The type of pilot taking early retirement from the airline industry is not to be scoffed at. Typically this is a senior pilot with decades of experience. Meaning this person is hard to replace – they are grown very slowly into this skill level. It not only takes a long time, it also takes a lot of money.

As the story says – "Anticipating the retirements, the carrier last month canceled 28 flights that it had intended to operate in February, mostly on long-distance international routes that used American's newest and largest airplanes, the Boeing 777." This tells you these pilots are at the top of the tier. These people are leaving before they have to.

Does this mean they are leaving the industry? Absolutely not. I would bet they have all signed up with Emirates or another hungry Gulf airline to maximize their revenue for the next few years in a tax haven. Their skill levels and training make them very valuable. Since they have no kids at home, many will move to places like Dubai with a spouse and live very well offshore and then retire in the US when it suits them.

World demand for skilled pilots now is hot. In fact, many would suggest it has never been hotter. China and India are equally as voracious in their appetites for pilots. Just like oil, these economies are demanding all sorts of resources.

But back to pilots. American is not the only airline facing this issue. United and Northwest have fractious labor relations – worse than American. US Airways cannot get its two pilot unions to merge – the most skilled will do better to retire and go offshore.

These are dark days for US airline managers. High oil irritates but is increasingly offset with higher fares. Full planes are great – but they need crews to keep them flying. 2008 will see a big airline labor turnaround as airline mangers discover that they no longer have the bargaining power they had post 9/11. Airline labor is back in a big way – and a global market for their skills ensures they can walk away. Get another view on this here.

The best airline managers will be those who can co-opt people into a shared vision. This vision will include everyone on the upside. Not a select few who get stock options while the remainder of the team hurts.

Some US airline managers are poster boys for greed – you know who I mean. For them 2008 will be a real bad year; merger or no merger.