Even Vegas is weighing in on the shortage

Yakob said:
It wouldn't surprise me at all if the next cyclical downturn has already begun, as it's been more than 7 years since the last recession. Going more than 7 years without a recession is rare and going more than a decade without a downturn would be unprecedented, so we are just about due for one.
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Thanks Obama!
 
Yakob said:
I find it hard to believe this is really a concern for the Las Vegas tourism industry. Any shortage that there is right now will be very temporary. The very pilot-friendly hiring climate we are now enjoying is caused by a very unusual confluence of factors that will not last long and is unlikely to ever be repeated again. For instance, oil prices are much lower than normal right now, we are at an economic crest, and the onslaught of foreign competition from flag of convenience carriers is only beginning. Oil prices will probably revert to the mean any day now and indeed already seem to be rising, and it's already been 7.5 years since the last recession which means we are just about due for another one. Once the economy enters a recession the pilot shortage will be over and will be replaced by an extreme surplus of pilots. Of course, the Las Vegas tourism industry will take a huge hit from the poor economy (Nevada was actually one of the hardest-hit states in the last recession, although that was mainly due to real estate prices being more inflated there than most of the country before the recession), so a shortage of pilots will be the least of their worries. Vacations/tourism tend to be one of the first things people cut out of their personal budgets during hard times. Also, right now any shortage of airline pilots is only at the regional level, but that article points out most tourists are brought to Las Vegas by Southwest, and many others travel there on the ULCCs, which of course don't use regional feed.
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It will have to be one hell of a down turn for the hiring environment to come to a stop within the next ten years. 22,500 pilots between the big 3, WN and AS are retiring by 2027. That doesn't count regional retirements, FedEx, UPS or any other LCC's.

I can see no more growth and a reduction in seniority lists if this economic downturn happens. But a stand still like the one that happened previously? No way, not with those numbers. It may just be hard to believe because it's never happened before, it was on the verge of happening until the can got kicked down the road and 65 became the new retirement age. The point is, they can only extend the retirement age, so even if 67 happens all these numbers slide two years...

Five years ago when I started flight training, places like OO and QX were interviewing 20 and hiring maybe 5 of those 20. QX required a two year degree and preferred a four year. Now they are turning every rock and will hire anyone with a pulse and 1500. I was hired 6 months ago with 25 hours multi... that was absolutely unheard of in 2012.

My first airline went out of business because they could not staff planes starting in 2015, they held on and hired anybody willing until late 2016. That same airline in 2010 turned down over half of their applicants, had a massive resume stack due to the industry slow down and they knew they could pay pilots pennies and keep them on property. That all changed in two years.

This all means the demand is exceeding the supply rapidly at the bottom rungs in 2017, I think this trend is on its way to the tipping point. Even a down turn will only slow the bleeding, not stop it completely.

Disclaimer: I came up with the number 22,500 by creating a simple chart pulling numbers from APC retirement projections. Therefore these could be alternative facts :)
 
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BEEF SUPREME said:
What are the indicators you are seeing that the industry is entering a downturn?


Sent from my iPad using Tapatalk
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Mostly comments and projections expressed during airline investor calls. Nothing that looks like a full blown recession, but this level of revenue growth isn't sustainable. There are a few stories in this month's edition of Airline Business I just read through this morning that essentially say the same.
 
Reducing the unsustainable profit margins does not necessarily equate to reduced demand. If they're making $50/hour on a seat rather than $100, they're still going to try to deploy the seat.
 
JDean3204 said:
It will have to be one hell of a down turn for the hiring environment to come to a stop within the next ten years. 22,500 pilots between the big 3, WN and AS are retiring by 2027. That doesn't count regional retirements, FedEx, UPS or any other LCC's.

I can see no more growth and a reduction in seniority lists if this economic downturn happens. But a stand still like the one that happened previously? No way, not with those numbers. It may just be hard to believe because it's never happened before, it was on the verge of happening until the can got kicked down the road and 65 became the new retirement age. The point is, they can only extend the retirement age, so even if 67 happens all these numbers slide two years...
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Unfortunately, we have every reason to believe it will be "one Hell of a downturn", especially for the airline industry. As I mentioned, the onslaught of competition from flag-of-convenience carriers is only beginning, but in time it will decimate the U.S. airline industry just like what happened to the maritime shipping industry. Also, I do not expect the airline industry to recover from the next recession the way it has from previous recessions. 47% of jobs are expected to be automated out of existence in the next 25 years http://bigthink.com/philip-perry/47...will-disappear-according-to-oxford-university . Recessions tend to accelerate trends that are already happening in the economy, and hasten the disappearance of outdated jobs, so I believe the next recession or two will be when Technological Unemployment really starts to rear its ugly head.

