing in             understanding of the aviation business environment while the air
recruiting and retaining CAIs. Reporting data derived from TIPS           operator would gain knowledge and insight into the regulatory
supported management’s observations that the level of staff               environment. Unfortunately, interviewees reported that the industry
vacancies is not comparable across all regions and service lines.         exchanges often ended with the CAI moving to the participating
                                                                          airline due to a significant difference in compensation offered by the
There are a number of initiatives undertaken by TC to make it an          participating parties. The practice of exchanges has largely ended, as
attractive alternative to other employers in the sector. And there is a   managers are not willing to risk losing a valuable employee.
broad commitment by TC, through the creation of a ‘first time’
Human Resource Plan, to “… develop a positive and innovative              It should be noted that TC has been relatively successful in making
work environment for all employees for their training and                 itself an attractive employer by providing a lifestyle that better
professional development.”30 However, many managers expressed             responds to the specific needs of its employees. However, in many
frustration with the results of these initiatives, their inability to     interviews with TC management and staff, it is apparent that there is
                                                                          a widely held perception that there has been an erosion of working
                                                                          conditions, specifically more overtime, primarily due to long-term
30 Transport Canada, Challenge ’98: Civil Aviation Program Overview.      vacancies and heavier demands from industry. This perceived
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                          34



erosion of working conditions comes about at a time when the salary        with filling vacancies in a timely manner, from both internal and
gap between industry and government has widened considerably.              external sources. It was noted in Department interviews that there
                                                                           was an identifiable need for establishing the tools necessary to
During interviews with management and CAIs, there were four                respond to potential candidates in a timely and effective manner.
primary factors affecting perceptions regarding the TC working
environment. These four factors are:                                       Another noteworthy issue that arose during the interview process
                                                                           with Department management was the narrowness of the salary
   The hours of work must not change without compensation.                bands for CAIs. This may result in management earning a salary
    Staff are willing to work overtime, but would resist any attempts
                                                                           close to those inspectors reporting to him/her, not including overtime
    to change the hours of work without some form of
    compensation;                                                          or in command flying allowances which favour line staff. It was
                                                                           thought that the narrowness of these salary bands has acted as a
   The provision for more frequent and pertinent training.
    Staff wishes to be afforded the opportunity to enhance their           disincentive for the staffing of vacant management positions within
    skills and see training and currency as essential to their             the Department as there is not a great deal of compensation for a
    credibility in the role of inspector.
                                                                           greater degree of responsibility and/or authority.
   The establishment of a career progression model.
    Management must provide opportunities for advancement within
    and between the different branches and regions of TC.                  Finally, it was noted in both the private sector and TC, that there was
                                                                           a need to clarify the conflict of interest policy that governs the
   The maintenance and/or increase of allotted flying time.
    Staff expressed a concern that it is becoming increasingly             behaviour of inspectors and, in some interviewees’ minds, restricts
    difficult to maintain their currency if they are not allotted flying   TC from undertaking innovative practices which would improve the
    time that is adequate to maintain their skills.
                                                                           working environment. The current conflict of interest policy is
It should be noted that TC management noted that beyond the issues         perceived by many as a double standard, especially with the increase

of compensation and the working environment are the difficulties           of delegated authority to individuals in the industry who are not
                                                                           restricted by the policy. An inconsistent policy may unnecessarily
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                             35



restrict those inspectors working outside of the Department and not         for line positions, but were often turned down due to their inability to
allow for a closer relationship between the inspector and the industry      offer the inspector a command position with the airline.
while maintaining third party impartiality.
                                                                            This is noteworthy since the union agreements that exist with the
                                                                            large flag carriers often mean that even an experienced pilot will be
                                                                            brought into the line far down the seniority list, thereby affecting
5.3     The Aviation Industry
                                                                            salary and working hours. In the case of firms with non-union shops,
                                                                            issues of seniority were not a barrier to recruitment of experienced
Turning to the industry, it should be noted first that many industry
                                                                            pilots, including CAIs.
interviewees took the view that TC and the industry are in a
partnership in establishing the safest possible airline industry – ‘it is
                                                                            There were some suggestions for improvement, specifically
in everyone’s best interest’ seemed to be the guiding principle.
                                                                            regarding the consistency of the application of enforcement and the
However, how to continue that partnership was another issue with
                                                                            level of surveillance by introducing risk management techniques that
many larger airlines advocating more delegation of authority and
                                                                            have been adopted by the industry. There were also general
flexibility with regulatory compliance (exceptions and/or minimal
                                                                            comments that the level and depth of experience among CAIs seem
equipment lists) and smaller air operators seeking a greater level of
                                                                            to have fallen recently as TC loses inspectors to industry and
regulatory assistance.
                                                                            retirement. As well, it was suggested that TC not rely on only one
                                                                            source for recruitment, specifically the military, as it is essential to
In general, all interviewees were satisfied with the professionalism
                                                                            have a good mix of aviation business experience, safety management
and level of service they were receiving from TC, especially since
                                                                            experience, and technical expertise. Finally, it was noted that TC
the creation of the TC Service Centres. In fact, in part due to the
                                                                            needs to establish a succession plan immediately before external
professionalism and experience of the CAIs, many industry
                                                                            losses affect service levels and to better communicate the strategic
interviewees stated that they had made informal offers to the CAIs
                                                                            direction of the Civil Aviation Program – to clients and staff.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                             36



