Is now a good time for trainees given the financial uncertainty globally? WWW?

[Dipole]

I've been monitoring these forums over the past 3 years from time to time. I'm training myself modularly. I've got P.P.L. and working towards ATPLs. So far all's good. Although, one of my schools went bust half way through my P.P.L. but I didn't get burnt due to luck. I started training around the time the financial crisis began. At the time people were debating as to whether it was a good time or not to train. In 2008/2009 it became clear I would have to slow down training. The E.U., in particular, seemed to be on lock down and the airline business was suffering badly. As it turns out I'm sort of glad I slowed it down. I think time to absorb the material assosiated with flying isn't a bad thing.

What I'd like to know is do people think the airline industry has stabilised? Do you think a default in Greece and possible downfall of the Eurozone could bring on another period of severe destabilisation? Is now a good time to be getting on with things?

I remember reading that many people had respect for what W.W.W. had to say about financial matters. Does W.W.W. see things improving?

[The Old Fat One]

Can't speak for WWW but, my tenpenneth for what it's worth...

There are two separate issues here and although they interact, it is a mistake to think that the outcome of one fully determines the outcome of the other.

As regards the outcome of the economy, global, regional or just UK...nobody knows. Economists (proper economists) will offer a range of outcomes all covered in ifs, buts, maybes and just about every other disclaimer you can imagine.

I'm not one for armegaddon prophecies (not least because none of us can do anything about them or avoid them if they do come true) so I personally discount global meltdowns and the like and look at the probabilities...and probablities are all they are.

The UK, regional and global outlooks do not look good and it is hard to see beyond the moribund state we are currently in. In my view (as a businessman) it is best to view the economy as remaining pretty much as it is for the next 5 years or so and make your plans (whatever they are) accordingly. An over simplification perhaps, but I aspire to the KISS method...

Keep It Simple Stupid

Whilst this overall ongoing economic gloom does affect growth in the aviation industry there are other, potentially more important factors in play...

In no particular order:

The inevitable ever upwards cost of fuel.
The increasing costs of providing security.
The inevitable reduction in business travel and consequent optimisation towards low cost leisure aviation.
The influx of low cost aircrew from developing countries (and the movement of low cost carriers towards that source of low cost employee)
The movement towards short term contracts to take advantage of increasing mobility of labour in the aircrew market.

Just a few...but importantly all of them are largely independant of the economic big picture inasmuch as they will grow/increase in effect whatever the economy does.

The real question for the aspiring pilot is does this career choice offer the lifestyle it once used to?

[Torque Tonight]

The industry never has been and never will stabilize. You just have to time it right so you're riding the upward side of the wave not the downward side.

[PPRuNe Towers]

I think it's fair to say that the Welshman got precious little respect until it was far too late to prevent vast numbers entering hideous debt. A time of collapse when the bigger exam locations where having a hundred plus punters per sitting saw him repeatedly skewered here for not understanding either the 'dream' or the 'passion.'

Someone will be along shortly who operates a computer in a trading house or as an analyst to reassure you with lots of quotes. They will be so impressive just like in the previous threads along these lines. All the airframe orders will be bandied about - especially fresh ones from the Paris Airshow and if you're really lucky there will be a graph. And a link to a report on immense future pilot requirements from a company that would like to sell you aeroplanes, lots of them, the more the better actually. Obviously a decade of huge debt in an insecure and volatile world is far better a financial proposition than staring, bored, out of an office window.

Meanwhile counterpoints will be offered by people who actually do the job. They will range from it's got downsides but is still the best thing I could dream of doing to: the job has been ruined and it is purgatory. Readers will also skip over the year in, year out potential career death offer by sim, line checks and medicals. Wannabees will also make sure they skim over the inconvenient truth: the fastest growing operators in Europe have announced slowdowns, fleet reductions, seasonal parking of airframes and 'voluntary' part year contracts.

In reality wannabees will actually listen mainly to those selling the dream - on commission.

However, in our PPRuNe dream world wannabees will use our archives to find their peers from 4 or 5 years ago who are working now and still posting. The big Ryanair thread in Terms and Endearments is a great place to start and you'll soon see how they feel about being in their dream job.

My opinion on the market? Away from the hype, the spin and the words of those who live off students.

* No significant rise in market rates has occurred.

