Aviation Industry Updates: October 5, 2021

US Airlines Recruit To Beat Pilot Shortage

• In early 2021, as vaccinations ramped up, air travel – especially in the USA – returned with a vengeance. Passenger traffic climbed dramatically, blowing away expectations, as customers scrambled to book flights after governments eased shelter-in-place orders and other travel restrictions.

• “Airlines are hiring like mad right now,” he says. Within a few weeks of applying earlier this summer, he secured a first officer job at a regional airline and began training in September.

• Looming age-driven retirements at many carriers – about 38% of commercial pilots are over the age of 50, according to simulator and training provider CAE – coupled with an air travel boom, a weak pilot pipeline and staggeringly high training costs, suggested demand would rapidly outstrip the one human resource that makes it all possible: the individuals at the front of the aircraft.

• The company put the professional pilot deficit number across civil aviation at 264,000 by 2029. Alone in 2021, the company said, 27,000 additional pilots would be needed to accommodate the rebound worldwide.

• With at least 3.8% of airline pilots retiring every year for the next 10 years, 126,000 new ones will be needed to offset those retirements and attrition, and another 93,000 to accommodate the industry’s expansion, CAE said. Its analysis added that at least 7,800 additional aircraft were expected to join the commercial airline fleet in that period.

• “Airlines had to adopt some different strategies when this crisis hit,” he says. “Early retirement seemed like an easy one, as did the leave programmes.”

• But these retirements, Murray says, accounted for as much as 15% or even 20% of the airlines’ seniority lists, leaving pilot ranks gutted of experienced aviators.

• “Unlike previous recoveries – where [airlines] could recall people and pretty much put them right back into the seat they left – this time the airlines are saying, ‘Holy smokes, we lost all of the senior captains. So we need to take the senior first officers, and move them into junior captain seats’,” he says.

• But while the numbers are progressively rising, they remain far from enough to satisfy the industry’s needs.

• In its most recent pilot hiring bulletin, published on 25 August, FAPA says that “pilot interview and hiring numbers keep climbing”.

• “The twelve major [US] airlines continue to recruit pilots and celebrate increased hiring numbers,” it says. “At this time, only three of our major airlines have yet to announce new pilot hiring numbers in 2021, all evidence points to the likelihood that they will in the coming months.”

Flight Global

Key Lawmaker Stands Behind 1,500-Hour Rule

KEY POINTS:

• Faced once again with a pilot shortage, some regional airline executives renewed their plea this week for relief from the 1,500-hour flight-training requirement that they say is ineffectual and imposes unnecessary barriers to entry into the profession.

• However, the remarks of one influential congressman offered the carriers no reason for optimism.

• "Having been there when we wrote the rule, I feel very obligated to it, and we should," House Subcommittee on Aviation chairman Rick Larsen (D-Wash.) said during a question-and-answer session at the Regional Airlines Association (RAA) Leadership Conference in Washington Tuesday.

• Some regional carriers say they are already feeling the pinch from a re-emerging pilot shortage, which prior to the pandemic had forced many of them to reduce their schedules while contributing to industry bankruptcies and closures.

• "We're truly hearing a big sucking sound now," Cape Air president Linda Markham said at the conference.

• The consulting firm Oliver Wyman has estimated that U.S. pilot demand in January will exceed supply by more than 9,000, a number that will increase to more than 12,500 by January 2023, according to the estimate.

• The re-emerging shortage has many of the same causes as the pre-Covid shortage -- a large number of pilots reaching the mandatory retirement age of 65, a reduction in the number of military-trained pilots who could quickly be hired and expectations of industry growth.

• Bryan Bedford, CEO of Republic Airlines, said he'd like to see a path for ATP certification that includes 300 hours of flight-school flying and another 300 hours of highly structured flying.

• But Bedford also said the regional carriers aren't pushing for Congress to simply do away with the 1,500-hour rule. Instead, carriers are pushing for the rule to be liberalized through the creation of new training pathways that would have fewer flight-hour requirements.

• Bedford asked Larsen if he believes the FAA has the authority to promulgate alternative pathways independently of Congress.

• "No. I don't think the FAA has that authority," Larsen said. "But I'm not an attorney either. But I also think the FAA would be wise to come talk to Congress if they were to look at those paths."

