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American Airlines regional carriers hike pilot pay as shortage persists

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American Airlines Embraer ERJ-145 regional jet aircraft as seen on final approach landing at Recent York JFK international airport in NY, on February 13, 2020.

Nicolas Economou | Nurphoto | Getty Images

Two American Airlines-owned regional carriers will hike pilot pay by 50% through the tip of August 2024, the newest sign airlines are willing to pay up in hopes of ending a pilot shortage that has left some travelers with fewer flight options.

The increases would make the pilots the best paid of the U.S. regional airlines, ramping up pressure on other carriers to follow suit.

Including separate, everlasting pay hikes, the temporary raises will bring hourly wages for first officers of their first yr of flying at Piedmont Airlines to $90 an hour, up from $51 an hour, the corporate said. For first-year captains, pay will likely be $146 an hour, up from $78 an hour. The airline could extend the temporary hikes if needed, Piedmont’s CEO said Monday.

Airlines have been on pilot hiring sprees since last yr when travel demand began to bounce back from Covid pandemic lows. But a persistent shortage of pilots remains to be hindering growth at a time of strong demand, prompting airlines to park jets that serve smaller cities. A part of the issue is that airlines encouraged pilots to take early retirement after demand cratered in 2020 and were left with too few when travel rebounded.

That has intensified the competition for pilots.

“Attrition of the regional pilots, particularly the captains, has really spiked to the purpose where we’re not in a position to put our fleet within the air,” Piedmont CEO Eric Morgan told CNBC.

The airline, based in Salisbury, Maryland, has been losing about 25 pilots a month to American’s mainline operation and has fallen in need of its goal to rent around 40 pilots every month. It flies 50-seat Embraer ERJ-145s for American, often between smaller cities, but hasn’t been in a position to operate 10 of its roughly 60 planes, Morgan said.

Piedmont approached the union with the pay increases that were outside of normal contract negotiations, said Morgan and Capt. Ryan Miller, chairman of the Piedmont chapter of the Air Line Pilots Association.

Envoy Air, based in Irving, Texas, said Saturday it reached an identical agreement with its pilots’ union to shell out a 50% premium to pilots’ hourly rates through the tip of August 2024.

Kit Darby, a pilot-pay consultant and a retired United captain, said raising regional pilots’ pay is a positive step but that the bar was low. He said airlines must ask, “What’s a living wage and what is going to it take to draw pilots to the profession?”

The pay increases come as a number of the largest pilot unions — those representing greater than 35,000 aviators at Southwest, Delta, JetBlue and American — are in contract talks with their carriers.

American Airlines pilots picket outside the Recent York Stock Exchange on June 2, 2022.

Leslie Josephs | CNBC

American’s management recently offered its roughly 14,000 pilots a 4% raise on the date of signing after which a 3% increase in the subsequent yr. Allied Pilots Association spokesman Dennis Tajer called that “insulting.”

“Good on the pilots receiving these raises but when you’ve got an airline that is pushing across a greater than 50% pay increase, it’s recognizing with dollars that they’ve an issue,” Tajer said. APA pilots picketed on the Recent York Stock Exchange earlier this month for an improved contract and higher schedules.

American didn’t immediately comment on the union spokesman’s remarks.

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