Even the Wall Street Journal lamented recently, "A world-wide shortage of pilots is putting less-experienced fliers at the controls of passenger jets and forcing some airlines to cancel flights for a lack of crews." Further, "The pilot shortage was a contributing factor in some flight cancellations this year."
The major airlines, now called network carriers, continued to have more than enough applicants from the ranks of the regional airlines and the military. The mega-airlines felt little impact of the pilot shortage. Even so, AIR Inc. says that Continental drafted 540 pilots in 2007, JetBlue hired 437, United hired 120, Southwest recruited 500, and Delta hired 397. But regional carriers scrambled to locate more than 6,000 new pilots, and hiring minimums dropped through the floor. Recruiters scoured aviation colleges, universities, and flight academies, some with cash-in-hand hiring bonuses, to induce young flying talent into their regional jets.
That was yesterday. What about tomorrow?
If there is one shortcoming in pilot education on all levels, it is a failure to stay in tune with the financial state of the industry. As profits rise and fall, pilot hiring also rises and falls. Case in point: How much money did the airlines earn in 2007? What is the projection for 2008? Never thought about it, did you?
Although final financials will not be reported until May, the best guess is that the airlines will have posted about a $5 billion profit in 2007. Bear in mind, though, that the industry had a five-year loss of $35 billion preceding 2006. The Air Transport Association's Vice President and Chief Economist John Heimlich says, "In 2008, ongoing passenger and cargo revenue strength--particularly in the international arena--will help offset a sizeable increase in fuel expenses and a modest increase in non-fuel expense, enabling the industry to post a $3.5 to $4.5 billion net profit."
Sounds good? Not necessarily. If 2008 profits drop from $5 billion to $3.5 billion, that means a reduction of 30 percent, which doesn't sit very well with the boardroom and stockholders. Based on 2007 fourth-quarter results, the handwriting is on the wall. According to Merrill Lynch & Co., the eight largest carriers posted a combined deficit of $450 million. You can bet that the airline big shots are going to respond aggressively.
Doug Parker, the US Airways chief executive, says that mounting fuel costs could wipe out the U.S. airline industry's profits this year, forcing consolidation in the sector as carriers seek to cut costs.
Delta Air Lines and Northwest Airlines have told employees that their carriers may need a partner to stay competitive. Since exiting bankruptcy in April 2007, Delta has considered a sale of its Comair subsidiary.
AMR Corporation has said it plans to spin off American Eagle, saying it would be "in the best interests of AMR and its shareholders and will be beneficial to American, American Eagle, their employees, and other stakeholders."
Why all the churn? Michael Boyd of The Boyd Group, one of the industry's economic gurus, sums it up in two words: "$100 oil!" Boyd has an astute and comprehensive 2008 projection on his Web site.
Of the more controversial predictions is this: "It should be back-to-the-drawing board time for Small Lift Providers (SLP), what some call 'regional airlines.' Maybe a time for sheer panic, too. The issue: 50-seat and smaller RJs are being economically marginalized by skyrocketing fuel costs.
"Major carriers will be looking to quickly cull out dozens of RJs in the coming months. And hundreds more in the next five years, with no replacement for this lift--or many of the markets they operate--in sight. Most SLP agreements provide for fuel costs to be a pure pass-through to the major carrier, and that means the majors are eating a lot of red ink."
Add to all of this the yet-unknown impact of the new Age 65 rule (see "Q&A: The Career Advisor," March AOPA Flight Training).
In view of all of these factors plus the overall U.S. economic climate, which could lessen demand for passenger travel, a softening of pilot hiring and job security will most likely result. How much is a question that just cannot be answered intelligently. It would be a straight-out guess.
Doom and gloom? No. But even the forever-optimistic AIR, Inc. speculates that 12,000 pilots will find new flight deck positions in 2008--almost 10 percent less than the 13,157 who landed jobs in 2007.
Is it time to take up law and dump flight training? No. Remember that Boeing conducted its own forecast and calls for an ever-increasing need for pilots; it claims that more than 28,000 new passenger and freighter jets will be needed by the year 2027. The FAA predicts that passenger enplanements will hit 1 billion by 2015. History tells us that any setbacks caused by the current economic situation shall, in time, pass.
Wayne Phillips is a type-rated Boeing 737 instructor who operates the Airline Training Orientation Program in association with Continental Airlines. He is a speaker for the AOPA Air Safety Foundation.
