US Airline Pilot Shortages and Fuel-Cost Rises Lead to an Uptick in Ticket Prices

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    Since the US pilot shortage is at its highest level in decades, airlines are required to think outside the box in order to recruit new pilots. While salaries are increasing, as are fuel prices, fares are also rising to help pay for bonuses and higher salaries for pilots. Unfortunately, that hasn’t been enough to prevent the industry from having to come up with more complicated solutions.

    Certain industries are eliminating their four-year-degree requirements, such as Delta, and recruiting pilots in Australia, such as Frontier. In American Airlines' case, it is selling tickets at a low cost. Although this innovative thinking may help, it has been a long-standing problem. However, it could require years to correct. COVID brought this issue to the surface when people were offered early-retirement benefits in 2020.

    On an earnings call in April, United Airlines CEO Scott Kirby made a statement on the ways in which the airline industry was changing. “The pilot shortage for the industry is real, and most airlines are simply not going to be able to realize their capacity plans because there simply aren't enough pilots, at least not for the next five-plus years.” Achieving these plans is, in the end, one of the most crucial things for any airline. This keeps investors coming to the company and ultimately keeps them operating.

    The people who acquired these packages at the beginning of 2020 experienced them at their peak and now, considering the situation, are elated that they're not trapped by current circumstances. In the meantime, companies such as Mesa Air, which services both United and American airlines from its Phoenix base, are stuck. They lost $43 million during the quarter just ended when costs grew. It's been extremely challenging with the 120 days needed to replace a pilot who has given his or her two weeks’ notice, 

    Many of these smaller regional airlines are alternatives to the larger airlines. Pilots work with firms such as Mesa to test their abilities after flight school and get their first two years of experience, then move on to larger companies that offer more lucrative pay. However, there is no guarantee that they'll be able to locate the routes and schedules they desire. Numerous airlines, such as Alaska Air and JetBlue, are being forced to reduce their expansion plans or, for some routes, completely drop them altogether.

    At the current price of $92,000 for a full-time, seven-month intensive program in ATP Flight School, it could take 18 months to accumulate enough hours to allow pilots to fly. And generally, they have the opportunity to instruct student pilots or fly banners on the beach. These jobs do not pay the same as the $350,000 of a major airline pilot, but they do provide the needed hours while earning enough to live comfortably. When they’re in this waiting period, airlines are now providing low-interest loans and various other incentives in order to entice those who are unable to access these programs.

    United Airlines, on the other hand, went in the opposite direction in December. In the process of opening its United Aviate Academy in Goodyear, AZ, the airline eliminated one of the largest obstacles for new pilots: the middleman. They will cover the training costs for new students for the duration of the course to the point of receiving their private pilot's licenses, which is upwards of $17,000. With the goal of ensuring that its students are made up of at least 50 percent women and individuals of color, United is trying to set a new standard while addressing the challenges that this post-COVID era brings.

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