Unprecedented pilot salaries at risk: Is the golden era already over? JetBlue cockpit crew believes so
Pilots have received record salaries in new contracts at major airlines, despite having to retire too many at the height of the Covid pandemic without hiring new pilots. Air travel was recovering, and hiring new pilots was time-consuming and expensive due to government regulations lobbied for by the major pilots’ union ALPA. The tide may soon turn.
- After the Colgan Air plane crash in 2009, ALPA succeeded in persuading Congress to pass significantly more time-consuming and costly training regulations.
- This is known as the 1,500-hour rule – the required flight time for pilots of a Part 121 aircraft carrier – although the pilots of the Colgan Air flight had more than that time.
- These are not structured training sessions. Anything goes – it is mostly open air takeoffs and landings, performed repeatedly from the same airports, rather than replicating the experience of commercial flights, although even time in a hot air balloon counts (the hot air balloon may even be tethered).
- At the same time, new rules have been introduced to deal with fatigue, which may be helpful and have actually addressed the problems encountered in the Colgan Air crash.
When American Airlines stopped hiring pilots in June, it joined Delta, United and Southwest, all of which had slowed or stopped hiring pilots. That took the pressure off regional airlines where the pilot shortage was most severe — major airlines could hire pilots at top wages but poached them to smaller airlines.
But now airlines have too much capacity, as one after another announced at their earnings calls. All of them grew faster than passenger demand, despite the absence of a recession, and without delivering any new planes at all. Boeing’s problems and inability to deliver planes have been surprisingly kind to airlines, whose profit margins have come under pressure from competition.
Low-cost carriers like Spirit and Frontier in particular are struggling, in part because rising wages have left them less cheap since the pandemic. United CEO Scott Kirby even tells a story about Spirit failing to make it after the Biden administration blocked its lifeline of a JetBlue takeover.
Without another pilot shortage, pilot salaries will not increase any further. Will they decrease? Enilria reports that many JetBlue pilots share this view in light of the airline’s problems. On message boards, they said:
• “(Wage) reductions are coming”
• “(Concessions) are inevitable”
• “It’s just a matter of time; days…months”
• “a bankruptcy judge will do it (if we don’t)”
• “hold back on major financial steps”
JetBlue has an open pilot contract and is struggling compared to others in the industry. They are unable to raise costs. But it is not just JetBlue that is trying to keep salaries low.
In pilot forums at other airlines, including American Airlines, there is discussion about airlines more strictly enforcing minor rules that would have previously given employees a free pass or a mere reprimand. Experienced pilots in particular must follow airline rules to the letter, because removing them from the payroll has the greatest benefit to the bottom line, since they are the highest paid.
Sun Country reported that a single pilot earned a maximum of $750,000, while at major airlines, salaries of over $500,000 are common.
But an economic downturn could accelerate the decline in demand. And in the future, the need for pilots could halve as AI improves and AI copilots become safer than human ones. Then the union’s demand for two pilots in each cockpit (it used to be three and four) will be anachronistic – a fist-punch against the tide of safety. In the long run, it won’t be such a lucrative career.
However, near-term risks are the same reason it may make sense to take a chance on deals now, especially if the economic situation changes and some airlines’ balance sheets weaken. For example, while American Airlines’ flight attendants’ union has probably achieved the greatest economic benefit possible with its new tentative agreement, there is a real argument that the union has set the wrong priorities for its members. However, rejecting a contract could put it in a position of having to renegotiate in a less favorable environment. American Airlines does not expect to make any money this quarter.
American’s mechanics ratified a new record 5-year contract right at the start of the pandemic. A few months later, they would not have gotten the same deal in negotiations, and the terms for the next one might not be as favorable.