                                                                          available. There is also a built in incentive to remain with the parent
As noted, it would be incorrect to suggest that industry enjoys           airline and its affiliates as seniority is often transferable and this
complete flexibility and has no restrictions on its recruitment and       significantly restricts movement between airlines at the senior levels.
retention policies. Many of the large carriers, such as Air Canada and
Canadian, and their affiliates, are restricted in their human resources   Not all of the industry is unionized and there are many large
management practices by the fact that they are a unionized                operators, specifically in the charter industries, which are not.
organization. However, there are some relevant examples of                Industry interviewees noted this and invited TC to enter into
innovative practices that were noted during the industry interviews.      partnerships with them to allow more opportunities for CAIs to
                                                                          update and maintain their skills while flying the line. Some of the
As demonstrated by the recent Air Canada strike, pilots and other         smaller air operators would benefit from the interaction with the
licensed aviation personnel have significant influence on the             inspectors, as they would obtain a better understanding of the
operations of any large operator and can literally shut down an           regulatory environment in which they operate.
airline indefinitely. As such, pilot unions have been relatively
successful in creating labour agreements that are based primarily on      Many of the smaller air operators noted the significant upward
level of seniority, job protection, and competitive compensation.         drawing of licensed aviators that is occurring as the flag carriers, the
Within such a structure, a company is extremely restricted in taking      charters and regionals continue to hire any pilot with relevant
innovative approaches to human resources management so that it            experience and certification. So significant is this draw that some air
maintains enough flexibility to effectively respond to changes in the     operators with unions have voluntarily opened contracts to apply
business environment.                                                     across-the-deck wage increases. In this instance, the costs associated
                                                                          with continuos recruitment and training were actually higher than
More importantly, unionized air operators tend to not have                significantly increasing compensation voluntarily. It should be noted
significant attrition problems, as an equivalent position with the        that this is an extreme example, but all industry representatives that
same level of seniority with another unionized airline is not             were contacted agreed that the career progression model had changed
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           37



significantly and compensation rates were being driven upwards at          new pilots to remain in operation. The larger operators, especially
all levels of the sector. Most industry interviewees noted a               the national flag carriers like Air Canada, know they dominate the
significant tightening of the labour market for licensed aviation          market simply by their nature and, therefore, have little competition
personnel.                                                                 regarding recruiting and retaining experienced aviators.


Recruitment policies also are dependent on the segment in which the
                                                                           6       Overview of Compensation
air operator functions. A smaller operator (commuters, charters, or
air taxis) reported having informal recruiting practices and typically
                                                                           Throughout the interviews herein undertaken, a majority of
targets flight school instructors or graduates. Larger operators
                                                                           stakeholders have noted that compensation has become a major
(airlines) reported having more formalized recruitment practices,
                                                                           factor in facing the challenges generated by the evolution of the
such as placing national advertising campaigns or even recruiting
                                                                           labour market for individuals that possess similar qualifications,
abroad, but interestingly enough they often receive so many
                                                                           certifications, and experience levels as those required by TC for its
applications that they need not even advertise their vacancies. As
                                                                           CAIs. This has been reflected in the increase of salaries throughout
well, it appears that industry is always in a recruiting mode and will
                                                                           the industry as noted in the earlier sections of this report.
make room for a talented pilot if the seniority issues do not block this
attempt.
                                                                           In order to record and report this trend, to accurately capture the
                                                                           current salary levels in the industry, and to address the uniqueness of
In order to remain attractive employers, the smaller operators rely on
                                                                           a diverse and complex industry, three methods were utilized: a
involving the pilot in the everyday running of the company and the
                                                                           national compensation survey, a review of secondary sources, and
provision of the opportunity to fly and gain hours on a variety of
                                                                           numerous industry interviews. This section documents the results of
aircraft. Many realize that it will be impossible to keep every pilot
                                                                           all three methods used.
as they cannot offer the same compensation as the larger airlines and,
therefore, these companies will always be recruiting and training
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                       38



