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http://www.sltrib.com/business/ci_5152069
Airline expansion
Demand for pilots sky-high
Regional carriers fuel much of the market; some worry that companies may lower standards
By Paul Beebe
The Salt Lake Tribune
Article Last Updated: 02/07/2007 12:50:58 PM MST
Fresh on the heels of hiring 610 pilots last year, SkyWest Airlines intends to hire another 700 this year to keep even with the regional carrier's snowballing growth.
It will be a daunting task. Regionals are flourishing as they pick up less-profitable and shorter routes that national carriers no longer want to fly. The consequence is a shortage of commercial pilots, which some in the industry predict could reach a crisis level and others say has compelled some airlines to lower their hiring standards closer to government minimums in order to fill seats in their cockpits.
"We are looking nationwide. We have a full-court press throughout the system," said Necia Clark-Mantle, vice president of people for St. George-based SkyWest. "The market in general is pretty difficult."
SkyWest executives say the airline has not lowered its hiring benchmarks. Its applicants need 1,000 hours of flying time, including 100 hours piloting multi-engine airplanes in order to get a job interview, and its typical candidate has 1,800 hours of experience. The Federal Aviation Administration requires 250 hours of flight time for a commercial license.
"Anything above and beyond what is stated [in FAA rules] is a business decision on the part of the airline," FAA spokesman Les Dorr said.
Because SkyWest is unwilling to relax its requirements, it must work harder than some airlines to hire qualified pilots.
Great Lakes Airlines demands 750 hours and is not feeling a shortage of acceptable candidates, said Monica Taylor, a spokeswoman for the Cheyenne, Wyo.-based regional carrier. American Eagle, which is hiring 30 to 60 pilots a month, accepts as few as 400 hours if applicants complete pilot training at approved flight schools, spokesman Dave Jackson said. American Eagle is a subsidiary of AMR Corp., which also owns American Airlines.
SkyWest has posted help-wanted notices on its Web site, and it will conduct pilot career fairs in Salt Lake City and seven other cities this month. The airline wants to talk to pilots who fly for other regionals or who have been furloughed by bigger carriers. And it's combing through university aviation programs, looking for acceptable candidates.
There might be no time like the present to become a pilot for hire. Airlines hired about 8,500 aviators last year, and the pace should continue at that level or higher for the next 10 years, according to AIR Inc., which tracks pilot hiring. Aerospace giant Boeing Co. estimates the global appetite for new pilots at 17,000 a year through 2024.
"All I can say is it's the best time to get into the industry," said Mike Kraus, program director for the aviation studies program at Westminster College, which graduates about 110 commercial pilots a year, ready for the job market. "When you are born sometimes controls your destiny and opportunities."
The remarkable turnaround of the airline industry - whose fortunes ebbed after 9/11 - is behind much of the demand for pilots, said Kip Darby, president of Atlanta-based AIR. Much of the industry is returning to profitability after wresting huge pay and benefits concessions from employees, shedding expensive retirement programs and shifting more flying to contract carriers such as SkyWest. Rising fares and falling jet fuel prices are helping, too.
At the same time, the military - traditionally one of the best sources of commercial pilots - is retaining more of its aviators. And many pilots who leave the military are choosing other careers, underlining the instability in the airline industry that has pushed many carriers to extract big pay and benefit cuts from their employees.
"The next big crisis is a lack of qualified crews," said Ed Thiel, a Delta Air Lines captain and member of the executive council of the Delta unit of the Air Line Pilots Association. "The airlines are having difficulty finding qualified applicants. There are not as many people coming out of the military route, and it's almost prohibitively expensive to go through the civilian route, while the career has degraded to the point where it doesn't make sense to go into the business."
Aspiring pilots who enroll in aeronautical colleges can expect big tuition bills. An undergraduate degree at Embry-Riddle Aeronautical University in Florida costs almost $100,000. Thiel said nonacademic routes to a job at a major airline can be as expensive and take 10 years to complete.
All the same, a job isn't hard to find after a pilot earns a commercial license.
Two years ago, Frank Ayers, chairman of Embry-Riddle's flight department, was able to keep graduates on as flight instructors for a couple of years before they landed a job flying for a regional airline or other employer.
"I'm lucky now if I keep someone six months," Ayers said. "Don't get me wrong; it's a good problem to have. Despite all the bankruptcies, it appears that the increased demand for air travel is solid. Airlines have finished downsizing and have figured out how to fly profitably."
Analysts are betting that most airlines will report strong earnings in 2007. Ray Neidl of Calyon Securities thinks that American Airlines could earn earn $4.06 per share, or about $889 million, with United Airlines earning $4.80, or abut $531 million. SkyWest is expected to be the most profitable regional carrier, earning $2.71 a share, or close to $173 million, this year.
