Insurance Implications of the Pilot Shortage

The current pilot shortage is wreaking havoc on aircraft owners, including the airlines. Airlines are dipping into the corporate aircraft pilot pool using hiring bonuses and higher wages, and the natural consequence is this practice flows downstream. Heavy jet owners who lose a pilot have to dip into the midsize jet pilot pool, who in turn, are having to dip into the Light Jet pilot pool, etc. There simply aren’t enough qualified candidates. The simulator training schools like CAE Simuflite and FlightSafety can’t keep up with demand for recurrent training slots because their instructors have been hired away as well leaving empty simulators with no instructors.

Our team of aviation insurance brokers are fielding calls daily from our insured aircraft owners who have to submit very weak pilot candidates because the more qualified pilots have taken positions with other companies for more pay/benefits. In addition, these same aircraft owners are trying to send their pilots to the insurance-required annual simulator recurrent training only to be told the only available slots are six months to a year in the future. Aviation Insurance companies insist the pilot shortage is not their problem and cannot influence the quality of pilots they approve or the timing of the required recurrent training because their risk profile/profitability is primarily based on the match of pilot experience and the aircraft being insured.

There are no easy answers. To compound the issue, we are also in a hard insurance market where insurance company underwriters have very strict underwriting guidelines. With regard to the insurance-required annual recurrent training, your best bet is to immediately schedule your next recurrent training event with the provider upon completing the current year’s training. If you wait and there is no slot available, most insurers will only allow a 30-day extension past the deadline. Pilots are in a great bargaining position at this point, and although it may be a tough pill to swallow, the salary to procure or retain a well-qualified pilot for your aircraft may have to be increased substantially. Last, when submitting a new pilot to your insurer for approval, especially if they are less qualified, always provide a current updated full pilot history form to give your AssuredPartners Aerospace broker the best chance to develop an approval strategy that will be successful. You can count on us to fight hard on your behalf.

Contact an AssuredPartners Aerospace broker with any questions.