The Morning Economic Report
8:24 am
Wed March 12, 2014

Regional Airlines - 3/12/14

Even in the face of still high unemployment nationally, there appear to be a growing number of industries reporting skills shortages, including construction, manufacturing and cyber-security.  Another shortage has emerged among regional airlines, which are facing deeper and more widespread pilot shortages as reported in the Wall Street Journal. 

According to the Government Accountability Office of GAO, 11 of 12 regional carriers contacted indicated that they were having difficulty filling entry level first officer vacancies.  This should come as no surprise.  Starting pilot salaries at 14 US regional carriers average $22,400 a year according to the largest U.S. pilots union.  According to the GAO report, a large pool of qualified pilots exists to meet the projected demand of regional carriers over the next decade, but they may not be "willing or available to work at wages being offered."

The economics of this situation are rather predictable.  Pilot salaries are set to rise among regional carriers, which in turn will result in higher ticket prices.  Many will be impacted since regional carriers fly approximately half of all airline trips in America and carry roughly one fifth of total passengers.