Warning to Airlines: Flight Instructor Shortage Could Create Long-Term Problems

I don’t normally comment on fundamental analysis here, despite having been a small cap analyst early in my career. However, since Mrs. Humble Student of the Markets is a pilot and has numerous contacts in the aviation industry I thought I would make an exception.

There seems to be a dearth of flight instructors in North America, largely because of the low paying nature of the job. Recently, Mrs. Humble Student of the Markets was involved in a feasibility study to bring students from China to Canada to be trained as pilots. To make a long story short, she found that there was little spare educational capacity at Canadian flight schools, largely because of an instructor shortage. The parallel situation exists in the US (and in any case the US is not suitable for foreign student flight training in the post-9/11 era.)

Why does that matter? It matters because pilots, and airline pilots in particular, need to be trained as older ones retire. This shortage of flight instructors will eventually feed into a shortage of pilots, which will shift the bargaining power of pilot unions vs. the airlines. In fact, the shortage is starting to be felt in the emerging markets, where there is not a ready supply of experienced pilots. In one instance, an airline based in an emerging market country offered a job to a recently a qualified pilot (commercial multi-engine IFR rating) as a First Officer (co-pilot) with the understanding that he would be promoted to Captain (pilot) after 500 hours of flight time. This would be the equivalent of allowing a fresh intern, one or two years out of medical school, to perform brain surgery.

Back in North America, it probably doesn’t make a huge difference in the medium term as the United States heads into recession, which would likely result in layoffs at the airlines and create a surplus of pilots. Longer term, however, the shortage of flight instructors and eventually pilots is like the plankton disappearing from the ocean – it eventually makes itself felt all the way up the food chain.

Comments

[User 171600]

A very true, and timely article. When I was in college, my flight instructor only got paid $10.00 a flight hour. It's hard to live on that when one is trying to establish a career for themselves at the same time. As a qualified commercial pilot, but choosing corporate finance by necessity, I feel for anyone who is an instructor now. New students have to buy their careers in the United States, and who has that kind of money to spend on top of their college education? I know I certainly didn't, which is how I ended up sitting in a cube working on spreadsheets all day.

[Simple Logic]

Your scenario about pilot hiring in emerging countries happens everyday in the USA. Many regional airlines hire pilots fresh out of flight school with less than 500 hours. These same pilots upgrade to Captain when they reach 1500 hours total. The reason for this is simple: you get what you pay for. Pilots hired at regional airlines make less than $20,000 in their first year. The Captains make $35k in some cases. After 12-15 years with the airline, they can expect to make $80k with no retirement. If the experience levels of some of the crews at the regional airlines were posted in the cabin, I'm afraid passengers would be marching back off the airplane. I wouldn't put my family on that airplane flying at night in marginal weather into a special airport.

By the way, I worked 60 hours a week as a flight instructor and brought home $780 per month. Then made $12,000 my first year at a regional airline, $19,000 my second, $24,000 the third. I'm not talking about the good ol'days in the 50's, or 60's, or 70's........that was flight instructing at an internationally renowned aviation university in 1996 and getting hired by ASA in 1997.

[The BoodyMan]

This article is spot-on. The assault on pilot wages and benefits over the last few years will come back to hurt the airlines in a big way. The job has way too much responsibility, technical skill and long hours away from home to be paid what airline managers think is reasonable. The blood, sweat and more importantly money required for flight training just to get the ratings to become an airline pilot is no longer worth it. This is not to mention the high risk flying jobs pilots take to build hours to get the coveted airline pilot interview. The industry will have to pay pilots what they are worth or start to take on some of the training costs of applicants in the pipeline. As much as airline managers want to believe otherwise this is industry is NOT Greyhound.

[JackEllis]

It goes beyond flight instructors. In the US, primary flight training is paid for by the pilot rather than by the airlines. Attempts to impose user fees on small airplanes and to otherwise limit where and how they can fly is discouraging new pilot starts, and those new pilots form the pool from which flight instructors and future airline pilots are drawn.

