Quote:
Originally Posted by scottm
Good question. Most people define it based on how it effects them, which is a problem when pilot union leaders aren't going to feel the effects for some time, and management may never feel adverse effects.
Most of us would say Great Lakes has a pilot shortage, but economists would say they don't, as they haven't raised their pay. Economists look at effects for evidence of a cause. The declining number of pilots available is increasing profits at most airlines, by forcing capacity discipline, elimination of less or non-profitable operations, and ending price wars. So there are the "right" number of pilots for this industry now, as long as it is economically healthy, which it is. For the past decade+, the industry has been unhealthy because of an endless supply of ever cheaper workers, allowing a downward spiral of quality and prices, where nobody could hold their prices long enough to make a profit.
This is not totally accurate. The capacity discipline being currently practiced is only in part due to a lack of pilots, and is only true at the regionals, not at the majors. The current DAL and UAL CBA's severely curtail the ability of purchasing more RJs unless mainline grows first. Other factors include the price of oil (RJ's, especially the 50 seaters, were designed to fly with oil priced at $12-15 a barrel), the cost of insurance, which skyrocketed after 9/11, and the cost of leasing (pre-9/11 and the bankruptcies, a DAL 767 lease payment was $500,000 a month; in the aftermath, it went down to $150,000. MD-80's could be had for under $100,000. The cost of a 50 seat RJ never got below about $60,000).
The new rules, however, do change the equation for everyone. Too much is being made of the new 1500 hour rule by itself. Remember, back in the day, we all had to work as CFI's to get our time up to 1500 hours to get a regional job. That will happen again, and that's the easy part--you won't have to buy the hours past 250 if you don't want to. What has changed are the other requirements to get the job (Level D sim training, etc.), and the overall cost of learning how to fly. None of us can dispute the disincentive to pursue a professional career with such uncertain odds of success (defined as making it to a major).
Another oft-forgotten issue is the fact that captain candidates need to log 1,000 hours of right seat time at a 121 carrier now before upgrading. That will decimate smaller carriers down the road, and probably end the Essential Air Service (EAS) program. It will also likely make it extremely difficult to start a new airline.
The shortage is most definitely here. One need only spend a few minutes talking to regional airline managers and recruiters to realize that. The majors themselves will not hurt for pilots for several years, but by then the damage will be done: most of their feed for long-haul domestic and international flights comes from Class D airports that are primarily served by regional carriers...that, as has been pointed out, are already reducing service. Some smaller towns will indeed lose service, and that is capitalism working at its finest. If the demand is not there, the service won't be either.
There are a number of options for addressing this, but as yet, nobody has been willing to take the necessary steps. Whoever does it first will win.