Age 65 Retirements Begin Soon, How Will That Affect the Airlines?

On December 13th, 2007 then President Bush signed the law that allowed the mandatory retirement age for airline pilots to be raised from 60 to 65. That means that in only two years we will begin to see the impact that pushing all of those retirements back 5 years will have on the airline industry.

Since the new law went into effect, there has been an average of 2000 airline pilots retiring per year who were not forced to retire due to their age, according to airline consultant Kit Darby. Some have retired for medical reasons, some have been let go and the remainder have retired for a variety of other reasons.

Beginning in the year 2012, the number of pilots who will have to retire because they have reached the age of 65 will begin to swell the number of those retiring for other reasons. Soon the number of airline pilots retiring each year will increase dramatically and there are not enough pilots currently in training to replace them.

According to the General Aviation Manufacturers Association GAMA, there has been an average of 9,130 new Commercial Certificates (which you must have to operate an aircraft for compensation) issued to pilots annually over the last 6 years.

Foreign airlines have been booming for the last few years, and these foreign airlines have been sending their people to the U.S for flight training in large numbers. As a result, a significant portion of those afore mentioned Commercial Certificates have been earned by foreign students who have no intention of working for an airline in the United States. In addition, a portion of these new Commercial Certificate holders staying in the U.S. will go to work for Freight Operations, Part 135 On-demand Charter Operations, Corporate Flight Departments and work as Certified Flight Instructors.

In order for a pilot to be a Captain for an airline, they have to earn an Airline Transport Pilot (ATP) Certificate. If you compare the number of new Commercial Certificates (9130) to the average number of new ATP Certificates (4775) issued over the same time frame, you can see the approximate number of Commercial Pilots who will go on to be Captains in the airline industry.

Compare this number then to the retirement figures in the graph above and you can see an impending pilot shortage. Add to this increased demand for pilots the 5% growth the FAA, Boeing and Airbus have forecast the airline industry to undergo through the year 2026.

In order to meet the demand for pilots in the growing airline industry, 19,000 new pilots will need to be trained each year until 2026. Flight schools in the U.S. have recently been training around 16,000 pilots annually, but there are only about 9000 pilots who are training this year due to the recession and its affect on financing flight training.

We are seeing a perfect storm of a pilot shortage developing for the airline industry. There are a few other factors to be added to the upcoming retirements that will make up this perfect storm, and we will explore those over the next few days.