Global pilot shortage has resulted in pay increases at airlines in Canada

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JohnnyHotRocks
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Global pilot shortage has resulted in pay increases at airlines in Canada

Post by JohnnyHotRocks »

SYDNEY / BANGKOK / MONTREAL (Reuters) - A growing shortage of airline pilots is putting the industry’s recent growth at risk as planes sit idle, higher salaries cut into profits and unions across the globe push for more benefits.

Carriers such as Emirates and Australia’s Qantas Airways have poured resources into hiring, but struggled in recent months to use their jets as often as their business plans dictate because of training bottlenecks.

Pilots at Ireland’s Ryanair are forming unions across Europe seeking better working conditions, and those at Air France are striking over pay.

In the United States, pilots who took pay cuts when carriers went bankrupt a decade ago are receiving big raises under new contracts now that airlines are posting strong profits.

The surge in employee costs, which rival fuel as the biggest strain on an airline’s finances, comes as higher oil prices are already squeezing margins. Airlines say ticket prices have not kept pace with costs.

“These cost pressures are not about to stop imminently,” International Air Transport Association (IATA) chief economist Brian Pearce said at the trade group’s annual meeting in Sydney, where IATA lowered its airline profit forecast by 12 percent, citing higher fuel and labor costs.

“It’s the symptom of a wider issue. If we look at developed economies, unemployment in the OECD has fallen to lows and we are starting to get wage pressures, of which pilot shortages are a symptom in our industry,” he told airline bosses, many of whom expressed concern about a shortage on the sidelines of the IATA annual meeting this week.

Inflation is beginning to take hold in OECD economies after years of lying dormant, and pilot wages also reflect that, Pearce added.

The high cost of pilot training and several years of earlier hiring freezes in markets like the United States and Australia have deterred potential aviators from entering an industry that Boeing says will need 637,000 more pilots over the next 20 years.

IATA estimates airline traffic will nearly double during that period, so companies like Canadian training group CAE Inc and L3 Technologies are building new flight simulators to cash in on training demand.

Planemakers Airbus and Boeing are also expanding into services like training, where margins are potentially higher than building jets.

And some airlines are planning to expand in-house training programs. Qantas says it will invest A$20 million ($15.26 million) in a new flying school to ensure a supply of pilots amid high turnover in its regional arm QantasLink. Emirates opened a $135 million fight training academy in November for up to 600 cadets.

“We have a social responsibility,” Qantas Domestic CEO Andrew David said. “We can continue to take pilots from smaller players in this country and elsewhere but we need to give back and that is part of what we are doing here as well.”



BIDDING WAR

Other airlines are having to look outside their home markets, competing with China, where experienced foreign captains are in high demand and airlines offer annual salaries of up to $314,000 - tax free.

“There is not so much a shortage of pilots as a rising cost of attracting and retaining the pilots you need, particularly the experienced ones,” said Andrew Herdman, director general of the Association of Asia Pacific Airlines. “There is a bidding war going on.”

In countries where average wages are relatively low, pilots are being offered much cushier pay packages than other professions because they are internationally mobile and must speak English, the global language of aviation.

SriLankan Airlines has lost a “steady trickle” of pilots to Gulf carriers, SriLankan CEO Suren Ratwatte, who was an Emirates pilot, told Reuters.

“We pay pretty well because the pilots going (away from the company) go mainly to the Middle East, and we tend to get very close to Gulf salaries except (we are) living in Sri Lanka,” he said. “Your lifestyle is pretty decent.”

Thailand’s Bangkok Airways PCL is raising pilot salaries and benefits and hiring foreigners for international flying, President Puttipong Prasarttong-Osot said.

Pilot unions are taking advantage of shortages to ask for better conditions for their members.

Dan Adamus, president of the Air Line Pilots Association (ALPA) Canada, said Canadian pilots are generally getting pay raises, although salaries at U.S. mainline carriers are higher than at Air Canada.

“It’s certainly harder for airlines to recruit qualified pilots,” he said, which has led carriers to raise pay. “The pilots are going to go where there is better pay.”

He estimates that about 1,000 Canadian pilots are flying for carriers overseas such as Emirates.

Airlines considered top employers in their home country, such as Qantas and IAG-owned British Airways, are not yet facing shortages of qualified applicants.

IAG Chief Executive Willie Walsh, a former pilot at Ireland’s Aer Lingus, said that there were signs of “pinch points” within the broader industry but that he did not believe there was a shortage.

“The day you see me back flying is the day you know there’s a pilot shortage,” he said.
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Xonga013
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by Xonga013 »

Pay shortage only.
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goingnowherefast
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by goingnowherefast »

Someone should tell Swoop management.
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CAL
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by CAL »

kinda looks like swoop management got what it wanted doesnt it?
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FOD_Vacuum
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by FOD_Vacuum »

Haha-I had to chuckle. Please enlighten me of any airline in Canada that have raised wages??? Canadian airlines severely underpay their pilots which is why some qualified ones, including myself, are not ruling out opportunities abroad. From what I read, Air North hiked their pay a bit, but highly doubt any other airline in Canada has (maybe a smidge enough to count for lowest end of inflation). AC first four year pay is garbage, most if not all regionals pay terrible, and don’t even get me started about Swoop. Am I missing something?
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by JohnnyHotRocks »

Hey the president of ALPA said it so it must be true!
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goingnowherefast
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by goingnowherefast »

Xonga013 wrote:
Thu Jun 07, 2018 9:38 am
Pay shortage only.
Plus the cost of admission is a $60 000+ training bill. Then nobody actually wants to go work in some isolated town, population 200, with 3 days off a month working 12-14 hours a day at minimum wage. I wonder how many student pilots quit flying when they realise that's an entry level job. No wonder there's a shortage!

AC needs a degree anyway, so just use that engineering degree to be an engineer. If you really love flying, use the engineering income to buy a 172.

I'm with Xonga, I'll believe it's an actual pilot shortage when AC and WJ pay 100g to start, regionals start at 60+, 704 captains are 6 figures with 703 not far behind. Right now it's fighting with operators for scraps, no decent lifestyle and being yelled at by passengers when the weather sucks and I end up at the alternate.
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by co-joe »

No it hasn't. It should, but no "airlines" have raised wages yet.
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by Boreas »

co-joe wrote:
Wed Jun 20, 2018 8:05 am
No it hasn't. It should, but no "airlines" have raised wages yet.
I heard Porter has raised their wages - perhaps it was just a bonus they were offering though.

Industry-wide however, I'd say wages have stagnated and are slowly being eroded by inflation. Then again, theres the whole Swoop thing...
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DanWEC
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by DanWEC »

What great news! Now, where is this other Canada that they're referring to, because we're all clearly in the wrong one.
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FL007
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by FL007 »

So far I've only heard of retention bonuses, which is a start.

I cannot wait until the new duty day regs come into effect, the vacuum will really be on then.
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Kosiw
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Re: Global pilot shortage has resulted in pay increases at airlines in Canada

Post by Kosiw »

One thing about retention bonuses is they tend to be a temporary measure and can be ended rather quickly where as wages increases are much harder to take away once implemented.
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