The debate over the salaries of pilots heats up again, The Dallas News recently ran a story talking with Pilot Union leaders and heads of a few regional airlines to get their take on the recent developments concerning wages and the highly debated pilot shortage.
Envoy, the old American Eagle Airlines, recently sent a contract to their pilot’s union offering signing bonuses and easier transitions to better positions but it also included a pay freeze. Envoy has asked for this pay freeze for cost cutting measures, American Airlines Groups, Inc (their parent company) said that would be a requirement for newer and bigger airplanes (we’ll get back to the bigger airplanes in a bit). The contract was quickly rejected and this is not the only pilot union to reject their contracts. Republic Airlines and ExpressJet unions also rejected their contracts, they are looking for higher wages plain and simple.
High Salaries Brings More Applicants
The unions have actually gone so far to ask each other to not sign conciliatory agreements, this is important because if one airline gets something signed by their union other airlines will use that as a negotiation chip and play the “well, they did this” card. It is sign of solidarity amongst the unions. It is the union’s belief that the pilot shortage the airlines are experiencing, regional airlines a lot more that the majors, will be helped by an increase of qualified pilot applicants looking for better wages.
The starting salaries of a regional pilot can range from $20,000 to something near $25,000. This is for a low time (1500 hour min) pilot just entering into the airlines, most of the time these pilots are strapped with easily over $65,000 in loans from their previous training. This is a very difficult burden for anyone just starting out, and the unions think that more money will spur the number of applicants. Personally I think it will cause a bit of cannibalization from other airline pools while pilots try to take advantage of better pay before the market corrects itself.
Airlines are arguing that the pilot shortage is not a result of low wages but from the new laws that require the 1500 hour minimum for new airline pilots, that and of course the new duty-time requirements put in place by the FAA. Finding a qualified pilot that has the needed hours is the hard part, then keeping them flying legally is also a very difficult challenge. The Dallas News story has a pretty accurate quote:
Cohen, head of the airline trade group, expressed doubt that a higher starting wage would help in the face of the 1,500-hour limit.
“It doesn’t matter if you triple the starting salary tomorrow,” he said. “That’s still not going to create one more person that’s got 1,500 hours tomorrow.”
Airlines Feeling The Crunch
Regardless of wages the airlines are feeling a pilot crunch, especially the regional airlines. They are having a hard time finding new pilots, Envoy President Pedro Fábregas is quoted as saying they are hiring about 50 new pilots every quarter but are losing about 20 new pilots every month. That math is not sustainable and they know it. The airlines all across the boards are experiencing the same issue with that difficult math. They are all looking at different ways of getting out of this pilot pickle too.
I mentioned that we would discuss the larger airplanes later so here you go, if an airline can begin using larger aircraft and fit more people onto their flights they can alleviate a flight or two, thus reducing the number of pilots they would be required to have to maintain their schedule. This is why they want larger aircraft, and the aircraft they are getting these days are bigger and more fuel efficient than some of the smaller aircraft they are used to, it’s a real win-win for the airlines.
Two different consulting firms sat down to determine the number of pilots that would be needed to fulfill the shortage left by retiring pilots in the year 2022, the ones hitting the mandatory retirement age of 65. They were not that different, one says 14,000 pilots will be required while the other thinks 18,000 is the magic number. Regardless, the major airlines are in trouble, with numbers like that to replace just the retiring pilots something needs to change, before it’s too late.