The pi­lot short­age is fi­nally a re­al­ity


Flying - - Contents - By Sam Weigel

I don’t know about you, but I sure love be­ing proved right. Lord knows it hap­pens rarely enough at home, so I have to look for small vic­to­ries else­where. As it so hap­pens, writ­ing a monthly col­umn for a widely read avi­a­tion mag­a­zine makes for a po­ten­tially rich vein of ret­ro­spec­tive sagac­ity. Thus I was re­cently pe­rus­ing a few of my early Tak­ing Wing col­umns when I came across this gem from March 2014: “What Short­age? It’s Kinda, Sorta, Maybe Here.” De­spite the blithely non­com­mit­tal ti­tle, I drew a few strong con­clu­sions about the nascent pi­lot short­age in that piece that have, quite hap­pily, since been borne out by in­dus­try de­vel­op­ments.

OK, per­haps my hum­ble lit­tle ar­ti­cle wasn’t quite a Nostradamus-level piece of bold prog­nos­ti­ca­tion. Given the eas­ily avail­able, in­con­tro­vert­ible data that jux­ta­posed sky­rock­et­ing pi­lot re­tire­ments against his­tor­i­cally low lev­els of flight train­ing, re­cent pre­dic­tions of a pi­lot short­age might now be treated on par with state­ments re­gard­ing pa­pal doc­tri­nal in­cli­na­tions or ur­sine toi­let habits. But as late as 2014 there was still an enor­mous amount of skep­ti­cism among pilots who had seen many such pre­dic­tions ig­no­min­iously fiz­zle out against a back­drop of per­sis­tent in­dus­try tur­bu­lence. Re­ally, one can ar­gue the main rea­son this pi­lot-short­age pre­dic­tion panned out while oth­ers did not is that the newly con­sol­i­dated U.S. air­lines have re­mained dis­ci­plined, sta­ble and prof­itable for a longer pe­riod than any since dereg­u­la­tion. Let the good times roll, I say.

So here’s where we’re at right now, a “State of the Short­age,” if you will. The so-called “legacy” U.S. air­lines (Amer­i­can, Delta, United) are still on the front edge of a spike in manda­tory re­tire­ments that will con­tinue to ramp up over the next few years be­fore peak­ing in 2023. Nearly half their cur­rent pi­lot force will reach age 65 within the next 10 years. “Low-cost car­ri­ers” like South­west and Jet­blue, and cargo com­pa­nies like UPS and Fedex, face a stead­ier pace of re­tire­ments but will nev­er­the­less lose a his­tor­i­cally large per­cent­age of their pi­lot groups. Mean­while, global de­mand for air travel has con­tin­ued to grow at a pace not far re­moved from in­dus­try fore­casts (for once), and main­line car­ri­ers have re­versed the prior trend of out­sourc­ing their do­mes­tic feed by bring­ing a larger por­tion of it in-house. The re­sult is that ma­jor, low-cost and cargo car­ri­ers have al­ready started hir­ing pilots in num­bers not seen since the 1997-to-2001 pe­riod — more than 10,000 in the past three years — even be­fore mass re­tire­ments have re­ally kicked in.

Thus far, the ma­jor air­lines have had lit­tle dif­fi­culty re­cruit­ing such num­bers of ex­pe­ri­enced, well-qual­i­fied pilots. True, the mil­i­tary ser­vices are putting out far fewer pilots than they once did, but the ma­jors also draw from a deep re­serve of tal­ent among the re­gional air­lines and lower-paid na­tional car­ri­ers, as well as cor­po­rate and frac­tional op­er­a­tors. It is at the en­try-level jobs in gen­eral and the re­gional air­lines in par­tic­u­lar that the pi­lot short­age is cur­rently most acute. Most re­gional pilots have as­pi­ra­tions of fly­ing for a ma­jor air­line and will make the jump as soon as an op­por­tu­nity presents it­self. Mean­while, flight train­ing has seen a re­cent re­bound, but not quite enough to feed the re­gion­als’ needs, and in any case, the 1,500-hour rule means there is a mul­ti­year lag in the pipe­line. There­fore, the re­gional air­lines have largely been re­duced to coax­ing qual­i­fied pilots to ap­ply with

the one in­duce­ment that con­sis­tently pro­duces ap­pli­cants: cold, hard cash.

