Aviation Workforce: Current and Future Availability of Airline Pilots
Released: 2014-02-28T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Over 66,000 airline pilot jobs exist for larger mainline and smaller regional airlines that operate over 7,000 commercial aircraft. After a decade of turmoil that curtailed growth in the industry and resulted in fewer pilots employed at airlines since 2000, recent industry forecasts indicate that the global aviation industry is poised for growth. However, stakeholders have voiced concerns that imminent retirements, fewer pilots exiting the military, and new rules increasing the number of flight hours required to become a first officer for an airline, could result in a shortage of qualified airline pilots.

GAO was asked to examine pilot supply and demand issues. This report describes (1) what available data and forecasts reveal about the need for and potential availability of airline pilots and (2) what actions industry and government are taking or could take to attract and retain airline pilots. GAO collected and analyzed data from 2000 through 2012, forecasts from 2013 through 2022, and literature relevant to the labor market for airline pilots and reviewed documents and interviewed agency officials about programs that support training. GAO interviewed and collected data from associations representing airlines or their pilots, and pilot schools that accounted for about half of the students who graduated with professional pilot majors in 2012. GAO selected the airlines and schools based on factors such as size and location. GAO is not making recommendations in this report. The Department of Transportation and others provided technical clarifications on a draft of the report, which GAO incorporated.

section_title: What GAO Found
paragraphs: GAO found mixed evidence regarding the extent of a shortage of airline pilots, although regional airlines have reported difficulties finding sufficient numbers of qualified pilots over the past year. Specifically, looking at broad economic indicators, airline pilots have experienced a low unemployment rate—the most direct measure of a labor shortage; however, both employment and earnings have decreased since 2000, suggesting that demand for these occupations has not outstripped supply. Looking forward, industry forecasts and the Bureau of Labor Statistics' employment projections suggest the need for pilots to be between roughly 1,900 and 4,500 pilots per year, on average, over the next decade, which is consistent with airlines' reported expectations for hiring over this period. Yet studies GAO reviewed examining whether the future supply of pilots will be sufficient to meet this need had varying conclusions. Two studies point to the large number of qualified pilots that exists, but who may be working abroad, in the military, or in another occupation, as evidence that there is adequate supply. However, whether these pilots choose to seek employment with U.S. airlines depends on the extent to which pilot job opportunities arise, and on the wages and benefits airlines offer. Another study concludes that future supply will be insufficient, absent any actions taken, largely resulting from accelerating costs of pilot education and training. Such costs deter individuals from pursuing a pilot career. Pilot schools that GAO interviewed reported fewer students entering their programs resulting from concerns over the high costs of education and low entry-level pay at regional airlines. As airlines have recently started hiring, nearly all of the regional airlines that GAO interviewed reported difficulties finding sufficient numbers of qualified entry-level first officers. However, mainline airlines, because they hire from the ranks of experienced pilots, have not reported similar concerns, although some mainline airlines expressed concerns that entry-level hiring problems could affect their regional airline partners' ability to provide service to some locations.

Airlines are taking several actions to attract and retain qualified commercial airline pilots. For example, airlines that GAO interviewed have increased recruiting efforts, and developed partnerships with schools to provide incentives and clearer career paths for new pilots. Some regional airlines have offered new first officers signing bonuses or tuition reimbursement to attract more pilots. However, some airlines found these actions insufficient to attract more pilots, and some actions, such as raising wages, have associated costs that have implications for the industry. Airline representatives and pilot schools suggested FAA could do more to give credit for various kinds of flight experience in order to meet the higher flight-hour requirement, and could consider developing alternative pathways to becoming an airline pilot. Stakeholders were also concerned that available financial assistance may not be sufficient, given the high costs of pilot training and relatively low entry-level wages.

section_title: Letter
paragraphs: The airline industry contributes to the U.S. economy by providing global  mobility and connectivity in transporting passengers and cargo, as well as  significant economic and social benefits to small communities. The U.S.  airline industry operated more than 7,000 commercial airplanes in 2012,  and there were over 72,000 pilots employed nationwide. Since 2000, the  aviation industry has experienced significant turmoil (e.g., the 2001  terrorist attacks, the SARS epidemic, two recessions, and numerous  mergers and bankruptcies) that has curtailed its growth. However, recent  industry forecasts indicate that the global aviation industry is poised for  growth, and airlines around the world, including several domestic airlines  that are recalling their remaining furloughed pilots, have announced plans  to hire several thousand new pilots in the coming years.

Aviation stakeholders have voiced concerns that an insufficient supply of  available and qualified pilots could develop because of imminent  retirements, changes to qualification requirements for airline pilots acting  as first officers, and perceptions that fewer people are entering pilot  schools and fewer pilots exiting the military, among other reasons, thus,  challenging airlines’ ability to fill the near- and long-term demand for  pilots. In light of these stakeholder concerns, you asked us to examine  the supply of and demand for airline pilots and potential market and  government responses. Specifically, this report describes (1) what the  available data and forecasts reveal about the need for and potential  availability of airline pilots and (2) the types of industry and government  actions that are being taken, or might be taken, to attract and retain airline  pilots.

To address these objectives, we reviewed economic literature that  describes how to evaluate labor market conditions, including identifying a  labor shortage. Following the literature, we analyzed data from the  Department of Labor’s (DOL) Bureau of Labor Statistics’ (BLS) Current  Population Survey (CPS)—a monthly survey of households conducted by  the Bureau of Census for BLS—on the unemployment rate, employment,  and median weekly earnings (earnings) from 2000 through 2012. We also  obtained data from BLS’s Occupational Employment Statistics (OES)  survey for employment and wage earnings from 2000 through 2012.  These data can be used as indicators of whether labor market conditions  are consistent with a shortage. We used SAS, a statistical software  application, to connect the BLS CPS data for 2000-2010 and 2011-2012  by the Standard Occupational Classification (SOC) for aircraft pilots. We  analyzed how these indicators have changed over time, and whether  these indicators suggest a labor shortage. To verify our results, we  consulted with Malcolm Cohen, Ph.D., labor economist and author of the  original methodology for conducting indicator analysis, and incorporated  his comments as appropriate. We determined the data were sufficiently  reliable for the purposes of our indicator analysis to provide context on  the labor market. We also reviewed studies that projected the supply of,  demand for, or employment for airline pilots. Each study was reviewed by  one GAO economist to evaluate its methods, assumptions, and  limitations, and this review was then verified by a second GAO  economist. For one study, we replicated the analysis using data provided  by the lead researchers. We determined these studies were sufficiently  reliable for reporting purposes, and where relevant in this report, we  described the limitations we identified in these studies. We reviewed data  from the Department of Education (Education) on completion rates for  degree or certificate programs that might prepare individuals to work as  airline pilots; the Department of Defense (DOD) on the number of military  pilots leaving the services; and FAA on the numbers of and types of pilot  certificates and pilot schools. We also attempted to gather data  projections for the next 10 years (2014 through 2023). To understand the  extent that employers have had difficulty attracting or retaining airline  pilots and whether steps were being taken to mitigate perceived  shortages, we interviewed and collected data from various industry  stakeholders, including associations representing airlines and airline  pilots, mainline and regional airlines, pilot training programs, industry  organizations, among others. See appendix I for more information about  our scope and methodology and a listing of the stakeholders we  interviewed.

We conducted this performance audit from March 2013 through February  2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The U.S. airline industry is vital to the U.S. economy. Airlines directly  generate billions of dollars in revenues each year and contribute to the  economic health of the nation. Large and small communities rely on  airlines to help connect them to the national transportation system. To  operate as an airline carrying passengers or cargo for hire or  compensation, a business must have an air carrier (airline) operating  certificate issued by the Federal Aviation Administration (FAA), based on  federal aviation regulations. Certification is determined by the type of  commercial service being provided. Airlines that provide scheduled  commercial service operate in accordance with Part 121 of Title 14 of the  Code of Federal Regulations (CFR)categories: mainline and regional. Mainline airlines include (1) passenger  service providers, such as American and Delta that offer domestic and   and are often grouped into two  international passenger service on larger airplanes, and (2) cargo service  providers, such as United Parcel Service and Federal Express, that offer  domestic and international cargo service. Regional airlines include (1)  passenger service providers, such as SkyWest and ExpressJet, that offer  domestic and limited international passenger service, generally using  airplanes with fewer than 90 seats and transporting passengers between  large hub airports and smaller airports, and (2) cargo service providers,  such as ABX Air and Kalitta Air, that provide domestic and limited  international cargo service on a charter or contract basis. Regional  airlines generally provide service to smaller communities under capacity  purchase agreements with mainline airlines, operate about half of all  domestic flights, and carry about 22 percent of all airline passengers. At  the end of fiscal year 2012, according to FAA, the U.S. commercial airline  industry consisted of 15 scheduled mainline airlines and 70 regional  airlines. According to available data, there were over 72,000 airline pilots  employed nationwide in 2012. In addition to mainline and regional  airlines, other smaller, commercial air-service providers offer scheduled  and unscheduled service, via commuter or on-demand operations, and  operate in accordance with Part 135 of Title 14 of the CFR.

It takes many years of training and significant financial resources to meet  FAA’s certification and aeronautical experience qualifications to become  an airline pilot. FAA issues several types of pilot certificates that airline  pilots progress through—including student pilot, private, commercial, and  airline transport pilot (ATP). Federal aviation regulations establish the core requirements for each pilot certification, including the eligibility  requirements, aeronautical knowledge, aeronautical experience, and flight  proficiency standards. Regulations also govern what pilots with each  certificate can do. For example, a private pilot certificate allows pilots to  fly solo or carry passengers in any aircraft for which they are qualified, but  not to fly for compensation; a commercial pilot certificate is necessary for  a variety of non-airline pilot jobs. The ATP certificate is the highest level  of pilot certification, requires the highest amount of cumulative flight time  and is necessary to fly as a captain or first officer for an airline.

