The national security of the U.S. relies on a healthy airline industry. That requires modern reliable airplanes — and highly skilled pilots to operate them. However, the U.S. has a shortage of pilots right now, particularly at the regional airline levels. According to the Federal Aviation Administration, there were about 827,000 pilots in the U.S. in 1987. Over the last three decades, that number has decreased by 30%. Meanwhile, during this time period, there has been a tremendous increase in the demand for air travel. The International Air Transport Association predicts that, over the next 20 years, air travel will double.
This is a classic case of low supply and high demand. This mismatch has created a perfect storm that could wreak havoc on the U.S. airline industry over the next decade. The somber news is this shortage is going to get much worse. I have not only studied and researched the airline industry since 1978, but I also was a pilot for 29 years, before going back to academia in 2008. In the 1970s, when most of today's airline pilots like myself were growing up, piloting for an airline was considered a prestigious career.
The job offered not only high salaries and nice schedules with many days off, but also a respected position in society. In the early 1990s, pilot salaries approached $300,000 in today's dollars for some international pilots.
What's more, during this time, the military had a steady and consistent demand for pilots. A young aspiring aviator could go into the military to receive all of his or her flight training. Once these pilots had fulfilled their military commitment, they were almost guaranteed a good job flying for a major airline.
From my own experience, I can attest to many pilots like myself who were forced to vacate their captain position and go back to first officer, resulting in their pay dropping from roughly $290,000 per year to $175,000 per year. There's even talk of extending the retirement age again to 67. I retired at 65 and was still asked to say on. I now have received a letter asked me to come back on sort hall flights.
Meanwhile, the number of pilots supplied by the military has dwindled. Much of this is due to the use of unmanned aerial vehicles. In the 80s, roughly two thirds of airline pilots were ex-military. Recently, that percentage has dropped to less than one-third. The Navy predicts a 10% pilot shortage in 2020, while the Air Force predicts its own 1,000-pilot shortage by 2022. This means many young aspiring aviators now have to pay for their own flight training. That can be very costly, easily exceeding $100,000, especially in light of an uncertain future. Many are simply unwilling to take the risk. This effect was aggravated by the great recession. In 2009, Congress changed the mandatory retirement age for airline pilots from 60 to 65. In my view, this didn't solve the problem, but merely kicked the can down the road.
The industry has taken a few steps to address this problem. Regional airlines now offer much higher pay and even signing bonuses. Also, there have been some minor amendments to the 1,500-hour rule. Pilots can now receive their certificate in fewer than 1,500 hours if training takes place at certain flight schools. In my view, these steps alone will not solve this problem. Airlines need to consider forming their own pipeline. The airlines will need to begin recruiting and training their own pilot candidates. For example, in April, American Airlines, where I used to work, announced the American Airlines Cadet Academy, with the intent of recruiting the next generation of pilots.