Crisis in Flight Training

DenverPilot8

Well-Known Member
I searched to see if this was posted but I didn't see anything. There is a lot of discussion on APC about this topic. I know the debate over a pilot shortage is a long and old one but I'm wondering if the Financial climate has ever been this difficult for students financing flight training. Also there has been a lot more news lately about the realities of what being an airline pilot means that perhaps not as many people will be willing to pursue the profession.

http://blogs.flyingmag.com/left_seat/2009/10/a-crisis-in-flight-training.html
 
Let's discuss:

A Crisis in Flight Training

I just spent a day at <st1><st1>Delta</st1><st1> Connection</st1></st1><st1><st1> Academy (DCA)</st1></st1> listening to industry experts discuss the state of airline flying and the industry training programs that feed the profession.
Hmmm....from my experience, little from DCA would qualify them as "experts". I don't recall many textbooks, papers, studies and other academia products of DCA.

The big questions raised at the round-table conference centered around what<st1><st1> D<st1>C<st1>A</st1></st1>, which sponsored the event, said was a coming shortage of pilots. Many furloughed pilots have been out of the cockpit for more than five years, and many of those pilots say that they don’t plan on coming back to an airline job.
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So apparently DCA paid for the rights to Kit Darby's scheme. Great. Now, about the guys furloughed for more than 5 years not wanting to come back, I wonder why? Is it they got burned and don't trust the system?</st1></st1><st1><st1>

On top of that, training providers across the industry say that business is off. Several said during the conference that nobody believes there will be enough new pilots to fill the seats on regional airliners even in a couple of years.
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I just want to know one thing. Where is the massive number of new airframes coming from that need filled? Isn't that what caused the hiring booms at the regional level on and off over the last 10 years? First the 50 seaters, then the 70+? Now that the 50 seaters are getting parked, they are being swapped out for the new generation of tprops and 70+ seat RJs on about a 1 for 1 basis.</st1></st1>
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There are still fleet adjustments going on for the "mainline" carriers. Obviously the new Delta will have to rationalize it's fleet in the coming years. Yields are down, Boeing is late with the miracle jet (thus causing the jet my company's expansion plan is founded upon to also be late).</st1></st1><st1><st1>

So, other than the trickle of retirements, where will the giant hiring void be?</st1></st1>

The coming shortage--of pilots and students--is based on a number of factors, some of which are frightening to the training providers because there’s very little they can do about them.
What's more frightening? The shortage of pilots (I almost blew soda out my nose reading this one), or students, which are units of revenue to "pilot mills" like DCA.

Perhaps the biggest factor is the drying up of financing to prospective students. Many students who want to fly—and <st1><st1>D<st1>C<st1>A says that it’s getting as many applications as ever—simply can’t get loans.<st1><st1>D<st1>C<st1>A</st1></st1>’s Jason Dauderman says that the company’s loan application acceptance rate is down to about 30 percent, and the amount of the loans that lenders approve has decreased, as well.
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Getting as many applications as ever? I wonder what one's SAT score or ACT or transcript must look like to get into such a prestigious institution.</st1></st1></st1></st1></st1></st1>

Part of why it’s harder for students to get loans is because of the sub-prime mortgage crisis that caused a worldwide recession. The same thing happened with student loans, as you might know, as the sub-prime market spread into the student loan market, with lenders okaying loans to inumerable students who had poor credit, poor academic records, and little prospects of paying off the loans. As a result, Sallie Mae, the private lending company, is writing off a billion dollars of bad student loans. Long story short, the crisis in student loans prompted many lenders to leave the student loan market altogether.

I wonder if it's because several of these "institutions" took the student's money upfront, closed up shop, filed bankruptcy and left the students with debt, and no means to repay it.

While the biggest reason that many lenders have fled the aviation student loan market is related to the financial crisis, the recession has made it harder than ever for students to pay off their loans, which are typically between $100,000 and $200,000 per student, if the entire two-to-four-year education is financed. And there's little chance of those costs coming down. Flight instruction, as Dauderman pointed out, is an expensive proposition. We as pilots understand that all too well.

I went to a 4 year college and didn't have 100k in costs. And I majored in Flight, paying the "lab fees" and what not. At least I have a BS degree from a nationally recognized university, in addition to my FAA cards.

What does a DCA student have for 100k besides the FAA cards?

And when lenders look at the risk, they see some big question marks. Will the student actually be able to earn their ratings? Some do wash out. And if they're successful, will they be able to land a job and be able to pay off their loans? And if they do wind up in the right seat of an airliner, will they be able to pay off those loans on the $18,000 annual salary they might earn for starters? Of course not.
There are no flying jobs now, so the odds of that loan being paid back, is probably in the single digit percentages.