Airline pilots are mostly trained through FAA-certified pilot schools at a  college or university—typically through 2- and 4-year degree programs— non-collegiate vocational schools, or in the military. Outside of military  training, where service members receive compensation while training to  become a pilot, costs can vary significantly for individuals wishing to  become a pilot depending on the number of certificates and ratings they  wish to attain and the school or training program they choose. Generally,  costs to attain a private pilot certificate averages about $9,500, according  to the University Aviation Association. However, the academic  education and flight training from a 4-year aviation degree program to  obtain up to a commercial pilot certificate with additional ratings  necessary to be hired as a pilot for commercial flying can cost well in  excess of $100,000. Pilot students generally do not come out of collegiate  and vocational pilot schools with the necessary requisites to attain an  ATP certificate. Individuals will typically graduate from these schools with  a commercial pilot certificate, and then they must gain experience by  accumulating flight time and pass additional certification testing to obtain  an ATP certificate. Similarly, upon separation from the military, military  pilots would have to meet the same flight time requirements and pass the  certification tests as a civilian pilot would in order to obtain an ATP  certificate, although they may be able to use their military flight time to  meet those requirements.

Until recently, regional and mainline airlines were permitted to hire first  officers who had obtained a commercial pilot certificate which, among  other things, required a minimum of 250 hours of flight time. However,  following the 2009 Colgan Air, Inc. crash, in New York, the Airline Safety  and Federal Aviation Administration Extension Act of 2010 mandated  that FAA further limit the hours of pilot flight and duty time to combat  problems related to pilot fatigue and increase training requirements and  pilot qualifications for first officers. In January 2012, FAA issued a rule  mandating that pilots have certain rest periods between flights and  limiting the number of consecutive hours a pilot may fly. This rule  became effective as of January 2014. In July 2013, FAA, as required by  the law, issued a new pilot qualification rule that increased the  requirements for first officers who can fly for U.S. passenger and cargo  airlines. The rule requires that first officers now hold an ATP certificate,  just as captains must hold, requiring, among other things, a minimum of  1,500 hours of total time as a pilot. The law also gave FAA discretion to  allow specific academic training courses to be credited toward the  required hours of total time as a pilot. As such, the rule included an  allowance for pilots with fewer than 1,500 hours of total time as a pilot to  obtain a “restricted-privileges” ATP certificate (R-ATP)—that is, to allow  pilots to serve as first officers until they obtain the necessary 1,500 hours  of total time as a pilot needed for an ATP certificate—when they meet  certain requirements1.  former military pilots with 750 hours of total time as a pilot;  2.  graduates of approved 4-year aviation degree programs with 1,000  hours of total time as a pilot and meet other requirements;3.  graduates of approved 2-year aviation degree programs with 1,250  hours of total time as a pilot and meet other requirements.

As of January 24, 2014, 37 collegiate 2- and 4-year aviation degree  programs have been authorized to certify graduates to be eligible to apply  for an R-ATP certificate.

In order to qualify for the R-ATP with a minimum of 1,250 hours of total time as a pilot,  the graduating pilot must hold a bachelor’s or an associate’s degree with an aviation major  and complete 30 aviation semester credit hours, who also receives a commercial pilot  certificate and instrument rating, from an institution of higher education that has been  recognized by the FAA Administrator as coursework designed to improve and enhance  the knowledge and skills of a person seeking a career as a professional pilot. 14 CFR  61.160(c).

Options available to these pilots to build the necessary

Obtain a certified flight instructor (CFI) certificate which allows pilots to  accrue flight hours while instructing new student pilots.

Become employed with Part 135 air service providers (i.e., commuter  and on-demand, or non-Part 121 cargo operations) as a first officer,  where a commercial pilot certificate (minimum 250 hours) is required,  among other requirements.

Become employed performing Part 91 operations—such as banner  towing, crop dusting, and corporate flights.

Pay for flight time such as renting aircraft for flying or training in a  flight simulation training device.

Work abroad for foreign airlines, or join the U.S. military and be  trained as a pilot.

Several federal agencies have a role in supporting and developing the  pilot workforce. As mentioned, FAA is responsible for the administration  of pilot certification (licensing), among other things, and DOD, the  Department of Veterans Affairs (VA), DOL and its Employment and  Training Administration (ETA), and Education each have a role that may  contribute to the availability of airline pilots (see table 1).

The holder of a valid flight instructor certificate may provide pilot training and instruction  for pilot certification in any aircraft for which they are qualified. 14 C.F.R. § 61.183.

Part 61 allows for a maximum of 25 hours of training in a full flight simulator representing  a multiengine airplane to be credited toward the flight time requirement for an ATP  certificate if the training was accomplished as part of a FAA-approved training course. 14  C.F.R. § 61.159(a)(3). In addition, no more than 100 hours of the total non-airplane time  towards the total time requirement for an ATP certificate which may be obtained in a full  flight simulator or flight training device provided the device represents an airplane and the  aeronautical experience was accomplished as part of a FAA-approved training course. 14  C.F.R. § 61.159(a)(5).

section_title: Data Are Mixed Regarding the Extent of an Airline Pilot Shortage, but Regional Airlines Are Experiencing Difficulties Hiring Entry-Level Pilots
paragraphs: Historical labor market data from 2000 through 2012 provide mixed  evidence as to whether an airline pilot shortage exists. The  unemployment rate for the pilot occupation—a key indicator for a  shortage—has been much lower than for the economy as a whole, which  is consistent with a shortage. On the other hand, wage earnings and  employment were not consistent with the existence of a shortage, as data  for both indicators showed decreases over the period. In looking forward,  to meet the expectation of growth in the industry and to replace expected  mandatory age-related pilot retirements, projections indicate the industry  will need to hire a few thousand pilots on average each year over the next  10 years. Data indicate that a large pool of qualified pilots exists relative  to the projected demand, but whether such pilots are willing or available  to work at wages being offered is unknown. Furthermore, the number of  pilot certificate holders has not been increasing, and fewer students are  entering and completing collegiate pilot training programs. Studies and  analyses related to the supply of airline pilots find that a shortage may  arise depending on several factors, including the extent of future industry  growth, the wages being offered, and escalation in education costs. As  airlines have started hiring to address growth demands and attrition, 11 of  the 12 regional airlines we interviewed reported difficulties filling entry- level first-officer vacancies. Mainline airlines, since they hire experienced  pilots largely from regional airlines, have not reported similar difficulties,  although mainline airline representatives expressed concerns that entry- level hiring problems could affect the ability of their regional partners to  provide service to some locations.
subsections: section_title: Some Historical Labor Market Data Are Consistent with the Presence of a Pilot Shortage, and Other Data Are Not
paragraphs: While no single metric can be used to identify whether a labor shortage  exists, labor market data can be used as “indicators,” in conjunction with  observations from stakeholders. According to economic literature, one  can look at historical unemployment rates, as well as trends in  employment and earnings.expect (1) a low unemployment rate signaling limited availability of  workers in a profession, (2) increases in employment due to increased   If a labor shortage were to exist, one would  demand for that occupation, and (3) increases in wages offered to draw  more people into the industry. Of these three indicators, the  unemployment rate provides the most direct measure of a labor shortage  because it estimates the number of people who are unemployed and  actively looking for work in a specific occupation. The BLS household  survey-based CPS data used to evaluate these three indicators combined  airline and commercial pilots into a single occupational category of pilots;  therefore, we cannot isolate the extent to which the indicators apply to  only airline pilots, although airline pilots represent about two-thirds of the  employment within the occupation.

According to BLS data we analyzed from 2000 through 2012, the  unemployment rate of pilots has averaged 2.7 percent—a much lower  unemployment rate than for the economy as a whole. This level of unemployment would be consistent with a shortage because it suggests  few pilots during this time frame reported that they were looking for  employment as a pilot and were unable to find it. Furthermore, in relative  terms, over the entire period, the pilot occupation had the 53rd lowest  unemployment rate out of the 295 occupations for which annual BLS data  is available.

Data on the other two indicators, wage earnings and employment growth,  are not consistent with the existence of a shortage in the occupation.  First, our analysis of BLS data from 2000 through 2012 shows that the  median weekly earnings in the pilot occupation decreased by 9.5 percent  over the period (adjusted for inflation), or by an average of 0.8 percent  per year. According to economic literature, a positive growth in wages is  required for a shortage to be present. So, by absolute standards, the  findings for this indicator do not appear consistent with a shortage for  pilots during the time frame. We also compared wages in this  occupation to all other occupations and found wage growth for pilots has  been low compared to other occupations. Specifically, the pilot  occupation would be 187th out of the 250 occupations for which annual  data are available. However, other factors can account for a decline or  lack of growth in earnings even during a labor shortage. Earnings may be  slow to adjust to other labor market trends, or certain aspects of an  industry may prevent wages from increasing. For example, airlines may  have limited flexibility to adjust wages for entry-level positions in response  to a potential shortage due to seniority-based airlines’ pay systems in  place for pilots and because airlines’ pilot wages are often negotiated  contractually with labor unions.

Second, for the rate of employment growth, our analysis showed  employment for pilots has actually decreased by 12 percent from 2000 to  2012, a decrease that is also not consistent with a shortage. As previously stated, the airline industry has experienced considerable  volatility over the last decade due to recessions, bankruptcies, and  merger and acquisition activities that have curtailed growth in the  industry. By relative standards, the rate of employment growth for the pilot  occupation ranked about 331st of the 490 occupations for which annual  BLS data is available.

Our analysis of labor market data has a number of limitations given the  nature of the CPS and OES data from BLS and the scope of our analysis.  Occupations in the SOC system are classified using occupational  definitions that describe the work performed and may not take into  account specific requirements an employer seeks. For example, some  airlines may require specific aircraft type ratings. We identified the  following other limitations of the labor market indicators:

Data are collected through a household survey and are subject to  sampling and response errors. Typically, one individual will identify  occupation, employment, and wage data for all household members;  individuals may report incorrect or inconsistent information.

Survey results of unemployment rates are based on the person’s last  job, rather than the longest job held or occupation in which a person is  trained or looking for work; the data therefore can miss individuals  who are seeking work in a particular occupation. For example, airline  pilots who lost their jobs, worked temporarily in another occupation  (perhaps even within aviation), but considered themselves pilots and  were seeking employment as pilots when surveyed would not be  counted as unemployed pilots in the CPS data; rather, they would be  classified according to the occupation they had held temporarily.

BLS collects data on earnings for pilots in all stages of their careers,  so we could not examine whether starting earnings—which would be  more likely to indicate if wages were rising to attract entry-level  workers—have increased.

