Podcast: U.S. Pilot Shortage: What's Going On?

Airlines and their representative organizations in America are expressing concerns about a long-term pilot shortage, yet pilot unions say there’s no shortage and are pressing for higher wages. U.S. editors at ATW and Aviation Week discuss the opposing views.

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Rush transcript: 

Karen Walker:              

Hello everyone. And thank you for joining us for Window Seat, our Aviation Week air transport podcast. I'm Air Transport World and Group Air Transport Editor-in-Chief Karen Walker. So welcome on board. Today I'm delighted to be in Washington, DC and joined by my colleagues, Ben Goldstein, North American Air Transport Editor at Aviation Week and Aaron Karp, Senior Editor at ATW and Routes. Ben, Aaron, welcome and thank you for you joining us today.

       Now, today we're going to be talking about the pilot shortage in the US, is the one or isn't there? We've seen more disruptions across US airline flights recently with hundreds of flights canceled or delayed just as the summer travel rush really picks up. The reasons are multifold, they're not just about a shortage of pilots. But airlines and their representative organizations are increasingly expressing concern about a long term pilot shortage, especially at the regional carrier level. Yet the Air Line Pilots Association or ALPA, the union representing most of the large US airlines, dismisses the notion that there is any shortage and blames airline management for not raising pilot wages.

       Meanwhile, in the news this week is a proposal by one airline to reduce the number of flight hours needed for a pilot to qualify for commercial airline flying. Ben, you covering this a lot, this whole issue. What's going on and who's saying what?

Ben Goldstein:             

Well, Karen, I think you've summed it up very well. The battle lines are very clear here. On one side, we have the pilot unions, most notably ALPA, which deny there is a pilot shortage and they instead blame the problem on low pay on offer at the regional carriers. And on the other side, we have basically everyone else, the airlines, the OEMs, flight training organizations, analysts, investors. It's basically the unions against the world on this issue. And I think that's what's been puzzling to so many people.

Karen Walker:              

Aaron, how is this playing out among the regional carriers, and in America's smaller communities, that they seem to be the ones that are most at risk of losing service and carriers most at risk of not having enough pilots. Is that true?

Aaron Karp:                 

Yes. I think a good way to talk about this is to give a very recent example, and American airlines announced that they're cutting four markets from their network, Dubuque, Iowa, Toledo, Ohio, and Islip and Ithaca in New York. And they were flying to two of those markets. They were flying to Chicago O'Hare, and from the New York markets, they were flying to Philadelphia. And so American is no longer serving those airports. Envoy Air and Piedmont Airlines, two of their regional affiliates, were serving the route.

       And so that just shows you how American has 100 aircraft grounded, regional aircraft grounded. United has 150 regional aircraft grounded. And so they're pulling out of smaller markets. And what will this mean for the US airline network? I think that's sort of up in the air. I mean, the speculation by regional airlines and smaller community airports for years has been that this will have really damaging economic effects on small communities, but American will point out that all of those markets they dropped out of are within 72 miles, at the most, of another airport that they serve.

       And so are we going to move into a situation where there just aren't pilots and there aren't aircraft to operate to these markets and instead people will just have to drive? There will be a lack of convenience. Will it be more than a lack of convenience? I think that will determine whether there are changes. If it's simply lack of convenience, and if the airlines don't notice that there's a huge loss in passengers from feeder routes, it may not be as big of a deal as they think. But the pilot shortage is going to continue without doubt cutting markets out of the US airline network.

Karen Walker:              

Interesting. Now one aspect of this whole debate is that ALPA seems to be framing this as a safety issue. They're saying that pilot hiring is still way up, there's no shortage, and they're claiming that airlines want to put safety at risk by introducing new pilot entry and training standards. Now, to me that seems improbable. I mean, at the end of the day, what airline CEO would want a less safe airline? That's just not a way that any serious airline CEO would look at his company, for obvious reasons. So, Aaron, at the center of this sort of different training standard that ALPA is against is the FAA's 1,500 flight hour rule and potential changes to that. Can you explain that in a sentence or two? And what's the argument for change?

Aaron Karp:                 

Yes. After the Colgan air crash in 2009, the FAA moved and eventually successfully implemented the 15 hour rule, meaning you have to have 15 hours of flight time before you can be a first officer at a regional airline. The regional airlines have argued that that rule had unintended consequences in that it brought pilots to airlines who had been flying in very undisciplined circumstances and they had to be retrained once they got to the airlines. And so the airlines say, and they will say that, "We're not trying to change the 1500 hour rule, and there's no appetite for that in Congress, but that we can make some changes." And what they really want to say is that hours in flight simulators are better than hours flying a small aircraft on weekends, that sort of thing. So that's the argument that it's actually less safe to have these pilots accumulate so many hours outside of disciplined circumstances. The regional airlines say they'd rather have pilots who come through very disciplined training, even if it's fewer total hours.

