Airlines are raising wages and hiring amid labor shortage
U.S. airlines plan to hire tens of thousands of new employees to fill the gaps created by the COVID-19 pandemic. The airlines had avoided mass layoffs in exchange for billions of dollars in grants and loans from the U.S. government.
But carriers like United Airlines (UAL) American Airlines (AAL) Delta Air Lines DAL) and Southwest Airlines (LUV) all cut their employee numbers with early retirement and buyout programs that left them short-staffed as the industry recovery began to takeoff last spring.
The U.S. Labor Department reported the number of people employed by airlines fell from 742,346 in August 2019 to 718,979 in August of this year.
"We are hiring a lot of people and we are bringing them in and getting them prepared for the holiday to make sure that our customers get where they need to go," Southwest Airlines' Elizabeth Bryant told Yahoo Finance Live.
Bryant is the vice president of Southwest University, the airline's new employee training center. "Everyone who works around the aircraft or works with our customers come for some technical training, the how-to. And then we offer leadership and employee development training," she said.
Southwest plans to hire 5,300 people by the end of this year and said it is more than half way to its goal. That includes flight attendants, pilots, pilot trainers, reservation and email customer support specialists plus engineers and maintenance folk. Next year the airline plans to hire another 8,000.
Airlines under pressure to raise wages
Southwest raised its minimum hourly wage to $15 in June covering about 7,000 of its 54,000 employees. At Delta, CEO Ed Bastian told investors during a third quarter earnings call, "We haven't put that number out yet, but we'll certainly be hiring pilots, we'll be hiring flight attendants and mechanics. I'd say it’d probably be the three main areas we will be hiring next year."
American Airlines told investors it will have adequate staffing for the holidays but Chief Financial Officer Derek Kerr, responding to a question about future hiring said, "we'll know more once we finalize our 2022 budget, but we do see pressures in fuel prices, hiring and training for both new hires and existing crews as we ramp up our operations."
And at United, President Brett Hart said, 'We have hired nearly 1,000 pilots, which is more than we hired in all 2019 and welcomed three new classes of flight attendants."
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The flight attendants and pilots at Southwest are covered by union negotiated contracts. The airline doesn't share salary data, but the website airlinepilotcentral.com offers an inside look at all the airlines and the money a pilot can earn.
At Southwest, a new pilot achieving the rank of first officer has an annual base salary of around $106,000. Southwest Airlines Pilots Association President (SWAPA) Casey Murray points out the actual yearly pay is much higher and added, "I've always thought it's incumbent upon the airline to really sell themselves, there is what I like to call the psychic wage, that's what I am paid for working here more than the money, it is Southwest Airlines," he said.
The carrier has a long history of good employee relations. But Murray said over the past few years, "I think our people have kind of been lost," and he's counting on incoming CEO Bob Jordan to pilot Southwest back.
"You can teach the technical skill. We really try to hire people who have within them the desire to serve. And that's what makes us unique," Jordan told Yahoo Finance.
"I think we're certainly in the middle of a great talent shortage," Southwest University's Bryant said. She added the airline is looking for, "really great people and we are hiring those that can help take care of our customers and take care of our employees and keep our culture, the special culture that it is."
Adam Shapiro is co-anchor of Yahoo Finance Live. Follow him on Twitter @Ajshaps
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