AA dangles $250K bonus to poach FedEx & UPS pilots

[Airband]

American Airlines Dangles $250,000 Bonuses to Poach FedEx and UPS Pilots

Passenger airlines are on a hiring spree for aviators with enough experience to fill the captain’s seat

Wed Nov 08, 2023 - WSJ
By Alison Sider and Esther Fung

Quote

PSA’s offer includes a $175,000 bonus included in the first paycheck, with another $75,000 paid after a year. 

The next recruiting hotspot for U.S. airlines in need of experienced pilots is FedEx  and United Parcel Service.

PSA Airlines, a regional carrier owned by American is offering bonuses totaling $250,000 for UPS and FedEx pilots who can come work as captains and help fill a gap that has forced PSA to keep planes grounded and curtail service to some cities. 

FedEx is saying its pilots might want to consider the offer. UPS passed on the details to pilots who recently accepted a company buyout.

Major U.S. passenger airlines are on a hiring spree that has left regional carriers like PSA desperate for aviators with enough experience to fill the captain’s seat in their cockpits. Cargo carriers, by contrast, are slowing down, unable to offer pilots more than the minimum level of flying or offering buyouts because of the slump in parcel volumes.

Shuttling passengers from cities like Knoxville, Tenn., and Birmingham, Ala., to Charlotte, N.C., on small planes could mean a step down in prestige, pilots said, with more uncertainty over pay and working conditions. Cargo pilots typically have fixed schedules and fewer legs to fly in a day compared with their counterparts at passenger airlines, and historically have had a lower risk of furloughs.

Pat DiMento, FedEx’s vice president of flight operations and training, told pilots last week that the air-cargo slowdown would likely continue for the foreseeable future, and they might want to consider PSA’s offer if they are frustrated with their flying hours and career progression. 

“Frankly, I was pessimistic about how attractive the opportunity might be when first approached, but the details are compelling,” he wrote in a message to pilots.

PSA’s offer includes a $175,000 bonus included in the first paycheck, with another $75,000 paid after a year. Pilots can eventually make the move to American Airlines itself, where they can work up to flying widebody jets and earn bigger pay boosts—experienced American captains can make over $400 an hour under a new pilot contract. Flying for a passenger airline also comes with perks such as flight benefits.

It is the latest gambit by regional airlines, which operate feeder flights for bigger airlines, to attract pilots who have additional flying time under their belts and can qualify as captains. They need both captains and first officers to operate flights. 

Regional airline executives say their pilots are now quickly lured away by the bigger salaries and career opportunities of the major airlines, a change from previous years when pilots would typically spend several years at a regional before moving on, including as captains. 

The “captain crunch,” as a regional executive once described it on an earnings call, has prompted regional carriers to cut flights and in some cases slow down the hiring of first officers. 

“We continue to face a captain shortage that has impacted our ability to fully utilize our regional fleet,” Heather Garboden, senior vice president of regionals and cargo at American, wrote in a memo to employees Saturday. 

PSA’s offer highlights the contrast in outlook between some passenger and cargo airlines, as consumers continue their spending on travel and services rather than goods.

Regional airlines are stepping up recruiting efforts as the air-cargo business is slowing. In the first nine months of this year, UPS’s domestic average daily package volume fell by 9%. For the fiscal year ended in May, FedEx saw a 13% decline in average daily package volume for its domestic Express unit.

To keep up with slowing demand and manage its flight capacity, UPS recently offered some senior pilots voluntary severance packages, and 193 pilots took the buyout. 

A UPS spokesman said the offer attracted great interest, and the company reached its buyout target. PSA reached out to UPS looking to recruit these pilots, and the parcel carrier passed along the information to departing pilots. 

With lower air-cargo demand, FedEx passed along the PSA offer to all of its pilots, said a FedEx spokeswoman. She added that this recruitment initiative provides FedEx pilots another career path.

UPS had around 3,400 pilots before the buyout. FedEx said in July that it has an excess of 700 pilots, out of around 5,800. FedEx has never furloughed pilots in its 50-year history.

After at least one year of service, FedEx first officers make around $156 to $238 an hour based on the type of plane they fly and their seniority. FedEx captains make $235 to $336 an hour.  

Regional airlines were once known for low wages, but they have boosted pay in recent years to attract and retain pilots. PSA captains currently make between $150 an hour as new hires and $217.50 an hour for those with the most experience, with increases in the coming years. Pilots coming from FedEx and UPS would get credit for their years of experience in terms of pay, retirement benefits and time off.