Pilot Return On Investment

Interestingly: The expense for Pilot Training is almost the equivalent to the Average tuition and books for an MBA.

According to MBAprograms.org the average cost for a two year program is 80,000 and some as high as 120,000. How does this compare to Flight Training Costs? According to ATP flight schools the listed price for complete training ranges from 60-65000$. Additionally, a program from Embry-Riddle estimates flight training costs from 46-65000$ depending on how much training is received, on top of an undergraduate cost of 40,000$ per year. Bringing the total Embry-Riddle experience to up over 200-220,000$ for the full program.

Using the models from the pages on Airline Pilot Hiring Demand we can estimate how long it takes for a Pilot trained at today's costs to make back a given return on investment. To give this Data some relative meaning, we can apply the average wage for a high school graduate and the average wage for a 4 Year College Graduate. The numbers for these two averages are taken from the US 2000 Census.

Average Educational Expenses for a full time College Student (not including food) were obtained from the College Cost tool at CNN. Flight training costs were calculated at about 48000$ spread out amongst the four years of college. The 48000$ was computed from the additional cost incurred for a Student at UVU following the UVU model of training. This included Flight time, required equipment, FAA test fees, and about 1 hour of ground instruction for every hour of flight instruction. This was computed using the best case scenario, 40 hour Private Pilot, 250 hour Commercial, with the minimum required instruction ( a superb student). Obviously only 1 percent of students will fall into this category and most will spend substantially more, but I think it provides a reasonable bottom benchmark for flight training costs.

After Training I have assigned a Two year period for time building as a CFI, or a low wage flight job required to have sufficient time to be hired at a Regional. This wage was estimated at 120 hours of flight and ground pay per month at 15$ an hour. I assume after this two year period, hiring at a Regional such as SkyWest follows. Following our pilot demand model for the next 20 years we assume a five year stint as a First Officer at the Regional, followed by a two year period as Captain. Each Airline Track then apply's the estimated upgrade time at the Major(displayed below), to determine when upgrade occurs.

To reflect how money in the present is more valuable than money that might be made down the road, I applied a reasonable interest rate. This interest rate is applied to negative and positive balances in the total for each year. The only exception is during the Education Period, where no interest rate penalty was applied, this is in keeping with most student loans.

The Bold and Underlined  values are the breakeven point with someone who recieved an average 4 year degree.

 

Education
Instructing
Regional FO
Regional CA
Major FO
Major CA

Estimated Upgrade Time At Major

United: 11 Years

Delta: 11 Years

American: 9 Years

USAir: 8 Years

Alaska: 13 Years

Interest Rate: 3%

High School

Graduate

College Graduate



Career@

Regional


United

Year Wage ($) Total Value ($)
Wage ($) Total Value ($)
Wage ($) Total Value ($)
Wage ($) Total Value ($)
1 30400 30400 -12000 -12000 -24031 -24031 -24031 -24031
2 30400 61712 -12000 -24360 -24031 -48783 -24031 -48783
3 30400 93963 -12000 -37091 -24031 -74277 -24031 -74277
4 30400 127182 -12000 -50204 -24031 -100537 -24031 -100537
5 30400 161398 52200 490 21600 -81953 21600 -81953
6 30400 196640 52200 52705 21600 -62811 21600 -62811
7 30400 232939 52200 106486 21120 -43576 21120 -43576
8 30400 270327 52200 161881 34560 -10323 34560 -10323
9 30400 308837 52200 218937 36480 25847 36480 25847
10 30400 348502 52200 277705 40320 66943 40320 66943
11 30400 389357 52200 338237 41280 110231 41280 110231
12 30400 431438 52200 400584 67200 180738 67200 180738
13 30400 474781 52200 464801 69120 255280 69120 255280
14 30400 519424 52200 530945 71040 333978 27900 290838
15 30400 565407 52200 599074 73920 417918 51300 350864
16 30400 612769 52200 669246 75840 506295 60300 421689
17 30400 661552 52200 741523 78720 600204 68400 502740
18 30400 711799 52200 815969 80640 698850 85500 603322
19 30400 763553 52200 892648 83520 803336 93600 715022
20 30400 816859 52200 971627 86400 913836 95400 831873
21 30400 871765 52200 1052976 88320 1029571 98100 954929
22 30400 928318 52200 1136765 91200 1151658 114300 1097877
23 30400 986568 52200 1223068 93120 1279328 117000 1247813
24 30400 1046565 52200 1311960 101760 1419468 117900 1403147
25 30400 1108362 52200 1403519 103680 1565732 135000 1580242
26 30400 1172012 52200 1497825 105600 1718304 135000 1762649
27 30400 1237573 52200 1594960 105600 1875453 135000 1950529
28 30400 1305100 52200 1695008 105600 2037316 135000 2144044
29 30400 1374653 52200 1798059 105600 2204036 135000 2343366
30 30400 1446293 52200 1904200 105600 2375757 135000 2548667
31 30400 1520081 52200 2013526 105600 2552630 135000 2760127
32 30400 1596084 52200 2126132 105600 2734809 152100 2995031
33 30400 1674366 52200 2242116 105600 2922453 152100 3236982
34 30400 1754997 52200 2361580 105600 3115726 152100 3486191
35 30400 1838047 52200 2484627 105600 3314798 152100 3742877
36 30400 1923589 52200 2611366 105600 3519842 152100 4007263
37 30400 2011696 52200 2741907 105600 3731037 152100 4279581
38 30400 2102447 52200 2876364 105600 3948568 152100 4560068
39 30400 2195921 52200 3014855 105600 4172626 173700 4870570
40 30400 2292198 52200 3157501 105600 4403404 173700 5190387
41 30400 2391364 52200 3304426 105600 4641106 173700 5519799
42 30400 2493505 52200 3455758 105600 4885940 173700 5859093
43 30400 2598710 52200 3611631 105600 5138118 173700 6208566
44 30400 2707072 52200 3772180 105600 5397861 173700 6568523
45 30400 2818684 52200 3937545 105600 5665397 173700 6939278
46 30400 2933644 52200 4107872 105600 5940959 173700 7321157

