Pacific airlines feel the pinch from oil rich Middle East airlines

Elenoa Baselala
If rising fuel costs is a problem for the region’s airlines, pilot poaching is an even bigger one—slowly burning holes in their already shrinking pockets as pilots fly off to more lucrative destinations.

Airline chiefs: John Campbell of Air Pacific (right) and Joseph Anea (second from right) of Solomon Airlines.

The fast growth of airlines in the Middle East, China and India have been blamed for the unending loss of  experienced pilots from the Pacific.

The region, however, is not the only one facing the problem as almost all airlines in the world are putting in place pilot retention measures.

Particularly affected are the smaller airlines that spend a lot of money on pilot training only to lose them to much bigger and wealthier airlines. So concerned are the small operators that the issue was raised at the International Air Transport Association (IATA) annual general meeting last year. Small operators from Africa also joined in in criticising the bigger ‘poachers.’

According to Airline Business magazine’s January 2007 edition, the topic was to have been IATA’s move to make certification under its international operational safety audit programme (IOSA) a qualification for membership.

Air Seychelles’ chairman, David Savy told the magazine this was a downside to IOSA as African airlines had a dismal safety record but had to meet IOSA by using trained specialists to deliver it.

He said a number of African airlines spend time and money training pilots but airlines around the world poach these pilots by dangling higher and unmatchable salaries.

GLOBAL ISSUE: IATA’s communication manager for the Asia Pacific, Albert Tjoeng told Islands Business that pilot poaching was a global issue. But it was outside of IATA’s scope.

“While we’re not directly involved, IATA is committed to skills development and training.

“In 1984, IATA established the International Airline Training Fund (IATF) as a central component of its programme for airlines in developing nations.

IATF fosters training as a means to sustainably enhance the knowledge and skills of employees of IATA member airlines in developing countries, thus allowing them to meet their business needs and the challenges of the air transport industry.

What can we do? Air Niugini’s David Tohi and Our Airline’s Geoff Bowmaker at the ASPA meeting in Nadi.

“IATF also serves as a key platform for supporting IATA member airlines in developing countries to meet industry priorities by facilitating access to training, information and other services within IATA.

“The Pacific Islands have benefitted and continue to benefit from IATF,” he said.

In India last year, pilot poaching was so serious that it led to cancellation of flights by some airlines.

For the Philippines, local airline operators Philippine Airlines, Cebu Pacific, Asian Spirit and Air Philippines warn that by 2010, the country may find itself without a single pilot or a maintenance crew because of the phenomenon. So serious was pilot poaching that the Philippino Government had to intervene with its own pilot retention programme.

Closer to home, chief executive of Solomons Airlines, Joseph Anea said his airline was not as affected as others airlines in the region like Air Pacific, because he has had only seven local pilots in the last 20 years, of which only three are being employed by them.

Anea believes that while losing pilots to bigger airlines may affect some airlines, the benefit would come their way in the long-term as these pilots tend to return home more experienced.

“For the pilots, they have to think of career progression, an improvement to their standard of living and a chance to have a wider experience,” he says.

“And in the future, these pilots will return and would be more experienced.”

Solomon Airlines now employs expatriates as pilots and has stopped its pilot training programme with Air Fiji.
Air Pacific seems to be the worst affected by pilot poaching with the airline reporting a loss of about 21 pilots in the last three years.

Of this number, 16 resigned to work in the Middle East, primarily with Oman Airways and Emirates Airlines, one will soon leave to work in Hong Kong and four have emigrated to Australia and New Zealand with two joining Virgin Blue.

MORE BRAIN-DRAIN: Chief executive John Campbell predicts more brain-drain in the future.

“A new airline, Etihad, has aggressive growth plans for flights from Abu Dhabi and we expect they will soon initiate a recruitment drive worldwide to fill the jobs to be delivered by their new aircraft orders.

“Airlines in the Middle East have ordered or taken delivery of around 400 aircraft in the past. Each aircraft requires seven sets of pilots with up to three crews in each set so the total recruitment drive by Middle East carriers is around 6500 pilots.

“The aggressive growth plans mean that they do not have the time or resources to train their own staff so they poach experienced, competent pilots worldwide,” Campbell says.

Figures released by IATA show that growth in air travel in the Middle Eastern is fuelling pilot poaching.

The region, the international agency says was the fastest growing area for both passenger and cargo in 2006, registering a full year growth of 15.4% and 16.1% respectively.