* The market is such that experienced captains all over the world are working several months without pay before beating a retreat from incompetent, corrupt and scabrous companies. All off it detailed outside this little ghetto within PPRuNe.

* The ads that people point to as indicating a rising market are just the opposite. Same ads, every month, year after year for the same companies by multiple agencies means they are desperately bad jobs or employers or both. The agencies resort to cold calling people with my experience just to try and get you to an assessment.

Until we see a significant change in the three items above, the market for new entrants is not attractive.

Additionally, there are those on PPRuNe who genuinely believe that the market is so bound and skewed by modern management fashion, like elsewhere, that the market rate can never be allowed to rise again. In my opinion the next few months, starting with Virgin Atlantic, will show if the market can be permanently and artificially constricted by beancounters or if they eventually have to admit they don't have a licence and actually need real pilots. They will go to untold and hugely expensive lengths to avoid that.

Search on Warren Buffet and the Sharecropper Society to see where this is all leading.

Rob

[Wee Weasley Welshman]

Back in 2007 I did think the world was on the brink of collapse. And it was. We didn't see as much of a collapse in EU airlines as I thought we would have. So things didn't turn out as badly as I thought they would.

That said what actually has happened is the pain has been deferred by slashing interest rates and printing money. This is Not Good over the medium and long term. The medium term is pretty much the period we are now entering.

I think it will be like Japan over the past 15 years. Hardly any real growth, an ageing population and decline. The airline sector will reflect the wider economy. The low cost explosion ends in 18 months. The East of Europe offers some scope for expansion but it is limited and you don't speak Latvian.

This means its dead mans shoes. It also means the training industry will be too big in relation to a market for pilots which has stopped expanding. Something will have to give.

If my kids were trying to become professional pilots now I'd advise them to get a 'cadetship' or not bother.

WWW


Ps Greece will default, the Euro will split.

[Dipole]

@WWW, I agree about Greece. Really hope the Eurozone doesn't break up. Could you imagine in inflation in Germany and deflation elsewhere... The one country that is doing well would be well and truely thown out of the game. That is why I think it is in Germany's interest to ensure the Euro survives. The peripheral countries are making it a competitive manufacturer.

It's a toughie. I do have to wonder about these 'cadetships' though. You're looking at paying up to 90K on them with no guarantee of a job really. The same criteria seems to be applicable whether you take that route or modularly, although you may have more opportunity of consideration.

How are the integrated schools doing? Does anybody know how their intake has been affected over the last 4 years?

What would your advice be WWW for me? PPL finished, minimum hours and working towards ATPLs. Not doing anything off credit. All done from savings. What would you do?

[KAG]

Dipole:Do you think a default in Greece and possible downfall of the Eurozone could bring on another period of severe destabilisation?




WWW:Ps Greece will default, the Euro will split.
Every year at the end of the spring we hear that one.
We forget a few facts that would be interesting to remember: the total company/private/public(national) Euro zone debt is lower than the Japan, UK or US one.
Euro zone is the first exporting economy in the world, far ahead of China or the US. Exporting means real money, from the factories not from the printer.
Germany economy growth is 1.5% this first trimester (it means a rate of 6% a year during this first trimester) France 1% (means 4% blablabla). Those 2 countries represent 50% of the Euzone GDP with this past few months an average gowth of 5% a year... While Greece represents 2.6% of the Eurozone GDP. Seing the future of the Euro zone because of what's happening in Greece that's like forseing the future of Japan based on the Fukushima prefecture (bad comparison, my apology to the Greeks), or predicting what will happen in the US referring to the state of louisiana or Georgia. For example the Alaska or New York state are much more in debt than Greece, and New York for example has a much higher economic weight in the US than Greece has in Euro zone (10% for New York, 2.6% for Greece).

In 2008 all news paper were already saying that Euro zone would explode, a few month before the economic turmoil started in the US...

The Eurozone "bankrupt", "turmoil" or whatever else has been used those past few years by some country, media and politics to avoid to look at themselves. UK for example has TWICE MORE EXTERNAL DEBT than France but without its industry... Here I see a BIG WARNING, much more important than Greece.


My point? If you are afraid the Eurozone may influence your pilot career, so take into account at least as much the potential dollar collapse, the US or UK economy metldown, or the fuel price.

The conclusion of my point: it's worse than what you may think.