In the case of user fees, the airlines are largely trying to make travel by private jet less competitive with airline travel and thereby get back some of the premium fare travelers that have put long security lines and crowded planes and airports behind them. In the process, they are killing off their farm team.

A private pilot may spend as much as $100,000 to get the experience they need to apply for an airline job. If the airlines ever have to start taking on the job of training primary flight candidates, these cost will fall squarely on them.

[FlightAttendant]

Yes, I agree. A pilot at my major carrier flying an md-88 after 12 years will make roughly 144K a year if they fly a full 1000 hours a year(which is the limit legaly for an airline pilot) That takes 12 years and lets say a good 5 years at a regional airline making 19K his first year there and about 2 years of school and a 100K debt.

17 years to make 144k and 100K of debt payoff during that.

I am a flight attendant. I make about 90K per year already and don't fly that many days as my work rules do not limit me during my flight days and year nearly as much. So I can pack more flight hours per day legally, sell items for comission, etc., and have as many days off as a pilot.

I started making 40K my first year and have only flown for 8 years.
My airline trained my for free and I began investing immediately.
Many pilots and people cannot believe what I make. And I have far less responsibilities and lengthy yearly training. (And a hell of a lot of carefree fun in the cabin as we fly) Southwest Flight Attendants are the top paid with many making 150K easily because of their pay and work rules. Who knew?

The point is this: Compare this fast easy money to what a pilot has to go through for years, and we can see how there is not much incentive for pilots to put up with all the expense and years of low pay.

[cropter]

I work for a major. After a 40% paycut and the loss of our pension, I'm still making a livable wage. But, here's the problem: I was always top of my class (high school, college). I was an Air Force officer /pilot and went to graduate school. When I decided to work for the airlines, I went to American Eagle and earned less than $1000/mo. That was okay, because I knew that when I had paid my dues, I would eventually end up at a major making a huge salary, with great benefits. That's all changed. After 10 years in the majors (and 22 years in aviation) I won't see 6 digits anytime soon. My wife makes more as a computer programmer. I'm not complaining, but this article hits the nail on the head. If there's no incentive to get the training and pay the dues (no significant salary opportunities), who's going to fill the positions? Honestly, you're eventually going to fill the seats with unqualified candidates that can't do better anywhere else. It's a very long lead time, that no one seems to see but Mr. Hui. I'm afraid, what's in jeopardy, is aviation's enviable safety record. When you see me walking the picket line soon, please understand that I'm not really there to improve my personal circumstances, I'll be there, attempting to shore up the future of a profession I love; a profession that's currently headed in the wrong direction.

[TPS 67]

From my perspective, after a full 44 years as a military jet pilot, followed by a lengthy career as a pilot for a major airline, the situation seems actually worse than is made evident by just the diminishing pool of qualified pilots and instructors.

There is, and has been for some time now, the assumption that all that is required to be an airline pilot is that one jumps through the requisite training hoops; ground-school, simulator training, and passes the defined check-rides. Whereas in years past a pilot was presumed to have garnered substantial experience, knowledge, and wisdom, he is now simply able to acquire a license to command a passenger jet merely by satisfying the formally defined qualifiers ...and the simulator check-ride is the major one.

Unfortunately, the entire modern initial type-rating training process, which is the avenue for granting a command pilot rating, is more, and more, designed to minimize training costs and circumvent a truly thorough evaluation of the candidate for the rating. As a matter of fact, the entire simulator training curriculum is now intended to simply rehearse aspects of the "rating-ride"... The check-ride is predictable to a fault, and it's predictability permits many of dubious skill to train for the sim check as if it were a video game, and ultimately pass the test.

Tragically, there's a perception that just about any monkey can be trained to fly a high-performance jet by the numbers. Looks pretty easy, after all.

This is a more prevalent attitude in this world of intense economic competition in which there is pressure all the way from the regulators (here the FAA), down through the aircraft manufacturers who strongly support sales of older jets to 3rd world, or low-cost, new entrant, carrier in the State (so that they can sell new, replacement, airplanes), and ultimately the airlines, themselves, who will try avoid spending every penny they possibly can. Of course, this leads to a terribly higher cost, unavoidably, when inept, or marginally capable pilots find themselves ill-prepared to deal with the inevitable circumstances which they will sometime meet, and find exceeds their abilities. When that moment comes airplanes are destroyed and people die in them.

