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Deepening Pilot Shortage to Raise Fares
Expect to see more gray hair next time you peek into an airliner cockpit -- and pay more for the privilege.
By Martha Lynn Craver, Associate Editor, The Kiplinger Letter
September 14, 2007
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Airlines grappling with a growing shortage of pilots are in a squeeze. More baby boomer pilots face the mandatory retirement age of 60, and there are fewer young people interested in taking their seats. With salaries and benefits on the decline in recent years, a career as an airline pilot is losing some of its glamour. U.S. carriers also face strong competition for young recruits from the military and from overseas airlines.
Demand for pilots, meanwhile, is picking up rapidly, both in the U.S. and around the world, particularly in China and India. U.S. commercial air travel is expected to grow by 500,000, to 1.2 billion passengers by 2020, according to the Federal Aviation Administration (FAA). Domestically, airlines are increasingly finding it more efficient to fly smaller planes, which means more-frequent flights, requiring more pilots.
Uncle Sam will help some by raising the mandatory retirement age to 65. Look for the FAA to issue a rule later this month allowing one pilot of a commercial flight to be over 60, as long as the other one isn't. The International Civil Aviation Organization recently approved a fly-until-65 standard, making it easier for the FAA to follow suit.
But airlines still face an uphill battle for more pilots. They'll struggle to fill about 12,000 jobs this year and are looking at having to fill another 20,000 openings by 2009 because of retirements and other factors.
To meet the demand, airlines are offering $5000 signing bonuses and $1000 or more to employees for referrals that lead to a hire. In addition, airlines will soon offer to pay at least some of a pilot trainee's schooling costs if he or she commits to working for the airline after graduation. Costs aren't cheap -- they typically run from $175,000 to $200,000 per pilot. Regional carriers, which are especially hard hit by shortages, are also lowering experience requirements from 1500 hours to 250, the FAA minimum.
For business and other air travelers, this is not good news. It spells higher operating costs for airlines, which undoubtedly will lead to higher ticket prices. And it sure won't help with reducing flight delays and other travel hassles.
For weekly updates on topics to improve your business decisionmaking, click here.
Deepening Pilot Shortage to Raise Fares
Expect to see more gray hair next time you peek into an airliner cockpit -- and pay more for the privilege.
By Martha Lynn Craver, Associate Editor, The Kiplinger Letter
September 14, 2007
RELATED FORECASTS
HELPFUL LINKS
EDITOR'S PICKS
Airlines grappling with a growing shortage of pilots are in a squeeze. More baby boomer pilots face the mandatory retirement age of 60, and there are fewer young people interested in taking their seats. With salaries and benefits on the decline in recent years, a career as an airline pilot is losing some of its glamour. U.S. carriers also face strong competition for young recruits from the military and from overseas airlines.
Demand for pilots, meanwhile, is picking up rapidly, both in the U.S. and around the world, particularly in China and India. U.S. commercial air travel is expected to grow by 500,000, to 1.2 billion passengers by 2020, according to the Federal Aviation Administration (FAA). Domestically, airlines are increasingly finding it more efficient to fly smaller planes, which means more-frequent flights, requiring more pilots.
Uncle Sam will help some by raising the mandatory retirement age to 65. Look for the FAA to issue a rule later this month allowing one pilot of a commercial flight to be over 60, as long as the other one isn't. The International Civil Aviation Organization recently approved a fly-until-65 standard, making it easier for the FAA to follow suit.
But airlines still face an uphill battle for more pilots. They'll struggle to fill about 12,000 jobs this year and are looking at having to fill another 20,000 openings by 2009 because of retirements and other factors.
To meet the demand, airlines are offering $5000 signing bonuses and $1000 or more to employees for referrals that lead to a hire. In addition, airlines will soon offer to pay at least some of a pilot trainee's schooling costs if he or she commits to working for the airline after graduation. Costs aren't cheap -- they typically run from $175,000 to $200,000 per pilot. Regional carriers, which are especially hard hit by shortages, are also lowering experience requirements from 1500 hours to 250, the FAA minimum.
For business and other air travelers, this is not good news. It spells higher operating costs for airlines, which undoubtedly will lead to higher ticket prices. And it sure won't help with reducing flight delays and other travel hassles.
For weekly updates on topics to improve your business decisionmaking, click here.
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