Three Reasons Why the U.S. is Running Out of Pilots

Travel season is upon us, and domestic airlines are facing a severe pilot shortage that’s not going away any time soon.

According to the Federal Aviation Administration, the U.S. currently has 159,000 active airline transport pilots. But to meet growing demand, we’ll need to train a staggering 87 new airline pilots every day for the next 20 years. Horizon Air’s vice president for flight operations said he wants to hire more than 300 pilots this year alone.

To recruit new pilots, Minnesota-based Compass Airlines has begun offering $17,500 signing bonuses to entice new recruits. Others are offering even more.

And it’s not only commercial airlines that are feeling the squeeze. Even the U.S. Air Force is having to get creative to recruit and retain pilots. And wages are so low at some regional airlines (where most airline pilots start), that military pilots have to take a pay cut when they leave the service. Federal agencies are also struggling to hire firefighter pilots, largely because there’s no formal training pipeline, and airlines are poaching their talent.

So what’s causing this shortage? Here are three contributing factors.

1. The Military Is Short On Pilots

 The military has long been one of the major pipelines for airline pilot talent. A significant number of airline pilots start their careers in the military, fly for 10-20 years, and then go into civil aviation. That’s why the military is among several of the top employers of pilots.

To find these top employers, we looked at the resumes and profiles of over 58,000 airline pilots, co-pilots, and flight engineers to see where they worked.

Figure 1. Top 10 U.S. Employers of Pilots

A prime example of this military-to-airline transition is Capt. Tammie Jo Shults. She served as a fighter pilot in the Navy for about 10 years before retiring and eventually taking a job with Southwest Airlines. Last month, she made headlines when she safely landed a Boeing 737 after one of its two engines exploded in mid-air.

Transitions like Capt. Shults’ are common and could explain why 68% of today’s airline pilots are 45 and older (Figure 1). The question is: when these pilots are required to retire at 65, who will take their place?

Note: Yes, there are licensed airline pilots who are older than 65. This represents pilots who have exceeded the age limit but whose licenses have not yet expired.

Figure 2. Estimated Active Airline Pilot Certificates Held By Age Group of Holder

According to a 2017 U.S. Department of Defense article, the Air Force, Navy, Marine Corps, and Army are all struggling to train enough pilots. All four branches cite inadequate funding for training and equipment. So while they wait for increased funding, the military is instead focusing on retaining the pilots they do have.

Meanwhile, civilian pilot demand has increased, pulling more pilots away from the military and putting even more pressure on the non-military training system, which is extremely expensive.

This brings us to No. 2.

2. Traditional Pipelines Are Drying Up

Airline pilots who don’t come from the military take the academic route instead. Using data from 58,000 resumes and profiles of pilots, we narrowed down the top 10 aviation schools.

Figure 3. Top 10 Aviation Schools in the U.S.

Surprisingly, the top program pilots go into in college is not aerospace engineering— although that comes in at a respectable No. 4. Business administration takes the top spot, while four liberal arts programs (education, liberal arts and sciences, psychology, and history) round out the top 10.

Figure 4. Top 10 Programs Studied By Pilots

Fewer Students Completing Pilot Programs

Government sources tell us that since 2010 jobs for pilots have grown by about 12%, adding over 9,000 new jobs. However, when we looked at our program completion data (a.k.a. graduates who have completed these educational programs) we see a mismatch between the amount of people being trained and the overall labor market demand.

For instance, in 2016 only some 2,000 people completed an academic program for airline/commercial/professional pilot and flight crew, but jobs grew by 3,800. In fact, there have been less than 2,000 completions per year since 2013. And this doesn’t even factor in the huge need for workers to replace retiring pilots.

To give a broader perspective, from 2003 to 2016, 35% fewer students completed academic programs for airline/commercial/professional pilot and flight crew.

There have also been significantly fewer student pilot licenses, which students need to fly solo, issued over the last 10 years. In 2008, the FAA issued 61,000 licenses. In 2017, that number fell to 38,400. Granted, rule changes in 2016 likely had a major effect on these numbers.

We also need to consider the fact that a lot of international students attend flight school in the U.S., and many of these license holders may not go on to fly for American airlines. To top it off, these 38,400 new student license holders still have to complete their 1,500 hours of flight time before they can begin working. By then, how many more current pilots will have retired?

Extensive (and Expensive) Training Deterring Students

It used to be that pilots could get their start in the military, transition to a small regional airline, and then move up to a larger carrier.

But when standards and flight-hour requirements were lowered, some regional airlines had accidents, most notably the Colgan Air crash in Buffalo, New York, in 2009 that killed 49 people. As a result, Congress and the FAA changed their rules. Co-pilots’ flight-hour requirements increased from 250 hours to a whopping 1,500 hours. Pilots must also have 1,000 hours as a co-pilot.

When flight time can cost more than $100 per hour, training expenses add up quickly. Especially when you’re tacking them onto a college degree. Even JetBlue’s innovative Gateway Connect program still costs $125,000 and requires four years of training. Many students never make it to the cockpit.

However, some airlines are starting new programs to help address these issues.

3. Compensation Isn’t Matching Investment

Given how expensive it is to become a pilot, one would assume that the pay would make it all worth it. But that’s not necessarily the case.

If airlines are going to combat the pilot shortage, they’ll need to take a hard look at what they’re willing to pay. Because not only are American airlines competing amongst themselves for new talent, but they’re also competing against high-paying global airlines. In this competitive market, money talks.

Using our compensation model, we took a closer look at domestic wages for airline pilots. Below you can see the spread of their wages. For example, employers willing to pay $40/hour for pilots only have access to about 22% of the available workforce (18,597 workers). Employers who are willing to pay $100/hour will have access to 79% of the total workforce (66,911 workers).

Figure 5. Pilot Availability by Wage

This makes sense, since median pay for airline pilots is currently $127,820. Pay ranges between $65,000 at the low end (10^th percentile) and $251,000 (90^th percentile) at the high end.

Figure 6. Annual Compensation From Low to High

If employers want to recruit and retain quality pilots, they’ll likely need to up the ante on compensation, particularly for entry-level pilots.

Pilots Could Make More In Other Fields

Being a pilot comes with a lot of baggage (pun absolutely intended). Not only is it expensive and time-consuming to become one, but once you finally get there, you’re met with demanding schedules, and a lot of responsibility mixed with lots of bureaucracy. Combined, these factors likely dull the appeal of the relatively high salary you can achieve as a pilot.

As of 2017, the median hourly earnings for airline pilots, co-pilots, and flight engineers is $61. This is good, but there are many other in-demand options that rival that salary and require far less education, training, and stress. Air traffic controllers, for example, have median hourly earnings of $58. And they don’t always need bachelor’s degrees. In fact, only 34% of air traffic controllers have a bachelor’s degree.

Here are a few other examples:

• Marketing managers— $63
• Financial managers— $58
• Sales managers— $56
• Computer hardware engineers— $55
• Political scientists— $54
• Software developers— $51

If you have questions about this data or are interested in exploring it further, please let us know. Feedback and research topic ideas are always appreciated.

For more information about Emsi, visit EconomicModeling.com, contact Rob Sentz at [email protected], or follow us on LinkedIn or Twitter.

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