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February 17, 2014

Monday Midday Must-Reads

-The Wall Street Journal says that "the widening shortage of U.S. airline pilots is spotlighting the structure of an industry built on starting salaries for regional-airline pilots that are roughly equivalent to fast-food wages," in this article. Starting salaries at regional carriers average $22,400 a year, the newspaper found.

-If you haven't heard about Norwegian Air Shuttle yet, you probably will soon. The carrier, which offers low fares to Europe from JFK and Ft. Lauderdale, plans to add more U.S. cities even as industry doubts whether it will be successful. "Norwegian’s larger competitors in the sky tend to dismiss the upstart carrier as an insignificant gimmick that’s bound to fail. Other forces in the industry have been openly critical of Norwegian’s practices, accusing the airline of everything from turning its back on its home country, to risking passenger safety, to scheming ways to avoid union rules of various countries, all in the name of lowering costs," Time magazine says in this article.

-And in case you missed it, I talked to several industry analysts about the viability of American Eagle and if American Airlines needs the regional carrier in this article that ran on Friday. Industry analysts say it's hard to separate rhetoric from reality for the regional carrier as labor talks appear to be at a standstill.  Management "is trying to extract concessions from a group that is clearly high-priced relative to others in the regional space. But at the same time, it’s a sector of the industry that is suffering from the problem of finding sufficient people to do the work," said Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology. Given concerns about a shortage of regional airline pilots, he said, the union is "playing poker with face cards in their hands."

-Andrea Ahles

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