Pilot Workforce and Training Update Issue Briefing Prepared October 2016

Pilot Workforce and Training Update Issue Briefing Prepared October 2016

Economic Impact of Civil Aviation Regional Airlines operate 44% of U.S. commercial airline departures. In 2012 at the national level, civil aviation generated $1.5 trillion in economic activity and supported 11.8 million jobs. Civil aviation accounted for 5.4% of the U.S. gross domestic product in 2012. Visitor expenditures by travelers using air transportation contributed the largest single portion of the total economic impact of civil aviation in 2012. At the national level, commercial airline visitor expenditures contributed $671 billion to the U.S. economy and supported nearly 6 million jobs. SOURCE: U.S. DOT FAA The Economic Impact of Civil Aviation on the U.S. Economy January 2015

Regional Airlines are Sole Link to Global Air Transportation for Many U.S. Communities

Pilot Shortage Has Impacted Air Service Regional airlines are on the front lines of growing pilot shortage that will deeply impact every corner of the industry within a few years. Hundreds of communities have already lost some of their air service, dozens have lost all of their air service. This is not economics. Profitable routes are being cut because there are too few pilots to fly all of today s routes. Pilot shortage persists despite dramatic pay increases for airline first officers. Fewer new pilot certificates are being issued during period of unprecedented retirements at the major airlines.

FAA s 2013 FOQ Rule Heightened Shortage FAA s 2013 FOQ rule reduced the pool of hirable pilots by requiring first officers to obtain hundreds more hours in flight, despite evidence that hours in flight have no positive effect on pilot proficiency. Many proficient pilots were made ineligible by the rule. Moreover, as pilots build hours toward eligibility, they lose recency of training. The longer pilots spend outside the structured training environment building hours, the worse their training performance becomes. In fact, pilots hired after the rule perform worse in airline training than pilots hired before the rule. The rule has had long-term impact, too. Future pilots are deterred by steep barriers of entry to the professional pilot career. The increased FOQ requirements present another obstacle to aspiring pilots. The pilot shortage can be resolved through safety-first solutions that restore career confidence, address high barriers of entry, and promote the profession as rewarding and attainable. These solutions can be achieved within today s regulations while increasing safety.

University of North Dakota Pilot Supply Forecast 2016 RAA Total Pilot Workforce in 2016: ~18,000 Cumulative Pilots Needed by 2020: 18,643

University of North Dakota Pilot Supply Forecast 2016 Includes new pilots entering the workforce

Shrinking Hirable Pilot Pool 16.5% since 2009 927 per month 30 per day

A Closer Look at the FAA s Airmen Certification Database At minimum, 26% of total ATP certificates are ineligible for hire Other ATPs, 32,773, 26% U.S. ATP Certificate s with current 1st or 2nd class medicals, 92,076, 74% Currently unquantifiable for analysis: age piloting ability check-ride failures recency and type of experience instrument proficiency criminal record Source: www.faa.gov Airmen Certification Database as of May 2016 9

How Many Pilots are TRULY Available? 92,076 ATPs currently living in the U.S. with current 1 st or 2 nd class medicals. Seniority lists for the legacy, regional, low cost, national, and large cargo carriers total roughly 85,000 pilots (some of which may not hold 1 st or 2 nd class medicals). Approximately 7,000 ATP certificate holders *might be eligible for hire among the entire industry. *Those unquantifiable factors, like proficiency, check ride failures, recency of training, etc., reduce this number much more. Current Seniority Lists (Approximate): All RAA Members 19,723 American 15,268 Delta 13,121 United 12,505 Southwest 8,235 FedEx 4,288 JetBlue 3,204 UPS 2,538 Alaska 1,700 Spirit 1,354 Frontier 1,012 Allegiant 711 Virgin America 710 Hawaiian 627 Sun Country 275 Pilots Already Working: 85,271 Sources: www.faa.gov Airmen Certification Database as of May 2016 AND www.airlinepilotcentral.com 10

RAA Member Airline Pilot Recruitment RAA member airlines sought to hire nearly 6,000 pilots in 2015 New Hires in Class vs. Desired New Hire Pilots

Between 2013 and 2016 309 U.S. airports experienced schedule reductions of 10% or more Source: RAA analysis of OAG schedules via PlaneStats online portal

Between 2013 and 2016 208 U.S. airports experienced schedule reductions of 20% or more Source: RAA analysis of OAG schedules via PlaneStats online portal

Between 2013 and 2016 52 U.S. airports lost passenger air service completely. Source: RAA analysis of OAG schedules via PlaneStats online portal

Since 2007, Scheduled Departures at Small and Non-hub Airports Have Increased in only One State 49 States are down Source: Broken Promises: Deregulation and Consolidation Coming Up Short for Small Airports - Regional Air Service Alliance w/ Intervistas Data

Attracting New Pilots

Innovative Career Progression Programs Regional airlines have worked to support pilots by strengthening the career path, partnering with collegiate and training institutions to create career progression stability and opportunities. Tuition reimbursement agreements Internship, cadet, and leadership development programs Preferred or guaranteed hiring agreements Many regional airlines also offer guaranteed interview or advancement (flow) to major airlines. Regional airline social media pages show airlines taking every self-help measure to attract and retain qualified pilots, with flow programs and significant salary investments even in the early years.