And if Congress has its way, we might be looking at the need for first officers to have an ATP, a requirement that will add tens of thousands of dollars to these students' debt, making it more difficult for students to get loans and for school to attract young people to their programs.
Just for the record, there are other flying jobs than at the airlines. In these other "jobs" a commercial pilot can build time, get paid, and even actually be paid to complete their ATP. At that point, they are free to sling gear at an airline. Without "tens of thousands of dollars to these students' debt."

For the record, no one at the conference thought the right-seat ATP provision would improve safety.
Here is one person who was a check airman at the regional level who disagrees. While I don't feel it's necessary, to say it wouldn't improve safety is silly. We all know it's silly to say such things.

Perhaps the most troubling question raised at the event was whether airline flying was a profession that any young person should pursue.
Why is that a troubling question? If a person wants to fly for a living, they should do their own research and see what a typical career path should be. If you get a few breaks, like I did, well, lucky you. Unfortunately, that has as much to do with timing as anything.

One attendee, a bright young many who got his ratings at DCA and now flies left seat in an AirBus for JetBlue said that he loves his job and still backs the profession. But he admitted on numerous occasions that there were big factors--chiefly economic ones--that should give any prospective student pause.
He's a smart cat. Most of us love it when the door is closed and the BS of the job is not causing us issues too.

Would I advise my kids to become airline pilots? As much as I love flying, in this day and age, it would be hard advice to give unless conditions changed substantially.
I'm just a dad. I will support my kids no matter what career they tend to choose. Even if it's not a popular, "it" job. I'll make sure they do their due diligence to know what they are getting into.

One thing has to happen. The airlines need to start paying starting pilots more money, a lot more money. A starting salary of $30,000 would go a long way toward making the transition to professional life if not attractive, then at least survivable, though barely. Starting teachers in almost every state make more.
Agreed, but let's make it 50k at least to fly professionally under 135 or 121.

And there’s no doubt that the airlines should start subsidizing training a great deal more than they already do.
There are still no jobs to be had, especially entry level ones at 121. There is no reason a business that tries to make a profit should subsidize training.

Today their subsidies consist largely of partnerships with training academies to give jobs to their graduating students, a good marketing approach but one that does nothing to help students cut their indebtedness.
Which is worthless marketing since there are NO JOBS to be had out there by entry-level pilots.

Why not have the airlines foot part of the training bill? It would be to everyone’s advantage, especially theirs. After all, they're the ones who need the pilots.
Huh? Why foot the bill of people they don't need. Pay attention one more time. T-H-E-R-E A-R-E N-O J-O-B-S.

And it's not all the regional airlines' fault. The major airlines share much of the blame. After all, they're the ones who on a daily basis squeeze their regional partners to cut costs--especially labor costs--to the bone, and then some.
I sincerely hope it's realized that there is approximately a 10% mark up in over the base cost for the regionals. But yes, the majors are a bit at fault. All their flying should be done by pilots on a master seniority list of that company.

And schools need to start pre-qualifying students, helping to ensure that those who can get loans have what it takes to get their ratings. That's a tough thing to do when times are hard. To be sure, some schools view a "qualified" student as one who can get a loan, as opposed to one who has the right stuff to fly an airliner. That kind of cynical view isn't fair to anybody.
When you graduate a "pilot mill" like DCA, you're not qualified (thus not the "right stuff") to fly an airliner. It's not to say that they can't have the right stuff after they get some experience, but flying in central Florida with it's flat terrain, highly predictable weather and great ATC system hardly count as gaining a wide cross section of experience and skills one will use every day flying part 135 or 121.

Right now schools are doing a lot of selling from the point of view that pilots will need to make a sacrifice to get into the profession. (That's also talking point number one for the Regional Airline Association.) The truth is, that's the absolute truth. And it just might pay off for those pilots in the long run. I for one sure hope so,
100k of debt for your ratings that you can get for a far smaller price at an FBO or you can get a college degree in addition to your ratings for the same price. 100k of debt is a huge sacrifice. One that will prevent most people with a debt load like that from owning a house. Especially with entry level wages at the airlines.

But as it stands today, the sacrifice is just too much, far too much, to ask.
It is, but only for people that waste money at such "institutions", which turn out a low quality product in comparison to other forms of training.

As someone that trained a broad cross section of pilots, including pilots from DCA, at the airline level, I can say this as an "industry expert".
 
I can hear the suckers lining up now.

Honestly, can you blame these guys? All it takes it a dog and pony show, a few dire, baseless prognostications, and here come the Rubes. This stuff practically sells itself.
 
I'd say it's a crisis in general aviation altogether. Anyone else get Controller's aircraft sales publication? Notice the number of planes that have been in there for 6-months +?

Think back to the 70s and 80s ... wasn't uncommon for a man making a middle class income to purchase a single-engine aircraft for personal use. Maybe some of those making upper-middle class incomes could purchase a small turbo powered aircraft or the like.

