This week we heard President Obama discuss the State of the Union. This got me thinking about the state of the flight training industry, so I decided to take a stab at my own version of a “State of the Industry” address. As I write these words, I can’t help but think, “Who am I to tell the flight training industry about itself?” I’ll be honest, there are others who are probably also qualified to make similar statements, but I feel okay doing this since I work in this industry every day, talking broadly with flight training providers who are individual instructors, from local FBOs and all the way up to collegiate/university and academy training environments. I see the broad path of this industry and I am concerned.
The flight training industry is facing pressures like it has never faced before. An unstable regulatory environment has left the flight training industry unsure regarding even what basic requirements may be required of a pilot who they intend to train to work in an airline environment. Financing for non-collegiate/university program training has virtually dried up, leaving customers faced with a pay-as-you-go or pay-ahead approach to their training. Many customers can not afford this approach to a career. A large number of smaller, FBO type providers of services including aircraft rental and training have closed.
The United States has been a leader in aviation for a long time. A part of this has been leadership in the provision of flight training. Significant numbers of students from all around the world come to the United States every year and receive flight training from U.S. flight training providers and professionals because we do it better, in a competitive manner related to cost, and because our regulatory environment is open to safe, but easily accessible training. If our nation continues to enforce policies that hinder the ability of this profession, the U.S. will no longer be the leader, and business will go elsewhere. If we think that there aren’t other places working to take this international business away from the U.S., shame on us for putting our heads in the sand and we have no right to complain when it is gone.
Large scale training providers are generally providing training that is syllabus based, may be part 141 approved, and typically has a more condensed training time footprint per rating or certificate given. They have retention and completion rates that are better than 80%. These providers traditionally include universities, colleges, academy style training providers, and a few large fleet FBO training providers. These training providers are the fewest in number in our system, but it looks like they conduct the largest percentage of training. Smaller scale training providers typically see longer training footprints per rating or certificate, have much higher dropout rates (AOPA studies indicated over 80%), and generally are providing much less structured training with much less training volume. Our industry’s ability to meet future pilot supply demands are directly related to the business structures all of these training providers have in place.
Costs of training have gone up and potential pilots, both career focused and personal and business focused, are doing the math. Flight training customers need to see value in what training providers are going to do for them. This value may be in self-actualization, overall training efficiency, or in our able to convey that training will allow students the ability to have a successfule career in aviation as a professional pilot. The flight training industry needs to develop the data that illustrates this value proposition and it needs to provide it effectively and efficiently.
Our industry needs to get tough, lean, and active. The days of just hoping students will show up at our door are gone. We can’t keep “hoping” that things will get better. Flight training providers who want to survive are going to need to talk with their local officials, state officials, and federally elected officials and work to impress upon them how important the business of flight training is the U.S. aviation market. As a collective group, we need to strengthen our business models. If our business models become profitable and strong, we might be bankable again for lending institutions to consider funding flight training financing for customers; right now they can’t because our track record of default rates on flight training financing through the industry has historically burned them too many times.
Flight training providers can’t be stuck in old ways. We have to be willing to consider new ways of doing business, new tools to use in our businesses, and be willing to get un-stuck from the old way of doing it. Customers have changed, the market has changed, and the flight training market has to change with them. We can’t just tell our customers to eat Spam because it’s what is left in our kitchen cupboard even though they have told us that they want steak.
This is no time to sit back. Our industry is not healthy, it is in a precarious position, and if we don’t do something about it, it will continue to contract and decay. I know this sounds bleak, but it doesn’t have to be. Reading this state of the industry article can be your own personal turning point; the point at which you begin to help all of us build toward a more effective tomorrow in the flight training industry.