The Pilot Supply Challenge

John Bent, FRAeS, Chairman Training Practices Workstream, International Pilot Training Consortium (IPTC), states that the variability in quality and relevance in pilot training around the world has become an exacerbating factor requiring urgent collaborative action if reduced safety margins are to be avoided.

Two significant airline challenges are being debated today, pilot supply and the variability of pilot training quality and standards across the world. Projections are just that, and deeply dependent on assumptions. But business plans need projections of the highest assumption accuracy possible. To this end, many stakeholders employ teams of analysts, and during the past 15 years we have heard regularly from ICAO, IATA, and OEMs about pilot shortages.

Projection methodology continues to improve, but unforeseeable events cannot be catered for. Serious short-term projection spoilers include unforeseen geopolitical and economic events. There have been quite a few of these:

1997 Air Transport Association projected shortages2001 (9/11) Airlines post 911: “see, no shortage now”2003-2004 SARS & Fuel crisis “see no shortage”2004-2005 Retirement age raised to 65 “see no shortage now”2007 USA Regionals started to run out of pilots to hire2008 Global Financial crisis – no hiring “see, no shortage”2011 Heavy orders of new aircraft into the future2012 Huge growth in Asia + surge of age 65 retirements2013? Euro-recession “look, shortages not as projected”!

While many training practitioners see shortage-related challenges as immediate and real, are all decision-makers seeing the same story? Based on the history above, what might be called ‘projection fatigue’ may cause decision-makers to ask: “why won’t the market self-correct again?”

Previous projections were postponed, not deleted, by unforeseen events, and new factors affecting crewing have emerged, such as increased aircraft utilization, tightening flight time regulations, and a “slowdown of new blood entering the field” (Boeing quote for USA). Despite mounting evidence, belief where it counts in pilot shortages is uneven, and those airlines at the top of the ‘supply food chain’ may still not be experiencing supply challenges, as pilots are available from lower down in the ‘food chain’.

The problem with doubt amongst decision makers is that action is delayed, and years of vital lead-time may be lost in the planning process.

There is another drag on action: safety itself!

A Perfect StormWhile we discuss shortages, a perfect storm is brewing with variable intensity by region. Many triggers are converging including dissipating experience (due to the surge of retirements); new-gen reticence towards airline careers in the numbers needed; inability of the training industry and regulators to rise uniformly to the quality challenges now faced; new flight time limitations increasing crewing ratios; grounded or postponed deliveries due to shortages, and narrowing safety margins which may emerge from latent pathogens inserted through rushed recruitment, and suboptimal selection and training.

But in the bigger picture, despite many shocks, airline growth has continued.

Table 2: Source ICAO/Shaw aviation economicsWorld Air Traffic (and broadly in line with projections).

Lead Times: Pilot PipelinesAn understandable focus on quarterly results and cost controls may take our attention away from the long lead-times needed for pilot supply. To plan manning more strategically, or rely on the market to correct shortages and risk groundings on delivery?

Extracts from recent commentary:The World - Aug 29 2013: “airlines will have to hire 498,000 pilots - about 25,000 each year” (source: Boeing). “The urgent demand for competent aviation personnel is a global issue that is here now and is very real.” “The key to closing the pilot and technician gap in our industry is enhancing our training…” said Sherry Carbary, vice president of Boeing Flight Services.

Asia-Pacific will account for 33 percent of global passengers in 2016 (Source: IATA). “Asia-Pacific airlines need 12,820 new airplanes in the next 20 years. The Asia-Pacific fleet will nearly triple, from 5,090 airplanes in 2012 to 14,750 airplanes in 2033.” “The Asia-Pacific region today has 56,000 pilots, accounting for 40% of global pilot demand or roughly 26% of the global total, and will require 192,300 new pilots by 2033” (Source: Boeing).

So what will be the impact of the workforce movement in Asia-Pacific? For sure we are closing in on a worsening problem, as foreign pilots are sought in greater numbers across the region.

Chinese carriers have more than 800 airliners on order (Source: Wall Street Journal 2013), and China will need 5,580 commercial aircraft over the next 20 years. Carriers in China are employing many senior foreign pilots; roughly 6% of the senior commercial pilot corps, with 1,778 foreign-pilot licenses issued as of last year (source: CAAC 2013). Some advertise annual salaries and benefits of up to US$270,000.

Lion Air, one of approximately 50 airlines in Indonesia, ordered 230 Boeing and 234 Airbus aircraft, and needs 3,500+ new pilots to man the five-fold growth ahead.

“One of the highest growth rates in North Asia in 2013 will be Asiana at a 9% increase in RPKs…” [exceeding other local carriers]… “Domestic growth will help feed Asiana’s long haul network due to expand further from 2014 as A380s replace B777-200ERs” (Source: CAPA)

The USA still accounts for over 30% of global commercial aviation, and many Asia-Pacific states broadly follow USA aviation processes. Most importantly the USA supplies a significant pilot training volume to Asia-Pacific operators, and if pilot demand in the USA grows as projected, spare training capacity for use by Asia-Pacific will shrink, leading to increased demand for local training.

