Pilot Hiring Demand Analysis

By Kudumomo

Over the Last Ten Years, many pilots have heard and hoped for an expected Pilot Shortage. What is this shortage and what are the non-biased Analytics of it. Too many this shortage has had more in common with desert mirage's than with statisfing reality.

In the last ten years almost every major airline except for a very small few have filed for bankruptcy. Mergers have also touched an equal number of carriers in ways unforseen over the last twenty years. As a result multiple furloughs have occured and virtually no hiring has happened at these "Major" airlines. The 65 age rule has also delayed much of the expected retiring of the last 5 years. Some airlines are still adjusting to these processes.

The Regionals once the shining stars in the Airline industry as Majors shrunk capacity on routes by applying more "regional" sized aircraft now find themselves in the same position the majors did 10 years ago. That is essentially a shrinking market with to many players. As the majors adjustment to this economic fact is finally winding down, the Regional's financial turmoil is just beginning to heat up. The reason for all this is a conversation for another day. However, knowing the general market condition will help set the stage for beneficial analysis of pilot demand over the next 20 years.

We can make a couple of assumptions from this brief history and condition.

  1. Regional Airlines will probably not see much growth in the next 20 years.
  2. After a Period of Consolidation and Restructuring the Majors are now beginning a period of fleet revitalization.
  3. The next Market Battles will not so much be between Domestic Mainline carriers but between International Carriers. (ie what keeps US Major Airline CEO's awake at night isn't each other so much, but airlines like Emirates and the like that are mobilizing massive levels of international capacity)

If the regional market will remain stagnant in overall capacity, we anticipate to see weaker carriers slowly collapse, allowing general regional capacity to slightly shrink, and stronger regional players to pick up the slack. This may allow some minor growth for strong Regional Players but overall capacity should remain constant or decrease slightly. Pilot Demand Amongst the Regionals will be closely tied to Attrition from Larger Airlines.

Fortunatly, because of this period of fleet Revitilization and the need to make aircraft with Boeing and Airbus years in advance, we can reasonably guess what their fleet size will be each year over the next 8-10 years. Their order schedule and planned retirement is general public knowledge and can be gleaned from quarter and yearly reports.

This Data is compiled by Airline on the Airline Pilot Demand Page. You'll find our fleet estimates per year up until 2020, after which we assume stagnant fleet growth. It is very possible the Majors may see additional growth after that, but to maintain in keeping a conservative model we will assume stagnant. History has shown that the increased Capacity predicted by FAA forecasts, are often met with larger guage or size aircraft, rather than with increased fleet numbers. Many factors encourage this approach, fuel cost per seat, restricted slot numbers in airports, and better flight crew productivity.

These pages also overlay HR requirements for pilots from fleet size with, current retirement schedules. Both of these factors, fleet size and current retirement projections give us a fairly reliable estimate of demand.

 Results:

From the research a few interesting conclusions surfaced. The Airline Demand Comparison Page being the most helpful in illustrating these.

First, even through the peak of Major airline hiring in this next cycle we will likely see the amount of time a new First Officer remains as a First Officer at the regional stay at about 4-5 years. Our projections showed a Major airline requirement of 2,100 pilots a year. Roughly, 10% of the current Regional Capacity, which we think will remain stagnant. At 10% attrition a year, a new hire can expect to reach 50% seniority after 5 years. We assumed 50% seniority was a fair estimate for upgrade to Captain.

Second, the two airlines(United, American) that expect the most hiring demand will be tempered by furlough recalls for the first couple of years and wont see significant hiring until 2014.

Third, their is a close relationship between risk and reward, if reward is quick Seniority progression. For example the US Airways model shows a new hire today reaching Captain upgrade in 8 Years, the fastest of any the airlines. However, US Airways is also the most poorly paid, and unstable of all the airlines in the Model. Conversly, in the Model, Delta takes the longest to start significant hiring, but has the best pay, and is the most stable business out of the selection.

2 Comments

  1. Hello, Very interesting analysis. Do you have any analysis including the number of US pilots getting jobs overseas? or how the new duty/rest rules will affect hiring? or the new 1500/ATP rule? How about mortality rates of an older pilot group and early retirements as the stock market climbs and other factors. Also, do you have any numbers on the decreasing number of student pilots and the rising costs of pilot training while building hours…as well as the rising difficulty to obtain financing? Note: Not everyone will be able to flight instruct to build the extra 1000 or so hours. There will be a backlog there. I suspect the 135 operators will make out like bandits with low pay for PIC time and SIC time builder programs! The regionals will be hurting badly for pilots in the coming years.

    It is my understanding that we have record low numbers of people interested in a career in aviation. The glamour is gone. Commuting, long hours, poverty level pay for years. High costs of training, which is now much higher due to the 1500/ATP rule. I agree with the rule, for safety, but the added costs will prevent even more people from being pilots. There are countless other better careers to pursue with a much better cost/benefit profile than aviation.

    I believe far too many airlines and factors have been omitted from this analysis. I agree with your numbers concerning the major airlines (except for number of aircraft. I don’t think larger aircraft alone will be the answer to increased demand. Added seats will have to come, in part, by more aircraft), but I think the demand will be much greater overall. With respect, I believe pilot demand, including all major, large national, and overseas (US pilots leaving the US) will be at least 50% higher than your estimates.

    Obviously some assumptions have to be made and any analysis can’t include everything, but it appears to me that some of the items not in this analysis could be very substantial.

    I believe for the pilots at the regionals now, the next 10 years or so will be the best in history, from a pilot perspective. Quality of life items will have to improve to attract pilots and the pay will have to increase. It will be exciting to watch.

    Best Regards, Brian D.

    • Brian,
      Thanks for your comment as one who is invested in the airline business
      I hope you are right. The model here is to provide a baseline of what could happen with current
      known conservative quantities.
      You are correct their are a lot of unknown quantities, and you mentioned a few. As far as the FAA’s new mandated rest, we just don’t know how that will affect pilot utilization. It could cause the airlines to hire more pilots, it could motivate the airlines to build schedules with efficient utilization of the pilot component in mind or do both.
      The Foreign demand is significant, but up to this point it has not been significant enough to affect our domestic supply. The question remains at what point will these foreign operations start Captaining their aircraft with their own nationals.
      As far as projected domestic growth, Boeing project’s it to be at about 2.3% through 2030 if there is not another recession. Many of the 50 seat aircraft will probably be going away in the next 10-15 years being replaced by 70 seat variants (a 20% increase in capacity per aircraft), this will likely result in fewer regional aircraft. The challenge is thier is not a commercial passenger aircraft(turboprop or Jet) on the drawing board for the next 10 years that will be smaller than 66 seats.
      Another unknown quantity remains with the number of military pilots that will displace jobs for those coming from the regionals. Although this will be lower than in the past it is unknown.
      Ultimatly I am speculating on a bunch of unknown quantities. The information is not intended to discourage people from becoming pilots, but to help educate them from an independent source before they make an 80-200,000$ investment. Hopefully so they can make their decision’s wisely.
      For the past few years Regional’s and Flight Schools have not been so forthcoming in the reality of the career’s they were training people and hiring people for in order to justify the cost of the training or the low pay at their airline.
      Flying can be and is a great career, as long as it is done smartly and as long as Pilots are aware of what kind of environment and career they are entering.