Bloomberg — U.S. airlines are facing a pilot shortage that is complicating efforts to speed up flights, forcing them to ramp up training programs, recruit foreign pilots and even replace planes with buses.
The industry must hire an average of 14,500 new pilots each year through 2030, according to federal labor statistics. But carriers say they can’t attract as many because of long delays in obtaining credentials. Worse, experts say the staffing bottleneck isn’t likely to end anytime soon.
“The pilot shortage for the industry is real and most airlines simply won’t be able to meet their capacity plans because there simply aren’t enough pilots, at least not for the next five years and beyond. “, said Scott Kirby, general manager. United Airlines Holdings Inc. officer said earlier this week on a conference call. That will likely force United to keep 150 regional planes parked despite increased demand for domestic travel, he said.
Members of the Air Line Pilots Association demonstrate 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 rebound. Thousands of pilots agreed to buyouts or retired early when federal help to avoid furloughs failed to cover all airline labor costs, especially for veteran pilots earning salaries six digits.
Two years later, airlines are unable to find enough qualified crew to fully restore 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 a call April 21.
Airlines have scaled back plans for a rapid resumption of pre-pandemic flight schedules. United expects a 13% drop in flights this quarter compared to 2019, while Delta Air Lines Inc. forecasts a 16% drop, American Airlines Group Inc. up to 8% and Alaska Air around 9% . JetBlue Airways Corp. cuts 10% of its planned summer flights.
Growth of regional carriers
The problem is more acute at regional airlines, where pilot ranks have been depleted by hiring from larger carriers. A beggar’s strategy left small planes idle and cut dedicated flights for shorter routes.
“We don’t have the regional plane that flies in the summer right now [that] we would love to,” American CEO Robert Isom told CNBC on Thursday. “It’s a fantastic opportunity for people who want to come and fly planes. They can make a lot of money.”
Regional airlines play a vital 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 that tie them to one or more major airlines such as American or Delta, which control schedules, prices and ticketing.
“That’s the crux,” Faye Malarkey Black, chief executive of the Regional Airline Association, said in an interview. “We haven’t seen this level of loss of service since just after 9/11 when that crisis changed the flight-driving equation. I expect this bad situation to get worse before it gets better, whatever we do.
Instead of puddle-jumper flights, some airlines connect with charter bus services. United and American have contracted with Landline Co., a startup based in Fort Collins, Colo., to transport passengers and their luggage by coach on shorter routes, allowing them to sell destinations where they do not fly.
Others rake wide to find staff. Discount carrier Breeze Airways and SkyWest Inc. are both recruiting foreign pilots to Australia.
The industry raises wages to attract and retain pilots. But rapidly escalating labor costs could undermine big-discount airline business models by limiting their ability to grow and eroding their key cost advantages.
That’s a risk for Spirit Airlines Inc. and Frontier Group Holdings Inc. Both carriers “demand an abundance of pilots ready to work for less than the major airlines are paying,” said JPMorgan analyst Jamie Baker. “The sustainability of this model should logically be questioned in the current environment.”
–With the help of Justin Bachman.
© 2022 Bloomberg L.P.
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