CHEYENNE – Despite much lower fuel costs in 2015, Great Lakes Aviation continued to report revenue loss in the third quarter, compounding losses to more than $7.4 million year-to-date.
That compares to a $6.1 million loss in 2014 during the same period, even though fuel prices have fallen by a third through 2015 compared to 2014. In federal documentation, the airline noted that aircraft fuel costs has accounted for 15.6 percent of operating expenses through 2015. Furthermore, each one-cent increase or decrease changes the company’s overhead by $36,000 annually.
According to the Bureau of Transportation Statistics, the average cost of aircraft fuel for all U.S. carriers stood at about $2.88 per gallon. Through September 2015, the average has been $1.92 with September prices sitting at $1.59. The yearly decrease could represent gas savings of nearly $3.5 million for Great Lakes, yet the company is bleeding money faster.
The company continues to blame a pilot shortage sparked by a federal training regulation change for its economic woes. The change required six times more training for first officers, making trained pilots harder to come by, especially in the low-experience, low-relative-pay niche that Great Lakes fills as a regional carrier.
“We have been challenged with the pace in which we can hire, train, and retain pilots versus the rate at which pilots have resigned to fill positions with larger carriers,” the company noted in documentation. Great Lakes hired more than 90 pilots in one year, it noted in its first quarterly report this year. It currently has only 67 pilots, according to Airline Pilot Central. “The decrease in the availability of qualified pilots has materially impacted our operations and financial condition.”
The company went on to state that if the pilot situation doesn’t change, it will have to seek additional capital or begin selling off assets. Furthermore, despite downsizing within the company that made it materially impossible to submit its third-quarter federal documentation on time, Great Lakes again said it would be unable to meet its debt commitments.
The company’s $27.5 million in outstanding loans more than offset the company’s decreased operating loss to push it closer to disbanding. Wyoming’s only airline said in the federal documentation that the pilot shortage, in particular, coupled with resulting problems, is raising “significant doubts” about the company’s ability to stay aloft.
The company had to reconfigure most of its planes to have fewer than half their seats so less-experienced pilots could legally fly them under federal regulations. That has pushed passenger count and revenue down heavily and pushed the airline to lobby for an exemption more recently.
Sheridan’s airport just got back its service last week after more than 230 days without commercial flights when Great Lakes pulled out.
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