US Pilot shortage twist

[Global_Global]

Now this is interesting. Normally the airlines in the US used chapter 11 to lower the salaries of their pilots. Now in a new twist a US regional files for bankruptcy as they cannot supply the major airlines they have contracts with the aircraft they have contracted due to pilot shortages.... :ok:

Republic Airways Files for Bankruptcy After Pilot Shortage - Bloomberg Business (http://www.bloomberg.com/news/articles/2016-02-25/republic-airways-files-for-bankruptcy-protection-in-new-york)

So lets hope that this positively impact the employment terms of the airlines in question :E

[CaptainProp]

They just found another "twist", someone to blame, something to justify the need to get out of financial commitments. This is all about their partially parked Embraer fleet and very little about pilot "shortage".

CP

[lomapaseo]

I'm not sure that "blame" is the basis of the story.

My read is that this is just plain simple balancing of costs in today's market. They stepped up to what they could afford in pilot pay and still get hirees and their source of income (from the big carriers like Delta) would not offset this.

They did seem to serve as a conduit of pilot experience in and out of their employed pilot lists :)

[er340790]

Supply & Demand, everyone...

Supply & Demand.

[Global_Global]

Fully agree and I think that besides the increasing "sign up bonuses" at the regionals they are finally addressing the pathetic start salaries. :ok:

[Superpilot]

Oh, how refreshing. Airlines finally realizing they can't run their business because the costs are too high rather than not enough demand from customers! Next step, get Joe Public to understand that if you want to fly 500 miles on a regional turboprop/jet you should expect to pay a minimum of $200. It's quicker than road transport or train, it's safer than driving, whoever decided it should also be cheaper than all of the above has just been proven wrong.

[Global_Global]

Interesting data: FAPA.aero | Pilot Hiring History - All Time (http://fapa.aero/hiringhistory.asp)
:8

[Zaphod Beblebrox]

Re: RAH files for Ch. 11


The Frankenstein Monster has returned to threaten its creators, the major airlines. Today's regional airline is a Frankenstein Monster. I cannot live on its own. I must have a host major to live. Today's current jet regional airline was created for one purpose; to transfer expensive pilot jobs, "scope" to lower cost units. I remember seeing the first RJ that Delta flew at Comair.

The majors were successful in their quest to lower wages and wreck working conditions and now they must bear the burden of fixing their creation. In a news article a few years ago, Gordon Bethune and Herb Kelleher both agreed that "you can make pizza so cheap no one will buy it". They were refereeing to the old Continental Airlines under the direction of Frank Lorenzo. That just about describes the present situation with regards to finding qualified pilots. If you lower the bar enough the market sends the signal, via low wages, that pilots are not needed, there is an oversupply hence the low pay. Now that there is a shortage the majors and their regional partners prevent the market from working properly. Where is the market signal of higher wages to attract the candidates they want? Bryan Bedford actually goes so far as to blame the pilot seniority system as the problem. They guys at the top make so much that the pilots at the bottom don't get anything.

The majors have created this profitability problem at their captive regional airlines and they must fix that problem. They need to pay more for "fee for departure" flying so that those carriers can pay what they need to to attract qualified candidates to the profession.

I have only two years left to go to retirement and when I started out flying I did not see major airline logos on Regional Airline Aircraft, with the exception of Allegheny Commuter which dates back to 1967. American Eagle was just being created. It was being created from stand alone airlines that could operate on their own and working business models that while supplying feed to the majors, allowed these carriers to handle their own scheduling and profitability. Ransom, Henson, Britt, Aspen, the original Air Wisconsin and many others operated independently.

Then came the code share craze and while it may have allowed for greater marketing co-ordination it also made regional airlines captives of their major partners. Their business plans were modified to suit the needs of the major. Then the majors started whip-sawing the regional airlines against each other to get the lowest cost feed. It is a situation of the majors making and they need to fix it.

Rather than passing all the profitability to the stockholders they need to take some of the unprecedented profitability they are currently experiencing and pass it along to their "fee for service" partners in the form of higher revenue so that those carriers can hire pilots at competitive rates.


Bryan Bedford, if you pay pilots well; they will come. Doug Parker, if you pay more to Bryan Bedford so he can hire the future pilots you will need later to properly support your major airline operation.




"If there is anything around here bigger than my ego I want it caught and shot at once." Z. Beblebrox

[GrandPrix]

It ain't a pilot shortage, it is a wage shortage
Bedford and his ilk need to have their careers outsourced to Rangoon.

