A Sign that there will be some changes in pilot pay over time as the demand increases, perhaps a while to happen here but already happening overseas.
Some Chinese airlines, reacting to rapid industry growth, are seeking to attract experienced pilots by offering salaries and benefits roughly double that of the average U.S. airline captain, The Wall Street Journal reported Friday. Top salaries offered by some Chinese airlines exceed $225,000, and the country’s current pay leader, Hainan Airlines, is advertising pay packages up to $270,000 per year. That push is part of a surge that has over the past 18 months seen pay offers to foreign pilots rise by up to 30 percent, the Journal said. But with the pay comes a price.
According to one pilot who worked for a major Chinese airline in 2010 and 2011, the pay comes at the price of some of the longest duty times in the industry. And that situation may continue. China is only part of the Asian-Pacific region forecast by Boeing to need more than 180,000 new pilots by 2031. By Boeing’s estimate, the Asian-Pacific region will account for 40 percent of total pilot demand worldwide in the next two decades. And competition for attracting pilots may be on the rise globally. Currently, the foreign presence in China’s commercial pilot workforce accounts for only about 6 percent. In the U.S., the Bureau of Labor Statistics lists average pay for pilots serving as captains for major U.S. airlines at about $135,000, but it’s not clear if that number, too, may be on the rise. Recent changes to training requirements for airline pilots in the U.S. and forecast pilot retirements may put pressure on U.S. carriers to attract pilots, as well. That could further complicate matters for China, but may also lead to changes in how U.S. carriers seek to attract and retain pilots.
By W.J. Hennigan
July 22, 2013, 5:00 a.m.
Help wanted: At least 130 veteran military aviators for nine-year commitment to fly fighter jets.
Salary: $34,500 to $97,400. Plus good benefits and a $225,000 signing bonus — guaranteed.
Contact: U.S. Air Force by Sept. 30.
That’s the offer from the Pentagon, which is so short of Air Force fighter pilots that it’s boosting its salary package to make the job more enticing.
It may be hard to imagine that life as a high-flying fighter jock has lost its swagger, but the Air Force revealed it has a shortage of 200 fighter pilots this year. And if something isn’t done, the Air Force, which has about 3,000 fighter pilots, fears it may face a shortfall of 700 by 2021.
PHOTOS: Fighter jets
Empty cockpits are bad news for the military, which is already shoveling money into the development of the world’s most expensive program, the F-35 Joint Strike Fighter jet — expected to cost nearly $400 billion. The cost is a double whammy for taxpayers, because the Air Force said it costs taxpayers about $6 million to train a fighter pilot.
Several factors are behind the exodus of pilots, officials said, including a surge in demand for better-paying commercial pilots, the stresses of deployments and reassignments to fly combat drones, the remote-controlled technology that has reshaped modern warfare.
As a result, the Air Force is offering a souped-up incentive package under something called the Aviator Retention Program, which was first rolled out in 1989. The program now offers a $25,000 signing bonus per year for nine years — nearly twice as long as the usual contract.
“Were it not for the program, there would be a greater problem than the one we currently have,” said Lt. Col. Kurt Konopatzke, who oversees the program. “Senior leadership is aware of the problem and is very concerned.”
The Air Force wants to get as many of the 200 to 250 eligible fighter pilots to take the deal. Some already have signed on.
Today, just 65% of pilots are deciding to extend their service past their 11th year, when they choose whether to stay for an additional five years. That’s compared with 80% in 1993.
Air Force pilots typically earn about $90,000 by the time they complete their 11th year. The median annual wage of airline pilots, copilots and flight engineers is $103,210, according to the U.S. Bureau of Labor Statistics’ latest numbers.
There have been fighter pilot shortages in the past, but the competition promises to be fierce in the years to come as airlines hunt for young talent because of a surge in retirements.
Last year, passenger jet maker Boeing Co. released a report that estimated a global need for 460,000 new commercial pilots over the next two decades. There are currently more than 71,000 active airline pilots in the United States.
F-22 program produces few planes, soaring costs
Neither US Airways nor American Airlines, which are in the middle of merging, has hired pilots in more than a decade, and are now beginning a large-scale recruiting effort to fill spots.
US Airways and American are anticipating the retirement of more than 2,100 pilots within five years because of the mandatory retirement age of 65.
