WSJ: Airline-Pilot Shortage Arrives Ahead of Schedule

[Boris Badenov]

You and Seggy are manufacturing those Straw Men at breakneck pace today!

Hey, you're the one who said "words mean stuff"...I'm just defending the poor, abused English Language. "Shortage" (see definition above) means there isn't enough of something to go around. Like, for example, if I say "There's a shortage of hot chicks on Jet Careers", it means there aren't enough of them present, not that they're charging more for their services than I am willing to pay (although I'm sure they are). I'm not sure why you're so attached to using this one tiny word incorrectly. There are lots of appropriate phrases..."contraction in supply", maybe? I'll go for that. But there's no "shortage", sorry, it's right there in the definition of the word. There will be a shortage when the FAA looks in their database and says "sorry, there aren't any more".

 

[jgheggie]

Can't we all agree that airlines are finally starting to open up and hire more than they have any other time post 9/11?

If you want to jump in and get a job at a regional for $20k-$25k per year then NOW's THE TIME to get hired.

If you want more pay at the regional level then consult your union rep. Or seek employment elsewhere.

There's no arguing that ALL airlines are hiring the most pilots post 9/11. If you call it a shortage....then great! If not....also great! The 1500 hr rule has certainly help dry up resources for the regionals. There most like is a shortage of ATP pilots willing to work for low pay. But pilots with <500 hrs would normally be willing to work the low pay as a "stepping stone". But now they are not allowed to. This has created a minor issue. However, I feel like the next generation of pilots, currently leaving flight school or instructing, will all reach 1500 within the next 1.5-2 years. That will take car of the small stagnation.

The age 65 rule was a temporary fix....and the 1500hr rule is just a temporary henderance in the opposite direction. It will all level out.

 

[SlumTodd_Millionaire]

Philosopher, I wouldn't even call it collusion or price fixing. The numbers are just the numbers. Using regional feed as a loss-leader made sense when oil was $30/bbl and 50-seat RJs were only slight money losers. But that reality changes when the new normal becomes $90/bbl or higher oil. At that point, it makes more sense to risk losing the market share on the smaller markets by reducing frequency and putting two 717s on a route instead of six RJs. All of the airlines simply looked at the numbers and came to the same inescapable conclusion.

 

[SlumTodd_Millionaire]

Hey, you're the one who said "words mean stuff"...I'm just defending the poor, abused English Language. "Shortage" (see definition above) means there isn't enough of something to go around.

And that's true. There isn't enough of something to go around: applicants for airline pilot jobs. That's a shortage, no matter how much you want to spin it to make your argument for wage increases.

 

[PhilosopherPilot]

Philosopher, I wouldn't even call it collusion or price fixing. The numbers are just the numbers. Using regional feed as a loss-leader made sense when oil was $30/bbl and 50-seat RJs were only slight money losers. But that reality changes when the new normal becomes $90/bbl or higher oil. At that point, it makes more sense to risk losing the market share on the smaller markets by reducing frequency and putting two 717s on a route instead of six RJs. All of the airlines simply looked at the numbers and came to the same inescapable conclusion.

I agree, but I do think there was a noticeable shift in philosophy in terms of how to manage the regionals, particularly for Delta. They realized they could start whipsawing, and did so with gusto.

 

[USMCmech]

, and frankly, there isn't a whole lot of wiggle room, since the legacy carriers have basically decided that they'd rather have their regional feed go out of business than pay them any more than they're already paying them.

At what point does the mainline management look at their subcontractors and realize that they if they want that regional feed, they have to pay more for it? Remember the old saying, "You can shear a sheep many times, but you can only fleece it once"?

I realize that they will dump a lot of their regional routes before that happens, but if they do not serve the smaller markets they lose one of their competitive advantages over the LCCs (the other being international flights). In TX, SWA already serves many markets that Eagle and Express Jet cover for their respective mainlines. If the Delta, United, and American drop the RJ feed to Shreveport, at some point SWA or another LCC will jump in to fill the market.

 

[SlumTodd_Millionaire]

I agree, but I do think there was a noticeable shift in philosophy in terms of how to manage the regionals, particularly for Delta. They realized they could start whipsawing, and did so with gusto.

The change was really in management. Richard Anderson had been doing that for years when he was CEO of Northwest. There was a never ending cycle of pitting Express/Pinnacle/Endeavor against Mesaba. When one was up, the other was down. He just had more regionals to mess with when he got to Delta. And frankly, I can't say as I blame him. It's not smart business to pay more than you need to for a product or service. There are so many regionals, and none of them offer any sort of proprietary level of service, so it makes sense to drive prices down.

 

[mshunter]

No, we aren't. The going wage is the going wage. We can work through collective bargaining to increase the going wage, but until that tree bears fruit, the only wage that matters is the one on the books. And right now, with the going wage what it is, we are seeing the early stage of the shortage.

