It’s no secret that regional airlines are struggling to backfill outgoing pilots. As the baby-boomer generation of major airline pilots encroaches on the mandatory age-65 retirement point, experienced pilots from regional carriers are quickly being hired to fill their shoes. The result is a desperate need at the regional level to fill the void with a new generation of airline pilots – a void that is only getting wider. But can we expect the problem to spiral out of control, or is the airline industry evolving in a way that counteracts it?
The pipeline of new airline pilots appears to be drying up for many reasons – reasons ranging from the high cost of flight training versus the perceived career payoff, to the increased flight experience required as a result of new federal regulations. Either way, a shortage of pilots at regional airlines yields significant consequence on the major airlines they operate for. As the regionals reduce the amount of aircraft they can operate due to staffing shortfalls, their major airline counterparts ultimately lose valuable passenger feed. Throw irregular operational events such as snowstorms into the mix, and an already struggling operation is quickly crippled. Clearly change is needed before it’s too late.
Fortunately, the industry may be adapting to its struggles in a way that compliments the cyclical nature of the airline business. Present day industry trends that point to past practices appear to address the pilot shortage issue by default. If we briefly review a timeline of airline history, cycles of an abundance of airline brands followed by periods of industry consolidation become apparent. For example, in the 1980’s we saw People Express, New York Air, and Frontier Airlines all merge into Continental Airlines. In the same decade, PSA and Piedmont Airlines merged into US Air. Before we knew it, the legacy airline landscape was comprised of United, American, Delta, Northwest, US Airways, and Continental Airlines. Proving the cycle once again, recent merger activity has yielded only three remaining legacy U.S. airlines - American, United, and Delta.
The past 20 years has also seen a spawn of numerous regional airlines doing business as (DBA) the major airline counterpart whom they hold a contract with. By outsourcing their regional jet flying needs, major airlines have realized significant cost advantages by leveraging the competition between multiple regional carriers who underbid one another to win a proposed flying contract. To be competitively positioned, regional carriers maintain the lowest cost structure possible, most notably through extremely low employee compensation.
When the regional jet first surfaced in the late 1990’s, the economics of cheaper fuel allowed the skies to be littered with smaller, yet profitable 50-seat jet aircraft. The use of these jets allowed for increased frequency between city pairs with the same speed and similar range of larger aircraft that couldn’t support such a strategy in certain markets. Today however, higher fuel costs have drastically changed the viability of such a business model – a model that is now changing.
Coincidentally, in a time when these smaller jets aren’t economically viable (arguably they haven’t been for quite some time), the ability to find the pilots to fly them is also failing. The current industry response is a feverish replacement of outgoing 50-seaters with larger 76 -100 seat regional aircraft, however not on a one-for-one basis. What we’re seeing is an overall reduction in regional airline size as the result of a shrinking fleet. In fact, many of the larger regional aircraft are finding their way back onto major airline fleets as a result of pilot union/airline management negotiations. The result of this trend is a long-term view of overall smaller regional carriers that will ultimately require fewer pilots. This new model won’t develop overnight, rather over the course of the coming years, but one can see how the aforementioned pilot void may shrink.
How might these changes affect the paying passenger? I think the overall outlook for the customer is a positive one. For starters, as the retiring smaller aircraft are replaced with larger ones on a less than one-for-one basis, overall there will be less aircraft in the skies. This of course leads to alleviated airspace and airport congestion, which equals fewer delays. On the other hand, smaller aircraft allow for more frequent flights between city pairs - a plus for the flexibility needs of a business traveler. Larger regional aircraft may reduce that frequency but still allow for similar cumulative seating capacity, with the added bonus of a first class cabin. As an example, instead of five flights a day between cities on a 50-seater, perhaps three or four flights on a 76-seater will result. The overall passengers carried will be roughly the same – only on fewer available flights, but in more comfort.
The cycle of the ever-adapting airline industry tends to repair it’s own problems in many ways. There is certainly current-day proof that air service is being restricted due to the effect of a shrinking pilot supply, and it will likely get worse before it gets better. These are highly dynamic times in the airline business, and reverting back to what once was may indeed brighten the outlook.