With so many economies struggling in the financial downturn, it is always worth wondering just how badly indebted are the major countries of the world. The presumption would be that the small undeveloped countries bereft of resources would be those most in debt, but the opposite is in fact true.

The following list details the top 10 indebted countries according to external debt, or the total public and private debt owed to non-residents repayable in foreign currency, goods or services (figures correct at the time of writing, unless otherwise stated).

United States of America - $13,399,859,000,000

The richest country in the world is also the most indebted. The United States is an astonishing $13.3 trillion in debt as of June 2009, putting each American citizen approximately $43,000 in debt.

United Kingdom - $9,191,104,000,000

Second on the list is the UK. With a relatively small population, the UK's debt per capita stands at $150,000, more than three times the debt of the average American. Huge loans for mortgages on inflated housing prices are a contributing factor to the UK's massive debt.

[KAG]

Other than Greece, excellent post, excellent thread.

We need to be optmistic in our individual and respective life (we all say it will be fine but we all die at the end...;) ), no doubt about that, but when somebody seeks some information, the realistics (pessimistics?) are most of the times the most accurate.

[Wee Weasley Welshman]

Pimco warns Greece will default - Telegraph (http://www.telegraph.co.uk/finance/financialcrisis/8591262/Pimco-warns-Greece-will-default.html)


Its going to happen.


My estimate, based on looking at the UK schools + Jerez is that there are currently 1,100 people a year training for professional pilots licenses in the UK. easyJet and Ryanair between them have been soaking up 400. Both airline stop expanding their fleets in the next 18 months after which recruitment slows to deaths, retirements and loss of medicals.

The charters need nobody, the freighters are sorted, the Netjets still have guys laid off and BA is static in fleet but has circa 150 retirees a year now, everyone else is fighting to stay profitable or stem losses. The RYR and EZJ stop is going to be seismic.


We also have the end of stimulus and the growth in unemployment to face. Additionally there is a massive crunch in household spending vs real income. House prices continue to head down and with them the prospects of the banks.


The wannabe zombie army is full armed with Parental cash and fond dreams. They bid over >£100k for training.




WWWW

[Bealzebub]

It won't change, it will evolve.

That evolution as has already been indicated, will vary by region and will depend very much on both global and regional economic factors. These things shouldn't be viewed too narrowly. For example growth in the Arabian gulf, will have a trickle down factor in other regions. Similarly contraction in Europe will have a negative impact on neighbouring local markets.

Recruitment will happen. To what extent, obviously depends on the previously mentioned factors. Recruitment is likely to be much more tailored than has historically been the case. Many companies now have little appetite for employing pilots on a year round basis when their own sales markets are seasonal. Future recruitment is therefore likely to involve a much larger element of part time and or seasonal contracts.

Prior to the current recession, and all through it, airline recruitment has focused into two distinct directions. One is the traditional "experienced, type rated and well qualified pilot." The other is the low experienced, affiliated, integrated cadet pilot." As far as the latter is concerned, there has (even through the recession,) been significant and targetted investment into the infrastructure required for a post recession expansion of this market.

Many airlines now see a significant cost benefit in utilizing these cadet schemes as part of their overall cost/risk strategy. These schemes are themselves closely tailored to the customer airlines operating philosophies, record keeping, and monitoring programmes. The training burden risk/costs are either heavilly or totally borne by the candidate. The entry salaries are priced at "apprentice" level. The candidates often come with a self financed bond thereby affording the customer airline additional protection. The "apprenticeships" are offered on an effective "sale or return" basis, and then often with the same part time or seasonal contracts that I mentioned earlier.

So if you want to stand any realistic chance of an airline first officers "apprenticeship" with only 250 hours, then this is the best option. In fact there is little new in the concept. It has been the case for decades, however post recession markets will see a rapid (and waiting) growth in this type of employment. It is expensive (for the pilot) and carries considerable financial risk.

Beyond that, there are the traditional "self improver" markets. These are crowded, significantly longer, often less expensive, risky, patchy, and usually require a much broader focus on the realities of the marketplace. In other words "don't hold your breath that airlines will look at you with 250 hours, because they won't!"

Paying £50,000 for one, or £100,000 for the other is going to guarantee you little or nothing. However each market sets it's own entry price. There is little merit in believing that joining the wrong queue won't matter. You need to know what you want and what you can afford before you start.

