Airlines Face Acute Shortage Of Pilots - Andy Pasztor - Wsj

[Don Hudson]

Airlines Face Acute Shortage of Pilots - Wall Street Journal

http://online.wsj.com/article/SB10001424052970203937004578079391643223634.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird

By SUSAN CAREY, JACK NICAS and ANDY PASZTOR

(WSJ) U.S. airlines are facing what threatens to be their most serious pilot shortage since the 1960s, with higher experience requirements for new hires about to take hold just as the industry braces for a wave of retirements.

Federal mandates taking effect next summer will require all newly hired pilots to have at least 1,500 hours of prior flight experience-six times the current minimum-raising the cost and time to train new fliers in an era when pay cuts and more-demanding schedules already have made the profession less attractive. Meanwhile, thousands of senior pilots at major airlines soon will start hitting the mandatory retirement age of 65.

A rule requiring new airline pilots to have at least 1,500 flying hours will postpone the day flight instructor John Adkins, above, can join a carrier.

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Another federal safety rule, to take effect in early 2014, also will squeeze the supply, by giving pilots more daily rest time. This change is expected to force passenger airlines to increase their pilot ranks by at least 5%. Adding to the problem is a small but steady stream of U.S. pilots moving to overseas carriers, many of which already face an acute shortage of aviators and pay handsomely to land well-trained U.S. captains.

"This is going to come to a crisis," said Bob Reding, recently retired executive vice president of operations at AMR Corp.'s AAMRQ -2.70%American Airlines and now a consultant to FlightSafety International Inc., an aviation training provider.

Added Kit Darby, a consultant on pilot-hiring trends: "We are about four years from a solution, but we are only about six months away from a problem."

Estimates differ on the problem's magnitude. Airlines for America, a trade group of the largest carriers that collectively employ 50,800 pilots now, cites a study by the University of North Dakota's aviation department that indicates major airlines will need to hire 60,000 pilots by 2025 to replace departures and cover expansion.

Mr. Darby's firm calculates that all U.S. airlines, including cargo, charter and regional carriers, together employ nearly 96,000 pilots, and will need to find more than 65,000 over the next eight years.

In the past eight years, not quite 36,000 pilots have passed the Federal Aviation Administration's highest test, the Air Transport Pilot exam, which all pilots would have to pass under the congressionally imposed rules.

For passengers, the biggest impact is expected to be at smaller, regional carriers. They have traditionally been a training ground feeding pilots to the bigger airlines, which are expected to step up their poaching.

"Absent a game-changing shift in the supply of" pilots, small to midsize communities "are in jeopardy of losing some, if not all, their scheduled flights," Roger Cohen, president of the Regional Airline Association, said in a July speech.

More than half of U.S. airline pilots are over 50, said Mr. Darby, the consultant, reflecting a bulge in new hires in the 1980s and scant hiring over the past decade.

In 2007, to bring the U.S. into alignment with some other countries, regulators extended the mandatory retirement age to 65 from 60. By some estimates, 80% of 60-year-old U.S. pilots now are staying on longer. But in December, the first of those who extended their careers will start turning 65.

Capt. John Silverman, a 64-year-old US Airways Group Inc. LCC -3.15%pilot, stuck around when the law changed but must retire in April. "I'm extremely healthy," he said. "I could do more time. But 65 is plenty."

The FAA's head of flight standards, John Allen, said at an industry conference this summer that the projected retirement numbers are "astounding and dramatic" and "we don't have a system to address this issue." A spokeswoman for the FAA said its official position is "to obtain data to determine long-term pilot staffing needs and solutions."

After a decade of consolidation and restructuring, some large carriers are planning to start hiring again. Delta Air Lines DAL -0.97%Inc. estimates it will need 3,500 new pilots over the next decade to maintain its ranks at 12,000, not including any growth. American Airlines recently said it plans to add 2,500 pilots over the next five years. United Continental Holdings Inc. UAL -0.85%has begun taking applications for a few positions in its Continental subsidiary.

