Vietnam Era Pilot Retirement Theory
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The Vietnam Era Pilot Retirement Theory

The United States entered the Vietnam war in earnest during the Gulf of Ton Kin resolution in 1964. The US actively used helicopters in the war effort from 1964 to 1975.  During this time, the US actively drafted, recruited and trained thousands of helicopter pilots. When the war ended, most left the service and had qualifications that nobody else had. These folks had both the training and most importantly they had thousands of hours of experience.

A shakey helicopter industry was just taking its first steps in the early 70’s; but before 1975 there wasn’t much of a helicopter industry to speak of. So, the story goes, these folks went to work for civilian contractors in the late 70's and early 80's that saw what the US Army was doing in Vietnam and adapting it to civilian world. Helicopters proved themselves in Vietnam as a viable tool for moving people and stuff around, when airplanes couldn’t land and takeoff.

Naturally, the veterans took all the jobs in the industry at that time. I believe this, because I remember in the late 80's and early 90's you couldn't find a flight school to teach helicopters and minimum requirements for most jobs were around 5000 hours. (Remember, this is based on my personal research, without the aid of the internet or any of the resources we have today, I looked it up at the public library {Which is a big building with books for those of you born after 1975}).

The average age was around 20 to become a helicopter pilot (Drafted at 18 or 19, and add a year or so for basic training, warrant officer and flight school. The midpoint of the war was 1970. So, a 20 year old helicopter pilot in 1970 would be about 60 years old in 2010. If he joined in 1964, he would be closer to 65, and if he joined in 1975 would be closer to 55. So, the theory holds that the 20 year old Vietnam era pilots should be hitting retirement somewhere between 2005 - 2015, creating a glut of pilot jobs for everyone.

And this is the theory of the Vietnam Helicopter pilot shortage. As these pilots exit the market, new opportunities exist for new pilots to enter the market and fill the shortage of helicopter pilots.

A Theory is Born…

During the late 90’s and up until 2006, this theory became widely accepted and perhaps over-used in describing demand for helicopter pilots. During this time the demand for pilots was at an all-time high. Minimums that were up around 5,000 hours dropped to 1,000 hours and even lower. The Gulf of Mexico operator's servicing offshore oil contracts were hiring 50 - 100 pilots a month in 2003 - 2004 (collectively). The helicopter emergency medical service industry started taking off due to some advances in medicine and a general realization of the value in rapid critical care transportation. It was pretty much guaranteed that if you had 1000 hours, you were going to the gulf or a tour company. There are rumors of folks being hired 'on the spot' with less; but these are rumors. 
The Dallas Morning News reported in May 2006 reported the helicopter industry nearly ‘doubling’ in the past 10 years.

It’s important to remember that until the late 90's and right around 2000 - 2002, there was no helicopter flight training industry, other than the military. During this period, President Clinton cut the military considerably from the Reagan/Bush era of the 80’s. The US Army was much smaller, so pilot ranks were shrank accordingly. Realizing the investment the Army had in its pilots, retention campaigns were effective in keeping military pilots in the military.

Combine a large number of the ‘Vietnam era’ pilots getting close to retirement age, add the helicopter industry itself ‘doubling’ between 1996 and 2006 and at the same time the US Military is now retaining its pilots, preventing them from entering the private sector in significant numbers to meet civilian operator’s requirement.

How will the helicopter industry fill this pilot shortage? Enter the civilian flight training industry….

Birth of the Civilian Flight Training Industry...

During the late 90’s the helicopter flight training industry started to become a stand-alone industry. Until this time in history, there really was no reason to train in the civilian market because there's nowhere to get up to 1,000 flight hours; much less 5,000. However, as a flight instructor, you can usually get insurance with low time, then use your flight training experience to build to enough time (1000 flight hours, seems to be the ‘magic number.’) to get a turbine flying job, which is really what you need to work in the helicopter industry.