Pilot knowledge, which must be passed down from generation to generation if we hope to avoid re-learning tragic lessons learned in blood, has been assigned a monetary value. The airline industry, and the support infra-structures surrounding it, has pretty much determined that it's cheaper to accept some loss of life than to assure that it provides the best trained and qualified pilot force. That's just too much expense. Better to skimp on training costs...after all, isn't that what liability insurance is for?

For the price of a ticket, you get to share the pilot's fate.

As for me, if it's not a big jet, flown by a reputable flag carrier, I'm driving, riding a horse, or just staying home.

[EVS]

I'm a current flight instructor with just about the minimum requirements to go to a regional airline (with current mins). I'm definately torn between pursuing a career in the airlines and continuing my education in pursuit of a masters degree. In light of this article, I could be optimistic and say that the pay and quality of life will turn around sometime soon. On the other hand I should be thinking RUN; go find a job doing something other than flying and hope to someday own my own airplane. After all, once you get this far, flying runs through your veins and no matter how low the pay, shiny jets will forever attract young hopefuls willing to sacrifice their quality of life, income and job stability. I personally hope to see things turn around as a result of the inverse relationship between the airlines' need for FO's and the lack of flight instructors to train pilots. All that really needs to happen is for the airlines to start paying pilots what they deserve. The lack of instructors will eventually stymie the interest of young people and their parents who will be helping to support their career interest. The lack of flight instructors should be enough to tell someone that this industry is currently tumultuous and in the process of change. Bottom line, when change does happen, it happens quickly and I'd like to have started at 23, built some seniority and hopefully enjoy the profession the way it is meant to be by the time I make it to the majors. Questions is...will it ever change?

[Spudman]

Its all about money. Until a business case can be made to show the connection between education/training/exp... and the accident rate, then just like any other industry, airlines will attempt to pay the minimum possible for pilot services

[TPS 67]

True dat, Spudman.

[jmcc405]

Unfortunately, this article rings true. I am a g/a pilot. My best friend is a captain with a box carrier. From what I understand the business managers that don't fly, yet run the company, they think new aircraft will basically fly themselves. Ask your friendly commercial airline pilot how much he/she actually hand flies the plane other than rotating and landing. These non-pilots see the gee whiz gadgets and think they can put a low time pilot (sometimes a 21 yr old kid-no disrespect intended) to fly these aircraft. That's fine until you have an "uh oh" moment and have to make critical decisions that affect your life and the life of your passengers. Being lucky is no substitute for experience. I am afraid the previous writer may be correct that the force that drives pay back up for pilots will be a correlation of accident/incident rates to experience, or a lack thereof.

[RJRedheadedStepchild]

Management doesn't pay pilots to literally fly airplanes, but rather to manage them. The actual flying skills are a small part of the overall job. Being in command of an aircraft has very little to do with the actual manipulation of the controls and everything to do with judgement and decision-making. The gee-whiz gadgets are there to automate the mundane tasks that humans aren't that suited for anyway like maintaining a constant altitude and heading for extended periods. They allow us as pilots to keep better track of the big picture and apply our experience to make appropriate decisions.

Just to be clear, the industry average for first year First Officers at jet regional carriers is about $23,000. Typical 3-year Captain pay is around $60,000. It's not as bad as it was in the turboprop days, but it isn't exactly stellar given that these pilots at the regional level may have up to 88 people onboard.

[BusDriver]

Why would any intelligent teenager....spend $80,000 on a four year degree, another $50,000 for an airline transport pilot certificate, only to take a job that starts at $18,000/year....with little upside salary potential? I wouldn't want anyone with that level of judgment as the captain of my airplane.
My son wanted to follow me into the aviation career field. After watching what happened to my salary, my pension, and my medical benefits in the last three years, he wanted no part of it.
He's choosing to be a doctor instead.