So if you can afford it, you pay your money and take your choice! The risk is significant if you are lucky. It is very high indeed if you are not. Most people are not!

[KAG]

WWW:
Pimco warns Greece will default: Its going to happen.
Do you know who is Pimco? That's a speculator. Do you know how speculators make a living? Encouraging speculation. That's just a little game that happens every year. Speculation on debt default, Euro goes down, speculators get huge amount of $$$. Because the Euro goes down, exportation increase, GDP increases, speculators speculate the other direction: Euro goes up, speculators get huge amount of Euro.
Speculator game. They win whatever happens. Already forgot what happened last year same period?

What's the difference between Germany, France, Uk versus Greece? Not much, the firt ones get the AAA rating, the last one not, which make it unable to reimbouse its debts and call for help everywhere... A speculator game...But a bad one.

http://static.seekingalpha.com/uploads/2010/2/16/saupload_10_02_16_world_debt.png








So, WWW and others, put yourself in any aspiring pilot's shoes, what would you do in these circumstances? And how do you think the industry will change over the next 5 or so years? I beleive right now is the best time. It will go down from there because of the oil price that may stay above 100$ from now on, unless in case of recession.

[stuckgear]

So, WWW and others, put yourself in any aspiring pilot's shoes, what would you do in these circumstances?

Sorry to say it, but Pprune towers and WWW are on the money. I know it's not what you want to hear, but thats just the way it is.

And how do you think the industry will change over the next 5 or so years?

The old fat one, Pprune towers and WWW, have pretty much covered it. Again, it's not what you want to hear, buts that projection.

There is no magic answer.



I beleive right now is the best time. It will go down from there because of the oil price that may stay above 100$ from now on, unless in case of recession.


I have to disagree, yes oil price is a contributory factor, but its just that a contributory factor, there are other influencing factors that also affect the future.


Greece will default, it's simply a matter of *when* not *if*.

[captainsuperstorm]

my pronostics:

china are building planes, airbus/boeing soon can say bye bye...
fuel will go up
unemployement will stablize around 9-10%, not going down.
stagflation is here, cost of life increase, salary stagns.
Greece will start a domino effect with ireland, Italy, Spain,...
some EU countries will have to leave the EU zone.
The entire worldwide industry(car,...) will move to China.
The US$ will be changed to the Yen
Bankrupty of the USA.
Bankrupty of EU.

to resume: YES IT'S A GOOD TIME TO START TRAINING, SCHOOLS NEED YOUR MONEY!:eek: and you will finish like the thousand of idiots there who have spent over 100'000 euro in an aviation training and now work in a fast food, bar tender, or cashier at TESCO!

[KAG]

Greece will default, it's simply a matter of *when* not *if*. I see;) Thing is, everything happens with time, even the end of the world. If Eurozone goes bankruptcy 40 years from now, it's irrelevant to this thread.






I have to disagree, yes oil price is a contributory factor, but its just that a contributory factor, there are other influencing factors that also affect the future. We agree, a contributory factor.

[stuckgear]

Honestly, if Easyjet and Ryanair stopped trying to be lucrative down to the very core of their business and actually assisted pilots in getting their foot on the ladder, that alone would make a huge difference. The chances of getting hired are low enough without having to pay your way into the seat, and if they need pilots they could at least hire them with their dignity still intact?


It's a business not social care.


Now, this *thing* with the EU.... The EU is starting to hurt for cash, so, what do you think will happen with circumstances like this...

The Irish Times - Sat, May 01, 2010 - Ryanair profits boosted by subsidies, say rivals (http://www.irishtimes.com/newspaper/weekend/2010/0501/1224269451828.html)

Extracts:

"Lufthansa says that if Ryanair was stripped of free or subsidised airport services in addition to cash, in the form of “marketing support”, it would lose money. “If all the airport subsidies and support paid to Ryanair were taken away, its economic situation would be very different,” says the Thomas Kropp, a spokesman for the German airline."

"French newspapers recently cited figures ranging between €35 million for France alone, and €660 million across the EU, as the value to Ryanair of the subsidies it receives. Until EU investigations into several alleged illegal subsidies are concluded, as well as a case being taken in the European Court by Air France/KLM, only one figure can be relied upon. That is the €35 million of Ryanair subsidies uncovered by audits conducted on several French airports controlled by local authorities. The audits, carried out by France’s cour des comptes (its version of our Comptroller and Auditor General), are representative, say Lufthansa and Air France/KLM, of what Ryanair enjoys at many of Europe’s 200 or so regional airports."

