WASHINGTON (BLOOMBERG) - United States airlines are facing a pilot shortage that is complicating efforts to ramp up flights, forcing them to step up training programmes, recruit foreign pilots and even replace planes with buses.
The industry needs to hire an average of 14,500 new pilots each year until 2030, according to federal labour statistics. But carriers say there is no way they can bring on that many due to long lag times for credentialling.
Worse, experts say the staffing bottleneck is unlikely to end anytime soon.
"The pilot shortage for the industry is real and most airlines are simply not going to be able to realise their capacity plans because there simply aren't enough pilots, at least not for the next five-plus years," Mr Scott Kirby, chief executive officer of United Airlines Holdings said earlier this week on a conference call.
That will likely force United to keep 150 regional planes parked despite increased domestic travel demand, he said.
The issue is not new - airlines already faced difficulty finding and retaining pilots before the pandemic - but a purging of employees at the start of the downturn in 2020 has left the industry ill-prepared for a rebound.
Thousands of pilots accepted buyouts or retired early when federal aid to avoid furloughs failed to cover all the airlines' labour costs, especially for veteran pilots earning six-figure salaries. Two years on, airlines are unable to find enough qualified crews to fully reinstate route maps.
"This is going to be one of the biggest constraints for the industry going forward," Alaska Air Group chief executive Ben Minicucci said on Thursday (April 21) call.
Airlines have scaled back plans for a rapid resumption of pre-pandemic flight schedules. United expects flying this quarter to be down 13 per cent from 2019, while Delta Air Lines projects a 16 per cent decline, American Airlines Group as much as 8 per cent and Alaska Air, about 9 per cent. JetBlue Airways is trimming 10 per cent of its planned summer flights.
Regional carrier crunch
The problem is most acute at regional airlines, where pilot ranks have been depleted by hiring at larger carriers. A beggar-thy-neighbour strategy has left smaller aircraft idle and cut flights dedicated to shorter routes.
"We don't have the regional aircraft flying the summer right now (that) we would like," American's chief executive officer Robert Isom told CNBC on Thursday.
"This is a fantastic opportunity for people that want to come in and fly planes. They can make a lot of money."
Regional airlines play a critical role in ferrying passengers from smaller markets to hub airports where they board flights operated by larger partners. These workhorses of the industry have capacity purchase agreements binding them to one or more primary airlines such as American or Delta, which control scheduling, pricing and ticketing.
"This is the pivotal point," Ms Faye Malarkey Black, chief executive of the Regional Airline Association, said in an interview.
"We have not seen this level of service loss since right after 9-11, when that crisis changed the fly-drive equation. I expect this bad situation to get worse before it gets better, no matter what we do."
In lieu of puddle-jumper flights, some airlines are linking up with charter bus services. United and American have contracted with Landline Co, a Fort Collins, Colorado-based start-up, to ferry passengers and their bags by motorcoach on some shorter routes, allowing them to sell destinations where they do not fly.
Others are casting a wide net to find staff. Discount carrier Breeze Airways and SkyWest are both recruiting foreign pilots from Australia.
The industry is hiking pay to attract and retain pilots. But the rapid escalation in labour costs could undermine the business models of deep-discount airlines by limiting their ability to grow and eroding their core cost advantages.
That is a risk to Spirit Airlines and Frontier Group Holdings. Those two carriers "require an abundance of pilots willing to work for less than what large airlines pay", said Mr Jamie Baker, a JPMorgan analyst.
"The sustainability of that model should logically be questioned in the current environment."