Dave Barger, chief executive of JetBlue Airways Corp., JBLU -1.67%said in an October speech that the industry is "facing an exodus of talent in the next few years" and could "wake up one day and find we have no one to operate or maintain those planes."

There are limits to the ability of airlines, especially the regional carriers, to attract more pilots by raising wages. While the industry's health has improved in recent years, many carriers still operate on thin profit margins, with the airlines sandwiched between rising costs for fuel and unsteady demand from price-sensitive consumers.

Dan Garton, chief executive of AMR's regional American Eagle unit, said the issue "is going to become much more visible when regionals have to decrease their flying" for lack of pilots, and some smaller cities lose air service.

Mr. Garton said he has beaten the drum about the problem on Capitol Hill and at the FAA without success. The FAA said it has been encouraging discussions among industry officials to come up with solutions.

Some regulators and industry experts worry about the safety implications of having a smaller pool of applicants at a time when demand for pilots is rising. They fret that some smaller airlines could be forced to lower internal criteria and hire applicants with questionable skills or spotty training records.

"It certainly will result in challenges to maintain quality," said John Marshall, an independent aviation-safety consultant who spent 26 years in the Air Force before overseeing Delta's safety. "Regional carriers will be creative and have to take shortcuts" to fill their cockpits, he said.

Ahead of the new 1,500-hour rule, the Regional Airline Association has been testing its first officers regularly in preparation for meeting the standards, said Scott Foose, the trade group's vice president of operations and safety. "Working collaboratively with the FAA, hundreds of first officers have already received their new certificates and the rest are on track to obtain theirs," Mr. Foose said.

The military hasn't been a major source of commercial pilots for years, and the supply of new pilots has been dwindling. Among the reasons is that would-be fliers face expensive training with no guarantee of being hired by an airline once they complete it.

Third Coast Aviation, a flight school in Kalamazoo, Mich., said business is down 30% to 40% over the past five years. At California Flight Academy in El Cajon, Calif., the rolls are full, but almost entirely with foreign students who will soon return to their home countries. "We don't have locals learning to fly anymore," said Ash Dakwar, the academy's operations chief.

While no one tracks overall attendance at the nation's 3,400 flight schools, FAA data show annual private and commercial pilot certificates-both required to become an airline pilot-are down 41% and 30%, respectively, in the past decade. The National Association of Flight Instructors, in a research paper published this year, said that "there is no feasible way...to continuously supply qualified pilots for the demand of air carriers."

Congress's 2010 vote to require 1,500 hours of experience in August 2013 came in the wake of several regional-airline accidents, although none had been due to pilots having fewer than 1,500 hours.

Regional carriers now are racing to make sure their pilots have 1,500 hours by next summer, while also trying to bolster their ranks. But prospects with close to the required number of hours aren't numerous. "These people just don't exist," said Mr. Garton of American Eagle.

The FAA is trying to soften the blow. It has proposed a rule that would lower the requirement to 750 hours for military aviators and 1,000 hours for graduates of four-year aviation universities. But the exemption, if it goes through, may come too late, and it isn't expected to help most aviators in training anyway, because they come from other types of flight schools.

For them, the challenge of meeting the new requirements is uncharted and costly. "I'm stuck being a flight instructor for another year," said John Adkins, a 27-year-old pilot at California Flight Academy. He achieved the current minimum for being a co-pilot, but the new rule has delayed his dream to join an airline. "You don't make a lot of money as an instructor," he said.

The 1,500-hour mandate "has only discouraged a future generation of prospective pilots to pursue this career," said Mr. Cohen, from the regional airline group. Those who persevere "will try to get the 1,500 hours the fastest and cheapest way possible," he said. "Flying around in empty airspace or towing banners doesn't give you the training you need to fly a complex airplane."

