Great Lakes Slashes Service to Small Cities, Blames Pilot Shortage

If you live in Devils Lake, Jamestown, Fort Dodge, Mason City, Ironwood, or Thief River Falls, you’ve just lost your only commercial air service link. Great Lakes Airlines pulled out of those cities on February 1 due to, according to a press release on the airline’s website, “the severe industry-wide pilot shortage and its relative acute impact on Great Lakes.”

Great Lakes is an interesting little airline, to put it mildly. The airline (which will once again fly nowhere near the actual Great Lakes edit: and in this case, the Great Lakes are actually the Great Lakes of Iowa, but they still don’t fly all that close), has made its living over the years primarily thanks to the federal government. See, most of the Great Lakes-served cities are Essential Air Service (EAS) markets. That program dates back to deregulation when small cities were afraid they’d lose service when the free market took over. They were right.

Were it not for these government subsidies, airlines would have pulled out of these cities long ago. But thanks to those subsidies, Great Lakes has been able to build its network over the years. But Great Lakes is still an anomaly. While there used to be plenty of airlines flying 19-seat props in these markets, that began to dry up when rules became more strict on how those airplanes could be operated. Despite that, Great Lakes has soldiered on.

Great Lakes New Route Map

After growing recently, however, it looks like Great Lakes has bit off way more than it could chew. On February 1, it effectively shuttered its recently-added Minneapolis hub with only flights to Watertown, Iowa South Dakota remaining. Why is this happening? According to Great Lakes, the recent pilot rule change that requires a minimum of 1,500 hours before being allowed to fly commercially has created a real shortage that is hitting the airline hard.

Dropping 6 cities sounds pretty dramatic, but consider that 4 other cities on the route map are dropping off in the next couple months as well because another airline won the EAS bid. So we are seeing pretty significant shrinkage here. Great Lakes says it simply can’t get the pilots it needs to fly its airplanes, and the operation is suffering.

Flightstats only tracks about half of Great Lakes’s flights, but of those that were tracked in the last couple days in January, about a quarter were canceled. The airline simply can’t maintain its operation as scheduled, so something had to give.

Now, you have to wonder if this is an isolated issue or if the pilot shortage will hurt other airlines and cause chaos around the country. Well, we already have United blaming the pilot shortage for the timing of the closing of its Cleveland hub. (I’ll be writing about that in-depth tomorrow.) But the reality is that it should, at least for now, only hurt the smallest airlines that pay the least.

Great Lakes was bound to be one of the first to feel the pinch here. The airline pays incredibly low wages. A starting first officer gets $16 an hour. That translates into $15,360 a year if you can somehow swing 80 hours a month. Even an 11-year captain on the Beech 1900 won’t clear $35,000 in a year flying 80 hours a month. That’s low. And you aren’t flying to glamorous locations either. This is really hard flying for low pay.

With that in mind, you’d expect that in any kind of pilot shortage, the lowest-paying operator doing hard work is going to suffer first. The greater the shortage, the higher up the food chain the problem will climb.

The mainline legacy airlines aren’t worried about their operations. They have a huge pool of pilots in the regional ranks that would gladly jump at the chance to move on up. The top tier regionals are probably a little more afraid. They still have a pool of places to pull from, including guys like Great Lakes. But the buffer isn’t as big. It’s the guys on the bottom that should be most concerned.

What does this all mean for the future? Well, let’s whip out a basic supply and demand curve. If the demand for pilots exceeds the supply. then the airlines are going to have to start paying more to entice people to come onboard. For that reason, while mainline operations folks aren’t worried, the bean counters are. After all, if wages go up, then regional carriers are going to require larger payments from the mainline airlines to continue service. And the bring it all full circle, it’s those small city flights that are more vulnerable to wage increases.

You’d think this would be a gradual trend, but there are a lot of pilots retiring in the next few years. The supply of pilots will shrink very fast if there aren’t more people coming into the profession at the beginning of their careers. Something is going to have to change.

50 Responses to Great Lakes Slashes Service to Small Cities, Blames Pilot Shortage

  1. SirWired says:

    The marginal regionals were always a shaky long-term proposition. Flying is fun, but a skilled, trained, professional clearing the equivalent of $17 an hour after a decade on the job is just not something you are going to be able to depend on people signing up for.

