Mercenaries and Private Contractors

There’s an ongoing discussion amongst several blogs about whether contracting for private security forces is a good idea. Mark Kleiman argues that hiring people at higher contract prices to deliver skills developed at government expense is a bad idea, amounting to competing with ourselves.

Eugene Volokh offers up commercial pilots as a counterexample.

    [M]any Air Force pilots get better-paying jobs with the airlines when they leave the service. They’re selling to private airlines skills that were acquired at public expense. Some of them might leave the service earlier because of these job opportunities.

    Should we be worried about that? Should we try to keep the airlines from hiring them away? I realize the situation isn’t completely analogous — the government generally doesn’t do much hiring of private airlines for military transport (though I vaguely recall that this is sometimes done). But still, the airlines are competing with the Air Force for skilled pilots, and I’m sure airlines get various government benefits of one sort or another.

Eugene’s counterexample is better than he realizes, because in fact military charter work is very common. American Trans Air alone did over $200 million in military charter business in 2003. Forbes attributes an increase in military charter work as one of the key factors in Continental Airlines 6% increase in revenue in 2003. It’s the biggest reason why once bankrupt World Airways is again profitable.

And in fact we do try to keep the airlines from hiring these pilots away — by offering significant bonuses (up to $100k) for pilot re-enlistment.

At the same time, it’s worth remembering that one of the reasons we’re able to attract so many people into the military to become pilots in the first place is that it’s a route to future civilian success. There are basically two routes to flying for a major airline: military experience or years of flying for small commuter carriers (where the pay is generally less than $30,000/yr and can be less than even $20,000).

The future rewards for a major carrier commercial pilot make both a large pool of potential pilots available and available at lower prices than they could otherwise be attracted at. In other words, the future private sector rewards subsidize a lower military employment cost.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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