ErfanChowdhury

Airline Pilot Supply and Demand: Current State following change in Legislation

Management Consultant

Erfan.Chowdhury@falconjet.com

Presented at The 19th World Aviation Training Conference

Orlando, Florida.

Sponsors

Global Flight Training market by the numbers.

• 4200+ flight schools/clubs/universities world-wide.• 3200 flight schools & clubs in North America.

• About 90% of the FTO’s are independent small business operators. Rest are medium/large organizations

(30+ Aircrafts) operating Independently or associated airlines and/or government.

• ~25,000 active training aircrafts.

• Globally, there are over a million active Pilot license of various types. • ~35 % of license holders fly for commercial operators.

• Industry has the capacity to produce between 30,000 to 40,000 CPL graduates per year.

• U.S. accounts for about half of global training capacity.

10%

2%

88%

Large Operators

Airliners

Others

Global Ab-initio Training Capacity Share(Based on assumed capacity of 25,000 Training Aircraft)

40

90

140

190

240

290

2.0

3.0

4.0

5.0

6.0

1991 1994 1997 2001 2004 2007 2010 2014

Flight

Hours(In millions)

Jet Fuel

Price(Cents/Gallon)

Training Hours Flown vs. Fuel price(FAA registered single engine piston aircraft only)

Jet Fuel Price

(Right Axis)

Flight Hours

(Left Axis)

SOURCES:

IATA

FAA Civil Airmen Statistics,

GAMA Statistical Yearbook Other Research.

200

250

300

350

400

450

500

1991 1994 1999 2002 2005 2008 2012

Training Hours Flown (FAA registered multi-engine piston aircraft only.)

Flight

Hours(In thousands)

Flight Training Market Overview

U.S. Airline Pilot Age Demographics

0

5

10

15

20

25

30

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

2013 1995

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

2014 1996

Active First Class Medical Holders by Age Group Active ATPL Holders by Age Group

68

70

72

74

76

78

0.85

0.90

0.95

1.00

1.05

1.10

2000 2002 2004 2006 2008 2010 2012 2014

ASM Flown by U.S. Airlines

Pilots Employed by U.S Airlines

ASM Flown and Pilots Employed by U.S. Passenger Airlines

Nu

mb

er

of

Pil

ots

(0

00

)

AS

M F

low

n (

In b

illio

ns)

# o

f P

ilo

ts E

mp

loyed

(000

)

SOURCES:

FAA Civil Airmen Statistics

Aerospace Medical Certification Statistical Handbook

500

1000

1500

1800

Low

Demand

High

Demand

Total Flight Time of Rookie Pilots Training Background Analysis of Rookie Pilots(% of Total Hired)

339

1071

1778

344

14

218 260339

2005 2006 2007 2008 2009 2010 2011 2012

Number of Pilots Hired by Regional Airlines

87

46

41

14

4

Flight Instructor

No Part 135/121 Flyingexpereince

Aviation Degree

ATP license

Military Background

205

36

18

21

36

2341

2005-2009 2005-2011

1500+ Hours

1001-1500 Hours

501-1000 Hours

<500 hours/Unknown

Total Time Breakdown of Rookie Pilots(% of Total Hired)

SOURCE:

Pilot Supply Study, Embry-Riddle Aeronautical University. Phase I, II & III.

Regional Airline Hiring Trends

76,500

75,700

2022

2014

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1990 1995 2000 2005 2010 2015

# of New Pilots Recruted by Majors

New ATP Graduates

Average ~6100

Average ~2150

2016

Actual Forecast

# of Employed Airline Pilots and Flight Engineers

SOURCES:

* Pardee Rand Graduate School, Air Transport Pilot Supply and Demand Study

FAA Civil Airmen Statistics

Fapa.aero

2020 2022

Retirement

& Attrition

Only*

Growth:

600/Year for each

1% of fleet growth

2500

31003400

U.S. Pilot Supply & Demand Forecast

Source: U.S. Bureau of Labor Statistics, Employment Projections program

# of

Pilots U.S Major/LCC Pilot Recruitment vs. ATPL Graduate Trends

Pilot Employment & Income Trends

25

60

33

55

787

CFI Corporate Regional LCC Major

Signup Bonus**

Base Pay Scale*

General Flow of U.S. Pilot Population Starting Salary of First OfficersUSD (Thousands/Year)*

Part 141/61CFI

Part 135/91 Corporate/Charter

Part 121 Regionals

Part 121 LCC/Majors

Total Number

of Employed

Pilots

10,000

46,000

23,000

60,000

SOURCES:

FAA Civil Airmen Statistics

FAA Air Operator Information Table

Air Transport Pilot Supply and Demand Study, Pardee Rand Graduate School

AirlinePilotCentral.com

* 1000 Hours flying time per year, excludes overtime pay.

