American Airlines recently came to an agreement in principle with its 15,000 pilots represented by the Allied Pilots Association. American Airlines can’t fly about 150 of its regional aircraft because of the ongoing pilot shortage, the Fort Worth-based carrier’s CEO said Wednesday.
“We would deploy properly to markets that aren’t being served,” Robert Isom, CEO of American Airlines said Wednesday at the Bernstein 39th Annual Strategic Decisions Conference. “We would do that today. It’s just we don’t have the pilots.”
The shortage of pilots and parked planes comes as airlines are facing record demand for travel this summer without the capacity to take advantage of high ticket prices. That’s even more jets on the ground than a year ago, when the shortage of pilots really hit regional airlines as demand returned after the COVID-19 pandemic downturn.
American anticipates getting more pilots over the next 18 to 24 months for the regional network, Isom said, and those aircraft would be put back into service “in a fashion that is going to produce unit revenues that are very favorable.” The airline industry faces an ongoing shortage of pilots, which will grow to a shortfall of nearly 80,000 by 2032 worldwide, according to Oliver Wyman.
American recently came to an agreement in principle with its pilots union, the Allied Pilots Association representing the carrier’s more than 15,000 pilots, Isom said. The agreement proposes about a 21% pay raise for this year on top of back-dated raises dating to 2020. He said the airline has done a nice job of being efficient and is seeing a large number of pilots who are interested in becoming first officers.
“American Airlines was an industry leader in getting regional pilot wages to a level that it can really attract new talent from a broad set of communities in the airline business,” Isom said. “We did that, and it’s produced the kind of interest in aviation that we had hoped.”
He explained his 18 to 24 months estimation accounts for the imbalance between the number of captains flowing out of the regional airlines to the mainlines. Isom said American has put in contractual provisions and incentives that allow the company to build up jobs over time.
Isom said a lot of pilots have left the industry and retired, so it has taken time to find replacements. Regardless, he thinks American has the best quality of life to offer pilots.
“It’s a matter of economics,” Isom said. “It’s a matter of quality of life. I think the kinds of things that have been done both from a regional perspective at American and a mainline perspective with the new agreement in principle, they address those kinds of issues.”
Alexandra Skores – Dallas Morning News
The pilot shortage has alleviated over the past year but still remains a substantial impediment for U.S. air service, especially in small markets.
According to an analysis by consulting firm Oliver Wyman, pilot availability for North American airlines is approximately 14,300 short of demand, an improvement over last year’s shortage of approximately 16,900.
However, the shortage would be more severe — an additional 6,000 pilots — if regional carriers were flying the same number of planes as they did before the pandemic, explained Oliver Wyman partner Geoff Murray at the Regional Airline Association’s (RAA) annual meeting on Tuesday.
U.S. regional aircraft flying, which typically connects small and midsize markets with airline hubs, has declined 36% from 2019, Murray said.
While the largest U.S. airlines say they have largely caught up on pilot hiring for mainline flights, a pronounced impact continues in the regional sector, Murray said, since the larger airlines do most of their hiring from the regional ranks.
According to the Wyman analysis, 75% of mainline pilots are hired out of the regional sector, with the remainder coming from business aviation and the military. The company estimates that 44% of the regional pilot workforce of 18,100 will get hired at a mainline U.S. carrier this year, including a whopping 59% of regional airline captains.
Murray said the pilot deficit improved in the past year due both to reduced demand and increased supply. Demand for pilots has been driven down by parked regional aircraft, planes being flown fewer hours per day than is optimal, and supply chain-related production delays.
Meanwhile, pilot supply has increased due to a bump in the number of pilots achieving certification to fly for commercial airlines. This year, Oliver Wyman expects 6,900 new North American airline pilots, countering 4,200 pilot retirements.
FAA data also show that pilot hiring is on the rise. Through August of this year, the agency had issued 7,526 of the Air Transport Pilot (ATP) certificates, which are the certificates required to fly for a commercial airline. That’s up 8% compared to the same period a year ago, according to an analysis from the Air Line Pilots Association.
Still, the Wyman study projects that the pilot shortage will persist for the foreseeable future and will still be approximately 13,000 a decade from now, driven in part by a 30% increase in demand for pilots over that period.
The RAA says that its members were flying 300 fewer aircraft this July than they did in July 2019. Those reductions have been driven by the pilot shortage and by airline strategies to focus more on mainline flying, which offers larger margins.
Forty U.S. airports have lost at least half their flights since 2019, according to the RAA.