Airline Hiring Cools Amid Soaring Pilot Pay

After a pandemic-fueled hiring spree, US passenger airlines are slowing down their hiring efforts. While they are nearing their staffing needs, the slowdown is attributed to a confluence of challenges.

• A surge in flights has led to lower fares, impacting airline profits.
• Demand growth has cooled down.
• Delays in aircraft deliveries from Boeing and Airbus are hindering expansion plans.
• Engine shortages are adding to the complications.
• Labor costs have climbed significantly following new contracts with pilot and mechanic unions, leading to substantial pay increases.

Impact of Rising Pilot Pay

The escalating pilot pay is a significant factor in the airline industry's current predicament. Pilot pay for three-year first officers on midsized aircraft has increased to an average of $170,586 in March 2024, up from $135,896 in 2019, according to aviation consultant Kit Darby. This significant hike represents the culmination of several factors, including the pilot shortage that emerged after the pandemic.

Rising Costs Across the Airline Industry

Beyond pilot pay, overall airline costs are climbing at a double-digit pace. Excluding fuel and net interest expenses, costs are expected to rise by about 20% for American Airlines this year and by around 28% for United Airlines and Delta Air Lines compared to 2019. The impact is even more pronounced for low-cost carriers, with Southwest Airlines projecting a 32% cost increase, JetBlue Airways anticipating nearly 35%, and Spirit Airlines foreseeing an almost 39% rise.

Airline Hiring Pullbacks

Recent data indicates a pullback in airline hiring, with August's air transportation employment figures largely in line with July's. However, some carriers are experiencing more significant adjustments. Spirit Airlines furloughed 186 pilots in September, citing ongoing losses following a failed acquisition attempt by JetBlue, an engine recall, and an oversupplied US market.

Strategic Cost-Cutting Measures

Other airlines are pursuing various strategies to manage costs and ease hiring. Frontier Airlines is still hiring pilots but will offer voluntary leaves of absence in September and October, when demand typically declines after the summer holidays. Southwest Airlines plans to end the year with 2,000 fewer employees than in 2023 and has halted hiring classes for several work groups, including pilots and flight attendants.

Pilot Hiring at United Airlines

United Airlines, which paused pilot hiring in May and June due to Boeing's delivery delays, is aiming to add 10,000 new employees this year, down from 15,000 in both 2022 and 2023. The company's pilot hiring plans are also scaled back to 1,600 from over 2,300 last year.

The Aftermath of the Pilot Shortage

The current situation marks a significant shift from the previous years when airlines struggled to hire enough employees, particularly pilots. Federal regulations requiring pilots to retire at age 65 create a constant need for new pilots. The pandemic-induced travel slump led to massive layoffs in 2020, followed by a swift recovery in travel demand that outpaced the airline industry's ability to rehire experienced staff.

A Shift in the Air Cargo Industry

Even air freight giants, which were actively competing for pilots in recent years, are now seeing a slowdown in demand. FedEx and UPS are implementing cost-cutting measures, leading to a decline in pilot hiring.

Future Outlook for Airline Hiring and Pilot Pay

Despite the current hiring slowdowns, the demand for travel remains strong, suggesting a long-term need for pilots. The training pipeline continues to produce new pilots, ensuring a steady flow of qualified professionals into the industry.