Globally Competitive Pilot Training Industry Struggling

“New Zealand’s globally competitive pilot training industry expects to have 22 international students in December 2021, compared with 651 pre-COVID-19, as the border remains closed to high value pilot cadets,” said Aviation NZ Chief Executive, John Nicholson.

Much is made about the strength of the New Zealand economy, despite COVID-19. But that general picture hides, for example, the problems arising in the pilot training sector.

Since June 2020, the pilot training industry has put several cases to the Government, seeking approval for a limited number of students to enter the country and train as pilots.

While much has been made publicly of the challenges facing global airlines, many airlines have taken advantage of the impact of COVID-19 to reduce their dependence on foreign pilots, train more locals, take delivery of new and more efficient aircraft, and lower their cost structures.

Many of these airlines want to train cadets in New Zealand. This reflects their good experiences of pilots trained here, the quality of training provided, the relationships developed over time with trainers and the integrity of the regulatory system managed by the Civil Aviation Authority.

Pilot training is high value, a concept the Government now pushes as it seeks to reshape international education. The average cadet pays around $80,000 per year in tuition fees. In 2020, the industry earned $51m in tuition fees from international students, generated $226m in economic activity, mostly in regional New Zealand, employed 380 staff and had an asset value approaching $100m.

Around 60 percent of those trained in New Zealand are international students. Their presence enhances the training provided to New Zealanders, and makes it very cost competitive.

But capability and capacity is disappearing. The industry:

• employed 380 staff in June 2020, 205 in March 2021 and expects to have 131 in December 2021 (63% reduction);
• employed 200 instructors in June 2020, 106 in March 2021 and expects to have 72 in December 2021 (64% reduction); and
• used 149 aircraft in June 2021, 127 in March 2021 and expects to require 85 in December 2021 (51% reduction).

By December this year, 629 of the overseas students in New Zealand in March 2020 will have completed their training and returned to employment in their home countries.

The absence of these students is placing considerable cash flow pressure on the trainers. It is presenting real challenges in terms of preserving staff currency, managing aircraft to manufacturer specifications, paying insurance and other fixed costs, and meeting CAA regulatory requirements.

The professional pilot training industry can play an important role in helping rebuild the New Zealand economy and developing the types of personal relationships that will be important in tomorrow’s globally connected World.

‘We are fast running out of time for the Government to respond to the industry’s requests’, concluded Nicholson.

Talking Points

Overseas airlines want cadets trained in New Zealand because our companies train very well, they produce well rounded pilots with exceptionally good flying skills, and we provide a great and safe training environment. These companies also recognise that New Zealand has done well in the fight against COVID-19.

Government to Government agreements in place with India and Vietnam encourage pilot training in New Zealand. There are also strong relationships in place between the Civil Aviation Authority and regulators in those and other countries. On the back of these Government relationships, several trainers have been able to negotiate business to business training agreements with airlines. Many of these contracts have been lost to international competitors over the last 12 months, and more are at risk.

A recent survey of the industry revealed that almost 500 pilot cadets, primarily from India and Vietnam, but also Indonesia, China and the South Pacific, have committed to coming to New Zealand. Many have been wanting to get here since March2020. They will not wait much longer.

Key facts about Aviation NZ

Aviation NZ was established in 1950 to encourage the safe growth of the aviation industry in New Zealand. In more recent years, it has also become involved in helping the international development of its members.

• Members include agricultural companies, air operators (fixed wing and rotary), aircraft designers and manufacturers, maintenance repair and overhaul, the UAV industry, airports, aviation trainers, tertiary institutions, emergency and medical services companies, helicopter companies, and parts manufacturers.

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