The US airline pilot shortage will not remain a US problem for long. With sharply increased salaries, any commercial pilot with an FAA ATP will return to the US and secure a job with a US airline. That means the US pilot shortage trickles across the globe. Oliver Wyman estimates that North American airlines will face a shortage of nearly 30,000 pilots by 2032. Mesa’s CEO thinks the pilot shortage will last another five years. We want to make the case that US Airline Pilots are on the wrong side of history.
US airline pilots have created remarkable protectionist barriers. As Investopedia states: “Traditionally, protectionism is a left-wing policy. Right-wing politics generally support free trade, which is the opposite of a protectionist stance. Left-wing politics support economic populism, of which protectionism is a part.” US airline pilots are political, very political. And they are generous to politicians. Airline pilots may be the highest-paid unionized profession.
The 1,500-Hour Rule
US pilots managed to get Congress to pass the 1,500-hour rule. Whereas, pilots in the UK and Europe need 250 flight hours to work at an airline. Would US airline pilots seriously argue they are better and safer because they have six times the flight hours? They might. But to say that the UK and European airlines are six times less safe is ludicrous. No airline knowingly risks an aircraft, crew, and passengers. The 1,500-hour rule is a law protecting a profession with a starting annual salary of up to $206,000.
The 1,500-hour rule does not make US airlines safer to fly than non-US airlines. This opinion comes from Airline Ratings, who have been tracking this for years. Another view, for context, on this rule: To become a Captain of a commercial aircraft, you must have logged at least 1,500 flight hours and hold a full Air Transport Pilots License (ATPL). However, in reality, most short-haul airlines require a minimum of 3,000 hours before considering any pilots for promotion. So not only is there a US airline pilot shortage, there’s a even tighter market for captains.
Next, let’s talk about the Scope Clause. This is another legal barrier to the optimal functioning of US airlines. The central idea is to protect American, Delta, and United pilots from competition at regional airlines. These three airlines reach into the regional airlines pilot pool to recruit pilots. This means regional airlines have continual training costs they can never reduce. In the linked story, Mesa Airlines now offers a signing bonus of $110,000 for captains to join the airline.
But the problem doesn’t end there. The shortage of regional pilots has led to communities losing air service. The Regional Airline Association (RAA) noted in November 2022 that 66% of US airports are only served by regional airlines. RAA notes that 76% of U.S. airports lost air services when comparing October 2022 with October 2019. And it has gotten worse.
The pandemic saw people move away from large cities to smaller communities. This may be a fundamental shift and it does and will impact commercial flying. There are opposing flows – airlines cutting regional service just as regional markets might be growing. While cutting service is an airline decision primarily based on markets and profits, the pilot shortage helps airlines cut regional flying.
The US airline pilot protection racket generates another impact that needs to be highlighted – the environment. The combined 1,500-hour rule and Scope Clause create a pollution cocktail big airlines and Congress won’t discuss. But you should know about this. Even the most vociferous climate change denier must concede that less pollution is better than more pollution.
On average, regional jets generate 62% more carbon emissions than single-aisle airliners. Please take a look at our ESG model for US airlines below.
The “greener” the number, the lower the emissions. On average, a turboprop generates 106.8 pounds of carbon per seat hour. A single-aisle aircraft generates 125.2 pounds of carbon per seat hour. But a regional jet generates 202.5 pounds of carbon per seat per hour.
ICCT reports fuel burn metrics that support this data as the following chart illustrates.
Because of Scope Clause with its 86,000-pound weight limit, US regional airlines deploy aircraft with 20-year-old engine technology. While aircraft engine technologies are capable of well over 25% better fuel burn now, they cannot be deployed because of Scope Clause. One new regional jet that used state-of-the-art engines has been destroyed because of Scope Clause. Another promising model has been sidelined for years because of Scope Clause and may never see EIS.
Opportunities for new entrants?
The changes within the US market create problems and opportunities. How will commercial aviation adjust? What is the next wave of regional aircraft? Smaller aircraft (<50 seats) might work as they once did. These aircraft might focus more on point-to-point service rather than be exclusively hub-feeders.
There is a lot of interest in electric aircraft, like that from Heart Aerospace. New ideas being developed also meet market requirements, such as TheAirCraftCompany. Then there is hydrogen, like UniversalHydrogen. Embraer also has a plethora of ideas.
All great ideas – but these aircraft have to prove their economics. And they need to prove this to skeptical operators. There are other options, like the Do328eco from Deutsche Aircraft. A Do328eco using SAF probably hits 80% of the “green targets” without complicated fuel and engine systems. The US customer for a regional aircraft solution is a risk-averse industry with wafer-thin margins.
It’s Green Hammer Time
While Congress and the management at the big three US airlines won’t confront pilot unions, it’s time for travelers and people concerned about the environment to be aware of the costs imposed by outdated US pilot protection rules. US Airline Pilots are on the wrong side of history. Indeed, the growing number of communities negatively impacted by losing air service also need to become proactive and get involved. The prodigious forces of the ecological movement can play a role here acting as the Green Hammer to help break outdated work rules hindering economic progress and a cleaner aviation environment.
A thin golden thread connects the global economy, and its name is commercial aviation. Cut that thread, and the damage is plain to see. We saw what COVID did to travel and the economy and we are still paying the costs. Evolving US demographics and the need to stay economically connected with no high-speed trains (<500 miles trips) means the status quo is no longer viable. In the US we will likely to see the first changes to keep people connected via regional air service.
We suggest three items to consider:
- Remove the Scope Clause weight limit to allow for state-of-the-art regional jets to be developed. The current rule is ecologically indefensible.
- Cut the 1,500-hour rule to match global industry standards, allowing pilot trainees an easier and more affordable career path. Let market forces perform their magic. While compromising safety is not an option, nor should there be an artificial market constraint to economic progress.
- Encourage US regional airlines to deploy state-of-the-art turboprops to rebuild air service. This is an easy hurdle.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.