Massive Pilot Shortage Coming | What Does This Mean for Your Quality of Life & Pay?
- Airlines were struggling to hire pilots fast enough before the pandemic struck.
- A huge number of pilots will turn 65 during the 2020s.
- That means the industry needs to recruit lots of new pilots even before making any allowances for growth.
- A 2017 report by analysts at Cowen estimated that mandatory pilot retirements at the top five U.S. airlines combined would surge from 1,266 in 2017 to 2,397 by 2021, finally peaking at 2,641 in 2025.
- Including other airlines, U.S. mandatory pilot retirements could exceed 3,000 annually in the mid-2020s. Moreover, the pace of retirements will remain elevated into the 2030s.
- The pilot shortage won't hit all airlines equally. Regional airlines pay much less than mainline carriers. That makes it harder for them to recruit new pilots, while their existing pilot ranks are routinely poached by higher-paying major airlines. A pilot crunch at regional airlines would, in turn, hit network carriers that rely heavily on regional partners to serve smaller communities.
- Thus, Southwest Airlines has nothing to worry about. A fourth-year first officer at Southwest is already making $150 per hour, far above what the most experienced regional airline captains earn. That ensures that the low-fare airline will get plenty of applications to fill available pilot positions.
- Delta Air Lines is also comparatively immune. Prior to the pandemic, its regional fleet numbered 442 aircraft, including 117 50-seat jets that will be fully retired by the end of 2023. The 325 regional jets that will remain in its fleet by 2024 are all two-class aircraft that generate enough revenue to cover higher wages for regional airline pilots.
- By contrast, United Airlines ended 2019 with 326 50-seat jets in its fleet. As the pilot shortage worsens, it will become increasingly difficult to operate these aircraft profitably. However, whereas Delta has had great success funneling traffic from smaller markets through its megahub in Atlanta on small mainline jets, United's hubs tend to be smaller, making such a strategy harder to pull off. As a result, United Airlines could struggle to adapt if its low-paying regional airline affiliates run short on pilots.
- American Airlines has a different challenge. On the one hand, two-class jets represent the bulk of its regional flying. On the other hand, it has a lot of them: over 400 at the end of 2020. So while its regional operations may be more sustainable than United's current setup, American Airlines has the biggest exposure to regional flying -- and, by extension, the looming pilot shortage -- of any airline.
The Motley Fool
Southwest Doesn't Have Enough Planes | Hints At More International Flying
KEY POINTS:
- Southwest Airlines CEO Gary Kelly doesn't think his airline has enough planes to continue its current business model in 2022 and 2023.
- New Boeing 737 Max aircraft are scheduled to enter the fleet as part of a modernization program.
- Purchasing used aircraft would be costly and run counter to Southwest's long-term fleet plans.
- Southwest is already one of the top four largest US airlines by fleet size with nearly 700 aircraft in storage, according to Cirium data, and has around 80 more aircraft stored or parked.
- "With the Boeing 737, just looking at North and South America, we have all kinds of growth opportunities," Kelly said. Southwest is yet to serve Canada, for example, and every South American country is accessible from Southwest's Fort Lauderdale, Florida base with the 737 Max 7 and its 3,850-nautical mile range.
- Inexpensive pre-owned Boeing 737s aren't difficult to come by but Southwest can't just go shopping for new planes. The multi-million-dollar investment would come with a time commitment that would run counter to Southwest's future fleet plans.
Business Insider
Blockbuster United Airlines Aircraft Order Confirmed
KEY POINTS:
- United Adds 270 Boeing and Airbus Aircraft to Fleet, Largest Order in Airline's History and Biggest by a Single Carrier in a Decade
- The 'United Next' plan will have a transformational effect on the customer experience and is expected to increase the total number of available seats per domestic departure by almost 30%, significantly lower carbon emissions per seat and create tens of thousands of quality, unionized jobs by 2026, all efforts that will have a positive, ripple effect across the broader U.S. economy.
- When combined with the current order book, United expects to introduce more than 500 new, narrow-body aircraft: 40 in 2022, 138 in 2023 and as many as 350 in 2024 and beyond. That means in 2023 alone, United's fleet will, on average, add about one new narrow-body aircraft every three days.
- What's more, United intends to upgrade 100% of its mainline, narrow-body fleet to these standards by 2025, an extraordinary retrofit project that, when combined with the number of new aircraft joining the fleet, means United will deliver its state-of-the-art inflight experience to tens of millions of customers at an unprecedented pace.
United Hub
FedEx Taps Boeing for 20 More 767 Freighters
KEY POINTS:
- Chief Operating Officer Raj Subramaniam said during Thursday’s briefing on the company’s quarterly results that FedEx is exercising options to purchase 20 additional 767 freighters from Boeing to modernize its fleet and improve service amid strong shipping demand. Ten aircraft are scheduled for delivery in the 2024-2025 time frame, and 10 more the following year.
- FedEx’s parcel volume for the fiscal year ended May 31 was very strong across the enterprise. FedEx Express revenue grew 18.5% to $42 billion, with operating income nearly tripling to $2.8 billion and operating margin up 6.7%.
- FedEx grew e-commerce parcel volume by more than $1 billion year-over-year out of Asia and Europe and was able to price international shipments competitively, making it “quite sticky,” said Chief Commercial Office Brie Carere.
- “We expect air cargo capacity to remain constrained through at least the first half of calendar year ’22. Recovery will be slow, potentially episodic, and a full recovery is not anticipated until 2024,” Carere said. “We believe favorable pricing internationally should continue through fiscal year 2022. We will continue to manage demand internationally, using yield management and continuation of peak surcharges, especially on trans-Pacific and trans-Atlantic lanes. We are seeing a very good capture rate on these surcharges.”
Freight Waves
Weekly TSA Numbers
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