B.loomberg — U.S. airlines are facing a pilot shortage that is complicating efforts to increase flights, forcing them to step up training programs, recruit foreign pilots and even replace planes with buses.
The industry needs to hire an average of 14,500 new pilots each year through 2030, according to federal labor statistics. But operators say there’s no way they can bring that many due to long delay times for accreditation. Worse yet, experts say the staffing bottleneck is unlikely to end any time soon.
“The pilot shortage for the industry is real and most airlines simply won’t be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five years or more,” said Scott Kirby, CEO. a United Airlines Holdings Inc. official said earlier this week in a conference call. That will likely force United to keep 150 regional jets stationed despite increased demand for domestic travel, he said.
Members of the Air Line Pilots Association picket outside Hartsfield-Jackson International Airport in Atlanta, Georgia, on March 10, 2022.
The problem is not new: Airlines were already struggling to find and retain pilots before the pandemic, but a purge of employees at the start of the recession in 2020 left the industry ill-prepared for a recovery. Thousands of pilots took buyouts or retired early when federal furlough avoidance aid didn’t cover all airline labor costs, especially for veteran pilots earning six-figure salaries.
Two years later, airlines can’t find enough qualified crews to fully reset route maps.
“This is going to be one of the biggest constraints for the industry going forward,” Alaska Air Group Inc. Chief Executive Ben Minicucci said in an April 21 call.
Airlines have scaled back plans for a quick resumption of pre-pandemic flight schedules. United expects flying this quarter to be 13% less than in 2019, while Delta Air Lines Inc. projects a 16% decline, American Airlines Group Inc. down 8% and Alaska Air about 9%. JetBlue Airways Corp. is cutting 10% of its planned flights for the summer.
Regional carrier crunch
The problem is most acute at regional airlines, where pilot ranks have shrunk due to hiring at larger airlines. A beggar-thy-neighbor strategy has idled smaller aircraft and cut dedicated flights on shorter routes.
“We do not have the regional plane flying the summer at this time. [that] we’d like to,” American CEO Robert Isom told CNBC on Thursday. “This is a fantastic opportunity for people who want to come and fly planes. They can make a lot of money.”
Regional airlines play a critical role in transporting passengers from smaller markets to hub airports where they board flights operated by larger partners. These industry workhorses have capacity purchase agreements linking them to one or more major airlines, such as American or Delta, that control scheduling, pricing and ticketing.
“This is the bottom line,” Faye Malarkey Black, executive director of the Regional Association of Airlines, said in an interview. “We haven’t seen this level of service loss since just after 9/11, when that crisis changed the fly-drive equation. I hope this bad situation gets worse before it gets better no matter what we do.”
Instead of puddle-jumping flights, some airlines are linking up with charter bus services. United and American have hired Landline Co., a startup based in Fort Collins, Colo., to transport passengers and their bags by coach on some shorter routes, allowing them to sell destinations they don’t fly to.
Others are casting a wide net to find staff. Discount airline Breeze Airways and SkyWest Inc. are recruiting foreign pilots from Australia.
The industry is raising salaries to attract and retain pilots. But rapidly escalating labor costs could undermine deep-discount airlines’ business models by limiting their ability to grow and eroding their core cost advantages.
That’s a risk for Spirit Airlines Inc. and Frontier Group Holdings Inc. Those two airlines “require a large number of pilots willing to work for less than what the big airlines pay,” said Jamie Baker, an analyst at JPMorgan. “The sustainability of that model should logically be questioned in the current environment.”
–With the assistance of Justin Bachman.
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