Airlines struggle to curb pressure on pilot staffing

 - August 24, 2007, 5:48 AM

Pilot attrition proved the bane of the U.S. regional airline business during the first half of the year, forcing flight cancellations that cost carriers not only passenger revenue and goodwill, but performance penalties under the terms of their mainline code-share contracts. Judging by the sentiments airline CEOs expressed recently, better recruiting and training efforts have stopped the proverbial bleeding. But signs of continuing problems persist in many markets, as most major airlines continue to draw recruits from the regional ranks at a pace not seen since before 9/11.

One of the airlines perhaps most taken off guard by this year’s sudden increase in pilot turnover, Memphis-based Pinnacle Airlines, reported that it paid a second-quarter penalty of $1.3 million to mainline partner Northwest–an airline whose flight cancellation rate routinely ranks below Pinnacle’s. All told, during the first half of the year Pinnacle paid Northwest $2.4 million for failing to meet contractual flight completion benchmarks.

Remarkably, though, Pinnacle’s completion rate ranked second only to SkyWest Airlines among all regionals required to report to the Department of Transportation during the period. Pinnacle canceled 2.1 percent of its flights in June–not a stellar showing, but far from the 6.4 percent it canceled in February and better than
the regional airline industry’s average. In fact, for the month of June regional airlines posted four of the worst five completion rates published by the Bureau of Transportation Statistics. The only major in the bottom five–Northwest Airlines– ranked third-worst, with a cancellation rate of 5.3 percent.

Contract Negotiations Stall
Since Pinnacle issued its first-quarter financials in May, pilot attrition has returned to forecast levels–albeit higher than last year’s rate–after the company incurred abnormally high hotel and crew training costs during the first half of this year. Notwithstanding the penalties levied by Northwest, Pinnacle’s improved cancellation rates reflect a better staffing situation, according to CEO Phil Trenary. “If you consider how much of our operation is concentrated in the Northeast and the issues we’ve had all summer long with the whole Northeast corridor…the airline has done very, very well,” he said.

Unfortunately, contract negotiations with the ALPA-represented pilots, now under federal mediation, haven’t gone nearly as well. “I have to tell you I’m a little frustrated that we’re still at the negotiating table,” Trenary conceded.

His counterpart from Phoenix, Mesa Air Group CEO Jonathan Ornstein, betrayed a bit of frustration himself with the fact that his outgoing pilots have given, on average, just 11 days’ notice before leaving for greener pastures. A hiring spike by low-fare carriers JetBlue, AirTran and, most notably, Denver-based Frontier Airlines’ new Bombardier Q400 operation Lynx Aviation, hit Mesa hard early in the year and no doubt exacerbated its poor operational performance in June, when it canceled 6.4 percent of its flights.

Although Ornstein attributed the poor performance to weather, ATC and the aftermath of code-share partner United Airlines’ well publicized computer problems, the Air Line Pilots Association prefers to blame attrition and low morale. The union took its message to the public this month with billboards in Atlanta, Charlotte and Phoenix and press releases calling on the airline “to address pilot staffing and morale issues that are reaching critical levels and negatively impacting Mesa operations.” ALPA said that nearly 400 pilots left Mesa during the first seven months of this year due largely to management’s violation of work rules and other contract provisions. Given that Mesa employs some 1,800 pilots, 400 resignations equates to an annual attrition rate of close to 40 percent during the period.

“We clearly had a spike in the early part of the year, and saw attrition rates that we had not seen for some time,” said Ornstein. “However, I will tell you that in the last month our attrition has gone back, not quite to last year’s levels, but far closer to last year’s levels than they were the prior few months…Unfortunately, we did have some shortages earlier because frankly when you have an eleven-day average notice, and it takes you approximately 90 days to train, there is that lag. But we are ahead of that lag at this point and we do not see this as a problem going forward.” Ornstein did concede that things could change, “but at this point we think we’ve got the situation pretty well under control.”

ASA’s Struggles
Another airline that has endured its share of pilot headaches, SkyWest Airlines’ Atlantic Southeast subsidiary, has recently seen its performance suffer, in some respects, to a greater degree than even Mesa’s. Perhaps not coincidentally, five years of on-and-off talks with ALPA for a new contract have turned more confrontational lately, as ASA pilots staged informational picketing this month at six outstations, chosen specifically for their limited service options. Operating in some of the most delay-prone markets in the country, ASA has never enjoyed a tranquil operational environment, but June’s numbers might tell more about the airline’s relationship with its pilots than it perhaps would care to broadcast.

“The pilot staffing issue has really been impacting the operation, especially during this busy summer travel season,” said David Nieuwenhuis, head of ASA’s ALPA unit. “Pilots are leaving the airline because we have been stuck working under an obsolete contract negotiated in 1998 with sub-par pay and work rules. And worse yet, nobody wants to come to work under these kinds of conditions so the company can’t even hire new pilots to fill the empty cockpits.”

While posting the industry’s fifth-worst cancellation rate, at 4.2 percent, ASA registered an industry-worst 56-percent on-time performance rate in June. Of the eight flight segments that experienced delays 100 percent of the time, ASA operated five of them, namely Atlanta to Myrtle Beach, S.C.; Atlanta to Chattanooga, Tenn.; Atlanta to Hilton Head, S.C.; Atlanta to Milwaukee; and Chattanooga to Atlanta.

Perhaps most telling, the DOT reported that 16.23 percent of ASA’s flights arrived late due to circumstances within its control, compared with an 8.13-percent industry average.

Still arguing over 12 disputed issues including pay and job-security guarantees, the sides scheduled their 290th meeting for August 28. The National Mediation Board promised to send an official to mediate.