The Pilot Shortage: Air Service Impacts and Solutions

Wisconsin Aviation ConferenceApril 26, 2017

Regional airlines: Generally operate aircraft with fewer than 100 passenger seats

Regional airlines operated 44 percent of the U.S. departures and carried

157 million passengers in 2015

Operate flights as legacy airline partners (Delta Connection, American

Eagle, United Express) or independently under their own brands

Some regional airlines provide commercial service to small communities

under the U.S. Essential Air Service (EAS) program

Deliver SAFE, PROFESSIONAL, and RELIABLE service within the same

regulatory environment as legacy airlines (Operate under 14 CFR Parts

135 and 121)

Wisconsin scheduled passenger air service (OAG April 2017)

Regional Airlines provide 60% of all Wisconsin

passenger air service.

11 Regional airlines provided scheduled air service to

Wisconsin last year:

• Skywest, ExpressJet, Endeavor, Envoy, Air Wisconsin, GoJet, PSA, Mesa,

Shuttle America, Compass, Trans States

Regional Airlines are Sole Link to Global Air Transportation for Many U.S. Communities

Pilot Shortage Has Impacted Air Service

Regional airlines are on the front lines of growing pilot shortage that will deeply impact every corner of the industry within a few years.

Hundreds of communities have already lost some air service; dozens have lost all air service.

This is not economics. Profitable routes are being cut because there are too few pilots to fly all of today’s routes.

Pilot shortage persists despite dramatic pay increases for airline first officers.

Fewer new pilot certificates are being issued during period of unprecedented retirements at the major airlines.

Solutions can be achieved within today’s regulations while increasing safety.

Shrinking Hirable Pilot Pool

New Certificates Issued are Declining

ATP’s have increased 19 percent since 1990, which we would expect after FOQ rule. Overall trend is fewer new certificates (1990 vs. 2016: private -59% / commercial -34%)

University of North Dakota Pilot Supply Forecast 2016

Cumulative Pilots Needed by

2020:

18,643

RAA Total

Pilot

Workforce

in 2016:

~18,000

University of North Dakota Pilot Supply Forecast 2016

Includes new pilots entering the workforce

Total RAA

Fleet:

2,086

= 300 parked

aircraft

= 1,400 parked

aircraft

Far-Reaching Potential for Job Losses

According to DOT’s airline employment data (November 2016),

RAA airline members employ more than 59,000 people.

When aircraft are parked without pilots to fly them, the impact

is widespread and complex. Besides 20,000 pilots, regional

airlines employ:

15,000 flight attendants

8,000 mechanics10,000 support staff

1,000 flight control 5,000 customer service

Available ATPs? There are 125,727 ATPs in the FAA’s November

database,

But….there were only 92,291 ATPs residing in the U.S. with unexpired 1st or 2nd class medicals

Seniority lists for the legacy, regional, low cost, national, and large cargo carriers total roughly 86,000 (with many more are employed by operators who do not have or publish seniority lists)

Fewer than 7,000 U.S. ATPs with unexpired 1st

or 2nd class medicals unaccounted for on seniority lists captured here

No way to account for age, piloting or leadership skill, prior checkride failures, or other disqualifying factors such as DUIs and negative background events.

Total Seniority Lists 14-Nov

RAA Members 19,289

American Airlines 15,199

Delta Air Lines 13,658

United Airlines 12,505

Southwest Airlines 8,418

FedEx Express 4,288

JetBlue Airways 3,344

United Parcel Service 2,538

Alaska Airlines 1,700

Spirit Airlines 1,453

Frontier Airlines 1,007

Allegiant Air 770

Virgin America 710

Hawaiian Airlines 627

Sun Country Airlines 314

Total 85,820

RAA Member Airline Pilot RecruitmentRAA member airlines sought to hire 6,800 pilots in 2016 (preliminary data)

Between 2013 and 2016…

Approximately 300 U.S. airports

experienced schedule reductions of

10% or more

Source: RAA analysis of OAG schedules via PlaneStats online portal

Between 2013 and 2016…

Approximately 200 U.S. airports

experienced schedule reductions of

20% or more

Source: RAA analysis of OAG schedules via PlaneStats online portal

Between 2013 and 2016…

Dozens of U.S. airports lost

connective passenger air service

completely.

