Thursday, July 19, 2012

FAA rules may lead to pilot shortage


On February 12, 2009, Colgan Airlines/Continental Connection Flight 3407 crashed near Buffalo, N.Y. killing 50 people, including one person on the ground. Part of the legacy of this crash was new regulations by the Federal Aviation Administration to increase the flight hour requirements for pilots at regional airlines.

In February 2012, the FAA issued a notice of proposed rulemaking that would increase the flight experience requirement for pilots at FAR 121 airlines to 1,500 hours by requiring first officers to hold the same airline transport pilot license that is currently required of airline captains. In the past, first officers were only required to hold a commercial pilot license. This license required only 250 hours of flight experience.

The FAA proposal created two exceptions. Graduates of aviation colleges and universities and military pilots could earn an ATP certificate with restricted privileges with less than 1,500 hours. Military pilots would need 750 hours and aviation degree holders would need 1,000 hours. The restricted ATP would allow these pilots to serve only as first officers and not as captains.

The new requirements are slated to go into effect next year and some already predicting that the rules will lead to a pilot shortage. USA Today notes that the new rules come at the same time as a new wave of airline retirements. Five years ago the FAA raised the mandatory retirement age for airline pilots from 60 to 65. Pilots who were granted an extension their careers are now facing retirement. As a result, the supply of pilots on airline rosters will be decreasing at the same time that the supply of qualified replacement pilots becomes more limited.

While there are many furloughed professional pilots, many of these are either no longer current or are not willing to work for the wages offered by regional airlines where many of the openings will be. Typical first year pay at a regional airline is about $21,000 according to pay scales posted on Airline Pilot Second year pay depends on the aircraft but can be in the $30,000 range.

Similarly, the new FAA rules will present a significant barrier to pursuing an airline career. Prospective pilots will likely be hesitant to spend the time and thousands of dollars that it takes to earn a pilot license if it means years of building flight time at low-paying jobs before they even qualify for an entry-level airline job, which will not pay well in itself for the first few years.

The logical solution for the airlines would be to pay more to attract more qualified pilot applicants, but the problem here is that the airline industry is heavily unionized. Airlines cannot unilaterally alter the collective bargaining agreement to pay new-hires more. They have to follow the process of negotiating with union representatives and having the new agreement approved by an election of the union members. Union members would most likely not approve increased pay rates for new-hires without inducements such as more pay for senior pilots. Over the past decade, many airline unions have granted concessions in pay, benefits and work rules that they will certainly work to gain back if given the opportunity. Conversely, labor is already significant portion of airline operating costs that airline managements will work to keep as low as possible.

One way around union negotiations that some airlines have used in the past is to offer a signing bonus to new hires. Rather than increasing the hourly rate, the company will offer lump-sum payments. For example, Airline Pilot Central reports that Republic Airways is currently offering a $5,000 signing bonus, paid in two lump sums. Pilots receive half of the money midway through training and the other half when their training is complete.

In the meantime, Airline Transport Professionals, a national chain of flight schools, notes that “Today, regional airlines are hiring every qualified pilot they can recruit at about 800 hours” of flight experience. Pilots hired now will be grandfathered under the new FAA rules, so airlines are recruiting while they can. This provides a good opportunity for low-time pilots to start a career as a professional pilot.

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