    This is a problem with no good solutions. The additional experience requirements make sense. But no matter how you slice it it’s either VERY expensive to build up 1,500 hours (by buying time on rental aircraft), VERY low-paid (cargo jobs like flying checks that make $17 an hour look generous) or VERY tedious (building up hours a few at a time as a flight instructor for peanuts.)

  2. Frederick R says:

    Thanks for the analysis Cranky!
    FYI, Watertown is in South Dakota, not Iowa :)

  3. David says:

    What happens to the towns in the middle of nowhere ? Are we essentially saying that even with large amounts of Govt cash there isn’t really an economic reason for their continued existence or does the Govt need to increase the subsidy ?

    • CF says:

      David – I think we’ll find that if the government wants to continue to serve these routes, it’s going to have to up the subsidy. And since no politician wants to be the one who is responsible for service going away in their home district, that’ll probably happen.

      • Carl says:

        Many of the airports who receive EAS subsidies are within a reasonable drive of an airport that is economically viable. Most of these airports should not receive subsidies, and while they might lose commercial service, it will strengthen the remaining airports, encourage shuttle providers, etc. EAS is effectively an entitlement program for unnecessary uneconomic airports. There should be a requirement that for an airport to receive EAS, that there needs to be no unsubsidized airport with commercial service within 150 road miles.

  4. Eric says:

    This is the back-end result of FAR 117 and has created a perfect storm for low paying, EAS dependent carriers like GLA. The pilot puppy mills are in low-gear so there are fewer aviators willing to bite the bullet for a few years to build time and move on to SkyWest or Eagle/Envoy. The majors are pulling from the ranks of RAH,OO,EV, etc. and those seats are being backfilled from people at GLA,Silver and CommutAir. Unfortunately I see these third-tier regional prop-ops dying on the vine or shrinking substantially to fit staffing levels. The collateral damage will be small towns that can not attract interest from the Big 4 regionals. Maybe this is an opportunity for CapeAir. They seem to have figured out how to keep costs in line while recruiting and retaining pilots.

    • Jon says:

      In regards to Cape Air, I would imagine part of the reason they are so successful is due to their ability to price gouge on the non-EAS routes like Boston to Nantucket/Martha’s Vineyard. Boston to Nantucket over Memorial Day weekend is over $500 round trip for a 45 min flight.

      • Carl says:

        It’s not price gouging. It’s using price to allocate limited supply. I would hope they add extra sections on summer holiday weekends as well.

  5. Bravenav says:

    This was an inevitable consequence of the short-sighted minimum hour change. The way Great Lakes in the past was able to entice pilots to fly for them for low wages was by offering them a form of compensation that young pilots treasure–hours. Now the government, in its bureaucratic wisdom, has stripped Great Lakes of this compensation method. This may be a death knell for Great Lakes, for as the other (better paying) regionals also search for pilots, Great Lakes pilots with the required hours will move to those airlines.

    BTW, the namesake “Great Lakes” the airline is named after are the Iowa Great Lakes near the airline’s birthplace in Spencer, Iowa, not the more famous Great Lakes surrounding Michigan.

    • SirWired says:

      It wasn’t short-sighted at all… it was the FAA deciding the increase in the safety of the flying public was more important than the viability of marginal passenger routes. It’s not as if the effect on bottom-dollar operations came as any sort of surprise to the FAA or anybody.

      Ask yourself; why doesn’t everybody pay the same wages for regional flying? The higher-end operations pay more for more experienced pilots because they believe it makes for a safer flying experience. I, for one, don’t want to be in the back of a plane with a pilot making poverty-level wages because he/she is too green to get a better-paying job elsewhere.

      Enough hours to attain a basic level of competence should not be a form of compensation for passenger pilots.

      • Mike says:

        If safety is the end all be all, then explain to me how 1,500 hours of flying time (experience) automatically makes one safe? This is an arbitrary number. I would prefer to have pilots with 5,000 hours, that would make me a lot safer. (by the way how many hours did the Atlas Air crew have when they landed the dreamlifter at the wrong airport, or the Southwest crew that landed at the wrong airport, or the Northwest crew that blew by MSP before they remembered they were “flying” an airplane, and I could go on).

