As the aviation industry faces yet another challenge, the doctrine of survival of the fittest comes to play.
With the continuous spread of the COVID-19 disease around the world, the aviation industry has been severely affected with global passenger traffic dropping by 14.1% with areas such as Asia-pacific dropping as much as 41% in February 2020 compared to February 2019.
What does all this mean for the aviation industry?
Is this the straw that will break the camels back?
Without any doubt, the COVID-19 pandemic has been the biggest crisis that has ever affected the aviation crisis however there is still hope!
Airlines as well as other aeronautical institutions will most certainly have to adapt and restructure their way of operation in oder to service this.
Taking into account the evolving situation with COVID-19, there are various aspects of the situation that will lead to the eventual paradigm shift in the industry.
These are some of the ideas to keep in mind.
The air transport industry is not only a vital engine of global socio-economic growth but is also of vital importance as a catalyst for economic development, creating direct and indirect employment, supporting tourism and local businesses, and stimulating foreign investment and international trade.
Due to this, a crisis in the aviation industry will most certainly cause mass havoc to millions of people considering its deep roots in the global economy that have grown over the years.
Knowing this, pilots as well as other members of the aviation industry, should have a few tricks up their sleeves in case of any calamity in the aviation industry, thus the purpose of this study. To incorporate into the teaching curriculum, the various aspects of global events that affected the aviation industry and how pilots and other members of the industry should prepare for such situations.
Throughout the years, the aviation industry has proven to be very volatile. From wars to economic crashes, epidemics to natural disasters, aviation has always been a casualty. Despite the rare occurrence of such events, millions of dollars, if not billions, are lost due to the damage caused by such events.
In order to understand how to deal with a crisis, one must know the various calamities that affect the aviation industry and how it happens. Therefore, the first section of this presentation will cover the various occurrences that historically shook the aviation world and how the aviation industry recovered from them, whereas the second section of this presentation will cover the recommended response that pilots and other members of the aviation industry should take in the event that any crisis such as the ones included in this presentation should occur.
Despite government intervention and financial aid, airlines with weaker financial structures will most certainly not have the capacity to withstand this crisis.
With financial obligations such as loans and leases with little to no means of revenue, a number of airlines will become insolvent.
To recover their money, banks will sell off assets owned by airlines such as aircraft, maintenance equipment and hangars at a throw away price.
The one thing we know for sure is that aircraft will not disappear into thin air! Aircraft will stay on the market and will need to be operated creating many opportunities for low cost operators to start up.
To avoid monopoly and unfair competition in the industry, the government will assist new low cost operators if needed in an attempt to restore the competition in the market and protect consumers’
The emergence of low cost operators will lead to a significant drop in ticket prices which will challenge bigger, more established operators with higher ticket prices and lead to an overall reduction in ticket prices for the consumer.
This reduction in ticket price will entice and encourage more passenger travel leading to an overall growth in the industry as a result of healthy competition between airlines.
New low cost carriers emerging as a result of bankruptcy of airlines during the COVID-19 crisis will have no obligation to keep pilots from former airlines. As a result, these airlines will let go of older, more experienced captains due to their high salaries and bring younger pilots will lower salaries to reduce operational cost.
As a result, experienced pilots close to retirement will be offered good retirement packages which will allow for the entry of newer, younger pilots into the industry.
This will lead to an eventual increase in demand of younger pilot thus exerting pressure on flight school to deliver ready pilots into the industry.
What does this mean for flight schools?
With the increase in demand for younger pilots in the industry, flights school will be required to adapt into producing industry ready pilots.
This will lead to the extinction of modular programs and introduction of high quality courses such as the Integrated ATPL and College programs offered by accredited flight schools.
Because of this, trainees who are graduates of industry ready programs such as integrated ATPL and the College programs will have a significant advantage finding work in the airlines.
In addition to this, due to higher demand for pilots from the industry, flight schools will invest in better equipment such as simulators and more efficient trainer aircraft that will better prepare trainees for the industry.
It is estimated that the industry will fully recover and surpass 2019 by 2022!
A structured college flight training program such as the Integrated ATPL program or the College Program will take approximately 24 months to complete therefore it is a great time to star your aviation program!
In the aftermath of the COVID-19 Pandemic, larger, more established airlines will cut back on less lucrative routes and concentrate on more profitable routes in an effort to cut cost.
Because of this, low cost carriers who emerged in the aftermath of the COVID-19 crisis will seize these routes as their profit margins will still be high considering the fact that they bought their aircraft and other assets at a fraction of their actual price.