Data are collected at a national level; while not all indicators were  consistent with a labor shortage, our analysis would not identify any  regional shortages.

Research by BLS and others suggests job vacancy data as another  potential indicator for identifying labor shortages. However, BLS does  not collect information on job vacancies at the occupational level.  Some job vacancy data are collected by some states and private  companies, but the data are limited. We could not obtain complete  and sufficiently reliable occupational-level job-vacancy data from  these sources.

Finally, as mentioned above, no single measure can provide definitive  evidence as to whether a labor shortage exists. Rather, these data can  indicate the extent to which employers may have difficulty attracting  people at the current wage rate. Moreover, even if perfect data existed,  the term “labor shortage” is sometimes used to describe a variety of  situations, some of which are generally not considered to be shortages. For example, during periods of economic recession, employers may  become accustomed to hiring a high caliber of candidate with specific  training or levels of experience at a prescribed wage rate. In these cases,  employers can be more selective when hiring from among the candidates  for the position. However, during an economic expansion, when  companies may be increasing the size of their workforce, it is likely that  the number of job applicants will shrink and employers may have difficulty  finding the same caliber of candidates that they could find during a  downturn. Under these circumstances the employer’s challenge may  become one of quality of available people, not necessarily quantity of  people willing and able to do the job. Economic literature also suggests  that to describe the nature and scope of any potential shortage, these  indicators should be considered in conjunction with other information,  such as trends in the industry that can affect the demand of and supply  for qualified professionals and the hiring experiences of employers, which  we discuss in the following sections.

section_title: Projected Employment Growth and Retirements Suggest the Need for an Average of a Few Thousand New Pilots a Year over the Next Decade
paragraphs: The number of pilots that U.S. airlines will need to hire will be driven by  increases in passenger traffic (growth) and replacements for retiring and  attriting pilots. Several reports have projected the need for pilots in the  future. Audries Aircraft Analysis—an aviation industry analysis firm— developed a forecast of pilot needs over the next 10 years based on  forecasts of new aircraft orders and expected deliveries from aircraft  manufacturers Boeing, Airbus, and Embraer. Using industry averages  for numbers of pilots needed per plane, the forecast determines how  many pilots will be needed to accommodate the projected fleet growth,  and couples this number with industry data regarding expected  retirements. An academic study conducted by researchers from six  universities, led by researchers from the University of North Dakota,  forecasts the demand for pilots using similar techniques. FAA also  projects the need for pilots based on forecasts of growth in passenger  demand and expected retirements. While these projections are helpful in  gaining a sense for potential changes in aviation employment, developing  long-term occupational employment projections is inherently uncertain for  a variety of reasons. Most importantly, each projection relies on a set of  assumptions about the future, some of which may not come to fruition.  For example, the projections discussed above relied on assumptions of  continued economic growth, but if a recession or other unexpected  economic event were to occur, the projections for employment are likely   These projections vary in their results and based on  to be overstated.those results, we estimated that a range of roughly 1,900 to 4,500 new  pilots will be needed to be hired on average annually over the next 10  years, as follows:

Audries Aircraft Analysis developed pilot demand forecasts based  on aircraft manufacturers’ forecasts of fleet growth. Each  manufacturer uses a slightly different method to create its forecasts.  For example, some projections include certain cargo aircraft, and  some do not. Despite the differences in methods, the fleet growth  forecasts yielded similar results. Each forecast resulted in the  projected need for pilots steadily rising over the next 10 years to  accommodate growth and replacement of retiring and attriting pilots.  Annually averaged, the Embraer forecast resulted in a projection of  about 2,900 new pilots needed per year over the next decade; the  Boeing forecast resulted in about 3,300 new pilots, and the Airbus  forecast resulted in about 3,900 new pilots. It is important to note that  these forecasts encompass the entire North American market and are  not specific to the United States. In addition, the Boeing forecast  projected demand for 498,000 new airline pilots worldwide over the  next 20 years. The effect of this global demand for pilots may also  have an effect on the available supply of pilots for U.S. airlines in the  future, as foreign airlines also recruit U.S. pilots.

Academic study led by the University of North Dakota estimated  demand for pilots for roughly the next 20 years in its study of airline  pilot labor supply. This study derived demand based on industry  growth, retirements, and attrition for reasons other than retirements.  Industry growth was derived from forecasts of new aircraft from the  Airline Monitor and estimates of the average number of pilots  needed per aircraft. Expected retirements came from industry data,  and the study used an estimate of an attrition rate for reasons other  than retirement of 1.5 percent. The study estimates that the industry  would need to hire over 95,000 new pilots over about the next 20  years, with about 45,000 being needed in the next 10 years, for an  annual average of about 4,500 over the next decade.

FAA 2013 forecast projects that passenger demand for U.S. airlines  over the next 20 years will grow at an average 2.2 percent per year  through 2033, with slow or no growth expected in 2013 and slight  growth over the next 5 years assuming the U.S. economy grows at a  faster rate. To account for this industry growth and to replace retiring  pilots, FAA projects that about 70,000 new pilots with an ATP  certificate through 2032 will be needed.need for about 3,400 new pilots annually over the next 10 years.

This equates to an average

BLS Employment Projections 2012–2022 assumes a 6.6 percent  net decrease in employment in the overall number of airline pilot  positions through the year 2022—which equated to about 4,400 fewer  pilot jobs over the time period. This is in contrast with the average  expected occupational growth of 10.8 percent for all occupations for  this period. Based on the employment projection, we calculated that  an average of 440 pilot jobs will be lost annually through 2022.  However, while fewer airline pilot jobs will exist during the 10-year  period, BLS also projects, at the same time, 19,200 airline pilot job  openings, or an annual average of 1,920 openings, that may be  available to be filled due to retirements and attrition. The BLS  employment projections assume that growth in supply will be  adequate to meet the demand, and so the analysis is not designed to  forecast whether a labor shortage might develop in any given  occupation.

In addition to the need for airlines to hire new pilots based on industry  growth and replacement of retirements, FAA’s new rule on pilot flight and  duty time may engender a one-time staffing adjustment for airlines.  Current crew schedules can vary by airline, the labor contract involved,  and the number of pilots assigned to operate each aircraft, and airlines  we interviewed varied in their estimates of how many additional pilots  they would be need to meet the new requirements. Airlines’ estimates  ranged from no effect on the number of pilots needed to 15 percent  increase in the number of pilots needed as of January 2014.

While these projections suggest the need for between roughly 1,900 and  4,500 new pilots on an average annual basis over the next 10 years, we  cannot indicate with any level of certainty the actual number of new airline  pilots that will be needed or hired in the future. Airlines make a variety of  business decisions to meet passenger demand for airlines’ operations  that could affect the number of pilots that the airlines would need or are  able to hire. According to information provided by eight mainline airlines,  they expect to hire about 20,800 new pilots from 2014 through 2023.  Accordingly, several mainline airlines have announced plans to recall all  of their remaining furloughed pilots or begin new hiring efforts. For  example, in September 2013, United issued recall notices to its remaining  600 furloughed pilots. According to United representatives, it has also  started hiring new pilots with an initial goal of about 60 pilots a month to  address the airline’s projected future needs. While American and Delta  had already recalled all of their furloughed pilots, each announced plans  for future hiring. In October 2013, American announced plans to hire  1,500 pilots over 5 years. Delta planned to hire 300 pilots in November  2013 and expects to hire about 50 pilots per month through September  2014. Several regional airlines we spoke to have also been actively hiring  new pilots. For example, since March 2013, ExpressJet has hired from 32  to 48 pilots monthly. Also, representatives of American Eagle told us that  they expect to hire an average of 250 pilots per year for the next 10  years.

section_title: Data and Studies of Pilot Supply Provide Some Evidence of the Potential for a Shortage to Emerge Pools of Certificate Holders Are Large Relative to Employment, but Are Not Increasing
paragraphs: While there were over 72,000 airline pilots employed in 2012, FAA data  show a total of 137,658 active pilots under the age of 65 who held ATP  certificates, as of January 6, 2014. This large pool of ATP certificate  holders, however, can include pilots who are not available for work or are  not suitable or competent to act as pilots in airline operations on large jet- powered aircraft. Data were not available to determine or verify how many  active ATP certificate holders were otherwise employed. The pilots not  employed by airlines may also be serving as pilots in the U.S. military,  employed as pilots in non-airline operations, employed by foreign airlines,  employed in non-pilot jobs in the aviation industry, or working in non- aviation careers. With respect to pilots holding FAA pilot certificates and  potentially working for foreign airlines, in 2012 according to FAA data,  about 7,858 pilots with ATP certificates (or about 5 percent of the total  number of pilots with ATP certificates) and about 15,994 pilots with  commercial certificates (or about14 percent of the total number of pilots  with commercial pilot certificates) are listed with a documented residence  outside of the United States.

In addition to ATP certificate holders, a large population of commercial  pilot certificate holders with instrument ratings also exists. In 2012, for  instance, a total of over 116,000 pilots held commercial pilot certificates  and about 105,000 of these pilots also held an instrument rating. While  not currently qualified to be airline pilots, future ATP certificate holders  typically come from this pool, and the instrument ratings held by some of  these individuals suggest that they may be on a pathway to qualifying for  an ATP certificate. According to FAA officials, the number of pilots holding  an instrument rating is a good indicator for forecasting pilots who are  more likely to seek an ATP certificate because an instrument rating is a  requirement of ATP certification; an instrument rating is not, however, a  requirement to hold a commercial pilot certificate.

While these pools of existing ATP and commercial pilot certificate holders  exist, the pools have remained relatively flat since 2000 (see fig. 1).

The number of pilots under age 65 holding active ATP certificates  decreased about 1 percent from 2000 through 2012, while the number  of new certificates issued annually decreased 17 percent during this  period (7,715 to 6,396) (see fig. 2). However, new issuance of ATP  certificates has increased since 2010, an increase that would be  expected given that the new pilot qualification rule took effect in July  2013.

Commercial pilot certificate holders under age 65 increased 4 percent  from 2000 through 2012. The number of new certificates issued each  year averaged about 9,900 over this time period.