** Excludes additional bonus for pilot with Part-121 flight time.

Regional Airline Fleet Trend

210 192 155 151 158 163 163 152 134 129 114 108 48 39 31

415622

810

1,0071,078

1,1501,229 1,205

1,153 1,1241,064 1,056

1,013 973837

747

20

77

151

257

357347 432 544 596

624 667

641 704

809910

0

2

4

6

8

10

12

14

16

18

20

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2000 2003 2006 2009 2012 2015

Regional Jet (50+ seats) Regional Jet (50 Seat or less)

Turboprop # of Active Pilots

30

35

40

45

50

55

60

65

70

75

80

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*

Demand for FFS Hours

Available FFS Hours

Full Flight Simulator Capacity Analysis

(CRJ 700/900) FFS

Hours

(In 000)

# of

Pilots

(In 000)

# of

Aircraft

U.S. Regional Airline Fleet & Pilot Trend*

Assumptions:

Initial Training: 40 Hours, Recurrent Training:16 Hours, Crew Ratio: 5.0/AC, Attrition Rate:20%,

FFS capacity: 6000H/Year, adjusted for CRJ 200/700/900 Convertible Simulators

SOURCES:

Flight Global Fleet Analysis,

FAA Flight Simulation Training Device Lists

CAT Civil Simulator Census

BTS Annual Employee Statistics by Labor Category

Training

Bottleneck

* 10% increase

in Attrition rate

*Certain airline airlines were omitted from the analysis due to lack of historical data.

Note: DHC-8-Q400 is segmented in Regional Jet (50+ seat) category.

SPL PPL + (IFR+ME)

100 300

FO (Part 131/135)

8500

CFI

350

ATPL Restricted (Part 121) ATPL

Bridging Gap

1250

Direct recruitment of 0

hour cadets and placing

them through flight

training program in

exchange for a long term

commitment.

Secures commitments of low time CPL

graduates in exchange for tuition

assistance/sign up bonus of about $5,000.

Employment starts upon successful completion

of required training and flight time.

1500(Total Flight Time)

(License Type)CPL

Eligible for employment

with Part 121 operator

upon completion of

aviation degree/diploma

with 1000/1250 Total

Flight Time.

The Bridging Gap

Negative Cash Flow Positive Cash Flow

Pilot Production Pipeline, China vs U.S.

0%

5%

10%

15%

20%

25%

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

United States

China

Age demographics of active ATPL Holders(% of ATPL Pilots aged between 20 & 64)

Pilots Employed by Scheduled Airlines

13.90%

-0.90%

-1%

2%

5%

8%

11%

14%

China

United States

ATPL+CPL Pilot Growth Rate (Average growth/Year, 2008-2014)

500

689

502 513

689

2010 2011 2012 2013 2014

Number of Active Foreign Pilots in China(Scheduled airlines only)

# o

f P

ilo

ts(I

n 0

00

)

# of Total ATPL

Population

Age Group

CCAR-141 Approved Foreign FTOs(N. American & Europe only)

8.7

9.3

10.611.4

8.18.6 8.7

8.1

9.8

1.7 1.9

2.6 2.5

3.2 3.1

3.73.9

4.2

0

2

4

6

8

10

12

2006 2007 2008 2009 2010 2011 2012 2013 2014

United States

China(Total)*

China (Intl Trained)

13.515.5

17.719.8

22.725.2

0

20

40

60

80

2005 2010 2011 2012 2013 2014 2015

China

United States

CPL Graduates per year*

# o

f S

tud

en

ts (

in 0

00

)

SOURCES:

FAA Civil Airmen Statistics,

Annual Report of Chinese Airlines Pilot Development

*Chines CPL graduate number is derived from CPL Student enrollment in CCAR-141 approved Flight schools.

FTO: Flight Training Schools

Summary and Conclusion

Current pool and projected supply of pilots should be sufficient for the overall industry to

replace the substantial number pilots who is expected to retire of over the next 10 years.

In the short term, some regionals are finding it difficult to attract sufficient number of first

officers required to fulfill their flight schedule. This is driven mostly by a combination of

following factors:

Low pay compared alternative opportunities within the industry.

Shrinking pool of qualified flight instructors.

Lack of bridging opportunity to obtain mandatory minimum flight hours.(750 to 1,500 Total Time).

Lack of long term employment commitment from rookie pilots and subsequent high attrition rate.

However, the current supply of pilots will not be sufficient for the industry to sustain growth for

a prolong period.

A coordinated respond by all stakeholders is necessary to increase the size of qualified pool

of pilots available to the industry.

Proposed Solutions

Short term: Bridging agreement.

With Part 141/135/91/foreign/Cargo Operators.

Increase payment.

Starting salary in regionals reaching sustainable level.

Upstream recruitment.

Offer employment prior to CPL completion.

Reduction of attrition rate.

Secure long term commitment from rookie pilots.

Hire foreign trained senior captains at the top instead of

Low hour first officers at the bottom.

Long term: Offer sustainable bridging solution or reduce minimum mandatory total time requirement.

UAV Flying, Second Officers.

Coordinated effort to increase pilot pool to a sustainable level.

Cadet Programs.

Large number of un-employed/underemployed pilots are not good for the industry.

Adaptation of new training concepts like MPL.

Reduce cost of Flight Training.

Reduce cost of aircraft, Simulators and other training equipment.

Involve retired pilots in flight training.

Questionable long term sustainability! Levy on each passenger ticket sold.

May Create Oversupply of pilots,

Increase cost of training

Create additional layer of bureaucracy.

Create in-fighting between various segments of the industry.

Raise Mandatory Retirement Age

Postpone the problem instead of solving them.

Importation of foreign trained pilots.

Create large pool of unemployed domestic pilots.

Shrink the size of domestic training industry.

Questions?