Wednesday, May 7, 2014

Commericial Airline Pilot Shortage?

Business Week reports that there is a commercial aircraft pilot shortage for regional airlines.  Typically when a shortage occurs the economic solution is to raise prices (or in this case wages).   There is plenty of room for wages to increase as some pilot jobs offer starting salaries of $15,000 according to The Wall Street Journal.

So why is this "shortage" taking place.  In both articles linked above state that the change in Federal rules in the minimum number of hours needed to be licensed to be a commercial pilot.  Thus the increase in the cost to become a pilot and the low wages has reduced the supply of pilots at the existing wage.  As mentioned in the WSJ article, some pursuing pilot jobs have stopped since they rationally did not expect the benefits of a pursuing this career to outweigh the costs of becoming licensed.

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