Regional Airline Entry Level Wages Higher than Reported Average total compensation for first year First Officers at RAA member airlines is $46,707. 90% of RAA s fleet pays average total compensation of $50,504. Total career earnings for airline pilots is estimated to reach $6.7 million. Financial Manager Airline Pilots, Copilots, and Flight Engineers Aerospace Engineers Industrial Engineers Occupational Health and Safety Specialists Aircraft Mechanics and Service Technicians Flight Attendants Flight Dispatcher $134,330 $117,290 $110,570 $86,990 $71,790 $60,160 $46,750 $40,140 Median for all U.S. Occupations $36,200

Addressing High Barriers to Career Entry and Improving Aviation Safety are not Mutually Exclusive. RAA has a plan that delivers squarely on both.

FOQ Rule Lowered Quality of Eligible Pilot Pool FAA s 2013 FOQ rule, while advancing safety in other ways, included an aeronautical experience requirement that did not advance safety. Aeronautical experience 14 CFR 61.1(b) means pilot time obtained in an aircraft, flight simulator, or flight training device. These flight hours are gained outside of the scope of instruction and can be obtained in various flying environments. Recency of training is critical for pilot proficiency. Eligible pilots have higher flight time but many lack other meaningful characteristics, like structure and recency of training. Many cannot meet regional airlines rigorous hiring standards. The R-ATP pathway, allowed by the 2013 rule, are working well and should be supported and expanded.

Pilot Source Study 2015 (www.pilotsourcestudy.org) A large, independent, academic, population study examining the training records of 7,073 pilots at 22 regional airlines showed no positive correlation between higher hours in flight and a pilot s proficiency. In fact, the inverse was true. Since the 2013 rule was enacted: New hire pilots performed worse, not better, in airline training. Pilots hired after the rule experienced more training non-completions and require more extra training than pilots hired before. Pilots with the highest hours in flight fared worst in airline training. Longer lapses between training and hire (as pilots build hours between their training and hiring), corresponded to worse training outcomes as pilots lost recency. Pilots with R-ATP certificates (associated with structured training backgrounds and fewer hours in flight) had the best training outcomes. Researchers included University of North Dakota, Embry Riddle Aeronautical University, South Dakota State University, Purdue, Middle Tennessee State University, Arizona State University, and Ypsilon Associates, an independent research consulting firm. RAA did not request or fund the pilot source study.

FOQ Rule Upset Pilot Career Aspirations In addition to skewing the pilot hiring pool today, the FOQ rule has been deterring future aviators. 2015 University of North Dakota and University of Nebraska Omaha Pilot Careers Aspiration Study Update queried 820 aviation students or recent graduates from 49 education and training institutions and found: The 2013 FOQ rule change prompted 28 percent of aspiring pilots to think twice about an airline career. Additionally, 8 percent of those formerly planning airline careers no longer planned to fly for airlines due to the rule. Large numbers were willing to consider relocating overseas to allow an earlier career start.

RAA s Solution Focuses on the wellsupported R-ATP Pathway Recognizing that R-ATP pathways produce highly proficient pilots, RAA has proposed an airline-sponsored R-ATP pathway to complement existing R-ATP pathways in place today (military and academic). Designed to work within FOQ regulations just like any other R-ATP pathway. Executed through a special FAR Part 121 initial pilot training program. Incorporates filters, screening, training enhancements, academics, oversight, testing, and post-hire supports to truly increase pilot proficiency. Qualitative, scenario-based, highly structured. Represents a significant airline investment in pilots and safety.

Short and Long Term Solutions How does ACE resolve the pilot shortage? Salary, quality of life, and flow help attract new pilots to the profession, but FOQ s flight time requirements stand as a brick wall between potential pilots and their career, deterring many from pursuing the profession. ACE helps by addressing a key barrier to entry and reestablishing opportunities for those finding the career out of reach after the FOQ rule change. How does ACE restore quality to the pilot pool? The FOQ rule degraded the quality of the eligible pilot hiring pool by excluding some of the most proficient pilots and by emphasizing flight hours at the expense of recency. ACE restores proper emphasis on recency in training, and increases access to the right pilots at the best time in their professional development to assure high proficiency, ACE then offers additional proficiency in the post-hire environment. ACE is not just a variation on airline initial training; ACE is an innovative program designed with all the rigor, structure, academics, supports, and oversight of an alternate R-ATP pathway itself. We can fix the pilot shortage. We need your help today.

Faye Malarkey Black President Stacey Bechdolt Vice President, Safety & Operations Regulatory Counsel Liam Connolly Senior Director, Security & Regulatory Affairs Jennifer Sunderman Director, Operations, Safety & Technical Services Staci Allison Morgan Operations Manager