Campbell said Air Pacific is resigned to the fact that it will continue to be a supplier of pilots for Middle East airlines.

“We understand that Qatar Airways has been so impressed with Air Pacific pilots that they recruit them without any further testing of their flight competence.

“The Air Pacific recruits are not put through simulator or other examination techniques, their competence is accepted based on our standards,” Campbell says.

Like Solomon Airlines, Air Pacific has filled vacancies through the recruitment of expatriate pilots.

“Air Pacific uses crew-leasing companies in New Zealand and Australia to hire licensed, experienced pilots while its recruitment and training process continues.

“To-date, Air Pacific has hired a total of 28 local pilots to replace the 21 pilots who resigned to emigrate or fly for other airlines.

“These pilots are mainly drawn from Fiji’s domestic airlines and have been initially trained by flying schools based in Nadi.

“However, the experience of these pilots are limited to small aircraft and therefore once they join Air Pacific, they would have to be trained for a minimum 12 months as second officers on the B747s or B767.

“Second officers are not licensed to take off or land a jet. Subject to skills and discipline demonstrated, they would be progressed through training courses to become First Officers and are then qualified to fly as a co-pilot on our B737 aircraft.

“The training courses are up to three months long and subsequently the pilots are monitored and tested by check and training captains before being cleared to fly as a line pilot.

“It typically takes around two years from the time a Second Officer is initially recruited to the time that they are fully qualified as a B737 pilot.

“Given the numbers we have recruited and are training, it follows that the pilots supplied by the crew leasing companies will be with Air Pacific for a few more years,” Campbell says.

Air Niugini is also affected by pilot poaching especially to airlines in the Gulf, but the full extent of the problem on Papua New Guinea’s national carrier could not be ascertained as questions sent to the airline were not answered by press time.

So, what can the airlines do to counter pilot poaching? There were suggestions during the 2006 IATA AGM to have a code of conduct put in place.

Airline Business magazine, however, reported that when this idea was put across at the meeting, it was effectively shot down as naïve.

Some say it might work in an ideal world, but its implementation in the cut-throat airline business will be practically impossible.

CUT-THROAT BUSINESS: A number of airlines including Air Pacific have tried to plug the brain-drain problem through promotion and better working conditions. But even such an approach has a limited effect given the type of carrots and incentives dangled by the mega-rich companies of the Middle East.

Some of these companies also protested about the use of the term “poachers”. They argued that it is not the right word to use because in reality, it’s about “supply and demand”.

“We are not finding it at all difficult to recruit good people. Our product is appealing for applicants,” Etihad Airways’ regional general manager for Europe and the Americas, Kirk Albrow told Airline Business.

“We certainly don’t poach—it’s a question of people approaching us.”

He added that the fast-growing Abu Dhabi-based airline has robust processes in recruiting and benchmarking against its competitors.

“Our salaries are very competitive, but not outrageous—we won’t line your pockets,” he says.

Air Pacific, which spends F$9 million a year on training, says it has relatively few tools to change or reverse this trend.

“Our existing pilots are being promoted rapidly as can be done so that all senior crew members from the B737s are being advanced through to B767 and B737 aircraft.

“National pilots are being promoted as safe and practical to the role of captains in the B737 aircraft.

“Salaries and work conditions for Air Pacific pilots are very generous and competitive within the region. But we simply cannot match those that are being paid in the Middle East.

“We are advised that pilots in the Middle East receive a salary in the order of US$18,000 tax free per month, plus free medical and hospital treatment, free schoolling, free housing and free travel to their country of origin twice per annum.

“In some ways, the Middle East airlines can afford this because they do not pay the initial costs of training and type rating for crews—these costs are being paid by Air Pacific and other airlines.

“In other ways, the governments which own the Middle East airlines have adequate oil income to pay for huge growth plans and salaries, so any escalation in salaries elsewhere will be countered by further increases in the Middle East.

“As a matter of interest, Air Pacific currently spends F$9 million per annum in training our pilots and maintaining the validity of their licences.

“The majority of this money is spent overseas in simulator training. We are committed to the continuation of the very high standards that we set and we will not cut back on the quality or extent of training, therefore whether we pay pilots more or not, the cost of training will continue,” Campbell says.

As Anea says not much can be done about pilot poaching except to accept that it will happen because pilots also need to think of their future well-being.