The so-called “summer of travel hell” is behind us, but the ongoing national pilot shortage is still causing plenty of headwinds for the industry.
Estimates vary, but one government estimate projects a shortfall of 18,000-plus pilots each year for the next decade.
Mesa Airlines, a regional airline that flies for both United and American as well as cargo carrier DHL Express, says his company has a solution.
CEO Jonathan Ornstein told Yahoo Finance his company is rolling out a program to provide would-be pilots with interest-free loans to help them accumulate the required number of in-air training miles to fly commercially in the United States.
“What we've done is we just made an order for up to 104 smaller, light training aircraft, where we're effectively going to give people the opportunity to fly those aircraft, finance it completely. They don't pay us any money until they come to work. And the basic price, $25 an hour, is about literally 1/6 of what it would cost them to do it on their own. So it's just a terrific opportunity for new aspiring aviators to get into commercial aviation, which has now never been more lucrative,” Ornstein said.
The response from eager pilots has been overwhelmingly positive, with nearly 70 new signups in one day, Ornstein said. “There are 25,000 or more folks out there who want to fly in commercial aviation but cannot build the time quickly enough.”
Ornstein said the company plans to hire everyone that completes the program, with starting wages at $100 an hour. “These people coming into the industry now, make probably close to $100,000 a year in their first year coming to work at Mesa.”
In 2013, the Federal Aviation Administration (FAA) required commercial pilots to have a minimum of 1,500 hours of flight training time, an increase from 250 hours. Republic Airways recently challenged this rule unsuccessfully, with the FAA citing safety concerns for shorter training periods.
Ornstein says the FAA’s rules are exacerbating the pilot shortage. He pointed out the that European Union requires pilots acquire just 250 hours of training.“It’s kind of incredible that a big wide body aircraft flown by Air France or Lufthansa can fly into JFK with a pilot who has 400 hours and yet an American pilot is not deemed as capable somehow to fly a regional jet into Des Moines.”
In recent months United, American, and Delta have cited the pilot shortage as a reason for cutting regional service to smaller cities such as Iowa’s Des Moines and Dubuque, New York’s Ithaca and Islip, and Ohio’s Toledo. Ornstein predicts the trend will continue. “We’re talking about the evaporation of the regional industry if we don’t do something quickly and I think the impact on the traveling public could be very, very significant.”
The pilot shortage can be seen from coast to coast in reduced schedules and increased delays, cancellations and, of course, rising ticket prices. “The ultimate loser is the consumer,” said Ornstein. “Airline prices are up almost 35% year-over-year, service in 70% of all cities has declined and believe me, this is all due to the fact that we just don’t have enough people to fly aircraft.”
The interest-free loan program launches in Florida next month, with Arizona to follow suit. Ornstein thinks the program will give Mesa an edge in hiring qualified pilots but hopes the idea will take off within the industry and “that other carriers do the same because if we work together in this respect, we could potentially solve the shortage.”
David Briggs is an anchor at Yahoo Finance. Follow him on Twitter at @davebriggstv
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Related Quotes
David Trainer, the CEO of the investment research firm New Constructs, believes there are now roughly 300 publicly-traded zombie companies.
If this indicator, which has called bear market bottoms before, is accurate, the stock market would have a lot further to fall.
Leaving these accounts open could tarnish your golden years.
(Bloomberg) — A crisis of confidence in the outlook for the UK’s finances was the latest trigger for risk aversion, helping drag the S&P 500 Index to an almost two-year low. Yet with investor sentiment in the gutter and the Bank of England vowing to open the checkbook to prop up its bond market, could another equities bear-market rally be in the cards?Most Read from BloombergGazprom Halts Gas Supplies to Italy in Latest Energy BattleIndonesia Soccer Stampede Kills 131 as Use of Tear Gas Queried
The bear market in software stocks has already lasted far longer than the typical decline, according to MoffettNathanson,
September more than lives up to its reputation as an ugly month for stocks. Here's what the data says about October performance.