The mandate applies to regularly scheduled passenger and cargo airlines flying jets and larger turboprops. Cargo airlines could also end up struggling to recruit sufficient pilots. Smaller planes, on-demand charters and business jets aren't covered by the new requirements.

The last big pilot shortage, in the 1960s, occurred because "everybody who was of a trainable age was in Vietnam," said Randy Babbitt, a former FAA administrator who was hired as a pilot in that era. Meanwhile, airlines were expanding as jets shortened trips and boosted traffic. Once the military pilots finished their tours, many joined airlines and the shortage problem receded.

[Dropzone]

From my seat......the best and the brightest are no longer interested in flying as a career. The payoff for the sacrifices is just not there anymore. Even at a local level, the quality of the people involved (instructors) has significantly declined....that's the reality.

[AME]

You think it's bad in flight ops, in maintenance no one wants to to work nights and week-ends for less money than a they can make driving a truck.

A number of the young people are simply putting in time to get their licence before jumping ship and a number of the older people (myself included at age 52) are going back to school.

[Don Hudson]

Brett, thank you for ensuring that the maintenance side of this issue is also heard loud and clear. The article does mention both groups, flight crews and maintenance - equally important in my view.

Working for the airlines is no longer desireable and it is painful and unhappy conclusion isn't it? While some are better than others to work for "aviation" no longer attracts "the best and brightest". The story is complex, with sources going back to the 80's and begs to be told but it wouldn't sell, at the moment anyway.

[GDR]

Hi again Don

It's always good when we agree and we're sure on the same page here. I think that we will continue to see tragedies such AF and Colgon and I don't see any fix on the horizon. I see things getting worse in the future and it will take massive changes which there is no appetite for to turn it around.

Greg

[Timothy]

With regard to the 1500 hour requirement, would it be feasible for a pilot to gain this experience in the military as a transport pilot? My military experience was in the U.S. Army so I'm not sure how long it would take to accumulate this amount of time. In the past the military seemed to be a very good training ground for airline pilots. Is this still the case?

[Don Hudson]

Hi Timothy;

I suspect that in terms of flying training, weather, autoflight and so on the USAF and the CF remain as good as it gets and still makes for a very desirable candidate. In terms of knowing corporate operations, CRM, economic constraints, and perhaps standardization, (I'm guessing here, ...someone please correct me), it is not a universal principle that training in the armed services makes the best airline pilot as the fundamental priorities and methods of operation are obviously different. People adapt of course and in most cases the point is moot.

Therein of course, lies the problem of losing pilots trained at great taxpayer expense to the airlines which is exactly what used to happen. I believe both Canadian and US armed services require longer commitments now, (perhaps someone can fill in details). As far as time goes, I think the 1500hr requirement itself may be a mistake. We all know that time in the circuit instructing isn't as good a teacher as flying even less time but say, on the coast or interior of BC. However a thinking candidate who is eager, is the beneficiary of thorough, appropriate training and has not permitted ego to get in the way of continuous learning and the constant checking could, I think, make a successful MCP, (multi-crew pilot) candidate and become a fine airline pilot in far less time than 1500hrs. I think the limit is ill-conceived from what I know. A better measure I think might be a regulator-supervised battery of tested competencies for personal qualities, native abilities, physical health/attributes, psychology tests, (cog-screening), ability to function under stress, fatigue etc, which give clear indications of suitability for the profession. That would permit early entry to the "competency track" vice assuming that 1500hrs does the job, (which I don't think it always does). Besides, we know of a number of log-book falsifications whereas supervised "airline pilot competency testing" would be far more difficult to fake.

Hi Greg - yes, always good to agree. We are on the same page with this issue...and I think you're right - we're just going to see more unnecessary accidents like AF447, Colgan etc.

I would like to offer the thought that de-regulation in the early days of a budding neoliberal economy has partially contributed to this but the counter-example is, "who made money in the 60's!?" Thing is, wages, pensions, benefits were, at the time, something airlines could at least afford but the industry has been forced to teach its clients that nickel-and-dime fares are realistic, and they aren't. The price-flexible targets are employee wages/pensions/benefits and we know where that has gone. The industry has already taken too much blood and the results are, as I said a dozen years ago or so, clear and distinct.

