Technician Shortage?

Some news reports are announcing that a maintenance technician shortage is looming shortly because of the so-called emergence of the industry from a long-term recession. There is some doubt about this. Just take a careful look.

AMR bankrupcy

We are all familiar with those laid-off technicians seeking employment in other fields which pay better and offer more security. And, of course we know of the recently announced 4,600 or so technicians who will go out the door along with 400 pilots in a total of 13,000 odd total planned layoffs in the American Airlines bankruptcy filing. (AMR has 130,000 employees.) We can only wonder where all the technicians will go. Oh, and incidentally, American “reassured” its employees on their pensions. But, it terminated its defined benefit pension program only recently. It has since handed it over to the Pension Benefit Guarantee program … funded by the pension sponsors and most likely taxpayers as backup, because the PBGC is running out of money.

The government operates the PBGC, which routinely will pay only a small part of what is owed. American on Feb. 1 announced that it will lay off the 13,000 total employees but was still interested in plans from their unions to ameliorate this result (early retirements, voluntary termination, etc.). The union contracts are canceled in the court proceeding. They also said that they intend to outsource 40 percent of their aircraft maintenance activities! (USA, China, South America, Europe?) There is no doubt that there will be further consolidation in the airline industry which means more layoffs will probably come. (For info on pension crisis in U.S. generally see: JackDean@PensionTsunami.com.)

General aviation and avgas

General aviation activities are at all time low … fuel costs going to between $6 and $15 a gallon in the near future … depending on who you believe. Private and business owners have curtailed their flying substantially and will continue to do so as the costs rise. Flight schools will come to a halt as the spike in av-gas prices continues.

Speaking of fuel you should have noticed that Chevron, Exxon, BP, and other major brands have stopped their brand retailing in California and perhaps other states to come. They all have sold the retail market for av-gas to distributors so that they no longer appear as the seller. Pretty soon, if not by the time you read this, only one distributor of av-gas in the U.S. will handle sales of all the av-gas. You should know what this means: The major brands will still provide the fuel, but who knows for how long and at what cost? By the way, jet fuel will not be affected directly since it has no lead. Av-gas from China or Canada may be in our future … As usual, we have the environmental people, among others, to thank for this because of Prop. 65 in California, which relates to lead in aviation fuel. All of the principal fuel people and some FBOs have been sued and the case is presently winding its way through the courts of California. This will raise the bar on fuel costs once more to whatever the traffic will be able to bear … If this should occur, general and other piston business aviation could come to a halt. Technicians will be affected naturally since no flying means no maintenance work…

And, finally, of course, the coming election poses the specter of more taxes, user fees, and the like, from our present leader, if he is re-elected. I think it’s time for further tightening of your seat belt, until we see what will happen in November. It’s going to be bumpy and by then, it won’t be pretty.

Overseas work

Some commentators have suggested that you can earn big technician salaries overseas. This of course requires that you give up your family and homes and move, in most cases. You can take short-term employment to fill your money gaps but on the whole they will require longer term commitments. There are some tax advantages in working overseas, so long as the local taxes are reasonable over there.

Some laid-off techs are seeking work overseas. There seems to be strong growth in overseas maintenance activity, according to some observers, and there are reports of salaries over 100Gs with expenses. Not a bad deal, if you want to leave. At home, salaries vary greatly but not anything like 100Gs. Before you accept any overseas position you should examine the deal very carefully … because once you are overseas you are locked in by costs of return and other restrictions usually involving money. If it sounds too good to be true, it’s usually not true!

MRO report

Look at the MROs … all mostly non-union with most paying less wages than an airline or corporate flight department, attracting new less-trained mechanics to do their work. They will be expecting to hire many laid-off technicians. All the technicians laid off so far that I know, seek jobs with more security, like with FedEx and UPS. These technicians would have more security than any other firms. Of course many technicians have gone to the government and found the best security in the FAA (jobs forever, never laid off, great pensions) and other government agencies, ICE, DEA, and various local law enforcement, and fire-rescue activities. There are still many technician maintenance opportunities in the government area. If you are still in a private enterprise maintenance activity you better have “plan B” ready for next year if not before. Remember, it’s always easier to obtain a new job while you are still employed. Pretty soon we’ll have more government employees than private enterprise … are you ready? Remember just because a company is large is no real protection … think Boeing … closing its plant in Wichita.

I have a report on MRO activities from a reader. He was in the airline maintenance field for many years and the layoffs hit him with some finality. He joined an MRO thinking it would be different. He said it’s not. In the airlines, he said, he had a union to protect him from the poor decisions of upper management related to safety. This protection allowed him to perform his job function with safety uppermost in his mind. He could do the “right thing”… as he said. He continued by saying in his opinion the rise in unlicensed and less skilled mechanics is going to lead to increased risk of accidents. (Note AMR above ... 40 percent). The increase in the number of unlicensed and less-trained mechanics is overtaking the number of those who are licensed with more training. He says this situation, if allowed to continue throughout the industry, can only lead to eventual disaster. FAA, by the way, has frequently admitted that it cannot conduct adequate surveillance on many MRO’s and other outsourced maintenance activities, especially those located overseas. They say they don’t have the staff … just look around you at the FSDOs and regional offices for example and count the staff …

What’s the future?

Some will contend that by continuing to indicate a need for technicians employers are guaranteed a continuing source of applicants at low starting pay. Some think that if there is a surplus of applicants for jobs then the salary levels will continue to be kept at a low level, acceptable to fringe and marginal maintenance activities, thus guaranteeing more profit for their work.

Yes, no doubt, there will be a greater need for technicians over the next 20 or 30 years simply because some of the people working now will be retiring. But this is nothing new, and is expected as normal attrition. However, many technicians today looking toward retirement are faced with little or no pension support or any other type of financial security. These people can only look forward to working well into their 70s in order to pay the bills.

Stephen P. Prentice is an attorney whose practice involves FAA-NTSB issues. He has an Airframe and Powerplant certificate and is an ATP rated pilot. He is a USAF veteran. Send comments to aerolaw@att.net.

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