This will result in low cost carriers serving routes between smaller towns and cities and bigger airlines serving routes between big cities with higher passenger traffic and higher disposable incomes.
Just to widen your perspective;
If Air Canada stops its daily Boeing 737 flight of 162 passengers from Quebec City to Chibougamau operated by two pilots, a new low cost airline will take this route and operate a Bombardier Q 400 flight of 80 passengers and operate twice a day operated by four pilots and therefore employing more pilots while operating a route with a smaller aircraft.
Route restrictions by larger airlines will lead to more opportunities for smaller low cost airlines and employment of more pilots at the same time leading to growth of the industry.
The goal of an airline is to reduce its operating cost while maximizing on profits.
As airline’s biggest expense is fuel, airlines will gladly retire, sell or lease older airworthy aircraft simply because they consume more fuel and opt for more efficient jets in an attempt to reduce operating cost.
This has led to the eventual retirement of the Boeing 747, Boeing 757, Boeing 767 among others.
The retirement of these aircraft was imminent before the COVID-19 pandemic however the crisis acted as a catalyst to speed us the retirement process of these aircraft.
Thus in an effort to reduce operational costs and dampen damage caused by the crisis, airlines operating older aircraft have opted to retire older aircraft without hesitation giving rise to new and more efficient aircraft in the industry which has also lead to less pollution in the environment.
The retirement of older aircraft will be an advantage to operators such as cargo or 3rd world countries as they will have an opportunity of increasing their fleet for very little initial cost, prompting a wave of startups.
Over the past several years, the development of civil aviation has been broadly impacted by several crises directly or indirectly related to aviation. The U.S. terrorist attack on September 11th, 2001, the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, the 2008-2009 world financial crisis and the recent COVID-19 global pandemic have all been detrimental to the overall profitability of the air transport system.
Despite this, history has repeatedly shown that the aviation industry has a tendency to recover from crises and grow even more!
At stake is not if the traffic will recover, but when it will recover!
The global occurrences discussed in this presentation include:
– Epidemics and Pandemics
– Economical crises and Recessions
– Terrorist attacks
– Natural Disasters
– Political Tensions
– Aircraft Accidents
The graph above is a visual representation of the growth of aviation throughout the years. As shown, there have been crises in the past that were considered the straw that broke the camel’s back. However, the aviation industry recovered and soared higher after each crisis, which has led to an overall positive growth in the industry that we see today!
With this trajectory, we expect a similar outcome with future crises, including the current COVID-19 pandemic. The most likely scenario being the industry will experience a downfall for a few months with a few companies going bankrupt, but recovering soon after and having rapid growth as seen before.
Aviation being a very delicate industry, epidemics and pandemics have proven to be lethal!
With governments restricting travel, closing borders and implementing social distancing into the cultural norm, airlines are left without business leaving thousands if not tens of thousands unemployed.
SARS EPIDEMIC (2003)
According to the International Air Transport Authority (IATA), the SARS outbreak cost Asia Pacific carriers $7 billion in revenue. North American airlines lost $1 billion, while European carriers largely escaped unscathed, analysts say.
During the SARS epidemic, global passenger traffic fell by 18.5% in April, 2003 compared to a year earlier, with a drop of almost 45% in Asia-Pacific passenger traffic. Despite the heavy blow to the industry, it took nine months before international passenger traffic returned to normal, IATA said.
COVID-19 PANDEMIC (2019 – 2020)
In the midst of the COVID-19 Pandemic, air travel has been one of the hardest-hit industries. As soon as news of the virus became widespread in late-January, 2020, travel demand to Asia from the rest of the world plummeted. Travel reduction to other parts of the world soon followed with most airlines grounding a significant percentage of their fleets.
According to analysts, the coronavirus will “definitely” surpass the $7 billion SARS hit.The global aviation industry, which generated $838 billion in revenue in 2019, will lose more money this time compared to SARS for several reasons:
1. The number of Chinese air travellers has ballooned since 2003. With China taking a big chunk of the world stage, its civil aviation market has grown to the world’s second-largest behind the United States, hauling in $151 billion in revenue in 2019.
2. Flight suspensions and travel advisories could last longer than they did during SARS, which would weigh on international airlines.
As the culture of social distancing is implemented more and more by world governments, the main goal of aviation – to bring people together – is directly opposed. With the crisis still ongoing (at the time of writing), the doctrine of “survival of the fittest” will be in play as a threat to some and a promise to others.
Despite the difficult times, the aviation industry is expected to eventually pick up as history has shown and recover to a more positive trajectory. The most likely scenario is that stronger airlines take a bigger share of the industry by absorbing or merging with other airlines and weaker airlines going to the dogs.
