By Mike Cordak, RICP®
As if Delta Air Lines pilots didn’t already have their hands full, a lasting shortage of pilots has impacted airline operations and flight restrictions. Forbes reported that North American airlines are down 17,000 pilots. Some analysts believe one remedy for the shortage is to raise the mandatory pilot retirement age from 65 to 67.
Such a move would affect many Optimum Wealth Management clients. How has the shortage unfolded, what has it caused, and how would raising the pilot retirement age change the industry?
Why There’s a Pilot Shortage
The Federal Aviation Administration (FAA) sets the mandatory retirement age at 65 for many valid reasons, including pilot and traveler safety, age-related issues, and staying in line with international flight standards.
The steady drumbeat of retiring pilots contributes to their overall decline in numbers. This comes as demand for air travel has gone up. Even with new airlines being founded worldwide, the shortage has resulted in more canceled flights, fewer travel options, poorer customer service, and extended layovers.
All those factors have affected airlines’ earnings and market share. Inflight Pilot Training reports that lower revenue has made it difficult for airlines to upgrade offerings, expand to new regions, and invest in new technology. Airlines have been forced to raise customer ticket prices, which doesn’t exactly thrill frequent travelers.
These factors have spurred the call to raise the pilot retirement age from 65 to 67—something the FAA isn’t eager to do.
What Would Increasing the Pilot Retirement Age Accomplish?
Industry insiders recommending raising the pilot retirement age believe it may quicken relief. Supporters say it may allow airlines to use more experienced pilots as training and advisory resources. The increase might also help future pilots gain necessary flight hours, helping them obtain more advanced roles in the air travel industry.
The International Civil Aviation Organization (IACO) places a premium on good health and wellness in pilots over age 60. Pilots over that age go through mandatory medical evaluations. Even if the pilot retirement age is increased, American pilots over 65 still won’t be allowed to lead international flights and would be restricted to domestic flights and smaller planes.
If that development happens, it could cause problems with younger pilots still in training. Older pilots switching to smaller planes would need to be retrained and requalified, which could take anywhere between three and five years. With limited space in those programs, younger pilots may find themselves backlogged or even forced out of the usual training cycle.
The Future of the Retirement Age Requirement
Although some trade organizations feel strongly about raising the mandatory requirement age, there is still a lot of resistance among political and aviation authorities.
Last February, the U.S. House of Representatives approved the FAA’s 2024 reauthorization for five years, an act that approved raising the retirement age to 67. However, the Senate Commerce Committee nixed that portion of the act by a one-vote margin, claiming more research on the issue was needed.
The Air Line Pilots Association (ALPA)—most of whose members oppose the higher retirement age—says raising it would result in a “lower utilization rate for pilots, rather than an increase.” The ALPA claims that since airlines give pilots with more seniority an edge in assigning flight schedules, those over 65 could squeeze out younger pilots.
The ALPA also contends that more pilots may go on leave if the retirement age is raised since, according to them, 40% of pilots over 64 are currently on health-related leave.
Since the FAA Authorization Act passed without raising the age and Congress has finalized the deal, it’s uncertain if or when the pilot retirement age issue might resurface. It’s worth keeping an eye on.
Financial Advice for Airline Pilots
As a Delta pilot myself, working on my peers’ financial and retirement plans is extremely important to me. At Optimum Wealth Management, my fee-only fiduciary service issues pilots customized advice from someone they can trust—and who knows their experience.
To schedule a complimentary meeting, get in touch online, call (678) 778-2694, or email mcordak@optimumwlth.com. I look forward to speaking with you.
About Mike
Mike Cordak is founder and owner of Optimum Wealth Management, a Registered Investment Advisor serving the financial, retirement, and wealth planning & management needs of airline pilots—from hiring all the way through the transition to retirement and beyond. As a Delta pilot himself for more than two decades, Mike’s goal is to cultivate authentic life-long relationships with pilots to help them and their families create, grow, and preserve their wealth. As someone familiar with the pilot lifestyle and their unique goals and concerns, he offers a different investment strategy than the average advisor. Combining a fee-only business model with a fact-based tactical investment management style, he creates an environment that allows him to fulfill his mission of bringing clients financial peace.
Mike received his finance degree from Gies College of Business – University of Illinois Urbana-Champaign before pursuing a career as a pilot. After losing the defined-benefit plan at his airline in 2006, he entered the financial industry, inspired to create his own firm and take control of his finances to pursue financial stability after retiring as a pilot. He obtained the Retirement Income Certified Professional® designation, which means he has a legal and ethical duty to put clients’ interests first.
Mike and his wife, now empty nesters, love getting together with their kids as often as their schedules allow. Outside of reading financial news, he enjoys flying his own plane, golfing, hiking, skiing, and playing tennis and pickleball. He also can be found enjoying good wine and food, spending time at the beach, or traveling to foreign countries. He also has an interest in the Atlanta Mission, which helps out homeless people, the Woodstock City church, and contributes to various young people going out on mission trips and working on college campuses. To learn more about Mike, connect with him on LinkedIn.