6.1      The Compensation Survey                                         chosen benchmarks provided a valid measure for industry
                                                                         respondents against which to compare their employees. The primary
An industry-wide compensation survey of the commercial aviation          reasoning behind this line of thought was that no matter in what
sector using three benchmark ‘positions’ derived from job                service line CAIs involved, they all must demonstrate that they
descriptions provided by TC’s Civil Aviation Department was              possess similar credentials regarding pilot licensing and type
completed. The three benchmarked positions were:                         certification for these three benchmark positions in the private sector.


     Inspector (CAI-03): This position was benchmarked with a           Of the 25 air operators that were surveyed, 14 responded, for a
      "Check Pilot - A Designation" on the market.
                                                                         response rate of 56%. Those operators who responded included
     Superintendent (CAI-04): This position was benchmarked with        major employers of licensed aviation personnel and provided strong
      a "Chief Pilot of Company and/or Type of Aircraft".
                                                                         representation of air operators from all segments of the industry (as
     Chief (Manager) (CAI-05): This position was benchmarked            noted in Appendix D).
      with a "Director/Vice-President of Operations".

These three benchmark positions have been drawn from the                 It should be noted that we organized the sample of air operators into

Commercial and Business Aviation (HQ), recognizing the fact that         four ‘tiers’ as follows:

they will provide reliable comparators for similar positions (working
environment, level of responsibility, technical requirements) in the        Tier 1: National Flag Carriers. Airline operators, such as Air
                                                                             Canada and Canadian, which provide national and international
private sector. We noted that the CAIs are engaged in a wide range           scheduled services typically using aircraft having 20 or more
of activities and responsibilities that include check rides, the             passenger seats.

certification of aircraft, the regulation of regional, national and         Tier 2: National Charter Carriers. Airline operators, such as
international carriers, flying training schools, and airports, and the       Canada 3000 and Royal, which provide national and
                                                                             international charter services typically using aircraft having 20 or
development/revision of regulatory guidelines. However, the three            more passenger seats.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                           39



   Tier 3: Regional Carriers. Airline operators, such as Air            The Civil Aviation Department also completed the survey
    Atlantic and Canadian Regional Airlines, which provide regional      questionnaire from an employer perspective in order to ensure the
    scheduled services typically using aircraft having 20 or more
    passenger seats.                                                     consistency of answers between survey participants and to draw a
                                                                         valid comparison between the Department and the industry.
   Tier 4: Commuter Operators. Operators, such as Bearskin
    Airlines and Air Creebec, providing scheduled and charter
    services typically using aircraft having 10 to 19 passenger seats.

The four tiers better represent how employers interact with the
                                                                         Compensation survey results
labour market for licensed aviation personnel, to provide relevant
competitors for licensed aviation personnel, and to better reflect the   The full report output of the compensation survey is included in a
career progression model that exists for pilots. It differs slightly     separately bounded report titled Survey of Compensation Practices.
from the typical segmentation definition noted earlier in the report.    The tables on the following page (Tables 1-3) report the average
Certain segments of the industry were not included since it was          survey results pertaining to base salaries (excluding overtime,
essential to accurately reflect the labour market that all employers     allowances and bonuses) as compared with the current TC base
face in the industry.                                                    salaries (excluding overtime and allowances) for the three
                                                                         benchmarked positions in Commercial and Business Aviation.
The survey questionnaire (see Appendix E) included a brief
description of the benchmarked positions in order to allow the survey    The four ‘tiers’, as noted above, organize the reporting tables. The
respondent to determine and compare an equivalent position in the        detailed results for all participants are presented in Table 1 while
respondent’s firm. The topics covered by the survey included: salary     Table 2 reports the survey results by clusters: the first cluster
scales and base salaries, bonuses, schedules, and prerequisites and      consists of ‘tier’ 1 and ‘tier’ 2 participants and the second cluster
benefits other than pensions and group insurance.                        consists of ‘tier’ 3 and ‘tier’ 4 participants. Table 3 presents the
                                                                         clustering of participants by the four ‘tiers’ and reports on the
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                       40



national exposure of TC to national competition for attracting and
retaining licensed aviation personnel.


