Anders Clark

Republic Airways recently filed for bankruptcy, but few people were aware of it. That’s in part because Republic Airways is not a recognized name in air travel. However, many people fly with Republic on a regular basis and just aren’t aware of it. Republic operates a variety of flights for Delta Connection, United Express and American Eagle, the big airlines’ affiliates for shorter flights and / or less popular destinations. In fact, as many as half of all Delta, United and American branded flights are in reality handled by regional airlines like Republic. Most people who fly with any regularity have likely flown with Republic or one of many other unknown regional airlines.

According to Republic’s CEO, there were several problems that led to the bankruptcy filing, but the primary issue was “…grounding aircraft due to a lack of pilot resources.” And they’re not alone in this problem. Last October, Seaport Airlines, another regional airline, dropped most of the routes it was flying from its Memphis hub, also due to a lack of qualified pilots. But this pilot problem isn’t limited to just the smaller regional airlines, and it is slowly spreading to more known and established names. SkyWest, which also handles flights for Delta, American, and United, reduced their flight capacity last year. And during SkyWest’s third-quarter earnings conference, President Chip Childs did acknowledge that they are “not immune” to the shrinking number of pilots and, in a transcript provided by Seeking Alpha, that to address the problem, they would need to manage the problem “from the very, very beginning.”

The idea of a “pilot shortage” may surprise those outside the industry as most people assume that there is intense competition for the job of an airline pilot, with the associated high salary, perks and glamour. So what gives? Well, those inside the industry point to two things. First, Congress enacted regulations in 2013 that increased the number of required flight hours for first officers (or co-pilots) from 250 to 1,500 in order to fly for a commercial airline. And there’s a large commitment of time and money involved in accumulating those extra flight hours. Second, while the salaries at and jobs at the big commercial airlines are competitive, newly minted pilots who start flying for the regional airlines can make as little as $20,000 a year. And with consolidation among the major carriers, they hold a strong negotiating position over the regional airlines, which makes it difficult for the regionals to raise wages.

So, for pilots, a low-salary job with a high barrier to entry isn’t very attractive. And when you consider that regional airlines operate roughly half of all the flights in the country, many pilots begin and end careers at the regionals, never able to make the jump to the major airlines. In addition, many young pilots have started signing up for foreign airlines, attracted by higher salaries and reduced requirements.

Forbes, in a recent article, provided an argument that this is not a short-term problem:

“Here’s some hard reality that’s now firmly in place. There is no “pilot shortage”—that term implies a situation where there is the possibility of correction. It isn’t “correctable”—the new regulatory barriers to entry to the pilot profession are effectively permanent. And that means that the availability of this resource will be different than in the past—read: a lot less. Result: less flying of smaller airliners. Less service at smaller local airports.”

Up until now, the effects of all this are being felt primarily by the smaller airlines. But with the pilot pipeline shrinking, and drawing in qualified pilot candidates becoming more and more of a problem, the major carriers may start feeling the effect of the pilot problem soon. In another recent piece from Forbes, they estimate that in the next 20 years, the number of available pilots will only meet two-thirds of the demand. And this could mean the major airlines will have to start dropping routes.

Many regional carriers have been lobbying Congress to change the 1,500 hour rule, but the feeling is that they’re not likely to, as it would make them look like they are prioritizing airline profits over the safety of passengers. In the meantime, the regional airlines are working hard to boost recruitment, including approaching and pitching high school and college students aviation career opportunities. Some in the industry say that with luck, the problem may start to correct itself to a degree. With fewer candidates, salaries will eventually have to go up to draw them in, which should start to make the job more competitive again. But until the issue is addressed and conditions start to change, regional airlines and passengers will continue to take the hit.

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^{Featured Image by Caribb}

Anders Clark

Don’t think the continuing pilot shortage is having an effect on the aviation industry? Tell that to Republic Airways, a major feeder airline who has just declared bankruptcy in New York. Republic flies smaller regional jets for three major carriers, Delta Airlines, American Airlines and United Airlines. And they say that the continuing pilot shortage caused them to ground so many planes that filing for bankruptcy became their only option. “We worked hard to avoid this step,” said CEO Bryan Bedford.

