1. Airlines’ costs set to soar over pilots’ crisis; here’s why

Airlines’ costs set to soar over pilots’ crisis; here’s why

A fairly big shortage of pilots two years down the line — estimated at around 2,000 — could drive up costs for airlines. While employee costs constitute around10% of an airline’s overall revenues, the need to pay pilots more may push up expenses on this front.

By: , and | Published: July 26, 2016 6:47 AM

A fairly big shortage of pilots two years down the line — estimated at around 2,000 — could drive up costs for airlines. While employee costs constitute around10% of an airline’s overall revenues, the need to pay pilots more may push up expenses on this front.

Although the country has over 5,000 commercial pilots currently, data from KPMG-Ficci reveal the sector could need close to 9,000 pilots in another two years. The planned expansion apart, carriers would also be looking to add aircraft now that they can fly overseas even before they have completed five years of operations provided they have a fleet size of 20.

The civil aviation regulator DGCA typically issues about 800-1,000 commercial pilot licences (CPL) every year, which would mean the country would have around 7,000 pilots by 2018.

However, the growth in the number of pilots doesn’t appear to have matched the growth in the fleet size. The current fleet size — commercial as well as chartered — is 850 and going by the orders placed, this should go up to around 1,000 by 2018. This would imply that against a requirement of 9,000 pilots for 1,000 planes, the supply will be closer to 7,000. Carriers are ideally required to have 10 pilots for each aircraft they operate. According to sector experts, the shortage will be higher because even after a pilot graduates from a flying school and gets a licence, he needs further training and cannot fly immediately.

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“Pilots as well as engineers will be a major problem in the future. One reason the projected fleet growth for this year is only 110 aircraft is because of pilots. There are lots of people in India who have CPL and PPL (private pilot licence) but in spite of that they are out of jobs as training on any one specific aircraft can be unaffordable to a lot of pilots with valid CPLs,” Dinesh Keskar, senior vice-president of sales in India for Boeing, told FE. He added that it takes $48,000 to train a pair of pilots.

Currently, the DGCA recognises 30 flying schools across the country. It takes nearly two years for a trainee pilot to obtain a CPL but the pilot still needs to be trained on specific aircraft by an airline for a few months before being cleared for flying commercial jets. However, some flying schools like CAE Oxford in Gondia and Raebareli have tailor-made courses in partnership with airlines that expedite the induction of pilots into cockpits, making it easier for such carriers to fulfil the quota of pilots needed for their fleet.

While such tie-ups cushion scheduled commercial airlines from a pilot shortage to a large extent, it makes it even more difficult for chartered operators to find trained pilots at an affordable cost. “Scheduled airlines alone would require about 2,000 pilots in the next two years and this poses a massive challenge for chartered operator to find trained pilots,” Bhupesh Joshi, CEO of the largest chartered operator Club One Air, told FE. He added that chartered operators end up spending more on pilots due to lack of training facilities in the country.

“There was a similar projection regarding shortage of trained pilots in 2008 when the sector was expanding rapidly. However, due to the global recession, some airlines went belly up while others adopted cautious expansion plans thus avoiding pilot shortage situation,” said Abhay Krishna Agarwal, partner, infrastructure & PPP at Ernst & Young.

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