Karen Walker:              

So Ben, we've had news, recent news, of a proposal that one of the airlines, Republic, is proposed relative to this and the FAA is apparently considering. Can you talk a little on that please?

Ben Goldstein:             

So Republic doesn't want to get rid of the 1500 hour rule. What they're proposing is to work within the framework of the law as it's written, which the current first officer qualification rule allows first for different pathways, including for the military and some accredited flight training institutions, to get an air transport pilot certificate with less than 1500 hours, 750 hours in the case of the military. What Republic wants is for graduates of its LIFT Academy, which is located in Indianapolis to be able to become ATP certified pilots with 750 hours. And their argument is that their rigorous, highly selective LIFT Academy is essentially as good and as rigorous as the military and the training they do there. And they want to see that program recognized with a formal pathway. Now, the Air Line Pilots Association is opposed to this proposal. They say that this is going to undermine safety, but it does have the support of the Regional Airline Association and some other industry groups. It's a proposal that wants to work within the framework of the law by setting up a new pathway for graduates of its LIFT Academy.

Karen Walker:              

Right. And then, Aaron, can you talk about what SkyWest, they have a proposal too, that would change things. But my understanding is, again, the unions are not happy about that.

Aaron Karp: 

So what SkyWest is proposing is that part, a part of their operation, a small part of their operation, become an affiliate carrier that would be labeled as a Part 135 airline instead of a Part 121 airline. Now Part 121 is what the major airlines are and what all the regional airlines are, basically airlines that operate scheduled services. Part 135 carriers are everything, and there's hundreds of them in the United States, everything from helicopter operators doing tours of the Grand Canyon to very tiny airlines hopping between the Hawaiian Islands. And so what SkyWest is saying, "Let's make part of our operation a 135 commuter airline operation." And what that would do is eliminate the 1500 hour rule. For a Part 135 carrier, you can be a first officer with 250 hours. There's no 65 hour age retirement rule. You can keep flying as long as you pass medical exams.

       And I think the ironic thing about this is that if you go back to more than 25 years ago, all regional airlines were considered Part 135 carriers. And then the FAA, as regional airlines started flying jets, as they started contracting with mainline airlines, as they started putting United and Americans delivery on their airplanes, said, "You have to become 121 carriers and operate under all the rules of scheduled commercial airlines."

       The regional airlines largely went along with that. There was one exception, and that was Jonathan Ornstein, the CEO of Mesa Airlines, who said that this change long term was going to be devastating for the industry because these smaller airlines wouldn't be able to operate as Part 121 airlines over the long term. And I think if you look at what's happening now with the pilot situation and regional airlines having to park aircraft, I think he would say that's turning out to be true. And he has said for years this was a huge mistake. The regional airlines should have collectively opposed this. And I mean, I think, realistically, a 70 seat jet with American Airlines livery is not going to be classified as Part 121. But what SkyWest is saying, "We'll take some of our aircraft, we'll take out seats. They'll only be 30 seat aircraft, and we'll operate on this 135 basis and that will fill gaps at smaller communities."

Karen Walker:

So we're seeing these proposals coming, particularly from the regional carriers. That's understandable because, as we said earlier, they're the ones that are sort of seeing it become harder and harder to get the pilots they need. But what about the low cost carriers too? The airlines like Spirit and Frontier. That's an increasingly big share of the US market now. And of course they're low cost carriers. So they've got a real strong eye on the bottom line. What's this going to mean to them as they're trying to grow fast and get more pilots, Ben? Do you see the impact here?

Ben Goldstein:

Yeah, well, it's going to be very bad for them. I mean, it already is very bad for them and it is going to constrain their ability to grow at a fast rate in the coming years. It's one of the reasons why Spirit and Frontier want to merge together is so they can source more pilots.

       So I think a big part of the problem right now is that regional airline pilots used to go work at the ULCCs. But right now they're going straight to work at the majors, and ULCCs, at the same time, they have very high attrition rates and their pilots are going to the majors too. So they're really being squeezed hard by this. And there's another effect here too. We recently saw American's regional subsidiaries, PSA, Piedmont, and Envoy Air, announce big pay increases with large premium pay for their pilots that basically puts them on par with starting first officers at the majors. And actually when you account the premium pay, they're making more than first officers would at Jet Blue or at some of the LCCs, to say nothing of the Sprits Airlines and Frontiers. So if these kinds of pay schemes spread in the regional industry, it could really pressure the ULCC business model and their ability to keep their costs low and keep their fares low. So the ULCC sector, I think, is going to be really pressured in a lot of fronts by this pilot shortage.

Karen Walker:

You raise an interesting point there, Ben, about those big hikes. Those carriers are both American Airline subsidiaries and they're pilots have won big hikes, as you say. So then again, you've got the more squeeze on the supply and demand chain there. So is this, bottom line, is this really just about money? I mean, is this really where just a case of where the unions are seeing that supply and amount squeeze. So they decided, "Okay, this is the time when we're going to just really get those wage hikes."

Ben Goldstein: 

Well, ALPA says that it's about safety. They credit the 1500 hour rule with the exceptional safety record in the United States over the last 10 years, during a period which I think there was only one passenger fatality which was not related to pilot training. And they observed that there are 1.5 certificated commercial pilots relative to available jobs in the United States. Although I don't think, those are commercial pilots, but not necessarily ATP licensed pilots. So that might be a bit misleading.

       So, that's what ALPA says. They say it's about safety. Is it really about safety? Well, I think you can debate that. I think there are some very good arguments to be made that an hour of flight training isn't equal to an hour of simulator training and that there are a variety of different solutions that could be explored here, whether we're talking raising the retirement age or immigrant visas for foreign pilots. But the common thread here is that ALPA and the unions seem to oppose all of these solutions, and I think that's very revealing in and of itself. I think they definitely do want higher pay across the industry. They're very open about that. Are they putting their own interest in terms of collective bargaining ahead of the industry's need for supply of pilots? That's a question that I think a lot of people are asking right now.

Karen Walker:

So from the other side, outside of the union where the people are, and most importantly, the airlines are saying, "Yes, there is a shortage and we have got to do something to grow the supply chain." What other proposals and actions are being taken, Aaron, either taken or considered?

Aaron Karp:

Well, I think it's first thing to say is the airline CEOs, members of Congress who are senior enough to make a dent are all saying, "There's no short term solution. That we're stuck right now." So it's a matter of a long term solution. And I think a case could be made that the pilots unions, if they look 15 years down the road and there's not enough pilots, they won't have members. And so there's a case to be made that their approach to this is relatively short term or short term thinking. So I don't think there is any short term solution. One thing I would add, we talked about the Sky West wanting to be a Part 135 carrier. There are hundreds of them in the United States and they could start, some of them already do, operate service from say a small airport to a major airport.

        The difference is, is that you're flying on a turbo prop, you're landing at the airport. You're often then getting off the airplane on the tarmac, carrying your own bag into the airport, and then being treated like you arrived on an automobile and having to go through everything again. And having to buy your own ticket. You have to buy a second ticket with say United and make sure your timing is right. And if your timing is off, if your first flight is canceled, you have no grounds to be refunded for the United flight. So it's a huge convenience factor, but you could see these smaller airlines filling the gap a little bit, and that way someone could get to an airport, but it would be a much harder journey.

Karen Walker: 

What about the age limit in the US for pilots? Is there any serious consideration to raising that cap?

Aaron Karp:

Senator Lindsey Graham did propose this a couple weeks ago and ALPA immediately shot it down. And what they cited was that IKO has a 65 retirement rule. If, say, Congress had moved to raise it to 67, it would only have included domestic flights, but that would've helped the regional airlines. But looks like there's no appetite for that in Congress. And it's, again, ALPA saying it's a safety issue. And I think one other thing we should say about ALPA is that when they take a position, it has heavy influence with members of Congress because many of them are not experts at all in aviation. And they say, "Well, if the Air Line Pilots Association, if the President of the Air Line Pilots Association, who's this really experienced pilot, is saying that this is unsafe. How can I possibly vote against what they're saying?" And so ALPA knows it has this advantage and it plays to that advantage.

Karen Walker:

That's a good point. Ben, how do you see this playing out for the rest of the year? It seems to me like there's two sides have sort of got themselves ingrained, which ultimately just means we're just going to see more disruption. Am I right?

Ben Goldstein:

Yeah. I think you are right. In terms of the near term, the summer, I think we're going to be looking at a lot of turbulence, a lot of disruption and more canceled flights. Scott Kirby has said that he thinks that the US airlines combined will hire 13,000 pilots this year and a similar amount next year. And the US only produces five to 6,000 pilots per year. So this deficit is not going away near term. And actually pilot retirements are going to peak later in this decade so the problem is going to get worse. So we're really talking about a multi-year problem. And like Aaron said, there are no immediate on the table solutions, but I don't think that continuing to block conversation about what possible solutions have been put forward, I don't think that's going to be helpful as this crisis gets worse.

Karen Walker:

So more engagement needed, more actually where both sides are talking as opposed to just hearing one argument and then that being dismissed. Ben, Aaron, thank you so much for your insights and for joining me today. I really appreciate that. And thank you to our listeners. I hope you'll join us again next week for our next episode. Make sure you don't miss it by subscribing to the Window Seat Podcast on Apple Podcasts or wherever you listen. Until then, this is Karen Walker, disembarking from Window Seat.