Asian Pilot Shortage
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Asian Pilot Shortage
Asia's skills shortage
Capturing talent
Aug 16th 2007 | HONG KONG
From The Economist print edition
Despite its booming economies and huge numbers of people, Asia is suffering a big shortage of skills. And it is about to get worse
Imaginechina
IT SEEMS odd. In the world's most populous region the biggest problem facing employers is a shortage of people. Asia has more than half the planet's inhabitants and is home to many of the world's fastest-growing economies. But some businesses are being forced to reconsider just how quickly they will be able to grow, because they cannot find enough people with the skills they need.
In a recent survey, 600 chief executives of multinational companies with businesses across Asia said a shortage of qualified staff ranked as their biggest concern in China (see chart 1) and South-East Asia. It was their second-biggest headache in Japan (after cultural differences) and the fourth-biggest in India (after problems with infrastructure, bureaucracy and wage inflation). Across almost every industry and sector it was the same.
Old Asia-hands may find it easy to understand why there is such concern. The region's rapid economic growth has fished out the pool of available talent, they would say. But there is also a failure of education. Recent growth in many parts of Asia has been so great that it has rapidly transformed the type of skills needed by businesses. Schools and universities have been unable to keep up.
Taking wing
This is especially true for professional staff. Airlines are one example. With increasing deregulation, many new carriers are setting up and airlines are offering more services to meet demand. But there is a dreadful shortage of pilots. According to Alteon Training, the commercial-pilot training arm of Boeing, India has fewer than 3,000 pilots today but will need more than 12,000 by 2025. China will need to find an average of 2,200 new pilots a year just to keep up with the growth in air travel, which means it will need more than 40,000 pilots by 2025. In the meantime, with big international airlines training only a few hundred pilots a year, Asian airlines have taken to poaching them, often from each other. Philippine Airlines, for instance, lost 75 pilots to overseas airlines during the past three years. China has been trying to lure pilots from Brazil, among other places.
Similar problems are bedevilling the legal profession...
The article goes on from there. Think CX and others will have to pay more eventually?
M
Capturing talent
Aug 16th 2007 | HONG KONG
From The Economist print edition
Despite its booming economies and huge numbers of people, Asia is suffering a big shortage of skills. And it is about to get worse
Imaginechina
IT SEEMS odd. In the world's most populous region the biggest problem facing employers is a shortage of people. Asia has more than half the planet's inhabitants and is home to many of the world's fastest-growing economies. But some businesses are being forced to reconsider just how quickly they will be able to grow, because they cannot find enough people with the skills they need.
In a recent survey, 600 chief executives of multinational companies with businesses across Asia said a shortage of qualified staff ranked as their biggest concern in China (see chart 1) and South-East Asia. It was their second-biggest headache in Japan (after cultural differences) and the fourth-biggest in India (after problems with infrastructure, bureaucracy and wage inflation). Across almost every industry and sector it was the same.
Old Asia-hands may find it easy to understand why there is such concern. The region's rapid economic growth has fished out the pool of available talent, they would say. But there is also a failure of education. Recent growth in many parts of Asia has been so great that it has rapidly transformed the type of skills needed by businesses. Schools and universities have been unable to keep up.
Taking wing
This is especially true for professional staff. Airlines are one example. With increasing deregulation, many new carriers are setting up and airlines are offering more services to meet demand. But there is a dreadful shortage of pilots. According to Alteon Training, the commercial-pilot training arm of Boeing, India has fewer than 3,000 pilots today but will need more than 12,000 by 2025. China will need to find an average of 2,200 new pilots a year just to keep up with the growth in air travel, which means it will need more than 40,000 pilots by 2025. In the meantime, with big international airlines training only a few hundred pilots a year, Asian airlines have taken to poaching them, often from each other. Philippine Airlines, for instance, lost 75 pilots to overseas airlines during the past three years. China has been trying to lure pilots from Brazil, among other places.
Similar problems are bedevilling the legal profession...
The article goes on from there. Think CX and others will have to pay more eventually?
M
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A similar situation existed when I first went to asia in the mid-seventies.
SQ was extremely short of B707 Commanders, and was offering a reasonable salary, but was loosing some guys to the mid-east, where the salaries were higher.