"In some cases, net subsidies amounted to as much as €32 per passenger carried, as with Rodez, a French airport where Ryanair benefited to the tune of at least €3.2 million between 2004 and 2006 for just three flights per route per week. At Brest, subsidies totalled €23 per passenger. At busier Beauvais (Ryanair’s Paris), the subsidy per passenger between 2001 and 2006 was a more modest €9, but total aid in cash and benefits still amounted to €28.6 million."



Now many of you may see Jet Blast as abunch of old fogeys and retired pilots talking rubbish about gumbo reciepes, but if you care to venture that way, there are threads running concerning these very issues as well as the political environment and like it or not, it does affect the industry.

see ya back down there KAG :ok:

[KAG]

see ya back down there KAG

See you here or anywhere we can exchange interesting viewpoint stuckgear.:ok:

[Golf--Lima--Papa]

Don't shoot the messenger.....


Demand for airline pilots set to soar - USATODAY.com (http://travel.usatoday.com/flights/story/2011/06/Demand-for-airline-pilots-set-to-soar/48661596/1)

[KAG]

Re Heat:

*sure I was talking about the TOTAL external debt, which includes the public debt. Is that irrelevant? Maybe. Maybe not... What is sure is any country want to look at itself in the mirror that will reflect the best image.

*Pimco is an investor. You are right. How does it work? Speculating to make money. Of course it demands a lot of brain, ressources, knowledge, but the goal remains simple: speculating and making money, even if it has to be against a country. Welcome to the 21 rst century.

*You say Greece will default... While the subject (and the question) is about the downfall of the Eurozone that would bring instability then a big recession and will compromise the project of becoming pilot. This is the whole picture that you have to take into account to speak about Greece, Eurozone, its foreseing future and its influence on the decision process to start a pilot training. I desagree with you: Greece won't necessarily default. And if it does it won't bring down the Eurozone. I already explained why, so if I were a wannabe I would be more cautious about the fuel price in the 5 next coming years than the Eurozone.

*Yes a cadet scheme is the best to become an airline pilot nowadays. But I beleive everybody is already convinced about that.


*I just checked your wikipedia list: it represents only one part of the total debts (it doesn't take into account the private debt, neither the external debt, neither the savings available, neither the economic growth, neither the budget deficit of the current year, which are all determinant information to evaluate the economical nation strength). This list doesn't mean much if we speak about default. For example Japan has a huge public debt, but it all belongs to japanese families,money available they already have. That's not external/foreigner debt, and as such nobody consider Japan will default because of its public debt, which is not subject to any speculation and fully under control of the country governement and bank.
At the opposite it shows Spain with a very low public debt... If you are really interested in economic and the relation between all economic agent, this list means close to nothing.








I beleive right now is the best time. I think that somebody who has just finished his training may have some opportunities right now. And if he (the same potential wannabe) didn't find anything yet, he shouldn't think it will get better with time, the industry is already giving everything it can considering the economic environment and the fuel price that will stay at $100 or above from now on, unless a recession brings it down.
Now is the best time: that's in fact bad news. Because a wannabe has to fly for almost 50 years before he can retire, and many people are ready to bet we will need far, far less pilot in 40/50 years than now, and for many reasons.

Pilot is mainly a career of the past, it has to be avoided. It doesn't mean there will be absolutely no interesting pilot career path available anymore, it simply means many young pilot who start today will lose their job

Now if somebody is passionate and wants to become an aviator: get a cheap CPL, enjoy some bush flying in Aslaska, Canada, Africa, south east Asia, Australia... Then, after 10 or 15 years "retire", and with all your experience, saving and pictures start a second career via university. That's the advice I would give to a young pilot student in 2011.

[KAG]

Virgin 350: about this article, I will say what I already did in an other thread: Each time you see an article trying to make optimistic pilot hiring prediction for the next 20, 30, 40 or 50 years, it always mean we are at the top of the hiring cycle. Each time, it never fails. The only difference today: the top of the hiring cycle (from which everything will decrease...) is not that high this time... Rather low I would say...