Jan 12, 2022

If you are in the aviation industry or somehow affiliated with it, you don’t have to go far to hear some talk about a pilot shortage. In fact, in two previous full articles in this series, On Aviation™, we discussed the pilot shortage from the viewpoint of the generally accepted reasons for the shortage. Reasons range from the 1500 hours requirement for first officers enforced by the Federal aviation administration (FAA), early retirement practices by airlines, and the effects of the pandemic. The last full article discussed a hypothetical situation in which the FAA decided to take action on helping to alleviate the pilot shortage by strengthening or relaxing regulations. 

Key Takeaways

1. There is more than what meets the eye as it relates to the pilot shortage. We may need to look deeper into underlying factors not readily seen. 
2. Secondary factors are acting in concert with hidden underlying factors, acting as a multiplier on the pilot shortage. 

This article is an opinion piece discussing a new and somewhat contrarian idea about the real underlying reason for the pilot shortage. This reason is not readily seen by even some of the industry’s most seasoned experts. This underlying cause is subtle and takes real analytical thought at times to dive down deep to where this underlying reason for the pilot shortage lies. We will take a deep dive into this underlying factor, looking at why though it is so benign and virtually unseen, it exerts a massive influence on the industry, and in particular on the demand for pilots. This article will also take a look at some secondary and tertiary effects of this underlying factor, and how these factors help to further exacerbate the pilot shortage.

What if there’s a deeper reason for the pilot shortage, one that most experts and commentators are overlooking? What if the long-lasting reason for the pilot shortage has very little to do with a regulation laid out over 10 years ago by the FAA, but with something a lot more inconspicuous and benign? What if the true cause of the pilot shortage is related to the manufacturer of aircraft themselves? Here is the rub. The real underlying reason for the pilot shortage is aircraft manufacturers themselves. Actually, it goes deeper than that. The true cause of the pilot shortage is aircraft engine manufacturers, namely, Rolls-Royce, Pratt and Whitney, and General Electric (GE).

Rolls-Royce, Pratt and Whitney, and General Electric (GE) are responsible. 

This article will not bore you with the details specifics of engine design and specifications, manufacturing practices, performance numbers, or specific use cases. We will talk, however, of the general effects of the major engine manufacturers creating more efficient engines each year. We will also look at the ultimate effects that help sustain the current pilot shortage.

The simple fact is that a change in the hour requirement by the FAA in 2013 via the 1500 Hour Rule, is a change that was made and remains the same. Meaning that the hours are not constantly being changed either up or down. The effect of this change would’ve worked itself out in the system, and it would’ve compensated for those changes already. There must be something in the system that is constantly changing in either direction to be having an impact on the availability of pilots. Furthermore, that factor must be changing at a rate faster than the system can compensate. This factor is the overall efficiencies of aircraft, enabled chiefly by the ever-increasing efficiencies of aircraft engines. 

A complimentary factor. 

A corollary to more efficient engines is that Aircraft manufacturers tend to take this opportunity to create more efficient airframes. As aircraft manufacturers such as Boeing, Airbus, Bombardier, and Embraer accurately speculate, it is most advantageous to build more efficient airframes to take advantage of greater efficiencies from the new generation of engines.

Coupling more efficient engines with more efficient airframes create overall increased efficiency. Aircraft manufacturers are able to build more efficient aircraft that are much more appealing to the airlines. With the net effect of greater efficiencies in the entire aircraft, from the engine to airframe being a decrease in Available Seat Miles (ASM). Available Seat Miles In “lay terms” is taking an aircraft seat, raising it to the flight levels approximately 25,000 to 40,000 feet, and moving it 1 nautical mile across the ground. 

The true cause…  

As the cost of ASM declines, so does the cost of airline tickets for the customers of the airlines. When combined with the general increase in wealth of the world’s population, which over the past 20 years - particularly in Asia - has been acquiring more wealth, with more people rising above the poverty line worldwide. This means that exclusive of the cost advantages of more efficient aircraft, there is another effect operating separately, which is the ability for more people to afford airline tickets.

With a steady decline in the costs of ASM and a growing middle class, there is a multiplier effect. This multiplier effect causes a steady but very pronounced increase in the demand for air travel. Yet, the most dominant factor is that the ASM cost keeps falling. This is a major variable in the entire equation that is outpacing the other variables, and it’s because of this that the system is struggling to reach an equilibrium point.

Airlines operate in an excessively competitive industry. To compete they need to do whatever it takes to remain efficient and control costs as much as possible. Since a reduction in the cost of ASM allows airlines to reduce their cost, and they are operating in such a competitive environment, there are very strong incentives for them to reduce the price of their service (tickets) down closer to their new lowered cost to remain competitive.

As stated earlier the cost of ASM has been steadily decreasing over the years, and there’s nothing that shows that this trend will stop. In fact, there are indications that the trend will accelerate over time. Now, with a constantly Increasing effect of a variable (reduction in the cost of ASM), and the multiplier effect from Increasing wealth on the average worldwide, with the other variables that go into the equation remaining the same these perpetuate the disequilibrium in the system. What are these other variables mentioned here?

On average it takes a student pilot to go from “zero to hero” - that is going from being a non-pilot to an airline transport pilot (ATP) with 1500 hours and flying in the airlines - approximately 3 years. While there are accelerated training programs across the country, they have already been calculated into the average that creates the three-year pipeline. With this equalizing variable being constant and the other two as mentioned in the previous paragraph ever-increasing, then we get the perfect recipe for a sustained pilot shortage.

In closing, if you align with the arguments laid forth in this article, then it is clear that the real underlying cause of the pilot shortage is engine manufacturers. Fortunately, or unfortunately, depending on your perspective, this underlying cause will not dissipate over the medium to long term. The reason is that engine manufacturers are always looking for new ways to make propulsion for aircraft more and more efficient. Partly because that keeps them in business and more competitive, and they generally believe that more efficient engines lead to more efficient aircraft, which is beneficial to the industry overall. Thus, if the opinions in this article are correct, then like it or not, the pilot shortage is here to stay for quite some time. Even if there are regulations to reduce the number of hours for pilots to fly in the airlines, or reduce the number of pilots required to fly an airliner, innovations in propulsion will continue to outpace all other factors unless there are significant disruptions in the engine manufacturing segment of the industry. However, as it currently stands all indications are showing that this is unlikely.

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