The global aviation industry continues to grow at a steady pace as economic development and low-budget airlines boost the pool of potential passengers.
With new deliveries of aircrafts expected in the tens of thousands in the next 20 years to accommodate new customers and replace an ageing fleet, the need for pilot training is also on the rise. Major companies that provide equipment and training solutions are consequently increasing their global footprint, particularly in south-east Asia, to meet the growing demand from legacy and low-budget airlines.
Civil aviation has proven resilient through the decades, with the number of air passengers doubling every 15 years and expected to grow at an average rate of 3.6% through to 2036, according to projections by the International Air Transport Association (IATA). Growth is coming particularly from China (expected to outstrip the US by size of domestic market by 2036), India and Indonesia, while mature Western markets are also growing at a steady, although more moderate, pace.
This is making the industry bullish at all levels. Aerospace behemoths Boeing and Airbus both put total demand of new aircrafts in the tens of thousands through to 2036 – 41,030 for Boeing and 34,900 for Airbus. Boeing estimates the resulting need for new pilots in the order of 637,000 by 2036, which creates a massive challenge, but also an opportunity, for the industry.
“Airlines have become more open-minded to solutions other than buying training equipment,” says Nick Leontidis, group president, civil aviation training solutions, at CAE, a Canadian equipment and training solutions provider. “When there is a pilot shortage, there is also a training problem, and [airlines look to the likes of] CAE to take care of it. Even when they buy training equipment, they limit the portion of the training they do in house, and outsource the rest.”
CAE, which runs more than 50 training locations worldwide, expects to keep investing $100m to $120m per year in growing its presence across the globe. It has a particular eye on China, India and south-east Asia, a region that lacks a pool of pilots, but also in North America, where thousands of pilots will have to retire in the next few years, according to Mr Leontidis.
The low-budget boom
Demand for pilot training also stems from the rise of low-budget airlines that tend to outsource the training of their pilots (unlike legacy air carriers), also creating room in the market for newcomers.
“The whole philosophy of low-budget carriers is to run operations as conveniently and efficiently as possible,” says Bhanu Choudhrie, head of global private equity group C&C Alpha and founder of Alpha Aviation Group (AAG). “Owning their own equipment and training pilots in house implies a big capital investment. If they can remove that by outsourcing the whole training, they can operate more efficiently.”
Founded in 2006, AAG currently runs two training centres in the Philippines and the United Arab Emirates and is now targeting low-budget airlines in Asia and the US, according to Mr Choudhrie, who adds that it plans to open another two facilities in the next five years.
As for unmanned planes, CAE’s Mr Leontidis says: “These are remotely controlled planes, and are already mainstream in the defence industry, and we do a lot of training for them. They still have pilots sitting on the ground in flight simulators, although I don’t see this happening in civil aviation in the short term.”