The third column of each chart refers to the position of TC on the
market. As an example, 0% means that TC is at the minimum market
level and conversely, 100% means that TC is positioned at the
maximum market level. A percent rank indicator of 50% would
mean that TC is at the median of the market. A percent rank of 35%
would mean that some 65% of observations on the market are higher
than the TC salary package while 35% of observations are lower than
the TC salary package. 31


The "market average" does not take into account the bonuses paid by
some participants. Even if bonus policies are marginal on the market,
they are significant for the total cash value offered by some of the
survey participants.




31 The notion of "percentile" has a similar meaning as the notion of "percent rank". It is
generally used to identify the distribution of market values than the term "percent rank".
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                 41



Table 1: Compensation Survey Results - All Participants                Table 3: Compensation Survey Results - By Tier Participants
                             TC Salary      Market        TC Percent                              TC Salary      Market        TC Percent
                                            Average         Rank                                                 Average         Rank
All Participants                                                       Tier 1 Participants
Inspector, CAI-03           $61 338      $91 168          24%          Inspector, CAI-03        $61 338       $168 105       0%
Superintendent, CAI-04      $65 263      $99 269          30%          Superintendent, CAI-04   $65 263       $174 598       0%
Chief (Manager), CAI-05     $70 484      $106 139         21%          Chief (Manager), CAI-05 $70 484        $175 105       0%
                                                                       Tier 2 Participants

Table 2: Compensation Survey Results - Clustered Participants          Inspector, CAI-03        $61 338       $106 860       0%

                             TC Salary      Market        TC Percent   Superintendent, CAI-04   $65 263       $131 500       0%
                                            Average         Rank       Chief (Manager), CAI-05 $70 484        $121 000       0%
Tier 1 and 2 Participants
                                                                       Tier 3 Participants
Inspector, CAI-03           $61 338       $137 483        0%
                                                                       Inspector, CAI-03        $61 338       $86 133        0%
Superintendent, CAI-04      $65 263       $153 049        0%
                                                                       Superintendent, CAI-04   $65 263       $85 050        0%
Chief (Manager), CAI-05     $70 484       $148 053        0%
                                                                       Chief (Manager), CAI-05 $70 484        $101 750       0%
Tier 3 and 4 Participants
                                                                       Tier 4 Participants
Inspector, CAI-03           $61 338       $72 642         0%
                                                                       Inspector, CAI-03        $61 338       $59 151        78%
Superintendent, CAI-04      $65 263       $72 379         47%
                                                                       Superintendent, CAI-04   $65 263       $59 708        100%
Chief (Manager), CAI-05     $70 484       $85 183         33%
                                                                       Chief (Manager), CAI-05 $70 484        $68 616        76%
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                            42



Transport Canada vs. the Market                                               there is a large gap between the CAI base salary and those measured
                                                                              positions in the industry.
Tables 1, 2 and 3 reveal that for all three benchmark positions, TC is
at the lower bound of the market (0th percent rank) 13 times out of 21
                                                                              Paid Overtime, Vacations and Prerequisites
under the correlation that we have analyzed. (Three benchmark
positions correlated against: (1) all participants, (2) by clustered tiers,
                                                                              Other survey results that address non-monetary topics indicate that
and (3) tier by tier.)
                                                                              paid overtime is not a frequent practice on the market for any of the
                                                                              three benchmark positions. Additionally, the vacation schedule
The closest position of TC to a central market trend is the
                                                                              generally stops at a four week maximum. After one year of service,
Superintendent benchmark at the 47th percent rank of the clustered
                                                                              the industry standard is to offer is two weeks of vacation. Finally,
Tier 3 and Tier 4 participants. However, since TC policy is to pay for
                                                                              most of the industry requires an annual medical exam.
overtime worked, while the survey participants do not generally pay
for overtime, we could presume that the overall position of TC ought
                                                                              6.2     Secondary Sources
to be better aligned with the market practices.

