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UAL Future Pilot Sourcing. AABI Winter Meeting. February 20, 2013. Worldwide Pilot Shortage – The Risk. Worldwide airlines n eed 460,000 new commercial pilots over next 20 years U.S. airlines need 69,000 new commercial pilots over the next 20 years - PowerPoint PPT Presentation
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UAL Future Pilot SourcingAABI Winter Meeting
February 20, 2013
Worldwide Pilot Shortage – The Risk
Worldwide airlines need 460,000 new commercial pilots over next 20 years
U.S. airlines need 69,000 new commercial pilots over the next 20 years
Regional airlines take the biggest hit – United Express carrierslose 10.0% of their pilots per year to majors for next 20 years
NO new crop of qualified pilots waiting in the wings to backfill
United Express$6.8B (21%) of UAL passenger revenue/160 (67%) of domestic destinations
UAL Future Pilot Sourcing2
United Risk and Mitigation
UAL Future Pilot Sourcing3
Famed “Worldwide Pilot Shortage” is here UAL needs 530 pilots per year (no growth) for next 20 years
Biggest effect on our regional partners – need 700 pilots per year United airlines proactive leadership is key to mitigate the risks (P3)
Power to shape the landscape Promote the airline pilot profession Provide a viable career path
Problem Definition – Increasing Pilot Demand
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
0100200300400500600700800900
UAL Pilot Demand – 20 Years (No Growth)
Pilot Retirements (Age 65) and Attrition (UAL Combined)1. Boeing study (July 2012)2. Retirements plus normal attrition3. UA regionals ~7000 pilots (10% annual attrition)
Annual(average)
20 Year Total(2013-2032)
Worldwide1 23,000 460,000
N. America1 3,450 69,000
United2 530 10,606
UAX3 700 14,000
Forces Increasing Pilot Demand Retirements (Age 65/Dec 2012) and normal
attrition FAR Part 117 Crew Rest Rules (Jan 2014)
+3.1% UAL +5.0-10.0% United Regionals
Global growth (especially Asia/Pacific)
UALGrowth
Annual(average)
20 Year Total(2013-2032)
1.0% 639 12,775
1.5% 701 14,023
2.0% 770 15,393
4 UAL Future Pilot Sourcing
Problem Definition – Limited Pilot Supply
Pilot Supply Pressures Part 121 SIC ATP regulation (Aug 2013) Declining career interest – University of North
Dakota Study (ROI and career stability) International airlines hiring experienced U.S.
pilots Unpredictable military supply
Annual U.S. Military Pilot Supply
New ATPs down 47% (8500 in 1991 to 4500 in 2011)
Leave Military
To Airlines (80%)
Air Force 1035 828
Navy/Marine 520 416
TOTAL 1555 1244
UAL Capture 15% 186 (annual)
New Commercial certificates down 50% (17,000 in 1991 to 8500 in 2011)
5 UAL Future Pilot Sourcing
UAL and UAX Demand and Supply Summary
6 UAL Future Pilot Sourcing
5 Year2013-2017
(Annual Avg)
10 Year2013-2022
(Annual Avg)
20 Year2013-2032
(Annual Avg)
UAL Need (retire + attrition + 1.0% growth)1 469 524 639
Pilots from Military 186 186 186
UAL Need from Other Sources 283 338 453
UAX Need: Flow to UAL 283 338 453
UAX Need (retire + attrition) - no growth 49 59 92
UAX Need: Flow to Other Airlines 96 115 155
TOTAL UAX Need1 428 (6.1%) 512 (7.3%) 700 (10.0%)
1. Does NOT include FAR 117 crew rest rule (Jan 2014) – increases pilot requirements 3.1% (306 pilots) at UAL and 5-10% (350-700 pilots) at UAX
Aviation University
Supply2
Annual Output
Airline Career (56%)
UAX Capture
(20%)
Annual Shortfall(5 Year)
Annual Shortfall(10 Year)
AnnualShortfall(20 Year)
2011 1800 1008 202 226 310 497
2. Approximately 2 year delay after graduation to have requirements for ATP (FAA F/O ATP Rule – Aug 2013)
Pilot Shortage Effect on UAL
Direct Effects Constrained mainline growth Increased costs Operational disruptions
Indirect Effects Reduced regional capacity Service termination Increased UAX costs
Regional airlines will take the brunt of the pilot shortage, but… UAX exclusively serves 67% of United U.S. destinations for UAL, and UAX contributes significantly to UAL passenger revenue ($6.8B/21% in CY2012)
7 UAL Future Pilot Sourcing
UAL Future Pilot Sourcing8
Mitigation
Power
Promote
Provide
Use United’s industry power and influence to shape the landscape (Government, Industry, Academia)
Promote the airline pilot profession
Provide a viable career path (High School to UAL)
Professional Pilot Career Path
9 UAL Future Pilot Sourcing
UAL Future Pilot Sourcing10
Questions?
UAL Future Pilot Sourcing11
Backup Slides
UAL Future Pilot Sourcing12
Airline Market Overview
UAL Future Pilot Sourcing13
Global Pilot Needs (UND Study)
UAX Pilot Age Demographics
Represents approximately 74% of UAL express fleet calculated by total number of monthly flights (Dec 2012)Total Number of Pilots = 8335
14 UAL Future Pilot Sourcing