[alexb757]

There has NEVER been a pilot shortage in the US....that is only smoke and mirrors. I should know after being "forced" to go overseas twice when I was made redundant/laid off.
And some airlines in those days would not even look at you if you had say, 3000 hours SIC and a 737 type rating unless you also had 1500 PIC Turbine. You can guess who those were.
So, sorry, I just don't buy talk like that, it's a deflection from other more important problems.
It's the road show people are saying that because they want to fill their books......I've heard that pilot shortage phrase for at least the past two decades and it always brings a smile to my face! ;)

[alexb757]

Couldn't agree with you more there, Zaphod Beblebrox!

You (they, the majors) reap what you sow and it looks like a very bad crop to me! No sympathy from me, sorry :=

[Greenlights]

pilot shortage...lol

never had, never will.

It is simple: the guys who run a business (airline) always prefer to run another new business (Luxury hotels...) than increasing pilots income.

[luigi1]

Many are right, not a shortage problem. Likely driven by low pay + the increased minimum time requirements placed by regionals (i think this was changed by law from 200 to 1500?) -- this alone probably accounts for most of it.

thinking econ 101: increasing requirements lowers supply in short run. If salaries sticky downwards, excess demand for pilots ("shortage"). In longer run, salaries should increase

[Metro man]

Some bottom feeder outfit got caught out as an increased demand for pilots meant it couldn't cope with a greater than expected churn rate and now decides to legally hide from its creditors.

There is no shortage of pilots wanting to work for Delta/United/American who will leave operators like this in the blink of an eye.

The majors expect you to stay until retirement, plan on a certain percentage losing their medicals and a few who will leave for other reasons.

Third level companies pay the minimum they think they can get away with in order to keep employee turnover down to a level they can cope with. Sometimes they get caught out, a bit like fuel hedging.

Passengers who expect to fly cross country for less than the cab fare to the airport may be in for a surprise.

[Airbubba]

Interesting data: FAPA.aero | Pilot Hiring History - All Time

I remember reading the FAPA newsletters in the 1970's predicting 'The Great Pilot Shortage' as the WWII aviators retired.

And George Nolly's classic The Road to Victory: My First Airline Interview:

The Road to Victory: My First Airline Interview - AVweb Features Article (http://www.avweb.com/news/careers/182742-1.html)

Captain Nolly's bitter screed posted at the other end of his United career was not as upbeat:

http://www.pprune.org/rumours-news/193540-letter-united.html#post2139994

[bafanguy]

Airbubba,

Had to laugh a bit (dark humor) at the contrast between Nolly's interview experience...and his "exit" experience.

A lot of us can write similar stories. 35 years and several CEOs can really create some perspective. The youngsters should be listening intently.

I try not to think about it too much. I NEVER trusted airline management (and planned accordingly) even though I worked for a good one a time or two in my 35 years in 121.

That said, if one wants to fly an airplane for a living, a career at a US legacy is still hard to beat in the Big Picture of his life...as long as he keeps the proper "perspective"...and plans accordingly. ;-)

P.S. Forgot to add an important point re the Big Picture: your lack of trust should encompass the union taking your dues and assessments while allegedly devoting itself to your well being. Just part of the story and must be factored in.

[Airbubba]

That said, if one wants to fly an airplane for a living, a career at a US legacy is still hard to beat in the Big Picture of his life...as long as he keeps the proper "perspective"...and plans accordingly. ;-)


Nearly three decades ago a wise captain gave me this career advice:

'Airline flying is a great hobby but don't ever rely on it for an income or retirement.'

The captain was Perry Jones.

See: The First Black Pilot For Pan Am Airlines (http://avstop.com/history/blackairlines/marvinjones.htm)

[bafanguy]

Interesting article about Republic's "pilot shortage":

"But the struggles that pushed Frontier into bankruptcy continued under Republic's ownership, with the brand quickly becoming a drain on its parent's resources. Making matters worse, the addition of Frontier's unions greatly complicated already rocky relations between Republic and its existing labor groups, leading to increasing tensions that eventually made it harder for Republic to recruit pilots to its regional service."

Self-Inflicted Turbulence Forced Republic's (RJET) Bankruptcy Descent - TheStreet (http://www.thestreet.com/story/13477173/1/self-inflicted-turbulence-forced-republic-s-bankruptcy-descent.html?puc=yahoo&cm_ven=YAHOO)