Pilot shortage, consolidation, aircraft threaten 200+ communities with loss of service

By Kathryn B. Creedy

A lot of focus has been placed on the so-called 1,500-hour rule requiring regional airline pilots have a minimum of 1,500 hours before taking the right seat of a commercial aircraft. Obviously, it has created the pilot shortage we have now and threatens to ground 1500 aircraft in the regional airline fleet, according to industry.

Little coverage, however, has been devoted to what that means to the towns that have lost or are about to lose service because airlines don’t have enough pilots. In 2016, then American Association of Airport Executives (AAAE) Chair Jeff Muldar said 30 communities lost air service since the 2013 implementation of the 1500-hour rule. He said another 86 lost 10% or more of their service including such major markets as Cleveland, Memphis, Louisville and numerous state capitols.

Fast forward a single year and InterVistas Consulting President Deborah Meehan reported the number has risen to nearly 50 communities. Perhaps a more daunting number is a comparison to how many communities have been lost since the 1990s. Regionals once served more than 800 communities, some of which were the bread and butter of the regional airline industry. Today that number is less than 400.  More telling still, she said 168 US airports rely on aircraft less than 19 seats, 69 of which are in lower 48. Another measure of losses is the fact regionals used to provide over 50% of all passenger lift but today that number is down to 44%.

Screen Shot 2017-06-09 at 10.22.39 AM
Source: Regional Air Service Alliance (RASA)

The risk of increasing losses was put into high relief by Meehan who briefed Regional Air Cargo Carrier Conference attendees in April about her organization Regional Air Service Alliance .

“In 2015, the economic impact of small community air service was conservatively estimated at $121 billion,” she said, discussing the importance of air service to the economy of these communities. “That supports 1.1 million jobs and $36.1 billion in direct economic activity. Small communities are losing service at five times the rate of large hub airports.”

Screen Shot 2017-07-05 at 9.08.45 AM
Source: RASA
Screen Shot 2017-07-05 at 9.11.28 AM
Source: RASA There are more than 350 small communities, of which 64 are small hubs, 105 EAS points and 186 non hubs. Together they field 4,000 daily flights and more than 300,000 seats. Tellingly, the average distance to a medium or large hub is between 125 to 200 miles. That is a lot of windshield time. Equally telling is the average seats per departures which shows that frequencies are far lower than they once were.

Industry trends conspire against community air service

Interestingly, she pointed to three reasons for the loss of community air service adding airline consolidation and the lack of a suitable aircraft for community air service.

“Failing to resolve these issues will undermine the economic development efforts in 200 small and rural communities,” she told RACCA attendees. “That means that regulatory change is necessary and we need to focus on increasing the pilot supply and the development of small turboprop that can economically serve small communities for them to remain economically relevant. We are in real jeopardy of being regulated out of business.”

The problem, however, is a matter of time. Even if the rule were overturned tomorrow, it would take three to five years before the industry sees these new pilots. This, at a time when fully 42% of pilots from the big five airlines will be retired by 2026, less than a decade away, according to Cowen Research analysts.

Meehan noted the number of the losses between 2014 and 2016 were mitigated because lost frequencies were replaced by larger aircraft minimizing seat loss. However, we have reached a tipping point today because new larger RJ orders are few and the mainline scope clause restrictions prohibit increasing RJ size to allow full replacement of lost service.

Screen Shot 2017-06-09 at 10.32.31 AM
Source: RASA

“This year – 2017 – marks the year when frequency cuts will likely not be met with seat increase,” Meehan reported. “The fear is that 150 to 200 markets likely have insufficient traffic or population to support larger jet service.”

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Source: RASA
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Source: RASA

One of the major issues Meehan cited was the prohibition against airport use of their own revenue to enhance service. However, that does not preclude cities and counties from fielding such funds as the city of St. George, UT, and Washington County did to field service between St. George-Phoenix and St. George-LAX providing start-up subsidies to SkyWest Airlines.

Airport service losses resulted in the creation of the Regional Air Service Alliance (RASA) which she introduced to RACCA members during her speech. This important organization, a research-based advocacy group, joins RACCA and others in working to bring sense to a nonsensical regulation imposing an arbitrary metric to pilot skill which both the FAA and NTSB opposed.

RASA membership includes 80 airports and one airline, Meehan told Payload Connector, many of which are very familiar to RACCA members who struggle with the same issues as their passenger airline and airport counterparts.

Screen Shot 2017-07-05 at 9.20.20 AM

The greatest risk, said Meehan, is at non-hub airports where reduction of seats is greatest.

Screen Shot 2017-07-05 at 9.21.41 AM

“Airports that cannot support 76-seat aircraft have to decide whether to fix the problem or continue to let air service and economic development at our nation’s small communities suffer a death by a thousand frequency cuts,” she warned.”

Aircraft solutions are being ignored

“Aircraft with less than 50 seats or less represent 32% of departures at small hubs and 71% of departures at non hubs, making them vulnerable as airlines trade up to larger aircraft to partially offset the pilot shortage,” she said.

Screen Shot 2017-06-09 at 10.10.44 AM
Source: RASA

What is so interesting about Meehan’s remarks is they echo regional airline presidents who are in search of a new aircraft to fill in the losses wrought by consolidation and other changes in airline service. One airline chair said he’d chuck his entire code sharing business to serve intra-regional and intra-state markets abandoned by the majors. The only thing stopping him, he said, is the lack of a new small turboprop that would make these markets successful. Otherwise he sees  these abandoned markets as have high profit potential.

While the rise of subscription airlines such as Surf Air provides a promise of regional airline service replacement in these markets, it remains to be seen whether this model would ultimately morph into the type of service once provided by regional airlines in their heyday.

Today, only one aircraft designed for community air service is under development and now in the testing phase – Tecnam’s P2012 Traveller – the push for which was led by RACCA’s own Cape Air. But many airlines around the world need something bigger in the 19- to 30-seat range and there is no activity on this front. Still others around the world, rely on Cessna’s robust Caravan and provide safe and affordable Single-Engine Turboprop (SET) operations even over extended water flight owing to the reliability of modern engines.

A look at the map of 272 airports served by 50-seat-or-less aircraft shows the opportunity and the increased convenience of an airline concept that removes the hub from the equation. Hubs are great for airlines but not for passengers who lose valuable productivity in being routed through them. Still, such a concept would still face the pilot shortage problem.

Screen Shot 2017-06-09 at 10.17.30 AM
Source: RASA
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Source: RASA

Most of the arguments surrounding the pilot shortage issue are very emotional, based on a single accident that had little bearing in the reality or safety of the industry, especially since both Colgan pilots had far more than the minimum now required. Despite that, none of the proposals offered by industry to help ameliorate the pilot shortage advanced to date have advocated for a reduction in the 1500-hour time although they should.

“The problem is we are all tilting at the same windmill,” said RACCA President Stan Bernstein. “The airports have RASA, then there is RACCA and RAA. What needs to happen is we need to join together and speak with one voice about the true impact of the 1500-hour rule.”

The other problem is trying to cut through the emotional, non-science based arguments that powerful Washington interest groups push. Perhaps if we do join together with science and facts, something can be accomplished. But as Meehan points out, all issues pivot on the pilot shortage. You cannot create new solutions with innovative aircraft or route connections without first having enough pilots to fly them.

 

Author: payloadblogger

Kathryn B. Creedy authors this blog on behalf of the Regional Air Cargo Carriers Association (RACCA). She is a freelance aviation journalist and communications specialist. https://www.linkedin.com/in/kbcreedy/

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