Fast forward to today... those old guys are losing their medicals and cashing out. Only thing is, this generation of middle and middle-upper class folks can't afford to purchase their aircraft, let alone a newer one. Not to mention the fact that there are fewer people even learning to fly. How many of you instructors have students who are learning to fly for recreational/personal purposes only? Guys I talk to are always a bit surprised when I tell them I co-own a plane and use it strictly for personal use.

I think the economy will eventually recover, but I think the market for general aviation services and products (including aircraft) will die out, regardless of what happens with user fees. The only thing that might save it is LSA as it attracts those who seek to fly for personal/recreational purposes.
 
I think the most important thing here is the financial side. With virtually no lender willing to take that kind of risk how are students going to find the money? I'm not saying that there will be a pilot shortage. Only one could hope for that. But I am saying that it is getting significantly harder to find the money.
 
I think the most important thing here is the financial side. With virtually no lender willing to take that kind of risk how are students going to find the money? I'm not saying that there will be a pilot shortage. Only one could hope for that. But I am saying that it is getting significantly harder to find the money.

It should be illegal to provide an educational loan to anyone will not earn the balance of that loan within two years of employment.
 
Just a few weeks ago, congress pretty much eliminated ALL private student lending programs. Uncle Friendly is now making the only student loans that will be available. Flight students will just have to borrow their tuition from the taxpayer.

Ah, hell, it's all just theoretical money at this point anyway, right?
 
I disagree that general aviation services will die out. Where I fly probaly 90% of our students get their ratings just to do it. We rarely have guys come to make a profession out of it. And we have anywhere from 20-50 people get a license every year. I am not saying that it is a huge number but if you have been to oshkosh and seen all the new protypes coming out for LSA and homebuilts, I have to imagine these companies due their due dilegence and wouldn't put so much money into designing these new airplanes if it was a dead end market.
 
I disagree that general aviation services will die out. Where I fly probaly 90% of our students get their ratings just to do it. We rarely have guys come to make a profession out of it. And we have anywhere from 20-50 people get a license every year. I am not saying that it is a huge number but if you have been to oshkosh and seen all the new protypes coming out for LSA and homebuilts, I have to imagine these companies due their due dilegence and wouldn't put so much money into designing these new airplanes if it was a dead end market.

I think that if most flight schools were graduating 20-30 new pilots per year, that would be a great sign for the industry. From what I'm hearing, though - your airport seems to be the exception. Most of my CFI friends say their businesses are dead, save for a few foreign students.

And you don't have to look any further than the VLJ to see an example of companies investing in a technology without a market.
 
I think the most important thing here is the financial side. With virtually no lender willing to take that kind of risk how are students going to find the money? I'm not saying that there will be a pilot shortage. Only one could hope for that. But I am saying that it is getting significantly harder to find the money.

By working. That's how I got my ratings.
 
What I've noticed with friends who went to places like ERAU and ATP is one of two things happens. They could actually afford everything they did there and take a low paying CFI job and are well on their way with their flying careers almost ready to move up to the regionals next time the door opens. OR...and this seems to happen with most people I know from these said schools, they are in SO much debt that they come out saying "Woohoo I have a commercial multi with 200 hours of multi time...but now I can't afford to fly!". They can't even afford to stay current and any jobs they are offered they can't take because they can't pay off the loans with a CFI job. At Skywest I work with a ton of these guys on the ramp and in CS who either haven't flown hardly at all since they've come out of school, or they did manage to get a CFI job but they're stuck working a few days a week at Skywest to pay the bills. And accordingly these CFIs can't fly nearly as much as they'd like and lose business for being unavailable a few days a week.

I really don't see the need to go to a flight school right now. I'm just taking my sweet time flying when I can afford it at the FBO. Its taken me almost 3 years to get my private because I was flying once every month or two the majority of that time because thats all I could afford, but I'm having a blast, and whats the rush? At least I always have money and never have any bills to pay off. Now I have a decent waged job and can afford to fly a few times a week, at this rate I'll probably catch up to the guys I know from ATP who haven't flown in months and months. Ya dig?
 
I think what really got the banks attention was the whole Silver State debacle.

I don't think that is what did it. Banks were still giving out loans like candy way after SS went 86. The loans became an issue just after the economy went bad in August. I have a couple buddies stuck in flight school due to not being able to now secure funds. They might be SOL.
 
I think that if most flight schools were graduating 20-30 new pilots per year, that would be a great sign for the industry. From what I'm hearing, though - your airport seems to be the exception. Most of my CFI friends say their businesses are dead, save for a few foreign students.

:yeahthat:

It is very quiet this Fall. It was very quiet this past Summer. There are not many hobbyists anymore, not many businessman-type students, nor are there many airline hopefuls. It is the economic slow down. And it is world-wide. The international market is quite slow as well. The problem is two-fold:

1) For the students who need to borrow, there are VERY few loans out there.
2) For the students who can pay out of pocket, most are not willing to take the risk.

It WILL rebound. When? Who knows. The strong will survive.
 
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