Ryanair is navigating turbulent skies.
On Wednesday, Europe's biggest airline declared that it would have to cancel around 18,000 flights that were lined up between November and March, affecting a total of 400,000 passengers. What's more is that many customers were "ineligible" for compensation offers made afterwards, further inflaming the situation.The damage isn't only limited to financial loss from the cancellation of flights. Ryanair has also had to pull out from the bidding war for bankrupt Italian airline Alitalia, further eliminating a potential source of growth and business.
"From today, there will be no more rostering related flight cancellations this winter or in summer 2018," Ryanair CEO Michael O'Leary said in a statement. "We deeply regret any doubt we caused existing customers last week about Ryanair's reliability."
However, it isn't just European air carriers that are faced with a market bereft of sufficient skill and pilot supply.
Horizon Air (NYSE: ALK) in the U.S. is also facing a similar problem, entailing hundreds of cancelled flights and a cropped down flight schedule. Because of this, executive Dave Campbell had to urge pilots to work beyond required hours.
"This is one of those gut times when we have to put our heads down and fight through it," Campbell said to employees. "If we don't do this, we will not only stop growing, we will cease to exist."
While Horizon Air is a relatively smaller carrier, its predicament reflects a deep-rooted and widespread problem with the American air market: entry level positions into the piloting world aren't appealing enough, with low pay becoming a serious concern.
Horizon pays its starting pilots around $30,000.
What's more is that even despite American carriers receiving around $300 million per year in subsidies as part of the Essential Air Service program, most of that money is spent on developing airport infrastructure and refining aircrafts.
The issue is that there is no point of building more things if there isn't enough spare labor to operate these things, including not only aircraft but heavy machinery, airport stations and transport services.
With regards to Ryanair, the carrier is now considering replacing its planes with buses to provide disgruntled consumers with "any comparable alternative transport." The total bill Ryanair has racked up as a result of their mistakes is around 1 billion Euros.
What's worse is that Ryanair has also been warned that its procedures for dealing with the cancellations are "not complying with the law," by the UK's Civil Aviation Authority. This presents another challenge that is mirrored in the U.S.: how to deal with government and economic regulations while trying to increase revenue and adopt a more consumer-targeted business strategy. This is especially pertinent under the corporate-oriented Trump administration.
The solution to this prevailing pilot shortage problem may lie in marketing its later benefits in a more efficient way, including citing experiences of existing pilots who worked their way to the top. "Yes, you start at the bottom. But after eight months, my schedule is already better," said one such pilot at Horizon Air. "Next month, I have 16 days off."