[cropter]

After 22 years in aviation and 10 at one of the best legacy carriers, I'm not making 6 figures, but here's a link to some careers where you can get that:

content.comcast.monste...

I got a real estate license last year. Maybe, I'll try that. Good Luck.

[Ramjet]

For one, pilotless aircraft are far in the future. Sioux City accident, and ask who will be the first to fly on a pilotless aircraft. Maybe not us, but maybe our kids. And two, what makes aircraft fly?? "Money" Economics say, if there is a shortage ie. OIL, the price goes up. Why is the pilot pay not going up?? Nobody is intrested in paying 80k-100k in loans, and flying your but off in the airlines making under 50k/yr for the first 5 years, being on the road more than half your life. That's not attractive!!!!!!!!!!

[Career Pilot]

I am astonished to see some of the things written above.. the most horrifying is "Being in command of an aircraft has very little to do with the actual manipulation of the controls" I had my pilots license at 17, back in 1972.. and I have been a professional pilot ever since, and that is the most inaccurate statement I have ever seen in my entire career. Gee whiz buttons and knobs do it all... well.. I have some more news for you... there is not one aircraft in the sky that doesn't have atleast ONE system inop.

You are allowed to fly under prescribed conditions with a considerable amount of the aircraft not working. To say that actual hands on control of the aircraft is less of a concern is a considerable insult. Just because an airplane HAS an autopilot (and A LOT of them do not) doesn't mean it works, and if it works, doesn't mean it works PROPERLY and/or completely, and sometimes that JUDGEMENT is important enough to NOT USE the stupid thing if it isn't safe.

Judgement is crucial to flying, and to operating any commercial venture, because someone makes those decisions when to go and when to stay, and that coupled with the HANDS ON ability to put the machine where it needs to go are what gets the job done.

Ironic that this should come out the day that American Trans Air one of my former employers finally rolled over and died... following Champion and Aloha... it's been a heck of a week for aviation. Something that has NOT been addressed... is the zooming market of fractional jets. This is sucking the Instructor pilot pool empty faster than anything. You are only required to have a Commercial/instrument rating to be a first officer on a corporate jet... FAR less.. YEARS less experience than is required at any of the Regionals. Yes you read that right...you do not even need a CFI ticket (instructor) you can SKIP that whole phase... and not know the joy of being BARFED on by someone, and oh those lovely little training planes are so nice and warm in the Summer time, only about 125 degrees until you get to altitude at 250 fpm climb on Hot Texas afternoon in a C-152... where they cool down to a chilly 78 degrees about the time you get to go back to the airport. NO, they do NOT have airconditioning.

I flew for AMR Eagle as well, and started at $15,700 my first year (1989) and was up to $75,000 a year as an ATR Captain when I left in 1998. That was not a lot of money for a 64 seat airplane (that was BRAND NEW) and flew FULL, 8 legs a day 7 days a week. You can make that salary now MUCH faster in the Fractional jet fleets that are EXTREMELY popular, and you will find that you are treated MUCH better. You WON'T have passengers that consider your plane (and crew) unsafe because it has propellors (which if you had to get out of an emergency situation can do it in about half the time of a jet and use a smaller area) you are not going to see guys coming out of the military any longer and hopping onto the majors.. because now they are staying in longer (hitches) AND the airline industry finally accepted the fact that pilots are pilots... being military is no longer going to get you hired over civilian candidates any longer.... particularly if you sporting around in a F-16 for a few extra years while some other guy was sitting right seat in RJ, who would you rather have at the controls of your airliner? Not a lot of MiGs flying around Tennessee these days... but that Part 121 experience sure looks good on your resume when you go interview with a major.

The real problem with instructor shortage is, that it has ALWAYS been a crappy job, but it was the only way you could build time to get experience. No one will hire you if you are low time, and if you DO get hired... NO ONE will INSURE you.. and THAT is the kiss of death right there. Today.. you can get on at a Regional, Boxhauler, or Fractional JET (in the 80's only Military pilots got the jet jobs) without the need of spending time as a CFI... the only time you find new instructors is when nothing else is available. It is, and always will be THE bottom of the ladder... and was kept filled because it was the only civilian path (extreme wealth and great connections not withstanding) to a flying job. It is that change which has most greatly affected the instructor hiring pool.

