Horizon Air Is Canceling Hundreds Of Flights Due To A Pilot Shortage

For the past decade or so, a vast majority of new pilot jobs in the US have been at regional airlines. That’s because after 9/11, when airlines weren’t doing well, most of the legacy airlines had a hiring freeze. Some didn’t hire any new pilots for nearly a decade. Given the mandatory retirement age, we’re now seeing lots of pilots retire, and as a result, the legacy airlines are once again hiring pilots.

The flip side of that is that there’s a shortage of regional airline pilots. That’s both because many regional pilots have now chosen to join legacy airlines, and also because many decided not to pursue careers in aviation following 9/11, given the lack of job security.

One airline that can’t hire pilots fast enough is Horizon Air, a subsidiary of Alaska Airlines. The Seattle Times has an interesting story about the issue Horizon Air is having with a pilot shortage, which has forced them to cancel over 300 flights this past month:

On Thursday, Horizon Chief Executive Dave Campbell sent a memo to employees announcing that the airline is cutting multiple flights in August and is studying its fall and winter timetables “to ensure we have schedules that we can reliably operate.”

Campbell wrote that the pilot shortage, coupled with the airline’s unprecedented growth as it has added aircraft, “created a perfect storm.”

“June will go down as our ‘bump in the road’ — our moment when things got too far off track, and now, we must decide how to recover,” Campbell told employees. “We have established a war room to daily manage potential cancellations.”

To make sure the rest of their summer operates more smoothly, Horizon Air has canceled about 6% of their August schedule. On top of that, Horizon Air is doing everything they can to address the problem. They’re:

  • Offering pilots 200% overtime pay to encourage them to fly more
  • Offering bonuses of up to $20,000 to new hire pilots
  • Boosting their recruiting staff from two to six people
  • Increasing starting pay for pilots from $30 per hour to $40 per hour
  • Increasing the number of check airmen they have from 19 to 34, so that more pilots can get certified as quickly as possible

But here’s what’s possibly the most interesting part of the story. Horizon Air’s pilot union is unhappy that the airline wants to offer pilots 200% overtime pay, and instead wants them to pay the contractually agreed upon 150%. Essentially the union views this as a bribe, and says it doesn’t address the long term issue that they have:

Horizon’s management and the Teamsters agreed in April on a new contract that specifies that overtime should be paid at 150 percent, not 200 percent.

In a letter to Horizon pilots last week, the union leadership — counterintuitively — objected to the company paying more than the contract stipulates and urged the pilots not to accept what it called a “200 percent bribe” to fly extra flights.

Greg Unterseher, director of representation for Teamsters Local 1224, said in an interview that the union objects to the company unilaterally amending the terms of the contract.

It doesn’t want management paying a handsome bonus now just to get through the crisis, then taking it away later.

I’m not sure I totally follow the union’s logic here. It’s clear Horizon Air is doing everything they can to hire new pilots, and the contractually agreed upon overtime pay is 150%. The union doesn’t want management paying a bonus to get through the crisis and then “taking it away later.” But even if they “take it away later,” the pilots would get 150% overtime pay, as is contractually agreed upon.

You’d think as many pilots earning as much money as possible would be a good thing, especially given Horizon’s efforts to hire. It’s not like they’re trying to save money by not hiring pilots so they’re instead paying some pilots overtime, in which case I could understand the union’s objection. But this I don’t get…

Bottom line

A lot of regional airlines have pilot shortages at the moment, though it’s probably impacting Horizon a bit more than other airlines. That’s because many pilots who have the goal of advancing in aviation would rather fly jets than the turboprops that Horizon Air operates.

It seems like Horizon Air is doing everything they can here, though the union’s objection is an interesting one.

Comments

  1. The pilot shortage was not primarily caused by the 9/11 hiring freezes, it was caused by the “1,500 hour rule” which was implemented after the Cogan Air accident.

  2. I can actually understand where the union is coming from. Allowing Horizon Air to unilaterally make changes to a labor contract when “the times are good”, even if for a good reason, sets an awful precedent for when “the times are bad”. In other words, the union is trying to prevent Horizon from unilaterally offering lower pay when the next airline industry downturn occurs, and Horizon decides they can only temporarly pay pilots 125% OT pay, and they cite their temporarily 200% OT pay as reason to be allowed to do so.

    Plus your article states that the union just renegotiated a contract in April … so, did this shortage issue only develop in May? I doubt that it has since you state that legacies are on a big hiring push which probably started before they signed their contract in April. So, why wasn’t this addressed by management in their last contract negotation 3 months ago?

