The International Air Transport Association (IATA) estimates that air carriers will need to recruit over 17,000 new pilots annually to cover increasing demand for air travel and dwindling pilot supply. At the same time, healthy, highly experienced pilots are leaving US airlines through forced retirement.
For the last 50 years, the Federal Aviation Administration has mandated that pilots must retire from commercial airline service at age 60. However, unlike previous years, many pilots today enjoy great health and could easily continue flying.
The Fair Treatment for Experienced Pilots Act (HR 4343), signed into law on December 13th by President Bush, allows pilots in the future to fly to age 65 so long as they meet health and training standards. The new law allows commercial pilots and copilots to be up to 65 years old on domestic flights. However, commercial pilots on international routes must still follow the International Civil Aviation Organization (ICAO) 2006 standard whereby at least one of the pilots must be under 60.
The new law only applies to pilots who have not yet reached retirement age. For pilots who were previously forced into retirement coming back to airline duty isn't so easy. Airlines base duty assignments and pay rates on a seniority system. A pilot who retires then rejoins the airlines would find himself back at the bottom of the seniority list, flying smaller airplanes on shorter routes and in a first or second officer role. Essentially he becomes a new hire.
The new rule allows pilots to stay on for an additional five years, but more importantly keeps experienced aviators in the US air network. In recent years, foreign air carriers have raided US and European carriers for their most experienced crews. This has placed a commercial burden on US air carriers even as they aggressively hire new pilots and trainees. Airlines in the Middle East and India have been aggressive in hiring experienced US air crews.
In 2007 several US air carriers chose to invest in additional international routes. Those routes demand experienced high time pilots. However when revenues are in dollars and expenses are often in Euros or other better positioned currencies, American carriers may be at a disadvantage in competing with foreign carriers who may be better able to afford higher priced American crews.
Senior pilots make significantly higher salaries than newer hires. Leaving experienced pilots in the captains seat for another five years will significantly raise crew costs for airlines. Combining the largest American airlines together, (American, United, Delta, Continental, Northwest, US Air, Southwest, FedEx, and UPS), there are over 22,000 pilots scheduled to retire in the next ten years.
Keeping senior pilots for an additional five years increases the availability of experienced talent, but at the same time holds younger pilots in lower slots and increases crew costs at a time when many airlines are struggling financially. Airlines may be pushed harder to consider mergers as the burden of crew cost combined with high fuel prices, force carriers to rationalize their fleets, routes and personnel costs just to survive.
Eric
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