Pilots, once in short supply, now losing jobs

Joshua Weinstein always wanted to be an airline pilot, but the industry was in crisis when he started college in 2002, so he became a middle school teacher instead.

He loved that job, but after a decade of flying in his free time at a cost of tens of thousands of dollars, Weinstein began hearing more about a looming pilot shortage and left the classroom in 2018 to pursue his dream. It worked: In January, he started training to fly for ExpressJet, which operates regional flights for United Airlines. But the coronavirus pandemic, which devastated the airline business, could thin the ranks of pilots by the thousands and has already put the nascent careers of people like Weinstein on hold.

“The worst part right now is that the only thing we know is that nobody knows anything,” he said. “There’s uncertainty. We just don’t know what happens next.”

For years, flight schools, airlines and experts encouraged people like Weinstein to become pilots. They promised young recruits a job that was lucrative and secure because thousands of pilots in their late 50s and early 60s would retire in the coming years and demand for travel would continue growing. The profession is still stacked with older aviators, but airlines are expected to make deep cuts in the coming months, and the pilots most at risk are those who are just starting out.

While air travel has recovered somewhat, it is still only about one-fourth of what it was last year, according to airport security data. Most experts say the recovery will be slow and uneven because of a patchwork of travel bans and the unpredictable nature of the pandemic. The recent surge in coronavirus infections has already forced some governors to delay reopening their state economies and to shut down bars and other businesses. If cases continue to increase, as some public health experts fear, air travel could become a lot less appealing. 

To prepare for that uncertain future, the largest airlines in the US are stockpiling billions of dollars in cash. If ticket sales do not recover soon, American Airlines, Delta Air Lines, Southwest Airlines and United have said they could resort to job cuts as soon as Oct. 1, the first day when airlines are free to eliminate jobs and reduce hours under a stimulus law that Congress approved in March.

Airlines could lay off, furlough or reduce the hours of tens of thousands of pilots, cuts that would disproportionately fall on those who have less union seniority and training. Major airlines have already stopped hiring pilots after posting hundreds of openings in the first quarter of the year, according to Future & Active Pilot Advisors, a consulting firm.

Several companies are offering buyout packages to avoid deeper cuts later. Southwest has acknowledged in discussions with its pilots union that the airline is likely overstaffed by more than 1,000 pilots. The company is offering several years of partial pay and benefits to those who agree to leave the company temporarily or permanently. Delta warned last week that it could furlough nearly 2,600 pilots and is offering early-retirement packages.

Some pilots said the turmoil was nerve-racking, but those who have been in the profession for a while have come to expect it.

“You kind of know going in that aviation has high highs and low lows,” said Lisa Archibald, 41, a Delta pilot and volunteer with the airline’s pilot union, the Delta Master Executive Council. “You do it because you love what you do.”

Like Weinstein, Archibald arrived at the job by way of a detour. After graduating from Purdue University’s School of Aviation and Transportation Technology, she was hired to fly at American Eagle, which American Airlines owns. But the job started days before the 2001 terrorist attacks, and she was furloughed after just a few weeks.

About a year later, Archibald found a job piloting corporate jets, which she did for 15 years. She joined Delta in May 2017.

Unsurprisingly, pilots are passionate about the profession. That is why they spend years in grueling training programs, trying to rack up the minimum flight hours and credentials needed to become airline pilots, at a cost of up to $100,000, not including the price of a college degree.

Weinstein, 36, estimates that he easily spent between $50,000 and $70,000 on flight training, offset by what he earned working at the flight school and teaching middle school in New Jersey over a decade. At ExpressJet, first-year pilots earn a minimum $36,000 a year.
Whatever the outcome, Weinstein said, all that effort has been worth it.

“I have something to show for it because I did make it to the airlines and I did get hired and I did achieve that dream,” he said. “And so part of me says not to regret a single moment of it, because I put my mind to something and I did it.”

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Foreign pilots at Chinese airlines return home on unpaid leave as demand plummets

BEIJING/SYDNEY - Foreign pilots at some Chinese airlines have returned to their home countries and are considering other jobs after being placed on unpaid leave as demand falls because of the coronavirus, affected flight crew told Reuters.

Meanwhile, Chinese pilots with greater job security said their income has been sharply reduced because most of their pay is based on flying hours.

Data firm OAG estimates about 80 percent of scheduled airline capacity to, from and within China has been cut this week because of SARS-CoV-2, the virus that has killed more than 2,000 people. Chinese airlines have been the hardest hit.

Major employers of foreign pilots, including China Southern Airlines Co Ltd and HNA Group's Hainan Airlines Holding Co Ltd, have acted swiftly to cut their losses, according to pilots and industry experts.

China Southern did not respond immediately to a request for comment, and HNA declined to comment.

"All the foreign pilots are on leave until the virus situation gets better," said an expatriate captain at China Southern who, like all of those who spoke to Reuters, requested anonymity because he was not authorized to speak with media. "For the moment we are all in our home countries."

Expats are typically paid more than local staff and work on contracts, which means they are more expendable in a downturn, industry experts said.

"We have seen pilots heading back to Australia in January and February due to the stand down and seeking new roles," said Kirsty Ferguson, the head of Sydney-based airline interview coaching firm Pinstripe Solutions.

