American Eagle Envoy Pilots Throw Down the Gauntlet, Try to Call American’s Bluff

The idea of pilot shortages at regional airlines may seem mundane to those of you outside the industry, but this has created some absolutely fascinating situations that will impact every air traveler. Most recently, union leadership at American Eagle Airlines (which I’ll refer to as Envoy here since the name is changing soon), opted not to let its membership vote on a concessionary contract that was stated to be the last and best offer from American’s management. American will now do what it can to shrink Envoy into oblivion, but Envoy pilots are betting American won’t be able to pull it off in light of the lack of pilots around the industry. This is a risky strategy, but it does highlight how things are changing.

Envoy Pilots Call American Airlines Bluff

For years, the regional strategy was the same for most carriers. Mainline airlines looked to a variety of regional carriers to carry passengers for cheaper than they could themselves. Naturally that meant the regional carriers paid lower wages as one way of keeping costs down. That wasn’t a problem because the supply of employees to work at lower wages was seemingly endless. Even the highly-skilled pilot ranks were filled with people willing to do the job on the cheap. And they even paid for their own training, putting them into debt as they worked their way up to the minimum 250 hours required.

Why would the pilots do that? Well, they loved to fly and there was a promise of a better life. With airlines growing, the regionals were an entry point into the sought-after job flying for the mainline carriers. That dream was hit by a truck when the bubble burst in 2000/2001.

Since that time, airlines have shrunk on multiple occasions putting their own pilots on furlough. Meanwhile the pilots at the mainline carriers that remained stopped retiring. See, at the end of 2007, Congress raised the mandatory retirement age for pilots from 60 to 65. So essentially until just about a year ago, no pilots retired. There were a lot more qualified pilots than jobs out there, so the regionals could continue to pay less but those pilots weren’t going anywhere. They were just living on a dream deferred.

On some occasions, regional pilots tried to stand up and demand more. Even if they made short term gains, they were simply marginalized in the long run. The mainline carriers could just move on and pick a different regional. In some cases, that meant the end of the regional entirely. Look at Comair, one of the earliest regionals that succeeded at flying jets for Delta. Its costs were too high, and Delta eventually opted to just shut it down, moving flying elsewhere.

Those regionals with higher costs who failed to bring them down faced certain doom. And that burden usually fell on the employees.

Sometimes the mainline carriers would dangle carrots in front of the employees of their regionals in order to get them to cut wages. US Airways-owned regional PSA was offered 30 more big regional jets if the pilots agreed to concessions just last year. They did. American Eagle pilots were offered more big jets as well if they did the same. They didn’t.

What was the difference in these situations? Just a little bit of time.

I already mentioned how pilots had started retiring again last year, and there are a lot that will be hanging it up in the next few years. That already had people talking about a pilot shortage, but the government kicked it into overdrive with new regulation. In the name of “safety,” they introduced a new rule requiring pilots to have 1,500 hours of experience (or a little less in certain circumstances). That combined with new pilot rest rules that force airlines to hire more pilots to fly their existing schedule means the tables have turned.

Airlines are now struggling to find the pilots they need to fly their schedules at all. Just a few examples that have popped up in the last couple weeks…

And that brings us to Envoy once again. The airline’s pilots were faced with concessions if they wanted to get a bunch of big jet flying from American. The union leadership, seeing all these shortages, refused to even let the pilots vote on the agreement. They shot it down outright.

The way they see it, pilots have leverage for the first time in recent memory because there aren’t enough qualified pilots out there. So they are going out on a limb and refusing to make concessions. In other words, they are trying to call American’s bluff.

For its part, American has said if the pilots didn’t agree to concessions, the airline would slowly but surely move regional flying to other partners. Envoy will eventually cease to exist. The Envoy pilots, however, think that American can’t find any regionals to do the flying, considering how many are short on pilots. They think American will come crawling back. I tend to think they’re overestimating their chances.