                                                                              A number of secondary sources which addressed the issue of
We have tested this assumption. Assuming that it is the practice of           compensation (salaries and benefits) were also examined during this
TC to pay 12% of base pay in overtime and taking into account that            study. These included a number of recent industry-wide salary
we have to compare total pay        indicators32   and not only base pay      surveys, both domestic and international, which provide coverage of
levels, the current total salary levels of TC are still located at the        licensed aviation personnel in several segments of the aviation
lower bound of the market 14 times out of 21. Therefore, for the              industry that were not included in the industry compensation survey
three benchmarked positions that the survey results indicate clearly          including: business aviation, flight training schools, and rotary

32 Salaries + bonuses = total pay                                             (helicopter) operators. A specific examination of benefits (pensions
                                                                              and group insurance) will follow the discussion on salaries.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                                43



                                                                           Table 5: Annual Current Salary (US $) (Job Title by Area)33
The Flight International Pilot Employment Survey – 1998
                                                                              Region                                         Job Title
                                                                                                                       First         Second                   Flight
                                                                                                 Captain
                                                                                                                      Officer        Officer                 Engineer
We reviewed an international pilot employment survey conducted in              Total              92,345              55,252          47,708                  62,464
1998 by Flight International Magazine that addressed a number of              United              88,256              54,592             -                    66,852
                                                                             Kingdom
issues relating to the professional pilot’s career including salaries         Europe              91,807                52,479           42,500                  63,069
from an international perspective. According to the ‘Work and                 North               94,822                58,531           47,614                  60,625
                                                                             America
Rewards’ portion of the survey, pay and allowances differ greatly by       Middle East            84,418                64,293                -                  42,417
                                                                               Asia              107,782                76,885                -                  68,574
region, rank, aircraft rating, and the segment of the industry. These
                                                                              Africa              61,054                41,778                -                  28,500
observations are supported by our industry survey.                           Australia            92,635                54,640                -                  73,542
                                                                               Latin              85,517                39,794                -                  57,500
                                                                             America
According to the survey, the average international salary for a pilot is   * Average salary for each job title per region shown where base size is sufficient.

$74,360 (US) as demonstrated in Table 5. Taking averages specific
                                                                           According to the survey, as demonstrated in Table 6, breaking down
to rank only (disregarding employer category or aircraft flown),
                                                                           pay averages by type of employer, pilots working for crew leasing
management pilots have the highest earnings at $97,650 (US),
                                                                           companies had the highest salaries at $86,380 (US) followed by
captains follow with $92,340 (US), flight engineers, at $62,460, are
                                                                           airline crews at an average salary of $78,210 (US). Corporate
paid more on average then first officers, who earn $55,250 (US) and
                                                                           operators were paid $62,910 (US) on average while air taxi pilots
second officers who are paid $47,710 (US).
                                                                           earned the least at $41,640 (US).




                                                                           33 Flight International Magazine. The Flight International Pilot Employment Survey – 1998.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                        44




Table 6: Annual Current Salary (Main Business Activity)34               Department managers saw an increase of 4.7% in their annual salary
                                                                        to $89,800 (US) not including performance bonuses. Chief pilots
Main Business Activity              Average Annual Salary (US $)
Total                                           74,360                  overall reported an average wage of $68,000 (US) per year or a 12%
Crew Leasing Company                            86,380
Airline                                         78,210
                                                                        increase over 1997’s levels. Those chief pilots who indicated that
Corporate Operator                              62,910                  they had specific management duties had a higher annual salary of
Armed Forces                                    55,790
Air Taxi                                        41,640                  $72,000 (US) not including bonuses. The average Captain’s pay was
                                                                        up 10% to $65,700 (US) while first officers’ salaries increased an
Interestingly, the survey noted that benefits and allowances for most
                                                                        incredible 30% to $45,600 (US) not including bonuses.
pilots do not form a large percentage of total earnings. Some 22% of
pilots surveyed reported that they did nor receive benefits while 38%
                                                                        1998 Canadian Aviation Salary Survey
of those surveyed reported that benefits and/or allowances were
worth less than 10% of total income.
                                                                        A national salary survey conducted by Wings: Canada’s National
                                                                        Aviation Magazine reflected many of the findings of our industry
Business Aviation – 1998 Salary Survey
                                                                        salary survey and our industry interviews. First, unionized airlines
                                                                        still have the highest salaries, followed by corporate and military
We also reviewed a survey conducted in 1998 by Business and
                                                                        pilots, and unscheduled general aviation charter pilots and instruction
Commercial Aviation Magazine, which focused on the corporate
                                                                        staff making the least. Second, there is a great variation in salaries
flight department personnel. The survey noted that a pilots’ average
                                                                        depending on job titles, type of aircraft, type of operator, and
business salary was $65,450 (US) which was an increase of over six
                                                                        responsibilities or tasks.
percent over 1997’s figure.


