The demand for pilots by U.S. airlines is likely to outstrip supply.U.S. airlines are in the early stages of a pilot shortage that could boost labor costs and even constrain growth.
Unless airlines find ways to work with partners to cultivate a pilot pipeline, they could face difficult, even volatile, competition for experienced pilots because the current regulatory and industry situation can only yield about two-thirds of the pilots the U.S. will need in the next 20 years. That could mean constrained airline revenue, higher fares, or both. Kids, get your pilots licenses, because this could be the career of the 2020s and 30s.
The pilot profession is highly regulated to drive a high level of safety, with laws dictating the level of experience and proficiency a pilot must acquire before flying a commercial aircraft, as well as when and how a professional pilot may work. This constrained environment has always made it difficult for the industry to meet the ebbs and flows of demand. New regulations further constrain the availability of new pilots. Now, as demand for air travel grows rapidly (global commercial airline capacity rose more than 6 percent last year, according to Oliver Wyman’s Airline Economic Analysis) many aviation insiders see the number of pilots in training and the future demand for commercial pilots diverging.
Leading airline executives are considering a new approach to the problem by forming partnerships with operators, training providers, and even regulators to shape the pipeline of pilots in training. Some major carriers and large regional airlines are well positioned to exploit these opportunities.
Pilots sit in the cockpit of a VietJet Air aircraft, operated by VietJet Aviation Joint Stock Co., at Noi Bai International Airport in Hanoi, Vietnam, on Sunday, June 1, 2014. VietJet, Vietnam’s only privately owned airline, may seek to raise $400 million to $500 million in an initial public offering next year as it takes delivery of as many as 100 additional planes.
Pilot Pipeline
Becoming a commercial airline pilot is a time-intensive process that requires academic instruction, flight experience, numerous certifications and, typically, a progression of different flight-related jobs to gain the right experience. In the past, commercial pilots needed at least 250 flight hours, which takes at least six months and can cost up to $100,000. U.S. pilots have traditionally absorbed these costs themselves, sometimes by combining the training with college degree programs. Prior to August 2013, pilots who had completed this stage of training were eligible to become U.S. commercial airline co-pilots. Outside of the U.S., many international airlines sponsor student pilots and either pay for this training or offer loans with favorable terms associated with future employment at the sponsoring airline.
New regulations introduced in 2013, designed to increase pilot proficiency, mandate that co-pilots working for commercial airlines hold airline transport pilot (ATP) certificates. This typically requires 1,500 flight hours and other experience gained by working at lower-paying pilot jobs. These new regulations make commercial airlines dependent on a set of aviation segments that provide the necessary experience but that are not elastic to growth in demand by the airlines and other career-employment companies. Even a perfectly efficient system could only provide the experience required for two-thirds of the pilots needed in the U.S.
Source: http://www.forbes.com
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