We have already seen some of this since the last recession- much has been made about how unemployment stayed high for longer than usual after a recession, and many people have been "left behind" in the recovery. Indeed, people who were left behind in the recovery are said to have been instrumental in the election of our current President. This has occurred during a time of unprecedented technological progress and it seems painfully obvious to me that we are witnessing the dawn of Technological Unemployment, yet it seems to be the elephant in the room few people are willing to acknowledge. But next recession will likely be when these problems become to obvious too ignore. My point with all this is that very few people will be buying airline tickets when nearly half of society is structurally unemployed. As airline employees, whether we like it or not, our livelihood is dependent on a large segment of society having enough disposable income to spend on luxuries like air travel, and a strong consumer-demand driven economy to support plenty of business travel. Consider how bad times were for the airline industry in 2008-2009, when the unemployment rate was 9 or 10%. 47% structural unemployment will have a devastating multiplier effect on the economy at large, since consumer demand will plummet. I expect the economy may well enter a permanent, irrecoverable recession at that point. For this reason, I expect most airlines to either shrink drastically or go out of business in the next decade or two, and few of the pilots who retire in the coming years will be replaced. There will be some very bleak times ahead for most of us.

JDean3204 said:
Five years ago when I started flight training, places like OO and QX were interviewing 20 and hiring maybe 5 of those 20. QX required a two year degree and preferred a four year. Now they are turning every rock and will hire anyone with a pulse and 1500. I was hired 6 months ago with 25 hours multi... that was absolutely unheard of in 2012.
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I am more familiar with this than most people as last year I received offers from five out of six regionals I interviewed at despite having an accident on my record. Two were after I washed out at one of the first three. Incidentally QX was the one I did not get an offer from, but I did make some gaffes on that interview. Several years ago they wouldn't have even called me as they required more multi-engine time than I had. However, this is the sort of thing that happens at economic crests. In 2006-07, the last economic crest, there were briefly a few regionals that were hiring pilots with brand new commercial certificates. But we all know what happened the next year. The airline industry is highly cyclical and it tends to be either feast or famine, and it can change in a heartbeat.
 
Yakob said:
Unfortunately, we have every reason to believe it will be "one Hell of a downturn", especially for the airline industry. As I mentioned, the onslaught of competition from flag-of-convenience carriers is only beginning, but in time it will decimate the U.S. airline industry just like what happened to the maritime shipping industry. Also, I do not expect the airline industry to recover from the next recession the way it has from previous recessions. 47% of jobs are expected to be automated out of existence in the next 25 years http://bigthink.com/philip-perry/47...will-disappear-according-to-oxford-university . Recessions tend to accelerate trends that are already happening in the economy, and hasten the disappearance of outdated jobs, so I believe the next recession or two will be when Technological Unemployment really starts to rear its ugly head.

We have already seen some of this since the last recession- much has been made about how unemployment stayed high for longer than usual after a recession, and many people have been "left behind" in the recovery. Indeed, people who were left behind in the recovery are said to have been instrumental in the election of our current President. This has occurred during a time of unprecedented technological progress and it seems painfully obvious to me that we are witnessing the dawn of Technological Unemployment, yet it seems to be the elephant in the room few people are willing to acknowledge. But next recession will likely be when these problems become to obvious too ignore. My point with all this is that very few people will be buying airline tickets when nearly half of society is structurally unemployed. As airline employees, whether we like it or not, our livelihood is dependent on a large segment of society having enough disposable income to spend on luxuries like air travel, and a strong consumer-demand driven economy to support plenty of business travel. Consider how bad times were for the airline industry in 2008-2009, when the unemployment rate was 9 or 10%. 47% structural unemployment will have a devastating multiplier effect on the economy at large, since consumer demand will plummet. I expect the economy may well enter a permanent, irrecoverable recession at that point. For this reason, I expect most airlines to either shrink drastically or go out of business in the next decade or two, and few of the pilots who retire in the coming years will be replaced. There will be some very bleak times ahead for most of us.



I am more familiar with this than most people as last year I received offers from five out of six regionals I interviewed at despite having an accident on my record. Two were after I washed out at one of the first three. Incidentally QX was the one I did not get an offer from, but I did make some gaffes on that interview. Several years ago they wouldn't have even called me as they required more multi-engine time than I had. However, this is the sort of thing that happens at economic crests. In 2006-07, the last economic crest, there were briefly a few regionals that were hiring pilots with brand new commercial certificates. But we all know what happened the next year. The airline industry is highly cyclical and it tends to be either feast or famine, and it can change in a heartbeat.
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Pretty much this, I'm enjoying the ride now while I can.
 
I don't see automation as an immediate threat. We may be 25 years from the roll out of an automated airliner, but it will take a long time for it to be mainstream.

We are seeing a shortage of skilled workers in many industries, not just aviation. The retiring boomers just aren't being replaced. I'll call out nursing in particular as having a critical shortage right now. Six figure incomes are the norm for a profession that has long been under-valued.

Also, that millennial stereotype.

But the dangerous element, as stated above, is that airlines are very vulnerable to economic changes. Fewer people flying means fewer airplanes and fewer pilots needed. Who can tell what will happen in the next downturn. It it's as big as the last one, we'll certainly see a bankruptcy or two.
 
NickH said:
I don't see automation as an immediate threat. We may be 25 years from the roll out of an automated airliner, but it will take a long time for it to be mainstream.

We are seeing a shortage of skilled workers in many industries, not just aviation. The retiring boomers just aren't being replaced. I'll call out nursing in particular as having a critical shortage right now. Six figure incomes are the norm for a profession that has long been under-valued.

