Facing pilot shortage, smaller airlines start giving big raises to pilots

Pilots at four U.S. airlines are now seeing significantly larger paychecks as the industry faces a pilot shortage.

Avelo Airlines on Thursday announced a significant raise for its pilots, becoming the fourth U.S. carrier in just two months to take action in an effort to attract more pilots.

Pilots at the Houston-headquartered ultra-low-cost carrier startup will now earn more than pilots at the established national ULCCs: Spirit Airlines, Frontier Airlines and Allegiant Air. The move comes two weeks after Avelo announced it had raised $42 million in a Series B funding round. The airline plans to hire 120 pilots in 2022.

First-year first officers will now earn $90 an hour, up from $70 an hour. First-year captains will now earn $200 an hour, up from $135 an hour. The new scale tops off with fifth-year first officers earning $140 and fifth-year captains earning $220.

While airline pilots are paid hourly, they are offered a monthly minimum number of hours, usually somewhere between 70 and 75 hours. Avelo's minimum is 70 hours, meaning that a first-year first officer will earn at least $75,600 a year, before sign-on bonuses, while a first-year captain will earn at least $168,000 a year, before sign-on bonuses.

"We're committed to attracting and retaining the industry's best pilots," Avelo CEO Andrew Levy said in a statement. "In addition to our enhanced pay scale, Avelo supports quality of life initiatives such as an additional $1,800 per month to help offset the cost of commuting. And, if a pilot chooses to live in base, they'll keep the $1,800 per month."

More: Startup Avelo Airlines announces new funding round as it plans to double in size

Avelo's announcement follows moves by fellow ULCC startup Breeze Airways, as well as Minnesota-based Sun Country and United Express carrier GoJet, which have all announced pilot pay increases since the beginning of December.

Breeze, which has faced criticism over low pay and a scheme to recruit pilots from Australia, raised its starting Embraer 190/195 first officer rate to $61 an hour, with first-year captains now making $129 an hour. Pilots on the carrier's Airbus A220, currently set for a May 4 entry into service, will start at $68 an hour as first officers and $131 an hour as captains.

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More: Pilot shortage brings growth concerns to Breeze Airways

"There's a limited supply of highly qualified pilots and a huge demand for highly qualified pilots," Chris Owens, Breeze's vice president of flight operations, said in an interview with TPG this month.

Pilots for Sun Country, which operates ultra-low-cost scheduled flights primarily out of its base at Minneapolis-St. Paul (MSP), as well as flying cargo for Amazon, also saw an increase. First-year first officers now earn $78.50 an hour, while first-year captains earn $195.89 an hour. Like Avelo, Sun Country operates flights using the Boeing 737 exclusively.

At regional airlines like GoJet, the pilot shortage is perhaps most acute. GoJet operates the CRJ-550 for United Express, a 50-seat version of the CRJ-700. Pilots there went from being among the worst paid of the regional airlines to among the best. First-year first officers went from being paid $38 an hour to $50 an hour, while first-year captains went from $71 an hour to $83.34 an hour. The best-paying regional, Endeavor Air, pays its first officers a starting wage of $52.19 an hour.

As the pilot shortage continues, it seems likely other airlines will follow suit this year and also increase pilot pay.