Whacker77

It seems to me that there have been two major changes in the airline industry in the last year. First, the mandatory retirement age was raised from 60 to 65. Without a doubt that caused an initial slowdown in hiring at major airlines. I know of a pilot at CHQ who was hired by Southwest late last summer, but wasn't given a class date until five or six weeks ago.

Second and most importantly, oil has doubled in the last year and risen by amazing 35% in just the last month and a half. Today, AA said their fuel costs have gone up by $1.7 billion in just the last seven weeks! Airlines can't function with oil at this level and staffing levels are now catching up to that fact.

So we have these two issues, but how long will they last? How long before airlines are once again hiring new pilots? My view is it may not be as long as we think. I base my opinion mainly on the price of oil. It's price is now completely divorced from supply and demand. I like to follow the markets and this run up is just like the internet bubble of 1999. We all know how that ended.

Too many smart people on TV and in print are warning that oil is headed for a huge bust. Their warnings are much the same as those issued in 1999. Oil may well hit $150, but the end of this run up is almost here. It may not come until the fall, but oil prices will go down. When oil breaks, it will break quickly and that will be good news for airlines. Oil at $90, while not cheap, would still represent a 30% decline from it's currnet levels and that can only help airlines.

If oil prices lose their speculative aspect, the return of hiring will once again depend on attrition at the majors. A large number of retirements were due in the coming years, but it's not clear how those pilots will handle another five years on the line. I suspect many will work an extra two or three years, but not five. While that pushes things down the road, it doesn't look as bleak as some might have you believe.

I'm 31 and still hold out hope of working for an airline. Financially, I can wait another year or so for the chance, but I'm very discouraged by the news today. I had pinned a lot of hope on an interview with Eagle, but that's not going to happen now. I hope those who are discouraged like me can look at the factors causing this slowdown and understand they can change quickly. There have been many busts in the airlines over the lat 30 years, but booms always follow.

Unlike so many other busts, this one is not consumer related.

SkyHigh

The current downturn is very different from ones in the past. The recession of the early 1990's brought hiring to an abrupt halt for several years and we only had a business slowdown to deal with. This time we have oil, the economy and the age 65 thing. It could be five or more years before hiring really gets going again.

Even when hiring resumes they will most likely not be taking 500 hour pilots anymore. By the time I was able to get on with a regional I was the lowest time guy in class with 3800 hours. It was normal to have high time people fighting over jobs at the regionals until fairly recently.

SkyHigh

Whacker77

SkyHigh

Things can change, but I don't think the econmy is bad shape right now. Certain areas are hurting (housing, credit), but the consumer remains strong. Just look at the stock prices of AAPL and RIMM. If consumers can buy high end smart phones, things are pretty good.

Oil is the wild card though. Speculators are having their say, but these prices can't hold and won't hold. The 65 rule hurts things, but oil may not be the factor six months from now that it is today. We suffered two short recessions in 1992 and 2001, but today's situation is much different in a good way. JMO.

SkyHigh

All I can say is that I lived through both recessions as a pilot and they were horrible. The industry still hasn't even fully recovered from the 2001 slowdown yet.

Regional hiring is usually very competitive. The RJ boom of the last few years is most likely over now. Airlines are contracting. Pilots are working longer. Oil retraction or not it still adds up to tuff times in aviation for a long while.

SkyHigh

flyboyzz1

this may or may not be a factor but there has been a huge decrease in professional flight training over the last few years. So yes there may end up being less jobs available but there may be a time soon when they find it hard to find qualified pilots...thus a return or continued 500 hr wonder.

SkyHigh

Things must be really crummy to keep the flow of new pilots at bay. However if the airlines are shrinking and furloughing and if guys are not retiring till 65 it will not be difficult to find pilots.



SkyHigh

Fly IFR

I respectfully disagree, the consumer is weaker than normal and falling. People have slowed down or stopped buying normal things (not including smart phones) to just put gas in their cars...

Airsupport

yes just like the first time when no one was becoming a pilot and the majors were picking people up and finishing their training for them. at my old flight school prior to 9-11 i had about 6-8 students. after 9-11 it went to 3-5. i just talked to a buddy of mine and they have about 80 instructors now, and about 200 people activily flying. there will be a pilot shortage in the not to distant future.

it will be difficult. because there are people like you who have decided to leave the industry all together. i seriously doubt that if alaskan airlines called you today with a class date you would go. i think you have had enough. and i think if people are getting furloughed and they are close to retirement they might just call it quits and go find something else to bide their time till retirement.

WhizWheel

Yes I have to agree that the economy certainly isn't doing well right now. Traditional indicators that signal a recession haven't been hit yet (2 consecutive quarters of real GDP decline) but we are darn close. The reason high end products are still in high demand is because many folks made a TON of money in the past 5-8 years while the economy was in much better shape. These folks went almost all cash in the last year and still have buying power. Don't let that fool you into thinking the economy is ok. It isn't.

Spooled

Oil will bust soon. The entire commodities market will bust.

Billions of dollars have been flowing into all these new ETF's based on commodities, which is driving the prices up due to speculation.

USA Today had a good article about it today. Gold was over $1000 in March, and is now back to $800.

Just a matter of time. Oil prices will go down.