Though figures indicate that the purchasing power of passengers and their confidence in air transportation is rapidly restoring, many airlines keep continuing to experience serious financial constraints. Unfortunately, not every carrier is able to restructure its operations successfully. As a result, from the beginning of 2013 already three European airlines have been forced to shut down their businesses, with several more being on the edge of bankruptcy. With the continuously volatile situation in the market, should pilots be concerned with saving their employers and how can they minimize their risks in case of a carrier’s bankruptcy?
In 2012 approx. fifteen European holders of an air operator's certificate (AOC) became defunct. The majority of those carriers were forced to exit the market due to poor or critical financial situation. Many players operating in other regions are under similar threat, too. For instance, the Armenian national carrier Armavia and the Indonesian Batavia Air ceased their operations in March and January 2013 respectively.
‘Airlines are burdened by numerous obligations and expenses which include salaries, fuel costs, aircraft lease and maintenance, material supply, airport and booking fees, etc. Under such unpredictable and harsh market climate as the one endured in the last 5 years, every player, provider and subcontractor becomes more exigent when it comes to paying the bills. Eventually, it significantly constrains carriers’ financial flexibility. Should something happen (e.g., an AOG), an airline may be suddenly faced with a chain reaction which not every carrier is capable of managing successfully,’ comments Skaiste Knizaite, the CEO of AviationCV.com
Despite having to deal with serious financial issues, certain airlines continue their operations in the hope that the passenger flow will remain as forecasted (commonly, those forecasts tend to be rather optimistic). However, the airline industry is very vivid, yet fragile due to unexpected events like weather conditions, terror threats, diseases and other unforeseeable factors which may instantly cut the traffic down. As a result, certain bankruptcies come as a real surprise for the general public.
But passengers are not the only ones who suffer from a sudden shut down of an airline. Pilots do, too. Though being still employed they are forced to stay on the ground, hoping and waiting until (and if) the employer resumes the flights. However, sometimes months pass and nothing happens until the carrier is being eventually forced to declare itself insolvent. As a result, during those several months pilots are being left in uncertainty while still being unpaid but obliged to the employer.
Some pilots who find themselves in such a situation tend to look for ways to change the employer (temporarily or permanently). Some choose to opt for part time solutions, e.g. working for a single season only or conducting ferry flights. However finding such opportunities on the open market might be difficult for an individual as many airlines are keen to lease part-time pilots from HR-agencies or other carriers.
‘The American Airlines’ case shows that sometimes both an employer and its employees may agree on their common future and join their efforts in order to achieve such. But that is not the case for everyone as many pilots are being left on their own after a carrier shuts down. Meanwhile, the situation is a bit different for pilots who cooperate with specialized HR-agencies. There are many cases when carriers need an extra pilot or two on a very short notice meaning that they have neither time nor resources to launch their own search and screening processes. Meanwhile, maintaining constant communication with their pilots, an HR-agency receives live update on their availability thus being able to accommodate both employers and employees who search for immediate solutions. In any case, in terms of the global shortage of experienced specialists, pilots shouldn’t deprive themselves from additional options as the cooperation with specialized agencies might bring them back into the cockpits in no time,’ comments the CEO of AviationCV.com