An updated estimate of regional pilot populations
United's two for the price of three deal; plus, where are traveler volumes headed?
After crescendoing ahead of Easter and Passover, TSA throughput looks to drift sideways for the next few weeks. If 2019 trends hold—and they broadly have thus far during Spring Break—the 7-day moving average of travelers screened might recede by 2.6% during the remainder of the month. Hardly a cratering of demand, but enough of a lull for us to get around to some blog ideas that’ve been accumulating.
We expect checkpoint volumes to turn upwards with more conviction during the second week of May. Accordingly, we’re penciling in our next outlook post for travel on Friday, May 13; in the interim, we’ll try to keep ahead of air travel disruption on Twitter. And, of course, let us know if there’s an itinerary you’re concerned about!
If the back half of April starts to resemble 2021 instead—and TSA throughput bends upward… well, about now—we’ll advance the resumption of outlook posts.
To quickly recap what informs our forecast
We had last considered pilot populations as it related to March schedules, when we estimated regionals were short by nearly 2,600 pilots. That post had proposed a methodology for gauging the pilot shortage wherein:
2019 pilots per block ratios were applied to forward-looking block amounts to approximate employed pilots, assuming that Network Planning will have sized block hours according to pilot availability;
and 2019 pilots per aircraft1 ratios were applied to latest fleet counts to approximate how many pilots are needed to utilize their fleets at a level consistent with pre-COVID (i.e. closer to fully utilized).
We’ve since increased the sampling2 of 2019 ratios to better account for uncertainty in our forecasts. Coupled with final fleet counts and block times, we’re revising our median March estimate downwards to short by 2,800 pilots. We’ll also note that we should get 2021 categorical airline employment data from the DOT3 (which breaks out pilots) during the first week of May. While this has benefit of being an actual accounting, not forecast, of pilot populations, there is a significant lag—it’s the weighted average number for any employee who received pay during the year.
One more practical question to resolve: How far out can we look using this method?
As we covered in a January post about selling schedules and our March look at aircraft utilization trends, we need to identify what month most recently underwent its major load4. United looks to be the limiter on our horizon, with July capacity shrinking by 2.6% in the Apr. 18 OAG snapshot—a large enough one-week change to be indicative of a major load. Our best guess is that the July major load occurred alongside the Mar. 14 and Mar. 28 OAG snapshots for Delta (capacity down 2.7%) and American (capacity down 1.3%), respectively. If any reader knows differently, pass it along!
Still short 2,800 pilots (and that’s the good news)
So what direction are things trending? If our median forecast is accurate, regional airlines in aggregate will have at least stabilized their pilot population between March and July—though that still leaves them short by more than 2,800 pilots.
However apparent gains at SkyWest mask deterioration elsewhere: excluding SkyWest, the shortage will deepen by 13.4% between March and July in our median estimate. And we’re not even sure SkyWest’s gains are entirely real. Given the legal limbo associated with their EAS exits, we wouldn’t be surprised if they’re taking a wait-and-see approach that results in some double-spending of pilots in the interim5. Elsewhere, Envoy and PSA, two wholly-owned American Airlines subsidiaries, swing to a narrow shortage by July in our median estimate. And our same laggards from March—Mesa, CommutAir, GoJet and Air Wisconsin—remain short pilots even in an [unreasonable] best case July scenario.
To contextualize the problem, let’s set Mesa aside for a moment (allowing us to forgo some extra work to prorate pilots between the United and American CPA6) and consider just CommutAir, GoJet and Air Wisconsin (who fly exclusively for United). By our math, these 3 airlines combined could afford to shed approximately 97 aircraft to reach fleet size-pilot population equilibrium. That’s an entire7 regional airline worth of pilots that is missing from United’s exclusive partners alone.
2019 block from Reporting Carrier On-Time Performance table (CRS elapsed time field); reporting carriers are 9E, MQ, OH, OO, YV, YX. 2022 block from 4/18/22 OAG Snapshot.
2019 fleet count from Schedule B-43 Inventory; reporting carriers are 9E, G7, MQ, OH, OO, QX, YV, YX. 2022 fleet count from annual reports and Planespotters.net.
Previous method produced just 3 scenarios:
Midpoint, derived from the median pilot/aircraft and pilot/block ratio;
Good case, derived from first quartile pilot/aircraft (e.g. low need) and third quartile pilot/block (high available) ratios;
Bad case, derived from third quartile pilot/aircraft (e.g. high need) and first quartile pilot/block (low available) rations.
New method applies all pilot/aircraft ratios to all pilot/block ratios in a matrix-like fashion, resulting in 48 samples.
Schedules from OAG, Cirium, etc. only loosely reflect the airlines’ plans beyond a 90-120 day horizon; moreover, COVID caused that horizon to contract, though airlines have been working to push it back. While selling schedules are maintained on an ongoing basis, there’s typically one “major” update when each month’s schedule is cutover to a more realistic facsimile.
We suspect both the EAS flights and their earmarked “funding” continue to sell, wherein the airlines will cancel one of (1) EAS flying, if allowed or (2) some non-EAS flying, if blocked from exiting the EAS markets on their desired timeline.
Regional airlines provide flying to mainline carriers under capacity purchase agreements (CPA), wherein the mainline partners pay a rate that varies with the number of completed flights, flight time and the number of aircraft under contract.
A 97 aircraft regional airline would rank between PSA (130 aircraft) and CommutAir (76).