Noah Schwab
Mrs. Straub
AP Econ
12/4/2018
Travel via airplane has surged in both demand and value throughout the last 100 years. What once was a privilege for the affluent in society has now become mainstream. How did it get this way? Technological leaps and stiff government regulations regarding aviation allowed for a relatively quick formation of the airline oligopoly. However, the systems in place that allowed the formation of this oligopoly has had some adverse consequences on its future expansion. Globally there is a shortage of pilots that is predicted to grow in the future that will make flights more expensive and less available.
Why are less people becoming pilots? The answer lies in that the costs of becoming a pilot in today’s society are too massive for most to bare. A four year bachelor's degree is essentially required to start your journey on becoming an airline pilot. The average cost of this in the U.S. right now is around $133,000. After this, the prospect aviator must earn their FAA Private Pilot license by logging 40 hours of flight time and costing them around $8,000 additional dollars. Next, the pilot must get their FAA instrument rating and Commercial Pilot License. These require an additional 230 flight hours being logged which costs around $23,500. Up to this point you can expect to have spend $213,000 and still haven’t made anything or gotten a job in flying. The hardest step occurs in getting your Airline Transport Pilots license which required 1500 flight hours which will cost you an additional $136,000 in plane rental - unless you fulfill this requirement by flying around advertising banners or serving as a skydiving plane pilot. Now after spending around $349,000 on pilot training your first year starting salary is a $30,000 per year, which is just slightly better than working in the fast food industry. What’s perhaps even more surprising is that veteran pilots can make salaries anywhere from $100,000 to $500,000 per year.
Why are these salaries so low to start? The answer lies in the powerful unions for the aviation industry that prevent United, Delta, and ‘American’ airlines from hiring pilots at pitiful salaries of $20,000 to $30,000 per year. Small planes are more expensive to operate than large planes. Large jetliners get approximately 88 miles per gallon (of fuel) per person while small regional jets only get 70 miles per gallon per person. To cut costs, the major American airlines hire a regional based “airline” to operate their planes under their brand. You may have seen United Express, Delta Connection, or ‘American’ Eagle flights. These flights are not operated by the parent company but by a regional airline like SkyWest or Horizon air. These regional carriers pay the crew (pilots and attendants) on a much lower pay scale than the unions would require the major to pay. The pilots of these flights aren’t employed by the multibillion dollar airlines (or represented by the unions) and therefore don’t get paid competitive wages. The airlines and aviation unions keep this structure in place because it allows them to keep their costs low and maximize profit. Eventually, the people who have put in years of experience at the regional carriers get hired by the major airlines and then make competitive and even generous wages.
Pilots only get paid for time spent in the air which causes discrepancies in working conditions. To illustrate this difference, a first year first officer for SkyWest, a regional carrier, would make $37 per hour in the air. However, a first year first officer for ‘American’ airlines would make $88 per hour in the air. Pilots only get paid for time spent in the air which causes discrepancies in working conditions. Veteran pilots get long haul flight routes over a typical 4 day period. This means they can get a typical 16 hours of flight time per week across 2 flights and have a 48 hour rest period in an exotic location. These are the people making multiple hundreds of thousand dollars per year. However, regional new pilots end up flying constant flights for 4 days that with only rest time for eating and sleeping. These pilots live out of hotel rooms, never see their families, and then get paid less despite logging the same amount of hours. These factors are dissuading people from becoming pilots, especially in America and Europe. The shortage has gotten so severe in China and the United Arab Emirates that major airlines there are offering foreign pilots a starting salary of $312,000 to move there. Unfortunately, airlines in those countries are known to have even worse pilot working conditions and longer hours.
All of these factors combine to make flights very expensive and this is expected to increase. Major airlines will have to start recruiting regional pilots and making the shortage mainly fall on small towns and charter flights. Flights between small areas which are profitable and in high demand will be cut. Flights are already full but this will continue to increase. Consumers won’t have the choice on when to fly because there won’t be enough supply. Major airlines will have to increase pilot salary and that will increase the cost of large market flights. This combination of decreasing supply and increasing price will make air travel a larger economic burden than it ever has been. The oligopolistic market structure of the airlines has such high barriers to entry that it is unlikely for new airlines to be established despite demand being high.
One possible solution is to restrict the powerful union and airline interests and restore competition to the pilot salary market. Competition will allow salaries to still be generous for veteran pilots but also be fair for new pilots. Another solution is to subsidize flight school’s or have airlines sponsor their own. However, until the major airline industry ceases to make their current profit margins, it is likely nothing will change.
Works Cited:
Denby, Sam. “Why the World is Running out of Pilots.” Wendover Productions,YouTube, animated by Josh Sherrington, audio by Graham Haerther, thumbnail by Simon Buckmaster, Wendover Productions, 2 Oct. 2018, https://www.youtube.com/watch?v=cognzTud3Wg.
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