The Pilot Paradox

It’s the kind of statistic that makes an airline CEO cringe. Earlier this year, Boeing released its 2018-2037 Pilot Outlook, estimating a 635,000 strong pilot shortage by 2037. The aviation industry knows that a perfect storm is brewing, and is frantically hoping that respective Governments, training providers and industry bodies will agree how to ride it out.

But let’s be realistic. According to the Federal Aviation Administration, in the United States alone, 160,000 airline pilots were actively employed in 2017. An additional 635,000 pilots more than doubles the workforce currently in employment worldwide. It requires over 30,000 extra pilots to be trained, per year, to 2037. That’s more than 80 pilots a day.

Some aviation experts claim that the total number of additional pilots required by 2037 is more than the number of pilots trained since the dawn of aviation. Let that sink in for a minute.

Interestingly, the Pilot Outlook released by Boeing in 2017 actually estimated a greater shortage by 2036 – 637,000 pilots. 2016 was similar. Both years received little attention at the time in mainstream media. The concept of a pilot shortage isn’t new. However, despite the prediction of a shortage actually decreasing, the reality remains – the aviation industry is going to struggle to fill the gap.

The shortage isn’t limited to the cockpit, either. Boeing also predicts that an additional 890,000 cabin crew will be required. However, the training of cabin crew – effectively a customer service primer with a twist of safety – can be carried out quickly and inexpensively. For most airlines, the entry requirements for cabin crew are fairly low, and there is a steady stream of young people wishing to enter the exciting and glamorous world of air travel.

It’s a bit harder to quickly, and safely, train those who will sit up the pointy end.

 

How did the aviation industry end up in this situation?

There are a number of factors that contribute to the pending shortage. As per usual, the baby boomers are partially to blame. As well as being responsible for the current economic crisis and the apparent decline of the housing market, they’re also messing with the aviation industry.

With the retirement age of most airlines at 60 or 65, mass numbers of current pilots are reaching this threshold, and transitioning from the industry. In 2017, 31% of all active airline pilots in the United States were aged between 50 and 59. That’s a huge number of pilots that will be departing the line in the next ten years.

The growth of the Asian Middle Class

The predicted pilot shortage is at its greatest in the Asia-Pacific region, with 240,000 new pilots needed by 2039.

Why is the predicted shortage so acute in that region? The rapid growth of aviation throughout China and India. The last ten to twenty years have seen a huge rate of growth in Chinese and Indian aviation, with demand for pilots greatly outstripping domestic supply. In May 2018, air traffic in the Asia-Pacific region rose a whopping 8% when compared to the previous year, and it was the 45^th consecutive month of double-digit revenue passenger kilometer growth in India.

India and China can’t train enough pilots to keep up with demand. China, in particular, has upped the ante in the international pilot recruitment stakes, hoping to attract qualified – and experienced – pilots from all over the world. While it has extensive training schemes in place for Chinese cadets, China can’t fill its vacancies fast enough. As a result, the number of foreign pilots working in China in 2017 was more than double those working there in 2010.

The cyclical nature of demand

The market for aviation services is tied closely with international market buoyancy, particularly demand for air travel. As a result, there are times when there is an increased demand for pilots – and others when recruitment efforts are largely frozen. Post 9/11, demand for air travel slumped, and huge numbers of pilots were unemployed. It wasn’t until 2004 that air travel demand in the United States reached pre-9/11 levels. Several large bankruptcies, mergers and restructures resized the industry considerably, leaving many qualified pilots out of work, or seeking work elsewhere. This didn’t make for a particularly attractive industry for new joiners.

However, the last decade has seen the industry withstand a range of exogenous shocks. Boeing points to the potential doubling of the world aviation fleet as a leading contributor to the pilot shortage. In 2017, the International Air Transport Association (IATA) announced that it expected nearly 8 billion passengers to travel in 2036, almost doubling the number of air travelers predicted by year-end 2017. This growth is monumental. In order to remain competitive and meet expansion demands, airlines are required to either recruit or train more pilots.

To train as a pilot requires patience – and deep pockets

In many countries, the time from commencing entry level pilot training to a jet role could be six or seven years. Life for a young pilot usually means low wages, long hours and a huge level of investment – and this can continue for years before getting anywhere near a well-paid jet or turboprop position. It could be argued that the ideal time to commence training is actually during a recruitment downturn, in the hope that demand will increase over the intervening period between training, and gaining enough hours to enter jet employment.

However, trying to convince a twenty-something that they are best off bankrolling their aviation training isn’t easy, particularly when they could get a Bachelor’s degree – and a juicy paycheck as a Marketing Manager – in three or four years.