A financial crisis affects all nooks and crannies of the world economy and aviation is certainly not an exception.
The 2008 world recession was caused by the fall in the real estate market. Investing in real estate was considered a safe, as well as lucrative investment, thus banks and investors were eager to get a piece of the pie. This was evidently shown by pumping billions of dollars into the market and building more houses in order to get their returns through mortgage returns. At first, the investment was very profitable with banks and investors giving mortgages to those who could afford it. These are known as Prime Mortgages.
The situation grew sour when investors gave mortgages to families who were not able to pay off their monthly mortgage payments which lead to defaults.
These are commonly known as sub-prime mortgages. This lead to more empty houses as these families were evicted. The result was an influx of supply of houses in the market which in turn reduced the demand, causing the price of houses to plummet drastically. While this was happening, those who were able to pay their mortgages (Prime mortgages) were dissatisfied because they were paying expensive mortgages while the value of their homes was plummeting.
This made them leave their homes to find a cheaper home with a cheaper mortgage due to the decreased value of homes in the market. This caused a further influx of houses into the market causing further reduction in value of houses in the real estate market. Investors tried to pull back by selling back mortgages. However, no one was willing to buy them, further causing banks to go bankrupt such as the infamous Lehman Brothers. Individuals who had investments with banks and other financial institutions lost all their money during these turbulent times.
This caused stocks to plummet even further. Due to lack of money and funds, consumers pulled back on discretionary spending, cancelling or downsizing planned vacations; businesses tightened their belts and cut corporate travel expense accounts causing the airlines to reduce operations while still maintaining running costs.
In addition to this, airlines were greatly affected by high fuel prices caused by the recession, which greatly reduced profitability. The combined effect of these two factors led to some airlines going under and those who survived had to incur great losses. During this time frame, airline stocks declined 68 percent. Nevertheless, in the years following the recession, the airline industry saw growth with employment slowly recovering and passenger traffic increasing to what we see today.
Except for the recent global COVID-19 ‘pandemic’, there are very few events in modern history that can rival the immediate impact of the 9/11 terrorist attacks on the United States and the world economy at large.
The airline industry was particularly hard hit because commercial airliners were the weapons used by the terrorists in the attacks against the World Trade Center and the Pentagon.
In the immediate aftermath of the attacks, the U.S. government grounded commercial fleets for three days, resulting in a 31.6% reduction in travel volume in September, 2001 compared to that same month in 2000. This obviously generated massive industry losses.
The 9/11 attacks compounded financial troubles that the airline industry already was experiencing before the attacks.
Share prices of airlines and airplane manufacturers plummeted after the attacks.
Midway Airlines, already on the brink of bankruptcy, shut down operations almost immediately afterwards. Other airlines were threatened with bankruptcy, and tens of thousands of layoffs were announced in the week following the attacks.
The reduction on air travel demand caused by the attack is also seen as a contributory reason to the retirement of the only supersonic aircraft in service at the time, Concorde.
To help the industry, the U.S federal government provided an aid package to the industry, including $10 billion in loan guarantees, along with $5 billion for short-term assistance.
Despite this, it took three years for the global airline industry to recover the 6% decline in revenue between 2000 and 2001. It took the global airline industry five years to report its first net profit after the September 11, 2001 terror attacks.
It is not an understatement to say that 9/11 attacks caused a paradigm shift in airline operations. With new security measures and new protocol in place to prevent the unspeakable from happening again, the 911 attacks were a deeply painful lesson that the aviation industry learnt from and eventually recovered from.
The effects of war are almost always detrimental to the aviation industry.
War and conflict affect countries in strategic flying zones.
For example, the downing of flight MH17 over Ukraine in 2014 shows that situations on the ground can have disastrous effects in some airspace. Altitude is no guarantee of safety and certain areas may need to be circumvented, costing time and fuel.
(Crash Site Of Flight MH17 In Eastern Ukraine, 2014)
In addition to this, while North Korean missile tests seem to have abated following the June 2018 summit between U.S. President Donald Trump and Kim Jong-un, the airspace around North Korea is subject to restrictions causing inefficiency to airlines due to circumnavigations that have to be made to avoid the airspace.
During the Iran-Iraq war which lasted 8 years, travel to the Middle East was considered very dangerous which in turn caused retarded growth and development to the region.
With Iran and Iraq being oil producing giants in the world, the production of crude oil in both countries experienced reduced production and lowered supply of crude oil by 6% in the world market. From 1978 to 1981, the highest price was a record $115.34/barrel.
