Sunday, October 22, 2017

Great Lakes Airlines founder says pilots, regulatory relief needed



CHEYENNE – Cheyenne-based Great Lakes Airlines has encountered severe turbulence in the last few years.

The regional airline has stopped air service to all but one of the cities it once served in Wyoming. It also has ended service to several cities in other states.

At one time, the airline flew to nearly 100 cities. As of November 2015, it served 22 airports in nine states. By September of this year, service had dropped to 13 airports in seven states, according to a map of its routes.

The company announced in late September that it will end service to Riverton Regional Airport on Nov. 1, dropping the airports total to 12.

“Over the last several years, Great Lakes has been adversely impacted by the pilot shortage and the new pilot regulations,” Kyle Butterfield, Riverton’s public works director, said last week. “The company’s business model was adversely impacted, which caused their reliability rating to drop and to cancel more flights.”

The number of Great Lakes flights in Wyoming dropped 75 percent from 2012 to 2017, according to the Wyoming Aeronautics Division. In 2012, Great Lakes operated 6,471 flights out of Wyoming airports, but it’s projected to have only 1,617 flights in 2017.

The airline provides one flight a week from Cheyenne to Denver International Airport.

At one time, Great Lakes offered as many as eight such flights a day.

The airline also has cancelled flights across its system, which caused delays and further cancellations for passengers.

Speculation varies about what has caused the passenger load to plummet and reliability to drop.

Reasons cited by an industry analyst and a local economist range from the need to pay pilots more to the type of airplanes the company uses and the market it reaches.

But Doug Voss, who founded the company in 1977, said these reasons are offered by people who don’t know what’s going on. He said the problems are due to one reason only: a national pilot shortage.

“It’s about pilot supply, and (the supply is) not there,” he said Friday. He also stressed that the shortage is not a Great Lakes problem, but an industry problem. Many regional airlines have not survived because they can’t find pilots to fly the planes, he said.

“The speed with which the industry is collapsing is due to this problem. But nobody is paying attention,” Voss said.

The shortage is the result of a Federal Aviation Administration rule that went into effect in August 2013, he said. The rule came about because of the February 2009 crash of a regional airliner in New York that killed 50 people.

The rule, designed to improve safety, requires co-pilots of all passenger jets and cargo planes in the United States to have an Airline Transport Pilot certificate. This standing requires 1,500 of flying time as a pilot.

Regional airline copilots previously had to have a commercial pilot license, which required 250 hours of flight time.

Great Lakes usually required copilots to have 700 to 800 hours of flight time, Voss said. But now, the airline can’t find enough copilots who have enough hours, Voss said.

The aviation industry also is losing too many older pilots and not replacing them with younger pilots. Young people no longer have a pathway into the pilot career that they can afford, he said.

“There has to be a recognition that small community air service is deteriorating due to the lack of pilot supply and that it’s happening,” he said.

FAA data show that the number of pilots ages 16-64 dropped by 84,036 from 2009 to 2017, based on charts Voss presented. These are pilots who are eligible to fly regional airlines.

The overall number of pilots in the United States dropped from 459,660 in 2009 to 375,624 as of last month.

Not the only issue

The pilot shortage is a big problem for Great Lakes now, said Alan Bender, a professor of airline economics at Embry-Riddle Aeronautics University, based in Daytona Beach, Florida. But it is only one of the airline’s problems. Great Lakes had problems before the pilot shortage, he said.

Pilots at regional airlines need better pay, he said.

“In order to pay better, you need to have the money to pay them better, and you have to fly bigger airplanes so there is more revenue,” Bender said.

Great Lakes’ fleet includes 19-passenger Beechcraft 1900D Airliner turboprops and 30-passenger Brasilia-120 turboprops. The airline could consider flying to larger markets to make more money by using larger aircraft, Bender said. “Great Lakes flies in marginal markets with smaller airplanes.”

The price of fuel is reasonable now, which should help the regional airlines, Bender said. “Great Lakes would probably be in a worse problem with the pilot shortage. But they’ve been blessed with low fuel (costs),”

Rob Godby is an associate professor in the Department of Economics at the University of Wyoming. He said that part of Great Lakes’ problem is its equipment and service. Passengers want to fly more comfortable, faster and larger planes than what Great Lakes uses.

