March 5, 2024
It’s no secret that the past few years have seen unprecedented growth in business aircraft flight hours, sales and pilot hiring – which is great for the industry as a whole. But, unless you’re a pilot, you may not know that the pay scales for the folks sitting in the flight deck are also going up, up and up.
“Since 2015, wages for senior captains across all types of aircraft have increased an average of 58%,” said Christopher Broyhill, Ph. D., CAM, and CEO of AirComp Calculator, LLC. “According to NBAA’s Compensation Survey, in the last year alone, compensation for all pilots, senior captains, captains and first officers increased 12%.”
What’s driving this steep salary climb rate? One factor is projected industry growth. CAE projects business aviation will need at least 32,000 pilots by 2032. Also, competition for pilots is increasing – specifically a sharp rise in hiring by airlines. Another factor: some operators are unfamiliar with how to efficiently structure pilot compensation packages.
“There are many situations where operators are just raising salaries and not looking at the overall compensation package,” explained Kellie Rittenhouse, CAM, director of aviation for Hangar Aviation Management. “This creates a false impression of what is truly happening or what should be happening in our industry.”
So, what’s going to eventually curtail this upward salary trend? The answer is simple supply and demand. But what happens when that demand starts to decline? Are stratospheric salaries sustainable, or will they come plummeting down to Earth? That scenario is what operators are struggling with today.
Creating a Compensation Flight Plan
Any pilot worth their salt couldn’t begin to plan a trip without knowing where they were departing from. And it’s the same with trying to create a fair compensation plan.
“In the past, compensation discussions among aviation managers have been based on a lot of hearsay and anecdotal evidence,” Broyhill said. “That doesn’t work anymore. They’re losing pilots because someone else is offering more money.
“To stay competitive, flight departments today have become more deliberate and data-driven in their approaches to creating salary/compensation packages,” he continued. “Our data is collected from multiple industry sources, including NBAA, and then cross-referenced with data from the U.S. Bureau of Labor Statistics. We use that to generate compensation ranges broken down into many categories like aircraft type, job title, location, department size and so on.”
And because accurate, real-time salary and compensation information are vital to everyone in business aviation, Jo Damato, CAM, NBAA senior vice president, education, training and workforce – and liaison to NBAA’s Business Aviation Management Committee – stressed the importance for all association member companies to participate in the annual Compensation Survey.
“In 2019, NBAA began partnering with an independent auditor, BDO USA, LLP, to collect the data and produce the survey. Our members can use the data related to compensation to help them stay competitive with salaries and benefits,” she said. “What sets our data apart is that it is used to create a baseline segmented by characteristics of what a typical flight department looks like, therefore allowing a company to compare their operations with its composite.
“But the more data we have, the better picture we can paint for our members,” Damato added. “We need it to be as participation-driven as possible. As our thanks for their help, any member who participates receives a free copy of that year’s Compensation Survey. Of course, it’s also made available for purchase for NBAA members.”
Type Ratings and Paychecks
“You need to make sure you’re comparing apples to apples in each situation,” Broyhill advised. “For example, a pilot flying a Gulfstream G500 might insist on the same pay as a pilot flying a G600 because they have the same type rating. But are the aircraft used in the same way?
“Because of the aircraft’s range, the G600 pilot may be spending a lot more time away from home, so the missions are dissimilar,” he added. “And, especially in today’s market, the aircraft’s mission type and frequency have a lot to do with the compensation.”
Sometimes It’s Not All About Money
As the NBAA Compensation Survey points out, money is just part of the compensation equation. And, for many pilots, it may not be the principle factor.
“I would say it’s the first step in creating a compensation plan. But the next most important element, and one that is often missed, is simply asking the pilot what is most important to them,” explained Jennifer Pickerel, vice president of Aviation Personnel International. “Employers often overlook this opportunity or avoid it for fear of implying that their desires can’t be met. We can all benefit from being reminded that different people are motivated by different things in various stages of their lives.
“We just helped a company hire a new pilot, and the interesting thing was, they actually paid less than other operators on their same airport, but their culture, pension plan, 401(k) and stock offerings were amazing,” she continued. “Their benefit package was so strong that we had no trouble finding top talent even at a lower salary.”
Companies increasing benefit packages are one change Pickerel has seen quite a bit in recent years. Opportunities that previously were only available to upper-tier managers are now being offered to more people throughout the organization as a tool to help recruit and retain talent, especially in companies with multi-generational teams.
“In too many instances, the flight department managers think it’s all about money, but often it’s not,” Rittenhouse said. “Maybe it’s having more set time off to meet changing family needs. Scheduling flexibility is not always possible in the charter or corporate world today, but knowing about someone’s needs can help us work to help them achieve their best situation.”
“Believe it or not, compensation is actually the least sustainable element of retention today,” Pickerel said. “Someone will always pay them more. But for so many people, the company culture they’re working in often moves the needle. Many of us have quit a high-paying job because of a toxic work environment.
“When it comes to compensation and retention, there is no one best solution,” she added. “The package has to be aligned with each person’s needs and values. But ultimately, fairness is key. Fairness to the employee, their fellow team members and the company. That’s the only way to ensure sustainability for the employees and the flight department.
“Even with all the positive growth in our industry, we’ve seen legacy flight departments close down and go to fractional providers,” Pickerel continued. “Demonstrating the value of the flight department is a constant concern. To prepare for the unknown, leaders are best served to understand what competitive compensation looks like with tools such as the NBAA Compensation Survey while ensuring their company culture is a healthy one.”
International Business Aviation Council Ltd.