Alternative Funding Concept for U.S. Pre-Employment Pilot Training A Panel Discussion WATS 2014 Woerth U.S. Ambassador to ICAO Moderator Capt (Ret) Peter J. Wolfe, FRAeS PABC Executive Director April 2, 2014 Alternative Funding for Pre-Employment Pilot Training From Session 3 on Global Pilot Supply Vashun Cole, U.S. Govt. Accountability Office (GAO) Anthony PeBeford, CTC Dr. Janeen Kochan, AviaIon Research Training & Services Funding Pilot Training • Is a Significant Global Concern • The Issues & Need are Evident Alternative Funding for Pre-Employment Pilot Training DATA & STATISTICS growth and pilot reOrements Pilot demand to support fleet Boeing Market Outlook 2013-‐2032 85,700 85,700 4,300/Yr 77,400 77,400 3,900 China 114,900 5,700 APAC 192,300 9,600 / Yr 114,900 Alternative Funding for Pre-Employment Pilot Training GLOBAL OVERVIEW: Funding Source OpOons 1. State Funded 2. Airline Sponsored 3. Self-‐Funded: Personal or Family 4. Carrier-‐linked Loans (Screener, Trainer, Employer) 5. User Fee Funded Loans Carrier-‐linked Loans (Screener, Trainer, Employer) Presenters Capt Gary Morrison, CAE Overview: Funding Elements Mr. Dick Verburg, EPST Candidate Screening Ms. Joanie Williams, OAS Loan Funding / Canada Capt Albert Glenn, OBAP Candidates’ PerspecOve Capt Pete Wolfe, PABC User Fees: A New Approach See separate PPT presenta,ons by for their individual remarks Alternative Funding for Pre-Employment Pilot Training Carrier-‐linked Loans (Screener, Trainer, Employer) • Can be arranged in in ALL NaIons • Their best use: Single-‐Operator/Network SoluIons ESPECIALLY EFFECTIVE WHERE NaOonal Carrier / Network or The Airline “Hires for Life” User Fees: A New Approach To Funding Pre-‐employment Pilot Training North American Demand 85,700 4,300/Yr • Recommend: U.S. adopt User Fee Funded Loan concept • Direct Entry1 hiring for US MPL Grads • Loan to Pilot is for phases 1, 2 & 3a of MPL course • Courses funded: • Teach all CPL/IR/ATP & MPL KSACs2 • Are Generic • EsImated Course Cost: $100,000 / Pilot • Airlines hire pilots from “the Pool” User Fee Funded Loan Generic MPL Curriculum MPL MulO-‐Crew Phase 1 2 3A Pilot License Company-‐Funded Type-‐Specific MPL Course ATP Exam Pilot MP 3B 4 L IOE POOL Type RaIng 1 Direct Entry – US MPL Graduates are eligible for Immediate employment by US airlines 2 KSACs – Knowledge, Skills, A\tudes and Competencies User Fees: A New Approach To Funding Pre-‐employment Pilot Training Company-‐Funded Type-‐Specific MPL Course Why Generic? MP Airline ABC L IOE So funded programs feed enOre air carrier system Type RaIng A-‐320 User Fee Funded Loan Generic MPL Curriculum Generic MPL MulO-‐Crew Phase 1 2 3A Pilot License ATP Exam Pilot POOL Company-‐Funded Type-‐Specific MPL Course MP Airline XYZ L IOE Type RaIng B-‐737 Company-‐Funded Type-‐Specific MPL Course MP Airline MNO L IOE Type RaIng ATR-‐72 User Fees: A New Approach To Funding Pre-‐employment Pilot Training User Fee Funding AssumpOons • Passengers carried by US airlines in 2013 = 740 Mil1 • 20 Yr Forecast US pilot demand = 4,300 / Yr • EsOmated US MPL/MPL-‐like Course Cost / Yr = $ 430 Mil2 EXAMPLE Impact on Ticket Price Course Cost: Cost / Ticket • $100,000 Less Than • $125,000 $ 1 • $150,000 US AviaOon Professional Workforce Development Fund • For airlines • Non-‐taxed revenue • Win-‐Win for ALL Stakeholders Back of the Envelope Es6mate 1 Passenger Data from: US Bureau of TransportaIon StaIsIcs (BTS) 2 Cost EsImated based on 4,300 pilots x $100,000 (USD each) 3 US/APWD – US AviaIon