We note that these populations of pilots holding active commercial and  ATP certificates, while currently relatively large, have been larger in the  past. Also, when mainline airlines increase pilot hiring, the rate at which  new pilots enter the pipeline would likely increase, as would the rate at  which pilots holding commercial pilot certificates upgrade to ATP  certificates. To illustrate, from 1990 through 2000, mainline airlines hired   During that period, the number of ATP certificates  about 31,300 pilots.held increased by roughly the same number—from 107,732 to 141,596— while the number of commercial pilot certificates held also decreased by  roughly the same amount—from 149,666 to 121,858. In contrast, when  hiring slowed from 2001 through 2012 and mainline airlines hired about  16,900 pilots, there was a decrease in the total number of airline pilot jobs  and the number of ATP certificates held increased only slightly—from  144,702 to 145,590—while the number of commercial pilot certificates  held actually decreased—from 120,502 to 116,400. The average number  of new commercial pilots certificates issued each year was also lower in  this period (9,780) compared to the 1990’s (11,688).

The number of flight instructors is another predictor of individuals moving  through the pipeline to becoming an airline pilot. The number of pilots  under age 65 holding active flight instructor certificates increased 13  percent from 2000 through 2012 (see fig. 1), while the number of new  flight instructor certificates issued each year averaged about 4,700 over  this period and remained relatively flat (see fig. 2). Under the new pilot  qualification rule, aspiring pilots must accrue more flight hours than was  the case in the past, and stakeholders expect that flight instruction is  likely to be one of the primary means of attaining these hours. This  means that new pilot graduates who decide to work as flight instructors to  gain hours will need to hold such positions for a longer period of time. If  this occurs, flight instructor turnover will be slower and new pilot  graduates may have more difficulty finding flight instructor positions. On  the other hand, representatives of three of the pilot schools we spoke to  told us that they are currently facing a shortage of qualified flight  instructors.
subsections: section_title: Enrollments in and Graduations from Pilot Programs Appear to Be Declining
paragraphs: Available evidence suggests that fewer students are entering and  completing pilot training since 2001. According to Education’s data, the  cumulative number of graduates (completions) of undergraduate  professional pilot-degree programs—those most likely to pursue a career  as an airline pilot—decreased about 23 percent from academic years  2000-2001 through 2011-2012 (see fig. 3). Although data on  enrollments are not available, representatives from most of the collegiate  and vocational pilot schools we interviewed told us their schools have  experienced declines in undergraduate enrollments over the last 10  years.collegiate vocational pilot schools reported waning interest among current  and prospective students wanting to pursue professional pilot education.

Further, representatives of the 10 collegiate aviation and 2 non- According to these representatives, the airline pilot career has lost some  of its historical appeal for young people over the last 10 years due to a  variety of factors, including increases in education costs, limited sources  of financial assistance, negative perceptions of working conditions and  wages for new pilots, and a perceived lack of stability in the industry. In  addition, according to these representatives, the new first officer  qualification requirements have also had some impact on student  perceptions.

The new requirements mean pilots must spend additional time accruing  flight hours (i.e., 1-2 additional years) prior to being qualified to apply to  an airline, during the time when new pilots may be receiving relatively low  wages (for example, according to the Aircraft Owners and Pilots  Association, flight instructors typically make less than $20,000 per year),and students are facing a longer period of time before they will be  financially able to begin repaying their student loan debt. As a result,  according to recruiters from four of the schools, students’ parents are less  encouraging of the career. According to officials at three collegiate  aviation schools, due to these and other factors, more students interested  in working in the aviation industry are pursuing other piloting careers,  such as in unmanned aircraft systems. To illustrate, the officials said that  in 2012, they sampled 240 new flight instructor pilots at 17 different  collegiate aviation schools and found that while 69 percent (166  instructors) responded that they initially aspired to be airline pilots when  they started their pilot training education, only about 38 percent (91  instructors) had aspirations to be airline pilots after graduating from  training. Representatives of 5 collegiate aviation and 2 non-collegiate  vocational pilot schools also reported financial hardships for many  students enrolled in pilot education. Officials representing two collegiate  schools told us that based on their discussions with students dropping out  of professional pilot education, the lack of financial resources or  assistance is often a barrier for students.

Although historically, the military has been a significant source of pilots for  the airlines, according to some airline industry representatives we  interviewed, the number of former military pilots being hired by airlines  has been declining. According to these representatives, prior to 2001,  some 70 percent of airline pilots hired came from the military, whereas  currently they estimated roughly 30 percent come from the military. In  addition, all of the airlines we interviewed reported that fewer candidates  with military experience are applying for pilot job vacancies than has been  their experience in the past. While specific data are not available on the  number of pilots separating from the military who sought and gained  employment at airlines, according to DOD data, from fiscal years 2001  through 2012, an average of 2,400 pilots separated from the military  service branches per year. DOD expects roughly the same trend to  continue into the foreseeable future, although future trends may be  influenced by several factors, including financial incentives to influence  pilots to stay in the military longer, civil job market opportunities, and  changing post-war military missions. Once separated from the military,  these pilots could choose to seek employment at an airline if FAA pilot  certification requirements are met, such as flight hour minimums and  other requisites, to be an airline pilot. However, we cannot determine the  number of these pilots who may meet these qualifications, who would  seek employment with civilian airlines after exiting from the military  services, or who have the flight experience that airlines require.

section_title: Studies and Analyses of Pilot Supply Trends Find that the Extent of any Shortage Depends on Changes in Wages, Industry Growth, and Education Costs
paragraphs: Brant Harrison from Audries Aircraft Analysis, Pilot Demand Projections/Analysis for the  Next 10 Years Full Model, 2013; and the MITRE Corporation, Pilot Supply Outlook (2013).

The academic study led by the University of North Dakota, which was  discussed previously, concluded that U.S. airlines will experience a  cumulative shortage of about 35,000 pilots over the next 20 years if no  actions are taken by the airline industry or government. Using  regression analysis, the study found that the number of new CFI  certifications has a positive association with pilot hiring by mainline  airlines—that is, as pilot hiring tends to increase so do new CFI  certifications; however, it has a negative association with the cost of pilot  school—that is, as educational costs increase, new CFI certifications tend  to decrease. Because of the significant finding of a potential shortage, we  reviewed the study’s methodology. We also replicated the study’s  analysis to better understand how the study’s key assumptions affected  its results. We found that the study’s findings of a shortage were based  on expectations of hiring needs of mainline airlines of about 95,000 pilots  over the next 20 years, and the supply of new pilots being curtailed by  the continued acceleration in the cost of training, relative to the general  rate of inflation. To predict future excess cost growth (the increase in the  cost of pilot training over and above the general economy-wide level of  inflation), the study extrapolated the growth of inflation in the cost of flight  training over the past several years to the next 20 years. While using  historic trends to predict future changes is part of forecasting, in some  cases, it can lead to results that may be unlikely. In this case, this  method resulted in forecasted year-over-year changes in the cost of flight  school of almost 8 percent above its historic mean by the year 2030,  which is well above historic averages over the past 20 years. However,  other changes in the market for pilot training, such as the openings of  other pilot schools, for example, could reduce this inflation. Using a  different assumption regarding increases in training costs would result in  different outcomes with respect to the size of the forecasted shortage. In  fact, guidance from the Office of Management and Budget suggests that  assumptions regarding price increases (such as the continuation of  current trends) should be varied to test the sensitivity of the final results to  that assumption. For example, we found that reducing the assumed rate  of increase of inflation in the cost of flight training to only 1-2 points above  its historic mean resulted in about 30,000 more CFI certifications—largely  ameliorating the estimated shortage. However, the researchers stated  that they felt that extrapolating from current trends would be the most  responsible forecast to consider but agreed that if the costs of training do  not continue to increase at an escalating rate, relative to inflation, as the  study forecasted, then the estimated shortage of pilots could be mitigated.

section_title: Regional Airlines Report Difficulties Filling Entry- Level Vacancies
paragraphs: Representatives at 11 of the 12 regional airlines told us they have been  unable to meet hiring targets for training classes for new-hire first officers;  most reported since early 2013. In anticipation of the August 2013  deadline for the new pilot qualification rule, officials at many of these  airlines indicated that 6 to 12 months before this deadline, they began  seeking new pilots to hire who already had an ATP certificate or had  enough flight hours that additional flying would allow them to reach the  minimum to qualify for an ATP certificate by the time FAA finalized the  rule. However, representatives of 5 regional airlines indicated they have  generally been able to meet about 50 percent of their hiring targets to fill  training classes. For example, one regional airline representative told us  that his airline had monthly targets of hiring 12 new pilots from August  through October 2013 but has been able to hire from 2 to 6 qualified  applicants each month. Representatives of most of the regional airlines  also reported that their existing banks of qualified pilot applicants have  dwindled and that they receive fewer applicants than they have had  historically in response to hiring announcements. Representatives of one  regional airline estimated that where they may have previously had over  1,000 applicants for hiring announcements, they are now seeing about  100. For the most part, as a result of the new pilot qualification rule, many  of the representatives attributed this reduction in the number of applicants  to a couple of factors. First, fewer overall number of applicants are  available who can meet ATP requirements. Second, according to several  of the representatives, pilots completing training from pilot schools must  now spend more time accruing required flight time—and forego some  potential career earnings—before they can apply for entry-level first- officer jobs at regional airlines, and fewer jobs are available in general  aviation and non-airline commercial sectors for pilots to accrue the  needed flight hours. Additionally, representatives of 6 regional airlines  noted that increasing numbers of applicants were not showing up for  scheduled interviews; some of the representatives speculated that this  might be due to opportunities at other regional airlines or other jobs.

