Category Archives: Great Lakes Airlines

Great Lakes Airlines continues operations despite defaulting on a $27.5 million loan

Great Lakes Airlines (Cheyenne, Wyoming) continues normal operations this weekend despite defaulting on a $27.5 million loan with Callidus Capital Corporation according to Wyoming News.com.

Airline officials expect to resolve the issue soon. Both sides are in negotiations to resolve the default according to the report. The lending company could however take back leased assets of the airline at any time.

Read the full report: Read the Full Story (LRW)

Top Copyright Photo: Ton Jochems/AirlinersGallery.com. Beech (Raytheon) 1900D N192GL (msn UE-192) taxies at Los Angeles International Airport.

Great Lakes Airlines aircraft slide show: AG Airline Slide Show

Route Map:

Great Lakes 9.2015 Route Map

AG Read the Real WAN

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Great Lakes hires Raymond James to advise on financing and strategic alternatives

Great Lakes Aviation, Ltd. (Great Lakes Airlines 2nd) (Cheyenne, Wyoming) has issued this statement:

Great Lakes Aviation has announced it has engaged Raymond James as its investment banker to advise the Company with respect to new financing options and strategic alternatives. As part of its assignment, Raymond James will also assist the Company in evaluating changes to its business and fleet configuration.

In March of this year the Company was successful at certifying new FAA Operations Specifications that have enabled the Company to hire pilots despite recent regulatory changes that have had the effect of materially reducing the supply of qualified pilot applicants for the regional airline sector in general. The reductions in small community air service capacity seen across the U.S. in 2014 are a result of this same reduced pilot supply, and are creating the need for a re-invented regional airline industry. The Company intends to respond to that need.

Great Lakes provides scheduled passenger service to over 30 airports throughout the mid-west and western United States operating a fleet of Embraer EMB-120 Brasilias, and Beechcraft 1900D regional airliners.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Beech 1900D N220GL (msn UE-220) in the promotional tail design for Alamosa, Colorado taxies at Los Angeles.

Great Lakes Airlines: AG Slide Show

Current Route Map:

Great Lakes 6.2014 Route Map (LRW)

Planely Speaking: Help Wanted … Pilots!

Guest Editor Aaron Newman

Guest Editor Aaron Newman

 

 

 

 

 

 

 

Guest Editor Aaron Newman

 

Help Wanted … Pilots!

 

By Aaron Newman

In direct response to the Colgan Air 3407 crash in 2009, Congress passed the Airline Safety and FAA Extension Act of 2010, also known as the “1500 hour rule.” The law mandates that the Federal Aviation Administration require pilots to complete 1,500 flight hours before they’re allowed to fly commercially, up from just 250 hours before the act. We are nearing the one year anniversary since the law was enacted (July 15, 2013) and over the last few months we have seen this law make minor rumblings across the smallest in the industry; will we continue to see this law disrupt an already volatile industry? What effects will the “baby boomer” generation of pilots have on the industry as they near the forced retirement age of 65? Let’s take a closer look…

Regionals Hit Hard

The new rules have already impacted the country’s smallest airlines because their pilots tend to be younger and less experienced. For the pilot, this means more schooling and more expense in return for moderately low wages.

Copyright Photo: Michael B. Ing/AirlinersGallery.com.

One example is Great Lakes Airlines (above), which serves Essential Air Service (EAS) cities across the upper Midwest and Rocky Mountains.  Great Lakes Airlines cancelled service in February from Minneapolis-St. Paul to the following cities: Thief River Falls in Minnesota; Devils Lake and Jamestown, North Dakota; Fort Dodge and Mason City, Iowa; and Ironwood, Michigan. Great Lakes is blaming the cuts on the new mandated pilot law. In a statement, Great Lakes CEO Charles Howell explained in a company statement, “Due to the unintended consequences of the new mandated pilot regulatory requirements, the company feels it is in the best interest of our customers, communities and employees to suspend service from these stations until we are able to rebuild our staff of pilots in order to provide reliable service.”

Silver Airways, based in the southeastern U.S. is following suit. Silver Airways has announced plans to drop Muscle Shoals AL, Greenville MS, Hattiesburg/Laurel, Tupelo and Meridian from its Atlanta GA hub effective in July. Silver Airways President and CEO Dave Pflieger attributed the move to tighter Federal Aviation Administration regulations on minimum pilot hours. “New federal regulations related to flight and duty limitations, as well as increased requirements related to new hire pilot certification, have had the unintended effect of creating a nationwide shortage of regional airline pilots.”

Although the above examples are unwelcomed news for the cities they serve, they do not affect the large majority of the traveling public and have gone relatively unnoticed. The first major news that gained the industry’s attention came from American Eagle Airlines (now renamed Envoy Air).