American will be looking to pull out some of the 50-seat aircraft in its regional system and those pilots will be able to fly bigger jets. American could make a deal to swap them out and give them a fast track to flying mainline. In addition, this shortage is likely a shorter term issue. It’s hard for a pilot to justify spending a ton of money to get 1,500 hours only to get paid a tiny amount of money once they cross the threshold.

While many speculate that the way to fix the problem is to increase wages, I think another solution is more likely. Instead, the airlines can work on putting together (or partnering with existing) training programs that get pilots through without the massive debt they’d require otherwise. It may take some time before the airlines figure out how this will work, but eventually they will.

Does this mean costs will go up? Yes. Will that make it harder to serve smaller cities? Yep. It just means that the government will have to decide if it wants to pay even more to retain service in these cities or if it will just let it go away.

As for Envoy, the airline is going to try to play its hand at the time when it has the most leverage it will likely ever have. Can’t blame them for trying, but it could mean the beginning of the end for the airline if they haven’t played their cards right.

(Visited 296 times, 1 visits today)

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

45 Comments on "American Eagle Envoy Pilots Throw Down the Gauntlet, Try to Call American’s Bluff"

avatar
Sort by:   newest | oldest | most voted
Xnuiem
Member

I agree the way out of this mess is for the mainline carriers to start partnering with the training shops. European carriers have been doing this for a very long time. Lufthansa and BA both do it. They pay for your training, you get a job, and you are just required to spend a set number of years flying for them. It is actually very similar to how you would go the military way of being a pilot.

Sean S.
Guest
The reality is why not? Facing concessions you can either 1) take them, and continue to face subpar wages that you can’t live on or 2) call their bluff and make a run for it and lose a job that isn’t paying your bills anyways. Given those two options most people in a skilled employment position are going to take option #2, because hell, there’s nothing to really lose here. Worst case scenario they all get handed pink slips and simply filter out to other carriers anyways. It’s not as if the overall flying is going to decrease substantially to… Read more »
tharanga
Guest

the airlines have finally learned what a pilot’s reservation wage is.
http://en.wikipedia.org/wiki/Reservation_wage

Somebody going to med school or law school will put up going into debt because they’ll be able to pay it off afterwards with a high-paying job. Why should somebody go into debt to get their flying hours, only to work for peanuts at a regional for several years?

How do new pilots in other countries get their hours? Surely they aren’t all doing it on their own dime (or through the military)?

Donald
Guest

Many ICAO (International Civil Aviation Organization) countries have a Multi Crew Member Commercial Rating. These are pilots who do not meet the requirements of a Full Commercial Rating (This means they are not qualified to be Pilot in Command of an light air-taxi or charter aircraft, but can be a crew member of an airliner. This is how they meet their needs. A recent
article in Flight International, a researcher related the safety concerns of highly indebted pilots.

Hugh Jorgan
Guest

Do you realize that a person with “Multi Crew” license is just someone trained to babysit the airplane while the REAL pilots are resting ? With a Multi Crew license you can’t even rent a cessna and fly yourself around because they are only trained on how to push the buttons on an autopilot and not how to REALLY FLY. Do you really want to put your kids on an airplane like that and hope that if there’s an emergency the REAL pilots can get to the cockpit in time ????

Eric A.
Member
The legacies have enjoyed over a decade of cheap feed by playing regionals against each other. L- United was masterful at playing the game and earned the rep as “the black widow of regional partners”. (Go to ATW and ask former long time partner Air Wisconsin…once a wholly UA owned sub). Shifting metal around was easy because there were plenty of pieces on the table and even the most obnoxious RFP would get several takers. Those days are gone….barring a black swan economic/political event, they will not return. The 4 pillars that propped up regionals for 20 years (cheap labor,… Read more »
A
Guest
“It means that weekday frequencies from Big City A to Big City B will go from 15 RJ’s to 4 737/320/717 and 1 or 2 RJs.” Airlines can always raise fares so demand equals the available pilots but in aviation we have a wonderful option where we can vary the aircraft size to meet demand too. Often I’ve said that back in the 1980’s I flew into small cities in 727’s that today is served by only CRJ’s. The only difference from today is that they had far less frequency. Things worked then and they will work that way again… Read more »
dan powers
Guest
Looks like American Eagle owned by american airlines will come to an end…just like comair owned by Delta died. These 2 airlines will be the martyrs for the rest of the regional industry. The race to the bottom has ended…the remaining commuter airlines will now find out that slave wages will not keep them alive. If they want to stay in business they must pay their pilots a fair wage(not one that qualifies for food stamps)…and charge their Legacy- parent a realistic fees per departure to operate these 50-76 seat regional jets. By the way the FAA public records show… Read more »
dan powers
Guest