Representatives at 10 of the 12 regional airlines we interviewed told us  they have also observed an overall decline in the quality of flight  experience of qualified pilots applying for pilot jobs, while some cited  higher drop-out rates among new hire classes or observed that new hire  candidates seem to be less prepared for the airline environment,  compared to the historic norm. Prior to the new pilot qualification rule,  regional airlines would often hire entry-level pilots who had recently  graduated from pilot training with a commercial pilot certificate and an  instrument rating, and had gained between 500 and 700 hours of flight   The pilot would  time in commercial operations or in flight instruction.then be hired at the regional airline, enter training with the airline, and  accrue flight time experience towards an ATP certificate in the airline  environment. According to representatives from most of the regional  airlines, as a result of the new pilot qualification rule, future applicants will  have had to accrue an additional 500 to 750 hours of flight time in flight  instruction, where they are not always actually flying a plane, or operating  in the general aviation (Part 91) environment wherein flight time is  accrued in aircraft such as small, single- and multiengine, propeller  airplanes that are not as technically advanced as aircraft operated by  airlines. According to these representatives, in their experience,  applicants with the greater number of flight hours earned outside the  airline environment were less proficient and prepared than previous  applicants who had recently completed pilot training with between 500  and 700 hours of flight time. While this has been the recent experience of  some regional airlines, we do not have data on where aspiring airline  pilots are gaining their flight experience, or empirical evidence regarding  how this has changed since the new pilot qualification rule went into  effect. Furthermore, judgment on what type of flight experience is most  suitable for would-be airline pilots is outside the scope of this report.

Representatives at most of the regional airlines also noted that some of  the difficulty in finding sufficient numbers of pilots with ATP certificates,  being experienced by some regional airlines, could be influenced by  current perceptions about the potential for career opportunities and  progression. Key factors that influence pilots to pursue a job with an  airline include the opportunity for upgrading to a captain, type of  equipment flown, and work schedule. Pilots’ pay rates at airlines are  based on seniority with a particular airline, and the rates increase each  year and when pilots progress from first officer to captain. According to  available data for 14 regional airlines, the average new hire hourly wage  for all airplane types is currently about $24 per hour for the first year of  employment. However, representatives of most of the regional airlines  said the hourly wages increase for the second year of employment for  first officers—to about $30, according to the data for the 14 airlines.  Regional airlines generally tend to have newer pilots who accumulate  flight time in smaller aircraft and use that experience as a stepping stone  to the higher wages offered at mainline airlines.

According to FAA, the reason that regional airline first officers are willing  to accept a relatively low initial salary is because of the increases in  salary that come later in the career, when they advance sequentially to  regional airline captain, mainline airline first officer, and, finally, mainline  airline captain.officer to captain is 5 years for regional airlines, but representatives of  several regional airlines said they expected upgrades to take longer. In  addition, the new pilot qualification rule have extended the period before a  pilot can be hired by an airline. Therefore, individuals interested in an  airline pilot career would likely expect several more years at the lower end  of the pay scale than had been the case in the past. Several industry  representatives also noted, however, that the potential career earnings for  an airline pilot continue to be significant. Some senior captains at  mainline airlines can make $200,000 or more annually in base salary.

The average number of years to upgrade from first  Pilot pay rates are also based on the type of aircraft that airlines fly  because higher pay rates are associated with flying larger, more complex  airplanes, and, thus, opportunities to eventually upgrade to flying these  airplanes are important in progressing in the career. Representatives of 6  of the 12 regional airlines generally said that young, entry-level pilots  have tended to favor the airlines that operate larger regional jet airplanes  as opposed to those that operate turboprop-powered airplanes.  Therefore, according to one regional airline, it could be difficult at times  for some regional airlines to find pilots to hire as first officers willing to fly,  for example, small turboprop airplanes when other opportunities are  available with other airlines to immediately or eventually fly larger regional  jets due to the career opportunities and associated higher pay rates.  According to two small regional airlines—those that generally operate  small turboprop airplanes—previous to the new pilot qualification rule,  they were able to attract sufficient numbers of pilots with an expectation  that these pilots would build flight experience over several years and  eventually leave for other airline opportunities. However, since the rule  went into effect, small regional airlines of this size cannot compete for the  available pilots with ATP certificates. Due to issues in finding enough  pilots with ATP certificates, one of these small regional airlines has  petitioned FAA for approval that would allow it to use some of its smaller  19-seat airplanes under a Part 135 operation—which would not be  subject to the new first-officer qualification requirement to have an ATP  certificate—on specific routes.

According to the representatives of the mainline airlines we spoke with,  they are not currently experiencing any difficulty in attracting qualified and  desirable candidates. These representatives generally credited higher  pay and benefits, better retirement options, and more flexible work  schedules than what regional airlines typically offer. For instance, the  average hourly wage for first officers at 10 mainline airlines for all airplane  types, for which an ATP certificate is required, is currently about $48 per  hour for the first year of employment. The mainline airline representatives  did not anticipate any problems as they seek to increase hiring in the  future and stated that they could draw from the pool of pilots now  employed at regional airlines. However, representatives did express  concerns that their regional partners may be experiencing difficulties  finding qualified entry-level pilots. Representatives at two mainline airlines  were concerned that as they pull pilots from the ranks of their regional  partners, the regional partners may have trouble replacing those pilots, a  potential chain reaction that might result in regional connecting services’  being curtailed. Five regional airlines we interviewed are currently limiting  service to some smaller communities because they did not have pilots  available to provide that service. Other industry stakeholders expressed  similar concerns that service to small communities will continue to suffer  going forward.

section_title: Industry and Government Are Taking Some Actions to Attract and Train Future Pilots
paragraphs: Economic literature identifies possible actions that employers in a market  may take to mitigate a labor shortage. Some of the actions discussed in  economic literature are already occurring as part of airline, collegiate pilot  school, and government efforts to attract more pilots to the airline  industry, including increased recruiting and financial incentives. However,  such actions have associated costs and can affect the industry in various  ways. Federal agencies have several programs aimed at promoting  aviation careers and providing financial assistance for education.  However, stakeholders suggested several additional actions that  government could take to increase the availability and flexibility of  financial assistance available to pilot students and to create additional  pathways to becoming an airline pilot.
subsections: section_title: The Aviation Industry Has Taken Various Steps to Attract, Train, and Retain Airline Pilots
paragraphs: According to economic literature we reviewed, employers—which are the  first to identify a shortage when they encounter difficulty filling vacancies  at the current wage rate—may take several actions in response to a  perceived labor shortage. The actions vary in desirability for the  employer based on resources required and their permanency. For  example, increasing recruiting requires fewer resources than raising  wages; further recruitment efforts could also be halted if labor market  conditions change, whereas wages, once raised, may not be easily  lowered. Employers may also choose to take some of these actions for  reasons other than filling vacancies—for instance, to improve morale  among current employees or to increase profitability. Some of the actions  suggested in the literature are not feasible for airlines to take with respect  to pilots.

In response to difficulties filling employment vacancies, employers may:  Increase recruiting efforts. This includes such activities as increasing  advertising, using public or private employment agencies, and paying  recruiting bonuses to employees who refer new hires.

Train workers for the job. In a difficult labor market, an employer that  traditionally relied upon colleges or vocational or trade schools to train  its workforce may choose to offer or sponsor training.  Improve working conditions. Equipment or facility upgrades, training,  and job recognition efforts may all be effective means to attract and  retain personnel.

Reduce the minimum qualifications for the job. Employers may have  set minimum qualifications higher than necessary and may choose to  reduce those qualifications when hiring becomes difficult. As  discussed, regulation sets minimum qualifications for airline pilots.  However, most regional and mainline airlines could have hiring  requirements in excess of or addition to the regulatory minimums that  could be reduced, although airlines with such requirements are often  not willing to do so because they view their requirements as important  to the safe operation of their airline.

Offer bonuses to new employees. Employers may offer new  employees a “signing” bonus such as a cash payment or an  agreement to cover the new employee’s moving expenses.  Improve wages and fringe benefits. Increasing wages will help  increase the number of personnel willing to work in a particular  position or occupation. However, employers are reluctant to do this  because they may be forced to raise the wages of current employees  as well. Further, unlike some other actions, once wages are raised, it  is unlikely that they will be reduced later if hiring becomes less  difficult.

Contract out the work. If employers cannot fill vacancies for  employees in certain occupations, they may contract out those tasks  to another company.

Turn down work. If an employer has exhausted other means to  mitigate its hiring challenges and vacancies persist, it may choose to  turn down work or curtail services.

Airlines and pilot schools have used a number of these strategies to  attract more potential individuals to a career as an airline pilot. Economic  literature suggests that increased recruiting is a logical first step to fill  vacancies because it requires relatively fewer resources to implement  than other potential options for attracting more interest in an occupation  experiencing a shortage. Most of the airlines with whom we spoke  reported that they have continued involvement with various recruiting  activities, such as attending career events, including job fairs, and a  couple of airlines reported that they had increased such activity to recruit  more potential pilots. For example, representatives of one regional airline  told us that after not hiring for several years and furloughing pilots, they  have increased their recruiting efforts at some college aviation schools as  well as Part 135 air service providers as part of their plan to begin hiring  again. In addition, representatives from another airline said that they have  almost doubled the size of their recruiting department to facilitate  attendance at events and started to advertise new job openings— something they have not previously done.

Some collegiate pilot schools have also expanded recruiting efforts to the  next generation of potential future pilots. Officials at some of the  collegiate pilot schools we met with had developed outreach programs  focused on local elementary and high school students to build interest in  aviation, which economic literature suggests could limit any future labor   For example, Embry-Riddle Aeronautical University works  shortages.with seven high schools that provide STEM-related courses (science,  technology, engineering, and math) intended to immerse and prepare  high school students in these academic areas for college as well as jobs  in the aviation industry. In another example, the Metropolitan State  University of Denver, which has a commercial pilot program, coordinates  with other groups in Colorado to stimulate interest in careers in STEM  fields from the preschool level through the graduate school level.

Airlines were also looking for ways to help new pilots to gain additional  flight time and training to eventually qualify for an R-ATP or ATP  certificate, and some regional and mainline airlines had begun to  restructure “bridge agreements” with collegiate and vocational pilot  schools. Prior to the new pilot qualification rule, regional airlines would  develop these arrangements with aviation schools as a way to directly  recruit pilot graduates with a commercial pilot certificate and instrument  rating as first officers, in which the airlines would typically lower their  minimum hiring standards related to flight time and experience for desired  pilots from these schools. Some regional and mainline airlines indicated  that they had implemented such partnerships with pilot schools to  promote greater interest in the field and provide a pathway from pilot  school to employment as an airline pilot. For example, ExpressJet, a  regional airline that contracts with Delta, has partnered with 11 collegiate  aviation schools to offer selected students guaranteed employment at  ExpressJet as a first officer and eventually a guaranteed interview at  Delta Airlines once the student gains enough experience.

