FALLING SHORT

FALLING SHORT

... skills gap 'putting airline industry at risk'

Tom Ballantyne
orientaviation dot com

The shortage of pilots facing the world’s airlines is reaching critical levels, but the problem is no longer confined to the flight deck. A skills shortfall, across the board, is endangering industry growth and worse, seriously threatening air safety. TOM BALLANTYNE reports.

There could hardly be a more glaring warning flag. According to Juergen Haacker, director of operations for the International Air

Some airlines are canceling flights or dropping routes, because they cannot get cockpit crew
Transport Association (IATA), job advertisements by some airlines are offering pilots “a step into the captain’s left hand seat based on entry levels that are less than 50% of what we would normally consider the accepted standard of minimum flight time”.

Worse still, last year there were a number of air safety incidents that appeared to have occurred because of inexperience on the flight deck.

“We are carefully monitoring what is going on ... it is a trend we are certainly seeing and, especially in combination with an inexperienced co-pilot on the same plane, it is definitely not the trend we would like to see,” he told Orient Aviation.

Haacker isn’t the only one concerned. Experts say aviation’s projected strong annual growth rates, with record numbers of new aircraft on order, may be unsustainable if the industry can’t find ways to meet staff requirements.

Some 17,000 new pilots will need to be trained every year (through to 2020). That is 3,000 to 3,500 more per year than present training capacity can accommodate’

With some airlines cancelling flights, or even dropping routes, because they can’t get flying time captains into the same cockpit to keep their jets in the air.

“Training pilots on the basics is one requirement, but making sure they are able to immediately, quickly and efficiently react in the cockpit of the modern plane in a critical situation is another absolute must. Some of the incidents we have seen in 2007 have given us an indication that this is not always the case,” said Haacker.

William Voss, president and chief executive of the Flight Safety Foundation, is also alarmed. He pointed out the skills shortfall isn’t confined to pilots. “The shortage is right through the system. There’s a lot more airlines than there used to be and they can’t magically produce that many more people ... this is one of the things that is really haunting me,” he said.

Voss said the shortages extended into airport and air traffic control infrastructure and, even more worrying, the regulatory authorities charged with policing the system.

As airline fleets grow rapidly regulators are finding it more difficult to find sufficiently skilled staff to conduct adequate safety inspections, he warned. He backed up Haackers’ view of a dangerously low level of experience in some cockpits. “I would suggest you can start seeing examples in accidents already around the world where this is becoming an issue. It’s only just begun,” said Voss.

The situation is likely to worsen. According to IATA, there are 16,000 aircraft on order for delivery to 2020. Some 17,000 new pilots will need to be trained every year – more than 220,000 in total - to fly them.

“That is 3,000 to 3,500 more per year than present training capacity can accommodate,” said Haacker.

India and China alone will need about 4,000 new pilots every year to cope with their growth, equivalent annually to the entire pilot workforce at Germany’s Lufthansa Airlines. Carriers need up to 30 highly trained pilots for each long-haul aircraft in their fleet and 10 to 18 for short-haul planes.

But the industry is becoming trapped in a vicious circle. As pilots are lured away to lucrative jobs elsewhere big airlines are raiding smaller regional operators to hire new crew and fill the gap. Regional carriers are recruiting where they can to keep flying, including the hiring of instructors from flying schools. Flight academies are running desperately short of instructors to train new pilots.

There is universal agreement that much of the skills shortage is the result of three factors: the extraordinary air traffic growth in the Persian Gulf, China and India, the rapid expansion of low-cost carriers (LCCs) and the recovery in the U.S. airline industry.

“There is a giant sucking sound, luring pilots to rapidly expanding airlines such as Emirates and Qatar and the budget carriers,” said

‘The fundamental issue is the doubling of the aviation industry by 2025’

William Voss
President and Chief Executive
Flight Safety Foundation
Voss. “When experienced pilots leave developing countries in Asia and Africa for the Gulf, those countries must hire replacements fresh out of flight school. Also, poaching of pilots and mechanics is expected to intensify as Asian markets like China and India burgeon.”