Stand alone flight training businesses began forming in the late 90’s and early 2000’s. The Robinson R-22's were selling for 100,000 dollars (compared to 230,000 now). Credit was easy to get for flight school owners wanting to buy helicopters, and even easier for private student lending companies. 
Career training loan companies like Sallie Mae, Student Loan Express and Key Bank made a fortune selling career training loans to pay for the cost of helicopter flight training. Pretty much, if you had a pulse, you could get a loan for the $50,000 - $70,000 needed to fly a helicopter. Money was easy to come by for everyone (operators and students) and training helicopters were cheap.

Companies realized that flight training could become a lucrative business. With legitimate flight schools also came ‘less than scrupulous’ companies like Silver State Helicopters that formed in 1999 to ‘save the industry’ from the inevitable pilot shortage….The natural assumption, that worked to the advantage of the people talking the loudest (flight school recruiters) was that the Vietnam era pilots were retiring, creating a vacuum that only new pilots could fill. This is why sales pitches promising easy financing, and phrases like, “you too could learn to become a helicopter pilot if you just spend $50,000 to xyz flight school…” drove many students to flight-schools.

Everything was good, the helicopter industry was exploding, new orders for new helicopters reached unprecedented demand (Bell Helicopters had 18 - 30 month backlogs, they literally couldn't build them fast enough....again, accessibility of cheap money made it a better deal to buy a new helicopter than fix an old one, in addition to the entire industry expanding). The Vietnam era pilots were leaving their cockpits for greener pastures, there was no better time to become a helicopter pilot.

The demand for new pilots reinforced the theory that the Vietnam era pilots were leaving the industry in record numbers. This ‘vicious circle’ perpetuated itself, when really, the economy was driving demand for helicopter pilots as much as retirement, if not moreso.

Are the Vietnam Era Pilots Really Affecting Demand for New Helicopter Pilots?

The pilots trained in the US Army during the Vietnam war, are approaching retirement age. But this is one factor that is affecting the demand for new pilots. These folks are getting older, and the retirement isn’t going to occur on a date, but it’s a range of dates that refers to a phenomenon that will occur for the next 5 to 10 years. The real question is, whether or not this retirement is significant.

Another factor affecting demand for new pilots, that cannot be overlooked, is the fact that during 1996 – 2006 the helicopter industry DOUBLED in size. So, if every pilot trained in Vietnam were to continue working, the number of new pilots would have doubled anyway. The fact that most of the pilots in the industry being near retirement age is coincidental, but undoubtedly affected the demand for new pilots.

Yes, I believe the theory is real, vietnam era pilots are retiring and creating opportunity for new pilots.  But, I do not believe in the hype of the perceived 'pilot shortage' panic that has swept the training industry.  There won't be helicopters sitting around waiting for newly minted 150 hour commercial helicopter pilots to come in and fill the shoes of the retiring vietnam era pilot that used to fly those birds... 

In this economy, I also don't believe that many vietnam era pilots are retiring at all.  I think the phenomenon has been short-circuited since 2008, and retirements have stalled, inflating the supply of helicopter pilots with highly qualified, experienced professionals that have been doing this for 40 or 50 years...

What's Really Keeping The Vietnam Pilots From Retiring?

The same thing that doubled the helicopter industry, is also keeping those Vietnam era pilots in the cockpit longer, and keeping them out of retirement.  The economy...

Most of the Vietnam-era pilots had their entire retirement savings in 401(k) accounts which was what most private operators have as a pension. People that were 54 or 55 and planning on holding on until they were 60 or 65 knew they couldn't live on social security and could supplement their income with their 401(k)....Until the stock market crashed in February of 2008, and the housing market crashed, banks collapsed and the economy nearly destroyed itself...

But remember, the Vietnam era pilots wasn't the only thing boosting the helicopter industry. Easy, fast credit made it easier to expand. Lots of disposable income for everyday people means lots of sightseeing tours over the grand canyon. Less income, means fewer extravagant vacations. All of this hurt the helicopter industry.

