Category Archives: GAO

The GAO looks at the loss of air service to small U.S. airports

GAO-14-454T, Commercial Aviation: Status of Air Service to Small Communities and the Federal Programs Involved

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The General Accounting Office (GAO) of the U.S. Federal Government has issued this report on the decline of air service to small communities in the United States since 2007. Here is an excerpt of that report and a link to the full report:

GAO-14-454T, Commercial Aviation: Status of Air Service to Small Communities and the Federal Programs Involved

Status of Air Service to Small Communities and the Federal Programs Involved

 

Air service to small communities has declined since 2007 due, in part, to higher fuel costs and declining population, and for some communities, compounded by more attractive service (i.e., larger airports in larger cities) within driving distance. In fact, airports of all sizes have lost capacity in the number of available seats, and largely for flights as well. However, medium-hub and small-hub airports have proportionally lost more service than large-hub or nonhub airports (see figure).

Why GAO Did This Study

Establishing and retaining reliable air service to small communities has been a challenge for decades. Communities seek access to air transportation services as a driver for attracting investment and generating employment. To incentivize service, Congress established two programs to help support air service to small communities—EAS and SCASDP. Airports are categorized by DOT’s Federal Aviation Administration and described in terms of “hub” size based on the number of passengers served annually. Airports range from large hubs with at least 7.3 million passengers in 2012 to nonprimary airports with fewer than 10,000 passengers. Airports receiving subsidized EAS service are either nonhub or nonprimary, and SCASDP airports are small hub or smaller.

This testimony discusses (1) the airline industry factors affecting air service to small communities, (2) the federal programs and policies that support air service to small communities, and (3) other options for improving access to air service for these communities. The testimony is based on previous GAO reports issued from 2003 through 2014; analysis of industry data for years 2007 through 2013; and selected updates on EAS and SCASDP programs. To conduct these updates, GAO reviewed program documentation and interviewed DOT officials and industry representatives.

The two primary programs, designed to help small communities retain air service, administered by the Department of Transportation (DOT), face challenges.

  • The Essential Air Service (EAS) program, which received about $232 million in 2013, provided subsidies to airlines that served 117 eligible non-Alaskan communities in 2013. For the most part, only airports in eligible communities that received EAS-subsidized service have experienced an increased number of flights since 2007. However, the service may not always be the most cost-effective option for connecting people to the national transportation network, and the total and per-community EAS subsidies have grown since 2008. Legislation to control costs was recently enacted which limited access to EAS, for example by changing eligibility requirements.
  • The Small Community Air Service Development Program (SCASDP) is a grant program to help small communities enhance air service at small-hub or smaller airports. DOT can award no more than 40 grants a year, thus SCASDP assists fewer communities than does EAS. Further, unlike EAS, funding for SCASDP—$6 million in 2013—has decreased since the program was created in 2002. Past reviews of SCASDP’s effectiveness have found mixed success, with about half or less of the grants achieving their goals.

    Multimodal and community-based approaches can be used to help small communities connect to the nation’s transportation network. Multimodal solutions, such as bus access to larger airports or air taxi service, could be more cost- effective than current programs. In addition, some communities have had success with attracting air service through methods such as financial incentives and marketing support.

Read the full report: CLICK HERE

Analysis by Bloomberg Businessweek: CLICK HERE

 

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The GAO looks into airline pilot shortage issue

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The U.S. Government Accountability Office (AGO) looked into the issue of airline pilot shortage.

Highlights of the Report:

GAO found mixed evidence regarding the extent of a shortage of airline pilots, although regional airlines have reported difficulties finding sufficient numbers of qualified pilots over the past year. Specifically, looking at broad economic indicators, airline pilots have experienced a low unemployment rate—the most direct measure of a labor shortage; however, both employment and earnings have decreased since 2000, suggesting that demand for these occupations has not outstripped supply. Looking forward, industry forecasts and the Bureau of Labor Statistics’ employment projections suggest the need for pilots to be between roughly 1,900 and 4,500 pilots per year, on average, over the next decade, which is consistent with airlines’ reported expectations for hiring over this period. Yet studies GAO reviewed examining whether the future supply of pilots will be sufficient to meet this need had varying conclusions. Two studies point to the large number of qualified pilots that exists, but who may be working abroad, in the military, or in another occupation, as evidence that there is adequate supply. However, whether these pilots choose to seek employment with U.S. airlines depends on the extent to which pilot job opportunities arise, and on the wages and benefits airlines offer. Another study concludes that future supply will be insufficient, absent any actions taken, largely resulting from accelerating costs of pilot education and training. Such costs deter individuals from pursuing a pilot career. Pilot schools that GAO interviewed reported fewer students entering their programs resulting from concerns over the high costs of education and low entry-level pay at regional airlines. As airlines have recently started hiring, nearly all of the regional airlines that GAO interviewed reported difficulties finding sufficient numbers of qualified entry-level first officers. However, mainline airlines, because they hire from the ranks of experienced pilots, have not reported similar concerns, although some mainline airlines expressed concerns that entry-level hiring problems could affect their regional airline partners’ ability to provide service to some locations.