Professional Workforce Development FoundaIon User Fees: A New Approach To Funding Pre-‐employment Pilot Training Fund Management US/APWD3 Founda,on US AviaOon Professional Workforce Development FoundaOon • US law allows user-‐fee collecOon as non-‐taxed revenue • US Congress may need to exempt this subject from anO-‐trust restricOons • Low-‐Interest loans: • FoundaOon is NOT a “commercial” lending insOtuOon • Terms reflecOve of Industry & Career uncertainOes • Funds aviaOon professional (Pilot)(Workforce) Training • Designed to achieve low default rates • Loan repayments augment User Fee income (long-‐term) 1 Passenger Data from: US Bureau of TransportaIon StaIsIcs (BTS) 2 Cost EsImated based on 4,300 pilots x $100,000 (USD each) 3 US/APWD – US AviaIon Professional Workforce Development FoundaIon User Fee Funded Loans US APWD FoundaOon US AviaIon Professional Workforce Development FoundaIon FoundaOon: Features & FuncOons Accredit Trng Programs Select Pilots Screen Pilots Recruit Pilots Audit Costs & Funds Evaluate Pilots & Training Design Loan to Match Demand Pay Trnr for Pilot’s Fees Revise Course & Policies as Reqd Confirm Value To Employers Disqualify Pilots & Trnrs Remediate Pilots & Trnrs Measure Value To Industry Adjust #/$ Of Loans Made Check Future Pilot Demand Monitor Repayment Note: FAA Approves flight training providers / APWD Accredits (qualifies) programs for funding User Fee Funded Loans US APWD FoundaOon: Concept Benefits 1. Provides larger Pilot Pool 2. Assures pilots’ preparedness for airline training 3. Enhances air transport safety & efficiency 4. Improves training standards, quality and scope 5. Makes producOon rate predictable & adjustable 6. Enhances MPL effecOveness by direct entry 7. Has negligible impact on passengers’ Ocket price 8. Enables high quality trainers to thrive 9. Provides loans designed for aviaOon careers 10. Benefits ALL stakeholders, including the public 11. Demonstrates training-‐funding process for RASOS RASOS: Regional AviaOon Safety Oversight System User Fee Funded Loans Concept Benefits for Other Industry Stakeholders Insurers: • Claim threat reduced • Quality of future Captains improved Manufacturers: Pilot producIon rate = Demand FAA gains: • Enhanced training quality & scope • Oversight augmented by accreditors Public: Improved air safety & service US Congress enhances air safety: • Using proven MPL training concept • Provides a model for emerging Sates RASOS: Regional AviaOon Safety Oversight System Carrier-‐linked Loans & User-‐Fee Funded Loans Now we ask YOU The RepresentaOves of Our Industry & Future Workforce For YOUR thoughts & recommenda,ons Presenters Capt Gary Morrison, CAE Overview: Funding Elements Mr. Dick Verburg, EPST Candidate Screening Ms. Joanie Williams, OAS Loan Funding / Canada Capt Albert Glenn, OBAP Candidates’ PerspecOve Capt Pete Wolfe, PABC User Fees: A New Approach Carrier-‐linked Loans & User-‐Fee Funded Loans THANKS to Each of our Speakers Capt Gary Morrison, CAE Mr. Dick Verburg, EPST Ms. Joanie Williams, OAS Capt Albert Glenn, OBAP Capt Pete Wolfe, PABC NaOonal Dialogue Long Term SoluOon Changes in Law Flesh on the Bones Carrier-‐linked Loans & User-‐Fee Funded Loans SPECIAL THANKS to Ms. Joan (Joanie) Williams Chair, Oqawa AviaOon Services CANADA [email protected] Carrier-‐linked Loans & User-‐Fee Funded Loans THANKS Also, to … Each of YOU Our Current & Future Workforce For your Service & DedicaOon To our Industry & our Customers
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