Voss, who was responsible for standards in international aviation in his previous post as secretary to the Air Navigation Commission and the International Civil Aviation Organization (ICAO) Council, said one of the problems is a lack of strong rules to regulate personnel skills in aviation.

“We always assumed the insurance industry would demand entry levels far higher for airlines than are actually the rule. So you don’t really have any tools for the regulators to restrict (airlines using low-time pilots) ... there is nothing to say they can’t start hiring 250-hour pilots in the right seat and put them next to a 1,500 hour pilot in the left seat. And so this starts to become a worry. It’s legal, but it doesn’t seem wise to those of us who have been in the industry.

“We are starting to see a decline in levels of experience and we could see a much further decline because there aren’t any hard forces resisting that. The forces that would resist it would be a very robust set of regulatory officials around the world, but they are being degraded and you don’t have very strong regulations. You are relying on airlines and the industry to police themselves. It’s just a big risk.”

Pilot union officials are also concerned. “The rush to push pilots through training and into the cockpit raises obvious safety concerns,” said John Prater, president of the U.S. Air Line Pilots Association in a recent speech at a forum on aviation safety and security. “New pilots today are going straight into the co-pilot’s seat and moving into the captain’s seat in a hurry. And they’re doing it in airplanes that are great machines, but can be unforgiving.”

Voss said the situation could become so critical that airlines will have no choice but to put the brakes on growth because they can’t get enough staff to run their operations.

The Chinese government has already imposed restrictions and more are to come. There will be no more air operator certificates granted until 2010 and the number of flights have been reduced.

Li Jiaxiang, the newly appointed acting aviation minister, told a conference small-scale private airlines would be specifically targeted by new measures.

Carriers unable to provide the required number of cockpit crew for their planes will not be allowed to import new aircraft or open new routes, he said. The administration would also closely scrutinize investors in airlines, plane ownership and pilot quality.

Last year, passenger numbers grew 16% to 185 million in China.

Former British Airways and Cathay Pacific Airways chief executive, Sir Rod Eddington, sees “the people issue” as one of the biggest challenges facing aviation.

“One of the things the industry has not always been very good at, in part because it is always under the economic cosh, has been ensuring it has the right number of trained men and women available to run all parts of aviation,” he said.

“I’m not just talking about airlines ... I’m talking about airports and air traffic control as well. And when I’m talking about airlines, it’s also about ground engineers and people who work in other areas. Many of the people who got into this industry in the 1960s and 1970s are now reaching retirement age and with them goes an enormous amount of experience. We need to replace them.

“It’s a big issue ... my plea to the airlines is to make sure you invest the right amount of energy and time into training.”

Ashley Smout, head of Airways New Zealand and chairman of the Civil Air Navigation Services Organization (CANSO) said rising staff requirements is a worry for the air traffic management industry.

“Our industry certainly has issues with the Middle East, in particular, attracting controllers away from the English-speaking countries and with huge demand in China and India putting pressures on training institutions,” he said.

The challenge to find cockpit crew and other staff will be even greater in Asia. According to a report released late last year the Sydney-based Centre for Asia Pacific Aviation (CAPA) Asian airlines have planned aircraft deliveries in the next five years representing almost 59% of the current fleet, well ahead of the global average of 31%. It predicted this will exacerbate airline staff shortages in the region, with 154,000 airline staff required over the next five to seven years alone.

As Air New Zealand chief executive, Rob Fyfe, told Orient Aviation recently: “We spend more time worrying and debating about this

‘We spend more time worrying and debating about [skills shortages] than we do about fuel prices’

Rob Fyfe
Chief Executive
Air New Zealand
issue than we do about fuel prices. New Zealand is a great exporter of America’s Cup sailors, pilots and engineers. We could do with a few more of them at home.”

