For once in the airline world, something has arrived early. This time, however, it’s not-so-good: a long forecasted, sometimes delayed pilot shortage. From the Wall Street Journal to Brett Snyder’s CrankyFlier to BusinessWeek,the news of a significant shortage of qualified applicants to our nation’s regional airlines has captured the attention of the media and business world alike. Great Lakes Airlines has taken the extraordinary step of closing their Minneapolis Essential Air Service base and Republic Airways is parking airplanes. This is an area with which I have spent the past several years immersing myself in heaps of demographic data from the FAA in the form of reports and spreadsheets. With this post, I hope to elaborate on some of the key areas in this conversation all members of the aviation community need to know.
The Pilot Shortage is not a Myth, Despite What ALPA Leadership Says
Yogi Berra once said that half of the game of baseball was 90% mental. While an offhand mistake, there is a comparison to be made to airline unions: more than half of the game of airline unions is 90% politics and messaging. The Air Line Pilots Association has decided to stake their political message in press releases and a video message from ALPA President Lee Moak. Within the talking points put forth by the pilot union, there are several key insinuations that represent misinterpretations of the market or outright falsehoods:
- Regional airline pilots are not leaving the United States en masse to go work for companies like Emirates, Cathay Pacific, or Korean Air. A prospective pilot or even a somewhat-established regional pilot does not meet the very high published minimum hour requirements set forth by these companies which include thousands of hours of flight time and/or time in aircraft of 737/A320 size or larger (Korean Air’s mins; Emirates’ mins). Cathay Pacific isn’t even hiring American pilots at this point in time.
- By the time a pilot meets the minimum hour requirements to fly for these global carriers, they are likely unwilling to uproot their families and daily life to move to Dubai or deal with a 7-14 day on-off commuting schedule. Is $20,000 enough to make you move you and a family halfway around the world?
- The number of pilots on furlough by ALPA member carriers is greatly eclipsed by the projected hiring amongst legacy carriers. American alone has publicly announced they will be hiring more than the number of pilots ALPA says are on furlough in the next five years. Pilots on furlough face a difficult decision: start at the bottom of another airline, with a reduction of salary and seniority or wait out a callback from their employer.
These mixed messages by ALPA’s national office fall flat compared to the pointed comments of American Eagle’s ALPA leadership, which stated last week after rejecting a concessionary contract offer from American: “[American Eagle's ALPA organization] will be working with the American Eagle pilots to help them find placement with other airlines. ALPA representatives will ask management for their timetable regarding the liquidation of American Eagle.”
The Demographic Picture Looks Like One of My Paintings: Not Pretty
The 2012 US Civil Airmen Statistics from the Federal Aviation Administration contain several statistics that show things are going to get tougher for pilot supply and the aviation industry as a whole.
- The average age of an Air Transport Pilot is 49.9 years old, an increase of .1 years from 2011. This is important, as many of the regional airlines began to transition their younger first officers to ATP holders during this time as it became clear that the certificate in some form would be required for FAR Part 121 operations. It is entirely likely the average age would be higher if it weren’t for these preparations.
- Slightly more than 62,000 of the 149,100 active Air Transport Pilots in the United States fall between the ages of 50 and 64, which places them within 15 years of the FAA mandated retirement age. Some of these pilots will continue flying in other places, but they won’t be flying for the airlines.
- There are 81,805 Student Pilots between the ages 0f 16-30 in the United States. While an okay number on the surface, there are several problems when reading between the lines. Analysis shows that somewhere in the area of 30-50% of student pilots won’t finish their Private Pilot certificates. The FAA doesn’t currently have a system in place that designates the number of these pilot certificates that are issued to foreign students who come to the country for flight training alone. Using written exam address data, colleagues at the University of North Dakota estimated that up to 40% of new Commercial Pilot certificates issued in the country were going to these pilots who will take their ratings home when training is done.
The Elephants in the Room (Pilot Pay, the New ATP Rules and Training Costs) Need to Be Addressed
Since the dawn of airline outsourcing after deregulation in 1978, the major airlines have pitted contractors and subcontractors against one another in an effort to reduce costs. Parlance calls this a “whipsaw,” where companies that provide some service, be it regional flying, aircraft cleaning or even aircraft maintenance, try to unsustainably underbid one another for an airline contract. The major airlines like this process because it keeps their costs lower. The employees of these contractors and subcontractors face downward pressure on their wages and benefits to the point where the starting salary for a regional airline first officer becomes $20,000 in their first year (less attention has been placed on ground crew as of late, but workers at Delta’s hub in Detroit were recently whipsawed for the fourth time since the airline merged with Northwest. Those workers that have stuck around between the four handling companies have seen their pay drop 50%). This race to the bottom is unsustainable for line employees and the air travel system as a whole. There’s near consensus that $21,000 a year is not acceptable for new airline pilots. At the same time, regional airline boards and CEOs need to be cognizant of the fact that offering their leadership raises in the area of 200% while asking pilots to take a pay cut is a slap in the face and highly unethical.
A student graduating from a university aviation program will do so with approximately 300 hours in their logbook. Thanks to the new ATP qualification rules, they are not able to begin flying for a regional airline until they earn 1000, 1250 or 1500 hours (depending on the program). This means they will spend an extra 1-3 years flight instructing or doing other forms of flying that don’t necessarily prepare them for professional piloting, thereby losing their honed study and professional skills from their degrees. This leads to increased training times once they do get hired at the airlines, and increased costs. Congressional and regulatory relief from the so called “1500 hour rule” is imperative. My proposal: a reduction of the restricted ATP certificate eligibility to college graduates to 500 hours.
Finally, aviation universities need to take a hard look at their training programs for ways to reduce costs for their students. This needs to be done on the micro (internal) and macro levels of aviation education. I cannot speak for individual programs and ways to save costs internally. On the macro level: Why is a new primary trainer from Cessna, Piper or Cirrus $200,000+? What can we do to reduce the cost of fuel & insurance?
Silo No More, Aviation Industry!
The most important takeaway from this situation is the need for the aviation industry as a whole to enter into a collective conversation about pilot and other aviation professional workforce supply. We can no longer afford to silo ourselves as labor, education, management, GA, and manufacturing. If we do not, the fundamental shift that will come won’t be pretty.