This forced SQ to raise the starting pay, but they were still behind the eight ball as regards crew numbers, especially later on, on the 747.
Most airline companies management can't reasonably plan beyond next Tuesday, never mind longer.
SQ was extremely short of B707 Commanders, and was offering a reasonable salary, but was loosing some guys to the mid-east, where the salaries were higher.
This forced SQ to raise the starting pay, but they were still behind the eight ball as regards crew numbers, especially later on, on the 747.
Most airline companies management can't reasonably plan beyond next Tuesday, never mind longer.
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2 Things.
1. If you already work for one of the better paying airlines you will not get more cash cause there is a so called shortage. Airlines like CX do not have a lack of applicants - if they are short in crew its due to bad planning. The shortage exists down the line with the smaller companies that don't pay and therefore lose guys. So if you work for Phillipine Airlines you might be in for a payrise. If you work for CX there's nothing that prevents them from giving you a paycut - and still get all the Filipino Pilots to apply.... ( this is an example only )
2. Pilot shortages will eventually be eradicated by huge cadet schemes. These cadets will be signed up for cheap long contracts and will fill all the slots in future. Ie. once again it will do nothing to improve your conditions cause a local cadet with a big bond/low starting salary/no housing and education allowance will cost the company a lot less over a 25 year career than an expat ever will.
So dream on if you think a pilot shortage will help you if you already work for a major well paying company.
1. If you already work for one of the better paying airlines you will not get more cash cause there is a so called shortage. Airlines like CX do not have a lack of applicants - if they are short in crew its due to bad planning. The shortage exists down the line with the smaller companies that don't pay and therefore lose guys. So if you work for Phillipine Airlines you might be in for a payrise. If you work for CX there's nothing that prevents them from giving you a paycut - and still get all the Filipino Pilots to apply.... ( this is an example only )
2. Pilot shortages will eventually be eradicated by huge cadet schemes. These cadets will be signed up for cheap long contracts and will fill all the slots in future. Ie. once again it will do nothing to improve your conditions cause a local cadet with a big bond/low starting salary/no housing and education allowance will cost the company a lot less over a 25 year career than an expat ever will.
So dream on if you think a pilot shortage will help you if you already work for a major well paying company.
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DEC Emirates
Not trying to start trouble with my EK friends, but thought I would point out an interesting comparison. If you started with EK as a DEC tomorrow, you would be 10% worse off over 10 years than if you stayed in CX(assuming you got your command today). This assumes neither airline gives any payrises over the next 10 years. Historically, EK has received over 40% in payrises over the last 5 years whilst CX has received none. Taking out the rather large recent payrise, EK have averaged around 5-6% a year.
Of course if you started with EK today as an FO vs joining CX as an SO, you would be 28% better off in career earnings after 10 years than in CX. That was based on a CX command after 9 years which is probably no longer valid.
Not suggesting you jump ship - my friend Donpizmeov says the grass is browner everywhere;-) But it does show how the mighty CX money making machine has fallen to being less competitive than EK.
Aviation- its just a job!
Of course if you started with EK today as an FO vs joining CX as an SO, you would be 28% better off in career earnings after 10 years than in CX. That was based on a CX command after 9 years which is probably no longer valid.
Not suggesting you jump ship - my friend Donpizmeov says the grass is browner everywhere;-) But it does show how the mighty CX money making machine has fallen to being less competitive than EK.
Aviation- its just a job!
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2. Pilot shortages will eventually be eradicated by huge cadet schemes. These cadets will be signed up for cheap long contracts and will fill all the slots in future. Ie. once again it will do nothing to improve your conditions cause a local cadet with a big bond/low starting salary/no housing and education allowance will cost the company a lot less over a 25 year career than an expat ever will.
Cadet training costs huge amounts,and there is never a guarantee that these lads+girls will stay on after their bonds are paid off..ESPECIALLY in asia where many of these cadets are university grads (unofficial requirement to join the CX scheme!!),,and have many other options available to them..
I know of at least 2 captains (local) who are in the process of applying to airlines further afield..YES..FOR THE MONEY!!Not to mention cadet SO's who recently joined Oasis in order to upgrade earlier...
