Regional Airline Service Update. South Dakota Airport Management Association Annual Meeting Sioux Falls, SD October 4, 2017

Transcription

1 Regional Airline Service Update South Dakota Airport Management Association Annual Meeting Sioux Falls, SD October 4, 2017

2 Regional Airlines by the Numbers 2

3 Regional Airlines by the Numbers 3

4 Regional Airlines Are Critical Infrastructure 4

5 FORECASTS HIGHLIGHT A SEVERE AND WORSENING PILOT SHORTAGE 5

6 Dramatically Fewer Pilots 6

7 Unprecedented Attrition 7

8 Far-Reaching Potential Job Losses When aircraft are parked without pilots, the impact is widespread and complex. RAA airline members employ more than 59,000 people. Besides 20,000 pilots (not all actively flying), regional airlines employ: 10,000 support staff 1,000 flight control 8,000 mechanics 15,000 flight attendants 5,000 customer service 8

9 Far-Reaching Economic Consequences 1.1 M $ $36.1 B $121.5 B In 2015, the economic impact of small community air service is estimated at $121B supporting over 1.1m jobs Source: InterVistas

10 U.S. Communities are Losing Air Service Between 2013 and 2016 hundreds of U.S. communities experienced schedule reductions: 259 lost at least 10% 156 lost at least 20% 87 lost at least 33% 52 lost at least 50% 29 lost at least 75% 18 airports lost all of their air service. 10

11 South Dakota Air Service Regional airlines provide 87% of South Dakota passenger air service Between , overall departures down -24% ABR (Aberdeen Regional *EAS) -1% departures / -1% seats ATY (Watertown Regional *EAS) -83% departures / -57% seats FSD (Joe Foss Field) -10% departures / +4% seats HON (Huron Regional) -63% departures / -63% seats PIR (Pierre Regional *EAS) -56% departures / -25% seats RAP (Rapid City Regional) -7% departures / -8% seats 7 RAA member airlines provide scheduled service to South Dakota SkyWest, Trans States, Mesa, Envoy, GoJet, ExpressJet, Endeavor In 2017, aviation will account for $1.4 billion in SD s economy and support over 15,000 SD jobs (Flightpath Economics ) 11

12 South Dakota Air Service 12

13 South Dakota Air Service South Dakota 2013 vs. 2016: -24% departures and -4% seats = upgauging Up-gauging has occurred when the rate of change in departures and seats are not the same. Departures are decreasing at a greater rate than seats in South Dakota. 13

14 South Dakota Air Service 14

15 U.S. Military Facing a Pilot Shortage The pilot shortage is a shared problem.

16 U.S. Military Faces Pilot Shortage This is a supply-demand mismatch The nation as a whole is producing less pilots than we need in order to service commercial, business and military aviation. I m the lead advocate as the airman on the Joint Chiefs of Staff, because we re all affected by this but we have to look nationally at incentives to increase the supply. Gen. David Goldfein, U.S. Air Force Chief of Staff Pilots are strategic national assets and the pilot crisis extends beyond the Air Force and military. It is a national problem which requires senior-level attention in Congress, the Commercial Industry, and the DoD Today the Air Force has a rated manpower shortfall of approximately 1,550 pilots across the Total Force. Lt. Gen. Mark C. Nowland, USAF Deputy Chief of Staff (Operations) Senate Armed Services Committee March 29, 2017

17 POLICY FACTORS DRIVING THE PILOT SHORTAGE 17

18 The Pilot Shortage + Policy = Crisis A 2013 Federal regulation (First Officer Qualifications) intended to increase pilot experience constrained supply further by elongating the pathway and driving up the cost of becoming a pilot. Pilots graduate training with around 250 hours. On average, it takes approximately two more years for student pilots to earn the additional time required to reach 1,500 hours. 1,

19 Becoming a Pilot is Prohibitively Expensive The added cost of getting those hours boosted the price tag for becoming a commercial airline pilot to about $200,000. Most of these costs, such as flight training or gaining additional hours in flight, are not covered by student loans. It is becoming financially impossible for all but the wealthiest students to become pilots. 19

20 The Additional Training Myth There is a misconception that pilots spend these two additional years between receiving structured, high-quality training. That is not the case. Pilots do not receive any additional training during that time. Instead, they have two options to get to 1,500 hours they pay out of pocket for additional flight time, or they do any type of flying they can that will get them hours. This includes flight instruction, banner towing, and crop dusting. 20

21 The Additional Training Myth After spending two years flying aircraft that bear no resemblance to the technologically advanced jets used by today s regional airlines and without supervised training pilots are expected to succeed in commercial airline training.

