Airlines will need to hire 440,000 additional pilots in the coming 20 years.
Exhibit 1 | Industry Average - Pilots per Aircraft
Source: IATA WATS and ICF analysis
Consequently, today’s pilot pool of 377,000 pilots will need to grow by approximately 220,000 additional heads by 2037.
That number doesn’t even account for pilots on the edge of retirement. A typical pilot career spans 40 years, which means that in 20 years, at least half of the current pilots can be expected to retire. In reality, more than half of our current pilots will retire, because the pilot population has been aging during the last decade. This is true in most of the regions, but especially in the developed world.
Overall, we can conclude that the industry will need to recruit more than 440,000 new pilots in the coming 20 years.
Let’s put those numbers in perspective. At first glance, there is precedent for this kind of growth — the global commercial fleet has already doubled over the previous 20 years. But our current situation is slightly different.
Where will new pilot capacity come from?
Traditional sources of additional pilot capacity are unlikely to supply enough pilots, quickly enough this time.
In the past, airlines facing a shortage could recruit pilots from the military. Today though, even the U.S. Air Force suffers from a lack of applicants. Further, as the military increasingly relies on drones, they will not need as many pilots per aircraft in the future. The ones they do need will likely require different skills than their commercial counterparts.
Also, in the past, many aircraft had a third or fourth crew member in the cockpit. When these positions were no longer needed in more modern aircraft, pilots simply progressed to become first officers and captains. This supply of pilots is also no longer available now, unless the industry moves to a single pilot aircraft technology, but there seems to be little support for such a move.
Qantas Group CEO Alan Joyce commented on the potential for reducing pilot numbers onboard aircraft, stating: "Certainly there is still a public perception issue and I think there will continue to be for some time about being too automated when it comes to commercial aircraft."
"Having a pilot to load-share with you in command of an airplane is invaluable," said Australian Federation of Air Pilots president David Booth. "We are not at all interested in these one pilot concepts. They are driven only by costs."
Discounting the unlikely scenario that the flight time limitations will be eased, the next generation of pilots will need to come from other sources, such as:
- Pilots who do not fly for commercial airlines. This pool is quite large: only 29% of U.S. pilot licenses are valid for commercial air transport (26% in the UK).
- Aspiring pilots from outside the industry. These professionals are the most expensive source given the substantial investment and time needed to train them.
It’s unlikely, though, that either one of these could offer a quick fix — for one, the attractiveness of becoming an airline pilot has faded over the years. Also, recruits from these sources need to be trained, which can take years. In the short term, airlines facing pilot shortages can increase pilot salaries and attract pilots from other airlines who are less able to raise salaries — but this does not solve the capacity shortage on an industry level.
Given these constraints, how can airlines possibly contend with the shortage?
Growing productivity to shore up capacity
In our opinion, the third source of additional pilot capacity could be an improvement in pilot productivity. The next exhibit demonstrates the untapped reserves in this respect.
Exhibit 2 | Average Daily Aircraft Utilisation vs. Annual Flown Hours of Pilots
Sources: IATA, ICF analysis (Note: each dot represents an airline)
Most of the jurisdictions limit the count of annual flown hours for pilots at 800 – 1000 FH per year. Our data (Exhibit 2), though, shows that the average across some 173 different airlines is actually closer to 600 — and, for 65% of those airlines, that number is even lower.
Also, the big spread between the dots indicates that even at similar aircraft utilisation levels, some airlines are achieving much lower pilot productivity than their peers.
If these lower performers improved their pilot utilisations by just 10% individually, the industry would gain the equivalent of the production of approximately 3,700 pilots. That translates to the flight hours of an airline the size of Emirates.
In ICF’s experience there is no single major route to achieving higher pilot productivity. Typically, airlines achieve good pilot productivity through many small levers.
For a start, the airline’s commercial network and schedules define the playing field for the crew schedules. A network with high frequencies is more likely to trigger high pilot productivity and recovery from disruptions is also easier when frequencies are high. An airline that experiences lower pilot productivity will typically suffer from multiple causes rather than from one big cause. Some of the more typical causes we have encountered are:
- Lack of coordination between commercial scheduling and operations which may cause late changes to crew planning
- Aircraft rotations that do not facilitate efficient crew pairings
- Training taking longer than planned to complete (sometimes due to shortage of instructors or ground facilities)
- Too much positioning/deadheading due to crews employed in the wrong place
- Unnecessarily high amount of standby to cover the operational risk at any particular time
- Unstable rosters
- Poor on-time performance disrupting the rosters, requiring large contingency
- Inability to balance roster production
- Learning how to use new ‘more sophisticated’ IT systems
Interestingly, the pilot productivity fluctuates over time. In good years, airlines tend to grow their pilot pool compared to their fleet size, decreasing the average hours each pilot flies. During bad years, this trend reverses (Exhibit 3).
Exhibit 3 | Industry Average Flown Hours per Pilot vs. Industry Operating Results
Source: IATA WATS and ICF analysis
By returning to pilot productivity levels experienced before, the industry could gain 16% more pilot hours.
Right now, we’re seeing lower-than-average flown hours per pilot (also seen earlier with a relatively high ratio of pilots to aircraft in historic perspective). This leads us to believe that the untapped productivity potential of the industry warrants attention. If the whole industry returned to the productivity level of 670 FH per pilot (as it was in 2009) the pilot pool could deliver 16% more flight hours, or enough to staff seven airlines the size of Emirates.
Time for a health check?
With all that in mind, now is a good time for airlines to perform a health check on their pilot supply chain and planning processes:
- Improving pilot productivity can grow available pilot capacity on the short term. And if the improved productivity is sustained, the airline will need fewer pilots on the long term as well.
- The industry achieved a good improvement of flown hours per pilot between 2002 and 2009, demonstrating that higher levels are achievable.
- At a time when pilot salaries are going up, improving pilot productivity is one lever that airline management can pull to mitigate the negative effect on the cost base. If productivity is not improved while pilot salaries are raised, that means inefficiencies are replicated with a higher price tag.
- In our experience, streamlining processes, improving the stability and the way pilots are deployed are usually welcome by all stakeholders.
- Finally, it is a generally good practice to pause for a moment sometimes and reconsider the way operations are conducted. Usually, several opportunities can be found to improve the lives for both the pilots and airline planning teams.
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