Since implementation of new pilot qualification rule requiring all airlines’  first officers to have an ATP certificate, airlines have begun to change  their bridge programs to help potential employees gain the necessary  flight time and training to qualify for an ATP certificate. For example, two  regional airlines are hiring pilots without an ATP certificate who are  currently flight instructors. As airline employees, these pilots receive  employee benefits such as medical and dental insurance, but continue  instructing for a collegiate or vocational pilot school program to build flight  time toward their ATP certification. Once these employees obtain an ATP  certificate, they are placed into new hire classes to begin the airline’s  training program for first officers. Airlines and other stakeholders told us  that they are also considering other options to adjust to the new pilot  qualification rules, such as exploring new pathways to becoming an  airline pilot and finding ways to improve pilot training, which will be  discussed later in this report.

Regional airlines have started offering financial incentives to entice both  graduating students and flight instructors. Offering financial incentives to  new pilot hires is advantageous for airlines because it is a one-time cost  and only affects the new employees hired. According to economic  literature, signing bonuses are most frequently used when employers feel  they are under intense pressure to fill vacancies in the short run. For  example, two regional airlines that have had difficulty filling their new hire  classes have started offering new-hire first officers an upfront $5,000  signing bonus, and one of these airlines also offers up to $10,000 for  tuition reimbursement. However, officials of the industry association that  represents these airlines told us that these efforts have essentially  attracted pilot applicants away from other airlines, but they have not led to  an increase in the applicant pool overall. DOD’s Service branches have  taken similar actions in direct response to addressing a potential shortage  of military pilots by requiring longer service obligations and offering  retention bonuses. For example, the U.S. Air Force recently began  offering retention bonuses of up to $225,000 to its fighter jet pilots in  exchange for a 9-year commitment. This is an increase from the Air  Force’s previous retention offer of a 5-year contract for up to $25,000 per  year, for a maximum of $125,000, in exchange for the commitment.  Similarly, starting in fiscal year 2013, the U.S. Navy began offering  retention bonuses to its pilots ranging from $25,000 to $125,000 for a 5- year commitment and paid over the term of the contract.

However, one small regional airline we interviewed recently announced an agreement  with the unions that represent their pilots to increase pilot pay, but final approval is subject  to ratification by the airline’s pilot membership. If ratified by the pilots, the agreement will  immediately increase pay and commuting and schedule flexibility, and allow all pilots who  remain with the airline for a year to earn a cash retention bonus. negotiation of collective bargaining agreements between airlines and the  pilot unions that represent the employed pilot workforce. As previously  mentioned, raising wages is not a costless remedy. Since regional airlines  generally provide service under capacity purchase agreements with  mainline airlines on a contractual basis, regional airlines’ ability to  increase wages would likely be limited by their ability to increase revenue  (i.e., increasing passenger fares).

Finally, economic literature indicates that contracting out or turning down  work are options to cope with a labor shortage. Mainline airlines normally  contract with regional airlines to expand available service. As previously  mentioned, representatives of five regional airlines we interviewed told us  that there have been some instances wherein the contracted capacity  (i.e., scheduled flights) for mainline airline partners has had to be turned  down by reducing and canceling flights due to a lack of pilot crew  availability. According to an official of a small regional airline, for the first  time in its history, the airline had to reduce about 20 percent of its  scheduled flights in August 2013 because it could not staff all of its  airplanes to provide the scheduled flights. Again, such actions are not  costless and pose implications for the industry. A continued shortage of  pilots for these airlines could mean additional curtailment of services, and  thus far, it is smaller communities that are experiencing reduced service,  and over a longer term may result in a contraction of the industry.

section_title: Federal Agencies Have a Limited Role in Helping to Attract People to Aviation- Related Careers
paragraphs: While no one agency is tasked with developing the pilot workforce,  several maintain programs that help promote and train people for  aviation-related careers. At the time of its creation in 1958, the FAA was  tasked with regulating, promoting, encouraging, and developing civil   In 1996, following criticism of its response to the ValuJet  aeronautics.crash in the Florida Everglades and to address concerns about its dual  role, FAA’s mission was amended to make ensuring the safety of the  national air space system as the agency’s top priority. According to  FAA, it has continued to promote careers in aviation, but specific  references were deleted from its mandate. Nonetheless, FAA has several  initiatives aimed at promoting the aviation industry and encouraging  young people to pursue careers in aviation. For example, FAA developed  the Aviation Career Education Academies, interactive aviation summer  camps geared toward middle- and high-school students interested in  aviation and aerospace; the agency also promotes DOT’s National  Transportation Summer Institute to introduce secondary school students  to all modes of transportation careers and encourage them to pursue  transportation-related courses of study at the postsecondary education   FAA also works with education and industry partners to offer  level.initiatives such as adopt-a-school programs and other activities that  expose students and others to aviation and aerospace. FAA works with  industry, including the Experimental Aircraft Association, to facilitate the  Young Eagle Program, which seeks to expose young people to aviation  and give them an opportunity to fly in a general aviation airplane. In  addition, FAA’s Aviation and Space Education website is intended to  appeal to an audience unfamiliar with aviation, such as students and  teachers.

Other federal agencies provide financial assistance that is available for  students that pursue aviation careers, including pilot training.

DOD provides Military Tuition Assistance benefits to service members  to help them enhance their professional development. The benefits  can be used for pilot training or to pay for certification tests, such as  an ATP certification.

Education offers various federal aid benefits, such as low-interest  student and parent loans, grants, and work-study funds to help cover   Collegiate aviation schools and some  educational expenses.vocational pilot schools are generally eligible to receive federal  financial aid.

VA administers education benefit programs, such as the Montgomery  G.I. Bill, that can be used to pay for flight training for veterans who are  interested in attending aviation programs approved by FAA, such as  collegiate aviation schools and some vocational pilot schools.  The  payment amount varies depending on the program and the type of  pilot school. In addition, a 2011 law amended the Montgomery G.I. Bill  program to provide financial assistance to veterans specifically for  flight-training programs.

DOL administers programs under the Workforce Investment Act of  1998 (WIA) in which training services are available to eligible  individuals who meet requirements for services—including training to  become an airline pilot. However, according to DOL, due to limited  available resources, workforce counselors encourage individuals  eligible for WIA training funds to also pursue educational funding from  other sources (including VA and Education). Nevertheless, according  to DOL data from 2010 through 2012, 124 individuals received WIA  funding for pilot training. In addition, apprenticeships are available  for pilot occupations,November 2013. but there were no active apprentices as of

The Internal Revenue Code also provides tax credits—such as the  American Opportunity Credit and Lifetime Learning Credit—and  various deductions that may be taken to reduce the federal income  tax burden for students or those paying the costs of students’ post  secondary education.

section_title: Stakeholders Suggested Various Actions Government Could Take to Mitigate a Potential Shortage of Airline Pilots
paragraphs: Airline and pilot school stakeholders we interviewed suggested several  actions that could be pursued by government to respond to potential  shortages of airline pilots. These actions generally fell into two categories:  (1) increasing the availability and flexibility of financial assistance  available to aviation students and (2) creating additional pathways to  becoming an airline pilot.
subsections: section_title: Increase Availability and Flexibility of Financial Assistance to Aviation Students
paragraphs: Several airline and pilot school officials we interviewed stated that the  high cost of pilot training is deterring students from entering pilot school  and pursuing an airline pilot career. To pay for pilot training, students  typically use a mix of personal funds, personal credit (credit cards and  personal loans), scholarships, grants, other private educational loans, and  federal financial-assistance programs. However, flight school officials said  that students enrolled in collegiate aviation schools and vocational pilot  schools are finding it more difficult to qualify for financial aid because  many private banks have been tightening restrictions on financing  available to potential new-pilot students, and others have left the pilot  training loan market. We previously found that in 2009, many lenders  offering student loans had exited the market due to limited access to  capital in response to the 2007-2009 financial crisis. Since that time,  according to officials of some pilot schools we interviewed, stricter lending  standards continue to make it difficult for some students and parents to  qualify for private loans. In addition, unlike colleges and universities,  many vocational pilot schools are not approved or accredited to offer  federal financial-aid programs. Some of these schools offer financing  options for those students who qualify by working with lenders including  banks, credit unions, and private lending institutions. A number of  stakeholders suggested that making it easier for all pilot schools to  participate in federal student-loan programs could make it easier for  schools to train more pilots because many students drop out due to  financial difficulties.

Aviation stakeholders we interviewed in previous work agreed that one of  most important challenges for maintaining an adequate supply of students  for pilot schools is the availability of financial support. Several airline  and pilot school officials said the federal government could consider  revising the existing student loan requirements for students in pilot  schools seeking to become airline pilots—such as extending the loan  repayment period, deferring the start of repaying the loan, and increasing  the maximum loan amount—or establishing a student-loan repayment or  forgiveness program for airline pilots. Loan forgiveness programs may  include criteria for a specified length of employment and a required period  of timely payments, upon which all or a portion of the remaining loan  balance would be eliminated. Some stakeholders suggested that revising  loan requirements could provide incentives to attract individuals to the  pilot profession.