        I am sure there are those that will say they have done studies and conluded… That is statistics and we all know there are lies, damned lies and statistics (thank you Mark Twain). Hours do not equate to experience.

        Besides, as you take away opportunities for pilots to gain experience flying a turbine twin engine aircraft you are reducing the supply of experienced pilots to larger turbine twin aircraft. I certainly do not want to get in an old RJ (or even a new one) with pilots that achieved their hours in small piston aircraft because they have more money than sense as the norm. I do not think that is safe.

        Bottom line is there must be a balance, not these “knee jerk” bureaucratic reactions that are more public relations than reality.

        • SirWired says:

          You are right; hours are no guarantee of safety. But absent any other measure, what exactly are they supposed to use to decide a pilot is ready to transport paying passengers? They do take tests, but any single test simply cannot capture more than a tiny fraction of the skills a pilot needs.

          And yes, statistical studies are no guarantee of truth, but if the FAA is trying to avoid accusations of “knee-jerk” reactions, exactly what do you propose they do instead?

    • CF says:

      Bravenav – I had no idea until today that a Great Lakes region of Iowa even existed. I’ve updated the post, but still, they don’t fly all that close!

    • Captain Pete says:

      “This may be a death knell for Great Lakes”

      Golly gee, I sure hope so. That’d be swell!
      -Captain Pete

  6. Mike says:

    I have no problem with any of this happening. All of the airlines have enjoyed a wonderful labor market for well over the last decade. It’s nice to see things starting to swing the other way for a change. Personally, I think this will continue for another few years, and then you’ll either see airlines sponsoring people to become pilots again, or the FAA enact some silly version of the MPL that you see in Europe.

  7. A says:

    Minimum hour rule or not, Great Lakes flies to places that just don’t have much demand. And looking at many of the cities that got cut they are within an hours drive of cities with much larger airports. So while I’m sure the Chamber of Commerce in Jamestown is upset, my guess is that most residents already drive to Fargo if they need to travel anywhere.

    The real discussion here should be how EAS is being used as a gov’t subsidized pilot training program to get hours. Since that loophole has been regulated away maybe the waste of money that EAS is should be scaled back as well.

  8. You would think the Feds on their 1500 hour rule would have at least had it so a pilot with less then 1500 could only fly with another pilot with over XXXX hours of flying so as not to cause a shortage. Or is there really a shortage? Wouldn’t the Feds have checked to see how many pilots out there fall under 1500 to know ahead of time there would be a problem? If the government is going to still have EAS, they need to make sure their are airlines that cover sectors covered under EAS.

    • SirWired says:

      Each pilot is supposed to have a basic level of competency in running the aircraft. The feds have decided that “basic level of competency” now means 1,500 hours if you want to haul normal passengers (as opposed to freight or students.) You cannot assume that a more experienced pilot will always be able to correct the mistakes of an inexperienced one.

      As a side-note, the Captain has no inherent authority over the First Officer, (who may, in fact, be more experienced), and the senior pilot has no authority over the junior pilot. In practice, the Captain gets to decide who does how much flying, but this is because he/she has labor seniority (not necessarily more flying experience.) Once the engines are fired up, all authority resides with the pilot currently in command of the aircraft, no matter what their job title is, or what their experience is. (Either overall, or with that aircraft type.) To do otherwise would be to completely break the concept of Pilot In Command.

      • Mike says:

        The FARs are pretty clear at who the pilot in command is in a 121 environment. The captain signs the paperwork, and the captain in considered the pilot in command regardless of seat designation, or who’s leg it actually is.

      • Steve says:

        “Once the engines are fired up, all authority resides with the pilot currently in command of the aircraft, no matter what their job title is, or what their experience is.”

        Completely false. The captain of a 121 (scheduled air carrier) operation has full authority over the operation of the aircraft at all times.