“The airlines are going to have more money to pay for pilots than the government,” said Rob Streble, 52, secretary and treasurer for the US Airline Pilots Assn., a labor union that represents US Airways pilots.
Streble knows firsthand, having left the Air Force as a pilot in the early 1990s for US Airways.
APC co-founder John Steinbeck sat down with Louis Smith, president of FltOps.com, to discuss where he sees airline pilot hiring heading the next few years:
It is just beginning and will be the longest and largest pilot hiring spree in the history of the industry.
Which sectors will show the most promise for professional pilots?
Among the primary career sectors (major airlines, corporate/fractionals, foreign/expats), the majors will return to the preferred positions for many pilots. The last ten years have been the worst I have ever seen, but the next ten years will be the best.
The four factors that created the depressed job market are now disappearing. The mandatory retirement age to 65, elimination of the third pilot, oil prices at $147 per barrel, and a severely depressed economy will soon be a distant and bad memory.
All the airlines are starting to show record profits even in a weak U.S. economy, and that has never happened. They have shown some remarkable restraint in expanding their schedules, but now they will have to expand since demand is recovering so quickly. With the baggage fees, the passenger airlines are finally getting compensated for turning jet fuels into lift, just like FedEx and UPS have done for years.
Will pay and benefits at the majors return to their pre-9/11 levels?
Adjusted for inflation, no. However, I do expect some contracts to show 30% increases in compensation depending on the success of the pilot unions to leverage their strengths.
Can companies really afford to do that?
The unions are figuring out that if passengers are willing to pay $25 for a Samsonite, they must be willing to pay a few more dollars for a “Sullenberger” in the front seat.
What about the highly-publicized stories predicting a pilot shortage?
I don’t think the U.S. major airlines will have a pilot shortage. Plus, it’s important to define what the term “pilot shortage” means. To me, it’s when companies pay for pilots to get necessary training to become minimally qualified. The major airlines are a long way from that and with a mobile work force and a highly-unionized pilot group, they will offer whatever it takes to attract qualified pilots. It’s a totally different story at the feeder airlines and the foreign carriers. I expect the feeder airlines (regionals) will need to spend money on low-time pilots to reach the minimums, especially with new regulations coming redefining the ATP.
The foreign airlines will simply ratchet down their minimum qualifications and increase the pay and benefits to increase the applicant pool and they will likely transition from training bonds to training bonuses to attract the talent they need. We see more of them coming to our pilot job fairs and there are continuous discussions with management about what it will take to improve the number of U.S. pilots willing to leave hearth and home and fly out of a foreign country.
Based on current fleet growth projections, senior pilot attrition will comprise nearly 65% of the pilot demand at the major airlines.
Some of the money for funding the early retirements might come from the sale of Eagle. I don’t think AMR can sell Eagle until contracts are settled at American among all the mainline unions.
American still has more than 1,900 pilots who are furloughed and everyone is guessing about the percentage who actually return when everyone is recalled. Many of the furloughees are permanently employed elsewhere.
How does an applicant stand out in today’s job market?
B. Develop extensive knowledge of the target company’s culture, strategy and market position well in advance of an interview.
C. Every employee that you know at your target company with any influence on the pilot screening decision makers should be well aware how badly you want the job.
D. Exceeding the minimum qualifications by a wide margin is significant, and always stay current flying if at all possible.
E. Be prepared well in advance to tell your story to the airline when called for an interview – waiting until two days before is a mistake.
F. Job fairs are very useful in accelerating the entire process (you knew I would say that).
What makes you qualified to discuss pilot career strategies and decisions? Aren’t you a little “old school?”
I have been in the business for a long time and have had the benefit of observing both the brilliant and inane career decisions made by professional pilots. I’ve made more than my share of dumb career moves. Thousand of pilots since 1972 (USAF pilot) have shared with me their ideas and experiences at all stages of their career. Although the industry and information sources have changed radically, there are certain constants which can be applied to most pilot career decisions.
August 2 is the implementation date for the new Part 121 regulation that requires all cockpit crew members to hold a Part 61-issued ATP certificate. That also means those airmen must have a first-class medical certificate if they intend to exercise the privileges of that ATP certificate.
The FAA emphasizes that P.L. 111-216 does not include any grandfathering provisions for current flight-crew members who currently hold commercial pilot certificates. The agency is also stressing that these changes will take effect from early August, “regardless of the FAA’s progress in related rule making.”