UAL Future Pilot Sourcing

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UAL Future Pilot Sourcing. AABI Winter Meeting. February 20, 2013. Worldwide Pilot Shortage – The Risk. Worldwide airlines n eed 460,000 new commercial pilots over next 20 years U.S. airlines need 69,000 new commercial pilots over the next 20 years - PowerPoint PPT Presentation

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UAL Future Pilot SourcingAABI Winter Meeting

February 20, 20131Worldwide Pilot Shortage The RiskWorldwide airlines need 460,000 new commercial pilots over next 20 years

U.S. airlines need 69,000 new commercial pilots over the next 20 years

Regional airlines take the biggest hit United Express carrierslose 10.0% of their pilots per year to majors for next 20 years

NO new crop of qualified pilots waiting in the wings to backfill

United Express$6.8B (21%) of UAL passenger revenue/160 (67%) of domestic destinations

UAL Future Pilot Sourcing22United Risk and MitigationUAL Future Pilot Sourcing3

Famed Worldwide Pilot Shortage is here UAL needs 530 pilots per year (no growth) for next 20 yearsBiggest effect on our regional partners need 700 pilots per yearUnited airlines proactive leadership is key to mitigate the risks (P3)Power to shape the landscapePromote the airline pilot professionProvide a viable career path3Problem Definition Increasing Pilot Demand1. Boeing study (July 2012)2. Retirements plus normal attrition3. UA regionals ~7000 pilots (10% annual attrition)Annual(average)20 Year Total(2013-2032)Worldwide123,000460,000N. America13,45069,000United2 53010,606UAX370014,000Forces Increasing Pilot DemandRetirements (Age 65/Dec 2012) and normal attritionFAR Part 117 Crew Rest Rules (Jan 2014)+3.1% UAL+5.0-10.0% United RegionalsGlobal growth (especially Asia/Pacific)UALGrowthAnnual(average)20 Year Total(2013-2032)1.0%63912,7751.5%70114,0232.0%77015,3934UAL Future Pilot Sourcing4

Problem Definition Limited Pilot SupplyPilot Supply PressuresPart 121 SIC ATP regulation (Aug 2013)Declining career interest University of North Dakota Study (ROI and career stability)International airlines hiring experienced U.S. pilotsUnpredictable military supplyAnnual U.S. Military Pilot SupplyNew ATPs down 47% (8500 in 1991 to 4500 in 2011)Leave MilitaryTo Airlines (80%)Air Force1035828Navy/Marine520416TOTAL15551244UAL Capture15%186 (annual)

New Commercial certificates down 50% (17,000 in 1991 to 8500 in 2011)5UAL Future Pilot Sourcing5UAL and UAX Demand and Supply Summary6UAL Future Pilot Sourcing5 Year2013-2017(Annual Avg)10 Year2013-2022(Annual Avg)20 Year2013-2032(Annual Avg)UAL Need (retire + attrition + 1.0% growth)1469524639Pilots from Military186186186UAL Need from Other Sources283338453UAX Need: Flow to UAL 283338453UAX Need (retire + attrition) - no growth495992UAX Need: Flow to Other Airlines96115155TOTAL UAX Need1428 (6.1%)512 (7.3%)700 (10.0%)1. Does NOT include FAR 117 crew rest rule (Jan 2014) increases pilot requirements 3.1% (306 pilots) at UAL and 5-10% (350-700 pilots) at UAXAviation University Supply2Annual OutputAirline Career (56%)UAX Capture(20%)Annual Shortfall(5 Year)Annual Shortfall(10 Year)AnnualShortfall(20 Year)2011180010082022263104972. Approximately 2 year delay after graduation to have requirements for ATP (FAA F/O ATP Rule Aug 2013)6Pilot Shortage Effect on UALDirect EffectsConstrained mainline growthIncreased costsOperational disruptionsIndirect EffectsReduced regional capacityService terminationIncreased UAX costsRegional airlines will take the brunt of the pilot shortage, but

UAX exclusively serves 67% of United U.S. destinations for UAL, andUAX contributes significantly to UAL passenger revenue ($6.8B/21% in CY2012)

7UAL Future Pilot Sourcing

7UAL Future Pilot Sourcing8MitigationPowerPromoteProvideUse Uniteds industry power and influence to shape the landscape (Government, Industry, Academia) Promote the airline pilot professionProvide a viable career path (High School to UAL)

8Professional Pilot Career Path9UAL Future Pilot Sourcing

9UAL Future Pilot Sourcing10Questions?

10UAL Future Pilot Sourcing11Backup Slides

11UAL Future Pilot Sourcing12Airline Market Overview

12UAL Future Pilot Sourcing13Global Pilot Needs (UND Study)

13UAX Pilot Age DemographicsRepresents approximately 74% of UAL express fleet calculated by total number of monthly flights (Dec 2012)Total Number of Pilots = 8335

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