In today’s Finshots, we try to find answers to the hottest running debate in the aviation industry ― pilot shortage.
The Story
Air India’s pilots are livid. On 27th March, they shot off a letter to their CEO with a litany of complaints.
- They complained about a blatant disregard for time offs and weekly rests. Apparently, pilots are being verbally abused to take up extra work that wasn’t on their schedule to begin with.
- The folks in charge of scheduling are operating on a one-way communication basis. If a pilot tries to get in contact with the team, they’re ignored.
- Pilots aren’t getting the empathy they deserve especially when they need emergency leaves for family hospitalisations.
Sounds like a problem, right?
And they ended the letter by saying that if the airline wants to attract new recruits and expand, they better fix the problem. And just in case you’ve forgotten. Air India isn’t a government airline anymore. It’s well and truly run by the Tatas. So it’s really not a good look for the brand.
Now, the way things are shaping up, it looks like Air India’s plan of offering an 8–10% salary hike to its pilots isn’t going to be enough to retain them.
So, why is Air India in this mess?
One big reason could be a massive pilot shortage.
Yup, Air India apparently doesn’t have enough pilots on its roster to fly its existing set of aircraft. Its ultra-long-haul flights are constantly getting cancelled or delayed. You know, the ones that fly 16 hours straight to places like Vancouver and San Francisco. And according to CNBC TV18’s calculations, the airline has only 1,600 pilots for its 114 aircraft. It needs at least 1,850 pilots when you take into account the rotational shifts and rests and emergencies that inevitably crop up.
But despite all this, Air India is hell-bent on expanding its fleet. It’s getting 40 more aircraft over the next few months. And it has even locked in a whopping $80–100 billion deal with Airbus and Boeing for 470 passenger planes over the long term.
So you can see why the pilots are worried. They’re being pushed to the brink. And their flying hours have shot up by more than 40% according to The Morning Context.
But here’s the thing. The pilot crunch isn’t going to be just an Air India problem. It could be a much larger one as Akasa, Indigo, and every other airline goes on a fleet expansion spree.
That’s because India apparently needs 1,000 fresh commercial pilots every year to meet the needs of the growing aviation industry. But getting to that number is hard. In 2021, the Indian aviation regulator issued 862 commercial pilot licences and in 2022, it rose to 1081. While that’s a good sign, the average number of licences issued each year is typically only about 600. Also, 200 pilots retire annually. So we’ll find it hard to keep up with demand.
And one problem is that getting trained to become a pilot is an expensive affair. A pilot’s training, including training to fly, can cost anywhere up to ₹50 lakhs. And this is even before they apply for a Commercial Pilot License (CPL). These exorbitant costs can be quite a deterrent since only those with access to funds can fulfil their dreams.
Then, experts say there’s a lack of training facilities in the country. As of now we have 35 approved flying schools that use 53 airbases to train pilots. Which is just not enough to churn out the number of pilots we’ll soon need. And setting up new flying schools after approvals by the DGCA (Directorate General of Civil Aviation) isn’t easy either. It’s going to take time.
And if you assume that an aspirant decides to head overseas for training and comes back, they can’t just take to the skies. They still have to log an additional 20 hours under different conditions to get an Indian CPL. And if they get lower pay than their foreign counterparts and have to jump through additional hoops, they might just choose to stay abroad.
But wait…the Ministry of Civil Aviation actually disagrees on the pilot shortage matter. In fact, the DGCA Chief Arun Kumar says that we have an oversupply of pilots. He says we have 13,000 pilots in the country and that 30% of them have no jobs.
Sounds like a plot twist, no?
Well, there might be an explanation for this paradox — experience!
You see, just because someone is a pilot and has a CPL doesn’t mean they’re ready to pilot an airline. Especially wide-body airlines to fly long-distance routes. A CPL holder needs to train for another 250 hours in simulators and training aircraft before they get the go-ahead to fly. And then, it will take years before they actually get to command an aircraft and not just be a co-pilot.
In fact, a junior pilot needs at least 1,500 flying hours under their belt before they can progress to being a captain.
So yeah, what airlines need at the moment are experienced pros. Not the newbies. That’s what the shortage probably is about. And that’s precisely why Air India is offering its pilots more money. But we’ll still have to wait and watch if Air India and the aviation industry can successfully fight the pilot crunch.
Until then…
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Ditto Insights: Why Millennials should buy a term plan
According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.
And the more worrying fact is that 55% hadn’t even heard of term insurance!
So why is this happening?
One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.
There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.
Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.
So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:
1. Just head to our website by clicking on the link here
2. Click on “Book a FREE call”
3. Select Term Insurance
4. Choose the date & time as per your convenience and RELAX!
