|Future airline pilot hiring - a Q&A with Louis Smith|
APC co-founder John Steinbeck sat down with Louis Smith, president of FltOps.com, to discuss where he sees airline pilot hiring heading the next few years:
What’s causing this to happen?
The four factors that created the depressed job market are now disappearing. The mandatory retirement age to 65, elimination of the third pilot, oil prices at $147 per barrel, and a severely depressed economy will soon be a distant and bad memory.
All the airlines are starting to show record profits even in a weak U.S. economy, and that has never happened. They have shown some remarkable restraint in expanding their schedules, but now they will have to expand since demand is recovering so quickly. With the baggage fees, the passenger airlines are finally getting compensated for turning jet fuels into lift, just like FedEx and UPS have done for years.
Will pay and benefits at the majors return to their pre-9/11 levels?
Adjusted for inflation, no. However, I do expect some contracts to show 30% increases in compensation depending on the success of the pilot unions to leverage their strengths.
Can companies really afford to do that?
The unions are figuring out that if passengers are willing to pay $25 for a Samsonite, they must be willing to pay a few more dollars for a “Sullenberger” in the front seat.
What about the highly-publicized stories predicting a pilot shortage?
I don’t think the U.S. major airlines will have a pilot shortage. Plus, it’s important to define what the term “pilot shortage” means. To me, it’s when companies pay for pilots to get necessary training to become minimally qualified. The major airlines are a long way from that and with a mobile work force and a highly-unionized pilot group, they will offer whatever it takes to attract qualified pilots. It’s a totally different story at the feeder airlines and the foreign carriers. I expect the feeder airlines (regionals) will need to spend money on low-time pilots to reach the minimums, especially with new regulations coming redefining the ATP.
The foreign airlines will simply ratchet down their minimum qualifications and increase the pay and benefits to increase the applicant pool and they will likely transition from training bonds to training bonuses to attract the talent they need. We see more of them coming to our pilot job fairs and there are continuous discussions with management about what it will take to improve the number of U.S. pilots willing to leave hearth and home and fly out of a foreign country.
How will Age 65 retirements affect hiring in the future?
The age rule changed on December 13, 2007 so all the age 60 pilots who made the cut must retire by their 65th birthday. When the mandatory retirement was 60 years of age, the projected retirements looking forward 14 years would actually occur in 10 years due to disability, early retirement, termination and the "grim reaper". I suspect the projected age 65 retirements over the next 15 years will actually occur in 10 years, but we won't know the real numbers until it happens.
Based on current fleet growth projections, senior pilot attrition will comprise nearly 65% of the pilot demand at the major airlines.
Will things pick up even at slow growth airlines like American?
American has the most potential among all the major airlines to offer early retirement to its senior captains thus stimulating upgrades without growth. Even without an early retirement incentive, American has 5,888 pilots scheduled to reach age 65 in the next 15 years, and if the historical attrition is accurate, that will actually happen over 10 years.
Some of the money for funding the early retirements might come from the sale of Eagle. I don't think AMR can sell Eagle until contracts are settled at American among all the mainline unions.
American still has more than 1,900 pilots who are furloughed and everyone is guessing about the percentage who actually return when everyone is recalled. Many of the furloughees are permanently employed elsewhere.
How does an applicant stand out in today's job market?
A. Online applications and documents must be perfect - there is no room for sloppiness or omissions.
B. Develop extensive knowledge of the target company's culture, strategy and market position well in advance of an interview.
C. Every employee that you know at your target company with any influence on the pilot screening decision makers should be well aware how badly you want the job.
D. Exceeding the minimum qualifications by a wide margin is significant, and always stay current flying if at all possible.
E. Be prepared well in advance to tell your story to the airline when called for an interview - waiting until two days before is a mistake.
F. Job fairs are very useful in accelerating the entire process (you knew I would say that).
What makes you qualified to discuss pilot career strategies and decisions? Aren’t you a little “old school?"
I have been in the business for a long time and have had the benefit of observing both the brilliant and inane career decisions made by professional pilots. I’ve made more than my share of dumb career moves. Thousand of pilots since 1972 (USAF pilot) have shared with me their ideas and experiences at all stages of their career. Although the industry and information sources have changed radically, there are certain constants which can be applied to most pilot career decisions.
FltOps.com hosts its next job fair in Las Vegas, NV on April 1st, 2011. View more details at FltOps.com/jobs.