Travel Weekly

United Airlines Restarts Cargo-Only Flights

KEY POINTS:

• United Airlines has restarted cargo-only flights just weeks after assigning all aircraft to normal passenger operations because the delta variant has dragged down travel volumes and growth expectations for the remainder of the year.

• “I just released five [Boeing] 777-300s to our cargo division for later this year to put those aircraft back into all-cargo markets, based on the dynamics we’re seeing in the marketplace today, so these aircraft won’t be idle,” Chief Commercial Officer Andrew Nocella said at Cowen’s transportation investor conference on Sept. 9.

• Meanwhile, many companies are delaying returning employees to the office and many industry conferences have been postponed, pushing back the potential return of lucrative corporate travel sidelined by the pandemic. United officials say they will operate fewer aircraft for the Thanksgiving and Christmas holidays than originally planned.

• United was the most aggressive domestic carrier in redeploying aircraft for dedicated cargo operations when the pandemic wiped out most intercontinental travel. The airline flew more than 13,400 passenger freighters between March 2020 and late July. The focus on cargo paid off with record cargo revenues, including an 86% increase in the first half of the year to $1.1 billion compared to 2019. United is on track to top $2 billion in cargo revenue this year.

• Nocella said the cargo division hit “a home run” with its ability to manage the influx of business and satisfy customers’ delivery needs. Corporate officers have said the cargo team will retain a larger enterprise role by having greater influence on route selection in the passenger network, which comprises the lion’s share of business.

• “What we’re trying to do is create a level of stickiness with the revenue trends we’ve seen during the pandemic for a post-pandemic cargo environment,” Nocella said. “We’re working to figure out how we keep as much of that revenue on board United Airlines as we possibly can as we come out of the pandemic.”

Freight Waves

Record Number Of Fliers Strain The System

KEY POINTS:

• Private jet fliers are facing increasing delays, cancellations and lack of available flights as the industry struggles to serve a record number of new fliers, while facing supply chain troubles.

• July was the busiest month ever for private jet flights, with more than 300,000 flights, according to Argus International. While business usually cools in the fall, September saw nearly 300,000 flights and Argus projects October’s pace will break the July record.

• The flood of new private jet customers — driven by health concerns during the coronavirus pandemic and the rapid creation of wealth — is now taxing an industry geared for slower growth. A shortage of new and used planes, delays getting aircraft parts, crew and pilot shortages, catering snafus, and air traffic problems are combining to create a growing number of delays and cancellations, according to industry executives.

• Customers who paid five or six figures for their dream flights are now learning that even private jets encounter delays and logistics problems.

• “These are people who spent $200,000 and they want perfection,” said Doug Gollan, founder of Private Jet Card Comparisons, a website that reviews jet card programs.

• A Private Jet Card Comparisons survey of private jet fliers found that more than 20% had experienced a service issue in recent months.

• Fractional owners are also using their planes more. The supply shortage is feeding through the entire private aviation system, from charter companies and jet management companies to brokers and operators. The inventory of used planes is at all-time lows, and private jet makers Bombardier, Textron and General Dynamics’ Gulfstream have all raised production to meet demand.

• Pilots are in short supply as well. Many retired or dialed back during the Covid-19 pandemic, and with the commercial airlines aggressively hiring, private jet companies and owners are scrambling to find pilots. Finding cabin crew is also becoming difficult and costly.

• Shortages and delays are also hurting the availability of aircraft parts, which means that repairs that should take a day or two are now stretching for a week or more, taking more planes out of circulation.

• The cascade of problems has led some companies to halt sales and new customers. Sentient Jet just stopped sales of jet cards as of midnight on Sept. 30, saying it wants to focus on its existing customers.

• NetJets has halted sales of jet cards, fractional shares and leases for light cabin aircraft — like the Citation XLS and Phenom 300. The company said flight demand is the highest in its 57-year history, averaging 500 flights a day compared with under 400 in 2019.

• The big question is whether the more than 10,000 customers who started flying private for the first time during the pandemic will stick around if the problems continue to mount. Gollan said that while customers may complain about service issues, none of the 300 it surveyed said they planned to go back to commercial airlines.

CNBC

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