Interestingly, Republic Airways is relatively healthy financially speaking, reporting an overall profit for eight straight quarters. They are literally declaring bankruptcy because they don’t have enough pilots to cover all their scheduled flights. In addition, it has been reported that they are also leasing a large number of smaller airliners, in particular 50 seaters, that have become a cost drain to fly and are not favored by major carriers. According to a statement released by Republic Airways regarding the bankruptcy, this appears to be a move on Republic’s part to find a way to re-size their business and better match the size of and aircraft in their fleet with the number of available pilots.

“Over the last several months, we’ve attempted to restructure the obligations on our out-of-favor aircraft – made so by a nationwide pilot shortage – and to increase our revenues. It’s become clear that this process has reached an impasse and that any further delay would unnecessarily waste valuable resources of the enterprise. Our filing today is a result of our loss of revenue during the past several quarters associated with grounding aircraft due to a lack of pilot resources, combined with the reality that our negotiating effort with key stakeholders shows no apparent prospect of a near term resolution.” – Republic Airways CEO Bryan Bedford

Currently, Republic has an estimated 240 jets in their fleet and operates roughly 1,250 flights a day to around 100 cities in both the US and Canada. They employee an estimated 6,000 staff, including about 2,100 pilots. But, over the first three quarters of last year, the number of hours Republic has been flying dropped by around 5%. This has caused at least one of the majors, Delta, to file a breach of contract suit against them for failing to operate all of the flights they had contracted to fly.

So, what does this mean for regional carriers? Right now, they operate 45% of the nation’s flights, and are the only provider of flights to many smaller cities. And like Republic, many are starting to feel the bite of the continuing pilot shortage. Industry experts say one of the key concerns is pay. In the past, pay has been so bad that regional pilots can make as little as $23,000 a year. In response to this, Republic has started paying new pilots at $40 an hour, under a contract that went into effect this past November. And while this increase in pilot salary is a marked improvement, industry experts point out that you also need to consider flight hours. Regional pilots can only fly an estimated 1,000 hours a year, meaning that an impressive hourly wage doesn’t equate to as much pay as it may appear to.

Another key concern is the recent change to the number of hours required to fly as a first officer. In 2013, the FAA announced that first officers would now be required to hold an Airline Transport Pilot (ATP) certificate, which requires 1,500 hours of total flight time as a pilot. Prior to this, they were only required to hold a commercial pilot certificate with 250 hours of flight time.

The industry has dealt with pilot shortages in the past, but most of them didn’t last long. But these changes have many industry veterans convinced that unlike those past shortages, this one isn’t going anywhere soon.

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^{Featured Image courtesy of Republic Airways}

Jennifer Payne

Pilots have been underpaid, leading to overworked and fatigued pilots, which creates a shortage of qualified applicants. Has aviation finally learned that low wages are hurting the industry?  It first needs to be clarified that this is the starting commercial airline pilot salary for all pilots. At the beginning of every pilot’s career, they must start at the bottom, as with any other business. For pilots, this is the commuter airlines or regionals. When a pilot is hired on with one of the major airlines (Delta, American, Southwest etc), they are not considered “starting pilots,” and that is the next step in their careers.

Since 2001, the aviation industry has had a surplus of pilots and the economic downturn of 2008 did not help with the shrinking airlines. Add the economic downturn to the Federal Aviation Administration (FAA) increasing the retirement age of pilots from 60 years to 65 years of age, and this created a scenario that forced many pilots and those interested in becoming a pilot out of the industry.

Since the “65 rule” passed in 2007, there have been very marginal retirements at the top of the industry, stranding pilots in their current position. As of 2012, the seniority list has begun moving with the retirement of those pilots. This has allowed for the industry to begin moving forward again, giving a positive outlook for pilot’s future. Due to the shortage of pilots created from a stagnant 5 years, lower paying pilot positions have become harder and more costly to fill. Pilots feel that if they do not like their job, there are plenty of other opportunities out there.

