Deepening Pilot Shortage to Raise Fares
Expect to see more gray hair next time you peek into an airliner cockpit -- and pay more for the privilege.
By Martha Lynn Craver, Associate Editor, The Kiplinger Letter
September 14, 2007
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Airlines grappling with a growing shortage of pilots are in a squeeze. More baby boomer pilots face the mandatory retirement age of 60, and there are fewer young people interested in taking their seats. With salaries and benefits on the decline in recent years, a career as an airline pilot is losing some of its glamour. U.S. carriers also face strong competition for young recruits from the military and from overseas airlines.
Demand for pilots, meanwhile, is picking up rapidly, both in the U.S. and around the world, particularly in China and India. U.S. commercial air travel is expected to grow by 500,000, to 1.2 billion passengers by 2020, according to the Federal Aviation Administration (FAA). Domestically, airlines are increasingly finding it more efficient to fly smaller planes, which means more-frequent flights, requiring more pilots.
Uncle Sam will help some by raising the mandatory retirement age to 65. Look for the FAA to issue a rule later this month allowing one pilot of a commercial flight to be over 60, as long as the other one isn't. The International Civil Aviation Organization recently approved a fly-until-65 standard, making it easier for the FAA to follow suit.
But airlines still face an uphill battle for more pilots. They'll struggle to fill about 12,000 jobs this year and are looking at having to fill another 20,000 openings by 2009 because of retirements and other factors.
To meet the demand, airlines are offering $5000 signing bonuses and $1000 or more to employees for referrals that lead to a hire. In addition, airlines will soon offer to pay at least some of a pilot trainee's schooling costs if he or she commits to working for the airline after graduation. Costs aren't cheap -- they typically run from $175,000 to $200,000 per pilot. Regional carriers, which are especially hard hit by shortages, are also lowering experience requirements from 1500 hours to 250, the FAA minimum.
For business and other air travelers, this is not good news. It spells higher operating costs for airlines, which undoubtedly will lead to higher ticket prices. And it sure won't help with reducing flight delays and other travel hassles.
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Reader Comments (13)
Posted by: Robert E. at 09/16/2007 08:38:17 AM
Perhaps the airline industry should start looking at recruiting young women for pilot positions. We too often view ship and airline captains as dashing young men or seasoned gentlemen. There must be thousands of serious-minded female candidates who could be culled for flight training. If qualified women were to be added to the mix, the pilot shortage could be solved by 2020.
Posted by: garry at 09/17/2007 04:43:30 PM
Robert, you are about 20 years behind the curve here - the airlines already aggressively recruit women pilots. Is your 2020 estimate a WAG or do you have some actual facts behind it?
Posted by: Jeff K. at 09/17/2007 06:54:56 PM
What this article fails to address (and most of the media) is that the $5,000 signing bonus's are at the Regional airlines, not the Major ones. The reason; starting pay at nearly all Regional airlines (ex. United Express, American Eagle, Northwest Airlink, Mesa, US Airways Express) are at food stamp levels and can take nearly a decade or more before they can even attain what you could earn at the 2-3 year mark at a major airline. As a result, Regionals attract pilots that are far less qualified than they need to be. Do you really want your family traveling on a state-of-the art jet by a pilot that has the MINIMUM amount of training, flying in hazzardous weather, in some of the busiest airspace in the world? The public never think about the consequences of "cheap fares" and then has the audacity to express outrage when a fatal accident results.
Posted by: Brad at 09/17/2007 07:16:32 PM
Women or men, it costs money to become a pilot. When the remuneration was slashed by management prospective pilots took note. Starting pay at a regional airline averages just over 20,000 dollars a year. Pilots provide a service that is expensive to become competent with and that needs to be recognized in salary. Bright minds are looking elsewhere for work.
Posted by: Steve at 09/17/2007 11:14:43 PM
If you'll notice, the article refers to pilots, without reference to gender. In fact, women are increasing chosing an airline pilot career and airlines are seeking them out. It will take some time for a woman to be commonplace in the cockpit but it is happening as we speak. Will that solve the pilot shortage...I don't think it's the easy answer you suggest.
Posted by: Reid P. at 09/18/2007 03:17:15 PM
An elegant case of supply and demand. Airlines and passengers must accept that pilots (of all levels) are more than glorified bus drivers and ought to be compensated appropriately for the training, skill and risk assumed by them to provide for a safe flight. Ticket prices and pay need to be aligned with reality and current economics.
Posted by: Kevin Wolley at 09/18/2007 06:39:51 PM
I am a pilot for a major freight airline, and came up through the non-military ranks. I spent about $40,000 in the early 1990s to accumulate the professional pilot certificates and experience I needed to land a major airline job, including paying $8500 to cover my training at a regional airline, where my starting pay was $13,500/yr. It was a shameful money grab by the regional airline owner, but I paid it because I needed to build experience for a major airline job. It is gratifying to see that airline owners (especially regionals) are now coming into a time of economic reality wthat demands they pay salaries sufficient to attract the motivated, capable people required to operate modern aircraft.
