U.S. air­lines are look­ing for a few good pilots. Ac­tu­ally, a whole lot of good pilots

With re­cruits cool to low start­ing pay, air­lines could face short­ages Costly flight train­ing “is a ma­jor im­ped­i­ment to build­ing the pool”

Bloomberg Businessweek (Asia) - - CONTENTS - −Mary Sch­langen­stein and Michael Sasso

Af­ter cop­ing with ter­ror­ism, bank­rupt­cies, and con­sol­i­da­tion, the largest U.S. air­lines are fac­ing a new prob­lem: They may start run­ning out of pilots in three years. That loom­ing deficit will soar to 15,000 by 2026, ac­cord­ing to a study this year by the Univer­sity of North Dakota’s Avi­a­tion De­part­ment, as more cap­tains reach the manda­tory re­tire­ment age of 65 and fewer young peo­ple choose com­mer­cial avi­a­tion as a pro­fes­sion.

The dif­fi­culty of at­tract­ing enough pilots is al­ready the bane of the of­ten low-pay­ing re­gional car­ri­ers that ferry pas­sen­gers from smaller air­ports to hubs op­er­ated by Amer­i­can, Delta, and other ma­jor air­lines. That’s wor­ri­some for the big car­ri­ers, be­cause they typ­i­cally use the smaller op­er­a­tors as a pipe­line for hir­ing. “The big­gest prob­lem is a gen­eral lack of in­ter­est in folks pur­su­ing this as a ca­reer any­more,” says Greg Muc­cio, a se­nior manager at South­west Air­lines. “That’s what puts us in the most jeop­ardy.”

Air­lines are re­spond­ing by chang­ing hir­ing re­quire­ments, boost­ing sign­ing bonuses at re­gional car­ri­ers they own, and part­ner­ing with flight schools and univer­sity avi­a­tion pro­grams. Muc­cio spends some of his time try­ing to in­ter­est col­lege, high school, and even el­e­men­tary stu­dents in an avi­a­tion ca­reer, while he’s work­ing to ex­tend the largest ex­pan­sion of pi­lot hir­ing in South­west’s his­tory.

The top three rea­sons would-be pilots are chang­ing their ca­reer plans are the cost of flight train­ing and cer­ti­fi­ca­tion, low pay at re­gional car­ri­ers, and a 2013 reg­u­la­tory change that man­dated a six­fold in­crease in flight hours re­quired to be­come a first of­fi­cer, ac­cord­ing to a study re­leased last year by the Univer­sity of North Dakota and the Univer­sity of Ne­braska at Omaha.

Un­til re­cently, few pilots were will­ing to rec­om­mend the ca­reer, even to their own chil­dren, says Louis Smith, pres­i­dent of FAPA.aero, a ca­reer and fi­nan­cial plan­ning firm for pro­fes­sional pilots. “That mood is chang­ing,” he says, as larger air­lines have be­come prof­itable and in­creased their pace of hir­ing to sup­port growth. “Still, the cost of learn­ing to fly and the risk and im­pact of fail­ure is a ma­jor im­ped­i­ment to build­ing the pool of pilots.”

Four-year flight-train­ing costs for a com­mer­cial avi­a­tion aerospace ma­jor to­tal about $64,500 at the Univer­sity of North Dakota, home to the largest pub­lic avi­a­tion pro­gram in the U.S. That ex­cludes tu­ition and room and board, which can add as much as an ad­di­tional $105,400 for an out-of-state stu­dent.

Ma­jor U.S. air­lines will hire as many as 5,000 pilots this year, mainly to re­place re­tirees but also to sup­port ex­pan­sion, Smith says. Most will come from re­gional car­ri­ers, mil­i­tary re­tirees, and flight schools. More than 30,000 pilots, or half the cur­rent to­tal of 60,222 at 10 large U.S. air­lines, United Par­cel Ser­vice, and FedEx, will reach age 65 by 2026, ac­cord­ing to data com­piled by Kit Darby, pres­i­dent of KitDarby.com Avi­a­tion Con­sult­ing.

