Mass retirements and pay increases in the airlines pose a challenge for Part 91 flight departments looking to attract pilots.
By Shannon Forrest
President, Turbine Mentor
ATP/CFII. Challenger 604/605, Gulfstream IV, MU2B
It’s the best of times or the worst of times. Identifying which of these it is depends on whether you’re an employee or employer. It also depends on how long a job candidate has been involved in an aviation career, and when he/she first sought employment as a pilot.
The past decade is an objective marker for analysis. Ten years ago, open pilot positions attracted a substantial number of candidates. All of them were equally competitive in terms of experience, flight time, and educational background.
A type rating and college degree were prerequisites for an interview. Salaries and benefits were stable and consistent, and varied only because of cost-of-living adjustments or performance bonuses like profit sharing and dividends.
Once hired, a newly employed pilot was likely to stay at that job until retirement. The market favored the employer, and applicants had to make some sacrifices if they took the job offer. In the airline world, this might mean low starting (probationary) salaries and commuting to an undesirable domicile, while in corporate aviation it could mean relocating one’s primary residence to the company’s home airport.
Some 30 years ago, the situation was even more employer-friendly. In the early to mid-90s, pay-for-training schemes were commonplace at the regional airlines. To get an interview at a regional, a pilot typically needed at least 1000 hours of multi-engine time, with at least 250 hours as pilot in command. If the pilot completed both the interview and technical skills evaluation successfully – the latter typically conducted in an ATC-710 or Frasca multi-engine flight training device set up to replicate a high-performance twin – he/she was offered the job.
However, there was one caveat that came with accepting the offer – the requirement to show up with a check made out to the company delivering the simulator training. The irony was that the cost of training funded by the job applicant often approached the first-year salary. In essence, a pilot was working for free in his/her first year of employment. This methodology was controversial and divisive, and many pilots branded it as “buying a job.”
Just getting the required multi-engine time for an interview could be difficult. In response, companies sprang up under the guise of “building time” and sold multi-engine time to commercial-rated pilots who didn’t meet the minimums needed to apply to the airlines.
The whole practice was somewhat dubious, and the owners of these organizations subjectively and liberally interpreted FAA regulations regarding logging of pilot in command (PIC) time. In one case, 2 multi-engine instructors sat in the left and right seat of a Seneca or Seminole, and each logged the time as PIC. To justify this behavior, one pilot logged the time as providing instruction.
The marketing ploy was that 2 pilots were simultaneously logging multi-engine PIC time while splitting the cost of renting the aircraft. Despite claims to the contrary, no real training was occurring.
In another case, an operator was charging pilots to operate as the copilot of a Piper Navajo (an aircraft certified for single-pilot ops) while transporting paying passengers in the back. It was a classic case of double dipping for the aircraft owner. Jobs during this time were so scarce that pilots would do whatever it took to accrue the requisite flight time.
The market was so competitive that pilots sometimes took to undercutting each other when it came to salary. The mantra “I’ll fly for free” became the rallying cry of the day. The infamous t-shirt with a graphic of the phrase “Will fly for food” scribbled on a brown paper bag with a sharpie began to appear in pilot shops. Most pilots who purchased and wore the t-shirt did so to satirize the current times, rather than solicit themselves for employment.
The corporate equivalent of pay-for-training was the training contract. If a pilot was hired into a corporate flight department, he/she was required to work for the company for a certain period. Otherwise, he/she would be responsible for paying back the cost of his type rating or training. These contracts were typically prorated in that the balance to be paid back would decrease continually with each month of employment.
The legal question was whether these contracts were ever enforceable to begin with, and many pilots took the matter to court and received an outcome in their favor. Other pilots received financial judgments against them. In nearly all cases, the pilot had been offered employment elsewhere before violating the contract, so a negative reference from the prior employer was not a big concern.
Leveling the field
Somewhere between then and now, all the market forces changed. A newly-certified pilot seeking employment in 2023 has hit the proverbial jackpot, both in opportunity and in compensation. Although the industry uses the term pilot shortage, that term has been bandied about for the better part of 2 decades (at least).
Whether or not there’s a pilot shortage depends on who you ask. A pilot who came through the pay-for-training era of the 1990s, and is still flying professionally, will be skeptical of the assessment.
According to Boeing, 602,000 new pilots will be needed to fly the global commercial fleet over the next 20 years. Employers – both airline and corporate – are reporting that finding pilots to fill the ranks (or keeping the pilots they have) is increasingly difficult. The question is twofold – Why aren’t there purportedly enough pilots now, and why won’t there be enough in the future?
