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.
LAKELAND, FL – Tecnam, one of Europe’s leading manufacturers of general aviation aircraft and International Aero Academy, Ltd. (“IAA”) today announced they have completed an aircraft purchase agreement for an initial six (6) P2008 aircraft with the first delivery scheduled in the 2nd quarter of 2018.
The IAA Tecnam P2008, will be equipped with state-of-the-art Garmin G3X touch screen displays. GTN-650 GPS/Com/Nav and a GTX45R that provides ADS-B in and out, traffic and weather. To enhance primary training, the Garmin displays can be quickly reconfigured to display the classic six-pack instrument view. Building on the base of European FTO’s utilizing the P2008, IAA will be the first FAA part 141 flight academy to acquire a fleet of P2008’s.
IAA is a Lakeland, FL-based FAA-certificated ab initio and accelerated flight academy with authority to issue foreign student visas for training. With its focus on training the next generation of domestic and foreign professional pilots, IAA has a modern 12,000 square foot maintenance facility with dedicated maintenance professionals, and over 12,000 square feet of office, onsite dormitory housing for students and training space.
“We are thrilled to have been selected by IAA for their next generation of training aircraft. The P2008 will deliver unprecedented economics to flight schools with its proven low-fuel consumption Rotax engine, next generation avionics suite, durable strategic combination of carbon fiber and metal, and U.S.-based AOG support,” said Shannon Yeager, Tecnam Director of Sales. “We look forward to supporting the IAA team and the entry into service of the P2008 with anticipated aircraft utilization exceeding 1,000 hours per year.”
“The analysis for our fleet renewal was no different from the analysis we have done as airline executives for Boeing and Airbus acquisitions – capital cost, maintenance cost projections, performance, fuel burn, manufacturer support, environmental compatibility, safety, reliability and customer acceptance. The Tecnam product line far exceeded the competition in this analysis and we are proud to be the U.S. 141 fleet launch customer for the P2008,” said Steven Markhoff, IAA President & CEO.“Our commitment to Tecnam is reflected in the arrangement that allows for additional models of Tecnam aircraft. IAA will soon become a Tecnam service center and a showcase for excellence.”
“We are proud of this new contract signed with IAA, because they will be the first FAA part 141 FTO to utilize the P2008 and we know that many other U.S. schools will follow. This fleet will be proof of a best practice model both from the student and school perspective: students will benefit from the new generation aircraft and avionics, and the school will benefit from the very low acquisition and operating costs”, said Paolo Pascale, Tecnam CEO.
“The Tecnam P2008 represents enhanced evolution in primary flight training for both students and flight academies: (i) next generation avionics, (ii) reduced maintenance costs (iii) state of the art materials integration (iv) remarkably low fuel consumption that effectively operates as a long-term hedge against potential increases in fuel cost,” said Gerald Gitner, IAA’s Non-Executive Chairman.
About IAA IAA based in Lakeland, FL is a FAA 141 certified flight academy with authority to grant foreign student visas. IAA is a leader in ab initio and accelerated flight training with a successful history of total immersion two-week private pilots’ courses, three-week instrument rating courses, three-week Certified Flight Instructor courses and a six-month private pilot through commercial multiengine rating course. IAA’s facilities include over 12,000 sq. ft. of dedicated hangar space with a dedicated team of maintenance professionals and on-site housing.
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Company Completes Series A Financing to Fund Growth
LAKELAND, FL – September 6, 2017 – International Aero Academy, Ltd. today announced it has completed a Series A Preferred Stock financing with strategic industry investors.
IAA is a Lakeland, FL-based FAA-certificated ab initio and accelerated flight school with authority to issue foreign student visas for training. With a focus on training the next generation of domestic and foreign professional pilots, IAA has a growing fleet of Cessna and Piper single and multiengine aircraft, its own modern 12,000 square foot maintenance facility with dedicated maintenance professionals, and over 12,000 square feet of office, onsite dormitory housing for students and training space. IAA acquired the assets of Tailwheels, an FAA CFR 141 Certificated Flight School, in April 2017.
