To answer that question, several sources were consulted for this industry pulse check.
The Government Says...
Each spring, the FAA convenes a forecasting conference of industry thinkers and planners. After all, new runways, terminals, baggage carousels, fuel trucks, etc., simply do not appear overnight to accommodate expanding air traffic. The government receives input from these experts, massages the data, and develops a long-range look into the industry's future needs. Here's what the FAA has concluded based on its Twenty-Seventh Annual Commercial Aviation Forecast, which was released March 12.
It is no secret that the events of last fall have had a dramatic impact on airline travel in particular. Although passenger traffic will continue to decline throughout 2002, the feds predict a "strong" recovery for 2003.
The forecast also sees airline passenger traffic returning to more normal levels of growth by fiscal year 2004, expanding at an average annual rate of 4 percent over the next decade and reaching 1 billion passengers in 2013 - three years later than predicted in the 2001 FAA forecast. The FAA theorizes that the slowdown is due largely to the recession starting in 2001 and, of course, the events of September 11, 2001.
FAA Administrator Jane Garvey is not daunted by the current softness in the airline industry. She says, "Regardless of the short-term decline in air traffic, our forecast underscores the need for government and the aviation industry to continue adding capacity to our system to meet the demand that will return and grow."
Nonetheless, there are three caveats that may upset - and will definitely affect - the apple cart.
Exactly how soon and to what extent will passenger traffic recover from September 11?
With carriers facing large losses this year while coping with reduced passenger demand and increased security and insurance costs, when will airline finances recover?
How soon and to what extent will high-fare business traffic, which provides a large percentage of airline revenue, return from depressed 2001 levels?
Recovery Already Under Way?
Although the FAA's forecast tends to be conservative and cautiously optimistic, good news is developing right now.
Yes, it is highly unlikely that the jobs at major airlines coveted by most career-oriented pilots will be there for the next two to three years. But the regionals are beginning to spool up again. Sources at Great Lakes, Comair, ACA, and others are talking about new-hire classes and recalling furloughed pilots.
Bear in mind that every indicator shows that the regional airlines will boast the biggest growth through the remainder of the decade. It is in this sector where most cockpit jobs will be found.
Kit Darby, whose AIR, Inc. is one of the industry's best sources of information about airline hiring patterns, is upbeat.
According to Darby, most airlines have reduced the total number of pilots that they expect to furlough, with some readjusting more than once, like Northwest Airlines. NWA reduced its predicted furloughs from more than 800 last October to 550 in January, and to 490 in February. Delta and United also trimmed the number of furloughs planned. America West started recalling furloughed pilots in the spring.
Some airlines did not even furlough pilots, such as Alaska, Southwest, UPS, and FedEx. In fact, for the most part these airlines have continued to hire.
Then there is the prospect of more retirements as the Vietnam-era pilots reach 60. Although some of the majors have already seen retirements peak, Continental Airlines is one carrier that will not experience peak retirements for several more years.
Business Aviation?
The FAA expects continued declines in the short term as the industry copes with the effects of recession and September 11, 2001. Longer term, business flying is expected to grow, with the number of jet aircraft increasing an average of 3.5 percent annually. Flying hours are forecast to be up 4.1 percent.
As proof that the business world cannot seem to run without the business jet, Cessna sent 98 brand-new Citations to new owners in the last quarter of 2001. Despite the recession, the 2001 total at Cessna tallied 313 jets versus 254 in 2000. With a backlog at the Cessna plant, some 300 new bizjets should make their way into the system in 2002.
The darling of business aviation - and a rich source of pilot jobs - continues to be the "fractional jet" phenomenon. At last report, none of the five large fractional operators had any pilots on furlough. Of the professional pilots hired earlier in 2002 in all sectors of commercial aviation, the fractionals hired more than 25 percent. The folks at NetJets continue to order aircraft like Falcon and Galaxy jets at an almost dizzying pace.
What About The Little Guys?
Although it is a proper strategy to look into the status and future of the airlines and business aviation, it must never be forgotten that the drivers of Boeings and Learjets were, if not military pilots, flight instructors in Piper Cherokees and Cessna Skyhawks at one time in their careers. Thus, general aviation is not an unimportant player in the grand scheme. Without those early hours in singles and light twins as flight instructors, many of today's professionals would not be where they are.
The FAA's gloomy predictions include a continuing softening of the student-start market. The agency concludes that the number of student pilots fell 6.6 percent in 2001 and is expected to decline further in 2002 and 2003. Although the number of student pilots is expected to grow by 1 percent annually after 2004, it is not expected to reach the level attained in 2000 before 2013, the end of the current forecast period.
This depressing forecast caught the eye of AOPA President Phil Boyer. Speaking before the tenth FAA General Aviation Forecast Conference in Wichita, Boyer said students would actually increase some 16 to 20 percent over the next five years. He said that flawed numbers from the FAA, which were based on bad assumptions and system errors, could drag the GA industry down. "Student starts are the key to the general aviation industry," said Boyer. "Everything is driven by the number of students. That number is the leading indicator for everything from fuel sales to new and used aircraft sales.
"Business leaders make decisions based on the student number forecast," Boyer continued. "If the FAA is wrongly pessimistic about the future, it can negatively affect industry decisions. A wrong forecast will hinder, not help, the general aviation industry's economic recovery."
AOPA said the FAA's analysis was faulty. "The FAA pilot population forecast is based on erroneous assumptions," said Tim Pennington, AOPA manager of statistics and analysis. "After extensive review of the data, we determined that the total number of student certificates held has been understated for the last two years." AOPA estimated that the FAA underreported the number of student pilots by some 13 percent.
The underreporting was caused in part by a system change implemented in late 1999. A switch to an electronic-based reporting system, plus a change in reporting responsibilities within FAA offices, generated a large number of "orphan" records. These orphan records were uncounted student pilots. The FAA apparently projected this inaccurate data into the future, forecasting a continuing decline in student pilot numbers. But when the orphan records are counted, the number of students increased slightly in 2000 and 2001. Using accurate historical numbers, AOPA projected that there will be 96,000 student pilots in 2002 (instead of the FAA forecast of 83,000). And by 2006, AOPA projected there will be 104,000 student pilots, while FAA predicted only 250 would be added to the total.
"Accurate projection of the number of student pilots is the most important because that in turn drives everything else," Boyer said. "For the health of the general aviation industry, we must get these numbers right."
Conclusions?
This is a quick assessment of where aviation is and where it is going, particularly for the career-minded. It does appear that opportunities will continue to bloom into the future for those who are persistent, patient, and competitive. As for switching career goals now from aviation to computer science? Nah!
Wayne Phillips is an airline transport pilot with a Boeing 737 type rating and is a designated pilot examiner in Colorado. He is a speaker for the AOPA Air Safety Foundation.
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