Source: RAA analysis of OAG schedules via PlaneStats online portal

Between 2013 and 2016…

Source: RAA analysis of OAG schedules via PlaneStats online portal

ATW (Appleton) -22% departures / -12% seats

LSE (La Crosse) -17% departures / -13% seats

MSN (Madison) -15% departures / +5% seats

GRB (Green Bay) -14% departures / -1% seats

CWA (Wausau) -7% departures / -8% seats

EAU (Eau Claire) -7% departures / -7% seats

MKE (Milwaukee) -6% departures / seats static

Seven Wisconsin airports

experienced air service reductions.

Attracting New Pilots

Innovative Career Progression Programs

Regional airlines have worked to support pilots by strengthening the career path, partnering with collegiate and training institutions to create career progression stability and opportunities.

• Tuition reimbursement agreements

• Internship, cadet, and leadership development programs

• Preferred or guaranteed hiring agreements

Many regional airlines also offer guaranteed interview or advancement (flow) to major airlines.

Regional airline social media pages show airlines taking every self-help measure to attract and retain qualified pilots, with flow programs and significant salary investments even in the early years.

Regional Airline Entry Level Wages Higher than Reported

Average total compensation for first year

First Officers at RAA member airlines is

$53,185.

Total career earnings for airline pilots is

estimated to reach $6.7 million.

For every 1 dollar spent on education, a

pilot earns $33 in salary, making a pilot’s

ROI higher than that of a doctor ($19), a

teacher ($23), lawyer ($30).

The pilot shortage has not been resolved

by recent wage increase trends.

RAA member airline average total

compensation increased more than 100

percent between 2015 and 2016, yet RAA

members actually hired 6.2 percent fewer

pilots than desired in 2016 compared to

2015.

$36,200

$40,140

$46,750

$60,160

$71,790

$86,990

$110,570

$117,290

$134,330

Median for all U.S. Occupations

Flight Dispatcher

Flight Attendants

Aircraft Mechanics and Service

Technicians

Occupational Health and Safety

Specialists

Industrial Engineers

Aerospace Engineers

Airline Pilots, Copilots, and Flight

Engineers

Financial Manager

Addressing High Barriers to Career Entry and Improving Aviation Safety

FOQ Rule Lowered Quality of Eligible Pilot Pool

FAA’s 2013 FOQ rule reduced the pool of hirable pilots by requiring first officers to obtain hundreds more hours in flight. While the increase in required flight hours has had negative effect on pilot proficiency, other elements of the rule advanced safety.

The hours in flight required by FOQ are not training hours. These flight hours are gained outside of the scope of instruction and may be obtained in various flying environments.

As pilots spend time building hours needed for eligibility, many lose recency of training, which is critical for pilot proficiency.

Post law, high time pilots did not perform as well in initial training as their lower time classmates.

Pilot Source Study 2015 An independent study examining training records of all part 121 regional airline first

officers hired since the FOQ rule’s enactment showed no positive correlation between higher hours in flight and a pilot’s proficiency. In fact, the inverse was true.

• New hire pilots performed worse, not better, in airline training

• Pilots hired after the rule experienced more training non-completions and require more extra training than pilots hired before

• Pilots with higher hours in flight fared worse than lower time counterparts

• Longer time between training and hire corresponded to worse training performance. Pilots lost recency, which is critical for proficiency

• Pilots holding R-ATP certificates (structured training backgrounds w/ fewer hours in flight) had best training outcomes

Researchers included University of North Dakota, Embry Riddle Aeronautical University, South Dakota State University, Purdue, Middle Tennessee State University, Arizona State University, and Ypsilon Associates, an independent research consulting firm.

RAA did not commission or fund the pilot source study.

Source: www.pilotsourcestudy.org

FAA’s 2013 FOQ Rule Impacted Pilot Supply

FAA’s 2013 FOQ rule reduced the pool of hirable pilots by

requiring first officers to obtain Airline Transport Certificate (ATP)

ATP requires hundreds more hours in flight and lengthens gap of

time between pilot training and hire.

As pilots build time, some lose recency, a critical factor for

proficiency. Airlines have expanded training footprints to provide

additional support.

The rule has had long-term impact on pilot supply because it

presents a steep barrier of entry to the pilot career path.

FAA’s FOQ Rule Impact on Pilot Career Aspirations

2015 University of North Dakota and University of Nebraska Omaha “Pilot Careers Aspiration Study Update” queried 820 aviation students or recent graduates from 49 education and training institutions and found:

• The 2013 FOQ rule change prompted 28 percent of aspiring pilots to “think twice about an airline career.”

• Additionally, 8 percent of those formerly planning airline careers “no longer planned to fly for airlines due to the rule.”

• Large numbers were willing to consider relocating overseas to allow an earlier career start.

• The study did not capture students who were deterred away from aviation altogether and focused on those remaining in the field.

R-ATP Pathways Authorized Under FOQ Regulations

Through PL 111-216, Congress authorized FAA to approve alternate pathways to the

commercial cockpit, extending credit for highly structured training toward flight hours

Pilots certificated through these pathways initially hold Restricted ATP (R-ATP) certificates.

These pathways are referred to as R-ATP pathways.

The FAA has already approved R-ATP pathways for military and two and four year degree

program institutions. These pathways count toward 250 – 750 flight hours.

A key requirement for these pathways is they must offer a higher level of safety than a

pilots’ accumulation of the associated hours in flight without structured training credits.

R-ATP pathways are well supported by the data, help support pilot careers, and should be

expanded to increase pilot proficiency and meet future workforce needs.

RAA Proposal: Additional R-ATP Pathways

RAA developed the Air Carrier Enhanced R-ATP pathway (ACE), which is just one example of an

airline-sponsored R-ATP pathway that would work within FOQ regulations like any other R-ATP

pathway today.

Empirical evidence shows pilots with lower expanses of time between training and hire perform

better than those with longer gaps. ACE is designed to bridge the gap between pilot training and

pilot qualification through additional structured training in the post-hire environment.

ACE includes but not limited to additional training and filters, screening, academics, expanded

oversight and testing, and other post-hire supports. ACE is qualitative, scenario-based, and highly

structured, fostering a higher level of pilot proficiency and enhancing safety.

ACE would be executed through a special FAR Part 121 initial pilot training program, in the post-

hire environment, before a pilot is released to line flying.

ACE is not a simple variation on airline initial training; rather, ACE is designed as a full R-ATP

pathway, with all the rigor, structure, academics, supports, and oversight required of R-ATP

pathways.

RAA’s Proposal and the FOQ Rule

Does RAA’s Proposal Repeal the FOQ rule?

• No. The Regulations already allow first officers to follow approved pathways to qualification:

– ATP Certificate: Achieve certain aeronautical experience requirements and attain 1,500 hours in flight

– R-ATP Certificate: Achieve certain aeronautical experience requirements, with FAA -approved structured training pathways providing credit toward a portion of the required 1,500 hours in flight.

• RAA has proposed an airline-sponsored R-ATP pathway within the current regulations.

Do R-ATP certificates offer reduced safety compared to ATP certificates?

• No. Data shows pilots holding R-ATP certificates actually perform better than pilots who hold ATP certificates.

Does RAA’s Proposal Seek a Reduction in the FOQs Required Flight Hours?

• No. As with all R-ATP pathways, the FAA would determine credit hours associated with the additional structured training offered.

• The law requires that FAA approve only those R-ATP pathways that enhance safety.

R-ATP Pathways Support Healthy Pilot Workforce

• Salary, quality of life, and career flow will help attract new pilots to the

profession, but FOQ’s flight time requirements still present a barrier of

entry deterring potential pilots from pursuing the career.

