American Airlines Is Trying to Poach All the Industry’s Pilots

To combat a crippling pilot shortage, PSA Airlines is dangling bonus packages worth $250,000 to lure pilots.

(Photo by Ross Sokolovski on Unsplash)
(Photo by Ross Sokolovski on Unsplash)

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This Captain Crunch has some seriously big prizes inside.

To combat a crippling pilot shortage, PSA Airlines, a regional flier and subsidiary of American Airlines, is dangling bonus packages worth $250,000 to lure pilots away from FedEx and UPS. Believe it or not, the two shipping giants are helping them fill the cockpit.

Clipped Wings

The captain crunch – that’s literally what insiders call it – has been especially hard on regional airlines like PSA, which typically offer lower pay and fewer career opportunities. PSA has already raised wages to $217.50 an hour for experienced pilots, but even that rate comes in well below what FedEx fliers can typically pocket (FedEx captains can earn as much as $336 an hour).

Hence the bonus package: PSA is offering pilots a $175,000 bonus attached to their first paycheck, according to a Wall Street Journal report, plus another $75,000 after a year of service, as well as a pathway to fly for the American Airlines mothership, where captains can score over $400 an hour.

Luckily for PSA, the cargo side of the industry is slowing just as commercial air travel is picking up:

  • Through the first three-quarters of the year, UPS has seen domestic average package volume fall by 9% from a year ago, while FedEx said it saw a 13% drop for its domestic Express unit in the fiscal year ended in May.
  • FedEx said in July that its crew of roughly 5,800 pilots is about 700 too many. And earlier this year, nearly 200 senior UPS pilots accepted a voluntary buyout package as the company looked to cull its ranks. Both cargo giants have gone so far as recruiting on PSA’s behalf, passing along the message of the regional flier’s bonus program.

Friendly Skies: The shifting winds of pilots’ employment prospects reflect a pivot by the American economy, one in which consumers are finally spending less on things and more on experiences — i.e., less Amazon splurging, more late-night impulse buys on Expedia. What’s good for American Airlines may just be bad for Amazon, at least until Jeff Bezos decides terrestrial air travel is just as exciting as going to space.