Airlines

American Airlines regional carriers hike pilot pay more than 50% as shortage persists

Key Points
  • Piedmont and Envoy pilots will get 50% pay premiums through August 2024.
  • Pilot attrition is rampant at airlines and has crimped growth, executives have said.
  • The smaller carriers are a breeding ground for pilots who often end up flowing through to major carriers.

In this article

American Airlines Embraer ERJ-145 regional jet aircraft as seen on final approach landing at New York JFK international airport in NY, on February 13, 2020.
Nicolas Economou | Nurphoto | Getty Images

Two American Airlines-owned regional carriers will hike pilot pay by 50% through the end of August 2024, the latest sign airlines are willing to pay up in hopes of ending a pilot shortage that has left some travelers with fewer flight options.

The increases would make the pilots the highest paid of the U.S. regional airlines, ramping up pressure on other carriers to follow suit.

Including separate, permanent pay hikes, the temporary raises will bring hourly wages for first officers in their first year of flying at Piedmont Airlines to $90 an hour, up from $51 an hour, the company said. For first-year captains, pay will be $146 an hour, up from $78 an hour. The airline could extend the temporary hikes if needed, Piedmont's CEO said Monday.

Airlines have been on pilot hiring sprees since last year when travel demand began to bounce back from Covid pandemic lows. But a persistent shortage of pilots is still hindering growth at a time of strong demand, prompting airlines to park jets that serve smaller cities. Part of the problem is that airlines encouraged pilots to take early retirement after demand cratered in 2020 and were left with too few when travel rebounded.

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That has intensified the competition for pilots.

"Attrition of the regional pilots, particularly the captains, has really spiked to the point where we're not able to put our fleet in the air," Piedmont CEO Eric Morgan told CNBC.

The airline, based in Salisbury, Maryland, has been losing about 25 pilots a month to American's mainline operation and has fallen short of its goal to hire around 40 pilots each month. It flies 50-seat Embraer ERJ-145s for American, usually between smaller cities, but hasn't been able to operate 10 of its roughly 60 planes, Morgan said.

Piedmont approached the union with the pay increases that were outside of normal contract negotiations, said Morgan and Capt. Ryan Miller, chairman of the Piedmont chapter of the Air Line Pilots Association.

Envoy Air, based in Irving, Texas, said Saturday it reached a similar agreement with its pilots' union to shell out a 50% premium to pilots' hourly rates through the end of August 2024.

Envoy, which has about 2,000 pilots, had been losing roughly 80 pilots a year to other airlines and hiring about 60, including American, according to Capt. Ric Wilson, the carrier's vice president of flight operations. He said the bulk of the attrition had been among Envoy captains.

Kit Darby, a pilot-pay consultant and a retired United captain, said raising regional pilots' pay is a positive step but that the bar was low. He said airlines need to ask, "What is a living wage and what will it take to attract pilots to the career?"

The pay increases come as some of the largest pilot unions — those representing more than 35,000 aviators at Southwest, Delta, JetBlue and American — are in contract talks with their carriers.

American Airlines pilots picket outside the New York Stock Exchange on June 2, 2022.
Leslie Josephs | CNBC

American's management recently offered its roughly 14,000 pilots a 4% raise at the date of signing and then a 3% increase in the next year. Allied Pilots Association spokesman Dennis Tajer called that "insulting."

"Good on the pilots receiving these raises but when you have an airline that's pushing across a more than 50% pay increase, it's recognizing with dollars that they have a problem," Tajer said. APA pilots picketed at the New York Stock Exchange earlier this month for an improved contract and better schedules.

American didn't immediately comment on the union spokesman's remarks.