Vietnam Era Pilots in 2011 And The Prospective Helicopter PIlot

What does the 'post economic crash world' now look like now? Vietnam era pilots that would have retired in 2008, are now holding on, waiting for the economy to recover, and not retiring ‘en-masse’ as some predict. If my 401(k) was cut in half, I'd keep working too as long as I could get out of bed.... There still are entry level jobs, but much fewer of them. The 1000 hour minimum has raised to about 1500 hours to be competitive, but hasn't returned to 5,000 hours like it was in 1980.

Although Iraq and Afghanistan has kept the US Army pilots busy for the last several years, I don’t see any of these professionals leaving the military to compete in this down economy. (Some have theorized after the wars end, these pilots will flood the market, reducing demand for civilian pilots).

The demand for pilots in the industry is down in the sightseeing tour industry. People aren’t spending money, they’re saving. Also, with the deepwater horizon disaster, offshore helicopter industry has been really hurt in the Gulf of Mexico. There was a moratorium on expansion and drilling following the disaster. Right now BP’s clean-up efforts are keeping operators going strong, but what are the far-reaching affects on the industry as a whole? The Obama administration isn’t a big fan of oil anyway; but a ‘drill baby drill’ congress is now in session, which may save that industry from over-regulation.

When the economy recovers, sightseeing should come back and offshore oil will continue to expand because this nation relies on oil, and domestic oil is important to a republican congress (If new Obama regulations don't make exploration impossible. If that happens, we'll see a shift to overseas which is why jsfirm is already popular among operators). An aging population will still rely on emergency medical transportation for treatment of heart conditions and stroke. The foundation of the helicopter industry is strong, the industry fundamentals fill a critical demand that our society needs.

Prior to the economic crash, the industry was booming; so when the economy rights itself, will the industry pick up where it left off?

The Real Affect on Helicopter Pilot Demand

The retirement theory depends on pilots retiring when they turn 65…What happens if they hold on until they’re 70 or I’ve seen some 80 year olds still flying every day. The retirement isn’t a single event that is driving the demand for new pilots. It’s one factor that refers to a phenomenon facing the helicopter industry over the next 5 – 15 years.

As it affects the demand for new pilots, regardless of how old they are now, I believe, the Vietnam era pilots aren't retiring in significant numbers until the economy re-stabilizes. I think those Vietnam era pilots that were thinking of retiring in 08 or 09, are now forced to work and hold on (just like the rest of us). But when these folks 401(k) accounts restore themselves, and they have the opportunity, they will likely retire. I think that the economic collapse is keeping pilots working in the industry that just plain can’t afford to retire….yet….

The question you must ask yourself is, when will the economy recover? Some say 2012, others 2016, but remember nobody’s ever seen a recession like this. Right now, the stock market is up, I think it's going to take a little longer for consumer confidence to return. Lots of people are out of work, so the economy has a lot of work ahead of it...

The helicopter industry will again face a shortage of pilots in 2012 - 2015 (depending on when the economy stabilizes) that will drive minimum hours down to the 1000 hour mark. But these pilots leaving won’t be significant enough to affect the industry other than reducing the minimum hours. The retirement of Vietnam era pilots will occur, whether they choose to leave the industry on their own terms, or lose their medicals and cannot fly professionally.

When the economy stabilizes, and people have more consumer income, the demand for helicopter pilots will again increase. At the same time, I see the older pilots retiring. Unlike other industries, most of the pilots that founded the helicopter industry were trained in the swamps of Vietnam. During that 10 year period, most of the pilots flying the helicopters in the civilian world, should be in their 60’s in the coming years. Combine the Vietnam era pilots slowly exiting the industry over the next 10 years, with a robust economy, the industry will still demand new helicopter pilots to fill the cockpits of helicopters in the country.