34 Ibid.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                              45



The average annual remuneration35 in 1997 for Captains with                Finally, the authors of the survey results concluded that the salary
regional, commuter and cargo airlines was $59,800 while those              gains of licensed aviation personnel reflect the difficulties that air
Captains working for charter carriers received $44,100. First officers     operators are facing in attracting new pilots when the regional,
employed by regional, commuter or cargo airlines received an               national and international airlines are hiring at record levels. The
average remuneration of $27,000 while those with charter carriers          findings of the survey also support our conclusions concerning the
received $24,600. Helicopter pilots averaged $67,600 while flight          changes in the career progression model, which have inflated
instructors had an average annual remuneration of $21,000.                 compensation levels at the more senior levels of the labour market.


The review of salary surveys undertaken by aviation periodicals            Group Insurance and Pension Benefits
reflected that salary levels are often being driven by that segment of
the industry in which the pilots are working versus their certification    The discussion concerning benefits and insurance was derived from a
and length of experience. This is the case even if, as for TC CAIs,        review of secondary sources including federal employee benefit
these individuals required similar certification and experience at the     documentation and industry benefit data for the aviation industry.
entry level.
                                                                           Our appraisal of TC salary and benefits package, as compared with
Additionally, it was noted that there are significant differences in the   the market, is based on our survey results and on secondary sources
responsibility levels of individuals within the industry beyond what       of information. For instance, Group Insurance Programs and Pension
their job title indicates and this is reflected in their compensation      Schemes were not surveyed. The assessment of TC’s benefits
levels.                                                                    package was based on the analysis of the federal service benefits
                                                                           program as compared to those packages available in the industry.


                                                                           We reviewed the benefits package provided to employees of TC and
35 Wings Magazine. Keeping Scores on Salaries, 1998.
                                                                           compared them to the benefits prevailing in the industry. As the
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                            46



information on industry practices concerning benefits packages is
incomplete, we undertook a very broad evaluation and comparison of
                                                                          6.3      Industry Interviews
the benefits package provided by the Department in relation to the
larger employers. Small employers will generally provide benefits at
                                                                          Salary
a much lower level. The main findings include:
                                                                          The interviews indicated that the segment of the industry in which a

   Death benefits. The combination of PSSA death benefits and            pilot finds himself/herself employed is the primary variable driving
    life insurance provides satisfactory coverage. The employer’s         compensation while the length of experience with a specific type of
    share of the cost is low;
                                                                          aircraft and in a particular seat (left – Captain, right – First Officer)
   Disability. The combination of sick leave (we assume they             is a secondary variable. A third variable identified was that the level
    provide the usual credit of 15 days per year) and long-term
    disability insurance can leave a gap in coverage. But this is a       of responsibility in relation to the job title of the position varied
    very sensitive matter. Private practice for short-term disabilities   greatly between segments of the industry.
    is generally to provide salary continuation or weekly indemnity
    benefits after a waiting period of up to 5 days which may be
    covered or not by non-cumulative sick days;                           In regard to the flight training schools, the Air Transport Association

   Health and Dental. The level of coverage is satisfactory as well      of Canada (ATAC) indicated that the average class 1 instructor, with
    as at the employer contribution level;                                delegated authority, would have an annual salary of $30,000. Salary
                                                                          levels varied greatly, with some chief flight instructors receiving
   Pension. The pension formula (2% of the best six years) is
    competitive. Employee contributions are very high at 7,5% of          $50,000 for larger flight schools and $28,000 for very small flight
    salary. Ancillary benefits indexation, earliest age without
                                                                          schools. Again, caution was expressed that often the chief flight
    reduction, survivor pension and disability benefits compensate
    for it but only partially. Employee contributions generally do        instructor was responsible for a number of other roles such as the
    not exceed 5% in private sector plans. Retirement benefits in
                                                                          director of flight operations, company chief pilot, and company
    excess of the authorized limits under the Income Tax Act are
    provided through RCA’s: this practice exists at Air Canada but        check pilot.
    all other private sector employers may not follow it.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                         47