[Dave Mc.]

Why be a pilot? I've been flying for 17 years, and all the reasons to do it are pretty much gone. The salaries seem terminally depressed, and every rebound gets struck down. My CEO makes more than 1,000 times what I do at a mainline carrier. First year pay at most majors is $32/hr of flight time. Sounds great, right? Well, you're on duty for something like twice that, and away from home for 3-4 times that. So think about it, after college and all that training you're making 8 bucks per hour away from home. The light at the end of the tunnel keeps going out as your domicile closes, your airline goes bankrupt, and your contract gets shredded.
I can't think of another career that requires greater personal sacrifice. "Starving flight instructor" is not just an expression. At one point I was living on $20/week in food money. I ate a crab I caught on my patio. You miss holidays, birthdays, get divorced, and miss your kids.
Many airlines seem to be run like CEOs piggybanks. All costs are passed on not to the consumer, but to the employees. Instead of retaining pilots with decent work rules and pay, we are treated as expendable commodities. Many new hires at my last airline were woefully inexperienced with little flight time and bad judgment.
Flying's still fun, but the next hiccup will probably mean I'm done.

[scamfly]

You all make really good points here. For someone looking at this though, they have to realize when you are all pointing out hourly pay, that we only get that pay when the aircraft is moving. Most don't get paid for the time used to prepare, plan, discuss, and analyze the weather and mechanical issues. Also, you may get paid for 6-7 hours when you are on duty for over 12. If someone is getting paid $20 an hour at a regional, it breaks down to less than 3.25 per hour away from home. Not a living salary by any means and really a sad excuse for something that is suppose to be a professional position. Not to mention, you roll the dice everytime you choose to work for a particular airline, so when that airline goes under, you are back to making poverty wages again. Unfortunately, you guys are right on the money about what it will take to change the greedy and money hungry CEO's and Boards.......Accidents and loss of life. I was furloughed from a major carrier after 5 years and went back to a regional and flew with some of the "inexperienced&qu... Captains and witnessed them try to box us into a corner - you couple that with a 300-500 hour FO and you have disaster written all over it. If the passengers had any clue how lucky there are not more incidents, they would all run. Tailwinds to everyone and fly safe!

[Ramjet]

Here is an additional comment: Young pilots out of college with a schedule of 4 on and 3 off commuting on maybe one or two of there days off, is hard to find a spouse to start a family and stay attached. This is why we will have a pilot shortage for the extended future.

[Alloyboy]

Wow lots of good comments here from you guys. I'm just about done with my private cert. and planned on going through at least my commerical. I'm fueled by passion right now but after reading this I'm starting to think twice about it. I'm also in an A&P program, and it sounds like I could make more doing that with far less debt at the end. Or maybe go overseas or work for law enforcement...anything but airlines.

[Conch]

Wow! I have read all these comments. I am 42, single. I have been a prosecutor for 15 years. I went into law school because in the late 1980s it seemed like the thing to do (it was very hard to get a pilot job and hey, wasn't L.A. Law the coolest!?). I left the prosecutor job when I hit 40 to see about exploring my dream to be a pilot (was excited when the mandatory retirement age went up to 65). There seems to be some contradictory previews of the future pilot show coming out in the future! I was thinking of calling the HR departments at some regional airlines and asking where they hire from---I was leaning toward Jet Univ. since I have free lodging here in South Florida---unless the regionals I contacted didn't hire from there. I have read that since English is required to be used on international routes that the BRIC nations (Brazil,Russia,India, and China) are hiring English-speaking pilots as their aviation needs are growing so rapidly (I have read that Australia is having a particular shortage of pilots because they are going to China and India for better pay). I read about the low salaries---is working for a foreign airline a possible solution! Time to emigrate to OZ?!Thoughts on the above? Should I be miserable as a prosecutor for another 15 years!? Jet Univ.? THANKS!....a clueless lawyer who always wanted to be a pilot!