Airlines are taking several actions to attract and retain qualified commercial airline pilots. For example, airlines that GAO interviewed have increased recruiting efforts, and developed partnerships with schools to provide incentives and clearer career paths for new pilots. Some regional airlines have offered new first officers signing bonuses or tuition reimbursement to attract more pilots. However, some airlines found these actions insufficient to attract more pilots, and some actions, such as raising wages, have associated costs that have implications for the industry. Airline representatives and pilot schools suggested FAA could do more to give credit for various kinds of flight experience in order to meet the higher flight-hour requirement, and could consider developing alternative pathways to becoming an airline pilot. Stakeholders were also concerned that available financial assistance may not be sufficient, given the high costs of pilot training and relatively low entry-level wages.

Over 66,000 airline pilot jobs exist for larger mainline and smaller regional airlines that operate over 7,000 commercial aircraft. After a decade of turmoil that curtailed growth in the industry and resulted in fewer pilots employed at airlines since 2000, recent industry forecasts indicate that the global aviation industry is poised for growth. However, stakeholders have voiced concerns that imminent retirements, fewer pilots exiting the military, and new rules increasing the number of flight hours required to become a first officer for an airline, could result in a shortage of qualified airline pilots.

GAO was asked to examine pilot supply and demand issues. This report describes (1) what available data and forecasts reveal about the need for and potential availability of airline pilots and (2) what actions industry and government are taking or could take to attract and retain airline pilots. GAO collected and analyzed data from 2000 through 2012, forecasts from 2013 through 2022, and literature relevant to the labor market for airline pilots and reviewed documents and interviewed agency officials about programs that support training. GAO interviewed and collected data from associations representing airlines or their pilots, and pilot schools that accounted for about half of the students who graduated with professional pilot majors in 2012. GAO selected the airlines and schools based on factors such as size and location. GAO is not making recommendations in this report. The Department of Transportation and others provided technical clarifications on a draft of the report, which GAO incorporated.

Read the full report: CLICK HERE

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The Air Line Pilots Association Int’l (ALPA) responded to the GAO report (GAO-14-232) “Aviation Workforce—Current and Future Availability of Airline Pilots” in a special issue analysis paper. The GAO report supports the points ALPA has made for several years concerning whether there is, or will be, a genuine shortage of airline pilots. To put it very simply, currently there is no shortage of qualified pilots. There is, however, a shortage of qualified pilots willing to fly for substandard wages and inadequate benefits. The recent increases in experience required to enter the airline pilot profession, which were crafted with input from industry, labor and government, were made to ensure that the United States airline industry remains the safest in the world.

Read the full response from ALPA: CLICK HERE

INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOGO

The following is the official statement of Teamsters Airline Division Director Capt. David Bourne on the United States Government Accountability Office’s (GAO) 2014 Aviation Workforce report, “Current and Future Availability of Airline Pilots”:

“I’m pleased that the GAO has confirmed what we in the airline industry have known for years – the starting wage structure in the regional airline industry has not only kept qualified pilots away, it has deterred many from entering the field.

“In a field that requires not only an extremely high level of training and professionalism and, unlike others, requires semi-annual proficiency checks and medical evaluations – with a failure of either potentially ending a pilot’s career – the current levels of pay for many in the regional industry are inexcusable.

“The issue causing the shortage is not a lack of skill, it is the inability for many pilots to survive on wages below the poverty level. When faced with that reality and the investment of the money and time required to enter the industry, there is no incentive for them to make the commitment. It is time for the industry to recognize pilots for the professionals they are and compensate them accordingly. When we see pilots paid in a manner commensurate with their skills, training and professionalism, we will see the shortage abate.”

Additionally, in response, the Airline Professionals Association, Teamsters Local 1224 commended the United States Government Accountability Office’s (GAO) on report findings contained in its February 2014 Aviation Workforce report, “Current and Future Availability of Airline Pilots.”

“The GAO report confirms our members’ experiences and what they have known for a long time,” said Capt.Daniel C. Wells, president of Teamsters Local 1224.

The attainment of the necessary qualifications and experience that is required before you may be hired by any airline takes years and requires a huge financial investment. The airline industry, however, has not been worth the investment for many of its employees. Starting wages among the regional carriers are often so low that pilots cannot afford to support a family or repay the debt they acquired to become qualified for the position.  This unfortunate reality often deters otherwise qualified pilots from seeking employment in the field and, additionally, it deters would-be aviators from entering the field altogether.

According to the report, 11 out of 12 regional airlines failed to meet their hiring targets for entry-level pilots last year.  At the root of this issue is pay and working conditions.  When pilots accept an entry-level position at a regional airline, they often do so with the intention of leaving as soon as they have acquired enough flight time to step into another position promising higher wages at a mainline airline.  It creates a perpetual wheel of employee turnover within the regional airline industry.  This trend also was identified in the GAO report.

“There is no shortage of Americans who are fully capable or who want to be airline pilots; there is no skills gap,” Wells added. “But the industry wages, especially for entry-level positions, are often not worth the time and financial investment that is required to become a qualified pilot; a pay-gap is the reason we are seeing a shortage.”

Some industry groups have argued that impending retirements or the regulation now requiring a pilot to have an “Airline Transport Pilot” license to fly for an airline are contributors to the pilot shortage.  However, from a pilot’s first-hand perspective, any regulation that enhances safety is critical.  Airlines must be proactive and work together to enhance quality of life issues to attract would-be pilots to the industry.

The Teamsters and Local 1224 work every day to maintain and better the pay, working conditions, and professional prospects of its members. We stand ready to work with our members and their airline management teams to ensure their companies have an adequate supply of safe, professional airmen to sustain and grow their companies.

Bloomberg Businessweek also takes a look at the issue: CLICK HERE