Don

[Guest rozar s'macco]

1500 hrs is a pretty low bar for large airline flying, but not perhaps for regional airline flying. I flew with a few pilots with far less than that when I was a B1900D captain with no problems, but I had 3000+ hrs of mostly PIC time at that stage myself. I think Don is correct then, insofar as the "personal competency" idea, but how do you formalize that concept? Perhaps a minimum pay, quite frankly, is a component too. If market forces are at play, this should happen naturally, and the right people will be attracted. Continue to pay $18k and no matter what the rules, smart people continue to stay away.

[CAT3DUAL]

Not to mention under the new contract at AC, all new hire pilots are now on a DC pension plan, a poor one at that. What is to keep a young man or women from moving on to better deals, poor pay (4 years), poor working conditions, and the golden handcuffs is hardly worth mentioning. Pilot shortage wont be as much of problem, as pilot retention.

[inchman]

Not to mention under the new contract at AC, all new hire pilots are now on a DC pension plan, a poor one at that. What is to keep a young man or women from moving on to better deals, poor pay (4 years), poor working conditions, and the golden handcuffs is hardly worth mentioning. Pilot shortage wont be as much of problem, as pilot retention.

Personally, I feel that, in the long run, the move to a DB plan is a great move for the more junior pilots. It does remove the golden handcuffs and will eventually make the company have to come up with other ways to retain pilots.

As far as new hire pay goes, that's quite an irony. The company has a number they are willing to spend on paycheques. It's up to our negotiators (if they stay at the table) to divide up the pie. It was one of our "saviour" negotiators who actually created the 4 year plan about 10 years ago (and helped lead us into FOS this time) and another "great union leader" who screwed the A320 pay back then so they didn't touch his 767 pay.

Having said that, if we're being realistic, how many "better" jobs are out there and really available or achievable, inside OR outside of aviation? A few guys have found better short-term positions with other airlines but, with a few exceptions, they all eventually come back.

[boestar]

There are 2 types of people who get into this industry. The first is the person who has a passion for it. The little kid who went to the airport and love to watch the planed take off and land. The kid who went to every airshow during the season. The kid who read books about airplanes. He may have been an Air Cadet to get closer to flying. Then at an early age was "introduced" to flying a small aircraft like a C172 or the like. These are the ones who love aviation for the love of aviation, those with the PASSION.

The other is the one looking for Money and Glory and nothing else.

The first will be happy so long as he is able to work with aircraft in any capacity especially pilots. The second is doomed to be unhappy in his career because the days of Money and Glory are gone.

There are many of us who are in the first category and just love "playing with planes" but there are ever more people in the second that tend to drag the rest to their level. If aviation is not in your blood then you are doomed to have an unhappy career.

[Don Hudson]

inchman, what you have said re AC in comparison with airlines elsewhere (U.S. & overseas) is very true in my opinion.

[boestar]

Admit it or not AC is a great airline from a purely historic standpoint. While the transition from Government airline to Private airline created alot of turmoil, AC still remained loyal to its product and continues to do so. The MINORITY of people at the airline who attempt to undermine the success of the airline for their own reason are the ones that make the "headlines".

AC has been on the leading edge of several advancements in aviation in its history with many firsts to its name as well. They were even on the short list of Concorde customers but pulled out when the economics of high fuel cost in the 70s made it a poor investment.

Setting aside the financial issues that plague the airline, the PEOPLE are some of the best in the business no matter what the news stories might say.

If the Labour Group and the Company could just get on the same page and get their respective houses in order that greatness could reach much further than in the past.

