American Airlines can’t fly about 150 of its regional aircraft because of the ongoing pilot shortage, the Fort Worth-based carrier’s CEO said Wednesday.
“We would deploy properly to markets that aren’t being served,” Robert Isom, CEO of American Airlines said Wednesday at the Bernstein 39th Annual Strategic Decisions Conference. “We would do that today. It’s just we don’t have the pilots.”
The shortage of pilots and parked planes comes as airlines are facing record demand for travel this summer without the capacity to take advantage of high ticket prices. That’s even more jets on the ground than a year ago, when the shortage of pilots really hit regional airlines as demand returned after the COVID-19 pandemic downturn.
American anticipates getting more pilots over the next 18 to 24 months for the regional network, Isom said, and those aircraft would be put back into service “in a fashion that is going to produce unit revenues that are very favorable.” The airline industry faces an ongoing shortage of pilots, which will grow to a shortfall of nearly 80,000 by 2032 worldwide, according to Oliver Wyman.
American recently came to an agreement in principle with its pilots union, the Allied Pilots Association representing the carrier’s more than 15,000 pilots, Isom said. The agreement proposes about a 21% pay raise for this year on top of back-dated raises dating to 2020. He said the airline has done a nice job of being efficient and is seeing a large number of pilots who are interested in becoming first officers.
“American Airlines was an industry leader in getting regional pilot wages to a level that it can really attract new talent from a broad set of communities in the airline business,” Isom said. “We did that, and it’s produced the kind of interest in aviation that we had hoped.”
He explained his 18 to 24 months estimation accounts for the imbalance between the number of captains flowing out of the regional airlines to the mainlines. Isom said American has put in contractual provisions and incentives that allow the company to build up jobs over time.
Isom said a lot of pilots have left the industry and retired, so it has taken time to find replacements. Regardless, he thinks American has the best quality of life to offer pilots.
“It’s a matter of economics,” Isom said. “It’s a matter of quality of life. I think the kinds of things that have been done both from a regional perspective at American and a mainline perspective with the new agreement in principle, they address those kinds of issues.”
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