A shortage of pilots from retirements and pandemic cutbacks has forced Fort Worth-based American Airlines to park about 100 of its smaller regional jets, even amid strong summer passenger demand.
“There is a supply and demand imbalance right now and it really is within the regional carrier ranks,” American Airlines CEO Robert Isom said Friday at the Bernstein Strategic Decisions investor conference in New York. “We have probably 100 aircraft or almost 100 aircraft that aren’t productive right now, that aren’t flying.”
Isom’s comments come amid soaring airfare prices as travelers are eager to get out after two years of pandemic restrictions and as airlines work to get back to pre-pandemic flying levels. Nearly every airline in the industry is facing similar issues with struggles to replace pilots and other key workers, even though several are forecasting record revenues.
Airlines would love to take advantage of rising ticket prices from high consumer demand. Airline ticket prices for summer travel are up about 48% compared with 2019, according to travel site Hopper. That more than offsets rising fuel and labor costs. American upped its second-quarter revenue projections on Friday, now expecting to bring in sales 11 to 13% higher than during the same period in pre-pandemic 2019.
The 2022 summer travel season has seen airlines try to balance their own ability to fly bigger schedules versus the risk of meltdowns if operations are stretched too thin. As carriers such as Delta, JetBlue and Southwest have cut flights to focus on reducing delays, American Airlines is flying a schedule that is about 20% larger than its next nearest competitor at Delta.
The biggest constraint, Isom said, comes in the number of pilots American Airlines and its regional carriers are able to hire. About 1,000 of American’s 15,000 pilots took early retirement packages during the COVID-19 pandemic. Paired with a large number of pilots slated to hit mandatory retirement age, it hass left carriers such as American with a deficit of key employees.
American has filled that gap by hiring pilots from regional carriers, including its own at wholly-owned airlines such as Envoy and Piedmont. In turn, that leaves a shortage of pilots to fly the smaller 50 and 75-passenger jets.
“There are constraints out there in terms of aircraft, there are constraints around pilots from the perspective of the mainline and through training,” Isom said.
American has been able to make up some of the cutbacks in flights by using larger regional jets and parking smaller models, Isom said.
While that helps carry more passengers, using bigger planes also means fewer frequencies, especially to smaller destinations. Regional airlines fly 43% of the country’s flights. according to the Regional Airline Association, and two-thirds of the country’s airports are only served by regional carriers.
American and others have increased pay for regional pilots and have added signing and retention bonuses to help students through flight school. The economic incentives of jobs that pay more than $200,000 a year should eventually attract more pilots, but it could take several years to get the number of pilots needed to properly staff airlines, Isom said.
“I see demand for travel,” Isom said. “I see an industry that has been more or less constrained and now trying to say back up and is still facing those constraints.”
