From pilots to ramp agents – US airlines are doing everything they can to attract staff

CHICAGO, Nov. 23 (Reuters) – From offering premium wages to hefty signing bonuses or poaching employees of other airlines, U.S. airlines are doing their best to ramp up staffing levels for the holiday season and avoid disruptions that will mar air traffic this summer.

After cutting workforces by thousands during the depths of the pandemic, the industry is grappling with shortages of pilots, flight attendants and customer service representatives.

Critics say the airline industry has caused the workforce shortage as major job losses last year, despite an infusion of $54 billion in federal aid to cover payroll costs, has left it ill-equipped to handle the airline snapback.

Airlines have said the bailouts have saved thousands of jobs, prevented bankruptcies and enabled them to support the economy’s recovery from the pandemic.

A spokesman for Delta Air Lines (DAL.N) said the company had no time off work or job losses as a result of the pandemic. However, the company left some 18,000 employees last year in the form of retirement or voluntary separation.

With a shortage of willing workers in the United States and companies frantically competing for them, carriers are being forced to spend more to attract talent.

“The reality is that the hiring environment has changed as a result of the pandemic,” American Airlines (AAL.O) chief operating officer David Seymour told employees in a memo this month.

American subsidiary Piedmont Airlines tries to lure pilots with a $180,000 bonus offer. United Airlines (UAL.O) offers a $5,000 signing bonus for a Boston platform agent position.

Spirit Airlines (SAVE.N) has increased wages for its platform agents by 30%. The ultra-low cost airline offers a one-time graduation bonus of $1,250 and up to $4,500 per year in tuition reimbursement to flight attendants.

The rush to hire in a tight labor market is driving costs up at a time when rising jet fuel prices and higher airport charges are also weighing on profits.

Southwest Airlines (LUV.N) payroll costs as a percentage of sales are up 14 points this year from 2019. There have been similar increases in payroll costs at other airlines, including United and American.

Still, the workforce at US airlines was 14.3% below its pre-pandemic peak in October. By contrast, employment in restaurants and bars, hit just as hard by pandemic lockdowns, is just 6.4% below its pre-COVID-19 peak.

REPLACE ALLURE

Industry experts attribute the slow recovery to the declining attractiveness of passenger airline jobs.

Wages for some entry-level jobs in aviation, especially those for the low-skilled, pale in comparison to those in other sectors, even as the work has become more challenging.

The situation is worse for regional airlines, which operate 43% of American, United and Delta flights. These companies provide connectivity to low-density networks, but their pilots and crews are paid much less.

Even among the regional airlines that are subsidiaries of American and Delta, the pay gap is huge.

For example, entry-level flight coordinators at American earn more than double the amount their counterparts at Piedmont Airlines earn. There is a similar gap between pay scales at Delta and its regional unit Endeavor Air.

Keturah Johnson, head of the Piedmont flight attendant union, said many workers have been forced to look for second jobs because wages at the regional airline are not high enough to cover living expenses.

Piedmont flight attendants voted last month to approve a strike, demanding better wages and benefits. “We’re fighting for a living wage,” Johnson said.

A CRISIS LONG IN THE MAKE

Analysts say the labor crisis was in the works long before COVID-19 hit the industry. They trace its genesis to a wave of bankruptcies and consolidations after the 9/11 attacks, which made carriers too cost-conscious and focused too much on productivity.

As airlines slimmed down, they became more dependent on employees who worked longer hours. The Association of Flight Attendants estimates that flight attendants’ workload increased by at least 25% after 9/11.

The pandemic-induced plunge in air traffic prompted the industry to cut costs, leaving it with the lowest workforce in more than three decades. Meanwhile, quarantine requirements or illness have further depleted resources.

“COVID was the tipping point,” said Henry Harteveldt, founder of travel consultancy Atmosphere Research Group. “It tore the protective layer of the aviation industry and exposed many of the underlying challenges.”

Airlines will resume hiring staff this spring, as the immersion of COVID-19 cases brought back passengers. But the supply of new pilots is limited and freight carriers from Amazon.com Inc (AMZN.O), United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N) are also competing for them.

Faye Malarkey Black, head of the Regional Airline Association, said the number of new pilots will drop by 60% in 2020. This year it is about 36% below pre-pandemic levels, she said.

Concerns about an impending pilot shortage have haunted the industry for years. That didn’t stop airlines last year from suspending staff hiring and providing thousands of pilots with buyouts and retirement packages.

INCREASING DEGREE OF EXECUTION

Faced with a crisis, they now hunt heavily on regional carriers.

SkyWest Inc (SKYW.O), which operates flights for Delta, American and United, said last month that turnover is in double digits.

Of course, regional airlines have been losing pilots to major airlines for years. But Black said that trend is now “on steroids.”

Subodh Karnik, chief executive of Georgia-based ExpressJet Airlines, compared the demand for pilots to the frenzy in the US housing market, where houses are flooded with offers within days of their listing. He said a fifth of pilots on regional airlines are snatched by major passenger and cargo carriers before they can even complete their mandatory training.

Insufficient personnel risk causing operational meltdowns of the kind that have led to a spate of high-profile flight cancellations in recent months.

Airlines such as American and JetBlue (JBLU.O) offer bonuses, higher wages and other incentives to ensure they have enough employees for what will be their busiest vacation season in two years.

If the shortages persist, Karnik warned major airlines could stop serving less profitable routes.

United has decided to remove eight routes in the US Midwest and South from its network. The airline’s CEO, Scott Kirby, told travel news industry website Skift last week that the cuts were the result of a shortage of pilots.

“We don’t have enough pilots to fly all the planes,” he said.

Reporting by Rajesh Kumar Singh in Chicago Editing by Tim Hepher and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.