We asked renowned aviation consultant Kit Darby for his analysis and prognosis, and this is the report he produced – in a nutshell, recovery is expected in the time it takes to qualify for the job of an airline pilot (2-3 years):

The best position to be in for an up-and-coming airline pilot in the recovery ahead is to continue your training and build the flight experience needed to be the most qualified and experienced pilot in the application stack. If it takes 2-3 years to qualify and gain the experience you need to fly for an airline, there is no better time to start or continue your training than now.

β€” Kit Darby

Click Here to have a PDF copy of this document emailed to you

Will Your Airline Pilot Career Survive COVID-19?

By Kit Darby www.kitdarby.com

Airline Survival

Yes, the airlines will survive and thrive after COVID-19 but it will take a while to get back to 100% and grow beyond previous levels. What does a typical recovery look like? Taking a look at previous economic, medical, and security events in the past like The Great Depression in 1929, 9/11/2001, SARS in 2003, MERS in 2012, I see a combined rapid in and out β€œU” shaped recovery (Red lines below), initially, followed by a slower β€œL” shaped recovery (Blue line below) lasting several years. It should look something like this; initial β€œU” (Red) plus a 1 (Green), Β 2 (Blue), or 3 (Purple) year slower β€œL” recovery shown below:

 

Airline Recovery Template

 

The variables will be how bad the virus gets and how long it lasts. These questions have not been answered at the time of this letter, but they will be over the next few months. The recovery from a virus usually takes about the same amount of time that it takes for the virus to peak according to the World Health Organization. So, if it takes 3 months to reach the peak it will be about three months to move back toward normal, six months total. This assumes that the measures we take to control the virus’ spread continue to be successful. The virus recovery period could be shortened if effective treatments are found or a vaccine is developed.

 

1-Hour Webinar with Kit Darby (May 2020) on The Airline Pilot Career Post-COVID

 

Worldwide Recession

The next issue is the worldwide recession that will follow the financial shock caused by the lock-down measures needed to control the spread of the virus. This is what causes the slower and longer β€œL” shaped part of the recovery. The cost of the lost business to our economy and especially to the airlines until this virus has passed is going to be huge. The government stimulus will help but it will not be enough to make the airlines whole again when this is over. There will be a portion of their business that will require a slower recovery pace.

Those with the lowest risk are domestic airlines with a single aircraft or limited aircraft fleet and a strong balance sheet going into this mess, like Southwest and Alaska, because domestic travel will recover more quickly, training costs are lower by having just one or a few aircraft types, and cash is king in a recession.

Those at greater risk are the large network airlines like American, Delta, and United because they have large international markets, many different aircraft types, and a smaller percentage of cash reserves; International flying will return more slowly due to government restrictions caused by continued medical concerns as the virus moves through the less industrialized areas around the world – the international recovery can only be so fast. Another issue that will slow the recovery at some of the legacy carriers is their stated intention to permanently retire some older, less efficient, aircraft early. If this happens, they cannot get back to 100% until they take delivery of new replacement aircraft, which will take several years. Other airlines are taking aircraft out of service to match the supply of seats to passenger demand but keeping them available for future use as the demand returns. Overall, before this is over, many older aircraft will permanently leave the fleet early, creating a temporary surplus of pilots.

There are other professional piloting jobs that may recover more quickly than the large established Legacy airlines. Corporate and Fractional flying is down a smaller percentage, at least initially, and if wealthy travelers continue to seek to avoid or reduce their medical risk this segment could recover more quickly or even grow in hard times.

Another segment that may hold its own or even grow is cargo. The desire for online shopping due to the medical concerns on top of an already growing demand for online shopping may stimulate this group of airlines to grow or at least maintain their current pilot demand. Both the Corporate/Fractional and the cargo groups are all vulnerable to a protracted deep recession that may result from this medically induced economic shock.

Government, government contract, and military jobs are a good place to be in a downturn. Anything that can keep you flying and pay the bills will do. It does not have to be a career position in the short term. Often returning to a previous segment is distasteful but presents one of your best opportunities due to your previous work experience and established contacts.