There is another worrying trend for airlines. The competition to sign up pilots, engineers and other highly trained personnel is pushing up the wage bill. Labour costs, the industry’s second highest expense after fuel, are climbing again.

According to Fyfe, the arrival of a new competitor, Pacific Blue, in New Zealand domestic skies, last November “pushed up the market price for line maintenance engineers by about 20%”. Numerous airlines, including several in the Asia-Pacific, have been forced to increase pilot salaries and entitlements to keep them from leaving.

Asian airline chiefs agree poaching of staff is a growing problem. “There will be a fight for pilots and crew in the next few years,” said Malaysia Airlines managing director, Idris Jala.

He has already increased the carrier’s cadet pilot intake, but adds that some airlines are not taking this approach. “This robbing from Peter to pay Paul, stealing from others approach is making things difficult. If we all followed that approach it is going to increase the cost eventually because the airlines who have trained them are not going to let them go like that. Eventually what it means is that costs will rise and it is going to be quite tough for the industry,” said Jala.

Cathay Pacific Airways chief executive, Tony Tyler, described it as a big challenge. “We too are increasing our cadet training, but increasingly we are going to find poaching coming along, not only of flying staff, but ground staff as well,” he said.

“The Middle East carriers supply quite a lucrative source of employment for all airline people.”

China Airlines: its local pilots have been given a pay rise and the work environment has been improved to encourage them to stay with the carrier.

As well as increasing its cadet intake Cathay has moved to retain instructors by undertaking to give them a job as an operational pilot if they stay on.

Tyler doesn’t believe there should be any regulatory moves to force pilots to remain with airlines. “It’s a free market and it should be a free market. We just need to find ways of working within that free market,” he said.

The critical shortfall of pilots and other aviation professionals, including engineers and information technology (IT) specialists in boom markets like the Middle East, India and China has been well reported in recent times, but the problem is hardly confined to those regions.

In Australia, several regional carriers have been cancelling flights and dropping routes because of pilot shortages. In a single week last year one airline in the U.S., Northwest Airlines, had to cancel 1,200 flights, or about 12% of its flight schedule, because it didn’t have sufficient pilots to replace those grounded after reaching maximum allowed hours.

In some Asian countries local airlines are not receiving much help from pilot unions. When leading pilot recruitment firm, Rishworth Aviation, held a recruitment session in Taipei late last year the Taiwan Pilots Association declared it was time pilots jumped on the exodus bandwagon to pursue higher pay and fringe benefits overseas.

Rishworth, which was looking for pilots for airlines in the Middle East, Vietnam and China, wasn’t the only one on the prowl. South Korea’s Asiana Airlines and Emirates Airline of the U.A.E. both sent teams to Taiwan last year to recruit cockpit crew. In the first 10 months of 2007, more than 70 pilots, including 50 foreign pilots and 20 domestic pilots, quit their jobs to fly with overseas airlines. In December, another 50 flew to Dubai to take a three-day exam with Emirates Airline.

Local airlines and authorities seem unphased. Chang Kuo-cheng, director general of Taiwan’s Civil Aeronautics Administration told local media he was not worried about the exodus because Taiwan’s airlines could simply hire more foreign pilots themselves.

China Airlines said in a statement it plans to offer a better working environment for local pilots, in addition to raising monthly pay for

Training facilities are falling far short of requirements

them. EVA Air said the exchange of pilots among domestic and foreign airlines is nothing unusual and won’t impact the carrier at all.

Few airlines in Asia have escaped the pilot drain in one form or another. It will certainly become more serious given the huge orders for new aircraft made by Middle East operators, some $100 billion worth during the recent Dubai Air Show alone. Operators like Emirates, Qatar, Etihad and others will need thousands of pilots, cabin crew, engineers and other specialists to operate these planes.

Terry Wesley-Smith, chief executive of the Regional Airlines Association of Australia (RAAA) said the country will need around 1,800 pilots in the next two years. “The question is: where are they going to come from ... the question of whether the current growth in aviation is sustainable is a very serious one”.

