You have just been hired as a strategic HR consultant to Vertical Horizons, a regional airline that has
hubs of operations in the three (3) states with the busiest airports. Pilot shortage in the Industry You have just returned from an
introductory meeting with Vertical Horizon’s management team in NYC where they asked you to attend
an upcoming strategic management session in upstate New York. They would like you to assist them
with a strategic issue relating to an impending shortage of airplane pilots. Coincidentally, on your return
from the NYC meeting, your flight home was delayed by 4 hours due to the lack of an “available” copilot.
They have read the 2014 Boeing Pilot and Technician Outlook report and want your help.
According to Boeing’s 2014 Pilot and Technician Outlook report, there is a need for nearly 533,000
airline pilots over the next 20 years. While demand is expected to be the greatest in the Asia Pacific
region, there is still likely to be demand in the US for pilots. Industry officials warn that a shortage
looms because of several factors. The mandatory retirement age in the US for a pilot is 65 (extended
from 60 in 2007) which means that many Vietnam Era veteran pilots are looking for retirement homes
near golf courses. In addition, the FAA has imposed greater training requirements and longer rest
periods between shifts for current employees. In addition, the economic downturn and the complication
of airline mergers have caused problems for airlines attempting to hire and retain qualified pilots
needed today and in the future. The profession is also facing difficulties attracting new entrants due to
the time it takes to meet the entry training requirements, and the high cost of training at accredited
flight schools. And the lure of foreign airlines could also help reduce the domestic supply of pilots.
The three (3) busiest airports in the United States are:
1) Hartsfield-Jackson Atlanta International Airport (ATL) – Atlanta, Georgia
2) O’Hare International Airport (ORD) – Chicago, Illinois
3) Los Angeles International Airport (LAX) – Los Angeles, California
Your assignment:
Prepare a report that you will share with Vertical Horizons that addresses the following:
• Research the severity of the predicted pilot shortage and the external labor market because
the company is concerned about the availability of pilots in the future.
• Compare forecasted employment trends in the above states (with the busiest airports) with
those of the entire United States. I suggest you reread Chapter 5 of your text for helpful
resources.
• Develop an action plan to strategically address the impending pilot shortage in the industry.
What are your suggestions for improving the quantity and quality of pilots over the next two
(2) decades? Vertical Horizon’s is considering discussing the issue at the next meeting of
Airlines for America, the airline industry’s trade group.
• Develop an action plan for Vertical Horizons to proactively address the situation for its own
operations.
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Management: Pilot Shortage in the Industry
The Severity of the Predicted Pilot Shortage and the External Labor Market
The problem of shortage of pilots in the growing air transport in the US has attracted a lot of attention from both the government and private sector. The issue of shortage of qualified pilots is not only an issue in the American market; this has been observed in Europe and the emerging economies like China that offer low-cost commercial carriers (Blair & Freye, n.d.). The North American aviation sector has been predicted to grow and in twenty years, it will require close to 83,000-trained pilots in order to meet their growing demand.
According to (Regional Airline Association, 2014), the Part 121 environment, restricted entry requirements and poor compensation among other factors has raised more eyebrows on the ability of the pilot industry to meet the growing need for the pilots in the country. Furthermore, there is a growing demand for pilots from the Asian flight industry, which offers better opportunities to the trained pilots, compounding further to the problem of shortage of pilots in the country.
Comparison of the Forecasted Employment Trends in the Busiest Airports in USA with Those of the Entire United States
The Hartsfield-Jackson Atlanta International Airport (ATL) – Atlanta, Georgia, O’Hare International Airport (ORD) – Chicago, Illinois and Los Angeles International Airport (LAX) – Los Angeles, California are the busiest airports in the country and contribute significantly to the national economy and to those of their respective states. According to (Beacon Economics, 2014), the there was an increase in the employment in Los Angeles city county while the rest of Los Angeles county experienced a decline in the employment rates between 2013-2013. A significant change in the employment in the air transport, which is among the highest contributors to the economy of the county, is likely to affect negatively the economy of the county. The drop rise in unemployment rates coincided with an increase in the decrease in the number of individuals enrolling for employment in the air transport in the county and country at large. Similarly, there has been a drop in the employment rates for those individuals enrolling in the air transport in the Hartsfield-Jackson Atlanta International Airport (ATL) – Atlanta, Georgia, O’Hare International Airport (ORD) – Chicago.
Action Plan to Strategically Address the Impending Pilot Shortage in the Industry
In order to address the impending shortage of pilots in the air transport industry, there is need to adopt a number of strategies. According to (Regional Airline Association, 2014), the shortage of pilots in USA is a problem that that has been attributed to a number of factors that include funding, restrictive entry requirements, reduction in number of instructors being certified and reduced number of instructors who are being certified.
In order to solve the declining number of pilots in the country, there is need to relax some of the entry requirements, especially the Part 121 environment in order to open up the sector and allow more individuals to enroll in flight training. There is also the need to reduce the excessive amount of training costs needed for one to train to be a pilot. The current fees charged are so high that it makes the profession a preserve for a few able individuals who may not even have a passion to be pilots. Finally, there is need to change the industry training model in order to allow for a quicker certification of instructors in the training institutions to fast track training and accreditation of trained pilots.
Action Plan for Vertical Horizons to Proactively Address the Situation for Its Own Operations In order to increase the number of individuals who enroll to train as pilots, there is need for Vertical Horizons to provide a compensation package so that those who enroll will get subsidized training costs. In addition…………………
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