Supply and demand in action in the pilot market

Pilot Shortage Prompts Regional Airlines to Boost Starting Wages
by: Susan Carey
Nov 07, 2016
Click here to view the full article on WSJ.com

TOPICS: Labor Markets, Supply and Demand

SUMMARY: Regional airlines that feed the nation's biggest carriers are boosting starting wages to fight a pilot shortage, hoping to encourage aspiring aviators to endure what has become lengthier training. "The marketplace for pilots is pretty tight right now," said Capt. Tim Canoll, president of the largest pilot union, Air Line Pilots Association. "What we're seeing is the operation of supply and demand economics."

CLASSROOM APPLICATION: Students can evaluate the effect of a decrease in the supply of commercial pilots for regional airlines on the equilibrium salaries of these pilots. The article also informs students about the importance of regional airlines to the major commercial airlines.

QUESTIONS: 
1. (Introductory) What factor has caused a decrease in the supply of commercial airline pilots?

2. (Introductory) What is the effect of a decrease in the supply of commercial airline pilots on the equilibrium wages of pilots?

3. (Advanced) What is the effect of decrease in the supply of commercial airline pilots on the prices of travel on regional airlines?

4. (Advanced) What is the effect of a decrease in the supply of commercial airline pilots on the supply of flights offered by regional airlines?

Reviewed By: James Dearden, Lehigh University