once american and usair are fully merged…american eagle will dissapear…replaced by american connection= made up of PSA wholy owned(already recipinet of the CRJ900’s)…and piedmont also wholy owned…air wisconsin will cease to exist. the rest of the flying will be divided among Mr.Bedford, Mr.Ornstein, Mr Kanodia and skywest(which by the way will be fully merged with express jet). piedmont will eventually become and all JET operation as the DHC-8’s get grounded because they approach their 40k hour limits.

Dan
Guest
Brett, I think you should elaborate on this statement a bit more: “They think American will come crawling back. I tend to think they’re overestimating their chances.” The training academy, as you pointed out, may be an option down the road. But, as others say, it’s going to take some time to spin up. I also don’t know what’s a practical number of hours to fly in a day while building up to the 1500 requirement. Assuming they can fly 8 hours a day (which is high in a stressful training environment, although not so bad for traditional line flying),… Read more »
LT_DT
Guest

It the curriculum and training at the academy are rigorous enough, the FAA might conceivably lower the hours required below 1500 for its graduates. I think that this is the case with military pilots. They need fewer than 1500 hours to get a civilian job under the assumption that their training meets rigorous standards and their experience might be more relevant.

David SF eastbay
Member

Seems like if AA shuts Envoy down even slowly, wouldn’t those out of work pilots want jobs and go to the other regionals AA would start using who would now be hiring more pilots so they in turn would be right back working for AA but at the bottom of the senority list and maybe even making less money?

These pilots need to remember union leaders work for the union so would not loose their jobs, it’s they the pilots that would so they need to step up and not let outsiders decide their fate.

Realist
Guest

This is exactly the line of reasoning on which Parker and Kirby are betting.

Juan
Guest

They rejected because AA regional partners are all paying higher wages than AA offered Envoy.

Boy Blue
Guest

It won’t work that way, the pilots at Eagle have been there for years and certainly most won’t start over again at year one pay. We have a few Comair pilots at our airline but most of these guys went on to do other things.

jeremy
Guest

And this is why Southwest, Jet Blue and Spirit are going to survive. No regional flying, only mainline with mainline pilots. No hub and spokes, just a great route network.

SEAN
Guest

Technicly Southwest & JetBlue have hubs, but they aren’t at the scale of Delta, American or United. They call them focus cities. Look at BWI, LAS & MDW for Southwest – they function like hubs even if that isn’t the intention. As for JetBlue at JFK, that is a hub no matter what you call it.

Realist
Guest
Tangential to this thread but of interest would be a discussion regarding how the AA/US merger, if not “saved”, definitely helped SWA out of tight spot. They were getting squeezed by higher operating costs and the resultant inability to distinguish themselves from their competition based on price; labor strains were already showing. Along comes Parker who not only increased new AA’s labor costs by over a half billion dollars annually (and US Airways by ~ 40%) in order to bribe, er I mean “woo”, the pilots, but the merger also will cause fares to increase, giving SWA breathing room on… Read more »
DesertGhost
Guest

You set out the issues very well, Cranky. I wonder what impact the new tentative contract Republic just worked out with its pilots will have (assuming it’s ratified, of course).

Austin
Guest

Why was Fee for Departure even created? Maybe it should just be eliminated. I like the Allegiant and Spirit model. I think Southwest is veering toward a major mentality which is sad. Allegiant and Spirit PAX may feel like they’re being cheated but they keep coming back so their models have to be working for the present.

