The impact of the COVID-19 pandemic on today’s commercial airline pilots is a well-understood.  It is as devastating on them as it is on everyone working within the commercial aviation silo.  Every day we hear about more layoffs at airlines. As we reported a few weeks ago, among the big three US network airlines, the pilot furloughs and layoffs are going to run into the thousands. Delta expects to be overstaffed by more than 7,000 pilots by year-end.

The rule of thumb is that for every aircraft these have 15 pilots. Fleet retirements are having a damaging impact on a group of highly skilled people – and those skills are tough to use anywhere other than on an aircraft flight deck. Commercial pilots exhibit excellent personal traits like staying calm under pressure, ready for anything, exceptionally detailed, and professional. Either you’re working as a pilot or you might struggle to find work using these specialized skills.

In a cyclical industry, there is a career risk of being a commercial pilot.  This is why the people who do this kind of work are so passionate about it.  Pilots truly love their work.  Besides, there is no other office window with a better view than what pilots have.  None!

Pondering this leads us to consider two real and significant issues.  They are short term and long-term issues facing the commercial pilots in the US.

Short Term – Scope Clause

We have shared our thinking on this matter several times.  But it bears repeating.  While the Scope issue applies to US pilots, there are related issues facing other pilots around the world.  Let’s define the short-term as the next 24 months.

As US emerge from the pandemic and travel demand returns it is the general view such demand will see slow growth.  Therefore, we expect to see airlines deploy their smallest aircraft first.  This is happening at American.  The other US can be expected to do likewise. 

are focusing on cash preservation above all else. It is truly a matter of survival.  They will not deploy an aircraft they cannot fill.  US airlines are well-versed in how to handle and indeed overcome the shocks the industry goes through regularly.  The current shock is by far the biggest and the number of staffers with personal knowledge of the last one is not that many.  COVID will leave lots of new career scars.

As deploy regional jets, they will almost certainly break their Scope Clause agreements.  Mainline pilots may accept this for a short while.  If the recovery accelerates as IATA projects, pilots might be amenable.  But the longer that recovery takes the more likely pilots will balk at Scope relief. 

COVID is the cataclysmic event that we think breaks the current Scope deals.  COVID took us from a pilot shortage to surplus within 60 days.   Pilots simply do not have the same negotiating position they did at the start of the year.  To survive the could request scope relief at least for weight, allowing them to access the -E2 and M90.  do not want to be sole-sourcing regional jets and are going to be reluctant to order more until they can have a choice.  There is no shortage of parked aircraft to work with and fuel is cheap.

For pilots outside the US, with no Scope issues, the impacts will also be felt.  Senior pilots who may no longer be certified to fly regional aircraft could wait a long time to get work.  Junior pilots (“junior” in no way implies lack of experience by the way), on the other hand, may actually be in a better position for a change.  Seniority may not be of too much help without refresher training. We expect want to avoid any extra training costs. Besides

Long-Term – Being a career airline pilot

Commercial pilots have been enjoying something like “golden days” over the past few years.  Which is great because pilots are at the rough end of the industry’s frequent yo-yo cycles.  Being a commercial pilot is not for the faint-hearted seeking a stable career.  Bear in mind that many of today’s senior pilots have fresh memories from the impacts after 9-11; losing about half their former salaries after many passed through bankruptcy and then consolidation impacted seniority and merging of pilot labor groups. It has been smooth for about 10 years; senior pilots have been through the wringer. 

In the long-term, say the next 20 years, we could see this career become less attractive.  Already young people are avoiding it, which played a role in the pilot shortage.  It may well be that we never see a pilot shortage again if the travel demand recovery takes over four years.  If that demand is robust (best case scenario) then we might yet see an excruciating shortage – something most pilots dream of.  However, pilots want and deserve a fair salary commensurate with the responsibility and would probably prefer a supply and demand balance, as pilots don’t like extra hours any more than anyone else. And they don’t like flying tired.

The past, as we often are advised, is not a reliable guide for the future.  With that proviso, we think it is appropriate to consider the impact of avionics technology.  Look back 40 years and see how technology has impacted flight decks.  No more engineer.  Two pilots are now standard.  The entire flight process requires exclusive human inputs at taxi and takeoff.  Aircraft land themselves and navigate in-flight. Garmin has an impressive autoland system in certification.

The military has shown that they can effectively perform attacks using drones with shocking precision.  That means we have the technology today that automates a lot of pilot work.  (we recognize that MCAS is an example of flight deck technology pilots would probably be better off without) This will not be popular reading among pilots.  We are not the first to say it.

Now look forward 20 years, knowing technological progress is not linear.  The odds of air freighters being unmanned in 20+ years may not be such a fantasy.  Several freight carriers are testing drones for their “last mile” deliveries.  You know where this is going.  We all do.

Now dial in another 20 years into the time machine and we are reasonably comfortable saying within 50 years passenger flights may evolve from three-person crews to, perhaps, one pilot and AI-manned flight decks.

Between 2020 and 2035 airline pilots might expect to see their careers change radically.  By 2030 we are likely to see growing interest in single-pilot flight decks.  This will change everything for pilots. The debate has already started, pilots against it, and Airbus offering a glimpse of how it might work.

Summary
in summary, the impact COVID is having on the air travel business will probably go down as its most disruptive time to date.  We think perhaps the US Scope Clauses are likely to crumble under the weight of near-zero travel demand and airlines burning through cash reserves.  Pilots will run out of money before airlines do.  Pilots, in our view, will yield and ease scope limits to buy time.  It is the best play for a weak hand.

Longer-term, those pilots that can should try to negotiate early retirement.  Get out while they can to enjoy their senior years.  They will miss the last five years of high earnings and optimal schedules.  But better to take the deal they can get than wait for a future that is moving further to the right, and time is not on their side. It is as depressing to write this as it is to read it.  Senior pilots are amazingly highly skilled people – tens of thousands of hours handling flights safely through all sorts of weather and economic cycles.  They are truly special people worthy of the greatest respect.  This is written as an appreciative passenger. 

The future for airline pilots as a career choice is murkier than other options for young people.  COVID is teaching everyone about risk management in real-time.  Looking out over a work career of forty or so years, commercial flying is not likely to be high on the list.

Please follow and like us:
%d bloggers like this: