Tuesday, July 21, 2015

A Looming Pilot Shortage Means a Bumpy Ride for Airlines • Airline pilots’ average age is 50, and newcomers are scarce. No wonder: The starting salary is $23,000.

The Wall Street Journal
July 21, 2015 7:40 p.m. ET

Where have all the pilots gone? 
That is the question the Defense Department and some regional airlines, such as Republic Airways and Cape Air, are asking as they contemplate what they believe to be a shortage of professionals able to man their cockpits. To keep the pilots they have and attract new recruits, they are offering hefty signing and retention bonuses, or promising a guaranteed interview with a major carrier after a certain amount of service.

Without corrective action or another demand-dampening event such as 9/11 or the Great Recession, the U.S. will likely face a serious pilot shortage in the next two decades. The reason is simple: It takes years to train pilots and the profession is hierarchical, so the supply is relatively inelastic. New government rules have made it even harder to become an airline pilot than it used to be.

Here’s how the pilot ecosystem is supposed to work. At the top of the food chain sit the major carriers. Typically, they hire experienced pilots from the military and regional carriers. The regionals and the Pentagon, in turn, train inexperienced pilots looking to move up the ranks.

But that base of the pyramid has been shrinking for decades. In 1980 there were 610,490 people in the U.S. with private, commercial or airline transport pilot certificates. By 2014 the number had withered to 432,138. In 1980, there were 557,312 student and private pilots; in 2014 there were about 240,000.

Complicating matters, Congress passed a law that went into effect in 2013 changing the certification required to become an airline co-pilot, which raised the required hours to 1,500 from 250. That requirement, known as the 1,500-hour rule, was intended to address concerns over pilot inexperience raised after the 2009 crash of Colgan Air Flight 3407, which killed 50 people.

But the law dramatically decreased the number of qualified applicants to regional carriers. The new rule adds roughly $100,000 and several years to the process of becoming an airline pilot, which has a chilling effect on young aviators. Particularly since the average starting salary for new regional pilots is an abysmally low $23,000, according to the Air Line Pilots Association.

Over the next 20 years, growth in commercial aviation and an unprecedented wave of pilot retirements—the average age of airline pilots is roughly 50, up from 44 in 1993—will exert huge pressure on the industry. The problem can only be addressed by introducing more young people to aviation and solving the cost-benefit dilemma of high training costs and low salaries. Here’s what could be done:

• Regional carriers are in competition to win feeder contracts with the major airlines, which limits their ability to significantly raise co-pilots’ starting pay. The carrier that moved first would be undercut on price by the others. But the Transportation Department could give regional carriers limited antitrust immunity, allowing them to collaborate to set an industry-standard compensation package.

• The FAA already recognizes that some flight-training programs are better than others. Limited exceptions to the 1,500-hour rule are given to military pilots and graduates of certain FAA-approved college aviation programs. These exceptions should be extended to include all accredited flight-training schools, and additional credit should be given for training in high-fidelity simulators and complex aircraft.

• Students going into medicine and teaching can take advantage of federal and state programs that will forgive student loans in exchange for years of service. The aviation industry and the federal government should develop similar programs for pilots who upon graduation work for law enforcement, the National Park Service, the FAA or the military. Airlines could sponsor participants or promise interviews to those at the end of their terms.

Everyone benefits from a strong and vibrant aviation industry: law enforcement, the military, manufacturers, airlines, shipping companies and, most important, the flying public. The FAA and the airlines will not compromise safety by lowering standards to fill cockpits. Instead, if the pilot supply keeps shrinking, airlines will reduce capacity and cut back flight schedules. Some communities could lose service altogether. Any steps made today to fill the gap will take three to five years to produce results, which makes it imperative that the government and the private sector act now.

Mr. Elwell is president of Elwell & Associates, an aviation consulting firm.

Original article can be found here:  http://www.wsj.com

A Southwest Airlines pilot and co-pilot in the cockpit in Dallas.

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