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CHICAGO, Nov. 23 (Reuters) – Whether it’s offering a signing bonus to signing bonuses or poaching employees of other airlines, U.S. carriers are striving to increase their workforce to the holiday season and avoid the disruption that has hampered air travel this summer.
After downsizing by the thousands at the height of the pandemic, the industry is grappling with a shortage of pilots, flight attendants and customer service agents.
Critics say the understaffing is to be found in the airline industry itself, as significant job cuts last year, despite $ 54 billion in federal aid to help cover wage costs, l ‘have left ill-equipped to manage the resumption of air travel.
Airlines said the bailouts saved thousands of jobs, prevented bankruptcy and put them in a position to support the economic recovery after the pandemic.
A spokesperson for Delta Air Lines (DAL.N) said the company had no time off or job losses linked to the pandemic. However, the company recorded around 18,000 staff departures last year in the form of retirements or voluntary departures.
With a shortage of volunteer workers across the United States and companies fighting frantically over them, carriers are forced to spend more to attract talent.
“The reality is that the hiring environment has changed in the wake of the pandemic,” American Airlines (AAL.O) chief operating officer David Seymour told employees in a note this month. this.
Piedmont Airlines, the American subsidiary, is trying to entice pilots with a bonus offer of $ 180,000. United Airlines (UAL.O) is offering a signing bonus of $ 5,000 for a ramp agent position in Boston.
Spirit Airlines (SAVE.N) has increased the salaries of its ramp agents by 30%. The low cost carrier offers a one-time graduation bonus of $ 1,250 and up to $ 4,500 per year in tuition reimbursement for flight attendants.
The rush to hire in a tight labor market is pushing up costs at a time when soaring jet fuel prices and rising airport charges are also squeezing profits.
Southwest Airlines (LUV.N) wage costs as a percentage of revenue are up 14 points this year from 2019. There have been similar increases in wage costs at other carriers, including United and American.
Yet the headcount of US scheduled air carriers in October was 14.3% below the pre-pandemic peak. In contrast, employment in restaurants and bars, hit just as hard by pandemic lockdowns, is only 6.4% below its peak before the COVID-19 outbreak.
GET OUT OF THE PACE
Industry experts attribute the slow recovery to the attractiveness of attracting jobs to passenger airlines.
Salaries in some entry-level airline jobs, especially low-skilled ones, are pale compared to those in other industries, although the work has become more difficult.
The situation is worse among regional carriers, which operate 43% of American, United and Delta flights. These companies provide connectivity to low density networks, but their pilots and crews are paid much less.
Even in regional airlines, which are subsidiaries of American and Delta, the pay gap is huge.
For example, entry-level American flight dispatchers earn more than double the amount collected by their Piedmont Airlines counterparts. There is a similar gap between the salary ranges for Delta and its regional Endeavor Air unit.
Ketura Johnson, who heads the Piedmont flight attendants union, said many workers have been forced to get second jobs because wages at the regional carrier are not high enough to cover living costs.
Piedmont flight attendants voted last month to authorize a strike, demanding better wages and benefits. “We are fighting for a living wage,” Johnson said.
A LONG ONGOING CRISIS
Analysts say the job crisis was in the works long before COVID-19 hit the industry. They trace its genesis to a wave of bankruptcies and consolidations after the September 11 attacks, which made carriers overly cost-conscious and excessively focused on productivity.
As airlines have shrunk, they have become more dependent on employees logging more hours. The Association of Flight Attendants estimates that the workload of flight attendants increased by at least 25% after September 11.
The pandemic-induced drop in air travel has prompted the industry to double cost cuts, leaving it the smallest workforce in more than three decades. Meanwhile, quarantine requirements or illness further depleted her resources.
“COVID was the tipping point,” said Henry Harteveldt, founder of travel consulting firm Atmosphere Research Group. “It tore the protective layer of the airline industry and exposed many of its underlying challenges.”
Airlines started hiring again this spring as declining COVID-19 cases brought in passengers back. But the supply of new pilots is limited, and freight carriers from Amazon.com Inc (AMZN.O), United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N) are also in the running for them.
Faye Malarkey Black, director of the Regional Airline Association, said the supply of new pilots fell 60% in 2020. This year, it is about 36% lower than pre-pandemic levels, he said. she declared.
Concerns about an impending pilot shortage have plagued the industry for years. That hasn’t stopped carriers last year from halting hiring and offering buyouts and retirement packages to thousands of airmen.
INCREASING ATTRACTION RATE
Faced with a crisis, they now poach massively from regional carriers.
SkyWest Inc (SKYW.O), which operates flights for Delta, American and United, said last month its attrition rate was in double digits.
To be sure, regional airlines have been losing pilots to major carriers for years. But Black said the trend is now “on steroids”.
Subodh Karnik, managing director of Georgia-based ExpressJet Airlines, compared the demand for pilots to the frenzy of the US real estate market where homes are inundated with offers within days of listing. He said a fifth of regional airline pilots were ripped off by major passenger and cargo carriers before they could even complete their mandatory training.
Insufficient staffing risks causing operational collapses of the kind that have led to a wave of high-profile flight cancellations in recent months.
Carriers such as American and JetBlue (JBLU.O) are offering bonuses, higher wages, and other incentives to ensure they have enough workers for what is shaping up to be the busiest holiday season. for two years.
If shortages persist, Karnik warned that major carriers could stop serving less profitable routes.
United has decided to cut eight routes in the Midwestern and Southern United States from its network. The airline’s chief executive, Scott Kirby, told tourism news industry website Skift last week that the cuts were the result of a pilot shortage.
“We don’t have enough pilots to fly all the planes,” he said.
Reporting by Rajesh Kumar Singh in Chicago Editing by Tim Hepher and Matthew Lewis
Our standards: Thomson Reuters Trust Principles.
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