The Limits To The Sky: The Shortage Of Pilots In The Aviation Industry – Aviation

The aviation industry is struggling with a shortage of pilots.
How big is the problem and what steps can be taken to solve it?

Airline pilots need to be able to move high value passengers and
goods from one place to another quickly, efficiently and, above
all, safely, in an exceptionally high-risk environment. Pilots need
to be very good at their jobs, but there has been a lot of
discussion in recent years about the lack of trained pilots.

The uncertainty created by COVID-19 led to several hiring
freezes and many people moved away from the aviation industry. The
system was under strain even before the pandemic though, with
several social and economic changes putting pressure on the flow of
trained pilots entering the industry. At the same time, demand for
air travel has been growing in many regions globally as a result of
the booming middle classes, growth of global business and the need
to move cargo around at speed.¹

With air travel firmly back on the agenda, this is a good time
to revisit the debate and add the risk management and insurance
perspective.

The recovery

The COVID-19 pandemic was an extraordinary challenge for the
aviation industry. There are various numbers out there depending on
source and definition², but the industry suffered 18
months of only being able to carry out a fraction of its normal
business and, in some cases, staff needed to be redeployed or find
employment elsewhere. This has complicated the COVID-19 recovery
process.³

The aviation industry is relatively mature and generally has a
strong understanding of what it needs and when it will need it.
Airframe manufacturer Airbus suggests that the industry will
require 585,000 new pilots between 2022 and 2041⁴, while
competitor Boeing suggests the industry will need to hire and train
649,000 new pilots between 2023 and 2042 if it wants to keep up
with projected levels of demand.⁵ These are very
forward-looking forecasts, but they do give an indication of the
scale of the industry’s challenge. The fact that they are based
on global airframe manufacturers’ forward order-books also
gives them a high level of credibility.

There are several reasons for the perceived requirement to
extend the pool of pilots available in the industry.

Changing aircraft to meet net zero

Firstly, the pace of change is unlikely to let up as the airline
industry strives to achieve net zero by 2050. In most ways this is
a good thing, but with each new generation of aircraft, pilots, and
cabin crew, need to learn additional skills and adapt to new
technologies.

This means that the potential pool of people that are both
willing and have the capacity to put in the work necessary to
become commercial airline pilots is not as deep as it might seem,
even on a global level.

This is a long way from being an insurmountable challenge with
the right training methods, support and incentives, but commercial
airlines operate in a very competitive market. Passenger safety is
paramount, but efficiency and margins are also very important.

Millennials seeking balance

Meanwhile, there are also social factors to consider. Alongside
the constant training and development, working on an aircraft
involves irregular shift patterns which can make it difficult to
achieve a work/life balance.

There are said to have been significant improvements made in the
aftermath of the fatal Colgan Air crash in 2009 where pilot fatigue
was suggested by some to have been a contributing
factor.⁶ A lot of attention was subsequently put on the
working conditions for pilots and crew, particularly in the north
American regional airlines, but the aviation industry places some
very specific demands on pilots that can’t be circumvented
without compromising training and ultimately passenger safety.

COVID-19 threw the question of work/life balance into sharp
relief, with the World Economic Forum going so far as calling it
The Great Reshuffle,⁷ but it has been on the agenda for
many people for some time. Aviation organisations need to find ways
to respond to the challenge and ensure that the industry remains
attractive to people as they enter the job market and remains
attractive as they progress through their careers.

Training for competitors’ benefit

While the simple solution might be to invest to attract more
pilots, there is a risk for some organisations that they might end
up doing little more than training pilots for their larger
competitors which can offer more opportunities on more modern
equipment flying to a wider variety of places.

Compounding this, global economic growth tends to be uneven, so
airlines in some parts of the world can offer the best terms to get
the pilots they want while airlines in other parts of the globe
will have to accept the lion’s share of the shortages.

This argument can become slightly circular though. On the one
hand the rapid pace of change could scare potential pilots off or
make it difficult for some pilots to find the interest to keep
training on new hardware, on the other if airlines train their
staff too well there is a risk that they will be acquired by
competitors.

This is a perennial issue for the transport industry as a whole.
Prior to the global economic crash, the marine cargo industry was
awash with discussion about the lack of ship captains. The
suggestion was that the number of luxury yachts belonging to the
exceedingly wealthy was making the talent pool in commercial
shipping very shallow indeed. While the demand for mega-yachts has
dwindled in recent years, the issue has not gone away, with the
marine industry facing similar work/life discussions and other
challenges emerging post-COVID-19.⁸

eVTOLs: New ways to soar

A third aspect of the problem stems from changes away from
commercial aviation. In the past it is suggested that many
commercial airlines responded to pilot shortages by bringing in
experienced, extensively trained, former military pilots to make up
any shortage in the available talent.

The nature of war is changing however, and many militaries now
focus as much on training pilots on unmanned aerial vehicles (UAVs)
as they do on traditional aircraft. This reduces their
applicability for roles on commercial aircraft.

the availably of trained former military drone pilots could
potentially fill this gap nicely

On the upside though, the potential emergence of electric
vertical take-off and landing (eVTOL) vehicles, which are expected
to start entering commercial service over the next couple of years,
could be a sub-sector that needs an existing supply of trained
drone pilots.⁹ Some eVTOL companies are hoping to
operate their vehicles autonomously, so the availably of trained
former military drone pilots could potentially fill this gap
nicely.

Given that piloted eVTOL vehicles have yet to enter commercial
service, it’s probably fair to assume that unpiloted eVTOL
vehicles are still a few years away, but it’s interesting to
note while technological evolution is having a detrimental effect
on one part of the aviation industry, it could become positive for
another.

Part of the bigger picture

It is also worth noting that staffing challenges are not
confined to aircraft. Airports and air traffic control operations
have also found themselves in difficulties because of staffing
shortages recently, causing delay and irritation for customers in
many parts of the world.

This was one of the recurring themes that emerged during Airport Risk Community’s annual conference
in November 2023 hosted by WTW in London. Several of the airports,
associated organisations and government representatives at the
event suggested that the industry needed to augment recruitment to
keep attracting high calibre staff. Speakers stressed the need to
work across the industry at both a national and international level
to avoid the current staffing shortages becoming acute.

There are business interruption and travel insurance
implications that arise from delays to individual flights or whole
airports being unable to function fully, and these implications
could become more significant if the demand for air travel grows on
its expected trajectory. This is an issue where there can be a
significant benefit in explaining to insurance partners the
measures that are being put in place to minimise delays or
cancellations during the process of negotiating an insurance
placement.

One of the quickest ways to increase the supply of trained staff
would be to reduce the cost of training. The problem with that
approach is that there is a risk of compromising the quality of the
pilots and staff that are being trained, which, given the high-risk
nature of aviation activity, would not be a sensible approach.

The reality is that the aviation industry, like many others, is
changing rapidly, the shortage of qualified pilots is being widely
discussed and is recognised as having the potential to disrupt the
industry.

From an insurance perspective the risk of a lack of trained
staff is a concern, but claims have remained relatively stable for the
last few years, even with the relatively rapid ramping up of
activity since COVID-19. Pilot shortages may continue to be a
challenge for the industry, but there are structures in place to
ensure that it does not have much of a direct impact on
insurance.

Footnotes