Commentary on the USA: Sept 6 2013: “United Airlines announced yesterday that it will recall all of its furloughed pilots - nearly 600.” (Source: United Media: Mark Phelps)

Aug 23 2013: “US Airways is looking for 30 high quality 1,500 hour Air Transport Pilots each month indefinitely and starting immediately" (Source: AvWeb).

Many pilots will be sourced from regionals, leaving a big question about back-fill. Will this eventually have an impact on ATOs inside and outside the USA?

Starting next year the minimum rest period before a pilot's flight duty will increase from eight to ten hours in the USA and must include the ability to get eight hours of sleep in a row, which will likely create an additional crewing impact, and the FAA announced the new rule this year requiring first officers to get 1,500 hours of flight time for ATP certification, up from 250 hours

Shortage ConcernsAs supply concerns mounted in 2012, a stakeholders group, sponsored by AABI (Aviation Accreditation Board International), the UAA (University Aviation Association), and the airlines, was formed to analyze the current state of the airline pilot labor supply in the USA. Participant Universities in the UAA were: North Dakota, Nebraska Omaha, Embry Riddle Aeronautical, Southern Illinois, Le Tourneau, University Aviation Association, Middle Tennessee State, and Aviation Accreditation Board International. Published on 13th March 2013, brief extracts from this study follow:

“…given that it takes several years for a pilot to enter the airline pilot labor supply, the industry cannot afford to wait and see”

“…the industry must make its best efforts to forecast and mitigate, if necessary, any future shortages, and these efforts should begin now and in earnest”

“The likely result of inadequate staffing will be the reduction of flying in smaller-communities and other markets served by regional airlines”.

“The overall effect could also cause harm and disruption to the entire airline industry and given its effect on the national economy, this threat should be taken seriously, and mitigations should be enacted in an attempt to circumvent this potential hardship”.

RetirementsTogether with growth and other challenges, the airline industry is experiencing unprecedented retirement rates. As retirees depart, working lives of aviation experience go with them. At the same time even more new graduate cadets enter the system. The average experience on flight decks is reducing in the global fleet.

(Table 6-Graphic JB)

In 2012, John Allen, FAA Head of Flight Standards, said that “the projected retirement numbers are astounding and dramatic,” and “we don't have a system to address this issue.”

In January 2013, at the ASEAN Aviation Training & Education Summit in Jakarta, Mr. Raymond Benjamin, Secretary General ICAO said “30% of the (total) aviation workforce will retire in the period 2013-2014. For all key participants, more effective training competencies must be defined.”

Safety risks lie ahead on flight decks due to the exit of experience, shortcuts in staffing, and more license transfers State to State, the trend for budgetary maximums to move down to regulatory minimums, and less stringent flight time regulations in some countries policing very high pilot workloads.

Safety TrendsThe airline industry is statistically ultra-safe, but as the volume of air traffic continues to grow, more needs to be done to maintain the current impressive safety record. As if to underline this, are we already seeing in 2013 the first signs of safety trends down related to pilot supply and training? Recent aircraft accidents this year lead to the question, were growth pressures and suboptimal training causal factors?

Commercial risk may rise because of the link between accidents and public perception and could impact the whole industry. The strategy of poaching is limited; pilot mobility will not fill the shortages projected; pilot turnover as a significant cost will rise as pilots use entry-operators as ‘training schools’ for majors, and early pilot training failures can cost up to US$50,000.

A modern airliner can cost up to US$380 million. Operators expect, and get, exacting global quality control standards in the aircraft manufacturing process, but can operators and regulators count on the same global pilot selection and training standards? If not, how can we support the status quo?

“US$350 billion dollars is spent on aircraft and infrastructure but the investment in people is tiny by comparison” commented Dr. Michael Lim, Director of the Singapore Aviation Academy.

Quality in TrainingSo after defining shortage challenges, there is a clear corrective target: training quality and standards. These remain variable across the world and all moves towards raising more harmonised standards will probably have a safety dividend. As if to endorse this, a Stakeholder Survey by RAeS found that 62% of respondents were dissatisfied with the consistency of training standards around the world, and 97% saw a benefit to safety in having international standards for flight crew training.

Boxed textInitiatives in play and IPTCA number of positive industry initiatives are in play:ICAO NGAP (Next Generation of Aviation ProfessionalsITQI (Training & Qualification Initiative)Pilot Training Conference Committee (RAeS)International Committee for FSTD Qualification (RAeS-ICFQ)FSEMC (Flight Simulation Engineering & Maintenance Committee)IFALPA Pilot Training Standards development (IPTS)The Professional Aviation Board of Certification (PABC),The International Association of Airline Pilot Schools (IAAPS Europe)The International Professional Pilot Training Group (IPPTG - Europe)The International Association of Flight Training Professionals (IAFTP)There is also the developing 4-partner consortium, the International Pilot Training Consortium (IPTC) with a wide global reach via ICAO, IATA, IFALPA, and RAeS. For those stakeholders interested to participate in IPTC, please contact: conference@aerosociety.com