Turbulence Ahead: The Coming Pilot Shortage and How It Came to Be

By John Scott Lewinski

There are few professions that command respect like that of an airline pilot. Maybe it’s the faux military uniform. Maybe it’s the clipped, modulated voice that asks you to fasten your seat belt, promising to rise above momentary turbulence. Maybe it’s because passengers want to have faith in the human being responsible for their lives from takeoff to touchdown.

The people I was speaking to at Proteus Air Services—a civilian flight school in Santa Monica, California—were just like you'd expect: level-headed and focused. As part of another writing assignment, I was waiting to try my nerves in the cockpit, but the reporter in me couldn't help but ask my instructors how they fell into teaching, as opposed to serving as commercial pilots.

My coach for the day was young and former military. His partner, who was holding down the fort back at the office, was a few years older and civilian-trained. The tales of how they both came to this small school at Santa Monica's tiny airport were the same: They loved flying, but they couldn’t make a living wage as airline pilots.

That had to be impossible. These two professional pilots couldn’t make more money flying passenger airliners than they were giving lessons in Cessnas?

My instructor was reluctant to go into detail in front of a reporter for fear that the airlines would get wind of his comments. “I’m not afraid that I’ll never be able to get a job as a pilot, because I’m not looking for one. I just got my real estate license,” he said. “I have friends who are still struggling to get into the business. I wouldn’t want something I say to hurt them.”

He went on: “The bottom line is, to work as a commercial pilot, I’d have to start out with a regional carrier for short hops. I’d end up making maybe $19 or $20 an hour. And I would only be paid for the time I spent in the seat with the cabin door closed. There’s a good chance the flight attendant would be making more money than me.”

I peppered him with questions, trying to figure out if he was just bitter because he was struggling to find a job. But I couldn’t shake him from that line. He insisted that aspiring pilots spend years, not to mention thousands of dollars, training for entry-level jobs with regional carriers, which offer hourly pay and minimal benefits. How could airline pilots face compensation levels that are merely in the neighborhood of a living wage?

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The nosedive in recent years of pilot salaries resulted from a mix of common economic woes. Neil Roghair, vice president of the Allied Pilots Association, said that these issues have been slowly mounting for a couple decades.

“When you factor in airline deregulation with the reduction in the number of carriers due to mergers, pilots face fewer opportunities as they enter the industry,” Roghair said. “Since there are still men and women out there who love to fly and want to pursue that as a career, you saw a labor surplus.”

After the Airline Deregulation Act passed in 1978, the government no longer controlled the industry's fares, scheduling, or staffing. While the FAA remained in charge of flight safety, the many airlines in the consumer market were now in charge of whom they hired and how much they paid them.

“The industry expanded quickly throughout the 1980s,” Roghair explained. “That growth slowed some in the 1990s, but 9/11 was obviously devastating to the airline industry. We faced a decade of bankruptcies and mergers throughout the industry. We went from a booming labor market to a shrinking employment pool relatively quickly.”

Todd Simoneau is one pilot who rode out many of those changes. He trained at Embry-Riddle Aeronautical University before going on to serve as a pilot with seven different airlines: Northeast Express, Precision Airlines, Atlantic, TWA, North American, American Eagle and American Airlines—most of which have been absorbed into a larger airline or no longer exist.

“I was furloughed by AA in 2003 and went to work for North American Airlines, based at JFK,” Simoneau said. “After a year there I was given the opportunity to fly at American Eagle. Six years later, I was finally recalled to AA. I am now very junior again at AA, after being hired at a major airline 17 years ago.”

Roghair said all pilots struggle at the beginning of their careers. Current FAA regulations require 1,500 hours of in-air training before a pilot can work for an airline. “It also costs pilots thousands of dollars to gain the education they need,” Roghair added. “New pilots can come into the industry in significant debt. When you consider the wages they’ll make if they enter the industry, more would-be pilots are simply choosing another path.”

“Unless they come from a wealthy family, the problem every new pilot has is debt,” Simoneau said. “The First Officers I flew with at American Eagle came there with over $200,000 in debt for a job that pays $22,914 per year, to start. It took me about 10 years to pay it back. If anything, the situation for new pilots is much worse.”