Thus we are treated to the rather amus­ing specter of re­gional air­lines that only re­cently com­peted with one an­other to slash costs — many be­ing quite vile to their em­ploy­ees in the process — now com­pet­ing with one an­other to throw the most money at prospective pilots! Take En­deavor Air, for ex­am­ple. Weak­ened by a botched merger, it was bought out of bank­ruptcy by its ma­jor-air­line part­ner, Delta Air Lines. Af­ter forc­ing En­deavor’s al­ready low-paid em­ploy­ees to take ad­di­tional pay cuts, Delta’s then-ceo openly bragged about achiev­ing a cost re­set in the re­gional air­line in­dus­try. Five years later, En­deavor is hem­or­rhag­ing pilots, who are flee­ing for greener pas­tures, and has found it nec­es­sary to of­fer a $10,000 hir­ing bonus and $20,000 an­nual re­ten­tion bonuses to at­tract and keep re­place­ments. En­voy and PSA, both of which cut pi­lot pay only three years ago, are of­fer­ing even heftier sign­ing bonuses ($22,100 and $21,560, re­spec­tively). Oth­ers with higher at­tri­tion or planned growth have yet deeper pock­ets: Mesa and Trans States Air­lines are each of­fer­ing new hires a cool $30,000, while Air Wis­con­sin is the cur­rent hir­ing-bonus cham­pion with up to $49,000 in first-year in­duce­ments. This is all on top of first-year base pay that has risen to an av­er­age of $35,000. Five years ago, many firstyear air­line pilots qual­i­fied for food stamps. Now it’s pos­si­ble to do rather well for one­self from the get-go.

Be­sides in­creased com­pen­sa­tion, the re­gion­als’ dearth of qual­i­fied ap­pli­cants has led to other changes as well. Ap­ply­ing and in­ter­view­ing has be­come ever more stream­lined. In one ex­treme ex­am­ple, Trans States Air­lines even al­lows ap­pli­cants to in­ter­view via Skype video­con­fer­enc­ing. Sev­eral air­lines will hire pilots well be­fore they ac­tu­ally have the re­quired flight time, con­tin­gent on meet­ing the re­quire­ments within a cer­tain time frame. Re­gion­als are start­ing to tout qual­i­tyof-life perks — for ex­am­ple, sis­ter air­lines Go­jet and Com­pass treat their com­mut­ing pilots to free ho­tel rooms up to four times a month. And vir­tu­ally ev­ery re­gional car­rier now has some sort of flow-through, bridge pro­gram or pref­er­en­tial-hir­ing agree­ment with their ma­jor air­line part­ners.

Even with­out such for­mal­ized pro­grams, ca­reer pro­gres­sion is be­com­ing in­creas­ingly fluid. Up­grade time has fallen pre­cip­i­tously at most re­gional air­lines, though not all; it’s be­come much eas­ier to build de­sir­able tur­bine PIC time within a few years. Mean­while, com­pet­i­tive min­i­mums have fi­nally started to fall at the ma­jor air­lines. All still re­quire a four-year de­gree, and most still want tur­bine

PICS, but the “ex­tras” that were nec­es­sary to get one’s re­sume no­ticed at the be­gin­ning of the hir­ing cy­cle are start­ing to fall away. Ev­ery ma­jor air­line is now fac­ing the like­li­hood that it will ex­haust its tra­di­tional sources of ex­pe­ri­enced pilots well be­fore its re­tire­ments be­gin to ta­per off. There is talk of air­line-spon­sored train­ing, very early gen­eral ap­ti­tude­based hir­ing, even Euro­pean-style ab-ini­tio pro­grams.