The other major difference noted regarding salaries for flight             7       Conclusions
instructors was between provincially recognized colleges versus
                                                                           The economic recovery of the aviation industry and a changing
private flight instructor operators. A flight instructor (aviation and
                                                                           labour market for licensed aviation personnel has introduced new
flight technology) at a community college would have an average
                                                                           challenges for all employers of licensed aviation personnel with
salary of $51,000 while the chief flying instructor would have an
                                                                           respect to managing recruitment, retention, and compensation. In
average salary of $55,000.
                                                                           response to these challenges, aviation industry employers have
                                                                           responded in a variety of ways depending on the size of their
Benefits
                                                                           operation, the segment of the industry in which they operate, the type
Interview findings on working environment and benefits also vary           of aircraft used and services offered, and if their operation has
greatly by the industry segment that the air operator is functioning in.   unionized employees. However, there are a number of significant
Smaller operators often offer routes or destinations which are very        and industry-wide developments which are noteworthy.
isolated and demanding on the pilot’s skills and experience. The
pilot, as an employee, may or may not have medical or dental               These include:
benefits but often does receive performance bonuses if the company
makes a profit.                                                               A significant increase in pilot salaries. Between 1995 and 1996
                                                                               salaries for pilots increased 10.3% according to Statistics
                                                                               Canada’s Civil Aviation Report. According to our survey of
Larger operators tend to offer generous benefits packages which                compensation practices, firms reported, on average, that they
                                                                               expect a base salary increase of 3% in 1999 for the three
include uniform allowances, per diems, reduced travel on the
                                                                               benchmarked positions. Finally, a 1998 salary survey of
operator’s and its partner’s fleets, and a restriction on the number of        business aviation reported a 6% increase in compensation for
                                                                               pilots between 1997 and 1998.
hours worked. Often, the choice of working hours depends on
seniority, but a pilot in the middle of the seniority list can expect as      An increased use of pilot retention programs. The DND, a
                                                                               significant Canadian employer of pilots, has launched a retention
many days off as he/she will be flying.
                                                                               allowance program which rewards upwards of $75,000 for
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                              48



    experienced pilots. Private sector operators have offered profit     More importantly, it should be noted that not all aspects of the Civil
    sharing schemes, better training opportunities, and performance
                                                                         Aviation Program are experiencing the same level of difficulty in the
    bonuses.
                                                                         recruitment and retention of licensed aviation personnel. However,
   Benefits programs and the working environment have been              the Department continues to use a homogeneous approach to the
    reviewed and enhanced. Carriers with unionized shops have
    decreased the number of hours flown by pilots and typically have     management of its human resources across the entire Civil Aviation
    benefits packages including uniform allowances, per diems, and
                                                                         Program. This approach to human resources management is the
    discounted travel policies. Often these policies set the standard
    for other airlines that may or may not have a union.                 foremost example of how the Department distinguishes itself from its
                                                                         industry counterparts and, as a result, puts TC at a competitive
In comparison, TC has experienced a long-term wage freeze that was
                                                                         disadvantage in recruiting and retaining licensed aviation personnel.
introduced by the federal government in the early 1990s for all          This conclusion is evident in the following discussion of the
employees. As a result of this wage freeze, the salary gap with the      Department’s specific challenges regarding recruitment, retention,
industry has continued to widen, even taking into consideration the
                                                                         and compensation.
fact that TC pays overtime to its licensed aviation personnel, which
is an uncommon practice in the industry. Moreover, despite a             Nationally, external recruitment of CAIs from April 1995 to April
changing business environment in the airline industry and an             1997 had not met the pace of CAI departures (attrition) from TC.
evolution of the role and the service delivery model of the
Department, TC has continued to use the same human resource
                                                                         PricewaterhouseCooper’s review of the current situation in the Civil
management practices regarding recruitment, retention, and               Aviation Program at TC does support the management’s concerns in
compensation that it has relied on in the past. Hence, it has become
                                                                         regards to recruitment and retention of CAIs. According to Aircraft
increasingly difficult for TC to respond to the business cycles of the                       36
                                                                         Operator (AO) distribution rates (Allocation/Strength), derived
aviation industry and to manage effectively the dynamics of the
                                                                         from TC TIPS data, the total allocation of staffed AO’s positions for
evolving labour market for licensed aviation personnel.
                                                                         36 The AO section is the classification group in which the CAI population resides in TC.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                                49



the TC Civil Aviation Program should be at 403 inspectors while
total current strength lies at 356.5 inspectors, or at 88.5% of             From our review it could be suggested that the service lines which
                         37                                                 are experiencing difficulties in recruiting and retaining licensed
operational levels.
                                                                            aviation personnel, specifically CBA, are a result of the competitive

However, it should be noted that this trend has not been the case for       labour forces which are occurring in the corresponding private sector

all regions or service lines. In fact, some of the regions and/or           segments that those service lines regulate.