    • Captain Pete says:

      No, the Feds don’t check anything in advance. They act retroactively, not proactively.
      -Captain Pete

  9. There isn’t really a pilot shortage as much as there is a shortage of pilots that will do anything for the privilege to fly. I could really rant about this for hours. But finding out about this hard fact of pilot life is why I left aviation and went into information technology. The downside of the 1500 hour rule is ticket prices will increase because there will be fewer extremely low paying pilot jobs. I had a friend who worked for great Lakes for 9 months and went back to flight instructing because he made more money doing that. Which is really sad in my book. And for the cities that great Lakes cut, I know that moab and vernal are now served by skywest which is what both communities would rather want anyway.

    • Dan says:

      Same here, although I didn’t technically go into IT, but data analytics. The company I work for consults to the government on aviation related matters, and pays pretty well. While most AA pilots make more than I do, I get paid better than any Eagle ATR captain, and any other Eagle captain with less than 10 years at the company. When you figure in furloughs that force you to start at the bottom of someone else’s list, I’m quite happy with my career choice.

      I used to say that a pilot is his own worst enemy when it concerns his paycheck. The 1500 hour rule will help increase wages (and ticket prices). But that’s not the only thing affecting the labor market — C172 rentals are no longer cheaper enough to do “just for fun.” You’ve got to make a conscious decision to spend over $100/hour.

      • pilotaaron1 says:

        I completely agree. I think all of this boils down to symptoms of much larger problems (some being corrected, some not). It would really shock the average passenger that on some “bottom feeding” regionals in the past, that the first officer was in fact PAYING to fly in the right seat of that airplane. Luckily those days are pretty much over with a couple of exceptions. Plus aircraft rentals, as you mentioned, are another problem as well. Good luck finding anything younger than 40 years old to rent at a decent price. Hopefully the changes to FAR23 and finding an avgas substitute will change that problem, but honestly I’m not holding my breath. But I do hope.

        • pilotaaron1 says:

          I had to add one more thing. I am so sad for the Colgan accident, it was tragic. I do believe one good thing to come from it is that it shed light on this subject. It needed to happen. Sometimes I wonder how much longer it would have been until this would have been uncovered. I do know the go! flight where the pilots feel asleep and missed hilo contributed to the new rest rules as well. But my parents still don’t get at all why I left such a “high paying” career path. If anyone wants to know more, the PBS Frontline titled, “flying cheap” pretty much nails it. Ok I’ll hop off my soapbox now lol.

          • Carl says:

            The Colgan accident was tragic. But the new rest rules that were introduced in response to that accident would have done nothing to prevent it — because both pilots were operating their very first flights of their trips — and both pilots had commuted and had not slept in a bed the night before starting their trips. One pilot had flown in a jump seat on a FedEx freight flight with a layover in MEM; the other flew in the night before from Florida and spent the night in a crew lounge.

            There need to be changes in regulations about commuting that require the pilots to have access to a bed and get a proper night’s sleep the night before beginning a trip; else all the rest regulations are worthless if they can report for duty unrested.

            Frankly I think the commuting plays into keeping pilot wages low. The high cost of living in the New York area means the pilots cannot afford to live there. If commuting were more restrictive it should lead to increases in pay at high cost stations.

  10. If I remember correctly, Brett, you’ve never been a fan of the EAS system. And I tend to agree with you, overall. Maybe the impending pilot shortage will give all interested parties a reason to do a thorough examination of the whole air transportation network, an evaluation that’s long overdue, in my humble opinion.

    • CF says:

      DesertGhost – You are correct. Other than Alaska and eastern Montana, both of which seem to have valid reasons to support the EAS program, I see it as nearly worthless. I wish it would go away, but it’s political. People in Congress don’t like to lose votes.

  11. Carl says:

    There shouldn’t be EAS subsidies for any airport that is within 150 driving miles (not as the crow flies) of any airport with any non-subsidized service.

    The current EAS program has a crappy definition of service levels and allows for EAS flights at airports that are not far from non-subsidizes airports. It’s a waste of money and doesn’t draw enough passengers to warrant the subsidy.

  12. dan powers says:

    I know hundreds of pilots from my college that are doing other jobs…the poverty level wages that these type of airlines pay was just not in their long term plans. It boils down to supply and demand…as wages increase…the employers get more applicants.

