Notam

But, as they say, follow the money, and the money now being invested in pilot training in Australia is not insignificant, especially the $20 million Qantas is now dropping on its two new pilot training academies. That suggests that there most definitely is, and will be for the foreseeable future, a pilot shortage.

‘Qantas can trade off its – deserved – reputation for pilot training.’

That $20 million sum is a pretty small figure in comparison to the US$325 million list price for a single Boeing 787-9 that the academy’s graduates may ultimately fly later in their careers. But it’s far from peanuts. Qantas being Qantas the numbers would have been run on this very carefully, and there is undoubtedly a thorough cost-benefit analysis behind the decision. If a pilot shortage is, after all, a simple question of supply and demand, why not just increase pilot pay, to better retain existing pilots and entice new pilots to self fund themselves into the industry, rather than going to the expense of investing in, and running, a pilot training academy?

I haven’t seen Qantas’s business case for the pilot academies, but I’m sure there were multiple considerations that led to establishing pilot training academies being seen as more cost effective than just increasing pilot pay. (Although that may well still prove necessary.)

Foremost of those considerations would have been assuring a consistency of supply of new pilots, especially into the QantasLink regional operation and into Jetstar.

There has been a big trickle-down effect from overseas airlines recruiting experienced Australian pilots – when the major airlines lose pilots they recruit from their regional operators, and when regional operators lose pilots they in turn recruit from the smaller independent regionals, who in turn recruit from GA and flying schools.

The consequence of all that is that QantasLink and Regional Express cancel flights due to a lack of crews, and a growing shortage of experienced flight instructors across the industry.

So having its own pilot training academy ensures a pipeline of suitably-trained and qualified junior pilots, and that likely goes a long way to addressing the risk to business continuity from pilot shortages (or shortages of the right kind of pilots).

There are bound to be benefits from consistency of training, too – cadet pilots trained from day one to Qantas’s standards and procedures will be able to move more seamlessly up the ranks between aircraft types and airline operating divisions, than a pilot trained externally. This, afterall, is a key reason why the ADF so carefully screens and trains its own pilots.

So there are sound business continuity and operational benefits for setting up a pilot academy.

But Qantas Group CEO Alan Joyce has also highlight the pilot academies’ potential to train pilots for other airlines as well as for the Qantas Group, noting, on more than one occasion, that Boeing forecasts a global need for 790,000 airline pilots over the next 20 years.

That potential suggests the Qantas pilot academies could generate substantial revenue and may well be profit, rather than cost centres for the airline group.

It’s here where the business could really stack up. Qantas can trade off its – deserved – reputation for pilot training and safety excellence to generate substantial income from airlines across Asia and the Middle East.

On top of which it shores up and guarantees a long-term supply of pilots trained to its exacting standards.

And all that for an investment of $20 million, supplemented, thank you very much, by state government funds and concessions, and co-investment, from the airport owner (Wellcamp for the first site) and Qantas’s training provider partner (L3 Aviation).

That $20 million could turn out to be a really sound investment.

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