We have also previously found that European airlines have at times  funded the training of pilot candidates in response to pilot shortages. In  the European countries that we visited for our previous work, many  student pilots, following a screening process, were provided training by  airline sponsorship with an agreement for future employment with the  airline. An example of an airline that follows this practice is Lufthansa,  where students are offered the training as part of a partial sponsorship  program, wherein candidates are required to pay a small portion of the  training costs upfront while Lufthansa provides a student loan to students  to cover this cost. Once training is completed, Lufthansa enters into an  employment contract with the candidate, and he or she repays the loan  by accepting a lower initial salary. Other European airlines have begun to  assist their students by forming agreements with banks to reduce the risk  of providing student loans to flight school students. British Airways helps  students secure the funding required for training through a guaranteed  bank loan in the hopes that this will increase the pool of qualified  applicants. KLM partially funds an insurance policy to help banks cover  their student loan default risks for students who end their pilot training  early due to poor performance, failed medical examinations, or other  unforeseen circumstances. If the insurance policy is executed, students  are contractually obligated to cease their pursuit of an airline pilot career.  None of the U.S. airlines we interviewed were currently considering such  approaches.

section_title: Create Additional Pathways to Becoming an Airline Pilot
paragraphs: Some stakeholders suggested that FAA should consider supplementing  the current regulatory framework for training new pilots with additional  pathways to achieving an ATP certificate. Stakeholders have made these  suggestions because the new pilot qualification rule changed the  traditional pathway to becoming an airline pilot, and airlines initial  experience under the new rule suggests that the flight hours new pilots  are earning to qualify for an ATP certificate may not be directly relevant to  an airline setting. Based on an exemption request to FAA from one of the  member airlines, the Regional Air Cargo Carriers Association (RACCA)  has supported a regulatory change that would allow first officers in Part  135 cargo-only operations to log certain flight hours that they are currently  prohibited from logging, except under limited circumstances. According to  RACCA officials, these first officers are frequently recent graduates of  flight-training programs with commercial pilot certificates, and allowing the  hours flown in these operations to count would give these pilots flight  experience toward the qualifications for an ATP certificate that is more  commensurate with flying for a passenger airline, since they are flying  similar planes under similar conditions—unlike the flight hours logged in  flight instruction using training airplanes, or through banner towing and  similar types of flight experiences. According to FAA officials, FAA is in  the process of developing a proposed rulemaking that could expand the  logging of flight time for certain Part 135 operations.

A proposal being developed by a consortium of industry stakeholders  would request that FAA consider new regulations allowing the airline  industry to take greater advantage of the advancements in computer- based and simulation technology for training pilots. According to the  group, U.S. pilot training requirements for certification of airline pilots  have not been significantly changed for decades and pilots have had to  complete the same certification path based on the same training  standards and requirements. While the standards for obtaining pilot  certificates have changed little over the years, training technology has  advanced through the use of simulation and computers. The group  suggested that FAA should allow more credit for training using this type of  technology in lieu of actual flying. The group argues that training aids  provided by computer software, computer-based simulation, and flight  simulation training can help students to achieve as good or better  competency in various training components, such as aircraft  performance, navigation, and aircraft systems operations. In fact, many of  the collegiate aviation schools already provide specialized training in  flight-simulation training devices, but FAA allows only a few of these  training hours to be credited toward private and commercial pilot  certificates. According to industry consortium, the ability to expand the  use of these technologies would enable pilot schools to train the next  generation of pilots more efficiently and improve the overall competency  of entry-level first officers.

Many Asian and European countries have already adopted a similar  approach in the form of the multi-crew pilot license (MPL)—an alternative  pilot training and certification concept specifically geared toward training  airline pilots. The training methods for the MPL are focused on  enhancing the quality of training geared toward first officer duties. Such  competency-based training for pilots is not new and focuses on the  training outcome in terms of how well students perform rather than simply  meeting specified numbers of training hours. Thus, training hours are  replaced by sets of defined, measureable performance criteria. The MPL  training model focuses on the core competencies that pilots need to be  able to operate modern jet airplanes during all phases of flight. Many of  the airline officials we interviewed suggested that this model for pilot  training could serve as an additional career pathway for becoming a U.S.  airline pilot.

section_title: Concluding Observations
paragraphs: Availability of a sufficient number of qualified pilots is vital to the U.S.  airline industry and necessary to support air transportation services for  passengers and cargo traveling within the United States or to and from  this country. Evidence suggests that the supply pipeline is changing as  fewer students enter and complete collegiate pilot-training programs and  fewer military pilots are available than in the past. Additional pressure on  pilot availability will come from (1) the projected number of mandatory  age-related pilot retirements at mainline airlines over the next decade and  beyond, (2) the increasing demand for regional airlines to address attrition  needs, and (3) the reported lower number of potentially qualified pilots in  the applicant pool for filling regional airlines’ first-officer jobs. If the  predictions for future demand are realized and shortages continue to  develop, airlines may have to make considerable operational adjustments  to compensate for having an insufficient number of pilots.

To address such a situation, opportunities exist for the airline industry to  take action to attract more pilots. For example, airlines can continue to  take actions that will promote aviation as an occupation—such as through  employment pathway partnerships with pilot schools and additional career  and financial support for pilots as they build flight hours for an R-ATP or  ATP certificate. In addition, mainline and regional airlines could work  together to shift some of the burden of increasing training costs from  students as has been done by some European airlines and adjust  contractual agreements between mainline and regional airline partners to  help regional airlines increase revenue. Furthermore, with the mandate to  increase pilot qualifications for airline pilots having only recently gone into  effect, opportunities exist to develop new training methods and pathways  for students to gain experience relevant to an airline environment. It is  unclear at this point what adjustments could occur within the pilot training  system that would help to respond to these stakeholders’ concerns about  the current regulations, or if government action may be necessary to  enable certain changes. Therefore, we encourage FAA to continue its  efforts in working with the airline and pilot training industries in  considering additional ways for pilots to build quality flight time that  contributes directly to working in airline operations. In the absence of  efforts discussed in the report to incentivize and attract more people to  the career, several airlines and industry stakeholders expressed some  concern that service to some small communities may suffer going  forward. Given the opportunities available for the industry to address a  possible shortage of pilots, as discussed, as well as actions FAA is  considering, we are not making recommendations in this report. In the  event that Congress decides that actions in the market are not sufficient  and it is necessary for government to intervene, this report offers several  options for doing so.

section_title: Agency and Third- Party Comments
paragraphs: We provided a draft of this report to the departments of Defense, Labor,  and Transportation for review and comment. DOD had no comments on  the report. DOL and DOT provided technical comments that we  incorporated as appropriate. In addition, to verify information, we sent  relevant sections of the draft report to Airlines for America, the Regional  Airlines Association, Malcolm Cohen, Ph.D., and various stakeholders,  which also provided technical comments that we incorporated as  appropriate.

We will send copies of this report to interested congressional committees  and members; the Secretary of Defense; the Secretary of Labor; the  Secretary of Transportation; the Director, Office of Management and  Budget; and others. This report will be available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or at dillinghamg@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix II.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our report focuses on the supply of and demand for airline pilots and  potential market and government responses. In this report, we described  (1) what the available data and forecasts reveal about the need for and  potential availability of airline pilots and (2) the types of industry and  government actions that are being taken, or might be taken, to attract and  retain airline pilots.

To address the two objectives, we reviewed and synthesized a range of  published reports from GAO, the Department of Transportation (DOT),  and the Federal Aviation Administration (FAA) that included general  background information on a variety of related issues, such as the pilot  certification process; pilot training schools; typical career paths to become  an airline pilot; piloting experience and airline pilot compensation; federal- funding programs for pilot training; and the historical and current health of  the airline industry. We also reviewed relevant literature related to factors  that affect the supply of and demand for airline pilots, including attrition  and retention concerns, factors to consider in the future, and international  pilot supply and demand issues based on search results from databases,  such as ProQuest®, TRID, and Nexis®, as well as trade publications,  industry stakeholder groups, and the Internet. Furthermore, we reviewed  the federal aviation regulations related to training and certification for  pilots under Parts 61 and 141, Title 14, Code of Federal Regulations  (CFR); as well as oversight of air travel operations in accordance with  Parts 91, 121, and 135, Title 14, CFR. We also reviewed provisions of the  Airline Safety and Federal Aviation Administration Extension Act of 2010  (Pub. L. No. 111-216) related to “Flight Crewmember Screening and  Qualifications” and “Airline Transport Pilot Certification.” We reviewed  FAA’s regulatory final rules required by the Act related to addressing pilot  fatigue (issued in January 2012); increasing qualification requirements  for first officers who fly U.S. passenger and cargo planes (issued in July  2013); and enhancing pilot training requirements for airline pilots (issued  in November 2013).

To determine what the available data and forecasts reveal about the need  for and potential availability of airline pilots, we reviewed relevant  economic literature that describe labor market conditions; developed a  summary of the general economic principles for evaluating labor market  conditions; and identified relevant data sources. Economic literature  states that no single definition exists to define a labor shortage; however,  one can look at multiple indicators—including unemployment rates,  employment numbers, and earnings—which might converge to suggest  either the presence or absence of a shortage. We obtained these data  from the Bureau of Labor Statistics (BLS) Current Population Survey  (CPS) for years 2000 through 2012. In 2010, the Standard Occupational  Classification (SOC) system’s occupation titles were updated and, as a  result, some occupations’ names were changed. We used SAS, a  statistical software application, to connect the BLS CPS data for 2000- 2010 and 2011-2012 by the SOC for aircraft pilots; this did not affect our  occupation of interest. We analyzed how these indicators have changed  over time, and whether these indicators suggest a labor shortage—that is  whether there appears to be an imbalance between the labor supply (i.e.,  available people) and demand (i.e., available jobs). We analyzed each  occupation relative to all other occupations and using a scale with  benchmarks developed in previous economic analysis.

For the  unemployment rate we looked at the average unemployment rate for  each occupation for 2000 through 2012. For both employment and  earnings we analyzed any change. Due to the limitation that airline  pilots and commercial pilots are combined into a single occupational  category in the CPS data, we also obtained data from the BLS  Occupational Employment Statistics (OES) survey for employment and  wage earnings and analyzed any change from 2000 through 2012. To  verify our results, we consulted with Malcolm Cohen, Ph.D., labor  economist and author of the original methodology for conducting indicator  analysis. We incorporated his comments as appropriate. Finally, we  summarized limitations with the data with respect to how we used it. We  determined the data were sufficiently reliable for the purposes of our  indicator analysis to provide context on the labor market.

To identify future demand for, supply of, or employment, we analyzed  projections for airline pilots in the United States. To identify relevant  studies, we performed a literature review of scholarly material,  government reports, and books, among others, to identify any  employment projections for airline pilots and limited our results to those  projecting employment in the United States (or North America) using  databases that included ProQuest®, TRID, and Nexis®. We identified  three demand-based forecasts—two conducted by government (FAA  Aerospace Forecast Fiscal Years 2013-2033 and BLS Employment  Projections 2012-2022), and one conducted by industry (Boeing Current  Market Outlook 2013-2032)—and obtained each for analysis. To  understand these projections, we reviewed the processes,  methodologies, and sources of information used to make the projections.  We also discussed the projections with knowledgeable staff involved with  each study. We did not verify the data that the companies collected and  used. Rather, we summarized the methodology and results for each and  discussed any limitations we identified with respect to how the forecast  was developed. We also described, based on economic literature, why  forecasting generally includes a great deal of uncertainty.

