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‘Pilot shortage’ tied to low wages, GAO report finds

WASHINGTON – Despite an outcry over a much-reported “pilot shortage” that airlines blame for service cuts around the country, there appears to be an ample supply of aviators to fill the nation’s cockpits – although they may not be willing to work for the low wages the regional airlines are offering.

That’s the key takeaway from a Government Accountability Office report on the pilot workforce that the investigative agency is set to release this morning.

A source provided The Buffalo News with a draft copy of the report on Thursday, and most notably, it showed 109,465 pilots nationwide who have the qualifications to serve as a pilot or co-pilot on a commercial airline – and only 66,000 jobs for those pilots in 2012.

And there are another 105,000 who might be qualified as soon as they log the 1,500 hours of flight time they need to become commercial airline pilots under a new rule that Congress mandated after the crash of Continental Connection Flight 3407 in Clarence five years ago.

“Data indicate that a large pool of qualified pilots exists relative to the projected demand, but whether such pilots are willing or available to work at wages being offered is unknown,” the GAO said.

Pilot salaries nationwide fell 9.5 percent between 2000 and 2012, the report noted.

In a survey of 14 regional airlines – the smaller operations that operate under contract to big-name carriers – the average starting salary for pilots turned out to be $24 an hour. Most regional pilots begin by working 900 hours a year and can work no more than 1,000 hours, meaning their average annual starting salary is between $21,600 and $24,000.

Would-be pilots are noticing, the GAO said.

“Pilot schools that GAO interviewed reported fewer students entering their programs resulting from concerns over the high costs of education and low entry-level pay at regional airlines,” the report said.

In trying to determine whether a pilot shortage actually exists, the GAO said it looked at the three factors usually associated with labor shortfalls: the unemployment rate in the profession, employment growth and wages.

The unemployment rate among pilots averaged 2.7 percent between 2000 and 2012 – a historically low figure that would indicate that there’s a pilot shortage, the GAO said.

But the other two factors pointed in the opposite direction. Pilot employment actually fell during those 12 years, while wages were falling too.

Adding it all up, the GAO said: “No single measure can provide definitive evidence as to whether a labor shortage exists. Rather, these data can indicate the extent to which employers may have difficulty attracting people at the current wage rate.”

That conclusion is sure to enliven a growing debate about recent cutbacks in service in the regional airline industry.

Most notably, United announced last month that it is cutting service out of its Cleveland hub by about 60 percent, blaming losses on those routes as well as the fact that “several of our regional partners are beginning to have difficulty flying their schedules due to reduced new pilot availability.”

On the local level, Silver Airlines announced that it is ending its service out of Jamestown and Bradford, Pa., by May 15.

Airlines have blamed those service cuts on a new rule that the Federal Aviation Administration implemented last August that requires first officers as well as pilots to have the same Air Transport Pilot license – and the 1,500 hours of flight time it requires. Airlines previously were able to hire first officers with as little as 250 hours of flying experience.

The Families of Continental Flight 3407 insisted on that higher experience requirement as they pushed Congress in 2010 to pass a series of aviation safety improvements in response to the crash that claimed the lives of 50 of their loved ones. Federal investigators blamed the crash of that regional plane on pilot error, so the families pushed for – and won – more stringent rules on pilot training and rest as well as experience.

But the GAO report indicates that the 1,500-hour requirement may be making a career as a pilot even more unappealing. That’s because the new rule will force beginning pilots to get more experience at a low-wage job as a flight instructor or small-plane pilot – towing banners, for example – before setting off on a low-wage starting job at a regional airline.

“Therefore, individuals interested in an airline pilot career would likely expect several more years at the lower end of the pay scale than had been the case in the past,” the report said.

While focusing on low wages, the report also made clear that the regional airlines are indeed suffering consequences from the 1,500-hour requirement. Five regional airlines that government investigators contacted said they had already curtailed service because they did not have enough pilots, and the GAO said that could just be the start.

“A continued shortage of pilots for these airlines could mean additional curtailment of services, and thus far, it is smaller communities that are experiencing reduced service, and over a longer term may result in a contraction of the industry,” the report said.

While acknowledging the struggles that regional airlines are facing, the report noted that the major airlines – where the most experienced pilots can earn more than $200,000 a year – are not facing the same hiring troubles.

“According to the representatives of the mainline airlines we spoke with, they are not currently experiencing any difficulty in attracting qualified and desirable candidates,” the GAO said. “These representatives generally credited higher pay and benefits, better retirement options, and more flexible work schedules than what regional airlines typically offer.”

The solution to the problem faced by the regional airlines, of course, would be higher pilot wages – but GAO indicates that it may be difficult for regionals to offer higher wages because of the contracts they are locked into with the major carriers.

“Since regional airlines generally provide service under capacity purchase agreements with mainline airlines on a contractual basis, regional airlines’ ability to increase wages would likely be limited by their ability to increase revenue (i.e., increasing passenger fares),” the GAO said.

Two of the regional airlines studied in the report are offering $5,000 signing bonuses to new pilots, and one is offering a $10,000 tuition reimbursement. But the GAO said the regional airlines appear to be resisting the traditional method of attracting new employees in a tight labor market.

“Economic literature … indicates that increasing wages is an obvious approach to increasing the number of workers willing to work in a particular occupation,” the report said. “However, 11 of the regional airlines with whom we spoke had not increased wages to attract better-qualified applicants.”