Transport Airlines

The Pilot Shortage Is Real and Regional Airlines Are Feeling It

@denschaal

Aug 08, 2014 12:11 pm

Skift Take

Call it a pilot shortage, attrition, a wage-rate problem, or a structural defect — it all amounts to basically the same thing. Pilot recruitment is under stress, and will remain so until there are reforms.

— Dennis Schaal

Free Report: The State of Student Travel

San Diego International Airport  / Flickr

A SkyWest pilot and airport mascot at San Diego International Airport. San Diego International Airport / Flickr


The pilot shortage, exacerbated by mainline airlines hiring for the first time in years, increased requirements for pilot training, the implementation of new pilot rest rules, and wage scales at the lowest rungs at regional airlines that challenge minimum-wage levels, is real and regional airlines such as Republic Airways Holdings and SkyWest are feeling the strain.

There isn’t a danger that cockpits will be empty at SkyWest, sister airline ExpressJet, or Republic Airways Holdings’ Chautauqua Airlines, Republic Airlines, and Shuttle America, but these airlines are being forced to cope with the attrition of their pilots, and the regional airiness’ expenses are going up in an effort to retain their pilots and to recruit new ones with bonuses and other enticements.

These regionals partner with mainline carriers, including US Airways, American, United, Delta and Alaska.

This is a problem that revolves around pilot pay, and more pilots would be flocking to jobs at regional airlines — and additional students and graduates would be heading to flight schools — if the pay at regional airlines were higher.

Republic Airways Pilot Attrition

Speaking during the Republic’s second quarter earnings call August 7, COO Wayne Heller says the regional airline is seeing “normal attrition levels” for pilots, although Republic felt the impact of “an upward spike” of pilots leaving the airline in April after a tentative labor contract was voted down.

“On the hiring front we continue to receive a steady stream of qualified applicants and that along with reductions in small jet flying should enable us to properly staff our operations through the introduction of our final 17 aircraft under our American CPA [capacity purchase agreement],” Heller said.

“And looking forward just the given anticipated acceleration of small jet retirements next year which Bryan [CEO Bryan Bedford] discussed earlier we believe there will be a significant number of currently qualified commercial airline pilots looking for a place to land whether at a mainline carrier or another regional airline,” Heller said.

But CEO Bryan Bedford explained that Republic’s wages, benefits and operating costs have increased because of the introduction of FAR 117, which requires increased pilot rest.

Bedford added that Republic is feeling the most acute impact on pilot staffing for its 50-seat Embraer regional jets because most pilots would rather fly the larger regional jets which many regionals are introducing and their mainline partners prefer.

“Yeah, on the ERJ side I think the irony here is that there actually is demand for reliable, cost-efficient, 50-seat lift,” Bedford said. “But this is really where the pilot supply problem, I think, hits the hardest. Historically we have to be honest that crew members have preference and today they have choice as there are lot of regional airlines that are hiring into CRJ900 and E175 aircraft types. So it’s a certainly a better office to work in than a 50-seater.”

Bedford said there is still demand for the 50-seaters, but there are issues about whether regional airlines will find enough pilots to fly them.

“So I think that there is demand for the aircraft, there is just a cloud of uncertainty over whether or not there is adequate pilot supply to support them,” Bedford said. “So, in some respects, we actually feel pretty good about our ability to mitigate, our tail risk exposure due to the fact that the ERJs do have some demand to it. So [I'm] not losing a lot of sleep over that right now, but that’s certainly management’s priorities is to continue to focus on mitigating that exposure.”

The Grass is Greener for Regionals With Larger Jets

Aviation consultant Kit Darby believes there are other issues at play beyond pilot preference for larger jets.

“Normally pilots do not care much about which jet they fly although larger, higher, and faster is always good,” Darby says. “But this time that seem to have figured out that airlines with lots of 50-seaters are getting smaller or will be soon.”

“Aircraft size also affects the pay so these jets are at the bottom of the food chain,” Darby says. “For the regional airline, the shortage arrived about a year ago and it is now approaching the acute phase where they cannot fly all of their routes so they are offering signing bonuses up to $12,000 and employ recruiting bonuses up to $2,500.”

SkyWest Pilots Leaving for Mainline Airlines

Over at SkyWest, controller Wade Steel said August 6 during its second quarter earnings call that SkyWest had to hire additional pilots to meet the FAR 117 requirements on pilot rest and that Skywest has been hiring at both SkyWest Airlines and ExpressJet to cope with pilot attrition, most of which comes as a result of “hiring from our major partners.”

Steel believes any pilot crunch at SkyWest will be reduced because of its introduction of larger regional jets.

Consultant Darby believes the pilot crunch intensifies with the introduction August 1 of new pilot education requirements that would cost new pilots $5,000 to $10,000 beyond costs for their 4-year educations and primary flight training.

“It looks like the airlines are planning to cover this cost to attract additional pilots as soon as they get their new courses approved,” Darby says. “In all, it’s a pretty good train wreck.”

Darby believes solutions are 4-6 years away, and this “may eventually affect the majors’ ability to meet their business plans by restricting the feed from the regionals.”

If the trend holds up, the pressure on pilot hirings “could affect our [U.S. airlines' ] ability to compete in the world marketplace if it goes on long enough,” Darby says.

Military-Trained Pilots As A Source for Commercial Aviation

Louis Smith, president of FAPA.aero, comes down on the side of those who believe there is no pilot shortage, although he believes attrition is a problem.

“There is no systemic pilot shortage,” Smith says. “Every sector below the six largest pilot employers, especially the regional airlines, is faced with growing attrition as the major airlines hire pilots to replace retiring pilots and provide for slight growth. The military pilot workforce and the corporate flight departments (known as Bizjet) will also experience significant attrition.”

Smith says the aviation industry “is struggling to adapt to civilian sources for its pilots. The 50-year subsidy of military-trained pilots as the primary source for airline pilots has evaporated.”

The solution lies with the major airlines, which depend on the regional airlines to feed them pilot new-hires, Smith says.

“Since the regional airline passenger feed is critical to mainline success, measures must be taken to make the career path more compelling and lucrative,” Smith says. “It is going to take lots of capital and even more adrenaline to work through this pilot workforce structural defect.”

Says Smith: “I will call it a pilot shortage when pilot employers begin paying students to learn to fly.”

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