To anyone saying "but my paycheck doesn't reflect a pilot shortage," read this. Then read it again. The re-read it one more time. Your pay check will never EVER reflect a pilot shortage unless you can scrap rest rules, and re-negotiate you pay rate. And we all know that that doesn't happen over night. It usually takes years. This business is modeled that way. Simple, plain and clear cut.

 

[SlumTodd_Millionaire]

At what point does the mainline management look at their subcontractors and realize that they if they want that regional feed, they have to pay more for it?

You're missing the point. They have looked at it, and they've decided that it's not worth anything more than they're paying. Unless the outsourced airplanes can be bigger (and that ain't happening anytime soon), then the regionals are of marginal value at best with current fares and current oil prices. It makes more sense to pull frequency out of markets than it does to pay more for the RJ feed.

 

[USMCmech]

You're missing the point. They have looked at it, and they've decided that it's not worth anything more than they're paying. Unless the outsourced airplanes can be bigger (and that ain't happening anytime soon), then the regionals are of marginal value at best with current fares and current oil prices. It makes more sense to pull frequency out of markets than it does to pay more for the RJ feed.

Is that the purpose of the shift to the larger Embraers and CRJs? Instead of 3 flights a day to Lubbock on a E-145, only one on a E175 or even a mainline 737?

 

[Boris Badenov]

And that's true. There isn't enough of something to go around: applicants for airline pilot jobs.

Look, I know you're not dense. The article title doesn't say "Airline-Pilot-Applicant-Shortage", does it?

And I don't really have an agenda on airline pilot salaries. I don't fly 121, I probably never will, and if I do, it certainly won't be at the regional level. My agenda has more to do with precision and clarity in language.

BTW, FWIW, etc, I tend to agree with your analysis re: lowered frequency on larger airplanes. It's the only sane solution.

 

[SlumTodd_Millionaire]

Is that the purpose of the shift to the larger Embraers and CRJs? Instead of 3 flights a day to Lubbock on a E-145, only one on a E175 or even a mainline 737?

Oh yeah. And even the larger RJs now capped at the 78-seat level are pushing the limits of making sense financially. You really need a 90+ seat airplane for it to be profitable. At the 70-seat range, you're still in loss-leader territory. The 50-seaters are so deep into that territory that they're being turned into beer cans now.

 

[ScorpionStinger]

Oh yeah. And even the larger RJs now capped at the 78-seat level are pushing the limits of making sense financially. You really need a 90+ seat airplane for it to be profitable. At the 70-seat range, you're still in loss-leader territory. The 50-seaters are so deep into that territory that they're being turned into beer cans now.

Sorry dude, I need more clarity, who exactly is loosing money?

 

[SlumTodd_Millionaire]

Sorry dude, I need more clarity, who exactly is loosing money?

The majors are losing money on their RJ feed. They pay your airline $2,500 for a flight, and they make only $2,250 in revenue for it.

 

[mshunter]

The majors are losing money on their RJ feed. They pay your airline $2,500 for a flight, and they make only $2,250 in revenue for it.

Where did you get those number? Sometimes, you have to step over the dime to pick up the dollar. If you can't feed the passengers to the hub...

 

[SlumTodd_Millionaire]

Where did you get those number? Sometimes, you have to step over the dime to pick up the dollar. If you can't feed the passengers to the hub...

Those numbers are just examples. Not meant to be actual numbers.

I agree with your premise, but only to a point. The legacies have determined that that the dollar is no longer there to pick up. Instead, they've been stepping over a dime to pick up a nickel.

 

[mshunter]

Those numbers are just examples. Not meant to be actual numbers.

I agree with your premise, but only to a point. The legacies have determined that that the dollar is no longer there to pick up. Instead, they've been stepping over a dime to pick up a nickel.

I'd say more like stepping over the Benjiman to pick up the penny. I know they've made a ton of money recently, but it's all off of fee's. Extra bag fees, selling a damn $1.50 sandwich for $8.99. Head sets that cost $.15 from China for $2.00, charging $6.00 for a movie on that TINY screen in the back of a head rest.

 

[SlumTodd_Millionaire]

I don't really have a problem with making money on ancillary fees. If that's where the money is, then go for it. Barring a re-regulated market, there isn't much choice.

 

[ScorpionStinger]

I don't really have a problem with making money on ancillary fees. If that's where the money is, then go for it. Barring a re-regulated market, there isn't much choice.

But are those "Ancillary Fees" accounted for at the "Regional" level????? Is it not the regional feeder that carry's the bag? Is the regional/hub feeder not providing the service?

I get that the "Major" carrier is selling the ticket and making the huge revenue from ancillary fees. But that revenue service is also provided by the Regional Feeder.

That example you gave is missing "Ancillary Revenue" the regional feeder is providing by carrying bags (which offsets weight,fuel burn ground personnel, cost, etc)..

It's huge revenue not being factored in.

 

[SlumTodd_Millionaire]

I don't know whether they factor in that revenue or not. But I can tell you that they have no reason to not do so, because it is in management's best interest to use accurate numbers when making business decisions. Believe me, if it made more sense to outsource more flying, they would. It just doesn't make sense anymore.