Perhaps a more important question is: What can be done to fix it? One response to the recent Covid-19 pandemic was to reduce the ranks of professional pilots by offering early retirement compensation packages to airline pilots nearing mandatory retirement age. These programs offered a partial salary to retire early – for instance, a guaranteed 50-hour minimum per month instead of the 85 hours per month the pilot was getting to work full time.
The intent was to shed expenses and keep the airlines financially viable by shrinking the numbers of the highest-paid employees. Hundreds of pilots took advantage of these offers, which only exacerbated the mass retirements occurring daily and that will continue to occur over the next decade.
The unintended consequence of a quick return to post-Covid flying was an inadequate staffing model to meet the schedule. Part of the problem was that so little flying during Covid caused a large part of the workforce to disqualify on landings, which meant a return to the flight simulator. Major airlines weren’t necessarily short on qualified pilots, but were short on pilots who met FAA currency requirements.
Barriers to entry limit the number of candidates in any career field. These barriers to entry can be based on knowledge, skill, finances, or otherwise. Barriers to entry are most severe at the initial entry level. For example, to become a doctor or lawyer, a candidate must achieve a competitive score on a standardized test, then attend school and figure out how to pay for it.
Except for standardized testing (excluding the military), someone who desires a career as a pilot faces the same obstacle. There’s always the question of return on investment. A student who attends an aviation program at a state school or private university that culminates in a 4-year degree and multi-engine commercial flight certificate will spend a minimum of $250,000 for that education. Similar flight training without the degree at a Part 141 Pilot School averages roughly $65,000. Ten years ago, that education might have garnered a first officer position that paid $30,000 a year flying a regional jet in some of the most complex airspace in the US.
It’s not about money
Unlike graduating medical school, where bestowing “MD” after one’s name guarantees a minimum level of income and opportunities, the title “ATP” means nothing.
A pilot with ATP after his name could spend a career towing banners over Myrtle Beach for $20 an hour and never achieve the $300,000 a year promised by the college recruiter. Given a calculation on return on investment (or lack thereof), many potential pilot candidates never entered training, or left training, a decade ago.
The combination of a reduced number of pilots in the pipeline and retirements meant employers had to increase salaries and benefits to attract and retain employees. The major airlines poach pilots from the regionals, which in turn poach pilots from flight instructing and Part 135 operations.
Each segment of the industry has seen a substantial increase in pay and benefits. In addition, airlines are engaging in non-traditional recruitment methods to get candidates to enter the career. These include flight academies that provide guaranteed financing to pay for flight training, and diversity programs that target demographics not currently prevalent in the career field. A reduction in applicant numbers always equates to a reduction in hiring standards. In many cases, a college degree is no longer required. And multi-engine requirements are as low as 50 hours at the regional airlines.
Historically, a corporate pilot job was desirable and considered a good career. Today, the question is not whether it’s a good job, but whether it’s a good job compared to something else. Whenever someone says it’s not about the money, it’s usually about the money. Or at least partly about the money. Even at the regional airlines, the starting salary has gone from $30K to over $100K over the past decade. This massive increase in airline compensation has caused some corporate pilots to rethink their career aspirations, and dissuaded others from applying to corporate flight department positions.
Aside from salary, corporate pilots tout retirement contributions as a reason for applying to the airlines. At the major level, airlines are contributing 15–16% of base salary to a pilot’s 401K retirement account, with full vesting in a few years. This is a known issue, and corporate flight departments continue to struggle to match the financial aspect of compensation packages.
Benefits of flying corporate
Despite clichés, choosing to be a corporate pilot doesn’t have to be about the money. Some airline pilots remain career first officers and never choose to upgrade to captain, even though doing so would guarantee a 60% raise in pay. The reason they don’t upgrade is quality of life. They’re senior enough in the seat to control their schedules and days off, and upgrading would upend that.
Many corporate pilots would similarly forgo airline captain compensation for quality of schedule and control of days off. Living in a base and not having to commute – especially when every airline flight is full these days – is another benefit of corporate flying. Some corporate flight departments provide hotel rooms at the airport the night before a trip for pilots who live in the suburbs, which further reinforces the quality-of-life paradigm. Flying nicer (more modern) aircraft to varied and interesting destinations is another selling point of corporate aviation.
Another consideration when recruiting or retaining corporate pilots is age. Flight departments tend to focus on the middle of the age group, but there are opportunities at the younger and older ends of the spectrum. Younger candidates can be brought on board with internship opportunities (and possibly flight training stipends) that focus on being a corporate pilot. And former airline pilots who retired at age 65 and aren’t yet ready to give up flying might be suitable contenders as well.
Right now, there’s serious talk about increasing the airline retirement age to 67. Now may be the time to lock in good applicants before that happens.
It appears that retaining and attracting pilots is going to be an issue for some time to come. Aside from the obvious pay bump, it’s going to take a little creativity to find and keep the good ones.