Furthermore..there are legal implications and constraints as to how much/what companies are allowed to charge regarding training bonds...
The one and only way to alleviate pilot shortages in HIGH demand times,is to pay HIGH salaries,and throw in incentives..
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Slapfaan - I really hope you are right about the cadet scheme thing - however what I have seen at all the Chinese airlines as well as Malaysian etc supports what I just said. And by the way - check out where Qantas plans to get their future pilots from - they are building a huge flight school.
Either way - my first point still stands. As soon as Cathay gives a decent pay rise due to a shortage I will consider myself truly shot down and retract my statement.
Either way - my first point still stands. As soon as Cathay gives a decent pay rise due to a shortage I will consider myself truly shot down and retract my statement.
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EK will have to increase pay if they hope to get enough "experienced" pilots to crew their expanding fleet, including 53 A380s. Many pilots will also have the opportunity to keep flying until age 65.
SIC
Just to clarify how the cadet scheme in CX works and how current recruitment is going.
1. CX pays the training costs for all cadets. About 36 per year.
2. Cadets “CAN NOT” be bonded by CX in HK after their training as evidenced by two cadets who after returning from Adelaide recently put in their resignation to CX. They had been offered a better deal with another local airline.
3. The flying school in Adelaide is severely constrained by a huge shortage of flying instructors in Australia. The pilot shortage in Australia is now approaching a critical stage with all sectors now starting to have difficulty attracting suitably qualified candidates.
4. Unlike what you may have heard, CX does have a severe problem with the number of suitably qualified candidates applying for the cadet scheme and direct entry positions. The number of people failing to show up for interviews is running at unsustainable levels. They have better offers elseware.
5. QF makes money out of their cadet scheme by charging for the training. The only reason QF is starting up their own flying school is they can see a buck in it. It is questionable though whether it will help their recruitment problems and whether they will be able to find the suitably qualified people in the current climate to run the school.
Just to clarify how the cadet scheme in CX works and how current recruitment is going.
1. CX pays the training costs for all cadets. About 36 per year.
2. Cadets “CAN NOT” be bonded by CX in HK after their training as evidenced by two cadets who after returning from Adelaide recently put in their resignation to CX. They had been offered a better deal with another local airline.
3. The flying school in Adelaide is severely constrained by a huge shortage of flying instructors in Australia. The pilot shortage in Australia is now approaching a critical stage with all sectors now starting to have difficulty attracting suitably qualified candidates.
4. Unlike what you may have heard, CX does have a severe problem with the number of suitably qualified candidates applying for the cadet scheme and direct entry positions. The number of people failing to show up for interviews is running at unsustainable levels. They have better offers elseware.
5. QF makes money out of their cadet scheme by charging for the training. The only reason QF is starting up their own flying school is they can see a buck in it. It is questionable though whether it will help their recruitment problems and whether they will be able to find the suitably qualified people in the current climate to run the school.
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SIC said ... "2. Pilot shortages will eventually be eradicated by huge cadet schemes. These cadets will be signed up for cheap long contracts and will fill all the slots in future. Ie. once again it will do nothing to improve your conditions cause a local cadet with a big bond/low starting salary/no housing and education allowance will cost the company a lot less over a 25 year career than an expat ever will."
Ahh, I hate to shoot down your theory, but do you know how long the Cadet program takes to pump out a qualified (and I use the term loosely) airline pilot? There is too much lag in that program to help out with any shortages today. As someone already pointed out, if there is a shortage TODAY, then the only option is to poach and recriut qualified applicants TODAY, not ones that will be qualified in a few years.
The Cadet program is a politically fueled system that greases some pamls somewhere along the buracratic chain. If CX wanted an all cadet airlne they could have done it a long time ago. The accountants might want that, but there are barriers to achieving that, otherwise it would have happened already.
Make no mistake, we (as well as most airlines arround the world) are scraping the proverbial barrel for applicants. Think of it as sucking soda through a straw. The glass is almost empty, but we are still getting some fluid through the straw...its just the fluid that's been sitting around the bottom of the glass. The problem is that more money doesn't fill the glass back up, it just tilts the glass so you get more fluid through your straw while other straws run dry (for example, mainland china carriers).
