BTS | May 2006 Passenger Airline Employment Down 5.0 Percent from May 2005

Bureau of Transportation Statistics (BTS) - Research and Innovative Technology Administration (RITA) - United States Department of Transportation (USDOT, US DOT or DOT)

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May 2006 Passenger Airline Employment Down 5.0 Percent from May 2005

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BTS 34-06
Dave Smallen
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Tuesday, July 18, 2006 - U.S. scheduled passenger airlines employed 5.0 percent fewer workers in May 2006 than in May 2005, the 17^th consecutive month that full-time equivalent employee (FTE) levels for the scheduled passenger carriers declined compared to the same month of the previous year, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today (Table 1).

BTS, a part of the Research and Innovative Technology Administration (RITA), reported that the May 2005 to May 2006 decline in FTEs was the ninth month in the last 10 in which FTEs declined more than 5 percent from the same month of the previous year. In FTE calculations, a part-time employee is counted as one-half a full-time employee.

December 2004 was the last month in which scheduled passenger airlines employed more FTEs than in the same month the previous year. December 2004 was the last of seven consecutive months of increases from the previous year (Table 2). Scheduled passenger airlines include network, low-cost, regional and other airlines.

Many regional carriers were not required to report employment numbers before 2003, so year-to-year comparisons involving regional carriers, or the total industry, are not available for the years before 2003. Using the available numbers from network, low-cost, regional and other airlines, the 403,000 FTEs employed in May 2006 were the lowest total since at least the beginning of 2003 (Table 3).

The seven network carriers employed 266,000 FTEs in May, 66.0 percent of the passenger airline total, while low-cost carriers employed 17.1 percent and regional carriers employed 13.6 percent (Table 4). The network carriers have employed fewer FTEs each May compared to the previous year since 2002, the only carrier group to do so (Table 5).

American Airlines employs the most FTEs among the network carriers, Southwest Airlines employs the most among low-cost carriers and American Eagle Airlines employs the most among regional carriers. Seven of the top 10 employers in the industry are network carriers (Table 6).

Network Airlines

Network carrier FTEs have declined every month since 2003 from the same month the previous year. They declined 7.0 percent in May 2006 compared to May 2005 (Table 7). Numbers from previous years were reported in BTS' Feb. 21 press release http://www.bts.gov/press_releases/2006/bts009_06/html/bts009_06.html.

Network carrier FTEs dropped from 369,000 in May 2002 to 266,000 in May 2006, a decline of 27.9 percent (Table 8).

FTEs at all seven network carriers declined in May 2006 from May 2002. The biggest percentage declines were at US Airways, down 43.8 percent, a reduction of 15,000 FTEs, and United Airlines, down 32.5 percent, a reduction of 26,000 FTEs. Collectively, the seven network carriers reduced May FTE headcount in 2006 by 103,000 since 2002 (Table 9).

Network carriers operate a significant portion of their flights using at least one hub where connections are made for flights to down-line destinations or spoke cities.

Data for US Airways and America West Airlines, now in the process of merging operations, are separately reported - US Airways' data are included in the network carriers' category and America West's in the low-cost carriers' category.

Low-Cost Airlines

Low-cost carrier FTEs declined 2.1 percent in May 2006 compared to May 2005, the 14^th consecutive month of decreases from the previous year (Table 10). The 69,000 FTEs employed by the seven low-cost carriers in May account for 17.1 percent of the passenger airline total (Tables 11 and 4).

Low-cost carrier FTEs were 63,000 in May 2002, 71,000 in May 2005 and 69,000 in May 2006. The increase from 2002 to 2006 was 9.2 percent (Table 11). Of the airlines operating and reporting in both May 2006 and May 2002, all reported more FTEs in 2006 except Southwest Airlines, down 3.1 percent; ATA Airlines, down 61.7 percent; and Spirit Airlines, down 10.7 percent (Table 12).

Low-cost carriers are those that the industry generally recognizes as operating under a low-cost business model with fewer infrastructure costs.

Employment data for Independence Air, which changed its business model from a regional to low-cost carrier in mid-2004, have been included with low-cost carriers for 2003, 2004 and 2005 for consistency. The airline discontinued all flights on Jan. 5.

Regional Airlines

Regional carrier FTEs were down 3.5 percent in May compared to May 2005 (Table 13).

Regional carrier FTEs rose from 42,000 in May 2003 to 55,000 in May 2006, an increase of 32.1 percent (Table 14).

The seven regional carriers reporting employment data in both 2002 and 2006 employed 10.7 percent more FTEs in May 2006 than in May 2002. Of that group, Air Wisconsin and Mesaba were the only carriers to report fewer FTE employees in May 2006 than May 2002 (Table 15).

Regional carriers provide service from small cities, using primarily regional jets to support the network carriers' hub and spoke systems.

Reporting Notes

Airlines that operate at least one aircraft with the capacity to carry combined passengers, cargo and fuel of 18,000 pounds - the payload factor - must report monthly employment statistics.

The Other Carrier category generally reflects those airlines that operate within specific niche markets, such as Aloha and Hawaiian Airlines in serving the Hawaiian Islands.

Data are compiled from monthly reports filed with BTS by commercial air carriers as of July 11.

Additional airline employment data can be found on the BTS website at http://www.bts.gov/programs/airline_information/number_of_employees/. BTS has scheduled release of June airline employment data for Aug. 15.

Table 1: Change in Passenger Airline Full-time Equivalent Employees* from the Previous Year

Percentage change compared to same month the previous year for the most recent 13 months

May 2006 Passenger Airline Employment Down 5.0 Percent from May 2005

Network Airlines

Low-Cost Airlines

Regional Airlines

Reporting Notes

Table 1: Change in Passenger Airline Full-time Equivalent Employees* from the Previous Year

Table 2: Change in Total Passenger Airline* Full-time Equivalent Employees** from the Previous Year

Table 3: Total Passenger Airline* Full-time Equivalent Employees**

Table 4: Total Number of Full-time Equivalent Employees* by Carrier Group, May 2002-2006

Table 5: Change in Full-time Equivalent Employees* by Carrier Group,

Table 6: Top 10 Airlines, May 2006

Table 7: Change in Network Airline Full-time Equivalent Employees* from the Previous Year

Table 8: Network Carrier Full-time Equivalent Employees* by Month

Table 9: Network Carrier Full-time Equivalent Employees, May 2002-2006*

Table 10: Change in Low-Cost Airline Full-time Equivalent Employees* from the Previous Year

Table 11: Low-Cost Carrier Full-time Equivalent Employees* by Month

Table 12: Low-Cost Carrier Full-time Equivalent Employees* May 2002-2006

Table 13: Change in Regional Airline Full-time Equivalent Employees* from the Previous Year

Table 14: Regional Carrier Full-time Equivalent Employees* by Month

Table 15: Regional Carrier Full-time Equivalent Employees*, May 2002-2006