With the shortage of applicants today, the aviation industry is finally starting to see honest requirements when looking for and hiring qualified pilots. According to Kit Darby, a retired pilot who consults on pilot hiring trends, regional airlines have increased pilot recruitment through offering signing bonuses of $5,000-to-$10,000. Although that has helped, sadly, the starting commercial airline pilot salary at the majority of regionals still remains low, often being anywhere from $16,000 to $25,000 (Carey & Nicas, 2014). Starting bonuses are a step in the right direction to helping the upward trend of pay for pilots, and recently SkyWest Airlines raised starting pay from $22 to $30/flight (“SkyWest Airlines Payscale”, n.d.)

With the increasing mandatory requirements, such as the 1,500 minimum hour rule, new fatigue and rest rules and lack of entry-level pilots, the industry needs to attract new talent now. With the rate of pilots retiring now and the lack of potential applicants due to high costs of schooling and previous years of low pay, it is becoming harder to fill the seats in the front of the plane. Now is a perfect time for becoming a pilot and joining the industry, due to the movement that is beginning to occur. Pilots entering the aviation industry today will possibly be paving the way for rapid movement up the totem pole to the major airlines, with better pay, experience, and benefits.

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References:

Carey, S., Nicas, J. (2014, February 3). Airline-Pilot Shortage Arrives Ahead of Schedule. Wall Street Journal. Retrieved from http://www.wsj.com/articles/SB10001424052702304851104579361320202756500

N.A. (N.D.) SkyWest Airlines Payscale. Retrieved from http://www.skywest.com/skywest-airline-jobs/career-guides/flight-jobs/#/payscale

With a thirty-five percent increase in global travelers, there are more than half a million aviation positions currently available for qualified pilots. The aviation industry is working hard to meet that demand, but experts are saying there may be a serious pilot shortage. Both fixed wing and helicopter pilots are required and, in addition, many pilots just completing their required flight times are now being hired before they can even apply for a position.

In recent years, a large majority of qualified helicopter pilots were ex-military or war pilots. These elder statesmen pilots who are now retiring from the industry and leaving many helicopter and fixed wing companies with questions and concerns as to how these open positions are going to be filled by the next generation of pilots, and how they’ll deal with a potential pilot shortage.

Another source of the world pilot shortage is that many of the airlines around the world have been increasing the amount of planes in their fleets. In Asia alone, Airbus has tripled the size of its shipments to meet the expected growth. Many of these airlines now face the hurdle of where to attain the funding to train pilots to keeps these planes safe and in the air.

Where Are the New Pilots Going to Come From?

Many large commercial airlines are looking to foreign nations to employ pilots to fill the empty aviation positions due to the significant increase in airline utilization.  Aviation industry salaries start at $60,000 for helicopter pilots as reported for 2014. Commercial pilots are starting year average salary range from $65,000 to $120,000 with the potential to $200,000 for those pilot’s who have accumulated over 1000 flight hours. It is rare for a five-year experienced pilot to expect less than $100,000 per year.

Where will the new pilots come from and how will they get the financial support for schooling? Historically, funding for fixed wing, private and airline pilot training has been financially prohibitive for many men and women due to limited monies available, or being required to take huge personal loans to cover the cost of training. But subsequently, the aviation industry and private lenders have made funds more available to those pursing a career in the aviation or air travel industry, which may lead to more pilots and help solve the issue of the pilot shortage.

Airline Pilots Get ALL the Peanuts They Can Eat!

The job perks for helicopter and fixed-wing pilots are nearly endless. While it is true that the responsibilities that pilot’s carry are quite staggering in terms of human life if one sits and thinks deeply about it, these duties become second nature with experience (flight hours). It can become easier to hold the safety and well to be of other individuals when you’re own well-being is on the line as well.

One of the most popular and well known of pilot benefits has been money.  Traditionally, the earning potential has been equivalent to that of a doctor (general practitioner) or a government lawyer, with much less time (in years) spent in school and as flight hours accumulate, pilots can surpass these status career’s salaries as well.  But many people say that is no longer the case, and pilot salaries have been in a continual slide. With this in mind, will the perks and current salaries be able to attract enough new pilots to stem the pilot shortage?

For more, here is an interesting short interview segment with aviation education book author Rod Machado:

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