Dan
Guest

Probably for schedule and equipment. I remember back in the day that the regional carriers could sell their own seats, which presumably means they had more say in the scheduling and aircraft fleet planning

Nick Barnard
Member

Fee for departure is mostly about risk shifting. The majors wanted a spoke flown, but it might not’ve made sense depending on how you sliced the revenues in general. The majors got the plane to fly where and when they wanted it to, and the regionals only had to deal with making sure the plane actually flew, not if it sold enough seats to be profitable.

Eric C
Guest
So two of United’s major feeds (XJT and CHQ) have pulled down flying, and American is proposing to remedy their own situation by laying off the very pilots to whom they just paid a $7500 signing bonus so that they can go solve United’s staffing woes. Meanwhile both Republic and SkyWest pay *more* to fly the same planes. Where is American going with this? There’s a train of thought that says the majors are well aware of the looming pilot shortage and are trying to strong-arm their way into long lasting, low-cost contracts to carry them through it, lest labor… Read more »
Anonymous
Member

While it’s the pilots who think they control this situation, American Eagle have a couple of thousand other other employees in a variety of roles – all doing a fine job. Eagle has done a great job in ground handling other airlines, for example, and it would be a pity to see it suffer. Maybe they’ll spin that off too?

Ben
Guest

Eagle ground handling is horrible unless you are flying on a plane painted in and operating under an AA codeshare flight. But don’t you worry, that part of the company will continue to exist long after the fate of the flight ops department has been decided.

sfitzgerald86
Member

This faux Craigs List ad seems a pretty accurate depiction of what AA is attempting to extract from the Envoy pilots from my distant perspective: http://dallas.craigslist.org/dal/lbg/4332339424.html

Realist
Guest

Funny. Except it should be signed by Scott Kirby; Pedro is just a messenger in this chess match.

Eagle Pilot
Guest
“The Envoy pilots, however, think that American can’t find any regionals to do the flying, considering how many are short on pilots. They think American will come crawling back.” I don’t know where you got this idea from; as ALPA has stated we fully expect AA to make good on their promise. You have to understand a little bit about our history – after 9/11 many Eagle pilots were displaced back to the right seat (First Officer) and/or could not upgrade to Captain for many years because of the flow through/flow back program with American. Nobody ever expected that there… Read more »
Realist
Guest

Oh, but I thought Parker was the answer to all the labor problems at AA? Right Brett? LOL

Another Eagle Pilot
Guest
As stated above, there is no feeling in the Eagle ALPA union leadership that we can’t be replaced. I was at the meeting, and it was said several times that the “Comair” threat made by mgt (or their hired union buster, actually) is very real and certainly can happen. My personal feeling is that enough is enough, and that Mr. Parker is going to do whatever he’s going to do, with or without concessions. I’ve spent 14 years working for subpar wages while subsidizing too low airfares, and I’m done. Either I get hired by a major, flow through to… Read more »
Mark Skinner
Guest

Perhaps like many other US trained pilots you might like to consider working overseas?

Some of the outfits pay reasonably well for experienced people.

Donald
Guest
Reply to several points made by the uninformed. 1. “All those ATP s out there can replace you”. Just holding an ATP doesn’t mean you are qualified. Do you hold a current medical? Are they active pilots? Many I suspect were obtained as personal milestones by amateur pilots. I used to reply to a Chief Pilot who would threaten me with all those apps he had on file. Half weren’t qualified. Of the other half, half of them you probably couldn’t contact because they had a job already. So now you are down a quarter of that pile! 2. New… Read more »
Andrew mondt
Member

That is exactly why I left AA. I LOVED going to work at ORD every day as an international CSR. I just couldn’t handle the crap pay and bullying by Crandall and Co along with the January furloughs. My language and customer care skills paid better outside of AA. I’m glad I had a chance at my dream job. AA made it untenable.

wpDiscuz