Big news for American Eagle Airlines, which is a wholly owned subsidiary of American Airlines Group, they have officially selected a new name for their airline. The Chicago Tribune reported earlier this week that Envoy is the new name of the regional carrier and the new name will debut in spring of this year. It was one of 1000 different names that went through quite the vetting process and was also initial selected by the 14,000 employees of American Eagle.
But this isn’t the only difference with American Eagle (AE); they have also come to a tentative labor agreement with the Airline Pilots Association (APA). The APA and AE have agreed to the freezing of wages through 2018, the only step remaining is for the pilots of the airline to approve and ratify these changes. So why would the pilots want to approve a change that would freeze their pay for the next four years, especially amid the current turmoil and tensions in our economy? An express pass to the major airlines would be the reason.
Enhanced Flow Through
American Eagle and American Airlines have agreed to help their regional pilots transition from the regionals to the majors at a quicker pace and also to give AE pilots a leg up over external candidates. The enhanced flow through is what most regional pilots are looking for anyway, this is a good compromise in a time and in an industry where everyone is looking to cut costs and save for the future. The airline is able to count on keeping their pilots pay at current levels and the pilots can look forward to moving up in their careers at an accelerated pace.
What does this do for the future of American Eagle in light of the coming pilot shortage? Well, it pretty much kicks the can down the road I suppose. This deal helps solidify a pipeline of new pilot recruits for American Airlines who will be ready, willing and able… but not so much for the regional carrier. That’s where signing bonuses come into play.
According to a Skift.com story, Kit Darby an aviation consultant at KitDarby.com says a pilot shortage is on the horizon. The shortage will be stimulated by the new federal flight time minimums, duty time requirements, and the planned retirements of current pilots. This is going to cause several airlines to not only start their own enhanced flow through agreements from regional to major airline but also begin offering a signing bonus of anywhere from $5,000 to $10,000 for new pilots. The signing bonus will be a very welcomed benefit for pilots who are expecting to receive not much more than minimum wage.
Not everyone is buying the pilot shortage story though, the news outlet Cincinatti.com recently ran a story where a representative of American Airlines is quoting as saying the projected numbers are over-blown. Katie Connell, a spokeswoman for Airlines for America says,
“Long-term projections … are based on assumptions about airline growth that have often proved to be faulty,” Connell said. “We expect the major commercial airlines will be appropriately staffed, and are not expecting any shortage within the next few years.”
While American may be a stating there isn’t going to be a pilot shortage their actions of moving pilots right along through their system may say something else. Also, if an airline comes right out and says, “yup, there’s a shortage” then they will be paying more for their new pilots. Lack of supply causes a nice demand and in this case that only works in the favor of the pilots.
As always we’d love to hear your thoughts. Feel free to leave any and all questions and comments below.