Also, that millennial stereotype.

But the dangerous element, as stated above, is that airlines are very vulnerable to economic changes. Fewer people flying means fewer airplanes and fewer pilots needed. Who can tell what will happen in the next downturn. It it's as big as the last one, we'll certainly see a bankruptcy or two.
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Not automation of the airliners, but automation of everything else in the economy.

EG; Direct competition from say an automated bus or self driving cars, I can't imagine with this technology that 75% of the routes we fly at my regional would be necessary or competitive.

EG; The automation of other jobs will make it as such that even if the airliner isn't automated there will be so few people with jobs and income that no one will be afford to buy an airline ticket, or anything else for that matter. If no one else can buy anything or trade money in the economy then no other jobs are necessary. It's completely zero sum and it will happen in our lifetimes. The next downturn is going to be YUGE and I'm not looking forward to it. I'm pretty sure by the time airliners are automated there will be such insurmountable structural problems in society, you're not going to care.

I'm 29 and don't really see flying as viable long term career, but for right now it's really good. I'm maxing investments and enjoying being employed and doing so in a manner that does not involve sitting in a cubicle. We'll see what the not so distant future holds though.
 
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JDean3204 said:
Wow, you guys really are a glass half full bunch aren't you?
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You can either identify a problem, prepare for it and deal with. Or you can stick your head in the sand and pretend that this; isn't a thing. It's all pretty obvious and the writing is on the wall, sorry man.
 
NickH said:
I don't see automation as an immediate threat. We may be 25 years from the roll out of an automated airliner, but it will take a long time for it to be mainstream.

We are seeing a shortage of skilled workers in many industries, not just aviation. The retiring boomers just aren't being replaced. I'll call out nursing in particular as having a critical shortage right now. Six figure incomes are the norm for a profession that has long been under-valued.

Also, that millennial stereotype.

But the dangerous element, as stated above, is that airlines are very vulnerable to economic changes. Fewer people flying means fewer airplanes and fewer pilots needed. Who can tell what will happen in the next downturn. It it's as big as the last one, we'll certainly see a bankruptcy or two.
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Exactly what @Soku39 said. Even without autonomous or single-pilot airliners (I think both are a few decades away, albeit only because of the regulatory obstacles getting them approved), there will be little need for pilots if too many other people's jobs are automated out of existence. As I said, air travel is pretty much a luxury good and if you work for an airline your livelihood depends on enough people having enough disposable income to afford it, which they won't if they're structurally unemployed. The jobs that remain will also likely pay less because there will be so much more competition for them. Very few people will be able to afford an airline ticket, so there will be little demand for pilots. That was my point.

Soku39 said:
Not automation of the airliners, but automation of everything else in the economy.

EG; Direct competition from say an automated bus or self driving cars, I can't imagine with this technology that 75% of the routes we fly at my regional would be necessary or competitive.

EG; The automation of other jobs will make it as such that even if the airliner isn't automated there will be so few people with jobs and income that no one will be afford to buy an airline ticket, or anything else for that matter. If no one else can buy anything or trade money in the economy then no other jobs are necessary. It's completely zero sum and it will happen in our lifetimes. The next downturn is going to be YUGE and I'm not looking forward to it. I'm pretty sure by the time airliners are automated there will be such insurmountable structural problems in society, you're not going to care.

I'm 29 and don't really see flying as viable long term career, but for right now it's really good. I'm maxing investments and enjoying being employed and doing so in a manner that does not involve sitting in a cubicle. We'll see what the not so distant future holds though.
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You bring up a good point about self-driving cars replacing short hall flights, I suspect that will happen. With how unpleasant most people find flying they will probably be a much more attractive option. Passengers will be able to take a self-driving car right from their door to a major airport to catch a long-haul flight. This will probably be possible in just a few years. Also, I foresee most short regional routes being replaced by bus service next time oil gets expensive, including most of the routes I fly in the Dash 8. This is already happening to a certain extent- my employer used to serve ABE but our mainline partner replaced that with a bus that goes from ABE right to gate 71 in EWR.

SeanD said:
The very near future is a perfect mix of the movies WALLE and Idiocracy.
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Pretty much. Ever read Manna by Marshall Brain? http://marshallbrain.com/manna1.htm I suspect the future will look very similar to what Brain describes once Technological Unemployment becomes an issue.
 
Soku39 said:
You can either identify a problem, prepare for it and deal with. Or you can stick your head in the sand and pretend that this; isn't a thing. It's all pretty obvious and the writing is on the wall, sorry man.
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Well, if in the very rare chance that unmanned jetliners are mainstream in my career. I guess I'll just have to sit in that office and fly remotely then, heck maybe the airlines will home base their UJL(Unmanned Jet Liner) pilots then!!! :D
 
JDean3204 said:
Well, if in the very rare chance that unmanned jetliners are mainstream in my career. I guess I'll just have to sit in that office and fly remotely then, heck maybe the airlines will home base their UJL(Unmanned Jet Liner) pilots then!!! :D
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If we can only be so lucky. I'm sure I'll have had my fill of flying by then anyway.
 
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