Airlines face severe pilot shortage as summer travel season nears

By Claudia Assis

Carolina Larsson was in her mid-30s and working at an investment bank in New York City when she overheard a co-worker talk about flight lessons. Soon she was taking lessons at the same flight school and plotting a career change.

“I emptied my 401(k) and I maxed my credit cards and I borrowed money from friends,” she said of taking the first steps toward becoming an airline pilot, which she estimated cost her about $100,000 over several years. “I went all in. I just hoped it would pay off.”

Ten years later, Larsson is a first officer at a regional airline on the East Coast, mulling her next career stage, a move made slightly more complicated by her recent marriage to another pilot. But there’s a strong chance the newlyweds will have plenty of career choices in the months to come.

That’s because the pandemic heated a simmering pilot shortage to boiling point, leaving U.S. airlines scrambling to hire enough pilots to get flight schedules back to full capacity. The shortage is expected to limit capacity growth, and be a factor in higher ticket prices.

Not a ‘temporary issue’

U.S. airlines received billions in government loans in 2020 to make payroll as travel restrictions, put in place around the world to curb the spread of the novel coronavirus, caused a sharp decline in bookings.

The airlines went into cash-conservation mode, especially when they were in between the two tranches of government loans. The carriers cut down on capacity and implemented hiring freezes and cost-cutting measures. Crucially, they also offered their pilots, among their highest-paid personnel, incentives to retire early.

Airline pilots must retire by age 65, a limit raised in 2007 from age 60, and the industry was prepared for retirement waves as pilots from the baby-boomer generation were approaching that threshold.

Those waves would have spanned two to three years, Raymond James analyst Savanthi Syth told MarketWatch. With the pandemic, “they happened all at once,” Syth said.

Flight schools were also getting hit and graduating fewer pilots. Many schools had to close doors under public-health orders, offering flight students fewer opportunities to build the flight hours they need to qualify and slowing graduation rates.

After air travel demand started picking up, flight-school instructors started leaving to become pilots themselves, leading to other training bottlenecks. Moreover, a pilot hired today may get a better offer from another airline tomorrow.

“There’s just a lot of movement,” Syth said. “Today as a pilot you are in a very sweet spot, you can become a pilot in a legacy carrier faster than ever.”

Aviation-training company CAE Inc. /zigman2/quotes/200553760/composite CAE -1.29% /zigman2/quotes/205699916/delayed CA:CAE -1.38% forecast that more than 264,000 new pilots will be needed globally over the next 10 years, in addition to some 45,000 pilots needed to fly corporate jets.

That includes about 219,000 airline pilots, with 65,000 needed in North America alone, a CAE spokesman told MarketWatch.

On an even longer time horizon, Boeing Co. /zigman2/quotes/208579720/composite BA +2.24% estimated last year that demand for newly qualified aviation personnel remains strong , with 612,000 new pilots, 626,000 new maintenance technicians and 886,000 new cabin crew members needed to fly and maintain the global commercial fleet through the next 20 years.

Pilot recruitment and advisory service FAPA.aero has estimated that major U.S. airlines hired a record 5,426 pilots last year, and are expected to hire about 9,540 this year.

In a call after United Airlines Holdings Inc.’s /zigman2/quotes/205037281/composite UAL +1.23% second-quarter earnings in April, United Chief Executive Scott Kirby said United was “ramping up” to hire about 200 pilots this year, but the shortage is a major growth roadblock for smaller airlines, including those regional carriers flying for United. “This is not a temporary issue,” he said.

Flight-training is fragmented, too. CAE graduates about 1,500 new pilots a year, but there are dozens of smaller schools graduating just a handful of pilots each year.

All told, the industry creates an estimated 5,000 to 7,000 pilots a year, and has to hire about 13,000 this year with similar to slightly higher numbers for 2023.

Once hired, a newly minted passenger or cargo airline pilot will need four to five months of training, usually, within the air carrier they chose.

Passenger airlines also were caught by surprise by how quickly air-travel demand was coming back, starting in the spring of last year, Syth said. “It went from zero to 60 very fast,” and airlines have been doing the most hiring she has ever seen.

Hiring new pilots has patterns: usually, regional airlines — which fly small-market, short-haul routes for different airlines — are viewed as a stepping stone toward becoming a pilot for larger airlines.

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