U.S. Airlines Slow Hiring After Adding 194,000 Jobs Since 2021 Amid Industry Challenges

Passenger airlines in the United States have gone through a significant labor boom, with an addition of 194,000 jobs since 2021, as reported by the U.S. Department of Transportation. After facing a slump during the pandemic, airlines embarked on a massive hiring spree to fortify their operations. However, the industry is currently experiencing a slowdown in hiring and is nearing its full staff capacity.

Reasons for the Slowdown

Several factors have contributed to the slowdown in hiring within the airline industry. The oversupply of flights in the U.S. has led to a decrease in fares, impacting airlines' profitability. There has been a moderation in demand growth, and delays in the delivery of new aircraft from Boeing and Airbus have prompted airlines to reevaluate their expansion plans. Moreover, a shortage of engines has caused delays in new aircraft deliveries, with some airlines even deferring their orders. Labor costs have also surged due to new contracts signed by pilots and mechanics, resulting in significant salary increases, the first in years for many.

According to data from Kit Darby, an aviation consultant specializing in pilot pay, the average annual compensation for a three-year first officer on midsized equipment at U.S. airlines was $170,586 in March 2023, marking an increase from $135,896 in 2019. This signifies a substantial hike of approximately 25% in pilot salaries over a four-year period.

Financial Impact on Airlines

The increase in labor costs is just one of the financial burdens faced by U.S. airlines. On top of that, the overall costs at these carriers have soared by double-digit percentages since 2019. Stripping out fuel and net interest expenses, expenses are projected to rise by approximately 20% at American Airlines, 28% at United Airlines, and Delta Air Lines. Low-cost airlines have been hit even harder, with cost increases of 32% at Southwest Airlines, 35% at JetBlue Airways, and nearly 39% at Spirit Airlines.

Recent developments in U.S. air transportation employment indicate that the sector's employment in August was relatively stable compared to July. However, there have been notable pullbacks, particularly with some airlines resorting to furloughing pilots and.offer voluntary leaves of absence to their employees. Notably, Spirit Airlines furloughed 186 pilots as the carrier's losses grew due to various challenges, including a failed acquisition by JetBlue Airways and an oversupplied U.S. market.

Cost-Cutting Measures

In response to the financial pressures, airlines have started implementing cost-cutting measures. While some carriers continue to hire pilots, they also offer voluntary leaves of absence during periods of anticipated demand decrease. Southwest Airlines, for instance, expects to end the year with a workforce reduction of 2,000 employees compared to 2023. The airline's chief financial officer, Tammy Romo, mentioned that the company's headcount is projected to decline further in 2025 due to attrition exceeding controlled hiring levels.

Additionally, United Airlines, which had previously announced plans to add 15,000 employees in 2023, has now reduced its target to 10,000. This includes a decrease in the number of pilots to be hired, down from over 2,300 in the previous year to 1,600 in the current year.

A Shift in Hiring Dynamics

The current scenario represents a stark departure from the preceding years when airlines were aggressively hiring to keep up with soaring travel demand. Following significant layoffs in 2020 to mitigate record losses and during the subsequent recovery phase in 2022, airlines have found themselves grappling with a labor market that is no longer in their favor.

The pilot shortage that plagued the industry in recent times has prompted regional carriers to offer substantial bonuses to attract pilots. However, the dynamic has shifted, with even air freight giants scaling down their pilot hiring endeavors as demand has dwindled. Nonetheless, despite the reduced hiring targets, flight schools continue to see a steady influx of students training to become pilots. Ken Byrnes, chairman of the flight department at Embry-Riddle Aeronautical University, emphasized that the demand for travel remains strong, indicating a resilient interest in pursuing aviation careers.