  13. JayB says:

    Wouldn’t it be nice if we had a Congress that was able to look at big issures, consider all sides of them and be willing to do something, something that makes sense for all of America, even if it might cost a “few” dollars. A compreshensive review of Air Service for America.

    There are people in DOT and FAA, most not be paid very much, working themselves to death to keep things going. The airlines are trying, in most cases, and maybe they are done consolidating, or killing off the last of their far too many hubs. And, thank you, all of you underpaid pilots, even if a few of you might no longer be flying out of Cleveland!

    Things are getting bad, and only going to get worse. Like the path we are on with our interstate highway system.

    We hope for safety first, but when you follow some of these Airline Pilot forum posts, and then watch how airlines are contracting out this stuff and that, with oversight of dubious quality, you wonder.

    Cranky for Air Service Czar. Rulemaking everywhere, not sure if it’s Part 121, or is it 135, but we’ll figure it out, won’t we?

  14. JustBob says:

    It’s not that there’s a pilot shortage. There isn’t. It’s just that there is no longer a GLUT,…..of pilots, and there are therefore not as many pilots who are willing to accept McDonalds-level wages simply in order to call themselves “airline pilots”.

    In the past, Great Lakes, (and other bottom-feeder airlines) have relied on the existence of an *excessive* number of pilots and the desperation of those excess pilots, to fill their cockpits.

    Well, along comes reality, (thanks to increased training costs and decades of low wages), but Great Lakes is still apparently addicted to the drug; excess pilot supply. They will either increase their pilot pay in order to compete for pilots, (like every other airline), or they will go out of business! What’s it gonna be, Great Lakes?

  15. tharanga says:

    Outside the US,
    - How do pilots get their hours? On their own dime? Through the military? Through airline training programs, where they get a stipend to make ends meet?
    - How many hours do they need?

  16. yo says:

    The Chadron to Alliance to Scottsbluff flight is just like printing money, surprised we don’t see wide bodies on that flight.

  17. Jayebird says:

    Great article. It is refreshing to see somebody bring pilot pay into the conversation. As a recent “rat jumping off the sinking ship” known as Great Lakes, I can tell you wages were a major part of why I left. Another was the way the pilot group as a whole was treated. I always felt as if I was just part of the equipment to them. That being said, Great Lakes had one of the most demanding training regimes in the industry, turning out some of the most skilled pilots. There are no autopilots or GPS in the Lakes aircraft and the issue of over reliance on automation that has popped up lately is not an issue with an ex-Laker.

  18. Captain Pete says:

    LOL!!!!! Yeah, Great Lakes forgot to mention they have a pilot shortage BECAUSE they won’t pay their pilots livable, ethical wages. As a pilot, I wouldn’t even THINK of THINKING of considering working for Great Lakes because I know how much they pay. Good luck Great Lakes, keep on blaming the pilot shortage, LOL!!!!!

    -Captain Pete

  19. Axelsarkiss says:

    Is this really surprising? It was hard enough to get licensed and build up time only to get hired on at wages lower than Starbucks. Now it’s practically impossible.

  20. Jessica says:

    As a former employee of this airline i believe that this is a blessing in disguise. The flight attendants are only trained for 2 weeks (10 days) before getting put on an airplane alone with passengers. There are a lot of planes that have mechanical issues daily. There was even a time that I flew from Williston nd to Denver co without heat on the plane, if I was a paying passenger I would be pissed to spend $500+ on a ticket and not have heat for 3 hours. There are also times where the planes are over their weight restrictions in those cases the airline employees would take paying passengers bags off and keep employees and their bags on who are flying for few to get to their destination. I would much rather drive to a major city to get on a better airline. This airline is not worth the money you pay and I hope the airline shuts down all together in the near future.