• R-ATP pathways help pilots overcome this high barrier of entry by safely

restoring a more seamless progression from training to flying.

• Airlines can invest in pilot career certainty by developing additional, airline-

sponsored R-ATP pathways that supplement those in place today.

Additional Measures to support the Pilot Workforce

Flight training is costly, and is not covered by student loans. Aspiring pilots must pay out-of-pocket or take on private loans, placing the career out of reach for many. Policymakers must consider innovative measures to help pilots offset training costs.

Many children never fly commercially during childhood. Outreach must start earlier and strive to include young people not otherwise exposed to flying.

Just six percent of commercial airline pilots are female. Outreach to women and girls is essential.

Programs like the Civil Air Patrol are critical for attracting more aspiring pilots and deserve support and funding.

Communities and organizations can defray costs of pilot training and present children with aviation exposure and flying opportunities through foundations and other avenues.

Guidance counselors can introduce pilot careers to students and parents when children are beginning to plan their education and career paths; but many if not most do not mention pilot careers. Greater outreach is needed.

Conclusions and Suggested Next Steps

Aviation safety regulations must be driven by evidence and empirical data, not sound-bites or optics.

We hear: “there is no substitute for an hour in flight.” However, the data shows not all hours of flight are equal, and proves structured training pathways superior.

Claims that regional airline service advocates wish to “roll back safety” or “lower experience requirements” for pilots are inaccurate. RAA is focused on creating additional R-ATP pathways to the commercial flight deck. These pathways are already allowed under today’s law and have been proven safer.

By attracting more pilots to the profession, increasing educational funding supports, and supporting R-ATP pathways that provide seamless and safe transition from training to flight deck, we can connect young people with a high wage / high reward profession, assure a safe and stable pilot workforce, and help keep every corner of the country connected to the nation’s air transportation network.

With your help, we can fix the pilot shortage.

U.S. Senate Support in the Senate is getting stronger

April 5 Rural Air Service Hearing

• Senators went on record discussing the concern

• Highlighted the pilot shortage

• FOQ and established there may be a better way to train pilots

Small Community Air Service Working Group

• Crafted by Senator John Thune (R-SD)

– Determine if federal funding is sufficient (grants to EAS, entitlements to airports) to ensure small community air service; consider strategies to train and keep pilots

• Made up of aviation safety experts, economic development officials, traveling public, and reps of state and local governments

Good chance to get language in the base bill of FAA Reauthorization in Senate

• Political environment is difficult; could preclude merit-based review of recommendations

• ALPA gearing up for fight

A breakthrough is needed with Senator Chuck Schumer (D-NY)

U.S. House

House support historically more difficult; fewer rural stakeholders

Successful March 18 hearing

• Skywest CEO Chip Childs

• Highlighted the pilot shortage

• Established there may be a better way to train pilots

ATC reform reigns supreme

• House transportation subcommittee members need to hear from Wisconsin lawmakers

Reluctance to put in base bill

• A deal being discussed for a floor amendment

• Please call your lawmakers – today

We can Resolve the Pilot Shortage with Your Support

How can you help?

• Thank your elected officials; ask them to call the House and Senate Aviation Subcommittee Chairmen and Ranking Members and ask what they are doing to resolve the pilot shortage

• These inputs are critical

• Consider letters, op-eds, raise the profile on the issue

How can your lawmakers help?

• Press activity from lawmakers (op-eds, quotes in press, etc)

• Inputs to Committees with jurisdiction and to Senator Chuck Schumer (D-NY) – we are not asking to repeal the law or rule; we want to work with Congress and the FAA toward a solution that respects the law, upholds safety, and allows safe air service to communities large and small. We have offered our proposal for input as a first step.

• Urge FAA to use its existing authority to expand R-ATP programs generally, ACE R-ATP specifically, also look at loan guarantees for flight training

Long term: Engage on FAA Reauthorization

It’s not “just economics” – challenge assertions that there are plenty of pilots, or that regionalization or sweeping air service losses are inevitable. They’re not!

Faye Malarkey BlackPresident