Pilot Shortage Prompts Deep Regional Cuts

Edward Russell

March 14th, 2022 at 12:01 AM EDT

Small U.S. airports stood to lose air service as the regional industry adapted to fewer pilots and larger planes. The former issue has finally become a reality with the Covid-19 pandemic proving the catalyst for the long warned of pilot shortage — and a culling of small airports from the national air transportation network.

SkyWest Airlines notified the U.S. Transportation Department (DOT) last week that it will end service to 29 cities served under the agency’s Essential Air Service (EAS) subsidy program within 90 days. The reason? Pilots.

But the move should not come as a surprise to anyone. William Swelbar, chief industry analyst at The Swelbar-Zhong Consultancy who has followed changes in U.S. air service for more than a decade, warned just such a culling of air service was imminent in a report earlier in March. Regional airlines faced a choice as their pilot ranks shrank: Either break their agreements with major airlines — the companies that keep them in business — or break their government EAS contracts. SkyWest chose the latter.

“The shortage of commercial pilots in 2022 that ensures more non-hub and Essential Air Service airports will have less scheduled air service going forward,” he wrote in the report co-authored with Boyd Group International CEO Michael Boyd.

Now, SkyWest’s notice of intent is not the end of the line for the 29 affected EAS cities. DOT is likely to object and bar the regional from ending flights until it can find a replacement operator. But, in all of our discussions with industry leaders, the pilot shortage is real across the industry, from regional airlines to general aviation operators.  

Most blame the Federal Aviation Administration’s requirement that new commercial airline pilots have 1,500 hours in the cockpit before they can be certified for the shortage. The rule was implemented in 2013 in response to the fatal 2009 crash of a Colgan Air De Havilland Dash 8-400. But the pandemic exacerbated matters, when thousands of pilots left major airlines, and the production of new pilots slowed to a trickle. An excess of available crew members in 2020 quickly turned into the shortage the industry is experiencing now. A recent Oliver Wyman report estimated the shortfall could hit 12,000 pilots next year.

Both Republic Airways and SkyWest, the two largest regionals in the U.S., expect the situation to continue into 2023. That’s counter to the less dire public forecasts from executives at American Airlines and Delta Air Lines that the crunch would ease by this summer.

“If scarcity of labor was not an issue, we would be 20 percent higher,” Republic Chief Financial Officer Joseph Allman said referring to block hours at the ISTAT Americas conference last week. “We’d be above pre-pandemic levels.”

Republic, which flies for American, Delta, and United Airlines, anticipates needing to reduce block hours to roughly 9 hours per aircraft in the second half of 2022 from around 9.5 hours today due to pilots, said Allman. And he does not expect the shortage to peak until the second or third quarters of next year.

American and Delta have both reduced regional frequencies, and selectively suspended routes, to mitigate the staffing situation in the first half. United has gone further by exiting a number of smaller markets and cancelling dozens of routes indefinitely as a result of the shortage. And Alaska Airlines has shuffled some of its Embraer E175 deliveries to address the pilot situation.

Of course there is an easy answer to the problem: Produce more pilots. But that is easier said than done. Under the best case scenario where a trainee is racking up hours full time, programs like ATP Flight School claim it takes at least seven months before that person could start a job at an airline. The process can take years on a part-time basis. And training full time is not cheap; estimates put the cost at between $65,000 to upwards of $100,000 depending on access to financial aid, and that excludes living expenses. Alaska and United have both set up their own flight schools to increase the supply of pilots.

And in response to criticisms over low pay at regional airlines, many have been boosting wages and offering lucrative incentives to new hires. Pilots at United Express operator CommutAir recently ratified a new contract with raises of up to 32 percent for first officers. And American offers hiring bonuses and incentives totaling as much as $182,500 for pilots who join and stay with its subsidiary Envoy.

One question that SkyWest’s notice to terminate raises is whether air service is the best way to connect smaller communities to hub airports. In his report, Swelbar noted that 260 of the 302 EAS airports in the Lower 48 states are within 180 miles of a larger airport. Travelers in cities like Muskegon, Mich., and Pueblo, Colo., can drive to nearby Grand Rapids and Colorado Springs, respectively, in less than an hour.

Services like Landline, which operates buses as “flights” under partnerships with Sun Country Airlines and United, could help fill the gap. The company already connects Eau Claire, Wis. — one of the EAS cities SkyWest is exiting — to the Minneapolis-St. Paul airport as part of its on-demand select service for Sun Country. If allowed by the DOT, EAS funds could be used to convert that to regularly schedule “flights” operated with a bus.

“There’s an open question what’s going to happen 30 to 200 miles from a hub — who is going to provide that lift,” Landline co-founder and CEO David Sunde said in January. He added that, based on the company’s experience, it has found that travelers increasingly “don’t care if it’s a bus or a plane.”

Pueblo Director of Aviation Greg Pedroza said the airport is working with the DOT to find a “suitable replacement” for SkyWest. He did not respond to inquiries on whether it would deem bus service like what Landline already operates for United at Denver International Airport would be considered suitable.

The other 27 cities SkyWest intends to drop are: Alamosa, Colo.; Cape Girardeau, Fort Leonard Wood, and Joplin, Mo.; Clarksburg and Lewisburg, W.V.; Decatur, Ill.; Devils Lake and Jamestown, N.D.; Dodge City, Hays, Liberal, and Salina, Kan.; Fort Dodge, Mason City, and Sioux City, Iowa; Hattiesburg and Meridian, Miss.; Houghton and Muskegon, Mich.; Johnstown, Pa.; Kearney, North Platte, and Scottsbluff, Neb.; Paducah, Ky.; Shenandoah Valley, Va.; and Victoria, Texas. All are served at the airline’s own risk under the United Express brand.

Only one of the cities, Clarksburg, has any other air service, according to Cirium schedules. Allegiant Air connects the city to Orlando Sanford and St. Petersburg in Florida.

Edward Russell

Edward Russell

March 14th, 2022 at 12:01 AM EDT