The aviation industry has its ups and downs and Noel McDermott (’06, PC) has ridden the roller coaster. He survived the dismal post 9/11 period, where air travel declined so significantly that furloughs and pay cuts were the rule, and the average starting pay for regional pilots hovered around $20,000.
“There was a long stint where the joke was, ‘Would you like fries with your landing?’” McDermott says.
The recession of 2007-09 slowed the air transportation industry again and McDermott experienced his first furlough.
While some airlines are struggling to stay aloft, the pilot is winning this latest turn in supply and demand for the aviation industry.
“To a pilot right now, the world is your oyster and you just need to choose the color of pearl that you want,” says McDermott, now a first officer at Compass Airlines.
It’s ‘Absolutely Real’
Significant increases in pay and hiring, coupled with low unemployment, are accepted economic indicators of a labor supply shortage, according to the U.S. Government Accountability Office (GAO). A 2014 GAO report on the Current and Future Availability of Airline Pilots found unemployment for pilots was already low, averaging 2.7 percent, a much lower rate than the overall economy. Pilot pay and hiring at the time did not indicate a shortage. That has since changed.
“The pilot shortage is absolutely real and growing significantly,” says Brent Bowen, dean of the College of Aviation at the Prescott Campus. “Pilots are getting more pay now than in the last two decades.”
Entry-level pay for first officers at regional airlines has rebounded in the last year from “fast-food wages,” to up to $60,000 with signing bonuses at select air carriers.
Justin Ingersoll (’08, PC), a pilot and flight training department manager at Envoy Air, a regional carrier and wholly owned subsidiary of American Airlines, affirms the uptrend in pay. “The hourly-base pay for first-year pilots at Envoy was increased in September 2016 by approximately 34 percent, with additional signing bonuses of up to $22,100,” he says.
That strategy is allowing Envoy to meet its hiring goals, which for 2017 is 750 new pilots, Ingersoll says. “With the beginning of 2017, Envoy is flowing at least 30 pilots each month to American Airlines. In addition, many pilots are getting hired at other major carriers, furthering the need for more new hires to replace this attrition,” he says.
The pilot shortage goes beyond the United States. “This is a worldwide problem,” says Alan Stolzer, dean of the College of Aviation at the Daytona Beach Campus.
Indeed, The Boeing Company’s 2016 Pilot & Technician Outlook predicts a need for 617,000 new pilots worldwide over the next two decades, with Asia Pacific requiring the most — 248,000.
“The China market continues to grow,” affirms Matt Flaherty (’03, PC; ’07, DB), executive director of enrollment and campus operations at Embry-Riddle’s Asia Campus in Singapore. “Many predict the situation will only grow more dire as the manufacturers start to make good on their delivery of aircraft over the next 20-30 years. Not properly planning for the growing pilot shortage could very well put some airlines out of business.”
Small Operators Are the Most Vulnerable
In 2015 Ken Byrnes (’01, ’05, DB), flight training department chair and assistant dean at the College of Aviation at the Daytona Beach Campus, led a study examining pilot motivation and found that roughly 30 percent of current Federal Aviation Administration (FAA) Airline Transport Pilot (ATP)/Commercial certificated pilots choose not to work in a cockpit — primarily due to insufficient pay and lifestyle issues.
Those “opt-outs” are contributing to the impact on smaller Part 135 scheduled-service carriers, as well as some Part 121 regionals in the United States.
“Everybody’s ultimate goal is to be a major airline pilot, so the regionals are the first ones to feel the pain,” Byrnes says. “It’s a vacuum.”
Based on available data, Byrnes predicts regional carriers and small cargo operators will have to replace 10 to 15 percent of their pilot workforce each year for the foreseeable future due to demand from the major airlines, coupled with attrition, retirements and fleet growth. Those without the resources, or the backing of a major airline to attract and retain pilots, may not make it.
The pilot shortage is also affecting flight training. “The pilot shortage has led to an instructor shortage,” says Juan Merkt, chair of the department of aeronautical science at the Prescott Campus. Instructor pilot turnover is an issue at the Daytona Beach Campus, as well. The university has established an incentive program that includes scholarships for flight instructor training and tuition benefits toward a graduate degree to retain instructors.
The major airlines seem to be exempt so far from the shortage, but predictions are that they will ultimately be affected. “While the major airlines still have plenty of applicants, they are starting programs that show they are viewing a longtime shortage,” says Costas Sivyllis (’12, DB), a first officer at United Airlines and a longtime liaison of the Air Line Pilots Association’s National Education Committee. “We, as an industry, need to keep attracting people to the field, because this is not a one-time problem. This is going to be a systemic problem.”
Those in the aviation industry point to several key causes to the pilot shortage. One is disbelief.
Stolzer says rumors of pilot deficits have come and gone over the years with little effect. The industry became immune to what they viewed as special interests “crying wolf,” he says. “The thing is: It’s worse. Now we are seeing regional carriers with parked airplanes because they can’t crew them. That’s problematic. Industry has in some sense done it to itself – by not fully understanding the situation and developing a long-term strategy.”
“I call it ‘the perfect storm,’” Byrnes says. “You have lots of factors playing a role.”
One is retirement. In 2007, the FAA extended its mandated retirement age for pilots from age 60 to age 65 — a decision that’s hitting full force now. The General Aviation Manufacturers Association’s 2016 General Aviation Statistical Databook reports there are 17,921 active FAA ATP pilots age 60 to 64. These pilots will “age-out” over the next five years. Another 24,749 ATP pilots ranging in age from 55 to 59 will follow suit by 2026, according to the report.