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  22. Eric C says:

    What I’m hearing is that Lakes has gone from 300 pilots to 100 over the last year or so. This story isn’t just about Lake’s inability to hire, it’s about an astounding amount of attrition. Pilots are positively fleeing that place. Lake’s previously had two competitive advantages in attracting pilots: they would hire people with vastly less experienced than any other airline, and they’d upgrade them much faster. Congress removed the first advantage, and in doing so dried up their pool of new hires. Without new first officers, as attrition set in they were forced to staff the right seat with former Captains, eliminating the remaining reason for them to stay at Lakes. And so everyone leaves.

    This is a story that will be repeating itself higher and higher up the regional food chain. The barrier to entry for new pilots is now too high for the reward of the job. I think one solution we’ll eventually see is the majors providing flight training “scholarships” in the 6-figure neighborhood that come with contractual requirements to work at the major’s chosen regional and then for the major itself, at a discounted pay rate.

    • Mark Skinner says:

      One of the consequences of the reduction of ” over-generous” conditions of employment of pilots and cabin staff is that there has been a proportional reduction in staff loyalty.

      Therefore, if you put in some sort of training scheme for pilots, paid for by the company, how do you retain them? You might think that a legal requirement for working for the company is an answer, and with a reduced pay rate to recoup expenses. However, suppose the trained employee then breaks the agreement, how do you recover the money from someone who is young and been working for MacDonalds wages? They have no money to recover. Declare themselves bankrupt, and too bad for the creditor. How do you stop them from going overseas where their US training and hours will get them twice as much money?

      This question was one that vexed major companies in the early days, and the only solution that worked was the pension schemes. Leave the company, and you lose benefits. However, there are now no such schemes for new entrants, so good luck for companies big and small if you are looking to retain staff. Loyalty cannot be expected if you pay low wages and there are no incentives to stay. Pilots have to feed their families, so if the next airline down the road pays a dollar an hour more, the loyalty of the pilot is to their family to take that dollar these days. Of course some airlines overseas pay more too, and US training is good generally.

  23. Great post, intervention from an outside source, government, will usually lead to, at minimum, a few unforeseen results. In this example we have a artificially stimulated business model servicing areas that cannot sustain that service. Then rules are changed as a knee-jerk, look what we did, reaction and now it will cost everyone a lot more money.

    People can blame Great Lakes if they want to, but either they are making money on those routes or they aren’t. They are a business looking to make money for their investors, not a non-profit charitable airline flying because it’s fun (which it maybe). If they have qualified crew to fly those routes and they are making money then they continue, but a change of rules as drastic as we’ve seen was bound to have some adverse results and Great Lakes cancellations of routes was just a few of the bad results.

    If we find that these changes result in high salaries for the pilots then I feel that is a good result. We are competing with foreign carries paying much better wages and we really need to find a better model to compete with them. Unfortunately most of those carriers are either wholly owned or heavily subsidized by a their respective foreign government.

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  25. Nancy says:

    My recommendation would be: NEVER fly Great Lakes Airlines. My family has been the victim of these flight cancellations 8 times in three flights and will NEVER fly them again. Their customer service is non-existent and , most recently, their flight cancellations cost us $200 in change fees for our connecting flight and then they cancelled the flight they rebooked us on resulting in lost wages for two people for a full day. It’s not just a pilot shortage that causes issues for this airlines. It’s pure mismanagement.

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  27. E. says:

    The best thing to do is to drive. Let ALL the airlines go bankrupt. They are treating people with less and less respect. They take no responsibility for their flight schedule changes, in giving refunds to customers or paying for hotels. This airline does whatever it wants to without giving a reason. They deserve to go down the pan. I don’t care about their excuses. I will NEVER fly with them again, neither will my family. I have been the victim of one of their major flight changes, just days before departing, and I’m not going to put up with this abuse again. I’d rather drive, even if it takes days to get anywhere, because in the end, it’s starting to take just as long, or longer, just to fly from one state to another, and you can’t even trust the airlines to keep to their schedule, or refund/compensate for when they do have to change. They should never cancel or makes changes to flights unless it is for a dire emergency, such as a dangerous storm or something. This airline is NOT TRUSTWORTHY. If they cant’ deliver what they are supposed to, they should give customers their money back.

  28. bob says:

    they claim its an industry wide “pilot shortage”?
    just ask delta, fed ex, spirit etc how many resume’s they
    have on file… literally thousands

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