MarketWatch Picks has highlighted these products and services because we think readers will find them useful; the MarketWatch News staff is not involved in creating this content. Since the start of the year, mortgage rates have been trending upwards — and according to many experts, this trend will likely continue through October. Echoing that sentiment, Kate Wood, home expert at NerdWallet, says interest rates for 30-year fixed-rate loans appear to be staying over 6% and products like the 15-year fixed and the 5-year ARMs are averaging over 5%.
The stock market is often a game in reverse psychology. That is, when the mood gets too euphoric, it’s often a sign it is time to sell. Likewise, when sentiment hits the skids, that could be the ultimate signal the time is right to load up the truck. And on that subject, J.P. Morgan’s Marko Kolanovic thinks we are at – or at least near – the bottom. The firm’s global market strategist believes the Fed’s hawkish stance has left stocks “very oversold,” and while inflation remains persistently high
One of the biggest advantages of Social Security is that its payments get annual cost-of-living adjustments (COLAs). 2022's COLA boosted benefits by 5.9% this year, and early estimates make it likely that the COLA that will take effect in early 2023 will be between 8% and 9%. What's even better news is that, unlike in 2022, many Social Security recipients are more likely to see the full amount of their cost-of-living adjustment actually hit their bank accounts.
The recent price decline of 7.8% in The Boeing Company's ( NYSE:BA ) stock may have disappointed insiders who bought…
Every investor in Altria Group, Inc. ( NYSE:MO ) should be aware of the most powerful shareholder groups. With 60…
"Home price appreciation has slowed dramatically in most markets," says Rick Sharga, executive vice president of market intelligence at ATTOM.
Semiconductor stocks have tumbled in recent months amid flagging demand, with the S&P Semiconductors Select Industry Index dropping 36% year to date. Bank of America analysts recently discussed their favorite choices in the sector.
It's a tough S&P 500 stock market to make money on. But some investors are still finding a way to do it.
This year has served as a not-so-pleasant reminder that stocks don't move up in a straight line — even if last year made the investment community believe that's what happened. A combination of historically high inflation, an incredibly hawkish Federal Reserve, and back-to-back quarters of gross domestic product declines has sent all three major U.S. indexes plunging into a bear market. While bear markets can be scary and produce some jaw-dropping volatility, they're also known for creating once-in-a-generation buying opportunities for long-term investors.
Welcome back to Week in Review, the newsletter where we quickly sum up some of the most read TechCrunch stories from the past seven days. Elon's texts: As part of the ongoing Musk vs. Twitter trial, a big ol' trove of Twitter-related texts between Elon and various key figures/executives/celebrities has been made public. Interpol issues a red notice for Terra's founder: "Interpol has issued a red notice for Do Kwon," write Manish and Kate, "requesting law enforcement agencies worldwide to search for and arrest the Terraform Labs founder whose blockchain startup collapsed earlier this year."
(Bloomberg) — The relentless plunge in China’s stocks has burnished the appeal of their biggest emerging-market rival India, spurring a divergence that’s rarely been seen before. Most Read from BloombergGazprom Halts Gas Supplies to Italy in Latest Energy BattleIndonesia Soccer Stampede Kills 131 as Use of Tear Gas QueriedGet Ready for Another Bear-Market Rally, Strategist Emanuel SaysFed Begins to Split on the Need for Speed to Peak RatesUkraine Latest: US Sees Russia Pullout From Lyman as Enc
Yes, Carnival reported a bigger-than-expected loss but in this case, unlike taking a cruise, it's the destination not the journey for the cruise lines.
The time to buy is when everyone else is fearful. Here are three industrial stocks getting hit that you should be looking at today.
(Bloomberg) — Most Read from BloombergGazprom Halts Gas Supplies to Italy in Latest Energy BattleIndonesia Soccer Stampede Kills 131 as Use of Tear Gas QueriedGet Ready for Another Bear-Market Rally, Strategist Emanuel SaysFed Begins to Split on the Need for Speed to Peak RatesUkraine Latest: US Sees Russia Pullout From Lyman as EncouragingThe OPEC+ group of oil producers will consider cutting output by more than 1 million barrels a day when it meets in Vienna on Wednesday, according to delegat