The Pilot Crisis

And it’s not just Rex facing the issue. While Rex has certainly been the most vocal, all the regional airline executives Australian Aviation surveyed for our regional aviation special feature from page 25 of this issue raised pilot numbers as a concern.

These admissions are staggering in an industry where for years GA operators and regional airlines could almost name their price in setting pilot wages, with pilots initially forgoing large salaries in the quest to build experience on the way to a coveted job flying jets with a major airline.

But today, rapidly expanding international airlines like Emirates are an attractive lure for Australian pilots, while in Australia the growth of Virgin Blue and Jetstar in particular is driving demands for pilots. With every level of the industry recruiting from the level below, it’s inevitable that GA and the regionals be the first sectors to face a pilot squeeze.

The fundamental economic law of supply and demand means it is fairly easy to see why some airlines are facing a severe pilot shortage.

Airlines are growing fast and so need pilots faster than the industry’s traditional methods of producing them.

What is not easy to see is the solution.

You would be forgiven for concluding that Rex used strong language in its press release to gain attention in the lead-up to a federal election, as it is calling upon federal government assistance with pilot training.

But losing 20 per cent of your pilots in three months highlights that this has become a severe problem.

“The high cost of flying training, estimated at around $80,000 per individual, is the main reason why there are not enough commercial pilots being produced today,” Rex chief of staff Jim Davis says in the release.

“Rex has done all it could and we call on the government to respond to this looming crisis by urgently implementing similar bold and decisive measures. ” That would probably help. Professional piloting should have an equivalent level of government support that doctors, lawyers or accountants receive through government funding of the university system and the HECS loan program.

But how much would government aid help? Because the biggest reason regional airlines struggle to retain pilots is the superior terms and conditions offered by the major airlines, addressing supply won’t reduce the attraction of major airline wages for hard working regional airline pilots.

“The smaller operators have no defence against such massive recruitment as they are in no position to match the salaries and conditions of the large carriers,” Rex’s Davis concedes in the release.

It’s this concession and issue that has stirred up the most debate in the pilot community, at least if Pprune website postings are a representative guide.

One poster quotes the section of the Rex release which reads: “If the government can subsidise the education of lawyers, accountants engineers and other professionals, surely it can recognise that the piloting profession is equally worthy of assistance?” The poster comments: “Should it be (instead) ‘If Rex can see the pay scales of lawyers, accountants, engineers and other professionals, surely it can recognise that the piloting profession is equally worthy of greater remuneration?’ ” Regional airlines have to decide if it is cheaper and more cost effective to train rather than retain. In seeking an alliance with a flying school and setting up a cadet pilot scheme Rex has opted for the former route.

This is possibly because, as another Ppruner put it, “Rex cannot afford to pay the T&Cs (terms and conditions) posters here are demanding! How many times do I have to say this? Don’t you think it obvious, especially given that all other similar operators in Australia pay about the same?” Therein lies the challenge. If Rex has 300 pilots, giving them all a $10,000 payrise would cost $3 million a year. In that light you can see why Rex is launching a cadet program and calling for government support. Fair to say Rex could cope with that at the moment (it made a $23. 6 million net profit in 2006/07). But rule number 1 in business is to control your costs, and it was only a few years ago when Rex was losing money and in danger of collapse.

In the end though Rex and other regionals will have no choice. If you can’t fly your aeroplanes you don’t have a business.

It’s a new challenge for aviation, but there is an old answer.