AVIATION INDUSTRY AT RISK: DECLINING COMMERCIAL PILOTS

2 min read

OVERVIEW

The aviation industry currently faces an escalating crisis, owing to the shortage of qualified pilots for operating the aircraft. According to a new report published by the Boeing, there is a significant need for enlisting 112,000 pilots between now and 2035 in the North American aviation industry. There is an additional requirement of 248,000 pilots in the Asia-Pacific, owing to the rapid growth of the aviation sector in the region. The United States aviation industry is further estimated to face a shortage of 35,000 pilots by 2031. The pilot shortage crisis has already started showing the considerable effect in the United States, as major carriers, such as Republic Airlines, filing for bankruptcy, owing to the shortage of qualified pilots. According to an additional study conducted by the University of Dakota, it is estimated that the pilot deficit shall rise to 15,000, by 2026.

PILOT SHORTAGE: REASONS

According to the forecast provided by the International Air Transport Association (IATA), there has been a significant growth in the global aviation industry. The worldwide passenger demand has been expected to witness a significant growth in the next 20 years. Factors such as the new regulatory requirements for first officers shall lead to a shortfall in the number of pilots for the aviation industry.
There has been the significant decline in the number of qualified pilots who are operating regional and international flights. In Feb 2014, United Airlines witnessed a decline in their daily departures from Cleveland by 60%, owing to the increasing economic pressures, owing to federal regulations. Various other regions have witnessed a decline in the number of operating flights, as a result of the pilot shortage.

New Regulatory Requirements for First Officers

The crash of a Bombardier- 8Q400 aircraft operated by Colgan airlines on its landing approach to Buffalo, New York on Feb 12, 2009, brought to light a number of issues, the major one being the lack of the number of flying hours mandatory for first officers operating regional flights. Prior to this incident, First Officers who held a Federal Aviation Administration (FAA) Commercial Pilot Certificate were seen fit for operating regional aircraft. The crash of the Bombardier –8Q400 aircraft raised the issue of the need for increasing the training for the pilots operating regional, as well as international aircraft. Various policies such as the possession of Airline Transport Pilot (ATP) certificate and the increase in the minimum flight hours to 1,500 hours were made as the minimum requirements for First Officers. The effect of the new regulations led to drastic changes in the aviation industry, with regulations stating a minimum number of accumulated flying hours for pilots willing to fly regional and international routes.

Some of the other factors leading to a shortage of pilots in the aviation industry are –
• Flight Time/Duty Time Rulemaking
• Mandatory Retirements
• Lesser Pilots Entering the Profession
• Worldwide Fleet Growth and Competition for Scarce Pilot Resources

A significant rise in the number of experienced pilots reaching the mandatory retirement at the age of 65, with fewer young people choosing commercial aviation as a profession has resulted in widening the boundaries of pilot shortages for the aviation industry.

FUTURE OF THE INDUSTRY

There is a shortage in the number of pilots, in the present scenario, as is reflected by the declining flying schedules of major air carriers, the Republic Airlines bankruptcy etc. It is estimated that the situation is likely to continue in the near future and beyond, with the exception of economic disturbances or major regulatory changes during the time period.
Major airlines shall not witness any significant impacts owing to the pilot shortage in the near future. On the other hand, aircraft which are operating in the domestic region are already facing the issues of significant staffing pressure which is getting reflected in the revenues generated for these carriers. Additionally, pilot shortages shall be alleviated for the domestic carriers, owing to the increasing level of compensation for lower paying airlines. Although, the implementation of financial incentive schemes, as well as career advancement guarantees for new pilots, have been portrayed in various regions, a decline in the number of people opting for commercial airlines as a career shall lead to a negative impact and is likely to further alleviate the problem of pilot shortage in the near future. The continuation of the pilot shortage crisis shall lead to a shrinking regional airline industry. Furthermore, the declining regional airline industry shall lead to a decline in terms of the revenue generated by these airlines.

Dipra Majumdar
Dipra Majumdar Dipra K. M. is a market research associate at Mordor Intelligence, LLP in the field aerospace and defense having graduated from the University of Petroleum and Energy Studies with the aviation degree and also has an IATA certification. He has been involved with market research and previously had been working on preparing the market report on airport financial valuation and due diligence.
Dipra Majumdar Dipra K. M. is a market research associate at Mordor Intelligence, LLP in the field aerospace and defense having graduated from the University of Petroleum and Energy Studies with the aviation degree and also has an IATA certification. He has been involved with market research and previously had been working on preparing the market report on airport financial valuation and due diligence.  

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