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Pilot shortage may mean higher prices for flyers

The pilot shortage could make many already frustrated flyers even angrier by leading to price hikes and entirely new hassles.

Due to a "quintuple storm of factors," there's currently a shortage of pilots willing and/or able to work in the U.S., says George Hobica, the founder of AirfareWatchDog.com . Part of the reason for this shortage is that a rule from the Federal Aviation Administration, which took effect in August, mandated that commercial pilots had at least 1,500 flight hours, up from 250 previously. Also, the industry mandates a retirement age of 65, and many pilots are hitting that age. Plus, pilots now are required to take a 10-hour minimum rest period .

And then there's the pay issue: Many pilots are unwilling to work for what regional airlines pay them. Salaries start at around $22,000 a year for pilots on regional airlines and even those with five years of experience sometimes only get paid about $35,000 a year. "You can only love flying so much: If you can't afford to love it, you stop doing it," says Hobica. He adds that because of low pay like this, some pilots decide to go into the private jet industry where the pay and working conditions can be better. (Those prospects are getting better as demand for private jet travel is increasing: 16% of the wealthiest 1% took a private jet trip in 2013 compared with 13% in 2012, according to research from The Harrison Group). And the major carriers, which pay significantly more (a pilot with five years of experience can make over $100,000) often hire pilots away from the regional carriers. (That too may continue as an estimated 18,000 big-airline pilots are poised to retire in the next decade.)

The results of the pilot shortage can already be seen. Republic Airways announced that it will remove 27 of its 243 planes from service due to the lack of qualified pilots. "The short-term answer is the aviation industry is just going to get smaller," Bryan Bedford, CEO of Republic Airways Holdings Inc., said in an interview Tuesday. "If a city can't support a larger-capacity aircraft, then those airplanes will go where they can be supported," he said. Great Lakes Airlines ended service in a handful of small towns in February and United Continental plans to reduce small-plane flights by its regional airline partners by more than 70% .

So what does this mean for consumers? "It isn't good news," says Hobica. "It has to result in higher prices simply because there are fewer seats and demand isn't going down." Hobica says that this situation could be assuaged by regional airlines paying more to their pilots, but that too could result in higher prices. "It would eat into the airlines profits and if they don't eat it, they'll pass it along to consumers." But there is a silver lining for some: IBISWorld industry analyst Andy Brennan says that price hikes will likely only impact consumers who use regional airlines. "The average consumer who flies on major routes won't have to worry about this," he says.

Flyers can also expect the already annoying flying process to get even more irritating. Hobica says there could be fewer nonstop flights along some routes. "There will be missed vacation time," he says. "If you're going to a wedding, you're not going to get there in time and may have to fly in the day before and pay for a hotel." Plus, flyers may have to drive to another, farther-away airport to get the flights they want and in some cases they'll simply have significantly fewer flights to choose from.