American Airlines Inks Deal for Huge Pay Raises for Regional Pilots

Nearly 4,500 pilots at American Airlines’ three major regional carriers will receive massive pay raises that will bump hourly rates to as much as $90 an hour for new pilots.

Envoy and Piedmont, both entirely owned by Fort Worth-based American, reached a deal with the Air Line Pilots Association Friday night that raises pay amid the tightest competition ever among airlines for aviators. PSA Airlines, a third carrier owned by American, reached a deal on pay and incentives and is working out the final details of a contract.

“There is a big demand from customers,” said Piedmont CEO Eric Morgan. “Customers want to fly and we have airplanes parked because we don’t have enough pilots.”

The new deals with pilots were an aggressive move for American, which preemptively approached the Air Line Pilots Association with a contract extension two years before the current deal expires. American was able to get enough support from the union’s executive board to ratify an agreement without a vote for a deal that extends through 2029.

American and other carriers are in desperate need of pilots, particularly for regional airlines that fly nearly half of the country’s flights. American Airlines CEO Robert Isom said earlier this month that the company has been forced to park about 100 regional jets due to a shortage of pilots, even at a time when consumer demand is high and ticket prices are rising.

With the deal, Piedmont pilots will make $51 to $90 an hour when flying and captains will make $78 to $146 an hour. Morgan said the deal at all three of the regional carriers is similar. That equates to about $90,000 a year for new pilots, $150,000 a year for first officers two to three years into their career and about $200,000 for experienced captains.

American Airlines has about 4,500 pilots at those two regional airlines, which are a key part of shuttling passengers across the country, particularly between smaller cities to its hubs at DFW International Airport and in Charlotte.

The biggest pay raises are good through 2024 and include a 50% “pilot supply premium” that should help combat the intense competition for pilots as the industry works through severe shortages due to the pause in training during the COVID-19 pandemic and a surge in pilot retirements expected during the next few years.

For early-career pilots, it should be a major help after pay was as little as $18,000 a year a decade ago, even though pilots spend more than $100,000 on training in flight school.

Envoy says wages for its pilots are now 6% to 10% higher than those at the next highest paying regional carrier, Delta’s Endeavor Air. At Endeavor, first-year first officers can make up to about $66,000 while the pay for a third-year captain is up to $104,000.

It will also pay about 10% more than pilots at ultra-low-cost carriers such as Spirit, Allegiant and Frontier, which are another source of competition for pilots from regional carriers.

Experienced pilots and new recruits are attracting attention from competing airlines across the industry, said Ric Wilson, Envoy’s vice president of flight operations.

“We were creating this huge imbalance problem where we had more first officers than we had captains,” Wilson said.

Since first officers need to hit 1,000 hours of flying to upgrade to captain, there are not enough captains to fly planes, he said. With fewer planes flying, there is less flight time for first officers to get upgraded to captain.

The raises come on top of up to $187,500 in sign-on and retention bonuses that American Airlines is giving to student pilots who agree to work for the airline and stay on until they reach the mainline airline after a few years. That incentive program can more than pay for flight school and the flying hours needed to reach the 1,500 hours required to get an air transport certificate to fly a commercial jet.

While those incentives have been around for more than a decade, American Airlines and other carriers began significantly increasing those bonuses last year as the airline industry realized that consumer demand was coming back quickly out of the COVID-19 pandemic downturn.

Major U.S. airlines have already hired about 5,500 pilots so far this year through May, according to pilot recruiting company FAPA.aero. That already surpasses the record 5,426 pilots hired in 2021.

The demand for pilots isn’t stemming from growth at regional airlines. It’s because pilots are being recruited into larger airlines such as American, United, Delta and Southwest, said Louis Smith, president and CEO of FAPA.aero.

“The regional airlines are mainly recruiting pilots to replace those leaving for larger carriers who fly much larger aircraft, providing significantly higher pay and benefits,” Smith said.

Regional airlines are losing about 30% of their pilots a year, he said. Much of the hiring across the industry is coming from pilots moving to new airlines, not necessarily an increase in new entrants into the industry.

“The recent escalation in pay and bonuses for new regional airline pilots does not increase the supply of pilots systemwide, but it serves as a competitive response to prevent new pilots from joining another regional airline,” Smith said.

Pilots don’t work traditional 40-hour weeks and the pay rate is only good for hours that they are actually flying, so $90 an hour doesn’t necessarily translate to the $187,000 or so that someone with the same hourly wage would make working at a bank or a factory.

The pilot shortage has also created another opportunity for new regional pilots. On average, Piedmont pilots can move from first officer to captain in about 15 months, earning a big pay raise. Pilots are also able to jump to a mainline airline, carriers such as American or United, in about three years. At mainline airlines, annual pilot pay averages about $250,000 a year or more.

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