‘We are increasing our cadet training, but increasingly we are going to find poaching coming along’

Tony Tyler
Chief Executive
Cathay Pacific Airways

He described it as a global issue, partly driven by the fact that the highest growth in the industry has been in areas which have not traditionally been leading trainers of pilots and engineers.

Voss echoed that view. “The fundamental issue is the doubling of the aviation industry by 2025. What makes it difficult is the growth rates we are going to see are not in areas that have historically been used to high rates of growth,” he said.

“Right now, the U.S. and Europe are about 80% of the market and that’s going to go down to 60%. There’s going to be a substantial shift and you will have the growth happening in places where they are not necessarily prepared to handle it.

“You are also looking at levels of growth that far exceed anything that anybody has successfully handled in history.”

Wesley-Smith pointed out that the 270 Australian pilots being trained to commercial licence standard each year are hardly replacing those lost to attrition. “We will face a shortfall of around 1,000 pilots over the next two years. To put that in proportion it represents around 17% of the total commercial pilot population [in Australia]. This is not an insignificant shortfall,” he said.

Australia is a major centre for pilot training. In the past three years the country’s Civil Aviation Safety Authority (CASA) issued 2,533 commercial pilot licences with more than half going overseas, predominantly to China, New Zealand and Taiwan. But there are growing numbers of licences going to India, Malaysia and the United Arab Emirates.

“But this is under threat. We currently have a serious shortage of instructors, in part because of major airline recruitment and in part due to the current lack of an adequate career structure for instructors,” said Wesley-Smith.

Once seen as a lucrative and glamorous choice of career, this is no longer the case for would-be pilots who are opting for other industries.

A glaring lack of training facilities is evident in high growth areas such as India, China and Indonesia.

In Indonesia, where air traffic is growing around 20% annually, there is only one flight training school, the Indonesian Aviation Institute, producing just 45 pilots a year. The country’s aviation ministry says more than 500 pilots are required immediately.

Pujobroto, a spokesman for national flag carrier, Garuda Indonesia, said the airline does not currently suffer from a pilot shortage, but is moving to cater for future growth demand. The carrier plans to open its own aviation school before the end of this year.

Despite moves by flying schools around the world to expand, the number of training facilities still falls far short of requirements. In the

‘The Middle East, in particular, [is] attracting controllers away from the English-speaking countries’

Ashley Smout
Chairman
CANSO
U.S., pilot training schools are turning away foreign airline customers because of a shortage of instructors.

Regulatory authorities are having even more trouble finding recruits than airlines. “The regulation side is a bit less exciting [than airlines] and they will struggle to attract suitable people even more than the airlines,” said Cathay Pacific chief executive Tyler.

IATA has moved to find a solution. It wants industry and governments to work together to change training and qualification practices. The association supports the competency-based approach of multi-crew pilot licensing (MPL) training programmes which, unlike traditional training, focuses from the beginning on training for multi-pilot cockpit working conditions, making better use of simulator technology.

Europe was among the first regions to adopt MPL and Australia and China are also moving ahead to incorporate the system into regulation. IATA has launched a Training and Qualification Initiative (ITQI) to support a global approach to MPL implementation.

“Our goal is to increase the pool of candidates and training capacity while improving standards,” said IATA director general, Giovanni Bisignani. “There are no global standards for training concepts or regulation. Pilot training has not changed in 60 years, we are still ticking boxes with an emphasis on flight hours,” he said.

“It’s time to ring the warning bell. We must re-think pilot training and qualifications to further improve safety and increase training capacity.” IATA is also working to introduce an ITQI for engineering and maintenance training.

However, Flight Safety’s Voss said MPL is not the magic answer to the pilot problem. “It was billed to be significantly quicker to train a pilot, but in application they are finding it requires a little bit longer. The cost is significantly higher and a higher level of instructor is needed,” he said.