We also identified and reviewed three relevant industry and academic  studies that focused on the supply of and demand for airline pilots. The  reviewed studies included (1) Lovelace, Higgins, et al, An Investigation of  the United States Airline Pilot Labor Supply, 2013; (2) Brant Harrison from  Audries Aircraft Analysis, Pilot Demand Projections/Analysis for the Next  10 Years Full Model, 2013; and (3) the MITRE Corporation, Pilot Supply  Outlook, 2013. To evaluate these studies, we reviewed their methods,  assumptions, and limitations. Each study was reviewed by one GAO  economist, whose review was then verified by a second GAO economist.  In our review of An Investigation of the United States Airline Pilot Labor  Supply, we replicated the study’s analysis using data provided by the lead  researchers, which raised questions about a specific assumption made  about future increases in the cost of pilot training. To determine the extent  to which the conclusions of the study were based on this specific  assumption, we varied the assumption to determine the extent to which  that would lead to a different conclusion. We discussed our analysis in  detail with the lead researchers, and in general, they acknowledged that  our findings were valid, but provided reasons to explain why the original  assumption used in the study was warranted.

To identify trends in supply sources for qualified airline pilots, we obtained  data from 2000 through 2012 from civilian and military sources for pilots.  We analyzed data from the Department of Education (Education) on  annual completions by major in professional pilot programs; data from the  Department of Defense (DOD) on expectations for the number of new  pilots entering military service and separating from the military; and FAA’s  data on the number of individuals holding and obtaining pilot certificates  and instrument ratings by year, specifically:

Education: To describe national trends in completions in professional  pilot degree programs, we analyzed data from Education’s Integrated  Postsecondary Education Data System (IPEDS). We used  Education’s Classification of Instructional Programs (CIP) and  matched degree programs to our SOC codes to identify the relevant  degree programs. Specifically, the CIP-SOC relationship indicates  that programs classified in the CIP category prepare individuals  directly for jobs classified in the SOC category. The categories of  schools included in our analysis were degree granting: 4-year  research, 4-year master, 4-year baccalaureate, 2-year associate, and  vocational schools. Unless otherwise noted, data estimates for  graduation rates are within a confidence interval of 5 percentage  points.

DOD: To better understand the role of the U.S. military as a source of  potential airline pilots, we obtained data on military pilots separating  from the Service branches (i.e., the Air Force, Army, Marine Corps,  and Navy); the current number of pilots in each Service; and  forecasted rates of separation for pilots. We interviewed military  officials at the Pentagon to understand how separation trends in the  future will compare to past trends.

FAA: To better understand trends in the number of pilot certificates  and instrument ratings held and new certificates issued, and age  distribution of current airline transport pilot (ATP) certificate holders,  we obtained data from FAA on pilot certificates and instrument ratings  held and issued from 2000 through 2012. We also obtained data from  FAA on the estimated number of active ATP certificates held by age  group during this period in order to exclude the number of certificates  held by pilots age 65 and older because they would not be allowed to  work as airline pilots due to mandatory age retirement. The database  in which certificate-holder information is stored maintains records on  individuals until FAA is informed of their death.

To assess the reliability of Education, DOD, and FAA data, we reviewed  documentation related to all data sources from prior GAO reports, the  agencies’ websites, and interviewed knowledgeable government officials  about the quality of the data. We determined that the data were  sufficiently reliable to describe general sources of supply of airline pilots  and to support broad conclusions about trends in these sources over  recent years.

To develop our list of actions that employers may take to mitigate labor  shortages, we reviewed economic literature and interviewed the  authors. We also interviewed selected industry associations that  represent airlines, the unions that represent pilots, and government  officials to get a broader sense of the extent to which employers are  taking actions to mitigate labor shortages. To supplement these broader  trends, we also reviewed data from and interviewed representatives from  passenger and cargo airlines, and selected collegiate aviation and non- collegiate vocational pilot schools. We contacted and gathered  information from 10 mainline passenger and cargo airlines, and 12  regional passenger airlines. We selected the mainline and regional  airlines based on size in terms of passengers transported in 2012 and  stakeholders’ recommendations. While these 12 regional airlines are  responsible for transporting about 71 percent of regional passengers in  2012, their views and experiences should not be used to make  generalizations about all regional airlines. We also interviewed  representatives of 10 collegiate aviation and 2 non-collegiate vocational  pilot schools, which accounted for about half of the students who  graduated with professional pilot majors in 2012. We selected these  schools based on geographical diversity, average number of student  enrollments in pilot training programs, stakeholders’ recommendations,  and our previous work related to pilot training. While these schools were  among the largest schools in terms of student pilot enrollments, our  findings should not be used to make generalizations about the views or  experiences of all of the pilot training schools in the United States. We  also met with and reviewed documents from various industry  stakeholders, including pilot labor unions, airline associations, and  industry organizations, among others (see table 2).

We conducted this performance audit from March 2013 through February  2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, the following individuals made  important contributions to this report: Andrew Von Ah, Assistant Director;  Amy Abramowitz; Benjamin Bolitzer; Russell Burnett; Vashun Cole; Dave  Hooper; Bonnie Pignatiello Leer; John Mingus; Susan Offutt; Joshua  Ormond; and Amy Rosewarne.


Question-summary annotations: questions: question: What did GAO find regarding the extent of a shortage of airline pilots?
answer: GAO found mixed evidence regarding the extent of a shortage of airline pilots, although regional airlines have reported difficulties finding sufficient numbers of qualified pilots over the past year.
child_questions: question: Why is a low unemployment rate not a good indicator of labor shortage in this case?
answer: Specifically, looking at broad economic indicators, airline pilots have experienced a low unemployment rate—the most direct measure of a labor shortage; however, both employment and earnings have decreased since 2000, suggesting that demand for these occupations has not outstripped supply.

question: What does the Bureau of Labor Statistic' employment projections suggest?
answer: Looking forward, industry forecasts and the Bureau of Labor Statistics' employment projections suggest the need for pilots to be between roughly 1,900 and 4,500 pilots per year, on average, over the next decade, which is consistent with airlines' reported expectations for hiring over this period.
child_questions: question: Was this confirmed by the GAO?
answer: Yet studies GAO reviewed examining whether the future supply of pilots will be sufficient to meet this need had varying conclusions.

question: Why is the existence of qualified pilots not sufficient evidence for there not being a shortage of U.S. airline pilots?
answer: Two studies point to the large number of qualified pilots that exists, but who may be working abroad, in the military, or in another occupation, as evidence that there is adequate supply. However, whether these pilots choose to seek employment with U.S. airlines depends on the extent to which pilot job opportunities arise, and on the wages and benefits airlines offer.

question: What effect does accelerating costs of pilot education and training have?
answer: Another study concludes that future supply will be insufficient, absent any actions taken, largely resulting from accelerating costs of pilot education and training. Such costs deter individuals from pursuing a pilot career.

question: What has been reported by pilot schools interviewed by GAO?
answer: Pilot schools that GAO interviewed reported fewer students entering their programs resulting from concerns over the high costs of education and low entry-level pay at regional airlines.
child_questions: question: What difficulties have regional airlines reported?
answer: As airlines have recently started hiring, nearly all of the regional airlines that GAO interviewed reported difficulties finding sufficient numbers of qualified entry-level first officers.
child_questions: question: How are the results different for mainline airlines?
answer: However, mainline airlines, because they hire from the ranks of experienced pilots, have not reported similar concerns, although some mainline airlines expressed concerns that entry-level hiring problems could affect their regional airline partners' ability to provide service to some locations.

questions: question: How are airlines attempting to attract and retain qualified airline pilots?
answer: Airlines are taking several actions to attract and retain qualified commercial airline pilots. For example, airlines that GAO interviewed have increased recruiting efforts, and developed partnerships with schools to provide incentives and clearer career paths for new pilots. Some regional airlines have offered new first officers signing bonuses or tuition reimbursement to attract more pilots.
child_questions: question: Why has this not worked for all airlines?
answer: However, some airlines found these actions insufficient to attract more pilots, and some actions, such as raising wages, have associated costs that have implications for the industry.

question: What have airlines suggested of the FAA?
answer: Airline representatives and pilot schools suggested FAA could do more to give credit for various kinds of flight experience in order to meet the higher flight-hour requirement, and could consider developing alternative pathways to becoming an airline pilot.

question: What concerns do stakeholders have about the current financial assistance?
answer: Stakeholders were also concerned that available financial assistance may not be sufficient, given the high costs of pilot training and relatively low entry-level wages.

questions: question: What resources are available to both larger mainline and smaller regional airlines?
answer: Over 66,000 airline pilot jobs exist for larger mainline and smaller regional airlines that operate over 7,000 commercial aircraft.

question: What is predicted about the future growth of the global aviation industry?
answer: After a decade of turmoil that curtailed growth in the industry and resulted in fewer pilots employed at airlines since 2000, recent industry forecasts indicate that the global aviation industry is poised for growth.
child_questions: question: What concerns do stakeholders have about these predictions?
answer: However, stakeholders have voiced concerns that imminent retirements, fewer pilots exiting the military, and new rules increasing the number of flight hours required to become a first officer for an airline, could result in a shortage of qualified airline pilots.

questions: question: Why did GAO conduct this report?
answer: GAO was asked to examine pilot supply and demand issues.
child_questions: question: What information is included in this report?
answer: This report describes (1) what available data and forecasts reveal about the need for and potential availability of airline pilots and (2) what actions industry and government are taking or could take to attract and retain airline pilots.

question: How did GAO conduct research for this report?
answer: GAO collected and analyzed data from 2000 through 2012, forecasts from 2013 through 2022, and literature relevant to the labor market for airline pilots and reviewed documents and interviewed agency officials about programs that support training. GAO interviewed and collected data from associations representing airlines or their pilots, and pilot schools that accounted for about half of the students who graduated with professional pilot majors in 2012.
child_questions: question: How did GAO select airlines and schools from which to collect data?
answer: GAO selected the airlines and schools based on factors such as size and location.

question: How did the Department of Transportation contribute to the report?
answer: The Department of Transportation and others provided technical clarifications on a draft of the report, which GAO incorporated.