Even if training schools ramp up their operations to create more qualified pilots right now, there is a lead-time before these pilots have the relevant experience – read, hours – to fly the large jet aircraft supporting the expansion of the aviation industry. It’s too late to wait any longer. Airlines are looking for innovative – or fast and efficient – ways to get more pilots into the recruitment pipeline.

So how exactly is the industry responding now, to avoid the pitfalls of the predicted shortage?

The resurgence of the cadet program

While the downturn following 9/11 saw most airlines abandon their cadet programs, these are now starting to see a comeback. Aiming to take new recruits from ‘zero to hero’ – no flight experience right through to line employment – airlines are afforded total control over the training and recruitment process. This, however, often comes at a large financial cost to the carrier, or individual.

Qantas has recognized the need to develop its own internal training program, and has recently announced the launch of the Qantas Group Pilot Academy in 2019. In January 2018, Air France relaunched its cadet program, dormant since 2009, with the airline covering the full cost of training. Cebu Pacific, Singapore Airlines, Jet Airways, British Airways and Virgin Australia all offer their own cadet programs.

These cadetships are particularly attractive when you consider the low salaries offered to Flight Instructors – a typical post training job – coupled with the high cost of training. The cost of training becomes a lot more palatable when a learner is guaranteed a reasonable income at the end of it.

While airlines have traditionally been hesitant to fully subsidize the cost of ab initio training when qualified pilots have been in abundance, this attitude is changing swiftly as shortages loom – as indicated by Air France’s resurrection of its cadet program.

Faster, cheaper…. safer?

The Multi-Crew Pilot Licence (MPL) is a relatively new development, and was introduced to deliver pilots that were line-ready within a shorter period of time. Simply put, it shifts the focus from flying hour requirements to competency-based training and assessment – meaning less time in the air, and more in the simulator. Typically, it means that pilots do not spend years in general aviation building up hours before transferring to a multi-crew jet environment – allowing a much swifter transition from training to jet employment.

However, it’s not without its opponents. There is an argument that MPL cadets do not gain enough practical flying experience. Some argue that cadets lack the advanced decision-making skills and experience needed to deal with emergencies in the cockpit, which are apparently much better honed during practical flying experience.

What you may not know is that a number of airlines are currently utilizing MPL trained pilots on the line. The Lufthansa Group accept MPL trained pilots, and some cadet programs – such as Air Arabia’s – specifically train MPL pilots. While it is not without controversy, its possible that we may see more airlines go down this route in order to quickly train new staff in the future.

 

Power to the pilots

The last few years have seen considerable power being shifted back into the hands of aviation professionals, given the increasing shortage of pilots. In a well-publicized event in 2017, United Kingdom Ryanair pilots demanded unionization – and in early 2018, the airline reached a historic deal with the British Airline Pilots Association.

Working hours are longer than ever, and salaries are never going to reach the dizzy heights of aviation’s golden years. However, in terms of job availability, there is no better time to be an international airline pilot. Direct Entry Command roles in China are creating a shift away from the ‘airline for life’ approach, with seniority becoming less crucial when deciding whether to shift to another airline. Certain deep-pocketed airlines are still throwing in considerable incentives to attract trained staff, or flexible contracts to encourage commuting.

Best yet, for young trainees, the demand for experienced pilots creates a healthy pipeline throughout the regional airlines. As large carriers seek experienced recruits, this creates demand for pilots that are close to the minimum-hour requirement for a First Officer – currently 1500 hours in the United States for non-academic graduates. For a student, the prospect of gaining employment at a stable regional carrier is far more attractive than getting stuck in the flight instructing lull for a few years.

The short-term solution?

To be frank – there isn’t one. Unless self-flying aircraft are developed much quicker than anticipated, the supply-and-demand issues plaguing the aviation industry aren’t likely to disappear anytime soon.

While some operational aspects of the aviation industry can be planned for, there are many factors that cannot be accurately predicted – or guessed. As anyone in the fuel-hedging game can confirm, it’s never quite as simple as looking at historical trends, or working to industry predictions. With the price of fuel continuing to rise, growth might cease altogether. The IATA admitted last year that trade protectionism or travel restrictions could limit the predicted growth in passengers to 2.7%, meaning 1.1 billion fewer passenger journeys annually in 2036.

Or liberalization measures could mean that passenger numbers triple over the next 20 years. Basically, despite all predictions pointing to the looming shortage, it could swing either way. The industry certainly wasn’t expecting 9/11, or the massive fallout that occured as a result. And airlines have to decide now how to prepare for whichever scenario eventuates, as well as considering a myriad of other factors that impact on operations.

Whether it’s flying flags of convenience or seeking new ways to cram more passengers into aircraft, one thing is for certain – the aviation landscape is changing. And without pilots to aid expansion, or deliver to existing routes? Airlines are really going to struggle to remain competitive.