The regional airline group is a question mark for now. Will the larger network carriers shift some of their shorter, thinner, routes to the smaller aircraft flown by the regionals to maintain their presence in the markets that are too small for their smallest jet? This occurred in the past after 9/11 – only time will tell. Most Regionals were short of pilots when this event began, and some will continue to hire to reach normal staffing levels, initially. Then future hiring will depend on the flying they receive from the Majors.

 

Too Many Pilots for a Few Years

Bottom line is that in the short term when the stimulus package(s) run out in September of this year, or later if there are follow-on stimulus packages, we are going to have too many pilots for a period of time. The good news is that there are going to be substantial age 65 retirements as well as the potential for a significant number of early retirements that will bring pilot hiring back years sooner than the general airline recovery. American alone had over 700 pilots choose to retire early in their initial early-out offering. For the next 20 years the airlines and Corporate/Fractional operators will need over 4,100 pilots per year just to fill the seats vacated by retiring pilots reaching age 65, or whenever a corporate pilot retires Any market growth will be extra pilot demand.

 

Pilots Age 65 Retirements to the Rescue

Β 

The Economic Recovery + Pilot Retirement

 

Pilot Wages Will Adjust

With an oversupply of pilots for a year or two and tough economic times for the airlines, you might ask will major airline pilots pay go down? The answer is yes. With small changes in supply and demand, pilots usually benefit from good times where they strive to get their share of the pie. In bad times they try to hold on to what they have. If the changes are small, they are generally successful, but when large changes are required quickly there is often an adjustment to be made. The adjustments are in proportion to the size of the problem and this is going to be a big problem, at least initially, but it will even out over your lifetime of flying.

 

Your Real Cost

So, let’s put this in perspective of a 30-year career. Each year is about 3.3% of the total value, making a 2-year delay in your career progress 6.6% of the total career value. When you add the value of an airline pilot career together– pay, benefits, and retirement – you get their total career value. As an expert witness, I build career value models for pilots used in litigation support of pilots delayed, injured or killed. A 30-year career at one of our Major airline’s averages over $10,000,000 in today’s dollars. A 6.6%, 2-year loss, is $660,000 which is slightly offset by whatever you are earning while you wait 2-years so, maybe $560,000 is the total loss. Very sad indeed, but what remains is a $9,440,000 career where you get to enjoy one of the best flying jobs in the world while working about 15 days per month on average. As you build seniority you get to choose what you fly, when you fly, where you fly, where you live, when you have vacation, virtually every aspect of your work life and time off…. Seniority controls everything about an airline career. Some business professionals make the same or more money as an airline pilot, but very few enjoy the schedule flexibility and time off to enjoy that income like an airline pilot.


What do you Want To Be When You Grow Up?

I have been in the business of advising professional pilots on their career choices for over 35 years. I have provided career products and services to over 200,000 pilots in the past. I have over 23,000 hours of flight experience as a retired B-767 Captain from United Airlines and another 7,000 teaching pilots in large jet airline simulator training for Boeing and Delta. I was a military pilot who then worked for Braniff, Capitol Air, Republic, and United as a Flight Engineer, First Officer, Captain and Instructor Pilot along the way. I have seen good times and bad. How you handle this adversity will shape your future.

The best position to be in for an up-and-coming airline pilot in the recovery ahead is to continue your training and build the flight experience needed to be the most qualified and experienced pilot in the application stack. If it takes 2-3 years to qualify and gain the experience you need to fly for an airline, there is no better time to start or continue your training than now.

The airlines interview the most qualified and experienced pilots they can find – and then hire the pilots they like. A patient, persistent, approach will produce the best results in the long run. Now is not the time to step back –  it is the time to step up – stay in the saddle and keep flying toward you career goal.

 

Those pilots that step away now will be your co-pilot some day! Captain.

Keep your airspeed up!

Kit Darby, President
KitDarby.com Aviation Consulting

 

Find out more about our Accelerated Airline Pilot Course