On a per­sonal note, over the past three years I have flown with a sharply in­creased num­ber of cap­tains who have a son or daugh­ter go­ing through flight train­ing, cur­rently build­ing time or al­ready at the re­gional air­lines. This is a marked turn­around from a decade ago, when many were ac­tively dis­cour­ag­ing their prog­eny from em­bark­ing on an air­line ca­reer. It’s cer­tainly not a sci­en­tific met­ric, but is per­haps in­dica­tive of the over­all op­ti­mism within the pi­lot­ing pro­fes­sion right now. Sim­i­larly, sev­eral of my ex­pe­ri­enced gen­eral avi­a­tion friends who for­swore air­line fly­ing have re­con­sid­ered, aban­doned their non­avi­a­tion ca­reers, and are now fly­ing for re­gion­als. Even pro­fes­sional pilots who are com­pletely un­in­ter­ested in air­line fly­ing — no mat­ter how much money is thrown their way — are find­ing their skills more in de­mand as the ef­fects of an air­linedriven short­age re­ver­ber­ate through the in­dus­try. A ris­ing tide lifts all boats.

I do want to avoid be­ing too Pollyan­naish here, be­cause I re­mem­ber sim­i­lar breath­less­ness in the late 1990s. Rec­og­niz­ing the pickle they are in, the air­lines will do ev­ery­thing they can do to ease their la­bor short­age. The U.S. Sen­ate’s re­cently pro­posed FAA reau­tho­riza­tion bill sig­nif­i­cantly weak­ens first of­fi­cer flight-time re­quire­ments, a long­time in­dus­try goal. I fully ex­pect the re­tire­ment age to be raised again, or even abol­ished al­to­gether, within the next few years. Even in the midst of good times, it is en­tirely pos­si­ble for in­di­vid­u­als to suf­fer through ca­reer tur­bu­lence. The se­nior­ity sys­tem — ubiq­ui­tous across union and nonunion air­lines alike — binds pilots’ liveli­hoods to the health of their em­ploy­ers, and the short­age it­self is in­creas­ingly cast­ing the sus­tain­abil­ity of the re­gional-air­line busi­ness model into doubt. That in­sta­bil­ity will cre­ate win­ners and losers within the re­gional in­dus­try. In just one re­cent ex­am­ple, Hori­zon Air pre-emp­tively can­celed hun­dreds of flights over the sum­mer due to a lack of pilots. Faced with in­creas­ingly un­re­li­able re­gional part­ners, it is likely that the ma­jor air­lines will con­tinue to bring a larger por­tion of their do­mes­tic feed in­house. While this is over­all a very wel­come trend, there will un­doubt­edly be short-term pain for many re­gional pilots.

Keep in mind that even the ma­jor air­lines, though cur­rently rak­ing in record prof­its, are not im­mune to a re­turn to their his­tor­i­cal in­sta­bil­ity. An­other ma­jor re­ces­sion would do the trick quite quickly. So would a global falloff in travel due to ter­ror­ism or trends to­ward iso­la­tion­ism. We may even­tu­ally see a sin­gle-pi­lot air­liner come to fruition, though that is en­tirely de­pen­dent on the du­bi­ous vi­a­bil­ity of a se­cure datalink net­work.

The hard ex­pe­ri­ence of a hun­dred years has shown these pos­si­bil­i­ties to be real, but if you yearn to make your liv­ing ply­ing the air­ways, if the itin­er­ant life­style of a pro­fes­sional pi­lot agrees with you, then at least the short-term eco­nomic dis­in­cen­tives have been re­moved. True, the train­ing in­vest­ment re­quired is as high as it ever was, but the re­turn on in­vest­ment is quicker than it has been in 60 years. All in all, I’m not sure that we’ll ever see a more ad­van­ta­geous time to start a fly­ing ca­reer. If you’re go­ing to go for it, it might as well be now.

Hori­zon Air (above), once a leader in re­gional pilot pay, has fallen be­hind and is now can­cel­ing flights due to a lack of pi­lots. Air­lines are at­tract­ing qual­i­fied pi­lots with large hir­ing and re­ten­tion bonuses that have been re­ported to be as high as...

With the re­gional air­lines strug­gling to man their cock­pits, ex­pect to see more do­mes­tic fly­ing trans­ferred back to main­line car­ri­ers.

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