Mesa Air Group CEO Jonathan Ornstein blasted U.S. requirements that pilots have 1,500 of flight experience before they can take the helm of a commercial aircraft and argued for lawmakers to reduce the number of hours on Thursday. The regional blames the national pilot shortage for why it is planning to operate 5-10 percent fewer flights this year than previously planned.
“It seems crazy that a 300-hour [first officer] can land a Lufthansa A350 into JFK flying over Queens, and a U.S. pilot can’t do the same thing,” Ornstein said, referring to the number of hours European pilots must have to be certified. “No other country in the world has adopted this [rule], not a single one.”
Ornstein called on lawmakers to rethink the 1,500-rule, put in place in the wake of the Colgan Air crash in 2009. “There is not a shred of evidence that says that a 1,500-hour pilot is safer than a 300-hour pilot with intense training,” he said. ” I think it’s important that some of the politicians start to act and take this up, because if they don’t, they’re putting the industry in jeopardy.” Smaller cities already are losing air service as regionals and mainline carriers are trimming their schedules in response to the pilot shortage, he said, adding that more smaller communities will lose connections to the national air transport system unless the law is changed.
American Airlines and United Airlines, both of which Mesa flies for, have trimmed schedules and routes to mitigate the shortage. Both carriers expect the fallout to carry on through this year and possibly into 2023.
Echoing SkyWest CEO Chip Childs, Ornstein said the regional industry did not factor in massive attrition at mainline carriers during the pandemic in their hiring plans. Starting in 2020, hundreds of mainline pilots took buyouts or early-retirement packages as airlines downsized in response to the pandemic. This, coupled with retirements due to age requirements, led to the mainline carriers scrambling for pilots by hiring them from the regionals, Mesa said.
And the Omicron variant didn’t help matters. At times in December and early January, almost a quarter of Mesa’s staff was out sick with the disease, hamstringing the regional’s ability to operate its schedule. In a normal December, only about 5 percent of Mesa’s staff report out sick. The operational impact cost Mesa almost $10 million in the quarter.
“While attrition impacted us this last quarter, please do not underestimate the impact of Covid,” Ornstein said. “When you’re dealing with 23 percent, 24 percent, 25 percent absence rates — I mean I don’t care what the attrition is — if you have no attrition, you would not be able to cover that on a day-to-day basis.” Mesa’s sick rate fell back to historic norms in the third week of January.
Mesa said its pilot-hiring pipeline is “full.” Unlike SkyWest, where captains are leaving for mainline carriers, Mesa is seeing more first officers quit. Training for first officers takes less time than for captains, giving Mesa confidence its pilot crunch will ease — but not go away entirely — next year. The company is hiring more instructors and booking more simulator time to train new hires.
Mesa has another card to play that its fellow regionals do not: Its cargo operation for DHL. Mesa is the only regional to offer mainline-jet experience on its Boeing 737-400Fs, Ornstein noted. This provides a career path for not only Mesa’s current pilots but makes the company a more attractive proposition for applicants, he said.
The cargo operation is growing. It will add its third 737-400F this month. Last year was the first full year for the cargo operation and Mesa’s proof of concept for the subsidiary, and Ornstein said the company has met DHL’s expectations. However, when the carrier launched its 737 operation in 2020, it believed it could have as many as 8-10 aircraft in its fleet in a year to 18 months. Ornstein declined to predict when Mesa may add more 737s but said only that Mesa is committed to expanding the fleet.
Besides attrition and Omicron, it was tough quarter for the company. It incurred $59 million in maintenance costs in the quarter. The bulk of this was maintenance work deferred from the beginning of the pandemic, and the company predicts these costs will abate over the next quarter. The December quarter also was the first not to benefit from federal payroll support, which in the fiscal first quarter of 2020 totaled $11.3 million.
Mesa reported a net loss of $14.3 million in its fiscal first quarter that ended on December 31, 2021, compared with a $14 million profit in the same period a year prior. Revenues of $148 million were down $2.6 million from 2020.
“Obviously, this has been a very tough quarter for Mesa,” Ornstein said.