Coupled with fewer new pilots entering the pipeline, the shortfall could result in as many as 1,500 aircraft, two-thirds of today’s regional airline fleet, being parked, says Jennifer Sunderman (’05, DB) of the Regional Airline Association.
“The airlines are getting squeezed at both ends,” says Kathi Durst (’88, WW), a chief pilot for American Airlines, who years ago left the Air Force to take a job in the commercial airlines. “There are fewer younger pilots entering the field and fewer seasoned pilots transitioning out of the military to the airlines.”
New federal legislation approved in 2013 requiring first officers to hold an ATP certificate and have a minimum of 1,500 hours of flight time, up from 250 hours, created an additional hurdle for people considering a pilot career. Graduates of Embry-Riddle and other qualified educational institutions received a Restricted-ATP provision lowering the flight-hours required to 1,000 or 1,250 (depending upon the degree earned).
The high cost of college and flight training is already a deterrent for would-be pilots. “It is very expensive,” says Xavier Samuels (’96, DB), a first officer at United Airlines and a board member for the Organization of Black Aerospace Professionals. He regularly visits classrooms in Houston to encourage students to pursue careers in aviation. “I think some are inspired, but I think the reality of trying to finance their education has made it very difficult for them to realize that dream.”
A Long Road to a Solution
Embry-Riddle has been working for years to alert the industry to the situation, says Stolzer. As early as 2010, it hosted its first Pilot Supply & Demand Summit to bring attention to the issue.
“The purpose of the summit was to wake up the majors [airlines]. We could see the [pilot shortage] locomotive heading in our direction,” says Tim Brady, interim chancellor at the Daytona Beach Campus and former College of Aviation Dean. “Now, we see the majors having a larger interest in the students that are coming up and they are providing scholarships and pathways into the airlines.”
Another change for the better is that in the last year to 18 months, the regionals started offering higher pay to new pilots, up to $60,000 with bonuses.
“The question will be, long-term, can the regionals support that?” says Stolzer.
Flow-through agreements between the regionals and major airlines are another new perk being rolled out to attract pilots. According to Ingersoll, as captains working for the majors earning upwards of $200,000 retire, it is freeing up revenue for regionals to offer higher wages and signing bonuses for new hires — at least for the wholly owned subsidiary carriers like Envoy.
The airlines could also finance pilot training through scholarships and loans tied to employment contracts. “I believe airlines will need to explore options to either subsidize or completely pay for pilot training,” Ingersoll says.
Ab initio programs, where an airline trains its own pilots, are another option — and are common in Europe, Asia and the Middle East. Brady says he hopes the majors will look to the universities for solutions to their pilot needs.
“We have roughly 200 colleges around the country that provide flight education. If they take the money that they would use to do their own training and provide scholarships with it, that would help solve the problem.”
The airlines may also try to lure back those who already have Commercial and ATP certificates, but who are not currently working as pilots — the 30 percent identified in Byrnes’ 2015 study on ATP pilot motivation.
“I think they’ll [the major airlines] probably offer more incentives to the pilots who are out there – the ones who are selling shoes or whatever they’re doing.” Brady adds. “I think that’s a cheaper option for them than to start training programs all themselves.”
What Will The Future Look Like?
The shortage could lead to more bankruptcies of small air carriers and the elimination of air service to some cities. Case in point: Republic Airways, a Part 121 regional, filed Chapter 11 reorganization in February 2016 citing the pilot shortage as a factor.
“As the carriers become more streamlined on manpower, they will have to eliminate service to the smaller cities,” Sivyllis says.
McDermott projects the demise of the Part 135 micro-regional altogether. Like SeaPort, he says, without the revenue and incentives to retain captains, these airlines may cease to exist.
Creative solutions on the part of the airlines may also evolve.
“I wouldn’t be surprised if we have drones replace cargo planes, like FedEX,” Durst says. This would free up more pilots for the commercial airlines. She says the airlines might also operate with one-pilot crews on short flights and with three pilots, instead of four, on long-haul flights.
While the extent of the shortage remains unknown, and the high cost and time inputs to attain an ATP certificate appear to be static, McDermott says those who dream of having a cockpit for an office will continue to enter the field.
“The people with the passion will figure out a way to justify it,” he says. “The people who are simply looking for a career won’t.”
Partnering Together for Future Pilots
Embry-Riddle has joined with a number of airlines to establish a direct path for its graduates into rewarding pilot careers. To participate, graduates must agree to work as an instructor pilot at Embry-Riddle for at least three semesters following completion of their bachelor’s degree and Certified Flight Instructor/Instrument ratings. Listed here are the airlines/programs with which the university has active pilot hiring relationships.
- Ameriflight Pilot Pathway Agreement
- Atlantic Southeast Airlines
- Jet Blue University Gateway Program with pathways through Cape Air or ExpressJet Airlines
- Endeavor Air Student JET Pilot Program
- Envoy Pilot Cadet Program
- Piedmont Airlines Pilot Cadet Program
- PSA Airlines Cadet Program
- Republic Airways Aviation Career Pipeline Interview Program
- SkyWest Airlines Bridge Program
- Silver Airways Professional Pilot Apprenticeship/Internship Grant Program