"There is a relationship between airline profits and hiring," AIR's Darby said. He believes that some airlines will earn as much as $1 billion a year as their profitability builds during the rest of the decade. "If that relationship holds true, we will see a lot of hiring."
The pilot hiring that SkyWest is undertaking is part of a broader plan to expand its 10,000-employee work force by up to 4,000 workers this year. In part, turnover is pushing the airline to accelerate pilot hiring. Regionals historically have been where young pilots assemble enough flying experience to move to bigger airlines.
About 10 percent of SkyWest's pilots leave the company each year. Some pack it in when they reach age 60. (Last week, the FAA said it would propose raising the compulsory retirement age to 65.) Others leave for jobs at other airlines, said Camille Ence, manager of pilot recruitment.
Most pilots who leave hope to hire on at national airlines and air cargo companies, which pay more and give better benefits, Darby said. FedEx pays an Airbus A380 captain with 10 years of experience $17,464 a month, according to WillFlyForFood.cc, a Web site that compares pilot pay. An American Airlines captain flying a Boeing 767 earns $11,008 a month. SkyWest jet captains with a decade of experience earn about $3,000 a month. First officers are paid $1,425 a month, according to WillFlyForFood.
Although some bankrupt carriers have turned their retirement programs over to the government Pension Benefit Guarantee Corp., most retirement packages at the bigger airlines are still defined-benefit programs instead of 401(k) programs. Bigger airlines also provide more rest time between flights, Darby said.
The key reason why SkyWest must hire hundreds of new pilots this year is its growing alliance with Delta. In November, Delta selected SkyWest Inc. to take over some of the regional flying business operated by its Comair subsidiary. This month, Delta will shift the flying of 12 Canadair regional jets to SkyWest, The company also is waiting to hear whether Delta will award it another 131 Comair jets. Each aircraft needs a rotation of nine pilots.
Delta also granted eight of the 70-seat jets to SkyWest when it bought Atlantic Southeast Airlines in September 2005. Those aircraft are scheduled to be delivered between now and May.
The growth in the numbers of pilots and other employees "will be primarily dedicated to our Delta mainline partnership," SkyWest's Clark-Mantle said.
pbeebe@sltrib.com
Airline expansion
Demand for pilots sky-high
Regional carriers fuel much of the market; some worry that companies may lower standards
By Paul Beebe
The Salt Lake Tribune
Article Last Updated: 02/07/2007 12:50:58 PM MST
Fresh on the heels of hiring 610 pilots last year, SkyWest Airlines intends to hire another 700 this year to keep even with the regional carrier's snowballing growth.
It will be a daunting task. Regionals are flourishing as they pick up less-profitable and shorter routes that national carriers no longer want to fly. The consequence is a shortage of commercial pilots, which some in the industry predict could reach a crisis level and others say has compelled some airlines to lower their hiring standards closer to government minimums in order to fill seats in their cockpits.
"We are looking nationwide. We have a full-court press throughout the system," said Necia Clark-Mantle, vice president of people for St. George-based SkyWest. "The market in general is pretty difficult."
SkyWest executives say the airline has not lowered its hiring benchmarks. Its applicants need 1,000 hours of flying time, including 100 hours piloting multi-engine airplanes in order to get a job interview, and its typical candidate has 1,800 hours of experience. The Federal Aviation Administration requires 250 hours of flight time for a commercial license.
"Anything above and beyond what is stated [in FAA rules] is a business decision on the part of the airline," FAA spokesman Les Dorr said.
Because SkyWest is unwilling to relax its requirements, it must work harder than some airlines to hire qualified pilots.
Great Lakes Airlines demands 750 hours and is not feeling a shortage of acceptable candidates, said Monica Taylor, a spokeswoman for the Cheyenne, Wyo.-based regional carrier. American Eagle, which is hiring 30 to 60 pilots a month, accepts as few as 400 hours if applicants complete pilot training at approved flight schools, spokesman Dave Jackson said. American Eagle is a subsidiary of AMR Corp., which also owns American Airlines.
SkyWest has posted help-wanted notices on its Web site, and it will conduct pilot career fairs in Salt Lake City and seven other cities this month. The airline wants to talk to pilots who fly for other regionals or who have been furloughed by bigger carriers. And it's combing through university aviation programs, looking for acceptable candidates.
There might be no time like the present to become a pilot for hire. Airlines hired about 8,500 aviators last year, and the pace should continue at that level or higher for the next 10 years, according to AIR Inc., which tracks pilot hiring. Aerospace giant Boeing Co. estimates the global appetite for new pilots at 17,000 a year through 2024.
