Where have all the pilots gone? How a looming shortage may curtail e-commerce

Bug smashers, nearjets, flippers, junkstreams. To most pilots, these names conjure memories of their first jobs in the business, flying small aircraft for regional carriers, often carrying cargo. “It’s real flying, the sort that puts hair on your chest,” a seasoned American pilot named Dover explained. “There’s nothing glamorous about it. You are the dispatcher, it’s your job to check the weather, and if it’s legal to go, you go. But at the end of the day, I wanted to be there because I wanted to fly. I wanted to be a pilot.”

A lot has changed since the late 1990s when Dover logged 250 flight hours, earned his commercial pilot certificate and started flying a small plane for a regional cargo carrier based out of Florida, “flying blood, piss and checks around at night.” He’s since moved up to a major carrier, and now pilots widebody freighters around the world. But the pool of young pilots waiting to replace him is drying up. No pilots means planes can’t fly, and that’s a looming problem for the air cargo business at the dawn of the e-commerce era.

Regional carriers in North America have started performing triage, reducing schedules and cutting routes, but there’s no end in sight. In fact, it’s about to get worse. A 2013 investigation, sponsored by the University of North Dakota (UND), projected that 45,000 pilots will retire by 2033, more than twice the 18,000 regional pilots in service at the time. Each year, fewer pilots are moving up the ladder, and all the while, demand for passenger and cargo services keeps rising.

America’s pilot shortage is a slow-burning crisis that has the potential to disrupt the national economy and undercut growing sectors like e-commerce. The U.S. Federal Aviation Administration estimated that the U.S. airline industry contributes more than US$1.3 trillion to the national economy, or 5.2 percent of the country’s GDP.

While larger carriers are still flying lucrative e-commerce goods, pharmaceuticals, perishables and high-end electronics, the issue is beginning to fester at the roots of the industry. Airlines that connect small-town America to the large package delivery hubs of the integrators are downsizing for lack of pilots. Carriers that serve the major integrators report being forced to abandon routes, furlough employees and forego millions of dollars in revenues because of the pilot shortage.

The problem is moving up the food chain. “Major trunk airlines have begun to see ‘no shows’ in their new-hire pilot training classes as a result of more attractive offers from competing carriers,” said John Hazlet, vice president of the Regional Air Cargo Carrier Association (RACCA). “This situation was unheard of only a few years ago, when a class date at a major airline was regarded as a priceless commodity.”

As Southwest Airlines’ senior manager Greg Muccio phrased it, “if we don’t have enough pilots, planes don’t fly.”

Anatomy of a shortage

The factors that led to the scarcity of new pilots are numerous, but one incident on Feb. 12, 2009, could be considered a major catalyst. On that day, Colgan Air Flight 3407, flying under a code-share agreement with Continental Airlines, crashed en route from Newark to Buffalo. The Dash-8 Q400, entered an aerodynamic stall from which it did not recover and slammed into a house in Clarence Center, New York, killing all 49 passengers and crew on board, as well as one person on the ground.

A subsequent National Transportation Safety Board investigation found the probable cause to be the pilots’ inappropriate response to the stall warnings due to inadequate training. Families of the victims lobbied the U.S. Congress for more stringent regulations for regional carriers, and more rigorous scrutiny of operating procedures and working conditions of pilots. Congress responded by passing Public Law 111-216, which mandated 1,500 hours of flight time and airline transport pilot certification (ATP) before most pilots could fly commercially. The new stipulations raised the barriers to entry overnight.

According to the UND study, adjusted for inflation, initial pilot training is “almost three times more expensive as it was in 1990.” Meeting the new training requirements can cost pilots upwards of $160,000. That’s the cost of a law degree. But, with starting salaries at regional carriers in the $50,000 to $60,000 range, the costs outweigh the rewards for many, and the scheduling is a further deterrent. Then there’s time. After certified flight instructor (CFI) instruction, an additional two years of flight training will be needed to achieve restricted ATP minimums. These factors have caused a significant rise in the number of career-oriented pilots abandoning their training for financial reasons.

President Trump has said he wants to spur domestic manufacturing, however, that will require timely connectivity and, aside from balloons, most aircraft need more than hot air to fly. But lawmakers in Washington, D.C., including Sen. Charles Schumer, who introduced the legislation partly responsible for the current crisis, are stonewalling industry representatives. “We have turned to the government, and to date, we’ve had no success in lobbying The Hill or the FAA in getting any relief in the pilot’s hiring requirements,” said Stan Bernstein, president of RACCA.