 

Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com.

Envoy Air (above) flies a large portion of American Airlines’ regional flights. American Eagles union recently voted down a contract offer to continue flying with the merged American Airlines. As a result, American Airlines will not allocate any new regional aircraft to Envoy Air, and the Eagle subsidiary’s regional flying will diminish as its aircraft fleet is retired. Despite the obvious threat that pilots will eventually lose their jobs if they rejected the contract, Envoy Air’s pilots overwhelmingly voted it down (70% voted against). With other domestic airlines to needing thousands of new pilots each year, Envoy Air pilots don’t foresee much trouble finding new jobs that will probably offer better pay and/or career advancement.

This is the beginning of what I believe is many changes to come within the domestic regional airline industry. Cheaper pilot labor is quickly becoming a thing of the past. Envoy Air pilots’ decision to turn down a contract knowing that it would eventually lead to the loss of their jobs demonstrates how little bargaining leverage the regional airlines have. Qualified pilots are expected to have a plenty of alternative job opportunities if their employers aren’t prepared to retain their best talent with higher wages and improved benefits. The strongest airlines in the regional sector are likely to survive, because network carriers will need the regional airlines to provide connecting traffic. The pending nationwide pilot shortage is putting the largest pressure on regionals, and ultimately some may not survive. A recent report from the U.S. Government Accountability Office (GAO) found 11 of 12 regional airlines fell short of their hiring targets in the past year.

Impending Pilot shortage

Does the new 1500 hour pilot rule create less supply in an industry with growing domestic and global demand? In their latest industry forecast, Boeing concluded that the global aviation industry will need to supply one million new pilots by the year 2032 to support growth from expanding economies (Boeing.com). The largest projected growth in pilot demand is in the Asia Pacific region, with a requirement for 192,300 new pilots over the next 20 years. China will generate the largest share of the region’s demand, with a need for 77,400 pilots. Europe will require 99,700 pilots, North America 85,700, Latin America 48,600, and the Middle East 40,000 (Boeing.com).

Boeing Pilot Graph

Graph Source: Boeing.com

As the major airlines start a new wave of hiring, they face uncertainties going forward; the regional pilot pool of candidates isn’t growing, military pilots being incentivized to stay, and growing global competition for qualified pilots. Regional airlines will undoubtedly feel the impact first, larger airlines secondly, but the impact will also be disrupting on the communities, whose air service will be reduced by a shortage of pilots. Roger Cohen, president of the Regional Airline Association, states, “flights are going to get grounded and canceled; airplanes are going to be parked” (Philadelphia Inquirer).

Is there hope on the horizon that the industry will remain unshaken from this? The last decade has seen flat levels of new pilots entering the market. Airlines (specifically regionals) are getting creative, introducing new methods to recruit the next wave of young aviators. Signing bonuses are now common, some as high as $10,000. Some airlines are offering pilot recruits incentives just to attend job fairs; Ipad’s, and cash prizes. Assisting aviation students pay tuition is also beginning to enter the field and university aeronautical programs are working with regional airlines to guarantee interviews after graduation. The most creative tactic so far has been utilized by Great Lakes Airlines. They are removing 10 seats from their Beechcraft turboprops so its first officers can avoid the regulations of the new law and fly with less than 1,500 hours (captains still need 1,500 hours).

Great Lakes 1900D Seating Chart

Seating Chart: Great Lakes Airlines.

Meanwhile, the larger airlines are doing their best to isolate themselves from the risk of a regional pilot shortage. For example; Delta Airlines has been the biggest largest airline to make visual changes to its fleet strategy since the law was enacted. Delta’s acquisition of 88 Boeing 717’s from Southwest/Airtran was in direct response to the law. It now deploys these mainline aircraft on short-to-medium routes cutting the older, inefficient CRJ 200 and removing the risk of pilot shortage on regional pilots by converting these planes to mainline crews.

My take

With the obvious need for pilots, the market should respond at some point soon and start producing new pilots to fill its jobs. Regional pilot pay will have to improve in order to attract new people to the industry. Most U.S. airlines are currently in growth period and have to look to invest in new talent in order to thrive. Whether you agree with this law or not, it appears the law is here to stay and airlines will need to adjust in order to cope. Either way it will be an interesting to watch as the years progress. Hopefully we can all agree on this…there aren’t many dull moments in the airline industry!

Great Lakes Airlines to end service early at several cities

Great Lakes Airlines (Cheyenne) has announced it will end Essential Air Service (EAS) passenger service a month early at Great Bend, Kansas on April 1. The struggling regional carrier will also end passenger flights at Dickinson, North Dakota on March 26 after 21 years. Williston, North Dakota will be dropped on March 30. Great Lakes will also suspend operations at McCook, Nebraska on April 1. The airline is blaming a pilot shortage but critics state the company does pay enough to attract enough pilots.

