Kathryn Creedy
2/8/2016
This series began by suggesting the Colgan families were blocking much-needed pilot training reform. Although observations over the years and recounted in these pages, made the case for such a conclusion, feedback from readers indicate the problem is deeper. Sources suggest the executive branch does not want to rile the powerful senator from New York, Chuck Schumer. Of course, it was Schumer who dragged out the Colgan families yet again last Monday to protest supposed efforts to change the regulations as reported in Part I.
For years, many in the industry have wondered why the National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA) have not been more proactive in reacting to the signs building the case for reforming pilot requirements and training. Parts I and II proved to be the catalyst for providing a clue for why they remain on the sidelines.
Of course, the puzzle pieces come together when considering how important unions are to the democratic party. Apparently whether or not it will happen is up to Schumer. Efforts to reach Schumer’s office were unsuccessful over the weekend.
Race To The Bottom – Unions
After Colgan Flight 3407 went down in Buffalo, most people were shocked to learn that new-hire pilots could make more flipping burgers than they could as first officers.
There is no argument that regional pilots should be paid more and progress is slowly leading to historic contracts that have put first officer pay at large regional airlines around $50,000 in the past year as illustrated by the following chart. Still, small regionals are struggling with salaries just under $29,000 per year.
“Pay is an issue,” Bill Voss, former president of the Flight Safety Foundation told Forbes. “But the regulations created a new problem and creating a new problem is not a way to solve the pay issue.”
What is little understood is the role of unions in low regional pilot pay. Part II explained majors racing to the bottom with their regional contracts. This article will explain the race to the bottom by unions.
“Unions negotiated those below-par regional pilot contracts in the first place,” said InterVistas Executive Vice President William Swelbar, who, as Research Engineer at MIT’s International Center for Air Transportation, has studied the issue for years. “This is not just regionals unable or unwilling to pay more. Unions have whipsawed regional pilots. The Air Line Pilots Association (ALPA) talks about creating a level playing field without acknowledging its own role in determining pay and benefits at the regional level. Low labor rates at regionals cross-subsidize the higher rates paid pilots at major airlines. The economics of the regional labor market are distorted as a result.”
Perhaps the best illustration of unions’ role in regional pilot pay is American Airlines. Pilots at American’s regional Envoy rejected a tentative contract last year, which called for pay freezes. Meanwhile, mainline pilot contracts gave pilots an immediate 23% raise plus a 3% annual increase.
ALPA counters it had little choice in ratifying the below-par contracts. It notes pilots are not part of capacity purchase agreement (CPA) negotiations despite the fact they have to live with the results. Union interests, said ALPA, lie in keeping the airline alive and pilots employed.
Airline Pilot Career Consultant Kit Darby explained another factor. “For some pilots rapid promotion is more important than high pay if it gets them hired sooner at the majors. That is where the real money is. Recent regional pilot contracts raised pay 50% in a year, establishing a new standard. Pay increases are happening very fast but it takes four to six years, sometimes even more to train a pilot.”
Swelbar points out that while the ALPA wants dues from its regional members, it hasn’t done much to move the needle in raising pay. Flightpath Economics Partner Dan Akins agrees noting ALPA has done little to open regional contracts early.
Yes, regional pay is rising as the result of the pilot shortage but this article will discuss the costs to union members, prospective members and the safety of the industry. The question is whether there might have been other ways to achieve the same end without the negative human and safety consequences. After all, regionals have been pushing for increased pilot pay since before Colgan and have been stymied by changes to major carrier CPA rates as reported in Part I.
Akins suggests there is something more sinister at play. “I really think, in the end, unions just want to kill the regional industry,” he said. And, he may be right as illustrated by mainline pilot contracts calling for airlines to shift flying from regionals to mainlines as explained in this Forbes story.
“Unions have hated regionals since the 1980s when outsourcing increased exponentially,” Akins continued. “Major airline pilots have been saying for years that three 50-seat flights could be replaced by one narrow-body aircraft. But that just illustrates how little they know about the network dynamics of a hub. To be successful, hubs need to have feed from as many markets as possible and large narrow-body aircraft do not have the economics to serve regional cities. Loss of that network destroys the economics of the hub. Eliminating that will have a profound impact on mainline pilots.”
But the importance of feed may be declining, according to Cowen Managing Director Helane Becker. “We see service from smaller airports shrinking,” she told Forbes. “We believe any city within a two-hour or possibly three-hour drive to a medium-sized airport will be at risk of losing service. Legacies still don’t want to lose markets to their competitors, so by doing the flying themselves they can maintain quality control.”
However, that means there will be more community abandonments and passengers will have to drive up to three hours to access airline service. Airport directors are quick to say that much of this windshield time is not on wide, clear interstates but narrow, winding roads across mountains such as in West Virginia, the West and New England. And as the National Journal pointed out, the death toll is much higher on the road than in the air.
Lost Generation
Understanding the impact of the economic and terrorist disruptions in the first decade of the 21st Century had on the pilot profession is important. In fact, they were instrumental in the rapid decline in the career. That decline was confirmed by a University of North Dakota (UND) study saying interest has waned from 80% in 2000 to 65% in 2010. The UND study revealed a third of respondents were reconsidering their career choice and 8% had already abandoned their flying careers.
It was not pay that destroyed the piloting career, it was the economy as so poignantly reported by David Thornton who wrote a moving piece about how his generation was lost. Pilots who were ready for the right seat in the late 1990s and 2000s watched their careers disappear to the dot.com recession, 9/11, war, airline downsizing and furloughs, SARs, high fuel prices, the Great Recession and industry restructuring. Industry upheavals also forced many furloughed and military pilots to give up on aviation.
Now, with the new pilot regulations resulting from Colgan, the next group is watching their careers disintegrate as well. Newly minted college graduates have about 250 hours of flight experience after investing more than $100,000 in their education. The new regulations give 500 hours credit for those graduating from accredited aviation universities as well as 750 hours for military pilots.
“That is another part of the problem,” said Airline Pilot Career Consultant Kit Darby. The four-year schools only produce about 1,000 pilots each year and again there is no screening except good grades.” Regardless, fledgling pilots face a steep climb building between 750 and 1,250 hours and the concern is they will drop out.
Darby, who is also an ATP instructor with a major U.S. airline, outlines the task for students. “They need a four-year degree and flight training anyway so the additional amount would be the new ATP-Certification Training Program (CTP) at $5,000 plus the cost of the additional flight time after initial training,” he said. “Virtually no one buys this time. They typically work as a flight instructor, traffic watch, fire spotting, fish spotting, or tow banners. Even buying the additional 1,000 hours at $50 per hour the cost would be about $50,000. If you bought it retail then you would be looking at $150,000+.”
The problem, however, according to Akins, is the pilot shortage has collapsed all the way down to instructors who are no longer available to instruct fledgling aviators. Students who were encouraged to go into piloting have been forced out for lack of flight instructors, collapsing of the pipeline.
The problem is so serious Transpac Aviation Academy, which is working on a training deal with a regional airline, said it is paying $5,000 bonuses just to get certified flight instructors. “We haven’t solved the fundamental problem of pilot supply,” CEO Curtis Brunjes told Forbes.
There is a crying need for a better way to fund training programs, said Darby, suggesting government loan guarantees or some sort of airline paid assistance. In fact, many regionals are offering pilots tuition assistance as a recruiting tool.
“We should do all of these things,” said Darby. “But you have to realize that even if we do it all it will not be enough to prevent this shortage from affecting our ability to compete on a global scale unless the laws are changed,” he said. “There is no lack of people who want to be pilots. But paying for the training is a huge issue. The ability of an individual to finance training by getting a personal loan was ended with 9/11 and the recession. It is all asset-based financing now with loans for flight training just starting to reappear. The pilot shortage is driving this but it is only for the top schools with proven track records.”
Darby also explained why the cost of training is unlikely to decline. “Flight training is not a high margin business,” he said. “In fact, it is a low margin, high liability business so do not count on the cost getting much lower.”
Safety experts and regional executives say the flying done in pursuit of hours alone leaves too much to chance. First of all they are flying in clear weather because insurance requires it. Second, it is unstructured flying and studies indicate a loss of skills and professionalism result. Third, and most importantly, pilots are not gaining the right experience because they are not flying in complex, controlled airspace around busy hubs in all weather conditions.
“A pilot who has only clear weather experience towing banners over the Florida beaches is not the ideal candidate for a regional airline pilot,” said Commutair President John Sullivan.
Pilot Quality Declining
Akins noted airline surveys confirm the diminishing proficiency of new hires resulting from the new regulations. Colgan pilot requirements have caused a marked decline in pilot proficiency.
“The majority of the 30 carriers we surveyed reported recent new-hire pilots are not as proficient as they were in past,” said. “They are coming out of respected schools and busting check rides because of the unstructured flying they are doing to build time. Or airlines are finding pilots that they don’t want including a history of legal problems, dishonorable discharges, domestic violence or drinking. Some may have a medical condition.”
Ohio State University Center for Aviation Studies Lecturer Martin Rottler agrees. “New regulations means pilots will spend an extra one to three years flight instructing or other forms of flying that doesn’t necessarily prepare them for professional piloting. They lose the professional skills honed in their [flight school] programs,” he said. “This leads to increased training times because airlines are breaking bad habits and re-teaching lost skills. This increases costs. Congressional and regulatory relief from the 1500-hour rule is imperative.
Regional Air Cargo Carriers Association President Stan Bernstein, who represents small package carriers working for FedEx, DHL and UPS, agrees. “We are finding, candidates that have serious shortcomings; that never would have been hired five years ago,” he told Forbes, confirming assertions by other airline executives. “But they are being hired because the industry is so desperate. They require remedial training at flight academies.”
This should send Colgan families up the wall because the Colgan captain had a problematic past in training and passing his FAA tests, unknown to Colgan when they hired him. Indeed, the airline testified he would never have been hired had they known as Colgan family Spokesman Scott Maurer pointed out. This prompted the yet-to-be-issued pilot records database required as part of the 2010 legislation establishing the 1,500-hour rule.
Studies Confirm Akins Surveys On Pilot Quality
Declining pilot quality concerns Nancy Shane, the author of the University of North Dakota study, The Impact of the First Officer Qualification Ruling: Pilot Performance in Initial Training. “Pilots being hired have the right amount of flight time, but they may not have really flown that much,” she said. “They may have had different careers and are now coming back to aviation but haven’t been in a structured training environment or haven’t operated to air carrier standards.”
A soon-to-be-published study of 19 airlines confirms Shane’s conclusions.
Shane, now an assistant professor of aviation at Farmingdale State College, found a demarcation line. “Pilots hired since 2013 have, on average, around 1,500 more flight hours than before the rule,” she said. “However, they are more likely to require extra training and less likely to make it through training than those hired prior. While it is early days, in the short term, such changes should give us pause.”
That makes moves by United and JetBlue very important to the debate. JetBlue’s new training initiative, covered in this Forbes story, was the first indication that the pilot shortage and quality issues reaches beyond regionals.
Darby made another point. “The military regularly puts low-time pilots in the most sophisticated aircraft in the world with a very demanding mission with great results,” he said. “What is more important than hours is pilot selection and training. Selection criteria was part of the original law after Colgan but was left out with the justification that more flight time would fix it. That was a mistake. I agree that more training is good but just total time misses the mark by a wide margin.”
Everyone – regionals, JetBlue, Colgan families – agrees selection and quality are critical but studies show that quality and selection goes out the window if there is no one in the pipeline.
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