One reason Congress might be slow to respond is that, on paper, U.S. flight schools are still churning out a respectable number of commercial-instrument, multi-engine pilot certifications. A GAO report, commissioned shortly after Public Law 111-216 went into effect, substantiated this, but failed to acknowledge that the majority of students seeking certification in the U.S. were from foreign countries. One RACCA publication found that, “85 percent of these pilots are funded with foreign money, will go to foreign airlines, and will never enter the U.S. pilot market.” The statistics are skewed, and according to RACCA, so is Congress’ appreciation of the situation.

At the moment, regional carriers are experiencing the brunt of the pilot’s shortage, and on the cargo side, the shortage is disruptive. Bernstein said that some RACCA airlines had been forced to raise salaries by 80 percent over two years just to maintain crews. Tim Komberec, president and CEO of Idaho-based Empire Airlines, said that the number of people entering the profession was 20 percent of what it used to be. “We’re in trouble,” he concluded.

It could get worse

Small-package delivery services via hubs in Atlanta, Memphis, Cincinnati, and Fort Lauderdale are already experiencing disruptions, according to members of RACCA. In other words, despite their assurances, FedEx, UPS, and DHL are already running up against the shortage. While their own pilots are at the top of the ladder, many of their routes are contracted out to smaller airlines. In addition, the five years retirement extension to 65 years of age is starting to hit the ceiling.

The UND study paints a dire picture. By 2020, unfilled pilot vacancies will exceed 8,000 per year, and by 2025, that figure will be more than 12,000, eventually exceeding 15,000. These statistics, in conjunction with Boeing estimates that North America alone will need 112,000 new airline pilots over the next 20 years, are cause for alarm.

“Millions of Americans are not going to get their online purchases delivered to their front door if the situation does not improve,” RACCA’s Bernstein warned. He noted that, while pilot shortages on the regional passenger side were well known, those same communities “are going to be surprised when what they ordered online isn’t delivered in a timely manner.”

The disruptions extend to other shipments, and ultimately general air cargo. Manufacturing equipment that needs to be rushed to assembly lines will take longer to reach peripheral economic centers, costing businesses millions of dollars per day. Medical testing samples might start to travel over land, endangering lives and preventing timely treatment. Across the U.S. economy, there are few areas of activity that aren’t at risk.

Forwarders, while less exposed at this point, are also repositioning their assets towards a smaller footprint and warehouses that are closer to the last mile, making agility a more important asset. “That means not relying on mega-distribution centers,” explained Mike Short, president of global forwarding at C.H. Robinson.

Amazon made headlines last year when it started leasing its own Prime Air aircraft to better control its capacity. However, the union representing pilots flying for Amazon warned that pilot turnover had tripled. Both Atlas Air Worldwide and ATSG, which are contracted to pilot the 767F aircraft for Amazon are sanguine in public, but there are rumors of low turnout to hiring classes and higher turnover as competition for pilots makes its way up the food chain.

Cancelled routes and schedule reductions are especially concerning to Komberec, of Empire Airlines. Over the last 18 months, Komberec has been forced to restrict scheduling and turn down new business, while contending with growing internal restraints. “Our customers have to be much more careful about how they deploy us as an asset,” he said. “We’re still carrying the freight, but some days are tougher than others.”

What needs to be done

At this point, there isn’t a silver bullet, since many of the problems won’t be felt for a few years. And with Washington still unresponsive, U.S. carriers are thinking about other ways to lure pilots into the business.

On a practical level, one improvement would be to use regional cargo carriers and training feeders for the larger airlines. That would involve lowering requirements for smaller cargo aircraft, and letting new pilots gain experience on cargo flights. It’s also a compromise that seems to address Sen. Schumer’s concerns about adequate training to protect lives. Komberec stressed the importance of this sort of cooperation between regional and national carriers, and training pilots for major carriers in regional cargo planes is a great start.

RACCA also points out that the FAA has the authority to “expedite and grant current petitions and exemptions that do not violate the public law, but will greatly increase the available pilot pool.”

Looking further ahead, there has been informal discussion of a national program that promotes entry into the business, although Komberec notes that, “it is only talk at this point.” What such a program would look like is therefore uncertain, but it’s goal would be to make pilot training affordable and attractive, either via public funding, or some public-private partnership model, in which pilots would pursue training at a lower cost, with the expectation that they would take certain lower-tier jobs. Such a model is already well established in Europe. Many foreign students in U.S. flight schools are enrolled in these programs, and are sponsored by their national carriers. South Korean students, for example, gain experience co-piloting Ameriflight regional cargo aircraft, while their sponsors pay Ameriflight. Everybody wins.

Until such compromise solutions become more available, people learning the trade like Dover did, by instinct in bug smashers, may become a dying breed.

Komberec and other regional bosses understand that the day is approaching when they will simply have to say, no. “At some point, overnight services to smaller cities will be relegated to two-day trucking, and a lot of critical overnight service is going to be taken away from smaller communities. There will be some form of degradation of the services that we enjoy today.”

Back to top

Exit mobile version