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UAL Future Pilot Sourcing

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

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UAL Future Pilot Sourcing

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  1. UAL Future Pilot Sourcing AABI Winter Meeting February 20, 2013

  2. Worldwide Pilot Shortage – The Risk Worldwide 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 carriers lose 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 Sourcing

  3. United Risk and Mitigation • Famed “Worldwide Pilot Shortage” is here • UAL needs 530 pilots per year (no growth) for next 20 years • Biggest effect on our regional partners – need 700 pilots per year • United airlines proactive leadership is key to mitigate the risks (P3) • Power to shape the landscape • Promote the airline pilot profession • Provide a viable career path UAL Future Pilot Sourcing

  4. Problem Definition – Increasing Pilot Demand 1. Boeing study (July 2012) 2. Retirements plus normal attrition 3. UA regionals ~7000 pilots (10% annual attrition) • Forces Increasing Pilot Demand • Retirements (Age 65/Dec 2012) and normal attrition • FAR Part 117 Crew Rest Rules (Jan 2014) • +3.1% UAL • +5.0-10.0% United Regionals • Global growth (especially Asia/Pacific) UAL Future Pilot Sourcing

  5. Problem Definition – Limited Pilot Supply New ATPs down 47% (8500 in 1991 to 4500 in 2011) New Commercial certificates down 50% (17,000 in 1991 to 8500 in 2011) Annual U.S. Military Pilot Supply • Pilot Supply Pressures • Part 121 SIC ATP regulation (Aug 2013) • Declining career interest – University of North Dakota Study (ROI and career stability) • International airlines hiring experienced U.S. pilots • Unpredictable military supply UAL Future Pilot Sourcing

  6. UAL and UAX Demand and Supply Summary 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 UAX 2. Approximately 2 year delay after graduation to have requirements for ATP (FAA F/O ATP Rule – Aug 2013) UAL Future Pilot Sourcing

  7. Pilot Shortage Effect on UAL • Direct Effects • Constrained mainline growth • Increased costs • Operational disruptions • Indirect Effects • Reduced regional capacity • Service termination • Increased UAX costs • Regional airlines will take the brunt of the pilot shortage, but… • UAX exclusively serves 67% of United U.S. destinations for UAL, and • UAX contributes significantly to UAL passenger revenue ($6.8B/21% in CY2012) UAL Future Pilot Sourcing

  8. Mitigation Power Use United’s industry power and influence to shape the landscape (Government, Industry, Academia) Promote Promote the airline pilot profession Provide Provide a viable career path (High School to UAL) UAL Future Pilot Sourcing

  9. Professional Pilot Career Path UAL Future Pilot Sourcing

  10. Questions? UAL Future Pilot Sourcing

  11. Backup Slides UAL Future Pilot Sourcing

  12. Airline Market Overview UAL Future Pilot Sourcing

  13. Global Pilot Needs (UND Study) UAL Future Pilot Sourcing

  14. UAX Pilot Age Demographics Represents approximately 74% of UAL express fleet calculated by total number of monthly flights (Dec 2012) Total Number of Pilots = 8335 UAL Future Pilot Sourcing

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