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Experts Sound Pilot Shortage Alarm in New Podcast


Flightpath Economics’ inaugural podcast explores the financial impacts from the pilot shortage on the US airline industry

In the first-ever Pilot Shortage Podcast, hosted by Flightpath Economics, a panel of aviation and business experts concluded that a broad swathe of U.S. airlines are exposed to financial risks from a deteriorating supply of qualified professional airline pilots. The supply-demand balance for qualified pilots continues to shift and is driving changes in labor costs and availability. The panelists recommend investors take note and understand that pilot scarcity is creating disruption across the U.S. airline industry. The podcast can be downloaded at www.flight-economics.com/financial-consequences-airlines-listen-latest-pilot-shortage-podcast.

Major U.S. airlines are facing a massive wave of mandatory retirements, rising pilot costs, and are reliant on regional partners to provide network connectivity. Regional airlines, low-cost carriers, cargo airlines, and business jet operators are directly exposed to the pilot shortage and will encounter substantial challenges in adapting to the scarcity of qualified pilots.

The podcast features commentary by an aircraft manufacturer, a Wall Street analyst, and a labor economist. As a generation of pilots retires out of the workforce, the supply is not keeping pace.

“There is a pie of available pilots. We’re not growing the pie and that’s the challenge,” said Courtney Miller, Director of Sales for North America at Bombardier Aircraft and one of the guests.

“At the end of the day, this pilot shortage is going to cost financial performance. It's going to hurt profitability. We’ve seen it pretty broadly distributed, meaning that everyone is paying more for pilots,” said another guest, George Ferguson of Bloomberg Intelligence. “If this keeps going, I would anticipate that the problem will become more complicated down at the ultra-low-cost level.”

“Since about 2013 or 2014, the market has shifted from a buyers’ market to a sellers’ market,” said Dan Akins, a labor economist at Flightpath Economics.

Akins added that U.S. airlines are either “career-oriented airlines or stepping stones. The worst position to be in, from a management perspective, is to think that you’re a career airline when pilots look at you as a stepping stone.”

Listed companies considered in this podcast include: Delta (DAL), United (UAL), American (AAL), Southwest (LUV), Allegiant (ALGT), Spirit (SAVE), SkyWest (SKYW), Mesa Air Group (MESA), Air Transport Services Group (ATSG), Atlas Air Worldwide (AAWW), Amazon (AMZN), FedEx (FDX), and United Parcel Service (UPS).

About Flightpath Economics LLC

Flightpath Economics LLC is a professional consulting firm that identifies and solves complex problems in the commercial aviation industry. As active participants in modernizing and restructuring the aviation sector, the firm’s professionals provide strategic guidance, economic analysis, and data-driven negotiation support to customers throughout the aviation industry.

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