[Flying Phoenix]

There are 2 types of people who get into this industry. The first is the person who has a passion for it. The little kid who went to the airport and love to watch the planed take off and land. The kid who went to every airshow during the season. The kid who read books about airplanes. He may have been an Air Cadet to get closer to flying. Then at an early age was "introduced" to flying a small aircraft like a C172 or the like. These are the ones who love aviation for the love of aviation, those with the PASSION.

The other is the one looking for Money and Glory and nothing else.

The first will be happy so long as he is able to work with aircraft in any capacity especially pilots. The second is doomed to be unhappy in his career because the days of Money and Glory are gone.

There are many of us who are in the first category and just love "playing with planes" but there are ever more people in the second that tend to drag the rest to their level. If aviation is not in your blood then you are doomed to have an unhappy career.

There are 2 types of people who get into this industry. The first is the person who has a passion for it. The little kid who went to the airport and love to watch the planed take off and land. The kid who went to every airshow during the season. The kid who read books about airplanes. He may have been an Air Cadet to get closer to flying. Then at an early age was "introduced" to flying a small aircraft like a C172 or the like. These are the ones who love aviation for the love of aviation, those with the PASSION.

The other is the one looking for Money and Glory and nothing else.

The first will be happy so long as he is able to work with aircraft in any capacity especially pilots. The second is doomed to be unhappy in his career because the days of Money and Glory are gone.

There are many of us who are in the first category and just love "playing with planes" but there are ever more people in the second that tend to drag the rest to their level. If aviation is not in your blood then you are doomed to have an unhappy career.

I'm not so sure that I agree with the concept that it is the ones that seek fame and fortune are the drag on the profession. In fact, I could argue that it is the other way around - but I won't; because we all know someone with the passion that has flown for free or worked on his/her day off etc. during times of industrial action.

[boestar]

That was not the direction I had in mind for the comment.

My point is that those with the passion will fly no matter what. Those looking for a high paying profession will be sorely disappointed.

The Glory days of aviation have come and gone. the white scarves and a woman on every continent are a thing of the past. Sad but true.

[Leading Edge]

I think that all of you are missing the point. There is a shortage developing world wide - finally. The reasons for this are entirely to do with the changes and demands of todays Airline Pilot position. The reality is that airlines a going to reap what they have sowed... The position of pilot still looks very good from Mr Inch's position, but the salient point that he is missing is the amount of sacrifice it took to get there vs other career opportunities. The "passion" that everyone talks about isn't just about flying the airplane, its about the "career". Flying aircraft was a very cool way to have a very good career. Nowadays, you still fly the plane, but the career sucks. It could be 15+ years before you make any real money.

Todays Pilot suffers a continuously declining living standard due to wages not keeping pace with inflation and an constant demand for more productivity - read hours worked. People with passion follow careers that will reward them for the passion, dedication and knowledge that they bring. Aviation no longer values any of these. Todays new hire can expect: substandard wages, poor working conditions, increasing time away from home, no pension, virtually unlimited personal liability, and a complete lack of professional respect for the position. As Don would say, why would the best and the brightest go for this?? The reality is, they don't and the numbers show this trend clearly. Airlines will have to pay a lot more, or they will not attract the candidates. Lots of careers pay more total career dollars, are more stable, and treat the people a lot better.

Passionate people today work in the medical, computing, business, and finance sectors - not in aviation.

Just to prove my point, here's a list of 40 jobs that start at $56K per year and do not require any formal education:

http://www.businessinsider.com/the-40-highest-paying-jobs-you-can-get-without-a-bachelors-degree-2012-8?op=1

[UpperDeck]

Quick note---article in today's paper about real estate prices in the US. There is a demonstrable correlation between falling inventories and rising prices.

The same should hold true of any skilled occupation----the fewer the numbers who possess the skill, the greater the marketability (and value) of those few.

So long as there is demand, of course.

[mo32a]

Just to prove my point, here's a list of 40 jobs that start at $56K per year and do not require any formal education:

http://www.businessi...ree-2012-8?op=1

Not this BS argument again. You can add to the list "airline pilot", no bachelor degree required, pilots license, moderate on the job training.

