Many regionals are slowing their growth as they compete for pilots against domestic and foreign majors
It is a small world for regional airlines, beset with similar problems. They badly need pilots in a time of continued resurgence by their larger peers, the major carriers, who are themselves hiring cockpit crew and doing it with greater ease than the regionals. Pilot retention, hiring and training costs are eating away at the profit margins that for many regionals were long guaranteed. At the same time, higher fuel costs are hurting.
The crunch has even forced some regionals to slow their growth. At Pinnacle, which flies for Northwest Airlines and others, the problems in filling cockpit seats led to a reduction in flying. That in turn forced Pinnacle to make a $1.3 million payment to Northwest owed under terms of its contract. At Republic, a holding company for several regionals that fly for multiple carriers, management slowed growth after its attrition rate reached 20% early this year.
Hiring bonus
Like many regionals, Republic is offering one-time hiring bonuses to new pilots. The pilots are required to sign a two-year commitment that protects the company's training costs of as much as $15,000 per hire. One major regional, AMR's American Eagle, has even gone so far as to guarantee new hires their choice of home base or domicile, removing the uncertainty of a possible forced family move.
Complicating the hiring squeeze, far fewer furloughed pilots than expected chose to go back to their jobs at the major carriers, while the rapidly growing fractionals and very light jet sectors of corporate aviation are also hiring, according to Kit Darby, chief executive of pilot career advisory service AIR Inc. "The candle is burning from both ends, and then the overseas carriers are also hiring it's a perfect storm," says Darby.
In the Asia-Pacific, the regional pilot shortage is real, and Australia's REX has said it faces a crisis. In Europe, Brussels Airlines is suffering "serious" attrition rates relating to its regional jet fleet, while Swiss European Air Lines has removed four regional jets from its fleet in response to the shortage of pilots. The International Federation of Airline Pilots' Associations says the situation is symptomatic of a global workforce dilemma.
Hiring by major Asian carriers such as Cathay Pacific is drawing pilots worldwide. Darby says Cathay Pacific and others could hire several thousand pilots in the next years. This demand is driving another trend in the USA: increased militancy and unionising. Pilots realise they're in demand, and this bargaining power has encouraged union drives at large regionals. Organising pilots at regionals has become a priority for the Air Line Pilots Association, which has hired a union militant, former local leader Tom Wychor of Mesaba Airlines, to mount a national drive.
As these pressures increase, regional managers continue to look for new business models, new sources of revenue and new ways of flying. The most closely watched experiment is underway at ExpressJet, the Houston-based regional that began independent branded flying in May. Another experiment that has drawn much attention is Mesa Air Group's foray into China, which began in October. But the jury is still out on both of these.
Turboprop revival
In the USA, the turboprop is enjoying something of a revival as regional carriers seek to avoid high fuel costs. Turboprops have replaced regional jets on some routes at Alaska's Horizon unit, and all eyes will be on Frontier's soon-to-be-launched turboprop unit, Lynx.
But regionals worry that pressures from the majors could force them out of key airports. Luxair, for instance, faces pressure at London Heathrow while US regionals fear that congestion concerns may limit access to key airports such as New York LaGuardia.
Source: Airline Business
