The Current COVID-19 Induced Aviation Industry Calamity Will Not Solve the Worldwide Shortage of Pilots and Mechanics – It Will Get Worse
Thursday, May 28th, 2020
On its face, the apparent drop in demand for air travel appears to portend misgivings for those wanting an aviation career as pilots or mechanics. We should not forget that pre-pandemic, the worldwide aviation industry was bemoaning an historic shortage in pilots and mechanics. The pandemic has not and will not make that shortage go away. There will be an unprecedented shortage of both pilots and aircraft mechanics in the medium and long term.
First, the US aviation industry faces an epic rate of pilot retirements. Over the next six years, forty-two percent of pilots at Alaska Airlines, United, American, Delta and Southwest face mandatory retirement. The same carriers’ maintenance professionals have an average age in the high 50’s. Regardless of how long the economic recovery takes, these demographics portend an unprecedented number of pilots and mechanics leaving the workforce in the next few years. And when traffic returns – which could be within the next 3 years, according to a leading financial magazine and a Wall Street airline analyst — these retirements will leave the industry short of trained professionals.
Second, as the industry faces a shortage in trained personnel, it will also face the double whammy problem of a shortage in training capacity. Flight schools are suffering for many reasons. Many flight schools in the United States are small “Mom & Pop” operations with neither the financial wherewithal nor the business experience to evolve and survive – particularly in the current economic environment. Most flight schools do not have the ability to offer tuition financing for US students. While some list major banks on their websites as possible sources of student loans, traditional banks average a paltry 8 percent approval rate on these loans. Indeed, one large US bank has recently ceased all flight training loans.
As about eighty percent of the world’s primary flight training occurs in the United States, many flight schools rely on a large population of foreign students. However, the pandemic has caused American embassies across the globe to close for visa interviews; no intereviews means no new foreign aviation students. Even if US Embassies process visas starting in June or July, there will be a massive backlog, which, coupled with social distancing rules, may result in significant lead time just for potential students to get an initial embassy visa appointment. Flight schools largely dependent on foreign students are unlikely to see such students until September at the earliest. This will greatly strain the financial capability of many schools and many flight schools — large and small – cannot survive without this steady influx of foreign students. Without a reliable source of tuition financing, many will close shop and disappear.
Many smaller flight schools engage their flight instructors as independent contractors and not payroll employees, thus they appear to not qualify for a significant portion of recent Payroll Protection Plan (PPP) grants and loans. Flight instructors are generally the largest labor expense for a school. Without access to this program, these schools are further strained.
Third, University aviation degree programs that were at or near capacity pre-pandemic may likely face unprecedented declines in enrollment as family finances are ravaged and schools ponder whether and when to reopen their campuses. Parents may be hesitant to send their children to live in dormitories this fall and some students may wrongly perceive dwindling long-term career prospects. A recent New York Times article posited that colleges and Universities overall will see a 15%-20% decline in enrollment for Fall 2020. That will beget a further drop in training and trainees.
The not-so-secret, but seldom discussed fact outside the aviation sector is that the FAA licensed mechanic shortage was — and is – even more severe than the pilot shortage. Just as flight schools are suffering, many US aviation mechanic (A&P) schools have suspended or substantially curtailed operations during the pandemic. Prior to the pandemic, the US Labor Department estimated that 11,800 maintenance positions needed to be filled each year for the next 10 years. The latest Boeing forecast was a need for 189,000 new maintenance personnel in North America alone by 2040. From 2015-2019 the FAA issued an average of only 6,538 new A&P licenses per year.
The A & P mechanic license course length is typically 14 months, and most FAA certified maintenance schools teach only that which is necessary for students to pass the FAA written and practical exams – leading to a pipeline into the industry and thereafter, lengthy on the job training. Making matters worse for aviation, a significant number of graduates pursue careers outside of aviation (estimated at 15%-20%). Utilities, industrial companies, amusement parks and automotive companies, amongst others, seek, hire and retain these well-schooled federally licensed individuals.
For now, the US pilot and mechanic shortage has been somewhat allayed by COVID-19. Not even the coronavirus can impact these industry demographics. Even assuming a soft recovery over time, the pandemic’s impact on training schools will likely result in exacerbated shortages of both cockpit crews and mechanics for years to come. On average, 24 months are needed to take a pilot trainee from zero experience to the requisite 1,500 flight hours. Disruptions in training today will have long term severe repercussions on the pipeline for aviation professionals.
What is the business lesson from this? Companies must constantly adapt, formulate and execute strategic plans and diversify revenue streams. Many flight schools that have relied on evaporated foreign business prospects will likely see their business decimated by COVID-19. As of this writing, a very large Southeast flight school with over 540 aircraft catering primarily to foreign students ceased operations in March of this year. Unfortunately, more are likley to follow in its wake,
The International Aero Academy group of companies is a unique aviation training organization. We are owned and managed by former senior airline and aviation executives — including former presidents, CEO’s, chief operating officers and managing directors of US major, national, low cost, cargo, charter and regional airlines. We have operated International Aero Academy, a FAA certified 141 flight academy for just over three years. In this period, we have earned FAA certification for International Aero Charters, a Part 135 certified charter air carrier and International Aero Maintenance, a certified Part 145 maintenance repair station. We are currently undergoing FAA Part 147 certification for a licensed Airframe & Powerplant maintenance training academy.
After working diligently for several months, in December 2019, we were approved by an educational lender to make available up to 100% tuition financing for our US students. The dollar value of educational loans approved for our US students in January and February of 2020 exceeded 50% of our total flight training revenue in 2019.
We are often asked why we spent the time and effort to pursue FAA certification for our commercial charter operations and for our maintenance organization. Charter operations will provide our experienced flight instructors an additional avenue to build flight hours in an air carrier environment, sharpening their skills and enhancing the likelihood of success when transitioning to an airline environment. The maintenance certification recognized the already high professionalism of our maintenance operations. Our manuals, procedures and paperwork are not dissimilar from that of airlines. We now perform 3rd party commercial operator maintenance services. This capability provides our Part 147 A&P school graduates opportunities to gain valuable experience before transitioning to an airline, manufacturer or other industry.
US civil aviation, pre-pandemic, represented over $1.6 trillion in annual economic activity, 5% of GDP and over 10 million jobs. Aviation is truly an economic engine. Aviation training organizations are essential to maintain this valuable economic contribution. They need to not only focus on training students to regulatory standards, they must also create a path to learning enrichment with real world experience.
We are immensely proud of our students’ success in their chosen field.
International Aero Academy, Lakeland, Florida