What’s the Real Story on Pilot Supply?
Here’s What Airline Executives and Industry Analysts Are Saying.
Goldman Sachs
“Also included in this report is an update to our GS Pilot Supply & Demand model, which points to a pilot surplus in most of the supply/demand scenarios we are assuming in our analysis, rather than a shortage in past iterations of the model. While the gating factor for growth in the early stages of the post-pandemic recovery was pilots, we now expect downside risk to capacity to be driven by aircraft availability.
“…Incorporating actual pilot certificate growth from the FAA’s 2022 and 2023 Civil Airmen Statistics reports and changes to historical/forecast fleet statistics, our model now points to a pilot surplus in 2023 under our base and bull case assumptions. Our bear case points to a surplus continuing through 2024 before flipping to a narrow shortage in 2025 (~1% of prior year workforce). The improved outlook vs. the introduction of the GS Pilot Supply & Demand model in December 2022 is primarily driven by higher-than-expected certificates issued (2022 and 2023 were both records) in addition to slower fleet growth and modestly lower-than-expected retirements.”
—“Americas Transportation: Airlines: How does potential downside risk to aircraft availability impact the US Airlines?”, March 26, 2024
TD Cowen
Pilot Supply Now Stabilizing:
“We now believe that demand is fulfilled and expect hiring to normalize in 2024. Airlines have also said they will hire fewer pilots this year. They have been now doing less (flying) with more (pilots), and will now look to grow into their employee base. In the past six months, we have also seen a few airlines (JBLU, SAVE, LUV, and UAL) pause pilot hiring or training due to delivery delays or grounded aircraft.
“Some airlines are pausing pilot hiring and training due to aircraft delivery delays, slowing retirements and parked aircraft resulting from GTF engine issues. United was the latest airline to say it would pause pilot hiring in May and June due to MAX delays. We believe the worst of the pilot issues are behind the industry.”
—Helane Becker, Managing Director, Industrials; Consumer–Airlines, Airfreight & Aircraft Leasing, TD Cowen; The TD Cowen Insight, March 8, 2024
Mesa Airlines
“So that's been a very positive move in the right direction. I will say that, that has come in large part due to the fact that attrition has fallen off. And as you know, the environment has changed significantly. There was a time when none of us could find first officers.
“Now I mean, I think we have close to 2,000 applicants for qualified first officers. The problem now that choke is around captains. But that too will start to improve as more and more first officers build the necessary time. They need to get to 1,000 hours in type so that they can be upgraded. We have put in a couple of the direct entry captain positions and that has generated some additional, but for the most part, it's been lower attrition as well as internal upgrades.”
—Jonathan Ornstein, Chairman and CEO, Mesa; January 19, 2024
SkyWest Airlines
“As shared last quarter, captain attrition has begun to improve, and the fourth quarter showed the lowest attrition we've experienced in two years. With industry-wide hiring also seeming to stabilize, we expect continued progress in 2024.”
—Chip Childs, CEO and President, SkyWest, Q4 2023 earnings call, February 1, 2024
“I think that when you look at the environment, we continue to say that there's further stabilization of captains and pilots relative to what we're seeing and in our models. And I think when you take a look at some of the events that are going on relative to capacity, relative to the number of pilots that all the major carriers already have, I think most of them have more pilots than they did before the pandemic.”
“Looking to the future, when you start talking about overcapacity, we evaluate -- to be candid, just the sheer numbers that the major carriers have hired and what they have today. I mean, I think you can look at publicly filed documents and see most of the major carriers have more pilots today than they did back pre-pandemic. And now we're having conversations about capacity. That's an industry event that we have sort of seen a trend over the past 2 to 3 months which we expect is going to be even stronger over I think the next coming months. That's the big one.”
—Chip Childs, CEO and President, SkyWest; Q3 2023 earnings call, October 26, 2023
CommuteAir
“We can hire first officers. I think almost every regional airline right now has a stack of first officers. The problem is building their time at the same time you’re attriting out captains at a pretty high rate in the industry. We went from a pilot shortage to a captain shortage now in the industry. So the pendulum is starting to move,”—Rick Hoefling, CEO, CommuteAir (Source: Airline Geeks, October 23, 2023)
American Airlines
“And from a regional perspective, it’s really not a pilot supply issue at this point. It’s more of an issue of having first officers with the amount of time, the thousand hours that they need to graduate from the right seat to the left seat,”
—Robert Isom, American CEO; Q323 earnings call, October 19, 2023
Frontier Airlines
“But on the pilot side, we've seen a dramatic change in the marketplace…And I think when you see the regionals being able to be staffed, I think that tells you everything you know about the shortage of pilots. So we don't see any challenges there.”
—Barry Biffle, CEO, Frontier; 4Q 2023 earnings call transcript, February 6, 2024
Sun Country
“As our pilot availability issues have eased, we've been able to achieve our growth plans, and we're benefiting from the operating leverage in the business. Importantly, more pilot availability means fewer hours paid at premium rates and lower unit costs.”
—Dave Davis, President and Chief Financial Officer, Sun Country; 4Q 2023 earnings call, February 2, 2024