SkyWest/United Express replaced Great Lakes in Laramie with jet service, which passengers seem to like, he said.

“It comes down to the level of service. Will your flight show up, and will it be on time?” Godby asked. “Great Lakes has had a lot of problems with dependability, on-time performance and cancellations.”

Godby acknowledged the pilot shortage is a problem, but said regional airlines have had three years to adjust to it since the rule went into effect.

But Voss said that Bender and Godby are missing the point. They don’t understand that it all goes back to the pilot shortage. SkyWest Airlines, the regional air carrier that serves Laramie, is a partner with a large major carrier that pays for the planes SkyWest uses, Voss said.

As for flying larger aircraft, Voss said there’s no way to make money using a larger plane if there aren’t enough passengers to fly on it. Small jets won’t work for the communities Great Lakes serves, Voss said.

“The data is crystal clear: the actual certificated pilots have been dropping dramatically, and young people can’t get into the system” because of the cost of becoming a pilot, Voss said.

Impact on local airport

What’s happening at Great Lakes affects the Cheyenne Regional Airport, too.

“There is no doubt Great Lakes is struggling,” said Tim Barth, director of aviation for the local airport. “We don’t like to see it. Nobody likes to see it.”

The airline dropped from 212 employees two years ago to around 30 to 40 (employees) now, he said.

Great Lakes helps the Cheyenne airport in some ways. The flight that Great Lakes provides to and from Denver keeps the Transportation Security Administration screeners and equipment operating here.

“If Great Lakes weren’t here, we would not have a need for TSA,” Barth said. If TSA left, it would be a struggle to get it back. “So that is a bonus.”

Great Lakes employees also handle ground crew work for charter aircraft at the airport.

Still, Great Lakes owes the Cheyenne airport $203,142 in lease payments and other costs, according to account information on file at the airport. The airline recently made a $10,000 payment to help reduce the debt.

“We’ve had a long discussion about what we should do with Great Lakes,” Barth said. “We feel it is our responsibility as the airport board to be as considerate as possible to our community.”

Barth said he doesn’t want to put the remaining 40 employees in the local unemployment line at one time.

“These are people that have kids in our schools, that shop in our grocery stores,” he said. “If they’re unemployed, how big of a hit is that on the Cheyenne economy?”

Barth said the airport owns the building where Great Lakes is headquartered, and Great Lakes is behind on its monthly lease payments. If the airport pulls the lease, air service to communities in Arizona and California that make up the majority of the company’s revenue stream would disappear, he said.

“We would cause unemployment in six to eight other communities and stop air service,” he said.

The Cheyenne airport can’t put the payments on hold indefinitely, Barth said. “They are making every effort to get us money,” he said, adding he expects something to occur within the next six to nine months.

The Cheyenne airport also could lose $1 million it receives from the FAA for boarding 10,000 passengers a year. The airport used to receive the money regularly, but Great Lakes hasn’t had that many passengers for a while.

A new bill in Congress would allow the Cheyenne airport to receive the $1 million by using passenger numbers from 2012, when the number of passengers boarding there reached the target, Barth said. But the issue is in limbo now.

He wants to use the $1 million for work on design of the runway reconstruction at the airport.

“The grace period won’t last forever. After a while, we’re just going to have to say we can’t do it anymore,” he said.

What’s the answer?

So how can Great Lakes solve its problem?

Bender said one solution would be for the company to partner with a major air carrier that could help with costs. But most of the large air carriers have already done that.

“The other solution is to do what they do now,” Bender said. Great Lakes “is a very specialized organization, and they do odd jobs that other (airlines) don’t do.”

Great Lakes Airlines flies Essential Air Service routes to more remote communities. The company receives federal money to fly to places like Farmington, New Mexico. The airline should receive about $8.3 million this year for providing air service to four qualifying communities in Kansas, Colorado and South Dakota.

Voss said he will continue to push for regulatory relief to help solve the pilot shortage. He said he has and will work with federal lawmakers to change the rule.

“The future (of Great Lakes) will be decided by regulatory relief ultimately,” he said.

Original article can be found here ➤ http://www.wyomingnews.com

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