You think you could step off the street and start giving people sonograms, installing power lines, repairing heavy duty machinery.

NO, emphatically NO. The same as somebody doesn't step off the street and start flying airplanes. They get training and on the job experience. The only reason AC started requiring undergrad degrees was to reduce the amount of applications they had not because the job requires it. Ask the old timers, I know a 340 captain that didn't make it through high school, he got it with a GED.

Some pilots may earn less in the beginning years than those in the beginning years of other careers but the capacity to earn much more is there.

[Mitch Cronin]

Some folks seem to be missing the point... Sure, you can 'let the market decide', but when the result is that the folks with higher IQ's are no longer interested in the job, what you're left with doesn't get much better than the worst you've seen from Colgan and Air France.

Go ahead.... Pay 'em peanuts.... But if I were you, I'd take the bus.

[Don Hudson]

Mitch, you nailed it.

That has been the whole point since the argument was raised a dozen years ago when it was plain then, where this was going to go. "Let the market decide" works in narrow ways. There is far more to society, to people, to life than the little things that "the market" can decide wisely upon. In fact I would bet that this is an underlying, perhaps silent notion that was behind the recent U.S. election. People are fed up with letting "the market" decide because they know there is much more to it than short-term whims driven by advertising and profit.

[Leading Edge]

People you can say what you like, but the young people are voting with their feet, and they are running away from aviation.

The starting salaries, early career salaries, combined with the cost of the "education" that you so readily dismiss are the driving force. I really don't give a $hit what you think, the "market" has already decided, and aviation is not where its at...

[Don Hudson]

Hi Rich, nice to see you.

Re, "I double dare anyone who complains about not making any "real money" or wanting to find a "high paying profession" to show the "total income" from each of their last 10 income tax statements here"

Would you include Rebecca Shaw's paychecks in that dare?

[AME]

I think that all of you are missing the point. There is a shortage developing world wide - finally. The reasons for this are entirely to do with the changes and demands of todays Airline Pilot position. The reality is that airlines a going to reap what they have sowed... The position of pilot still looks very good from Mr Inch's position, but the salient point that he is missing is the amount of sacrifice it took to get there vs other career opportunities. The "passion" that everyone talks about isn't just about flying the airplane, its about the "career". Flying aircraft was a very cool way to have a very good career. Nowadays, you still fly the plane, but the career sucks. It could be 15+ years before you make any real money.

Todays Pilot suffers a continuously declining living standard due to wages not keeping pace with inflation and an constant demand for more productivity - read hours worked. People with passion follow careers that will reward them for the passion, dedication and knowledge that they bring. Aviation no longer values any of these. Todays new hire can expect: substandard wages, poor working conditions, increasing time away from home, no pension, virtually unlimited personal liability, and a complete lack of professional respect for the position. As Don would say, why would the best and the brightest go for this?? The reality is, they don't and the numbers show this trend clearly. Airlines will have to pay a lot more, or they will not attract the candidates. Lots of careers pay more total career dollars, are more stable, and treat the people a lot better.

Passionate people today work in the medical, computing, business, and finance sectors - not in aviation.

Just to prove my point, here's a list of 40 jobs that start at $56K per year and do not require any formal education:

http://www.businessi...ree-2012-8?op=1

Check out number 16 on the list and I love number 1

[Guest rozar s'macco]

Getting random people at the supermarket to comment is always a worthwhile exercise.

I mean, $20M/yr to throw a baseball 60 feet? Random comment: that's ridiculous I'd do it for free! \sarcasm

Let's take the random comments at the L1 door as people are boarding. Q: Would you pay an extra dollar to have a highly experienced pilot, or do you want to keep your dollar and take your chances?

Anyway, useless topic. In Canada there will be no shortage for airlines as they can hire ab initio.

[boestar]

Rich:

I firmly believe you have a passion for it. Admit it or not.