"All I can say is it's the best time to get into the industry," said Mike Kraus, program director for the aviation studies program at Westminster College, which graduates about 110 commercial pilots a year, ready for the job market. "When you are born sometimes controls your destiny and opportunities."
The remarkable turnaround of the airline industry - whose fortunes ebbed after 9/11 - is behind much of the demand for pilots, said Kip Darby, president of Atlanta-based AIR. Much of the industry is returning to profitability after wresting huge pay and benefits concessions from employees, shedding expensive retirement programs and shifting more flying to contract carriers such as SkyWest. Rising fares and falling jet fuel prices are helping, too.
At the same time, the military - traditionally one of the best sources of commercial pilots - is retaining more of its aviators. And many pilots who leave the military are choosing other careers, underlining the instability in the airline industry that has pushed many carriers to extract big pay and benefit cuts from their employees.
"The next big crisis is a lack of qualified crews," said Ed Thiel, a Delta Air Lines captain and member of the executive council of the Delta unit of the Air Line Pilots Association. "The airlines are having difficulty finding qualified applicants. There are not as many people coming out of the military route, and it's almost prohibitively expensive to go through the civilian route, while the career has degraded to the point where it doesn't make sense to go into the business."
Aspiring pilots who enroll in aeronautical colleges can expect big tuition bills. An undergraduate degree at Embry-Riddle Aeronautical University in Florida costs almost $100,000. Thiel said nonacademic routes to a job at a major airline can be as expensive and take 10 years to complete.
All the same, a job isn't hard to find after a pilot earns a commercial license.
Two years ago, Frank Ayers, chairman of Embry-Riddle's flight department, was able to keep graduates on as flight instructors for a couple of years before they landed a job flying for a regional airline or other employer.
"I'm lucky now if I keep someone six months," Ayers said. "Don't get me wrong; it's a good problem to have. Despite all the bankruptcies, it appears that the increased demand for air travel is solid. Airlines have finished downsizing and have figured out how to fly profitably."
Analysts are betting that most airlines will report strong earnings in 2007. Ray Neidl of Calyon Securities thinks that American Airlines could earn earn $4.06 per share, or about $889 million, with United Airlines earning $4.80, or abut $531 million. SkyWest is expected to be the most profitable regional carrier, earning $2.71 a share, or close to $173 million, this year.
"There is a relationship between airline profits and hiring," AIR's Darby said. He believes that some airlines will earn as much as $1 billion a year as their profitability builds during the rest of the decade. "If that relationship holds true, we will see a lot of hiring."
The pilot hiring that SkyWest is undertaking is part of a broader plan to expand its 10,000-employee work force by up to 4,000 workers this year. In part, turnover is pushing the airline to accelerate pilot hiring. Regionals historically have been where young pilots assemble enough flying experience to move to bigger airlines.
About 10 percent of SkyWest's pilots leave the company each year. Some pack it in when they reach age 60. (Last week, the FAA said it would propose raising the compulsory retirement age to 65.) Others leave for jobs at other airlines, said Camille Ence, manager of pilot recruitment.
Most pilots who leave hope to hire on at national airlines and air cargo companies, which pay more and give better benefits, Darby said. FedEx pays an Airbus A380 captain with 10 years of experience $17,464 a month, according to WillFlyForFood.cc, a Web site that compares pilot pay. An American Airlines captain flying a Boeing 767 earns $11,008 a month. SkyWest jet captains with a decade of experience earn about $3,000 a month. First officers are paid $1,425 a month, according to WillFlyForFood.
Although some bankrupt carriers have turned their retirement programs over to the government Pension Benefit Guarantee Corp., most retirement packages at the bigger airlines are still defined-benefit programs instead of 401(k) programs. Bigger airlines also provide more rest time between flights, Darby said.
The key reason why SkyWest must hire hundreds of new pilots this year is its growing alliance with Delta. In November, Delta selected SkyWest Inc. to take over some of the regional flying business operated by its Comair subsidiary. This month, Delta will shift the flying of 12 Canadair regional jets to SkyWest, The company also is waiting to hear whether Delta will award it another 131 Comair jets. Each aircraft needs a rotation of nine pilots.
Delta also granted eight of the 70-seat jets to SkyWest when it bought Atlantic Southeast Airlines in September 2005. Those aircraft are scheduled to be delivered between now and May.
The growth in the numbers of pilots and other employees "will be primarily dedicated to our Delta mainline partnership," SkyWest's Clark-Mantle said.
pbeebe@sltrib.com
