Airlines checked by shortage of pilots

Vietnam’s budding aviation industry has grown short of pilots, while more and more new faces are approaching the market Photo: Le Toan

Early 2019 has just seen local tourism company Vietravel Group and Malaysia-based AirAsia announcing ambitions to establish their own airlines in Vietnam. Accordingly, Vietravel Group submitted the documents to open Vietravel Airline to the Thua Thien-Hue Department of Transport.

Similarly, AirAsia’s managing director Tony Fernandes in the middle of February sent a letter to Prime Minister Nguyen Xuan Phuc to express interest in establishing a low-cost airline in the country. This is the fourth time the foreign airline has attempted to enter Vietnam.

In fact, there has been a definite trend of opening airlines in the country. Last year saw new airline Bamboo Airways of real estate giant FLC Group officially began commercial operations after years of planning.

The more airlines are established, the fewer pilots there are to go around. Vietnam Airlines is no longer the country’s leading employer of pilots as over the past years, the aviation market has been greatly fragmented by Vietjet, Jetstar Pacific, and lately Bamboo Airways. At present, as the market is recording a deep shortage of pilots, domestic airlines are growing ever-more serious in their sniping for each other’s personnel.

Serious shortage

According to the Ministry of Transport’s (MoT) Civil Aviation Authority of Vietnam (CAAV), the local civil aviation industry has 171 airplanes that were registered in Vietnam in operation. The number is forecast to increase to 250 in 2020-2030.

In addition, the CAAV also estimated that from now to 2030, the domestic aviation industry will need 200 new pilots per year to steer these new airplanes. Such a high number of pilots is difficult to procure, especially as the country has a single training school. This is also behind the fact that the brunt of Vietnamese pilots are trained overseas at a tremendous cost, which means that local airlines have no real control over the supply of trained pilots.

The only pilot training school in Vietnam is Viet Flight Training, a subsidiary of Vietnam Airlines. After a course at this school, students have to pass an examination and interviews to go abroad for training to the US, Australia, UK, France or New Zealand.

In order to find employment at an airline, a pilot needs to obtain numerous certificates, from a Private Pilot License (PPL), to Commercial Pilot License (CPL), and Airline Transportation Pilot License (ATPL). To switch airplane types, they have to enrol on half a year or year-long transfer courses.

Therefore, pilot training is very expensive and can only be afforded by a handful of trainees. A pilot from a big airline in Vietnam told VIR the minimum cost to train a co-pilot is VND3-4 billion ($130,400-174,000).

According to a Vietnam Airlines document sent to the CAAV last year, the number of the airline’s pilots was 1,100 in 2018 and 1,293 in 2019. The document also forecasted the airline’s personnel demand to reach 1,340 pilots by 2020 and 1,570 pilots by 2025. Thus, within six years, Vietnam Airlines will need at least 470 pilots more, equalling 30 per cent of the demand in 2025.

The pilot said that 75 per cent of the pilots working in the local aviation market are foreigners. In addition, airlines pay higher salaries to both Vietnamese and foreign pilots than the regional average.

To tackle the shortage, over the past few years, airlines have been recruiting pilot trainees to build out their own reinforcements for the future, while also looking for experienced pilots.

Duong Tri Thanh, CEO of Vietnam Airlines, told local media that both the global aviation market and Vietnam have seen a great shortage of pilots. Therefore, the company has to constantly recruit trainees and hire foreign pilots to facilitate its expansion plans.

The shortage of pilots is exerting remarkable effects across the globe. Most recently, India-based IndiGo Airlines was forced to cancel dozens of flights a day as there were simply no pilots to operate the planes.

According to Cedar Valley Business magazine, the shortage of pilots in the US is forecast to keep getting more serious in the next years because senior pilots are going to retire although the Federal Aviation Agency has risen the retirement age to 65 from 60 since 2009. Specifically, 42 per cent of the pilots in the US will retire in 2016-2026.

Battling over pilots

Driven by this shortage, airlines in Vietnam are in a tough battle for personnel.

The pilot told VIR that his colleagues regularly receive invitations from other airlines promising 10-20 per cent increases in their salaries. Bamboo Airways even offers to pay part of the compensation if a pilot terminates their contracts with their existing airline.

According to the pilot, an Airbus 321-320 co-pilot earns VND80-100 million ($3,500-4,350), while an airline captain make VND100-150 million ($4,350-6,500) per month. Despite this income, airlines still struggle to recruit experienced pilots, leading to a great deal of sniping, in addition to training their own pilots.

Over the past few years, airlines have been offering preferential salaries to lure in pilots. To snipe pilots from competitors, in 2017, Vietjet offered an average of VND180 million ($7,800) per month, higher than Vietnam Airlines’ VND160 million ($7,000).

While waiting for the government’s approval, Bamboo Airways has recently offered a monthly average of VND200 million ($8,700) to a pilot, 10 per cent more than Vietjet.

Competition here for long

The CAAV’s data suggests that the local aviation market will need 200 more pilots each year and the shortage may continue for a long time – it may even exacerbate as an increasing number of investors are planning to open airlines in Vietnam.

According to job research website VietnamWorks, in 2018 recruitment posts for pilots increased by 8 per cent on-year and the figure will keep growing in the following years.

This is no gap to be filled in haste, as an experienced co-pilot needs 3-5 years on the job, while captains need 6-10 years, according to the pilot, thus the pilots currently in training will only be able to truly account for themselves in at least half a decade. This suggests that airlines will be hard-pressed for experienced captains for at least six years more, which is going to be a tremendous challenge for their expansion plans. Thus, airlines are expected to keep going into great lengths to lure away pilots from competitors, as this is the only source of experienced personnel.

To meet the huge demand, airlines might be launching facilities to train pilots locally.