By Andrea Traut*

Abstract
Airlines in the United States are currently experiencing what could be described as a modern golden age. In 2015, airlines had a record-breaking year—earning $24.8 billion in after-tax profit. In 2016, airlines earned $14 billion, and in 2017, they experienced their second-most profitable year ever, with after-tax profits of $15.5 billion. It is important to note, however, that the two biggest drivers of airline costs and profits are labor and fuel. Fuel contributes to about 10%–12% of operating costs for airlines. The drop in oil prices from 2014 to 2017 is primarily responsible for the record profits of recent years because labor costs are mostly fixed.

Unfortunately for airlines, it appears that this era of record profits may start to decline as fuel costs are expected to climb. With labor costs accounting for nearly 35% of airlines’ total operating expenses, airlines must find ways to reduce these fixed costs during economic downturns. However, labor costs are also beginning to rise at a steady rate, as airlines race to fill the pilot staffing necessary to meet the demand of increasing world air traffic. This hiring race is largely the product of what is considered a worldwide pilot shortage caused by Congress’s adoption of the 1,500-hour rule following the crash of Colgan Air Flight 3407. This requirement has begun to force airlines to offer hiring incentives to steal qualified pilots away from other airlines, which puts small airlines at an enormous competitive disadvantage, places a large potential price burden on consumers, and threatens underserved regional routes and private aviation.

Despite the promulgated safety benefits of the rule, the practical threats it poses to airlines’ operations are too serious for Congress to ignore. Congress should reduce the flight-hour requirement and focus instead on a standardized flight training education rule because of the 1,500-hour rule’s economic consequences and the lack of evidence that the rule actually improves flight safety. Part I of this Comment discusses the background of the airline industry in the United States and the Colgan Air accident. Part II illustrates the legislative response to the Colgan Air accident. Finally, Part III of this Comment analyzes the successes and failures of current legislation and suggests a new focus on quality enforcement for air safety improvement.

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Westlaw | Lexis

*Winner of the 2019 International Womens Aviation Association Scholarship

Recommended Citation
Andrea Traut, Comment, The 1,500–Hour Rule: When Does Quantity Outweigh Quality?, 84 J. Air L. & Com. 267 (2019).