Delta

American

US Airways

Alaska

Year Wage ($) Total Value ($) Wage ($) Total Value ($) Wage ($) Total Value ($) Wage ($) Total Value ($)
1 -24031 -24031 -24031 -24031 -24031 -24031 -24031 -24031
2 -24031 -48783 -24031 -48783 -24031 -48783 -24031 -48783
3 -24031 -74277 -24031 -74277 -24031 -74277 -24031 -74277
4 -24031 -100537 -24031 -100537 -24031 -100537 -24031 -100537
5 21600 -81953 21600 -81953 21600 -81953 21600 -81953
6 21600 -62811 21600 -62811 21600 -62811 21600 -62811
7 21120 -43576 21120 -43576 21120 -43576 21120 -43576
8 34560 -10323 34560 -10323 34560 -10323 34560 -10323
9 36480 25847 36480 25847 36480 25847 36480 25847
10 40320 66943 40320 66943 40320 66943 40320 66943
11 41280 110231 41280 110231 41280 110231 41280 110231
12 67200 180738 67200 180738 67200 180738 67200 180738
13 69120 255280 69120 255280 69120 255280 69120 255280
14 53100 316038 31500 294438 37800 300738 43200 306138
15 72900 398420 67500 370772 40500 350261 67500 382823
16 85500 495872 81000 462895 55800 416568 80100 474407
17 88200 598948 85500 562282 65700 494765 88200 576839
18 92700 709617 87300 666450 78300 587908 94500 688645
19 95400 826305 90000 776444 80100 685646 96300 805604
20 100800 951894 96300 896037 90900 797115 98100 927872
21 102600 1083051 99000 1021918 92700 913728 99900 1055608
22 108900 1224443 101700 1154275 85500 1026640 101700 1188977
23 109800 1370976 143100 1332004 87300 1144740 105300 1329946
24 113400 1525505 144000 1515964 89100 1268182 107100 1476944
25 146700 1717971 144900 1706343 90900 1397127 108900 1630153
26 146700 1916210 149400 1906933 90900 1529941 162000 1841057
27 146700 2120396 149400 2113541 112500 1688339 162000 2058289
28 151200 2335208 149400 2326347 112500 1851489 162000 2282037
29 151200 2556464 149400 2545538 112500 2019534 162000 2512499
30 151200 2784358 149400 2771304 112500 2192620 162000 2749874
31 154800 3022689 149400 3003843 112500 2370899 162000 2994370
32 154800 3268169 149400 3243358 129600 2571626 162000 3246201
33 154800 3521014 149400 3490059 129600 2778374 162000 3505587
34 157500 3784145 149400 3744161 129600 2991326 162000 3772755
35 157500 4055169 156600 4013086 129600 3210665 162000 4047937
36 157500 4334324 156600 4290078 129600 3436585 162000 4331375
37 163800 4628154 156600 4575380 144000 3683683 162000 4623317
38 163800 4930799 161100 4873742 144000 3938193 162000 4924016
39 163800 5242523 161100 5181054 144000 4200339 162000 5233736
40 170100 5569898 161100 5497586 144000 4470349 162000 5552749
41 170100 5907095 161100 5823613 144000 4748460 162000 5881331
42 170100 6254408 161100 6159422 144000 5034914 162000 6219771
43 191700 6633740 161100 6505304 144000 5329961 162000 6568364
44 191700 7024453 161100 6861564 144000 5633860 162000 6927415
45 191700 7426886 161100 7228510 144000 5946876 162000 7297237
46 203400 7853093 184500 7629866 144000 6269282 162000 7678155