Christopher M. Broyhill, Ph.D., CAM
“Meteorologists see perfection in strange things, and the meshing of three completely independent weather systems to form a hundred-year event is one of them. My God, thought Case, this is the perfect storm.” - From The Perfect Storm, A True Story of Men Against the Sea, by Sebastian Junger.1
The term “perfect storm” has become overused these days, almost to the point where it has become hackneyed or trite. But its overuse doesn’t affect its applicability or descriptiveness where and when appropriate. The place is the business aviation personnel marketplace. And the time is soon...very soon indeed.
Before the COVID-19 crisis, the business aviation industry and the airlines were fighting over the pilot workforce, and while business aviation wasn’t necessarily losing “the war,” it was definitely losing many of the battles. In a retention study I performed in 2018, 63% of the operators surveyed had lost at least one pilot to a position elsewhere in the previous three years and 29% of the pilot force had changed jobs. Of that number, nearly half, 43%, chose the airlines as their job destination. The vast majority of the remaining pilots went to other operators within the industry and the percentage of those who were hired to fill a gap left by pilot departures for the airlines remains uncertain.
Why the strong draw of business aviation pilots to the airlines pre-COVID? In a word: demand. The airlines were expanding their fleets and pilots in the baby boomer generation were retiring in droves. The airlines were aggressively recruiting and business aviation pilots, already qualified in complex jets, were perfect candidates. The airline unions had negotiated lucrative contracts with the major carriers, and a business aviation pilot could calculate how much he or she could make working for a major carrier over a given period of time. The BA pilot could also choose a career where he or she could have a guaranteed schedule and predict his or her life. For many business aviation pilots, working for operators where paths for advancement and pay increases were uncertain and where time off was not predictable, a transition to the airlines was more desirable than remaining where they were.
In response, many business aviation operators made changes to their scheduling and compensation practices to retain their pilots, and in the process, the rate of compensation growth for pilot compensation increased to unprecedented levels. Going into 2020, the rate of pilot compensation increase was over three times the rate of increase for all workers in private industry as determined by the U.S. Bureau of Labor Statistics (BLS).
Then, the COVID crisis hit, and the bottom seemed to drop out. The airlines grounded large portions of their fleets and furloughed thousands of pilots. But, in their strategy to cope with the economic impact of the COVID crisis, the airlines used an additional tactic that sowed the first seeds of the upcoming personnel storm – they offered early retirement to thousands of pilots. The reasoning seemed sound at the time. Everyone expected the travel industry to take two to three years to recover and the pilots offered early retirement wouldn’t be needed before they retired anyway.
But that’s not what happened. The travel industry is rebounding faster than anyone...almost anyone...predicted. As early as mid-March, the Wall Street Journal reported that airport business was on the upswing. In late March, the Dallas Morning News reported that American Airlines expected to have its full fleet back in operation by the end of the second quarter. “Bookings are at approximately 90% of 2019 levels and planes are filling up,” the airline said. At the beginning of April, CNBC reported that United Airlines told its staff that it was hiring hundreds of pilots in the coming months as the carrier planned for a travel recovery. A few days after that, Aerospace Technology reported that Delta Airlines, after committing to bringing back its furloughed pilots by the end of the year, had to cancel 100 flights on Easter Monday because the airline didn’t have the crew to fly them. Delta, along with the other major airlines, and multiple regional airlines, has resumed hiring.
With the travel industry in full-fledged recovery, the airlines are being forced to reconstitute far more quickly than they anticipated and do so with thousands of pilots unavailable due to early retirement and baby boomer pilots still retiring. In fact, the airlines’ hiring efforts are becoming somewhat frantic. In the past week, I was made aware of two pilots, one in the pipeline for Southwest Airlines and the other in the pipeline for United, both of whom were told to stand down when the COVID crisis hit. They were also told that when the crisis passed, they would have to begin the hiring process anew and compete against other candidates. In this past week, both were called by their respective airlines and offered training class dates in the near future.
And, of course, the airline pilot unions, like the Airline Pilots Association (ALPA) and the Allied Pilots Association (APA) are waiting in the wings, eager to negotiate more lucrative contracts with the airlines as the demand for pilots continues to grow.2
In the meantime, business aviation has been in a recovery phase of its own. A few anecdotes. In March, Aviation International News ran a story in which WingsX, an industry data provider, published statistics on the COVID recovery and indicated that business aviation was only down 2% year over year, January – February 2020, before the pandemic was declared, versus January – February 2021. WingsX also said that business aviation accounted for a larger percentage of fixed-wing traffic during the two months in 2021, at 19%, then 12% for the same time in the previous year. In April, an industry publication called Private Jet Card Comparisons reported that NetJets, which had furloughed pilots due to the COVID crisis, had announced it was resuming hiring and planned to hire 150 pilots in the coming months to crew 39 new aircraft that the fractional provider had purchased.
So, what does this all mean in the big scheme of things?
The perfect storm is on the near horizon and it's headed our way like a fast-moving line of thunderstorms. The airline hiring process is full-on and the draw of pilots from business aviation to the airlines will be inexorable. The airline demand will create vacancies in our industry that will have to be filled. If you’re an aviation manager in a flight department or aircraft management company, you're going to have an airline problem. You can recognize the coming storm and take steps to deal with it, or you can ignore it and suffer accordingly. You can lose people directly to the airlines, or you can lose them to another operator who has an airline-driven vacancy to fill...or you can do the right thing for your people – give them a good quality of life, pay them competitively, and create a culture where your people feel valued – and inspire them to stay the course. The choice is yours. You can prepare for the storm or get lost in it.
Having compensation information at your fingertips will help you plan and prepare for the hiring challenges that are on the horizon. The AirComp Calculator is the only definitive tool in the business aviation industry to provide the information you need to remain competitive. Learn more here.
Bibliography and Notes
1Junger, S. (1997) The Perfect Storm, A True Story of Men Against the Sea. New York: W.W. Norton and Company.
2In a recent webinar presentation to the participants of the IBM Corporate Flight Operations Compensation Survey, hosted by Pearl Meyer, I made this contention, and it was echoed by the Director of Aviation at a Fortune 500 company who previously worked for a major airline. He indicated that he had friends who worked for ALPA and that the unions was, in fact, waiting for the precise moment to force the airlines where their members were employed into labor negotiations.