Commercial Pilot Training Impacts and Opportunities for Small Airports Anne Marie Guay, Formerly with IASCO Flight Training Captain Jean-Marc Eloy, International Airline Training Academy Association of California Airports Fall Conference September 11, 2014 South Lake Tahoe, California

Boeing & Airbus agree on the Number of New Pilots Required over the next 20 Years. Asia will Require a Minimum of 192,300 New Pilots including 77,400 in China. SE Asia will Require 48,100 New Pilots or 2,405 Each and Every Year for the Next 20 Years. Estimated (2013) Total CPL/IR (ATPL Frozen) Graduations per Year in SE Asia: 565 New Pilots that is 1,800 Short of Needs! Middle Class will Grow 4 Times over Next 2 Decades The ASEAN Multilateral Agreement on Air Services (Open Skies) will be in place beginning 2015 Current Fleet in SE Asia: 1,050 aircraft… Backlog of New Aircraft Orders: 1,650 aircraft (Mid 2013)!! Pilot Shortage is Here to Stay

Extreme Growth in Air Transportation Throughout Asia with Middle Class Growing at Rapid Pace Proliferation of LCC (Air Asia, Cebu Pacific, VietJet, Vanilla, etc.) making it easier for People to Fly Aircraft Ordering to Meet Demands: 1,650 on Backlog at of July 2013 in SE Asia alone Minimum Number of Military Pilots in the Region Transferring to Commercial Airlines and/or Operators. Worldwide Pilot Shortages Meaning Less Access to Expatriates Inability to Graduate AIRLINE-READY First Officers in months as required by Airlines Lack of Experience, Expertise of Flight Schools Combined with Logistical issues (Access to Airports for Instrument and Night Training, English Language, Quantity and Quality of Training Fleet, Regulatory Compliance, Instructor Shortage, etc..) Issues Contributing to Pilot Shortage

The Airlines have Deliveries Schedules that Must be Met or they Face Penalties. Airlines Know Year by Year How Many Aircraft will be Delivered & How Many Pilots they will Need. New City Pairs are set Many Months in Advance and Any Cancellation Due to Pilot Shortage is a Marketing and Sales Nightmare. First “Generation” of Pilots is Retiring at High Pace Worldwide, Limiting Access to Experienced Expatriates. ASEAN Open Skies will give Countries with Limited or No Shortage (i.e. Singapore) Control over Domestic and Regional Routes. Airlines Do Not Have enough Instructors to Conduct Remedial/Transition Training for New Flight School Graduates Challenges Facing the Airlines

New Regulations require 1,500 flight hours and age 21 before a pilot may join ANY airlines. Until now hours was sufficient to act as First Officer in regional airlines. Over 85% of the students in US flight schools are foreigners (self and airlines Sponsored) Starting Wages in Regional Airlines are still below $22,000 per year while training costs with College Degree are well above $150,000 Average age of a captain in US Major airlines is at 57.2 years. While retirement age has been increased to 65, there is no retirement plans after all airlines (Except SWA) have files Bankruptcy. Already, and even after airlines mergers, Airlines are parking aircraft for lack of pilots, Regionals are hardest hit while they contribute over 50% of the passengers.. Issues Facing US Airlines

Since 9/11 Training capacity in the US has been reduced by almost 60% Overall costs of Operations and new Insurance policies have forced many flight schools to stop operations. Financing for Flight Training is now almost inexistent and prospective students weight cost of training versus salaries in first 5 years with the airlines. New FAA regulations requiring 1,500 hours before joining the airlines add to costs and limited amount of domestic students. Today more than 82% of large flight school revenues are derived from Foreign students. Yet most lose money by lowering their training program prices due to brutal competition. All the above means that the Flight Training industry is in troubles and Training Capacity to an all time low. Training Capacity in the US

The reduction in the number of flight schools has meant reduced revenues for airports. Failure of Flight schools and business servicing schools at airports has meant several airports were left with unpaid bills. Flight schools failures often meant no warning and time for airport manager to protect themselves. The cultural impact of having a majority of foreign cadets has changed the relationship between Airport and schools as well as between airports and local community. Budgetary constraints at FAA has also meant Reduced manning at Towers and consequently additional restrictions to cope with added load of dealing with foreign speaking students trying to communicate in broken English. Impact on Airports

Foreign Training means Foreign Currencies are coming to the US against a plastic card (License) returning home… a great Export for the US! Economic Impact is much larger than for Domestic training as Students need lodging, ground transportation, meals and social activities in the community. The Economic Impact when JAL left Napa is still felt to this day. When IATA proposed to take over the facilities, the entire Community stood behind us. Foreign students tend to concentrate in specific airports rather than spreading across several schools. Thus Schools are usually larger and create traffic congestion to/from the airports H per student and per year means relationship with Neighbors might become tense unless noise mitigations are exercised. Cultural issues are sometimes rising across the community especially when Muslin countries are sending students to US Schools (Post 9/11) Impact of Foreign Training for Airports

Make the local Community understand the advantage of Foreign Training as it related to Economic Impact. More taxes means more infrastructure and Services. Make the Local and State Politicians to understand this is an “Export” activity contributing positively to the Trade Balance with numerous countries in Asia in particular. Facilitate access to Lodging capacities by recruiting local real estate investors and owners. Communicate with the local FSDO and remind them that supporting Flight Schools is indeed a Priority both for the Domestic and International markets. The shortage is on us, pilots get older every single day unfortunately. Communication, Communication and Communication to alleviate and eliminate Noise and Cultural Issues due to sometimes explosive growth after long period of stagnancy. What should Airports do to Benefit from Training

Commercial Pilot Training Impacts and Opportunities for Small Airports Anne Marie Guay, Formerly with IASCO Flight Training Captain Jean-Marc Eloy, International Airline Training Academy Association of California Airports Fall Conference September 11, 2014 South Lake Tahoe, California