SeaPort Airlines has bid on the routes with the Department of Transportation (DOT).

Great Lakes has received permission to operate some of their Beech 1900Ds with only 9 seats (please see the seating diagram below) rather than the normal 19 seats so the aircraft can be operated under Part 135 regulations. This allows the company to hire First Officers who have less the 1500 hours FAA requirement. The aircraft still have a captain with at least 1500 hours of experience with an ATP rating. Even with this measure, the airline was not able to stave off the termination of service to these affected cities.

Great Lakes Fleet Seat Plan

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Beech (Raytheon) 1900D N201GL (msn UE-201) with a promotional Pierre, South Dakota image on the tail arrives at Los Angeles International Airport (LAX).

Great Lakes: AG Slide Show

The shrinking Great Lakes Route Map (routes shown as of February 1):

Great Lakes 3.2014 Route Map

Great Lakes Airlines suspends service to six airports due to a pilot shortage

Great Lakes Aviation, Ltd. (Great Lakes Airlines) (Cheyenne, Wyoming) on February 1 suspended service to and from Devils Lake and Jamestown, North Dakota; Fort Dodge and Mason City, Iowa; Ironwood, Michigan; and Thief River Falls, Minnesota due to the severe industry-wide pilot shortage and its relative acute impact on Great Lakes according to a company statement.

Charles Howell, CEO released the following statement: “Due to the unintended consequences of the new congressionally mandated pilot regulatory requirements, the company feels it is in the best interest of our customers, communities, and employees to suspend service from these stations until we are able to rebuild our staff of pilots in order to provide reliable service. We deeply regret and apologize for this inconvenience.”

All customers with future flights in any of these stations will be given refunds.

Editor’s Comment: Many pilots and pilot groups (as the comments will attest) would strongly argue it is not a pilot shortage issue facing GLA but a pay issue. Simply put, higher pilot wages would probably attract more applications.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Great Lakes promotes many of its destination with area displays on the tails. Beech (Raytheon) 1900D N202UX (msn UE-202) promotes Dodge City, Kansas as it arrives in Los Angeles.

Great Lakes Airlines: AG Slide Show

Updated Route Map: Despite its name, the airline does not serve a city on any of the Great Lakes.

Great Lakes 2.2014 Route Map

Great Lakes Airlines’ passenger numbers decline for year-to-date

Great Lakes Airlines (Great Lakes Aviation) (Cheyenne) today (June 7) announced preliminary passenger traffic results for the month of May 2013.

MAY 2013 AND YEAR TO DATE STATISTICS
May-13  May-12 Change
Passengers Enplaned 42,390 49,088 (13.6)%
Revenue Passenger Miles (000) 12,435 15,614 (20.4)%
Available Seat Miles (000) 31,605 34,991 (9.7)%
Load Factor 39.4% 44.6%  (5.2) pts
RASM (cents) 33.12 34.78 (4.8)%
YTD 2013 YTD 2012 Change
Passengers Enplaned 188,902 216,872 (12.9)%
Revenue Passenger Miles (000) 55,665 70,138 (20.6)%
Available Seat Miles (000) 150,968 163,503 (7.7)%
Load Factor 36.9% 42.9% (6.0) pts
RASM (cents) 32.18 32.97 (2.4)%

For the year, the feeder airline suffered a 12.9 percent decline in passenger numbers for the period though the end of May.

The carrier provides Essential Air Service (EAS) throughout the Plains, Rocky Mountain and Four Corners areas (see map below). Great Lakes provides scheduled passenger service at 45 airports in thirteen states with a fleet of Embraer EMB-120 Brasilias and Beechcraft 1900D regional airliners.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Beech (Raytheon) 1900D N100UX (msn UE-100) promotes the ski destination of Telluride, Colorado.

Great Lakes Airlines: AG Slide Show

Video: Flying into Telluride, Colorado on a Beech 1900D:

Route Map: Other than Ironwood, Michigan, none of the current GLA destinations touches on the Great Lakes. New name coming?

Great Lakes 5:2013 Route Map

Great Lakes Airlines honors Pierre, South Dakota

Great Lakes Airlines (Cheyenne) for years has been honoring its destinations by placing designs and logos on the tail surfaces of its Beech 1900D fleet to promote the destinations they serve under the Essential Air Service (EAS) subsidiary. The latest is to promote and honor Pierre, South Dakota.

Copyright Photo: Joe G. Walker. Beech (Raytheon) 1900D N201GL (msn UE-201) stops at Chadron, NE with the special tail design.

Route Map: