Pilot Shortage – Fact or Fiction?

Our Head of Operations Jen has written the following:

 

I’ve been asked to speak about Pilot Shortage at a Pilot Expo next month.  I’ve worked in aviation for 12 years and it seems like the “looming” pilot shortage has been threatened for most of that time.   This article’s been written so many times by many different authors over the years.  The myriad articles written have always interested me – the conclusions most of all – they seem to be coloured by the subjective perspective of the author.  Those in the USA often say that there’s a pilot shortage, while in Europe the opposite appears to be the consensus (pilot surplus!) and in Asia they need so many pilots that you’d imagine half the fleets must be grounded by now, no?   Some authors even go so far as to say that pilot shortage is artificially created / the myth is perpetuated so as to allow the airlines and training academies to improve their profit margins and/or reduce standards.

If we look at the regional situations it would appear that in the USA there’s a temporary shortage of pilots as a result of the change in the FAA regulations requiring pilots to have 1500 hours flown before they can fly commercially.  This has resulted in the national carriers getting the biggest cadre of newly minted pilots once they reach the magic 1500 number (which takes about 2 years of crop dusting, banner towing and/or flight instruction) and created a serious situation for the regional operators where they simply couldn’t afford to compete for the limited pilot supply.  This situation seems to be resolving itself already however now that we are six years into the change.  Most USA based articles now seem to be focusing on the ‘retirement iceberg’ which seems to have hit hard with a massive number of pilots born in the 1950s now exiting the workforce and such a wealth of opportunities available to potential pilots in more lucrative and work-life balance friendly careers such as IT.   The FAA says it’s confident that it’s issuing enough ATPs each year though to counteract this (if only new licence holders were equivalent to senior wide body Captains with decades of experience, eh?).

Looking to Europe there are quite a lot of recent ATPL graduates struggling to find their first opportunity.  Attending pilot career fairs it is obvious to see that the bulk of the opportunities are for qualified, experienced pilots (mostly Captains if you use an agency) and I’d hate to be a fresh graduate trying to get a foot in the door when every airline seems to want you to magically have 500+ hours ME experience and preferably a type rating, or better yet, their type rating!   But this is likely due to the fact that within Europe we’ve had quite a bit of market turbulence.  Globally, 23 airlines ceased operations in 2019 with notable European carriers being Germania, Flybmi, Wow Air, XL France, Thomas Cook and Adria Airways. This floods the market with qualified experienced pilots meaning that airlines can recruit more readily and be more selective than perhaps necessary with so many good candidates to choose from.  Similar events unfolded in 2012-3 when Spanair, Malev, OLT, Windjet, etc. went bankrupt all in close succession (and was worse in fact because big carriers like Kingfisher outside of Europe all perished around that same time).    Thus, in Europe, the carriers who typically struggle to fill pilot positions seem to be the ones with the poorer packages on offer…. It’s quite nuanced even, it can be just that a package is “relatively” less attractive then the market average as opposed to a “bad” package. Pilots will often choose less pay to remain close to family so it hasn’t created a true shortage of pilots even in those airlines who cannot afford to pay the benchmark.

All of the forecasts for growth (GDP growth, RPK growth, etc.) indicate that Asia will continue to be the most active market for the foreseeable future, by quite a margin.  Indeed, while the global fleet has at least doubled since 1980, it has tripled in Asia. The Asian order books are most impressive too – Airbus says 41% of the global pilot demand (based on airframes to be delivered) for the next two decades is in Asia while Boeing says 39%.   Scrolling through aviation job boards it’s clear that a massive proportion of all pilot opportunities right now are in Asia – the vast bulk in fact.   However, there is no requirement for newly graduated ATPL holders there either with very few airlines even hiring experienced expat First Officers.  The gap in terms of pilot supply in Asia is very much oriented around the Left Hand Seat where most of the big carriers, with big order books, are hiring expat Captains and TRI/TREs only.  It takes time to produce a Captain of course, so they cannot roll out pilots with 6,000 hours total time and 1,000 PIC on type quickly enough to keep up with new aircraft deliveries.   This could be set to change over time.   It’s clear to see training providers partnering with large Asian airlines to create a sustainable pilot pipeline for the future (for example Air Asia and IndiGo cadet programmes via CAE) and the increase of “old-fashioned” fully sponsored cadet programmes (for example Singapore Airlines, Cathay, etc).  It is suggested that by creating a steady supply of new First Officers, it will allow the airlines to upgrade their existing First Officers to command much more quickly.  TRIs and TREs are then essential of course to manage the training burden of all this upward progress.

Globally, it seems that there is a shortage of experienced Captains in Asia but everywhere else is pretty much okay in the medium term so why is the looming pilot shortage a topic at all?  Conspiracy theories say that the FTOs perpetuate the myth so as to encourage middle class kids to hand over hefty training fees (upwards of EUR100,000 at least) and that a “looming pilot shortage” is good for business because people expect that it means a guaranteed job.  As we all know though this isn’t the case and certainly (most) FTOs seem to be a bit more scrupulous than that and even put prospective students through competency and aptitude tests to ensure that they will be somewhat “employable” upon graduating!   So, where does it stem from?

In my experience, I think that it’s a case of sensationalist reporting.  Every year without fail the OEMs produce their new twenty-year forecasts and the media outlets pick some key statistics out and turn them into articles.   The problem is that the information is often taken out of context.   The most recent Airbus GMF 2019 says: “with the fleet more than doubling over the next 20 years this will give rise to the need for 550,000 new pilots over that period “.  Similarly, the Boeing Commercial Market Outlook 2019-2038 predicts 44,000 new jetliners required over the next two decades and states “the industry is forecast to need 645,000 new pilots to serve projected travel demand.”  Those numbers seem truly enormous.   The OEMs are pretty good at utilising economic modelling to include factors such as oil price, GDP growth, urbanisation, demographics re population composition (and wealth), etc. into their airframe demand forecasts.  What needs to be remembered though is that the pilot demand is directly correlated to the airframe demand forecast and that a massive portion of the forecast order book is for fleet replacement.  When older aircraft are retired and replaced (even if just an A320 ceo for a neo), the pilots flying the older aircraft don’t vanish into thin air overnight!!!  Naturally then, the predicted pilot demand needs to be reduced accordingly.  At the same time, because the pilot demand is directly correlated to the airframe demand we have no way of knowing whether the OEMs have built in any allowance for the impending pilot retirements.  Lastly, the inexorable rise of the LCC model means that crew ratios are tightening more and more on a global scale.  The average ratio for a narrowbody now is 9.6 pilots to 1 apparently.  If we look at the Boeing data as an example and divide the pilot demand by the airframe demand it seems they’re suggesting 14.7 new pilots are required for every airframe that will be delivered in the next twenty years!  If we divide the total 645,000 by the number of aircraft needed for growth alone than the crew ratio jumps to 26 pilots per airframe!  Those figures don’t add up.  What pilot ratio would be practical in terms of forecasting demand?  I don’t know.   If we take 44,000 airframe deliveries and deduct 19,210 for fleet replacement (Boeing data) then we need to multiply 24,790 (new airframes for growth) by X for a realistic global pilot ratio.  Then we should add on Y to allow for expected pilot retirements in the period and what will we get?    Likely a hell of a lot less than 645,000 pilots!

I believe that the “looming pilot shortage” is a hyperbolic fallacy.  I don’t think there’s any big conspiracy, maybe just some misguided analysts and journalists who want to write click worthy headlines.  What do you think?  Also, please let me know in the comments what you’d suggest for X and Y?  It’d be great to work out a better estimation of the number of new pilots we need to roll out of our DEC factories! 😉

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