22 Pilot Source Study 2015 An independent study of 7000 pilot training records, conducted by six of the most trusted aviation universities in the country, showed the opposite: Pilots hired after the rule required more extra training and failed to complete training than before the rule. Pilots with lower hours in flight performed better than pilots with higher hours in flight. Longer times between graduation date and airline hire corresponded to decreased training performance. R-ATP pilots (pilots with structured training credit toward flight hours) had the best outcomes. 22

23 Structured Training Pathways Congress has already authorized Alternate (R-ATP) Pathways that eliminate some unsupervised flight hours in favor of additional structured training. Military and Academic Institutions are already approved for these R-ATP Pathways Regional Airlines have proposed additional, training-focused pathways to the commercial airline cockpit. The training would be offered by airlines, paid for by airlines, and certified by the FAA as achieving a higher level of safety. 23

24 Airline Based Structured Training Pathways Bridge gap between pilot training and qualification, providing additional structured training before a pilot is released to line flying. Incorporate rigorous screening, testing, academics, checks, audits, mentorship and more. High-quality simulators would prepare pilots for scenarios they don t encounter when building flight hours in fair weather, like icing on the wing, or losing an engine. The FAA would approve programs line-by-line, to ensure they enhance safety. 24

25 Recruiting Success Falling Despite Investments RAA member airline first year, First Officer average total compensation rose more than 150 percent between 2015 and today. RAA member airlines pay first year, First Officers an average total compensation of $57, % of RAA member airlines (by fleet) pay first year, First Officers an average compensation of $59,930. Overall recruiting success declined during the same period. Higher pay has not resolved the pilot shortage; broader solutions are needed.

26 Regional Airlines are Investing in Pilots Flow programs and significant salary investments, starting year one. Collegiate and training institution partnerships, creating career progression stability and opportunities. Tuition reimbursement agreements. Internship, cadet, and leadership development programs. Preferred or guaranteed hiring agreements from universities. With your help, airlines can begin to offer another source of support to pilots, through airline-funded, safety enhancing structured training pathways. 26

27 Congress Should also Invest in Pilots In addition to promoting additional structured training pathways, lawmakers should: Expand student loan coverage for flight training. Establish student loan forgiveness programs for pilots. Expand GI bill funding and allow more flexible use. Create tax incentives for employer-based loan forgiveness programs. 27

28 Washington s Role in Recovery Senate Commerce Committee Chairman John Thune (R-SD) included language in the Senate FAA Reauthorization that affirms and expands FAA s authority to approve additional structured training pathways, including pathways funded by airlines, when they enhance safety. Senate Minority Leader Chuck Schumer (D-NY) has threatened to filibuster FAA reauthorization over the pathway language. Chairman Thune needs our support to protect rural air service. 28

29 AIR TRAFFIC CONTROL REFORM: MORE WORK NEEDED TO ENSURE RURAL ACCESS 29

30 Air Traffic Control Reform Senate FAA bill does not include ATC proposal. House FAA bill would privatize ATC. All modeled fee scenarios under House plan exceeded current excise taxes on regional flight segments to smaller communities, imperiling these routes. RAA supports ATC reform in concept, but opposes the House proposal over lack of assurances of access and cost neutrality for small communities. 30

31 ESSENTIAL AIR SERVICE 31

32 Essential Air Service Appropriations: FY17 funding levels expire December 8 th omnibus likely. Neither House or Senate THUD bill incorporate EAS cuts sought in President s budget. Congress should fully and predictably fund the Essential Air Service program and resist proposed cuts to the program. Many of the perceived inefficiencies in the EAS program are symptoms of larger issues, especially the shortage of qualified pilots. Eligibility reform should be paused until the pilot shortage is resolved. 32

33 CALL TO ACTION 33

34 All Politics is Local Chairman Thune has included a safety-enhancing solution in the Senate FAA bill that improves pilot training, lowers pilot education costs, and protects small community air service across the country. This solution is running into Washington politics, but the battle won t be won in Washington, alone. South Dakota lawmakers are strong on the issue; engagement from airports in other states is critical. 34

35 Thank You. Faye Malarkey Black President, Regional Airline Association