Con­sol­i­da­tion may be trig­gered at re­gional car­ri­ers by staffing com­pe­ti­tion from bet­ter-pay­ing larger air­lines fill­ing their own pi­lot needs, says El­iz­a­beth Bjerke, chair of the Univer­sity of North Dakota Avi­a­tion De­part­ment. Repub­lic Air­ways, which runs com­muter flights for Amer­i­can, United, and Delta, filed for bank­ruptcy in Fe­bru­ary, in part be­cause of a pi­lot short­age. “The fu­ture is a lit­tle scary,” says John Horni­brook, chief pi­lot for Alaska Air­lines, the na­tion’s No. 6 car­rier. “The pool is just not as big as it used to be.”

To help re­cruit­ing, South­west has dropped a re­quire­ment that pi­lot ap­pli­cants al­ready hold a cer­tifi­cate to fly Boe­ing 737s, which can cost as much as $14,000 to earn. It’s also cut in half the time be­tween a pi­lot in­ter­view and a job of­fer, Muc­cio says. Amer­i­can, which is adding about 650 pilots this year and 750 in 2017, gets about half of its cock­pit staff via “flow-through” agree­ments that al­low avi­a­tors at its three wholly owned re­gional car­ri­ers to move into jobs at Amer­i­can. Delta has a sim­i­lar deal with its En­deavor Air unit, while Alaska Air­lines guar­an­tees in­ter­views to pilots from its sis­ter com­pany, Hori­zon Air. “Ev­ery ma­jor we’ve talked to, they are con­cerned be­yond the next three to four years,” says Jim Hig­gins, the prin­ci­pal in­ves­ti­ga­tor on this year’s Univer­sity of North Dakota study.

At Amer­i­can’s En­voy Air com­muter unit, the prom­ise of a seam­less move to a ma­jor car­rier is a big draw, says Jon Reibach, di­rec­tor of En­voy’s pi­lot re­cruit­ing. “Once a young pi­lot in­ter­views with us, that’s the last air­line in­ter­view they’ll ever have to do,” he says.

In June, Amer­i­can’s re­gional car­ri­ers—En­voy, Pied­mont, and

PSA— upped their sign­ing bonus to $15,000. Delta’s En­deavor pays a re­ten­tion bonus of up to $23,000 and has the high­est first-year salary at $50,000, ac­cord­ing to Delta spokesman Michael Thomas.

First-year pay at com­muter car­ri­ers av­er­ages $35,227. A first of­fi­cer, or copi­lot, on the small­est air­craft at large air­lines earns an av­er­age $55,054 his first year, ac­cord­ing to Darby. That can in­crease to more than $120,000 in his fifth year, fly­ing the largest plane. A cap­tain at top se­nior­ity fly­ing the big­gest planes av­er­ages $208,828.

Some car­ri­ers are try­ing non­tra­di­tional hir­ing ap­proaches. In March,

Jet­Blue Air­ways ini­ti­ated Gate­way Se­lect, in which re­cruits with no fly­ing ex­pe­ri­ence, af­ter pass­ing a se­ries of screen­ings, can pay $125,000 to en­ter an in­tense four-year pro­gram to be­come pilots. Suc­cess­ful grad­u­ates get a job of­fer. The model, de­signed to re­cruit from a broader range of can­di­dates, is sim­i­lar to those used in Europe and Asia.

At United, a new pro­gram de­signed “to counter the po­ten­tial short­age of qual­i­fied pilots” in­volves two re­gional car­ri­ers and a flight-train­ing school, ac­cord­ing to an in­ter­nal memo from the air­line. The plan pro­vides a chance to move to the larger car­rier, which will hire 650 pilots this year and as many as 900 in 2017.

The bot­tom line Air­lines in the U.S. could face a short­age of up to 15,000 pilots by 2026. That’s caus­ing air­lines to try new ways to re­cruit staff.

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