“During our due diligence to acquire an FAA-certificated flight school, Tailwheels became the obvious choice with an unparalleled record of success in accelerated and ab initio training, full service dedicated maintenance capabilities and an extremely supportive airport management team,” said Steven Markhoff, President and CEO of IAA. Tailwheels was the obvious candidate from which to launch our strategic plan.”
“Primary flight training remains one of the last segments of aviation that is not fully professionalized, and we are in the midst of the largest pilot shortage in modern history,” said Gerald Gitner, Non-Executive Chairman. “We see an opportunity to bring our years of aviation experience to operate at the highest level of safety, regulatory compliance and efficiency coupled with a customer service-focused environment.”
Mr. Markhoff previously served as General Counsel of several airlines, including ValuJet, Vice President of Acquisitions at Hawaiian Airlines, General Counsel and Chief Operating Officer of Kitty Hawk, Vice President of Travel Management of Caesars Entertainment and most recently led the FAA 121 certification of a regional airline.
Mr. Markhoff, with over 30 years of flying experience, holds Airline Transport Pilot and Certified Flight Instructor ratings and is type rated in the Boeing 737. Mr. Gitner brings 50 years of aviation executive experience having served as Chairman and CEO of TWA, Vice Chairman and CFO of Pan Am, President of Texas Air, Chairman of Kitty Hawk and a co-founder of People Express. Mr. Gitner has also served on numerous public and private company Boards.
IAA is a leader in ab initio and accelerated flight training with a successful history of total immersion private pilots’ courses, three-week instrument rating courses, two-week Certified Flight Instructor courses and a five-month private pilot through commercial multiengine rating course.
“Our strategic plan and vision is to simply be the best – the best training with industry leading pass rates and an unparalleled commitment to customer service and satisfaction,” Mr. Markhoff stated. “Our reputation for these attributes is attracting those new to aviation, as well as numerous students who have already started their training at other flight schools and wish to enhance their training experience.” For more information contact:
Officials from International Aero Academy and Southeastern University gathered at Lakeland Linder International Airport in Florida on Wednesday to announce a new aviation program that they believe will blaze the trail for a solution to the pilot shortage. Joined by SEU President Kent Ingle and others at IAA’s LAL facilities, IAA President Steven Markhoff declared that this new venture “will institute a complete paradigm shift in aviation degree programs,” as students will be able to focus first on training and attaining their ratings.
“They will gain valuable flight hours working as flight instructors while completing their degrees and enjoy a defined career pathway to a commercial airline,” Markhoff told the gathered crowd of reporters, SEU students, and community leaders. “Our unique pilot training program provides an excellent opportunity for students to accelerate their pilot training and careers.”
This partnership, Markhoff told Flying, was established as a response to Boeing’s pilot and technician forecast calling for the doubling of the workforce size over the next 20 years. Boeing’s vice president of business and general aviation William Ampofo told the audience at this year’s AirVenture that the key to solving the pilot crisis is expanding the pool from which everyone pulls their pilots. Markhoff hopes to do just that by attracting new students who never previously considered careers in aviation because of the exclusivity of the industry. At SEU, they’ll be offered cost-effective, accelerated Federal Aviation Administration Part 141 approved pilot training programs.
“Students will have the opportunity to complete their private pilot certificate and their commercial multi-engine and flight instructor ratings during their first eight months of enrollment, allowing them to work as flight instructors in their first year – building flight hours and earning wages, while accelerating their post-graduate careers,” Ingle explained.
SEU students can begin taking ground school and flight courses as electives in the spring of 2019, while the university plans to offer three aviation degree programs by the fall, pending approval from regional accreditors. Those degrees will be Associate of Applied Science — Professional Pilot, Bachelor of Science in Aviation Management, and Bachelor of Business and Professional Leadership — Professional Pilot. Courses will be available both online and at IAA’s classrooms at LAL. Federal loans are available for U.S. students.
Missouri-based Trans States Airlines, a United Express operator, also joined the partnership to offer a career pilot pathway program.
“The ability to provide a career pathway for students at the beginning of their academic career, coupled with an airline transition course specifically tailored for our airline, will both incentivize the next generation of aviation professionals and ensure their success,” said Lee Stelzner, director of flight operations at TSA.