Posted by: H. J. Rosen, CPLP at 09/20/2007 09:29:46 AM
As a boomer who's also a training professional in the aerospace sector, I echo Mr. Wolley's sentiments about pilots and add that the airline owners must now face identical labor shortages among maintenance and service personnel. By proportionally increasing salaries across the board, commercial operators stand a good chance of prospering as global traffic grows. The salient question is whether they choose to survive by milking travelers, appealing to the US Government and the public Treasury, or diversifying their business holdings.
Posted by: Guy at 09/27/2007 04:34:09 PM
So let me see if I follow the logic of this article. The airlines lowered wages to save money and keep ticket prices cheap. Now the average 19 year-old has decided that spending $175K to $200K for flight training is not a good investment if you only get a starting salary of $20K per year. For those that do stay with the career, an airline executive will happily take your pension or cut your pay severely if it will make him richer. The career path has simply become unstable. Granted, it always was unpredictable, but one expected to keep their pension if they made it to retirement. The industry lowered the wages and cut pensions to save money-but now fewer people want the job. So now the airlines have a self-inflicted 'pilot shortage' and they are quite worried they might have to 'sponsor' a new pilot which will increase their costs. Let's see, lower wages means lower costs; really low wages means higher costs. And the author seems more worried about her bank account than strapping herself into a jet behind a kid whose experience is measured in days. Interesting.
Posted by: Jeff at 11/17/2007 10:05:16 AM
I am certain the article is accurate about the upcoming pilot shortage. However, as a flight instructor looking at the regionals as a possible job option (not sure I want to take the cut in pay for five years though), I have yet to see a sign-on bonus offered. The regionals have simply lowered their minimums to allow very low time pilots to qualify. Plus, theses regionals maintain their low salaries to starting pilots and seem somewhat clueless to the implications. As I view it, they simply need to raise their pay rate, forget the amount of multi time needed - 100 hours of Seminole time actually does very little on the overall learning curve, look for 1000 to 1200 hours of total time - which moves someone along the learning curve drastically (along with of course the Commercial, Instrument, and Multi ratings) as a minimum... and they will then have enough qualified, competent applicants to safely fly their airplanes. Look for an increase in accidents among the regionals in the years to come. These low time pilots being hired are not getting the personal experiences needed (1200 hours flight time on their own... which would be much better than sitting in the right seat of a CRJ flipping switches and making no decisions) for growth in the environment they are being hired for. Just my .02 cents. I hope I'm wrong.
Posted by: Greg at 11/21/2007 08:46:56 PM
Few airlines have offered signing bonuses, and I have yet to see any as high as $5000. Signing bonuses generally are only available to pilots with previous experience in the specific type of airplane they are going to fly (i.e. CRJ, ERJ, B-737, etc.). My background is in Economics and I recently took a position as a First Officer for a regional airline. While my educational expenses have roughly equated to what it would take to earn a JD or MD, I will be lucky to earn $20,000 this year. I am not complaining. I love my job. However, it is not realistic to assume this industry can maintain adequate staffing levels when there is such a low return on the investment of flight training. Higher ticket prices are absolutely necessary to return the supply/demand for pilots to equilibrium. However, the article was incorrect in saying that higher prices will not help in reducing flight delays. Many of the recent delays have been caused by a shortage of pilots. As higher prices bring in greater revenue, the increase in pilot pay will once again make it an occupation worthy of the financial investment needed to get started.
Posted by: highsixnumber6 at 12/05/2007 02:46:14 PM
I have thirty fives years of flying experience, flown the B-747-400, B-757, A-320, DC-9, LR-25, CE-500, AC-1121. If given the chance to start my life over knowing what I know about aviation I would NOT pursue a flying career! The managements of airlines have decimated the retirements and benefits, along with pay. The UK graduated nine instrument rate pilots last year so there may well be a pilot shortage. It takes years to become skilled at aviation. My advice: don't pursuit a flying career. Start a career that has a future. Management of airlines use and abuse their employees to their benefit.
Posted by: Eric Rios at 05/17/2009 10:57:08 PM
The not long ago Buffalo crash is an indication of things to come. If the public does not demand it, more crashes will be the norm. If anyone has been paying attention, world wide crashes of similar carriers are on the rise. Spain, Guatemala Africa (737 MD80) come to mind in 2008. There is an old saying. Learn from someone else's mistakes since chances are you will not survive your own. At least in years past the experience levels, especially pilots from the military, were high. The only savior right now is the economy being so bad that there will be no more 1000 hours flying wonders in command of your lives.