As China's airline sector ballooned, it imported foreign experience: the number of foreign pilots flying with Chinese airlines more than doubled to over 1,500 between 2010 and 2019, according the Civil Aviation Administration of China.

China will need another 124,000 pilots in the next 20 years, according to Boeing, as an expanding middle class drives demand for air travel. But foreign pilots said being put on leave without pay makes it less likely they'll return when demand recovers.

A foreign captain at Fuzhou Airlines, part of HNA Group, said he was placed on unpaid leave when the virus hit and was concerned it would be permanent.

"They hope people will find other jobs as none can go without pay forever," he said. "This way they 'save their face,' and secondly they don't feel obliged to dismiss you properly according to the contract."

The pilot said that he was looking for jobs closer to home, but that so far those options paid less than in China. Foreign pilots can make more than $300,000 a year there, making it one of the best-paying markets in the world.

A pilot at Tianjin Airlines, also part of HNA Group, said he was told it would be at least three to four months before the carrier starts recalling expatriate captains. He has found work with another foreign airline, he said.

HNA declined to comment.

A local pilot at China Southern said he was barely flying and as a result was receiving only his base salary, roughly 1/6 to 1/8 of his normal pay.

"What we can do now is keep a good mentality and enjoy the company of our family at home," he said. "Eat well, sleep well and exercise well and keep learning. Build up the energy so that we'll be well prepared for whatever comes later."

source: news.abs-cbn.com

Why space tourist loophole in life insurance may end

NEW YORK - While private pilots and skydivers have to take out extra life insurance to cover the added risk of their pursuits, space tourists do not need special policies on their high flying rides.

That loophole is likely to disappear, slowly, after the fatal crash last week of a test flight of a Virgin Galactic space ship designed to take tourists into space.

The loophole exists because U.S. life insurance policies don't ask about space tourism or exclude it from coverage, meaning insurers most likely would have to pay if the holder died on a space trip, insurance industry veterans said.

Insurance companies, which say they are considering what to do about space tourists after the Virgin crash, are likely to start adding questions about space travel and may even explicitly exclude space coverage, the industry observers said.

The companies themselves are taking a cautious approach.

"If we had an applicant with such plans, we would postpone any underwriting decision until they returned," Prudential spokeswoman Sheila Bridgeforth said.

Northwestern Mutual said that it is paying close attention to the issue after the crash, but that there is too little safety data to assess the risk of space tourism. U.S. life insurer MetLife said it doesn't have imminent plans to offer space tourism insurance.

Still, the industry is starting to gear up for sparce tourists, just as they cover satellite launches. Pembroke Managing Agency offers a policy that pays up to $5 million per space passenger or up to $20 million per trip, according to parent Ironshore International, which announced the policy in June.

"I suspect in insurance company offices all over the country right now - as a result of what's happened to the Virgin Galactic plane - it's being discussed," said Burke Christensen, former insurance lawyer and chief executive who has authored or edited three textbooks on insurance law.

It would take time, perhaps years, for those changes to be approved by all U.S. state insurance commissioners, he noted.

In deciding what to charge, insurers are likely to look at satellite policies, which range between 2.5 percent and 10 percent of insured value, Neil Stevens, a space insurance expert and member of the UK's Satellite Finance Network advisory board.

At that rate, a policy paying a million dollars would cost $25,000 to $100,000.

"Getting on a space flight is a material change in risk," he said, akin to strapping rocket boosters onto a car and asking for a new policy. "Put yourself in the place of the insurer. Would you charge the same premium?"

But the data on human space travel is much more favorable, if limited. There have been no fatal suborbital manned flights and three fatal orbital space shots, including the U.S. space shuttles Challenger and Columbia with 14 deaths, and a Soyuz flight that killed one, according to the Seradata SpaceTrak database. That puts the risk of fatal accident on a manned orbital or suborbital spaceflight at 3 in 306 or just under 1 percent, the company said.

Given those numbers, and the few people who are likely to fly on rockets, "you come up with a very, very, tiny, tiny probability" of death, Christensen said, and the company might conclude it is not worth charging extra.

RISKY BUSINESS

Virgin Galactic's SpaceShipTwo broke up after its release from a launch plane high over the Mojave desert on Oct. 31, killing one of two pilots. The craft is designed to carry six passengers on two-hour suborbital flights, including a few minutes of weightlessness.

Virgin's space program, backed by founder Richard Branson and Aabar Investments, a United Arab Emirates investment fund, is the most developed of several projects to develop space tourism, with about 800 deposits for a ride into space at up to $250,000 a seat. Singer Lady Gaga and actor Ashton Kutcher have signed up.

Other companies developing space ships include privately owned XCOR Aerospace and Blue Origin, a startup owned by Amazon.com Inc founder Jeff Bezos.

While current life policies probably would pay in the event of death, applicants for new policies should disclose space plans or risk a dispute with an insurer, said Steven Weisbart, chief economist at the Insurance Information Institute, a non-profit trade association.

Insurers typically have up to two years after a policy is written to contest the application, allowing them to investigate whether the insured person has misrepresented facts.

So it's possible an insurer could avoid paying if someone bought a policy and died in a rocket crash during the two years period.

"You know that insurers are going to look for some way to invalidate the claim if you had a ticket," said Glenn Daily, a fee-only insurance adviser based in New York

source: www.abs-cbnnews.com