    What this screams to me is that management knew that shortages might be a problem, but didn’t want a 200% OT rate baked into a multi-year contract they just negotiated. Further, I could understand the union’s hesitance to deviate from a contract that was just negotiated; they are probably irked to no end. But I am sure if Horizion wanted to amend said contract, to increase pay, I am pretty sure the union would say yes. However, I’m willing to bet Horizon doesn’t want to do that, so they are trying to have their cake and eat it too.

  3. @jouniormint: “In other words, the union is trying to prevent Horizon from unilaterally offering lower pay when the next airline industry downturn occurs, and Horizon decides they can only temporarly pay pilots 125% OT pay, and they cite their temporarily 200% OT pay as reason to be allowed to do so.”

    That’s not the way contracts work. There is no harm/damages in paying people more than the agreed upon rate, but there is harm/damages when paying them less.

  4. “It seems like Horizon Air is doing everything they can here”

    Well, clearly they’re not. I see they’ve increased their starting wage to $40/h which, I assume, is still lower than Delta etc. If Horizon were really “doing everything they can here” they’d increase their salary to X% above what the big boys pay and they’ve have all the pilots they want. 1st yr econ….if they can’t offer a competitive salary for their revenue then, again, basic econ tells use their business model is not viable.

  5. @Juniormint

    It sounds like you know nothing about unions and union contracts. It is very common in union practices to accept “greater benefits” during times of company need. Like for instance overtime paid as 200% rather that 150%. There is no possible way for them to pay less in the event of a downturn, because that in turn is protected in the union contract which is binding and any court would uphold in a second.

  6. “I’m not sure I totally follow the union’s logic here.”

    That was your first error in analyzing their statement.

    Seriously the union wants higher standard wages, and more pilots, and hence members. Generally speaking they are not going to be looking for win win solutions. They view this as a zero sum game. Standard MO.

  7. I noticed that SEA-SBA is going mainline in Sept. I wonder if this has anything to do with it, or if there are similar routes going to mainline.

  8. @Charlie H and @Cole —

    True, I don’t. I also never said that they would be successful in getting to pay lower than what the contract stipulates, but that hasn’t stopped companies from trying to not uphold their labor contracts in the past or else you wouldn’t have relevant case law to cite as to why I may be wrong. It has been my experience in non-labor/union related contracts where deviating from agreed upon terms, even if it benefits and is not objected to by the other party, can establish a precedent to deviate from said contract in the future, which in turn could cut in the opposite direction. That to me, sounded like the reasoning provided by the union rep above where he said “…[the] union objects to the company unilaterally amending the terms of the contract.”

  9. This is all because of FAA’s useless 1500hr rule to accomplish this after spending a lot on flight school is scary and disheartening

  10. I think the union’s position here is interesting. It’s like they’ve realized their members will happily leave for a mainline carrier as soon as they can and now they’re paying attention to their prospective members as much as their current. It’s a smart move and overdue. Horizon, Republic, etc are now on notice that they cannot count on an unlimited supply of junior pilots at whatever price they decide. For what it’s worth, I typically feel for the management side in most disputes, but I’m glad to see a middle class union actually do what they’re supposed to and represent all their workers, not just the old ones. This can be nothing but beneficial for the industry. It’s inexcusable that a pilot can make less than a fast food assistant manager.

  11. Juniormint – Do you really have any “experience” with contracts? I find it hard to believe there is a legally binding employment contract that allows companies to pay less than the contract states you must be paid on the basis that “they voluntarily paid extra in the past so can just choose to pay less whenever they want in the future”.

    I’m no expert, so I’m genuinely curious what type of contracts allows such precedents to be made.

  12. It is called concessions and when times are bad the first thing mgt does is go to the union and say “hey we are going to have to furlough people unless you guys take concessions. I.e. Pay cut.

    I should know I am a 20 year united pilot.

  13. James – And then the union can say “no”…. This does not remotely tie their hands or force them to accept anything. If times were tough Horizon could do exactly the same without increasing pay from 150%.

  14. “I’m not sure I totally follow the union’s logic here.”

    Snickered at that one. I don’t follow the logic either, but it must have something to do with impacting union dues.

  15. It is a bribe to get through a crisis.

    If they crewed the airline above an absolute minimum staff they would have a reserve and wouldn’t be cancelling flights.

    $30-40 an hour is barely a living wage too. Remember, pilots are paid only when the plane is moving. 75 to 80 pay hours per month is an average block… despite spending many more hours at the airport flight planning and preparing for flights, not to mention all the time on the road in hotels…

    Pay more and you’ll get more pilots applying.

    What we have is not a shortage of pilots, but a shortage of pilots willing to work for poor wages.

  16. Not sure when Horizon is scheduled to get their first E175 but I would speculate that many Q400 pilots have transitioned or are in training now for the new airplane and thus are unable to help with the current shortfall. Complications associated with adding a new airplane type that management failed to plan for.

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