service lines have been relatively more successful in filling vacancies
and managing attrition. For instance, the CBA branch is at 80.7% of         Typically, the private sector compensation model for employers of

operational allocation nationally but when the specific programs            licensed aviation personnel reflect the competitive labour forces

within the branch are examined, it was discovered that there are            which confront that employer based on its industry segment and the

significant staff shortages at the large air carrier program (7th Region)   role of the employee in question. While TC recognizes that the level

which is at only at 78.4% of operational allocation.                        of technical expertise and complexity of the regulatory environment
                                                                            differs between service lines, and hence requires different
Correspondingly, when certain regions were cross tabulated with the         classification levels, it does not reflect at a sufficient level in its
CBA branch, it was found that the Ontario Region, at 81.8% of               compensation practices the differences in the competitive labour
allocation, and the NCR region, at 85% of allocation, were also             market that cross service lines.
suffering from significant staff shortages. In comparison, other
service lines, such as aircraft maintenance and manufacturing and           As a result, the Department removes its ability to respond to labour
regulatory services, both at 100% of allocation, and general aviation,      market pressures to the same degree that its private sector
at 94% of allocation, seemed to be more successful at retaining their       counterparts for the areas of the industry where the competitiveness
staffing levels at or close to allocation.                                  for skilled and experienced individuals that possess the certification
                                                                            and the qualifications required by TC is the strongest. Additionally,
37 Allocation/Strength levels as of September 21st, 1998.                   the narrowness of salary bands between classification levels makes it
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA                                                                      50



difficult for TC to promote or encourage line staff to move across      The following dimensions should be taken into account when
service lines or to transfer between regions restricting the            developing a long-term strategy:
Department’s ability to best manage and develop its workforce.
                                                                           The establishment of a compensation package with a greater
                                                                            degree of flexibility that would take into account specific labour
Other employers of licensed aviation personnel expressed similar
                                                                            market pressures in the various segments of the aviation sector.
opinions about TC’s benchmarked position in the aviation labour             This flexibility would include the widening of the salary bands
market and have distinguished between the different segments of the         between the different classification levels to distinguish between
                                                                            the degree of complexity but also the effect that these variables
industry, covered by TC’s various service lines within CBA and GA,          have on the competitiveness of compensation within the labour
                                                                            market. The compensation package must take the Department to
when addressing issues of recruitment, retention and compensation.
                                                                            a competitive level were the CAI’s role in aviation safety is
                                                                            perceived to be an attractive alternative to those individuals in
It must be concluded that TC needs to position itself as an employer        the industry seeking a career change. Compensation packages
                                                                            could include measures beyond the basic salary structure and can
who is both attractive and competitive. This can be achieved                include allowances or bonuses that are often found in the private
through the renewal of TC’s human resource practices, the effective         sector.

promotion of the essential role of the inspector in ensuring aviation      Develop recruitment campaigns and policies that promote the
safety and the creation of a competitive compensation and benefit           positive factors of a career with TC. These include the level of
                                                                            responsibility, the working environment, and the uniqueness of
package that recognizes the forces of a competitive labour market for       the CAI’s regulatory role. These factors were noted in staff
licensed aviation personnel. In order to begin this process of              interviews as important in making the Department an attractive
                                                                            alternative to the private sector while noting the unique culture in
renewal, TC needs to develop a long-term strategy to provide it’s           which the licensed aviation personnel develop their skills and
management with the tools necessary for the effective administration        experience.

of the CAI population and the creation of the required working             Target those individuals who have come to a point in their career
environment to attract and retain a skilled and motivated workforce         where a senior pilot position on the line or a management
                                                                            position with the carrier no longer provides them with the
TC needs.                                                                   lifestyle, working environment, or professional challenges they
                                                                            are seeking in their career.
A REVIEW OF THE CIVIL AVIATION INSPECTOR COMMUNITY AT TRANSPORT CANADA   51




   Strengthen and revise existing exchange programs to again
    encourage exchanges within the Department and with the
    industry at large. Use these exchange programs to support the
    development of a career path for all inspectors that are
    achievable and affordable to the Department.

   Address the hurdles that a manager must overcome in order to
    fill a vacancy. The issue of portraying the Department as an
    attractive and competitive alternative to the industry is as
    important as establishing the tools necessary for management to
    effectively interact with an increasingly competitive labour
    market. All efforts in managing the problem of recruitment will
    fail if management does not have the flexibility to respond to
    potential candidates in a timely manner.

   The Department should consider a strategy of complementing
    ‘off the shelf’ skill sets obtained through experienced industry
    recruits with the development and sustainment of essential skills
    internally through a diversified approach. This approach could
    include; traditional training provided by the Department, the
    strengthening of the line-flying program.

				
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