United Airlines pilots perform a walkaround before a flight
Leslie Josephs/CNBC
U.S. passenger airlines have surged hiring after a months-long pandemic slump, adding about 194,000 jobs since 2021, according to the Department of Transportation. Now the industry is curbing hiring.
Airlines are getting closer to meeting staffing needs but face a number of challenges that are also contributing to the slowdown.
In the United States, a glut of flights is driving down fares and squeezing airline profits. Demand growth is slowing. Boeing Airbus’ slump has forced airlines to reassess their expansion plans, creating engine shortages that have led some carriers to postpone plane deliveries altogether and raising labor costs after pilots, mechanics and other groups signed new contracts with the biggest pay hikes in years.
A first officer with three years of experience flying midsize planes for a U.S. airline earned an average annual salary of $170,586 in March, up from $135,896 in 2019, according to Kit Darby, an aviation consultant who specializes in pilot salaries.
Since 2019, U.S. airline costs have risen by double digit percentages — about 20% if you exclude fuel and net interest expenses. American Airlines This year, the number has increased by about 28% in both countries. United Airlines and Delta Airlines since 2019, according to Savanti Sis, an aviation analyst at Raymond James.
This is even more evident with low-cost airlines. Southwest Airlines‘Costs are likely to rise by 32%. JetBlue‘ Increased by about 35% Spirit Airlines Sis estimates that, adjusting for flight distances, the data shows an increase of about 39% over the same period.
Employment easing
Friday’s U.S. jobs report showed air transportation employment was roughly at the same level as July in August.
But there are also exoduses. In the most serious case, Spirit Airlines laid off 186 pilots this month, the union said Sunday, as the airline’s losses widened following a failed bid by JetBlue Airways. Pratt & Whitney Engine recalls and an oversupplied U.S. market. Even before the merger fell apart last year, the company had offered employees a buyout.
Other airlines are easing hiring restrictions or looking at other ways to cut costs.
Frontier Airlines The airline continues to hire pilots but plans to offer voluntary leave in September and October, when demand slows after the summer holidays and before Thanksgiving and the winter holidays. A spokesman said the leave is offered “on a rolling basis” when “staffing exceeds planned flight schedules.”
Southwest Airlines expects to end the year with 2,000 fewer employees than in 2023, and earlier this year announced it would stop hiring for work groups that include pilots and flight attendants. Chief Financial Officer Tammy Romo said in an earnings call in July that employee numbers will likely fall again in 2025 because turnover rates exceed the Dallas-based airline’s “managed hiring levels.”
United AirlinesThe airline, which paused pilot hiring in May and June because of delays to the arrival of Boeing Co. planes, said it planned to add 10,000 pilots this year, down from 15,000 each in 2022 and 2023. It will reduce pilot hiring to 1,600 from more than 2,300 last year.
That’s a departure from past years when airlines couldn’t hire workers fast enough. U.S. airlines typically add pilots on a continuous basis because federal law requires pilots to retire at age 65.
Airlines have laid off tens of thousands of workers in 2020 to stave off record losses. Layoffs were prohibited under the more than $50 billion taxpayer aid package passed to help the industry weather the worst crisis in its history, but many employees accepted repeated offers of buyouts or voluntary furloughs from airlines.
Travel demand then recovered faster than expected and only really picked up in 2022, causing airlines to lose experienced employees such as customer service representatives. It also led to the worst pilot shortage in recent years.
In response, companies, especially regional airlines, offered large bonuses to attract pilots.
But times have changed: Cargo giants have also competed for pilots in recent years, but demand is declining. FedEx and UPS Aiming to reduce costs.
American Airlines Chief Executive Officer Robert Isom said in an investor presentation in March that the company added about 2,300 pilots last year and plans to hire about 1,300 more this year.
“We intend to continue hiring at those levels for the foreseeable future,” he said at the time.
Despite the lowered bar, students continue to fill classrooms and cockpits to gain training and flight hours to become pilots, said Ken Burns, dean of flight studies at Embry-Riddle Aeronautical University.
“The demand for travel is still there,” he said. “I don’t see it slowing down in the long term.”