So, if you are Cathay management, what do you do? Do you wait until the glass is empty to tilt it in your direction, or do you do it now and get all the qualified applicants you can. You also have to keep in mind that Cathay is now also dealing with higher than normal attrition. Why else would they have offered A SCALE to retain the top of the list? That is a last ditch attempt before they have to reach desperate measures.
Ahh, I hate to shoot down your theory, but do you know how long the Cadet program takes to pump out a qualified (and I use the term loosely) airline pilot? There is too much lag in that program to help out with any shortages today. As someone already pointed out, if there is a shortage TODAY, then the only option is to poach and recriut qualified applicants TODAY, not ones that will be qualified in a few years.
The Cadet program is a politically fueled system that greases some pamls somewhere along the buracratic chain. If CX wanted an all cadet airlne they could have done it a long time ago. The accountants might want that, but there are barriers to achieving that, otherwise it would have happened already.
Make no mistake, we (as well as most airlines arround the world) are scraping the proverbial barrel for applicants. Think of it as sucking soda through a straw. The glass is almost empty, but we are still getting some fluid through the straw...its just the fluid that's been sitting around the bottom of the glass. The problem is that more money doesn't fill the glass back up, it just tilts the glass so you get more fluid through your straw while other straws run dry (for example, mainland china carriers).
So, if you are Cathay management, what do you do? Do you wait until the glass is empty to tilt it in your direction, or do you do it now and get all the qualified applicants you can. You also have to keep in mind that Cathay is now also dealing with higher than normal attrition. Why else would they have offered A SCALE to retain the top of the list? That is a last ditch attempt before they have to reach desperate measures.
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My words were " eventually" I am still convinced that in the long run companies in Asia want to recruit and employ asians and not expats. This will be done through huge cadet schemes. You are obviously right about the current need for pilots - but that is a transient situation. In twenty years time I will be very surprised if the same situation prevails.
And I am still standing by for the pay rise caused due to pilot shortage...
Refer to my first post above. Either way time will tell - and I hope I am wrong - cause If I am right this career is on its way to become even less attractive than it currently is.
And I am still standing by for the pay rise caused due to pilot shortage...
Refer to my first post above. Either way time will tell - and I hope I am wrong - cause If I am right this career is on its way to become even less attractive than it currently is.
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3. The flying school in Adelaide is severely constrained by a huge shortage of flying instructors in Australia. The pilot shortage in Australia is now approaching a critical stage with all sectors now starting to have difficulty attracting suitably qualified candidates.
Gee, . . . I bet that if the pay for flight instructors were raised you would magically find all sorts of qualified, well experienced, instructor pilots come out of the woodworks, especially retired airline pilots. It's all about money, because these retired chaps wouldn't be interested in "building hours."
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The Cadet program is a politically fueled system that greases some pamls somewhere along the buracratic chain. If CX wanted an all cadet airlne they could have done it a long time ago. The accountants might want that, but there are barriers to achieving that, otherwise it would have happened already.
bus
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The above might be true for the current CX cadet scheme, but I've got this feeling that the management might want to shift their cadet scheme closer to the SQ or CI model (look at the new HKID requirements that was announced by NR a few weeks back)
My filipina domestic helper has just submitted her online application..and if she doesn't make it in..plans to sue for GENDER discrimination under new laws heading this way...
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Well Faan - had to laugh - untill I realized its not actually funny. Especially since flying is so easy these days with autopilots and glass cockpits you know. Soon they will lower the minimum IQ requirement like the US Army had to....
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"Especially since flying is so easy these days with autopilots and glass cockpits you know. Soon they will lower the minimum IQ requirement like the US Army had to.... "
...tell that to TAM, or to China Airlines, or to Comair, or to...I don't know, who else has bent metal recently operating one of these "easy to fly" airplanes?
Don't get me wrong, I love my computer, I use it everyday. But I'm not sure if my life is easier now than it was before I ever owned one.
...tell that to TAM, or to China Airlines, or to Comair, or to...I don't know, who else has bent metal recently operating one of these "easy to fly" airplanes?
Don't get me wrong, I love my computer, I use it everyday. But I'm not sure if my life is easier now than it was before I ever owned one.