Simoneau clarifies that not all pilots are hurting: If you're a senior pilot flying sought-after coast-to-coast or international routes, you can make good money. Otherwise, for the estimated 18,000 pilots working for smaller, regional carriers, the job can bring financial struggles that passengers wouldn’t expect.

In other industries, employees facing unsatisfactory wages would strike, but pilots don’t have that option. While they might be able to organize a short-term walkout on or boycott of an individual airline, a long-term, industry-wide stoppage would almost certainly draw federal intervention. 

Edgar James, a labor attorney with James & Hoffman, specializes in the issues currently bedeviling the airline industry. Advocates like he and Roghair are limited by the fact that pilots can engage in collective bargaining with the airlines but are unable to strike by law.

“The result are negotiations [like those] the pilots had with American Eagle,” James said. “They asked the pilots to take concessions instead of offering any kind of increase. The pilots refused. You end up with pilots working without a collective bargaining agreement.”

But, for many pilots, the job has its appeal even so. As Simoneau puts it, "Flying is all I ever wanted to do. My father was a maintenance supervisor for TWA, and he would take me to work as a kid. I was just hooked.”

Of the regional and major airlines I contacted for comment, Emirates was the only one that agreed to respond. Alison Ward, the airline's vice president of human resources and recruitment, said that larger carriers like Emirates have no influence over the wages paid by regional carriers. Even the smaller airlines that partner with the majors to run short-hop flights set their own prices without direct interference from their bigger partners.

Ward pointed out that in order to make it easier for new pilots to enter the field without assuming such heavy educational debt, Emirates invested heavily in the construction of a flight academy in Dubai. The school will initially serve as the dedicated training center for Emirates pilots, but will eventually expand to include pilots from other carriers. Simoneau, however, indicated that Emirates's plan is a notable exception to the practices of other major airlines.

* * *

Emirates's efforts were launched in part to fend off a potential pilot shortage, something that James, the labor lawyer, also mentioned. "To delay a possible shortage, the FAA extended the retirement age from 60 to 65. They can’t extend any further," James explained.  On top of that, fewer and fewer younger pilots can afford to enter the industry. "The result is we’re already seeing flights cancelled because the airlines can't find pilots to crew them.”

Helane Becker, an airline-industry analyst at the financial advisory firm Cowen and Company, agrees. After Republic Airlines pilots voted down a new contract that didn't increase wages, she said, 27 routes had to be grounded. 

“Without a new pilot contract in place, we'd expect new business to be somewhat difficult to procure unless [Republic] lowered their return objectives,” Becker said. “The company is losing 30 pilots a month and has currently been able to recruit to offset that attrition but could run into operational issues during the peak summer travel season.”

Republic did not respond to requests for comment. However, at Emirates, Ward acknowledged the threat of the pilot shortage: “The looming shortage, as it has been called for years, has become more about the retirement of the Baby Boomer generation of pilots,” she said.

Ward added that Emirates is trying to protect its current schedule from shortages by improving their pilots' compensation. All Emirates pilots, Ward noted, receive medical benefits for them and their families, education allowances for their children, and even chauffeur service to and from work.

Improved compensation packages for pilots might result from any shortage that happens to arise. Both Roghair and James hope any potential staffing crises would sweeten the pot for the pilots they represent.

“It would obviously be much easier to negotiate higher pay for pilots if the airlines are looking at not being able to crew their flights,” Roghair said. “But how many flights are we going to see cancelled before we get to that point? How much will the consumer passengers suffer with fewer flight options when the shortage hits?”

But it's not necessarily the case that airlines will have to increase pilots' pay in the face of a shrinking labor pool. Consumer inconvenience is another potential outcome, as airlines could cut back service or terminate routes. 

Back at Proteus, as my car service arrived to run me back to LAX and the airline pilot who would fly me home, I took my flight instructor’s business card and promised to protect the identities of him and his airborne comrades. As we said our goodbyes, my instructor said one last thing. “I still love flying,” he said. “I’ll probably always be around it one way or another. But, for now, wish me luck. I’m trying to sell a house today.”

This article available online at:

http://www.theatlantic.com/business/archive/2014/07/turbulence-ahead-the-coming-pilot-shortage-and-how-it-came-to-be/374171/