It is now four years since the first of a series of articles were published in aviation journals (linked at the bottom of this commentary), flagging the inevitable pandemic-induced risks to the airline industry which we now see unfolding. The arguments made were based on simple arithmetic, and the solutions proposed included the use of pandemic downtime to prepare for the airline recovery phase.
But appropriate actions were not taken to prevent the crisis now in play: grounded airliners due to pilot shortages.
In March 2020 at the start of the Covid pandemic, it was obvious that the airline industry would suffer severely as governments closed borders. Airlines, seen as critical infrastructure, drove many governments to provide bailouts to avoid closures. Even so, no fewer than 64 airlines ceased operations, according to aviation website AllPlane.tv. A handful have revived after announcing bankruptcy, or changed names, but the vast majority are gone for good.
Training Schools Decline
It was also obvious that parts of the airline supply chain would also be devastated. No primary training organisation (ATOs) delivering professional pilots to airlines is known to have received State support, and many have been unable to survive the pandemic without students and revenues. Current analysis suggests that approximately 28% of the global inventory of ATOs have closed and many are left in considerable financial stress and may still fail.
Organic Growth Challenging
Organic growth of surviving flight schools is happening but not at a pace to provide a market correction any time soon. Many experienced flight instructors have gone to the airlines and the shortage of flight instructors is the critical path risk to ATOs. Additionally, training aircraft production lead times are now long.
Despite regular reports of (some large) orders of training aircraft for ATOs, and new training airports being launched (especially in the USA), the organic growth trajectory is unlikely to properly correct the huge shortages for 5-10 years. The development of new ATOs can take 2-5 years to reach any significant production rates. The consequences of these circumstances for the airline industry are significant.
Other Sourcing Strategies
Other sources such as ex-military pilots are limited. Increasing airline pilot retirement age may be under consideration but is unlikely to be executed in any meaningful timescale. The only immediate solution for airlines is to buy pilots from smaller airlines.
As the recovery surged in the USA, airlines have been enticing pilots with high salaries to move countries and employers, depleting the pilot corps in those airlines losing pilots, with no commensurate sources of replacement. So one may suggest that a perfect storm has arrived which has no quick fixes.
Safety & Economic Consequences
Poaching pilots from one airline to another also increases training demand in a resource-starved sector. Under extreme staffing pressure, some airlines are reducing eligibility criteria for command training; others are offering direct entry commands; and trainers and examiners are working extreme hours without ways to replenish their corps in the short term.
Staffing pressures are causing standards to trend downwards towards absolute minimum regulatory levels; forcing existing pilots to fly tired to legal limits, their sickness rates to rise, and mental health to be put at risk. What actions are regulators taking here?
Shortcuts to training in an environment of shrinking experience levels on flight decks, will inevitably sow latent pathogens into airline safety systems, and the safety threat is clear. Commercial outcomes for many airlines are grounded aircraft and reduced services through lack of pilots, impacting already weakened finances.
Even if proper risk assessments had been done, most airlines may have been most reluctant to break legacy outsourcing practices and spend on the acquisition of ATOs. But risk aversion works both ways: while investing limited funds into training capacity may have been hard for airline CFOs to accept (a cost equivalent to one widebody jet engine), there seems to have been little recognition of the risk / cost of grounded aircraft, curtailed services and revenue losses, which is many multiples more. This is quite apart from the risk to safety if the current status quo is maintained.
The quality of primary professional pilot training has been a matter of considerable concern for decades. To simply find supply solutions will not be enough. New ATOs in formation must be designed to address the needs of modern airlines in terms of relevance and quality.
So what happened in this international industry? Quite apart from the long relative silence from ICAO and national regulators, it is a matter of considerable surprise that a large part of a global industry so highly capitalised and averse to risk did not see, evaluate, or act on the strategic threat posed by lack of pilots (and other key personnel), to staff hundreds of new aircraft orders still being executed as recently as 2023.
In mitigation, during the pandemic, there is no doubt that airlines were under huge stress to simply survive, running short-term operational budgets without the luxury of time to study longer-term risks. And if the latter had been considered, the traditional comfortable perception that ‘markets would correct’ may have prevailed.
The assumption may have also prevailed that the 100,000 or more pilots who had been grounded in the pandemic would come racing back to fly in the recovery, not expecting many pilots to switch careers, or retire early, and the depleted training industry unable to correct in time.
At this point in the crisis, the primary ATO industry cannot correct itself in time for the airlines. So it will be the airlines that need to act to invest directly into pilot supply solutions at the volume and quality needed to ensure continued high levels of safety.
Only if airlines, as prime customers, take control of the primary pilot training challenge, can a long period of stagnation and risk be averted.