As airlines’ main expense is fuel, the high price of oil caused a massive reduction in profitability of the industry. High fuel prices and the reduction in passenger traffic due to the war created a lethal concoction for the industry which sent a number of airlines under.
Despite the war lasting 8 years, the war finally came to an end in 1988 which led to stable oil prices and improved passenger traffic.
From hurricanes to flooding, earthquakes to landslides, there have been some deadly natural disasters causing mass disruption for airports and airlines. With damaged airport infrastructure, maintenance and fuel operations can prove to be very dangerous. This reduces airport efficiency, which in turn reduces passenger traffic. In 2011 alone, tornados, fire, tsunamis and volcanic eruptions disrupted travel and devastated airport operations around the world.
The 2011 eruption of Grímsvötn caused disruption to air travel in Northwestern Europe from May 22-25, 2011. A total of 900 flights (out of 90,000 in Europe) were cancelled as a result of the eruption.
Upon the onset of ash clouds, several airports in Northwestern Europe closed their doors, causing thousands of flights to be delayed or postponed to a later date. On May 24, more than 1,600 flights were grounded as ash clouds travelled over Scotland.
Also In 2011, Japan experienced an 8.9 magnitude earthquake which triggered a massive tsunami with waves roaring to 10 meters high. The event lasted only 5 minutes but would have pernicious effects that would last years.
Following the disaster, Japan closed its two main airports Narita and Haneda, causing major carriers to cancel flights to Japan. Hundreds of flights were cancelled. This left thousands of people stranded because of the earthquake.
Aviation is a sector inherently exposed to political risk because it is so visible. Whole societies depend on it, and it is seen as symbolic when it goes wrong. As aircraft crisscross national airspace, airports are targeted by disruptive and destructive actors. Air travel is also viewed as a non-green travel option by some. It is fragile and vulnerable to climatic extremes, societal and economic tension and weaponised technology. This means aviation is liable to be affected by shifting international political and security situations, as well as new regulations.
The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition.
For example, in response to new EU sanction to Russia in 2014, Russia threatened to return to its Soviet-era airspace restrictions.
This would result in an astronomical rise in ticket prices for flights from European to Asian countries so as to be able to fly abeam the Siberian Airspace and would lead to western airlines cancelling flights or improvising complicated and expensive alternative routes.
Aviation experts say a flight ban would cause hundreds of cancellations in the short term and over time could hold severe consequences for European-based airlines, especially ones that operate flights directly to East Asia.
Despite no say in such political discussions, airlines are subjected to these laws which are sometimes a threat to their overall survival.
The world’s airlines are transporting more passengers and flying more miles than ever before. While accidents are rare, several studies suggest that passenger concerns about flight safety appear to be on the rise. Some studies have shown that at least 30 percent of air travellers use perceptions of an airline’s safety record as a basis for deciding which airline to choose.
Public awareness of airline safety issues is likely to increase simply because of an increased number of passengers and frequency of travel. Even if the airline industry maintains its current accident rate, the raw number of accidents will increase because of the increase in flights. In this context, public perception of the airline industry is even more demanding. Due to this, one accident in the industry can spark uncertainty in the public’s confidence which spreads like wild fire due to the media’s influence over the public opinion.
Ethiopian Airlines Flight 302 crashed in the morning of March 10 2019 after taking off from Addis Ababa, Ethiopia on its way to Nairobi, Kenya, killing all 157 people on board. The plane was carrying passengers from around the world, many of whom worked for the United Nations.
Lion Air Flight 610 crashed into the Java Sea in Indonesia on October 29 2018 after taking off from Jakarta. All 189 people on board died. The plane was scheduled to make a one-hour journey to Pangkal Pinang, on the island of Bangka.
Shortly after the crash of Ethopian Airlines Flight 302, the Boeing 737-Max aircraft was grounded and investigation began revealing the infamous MCAS system on the aircraft that caused the accident. This sparked global attention causing ratings on the Boeing 737-Max to plummet even further.
Further data on the 737 MAX shows that after the crash in Iran of a 737-800 operated by Ukrainian International Airlines, consumer willingness to fly dropped dramatically to lows seen just after the Ethiopian crash. Only 36.5% of Americans would be willing to fly in this aircraft, while 61.5% would be unwilling. This is a big drop from when the numbers were previously 46% willing and 48% unwilling.
Besides the passenger reluctancy to fly, airlines who operate aircraft that are faulty such as the case of the Boeing 737 Max are forced to ground a big part of their fleet during investigation which reduces their revenue due to a reduced number of passenger traffic and less routes flown.
Airlines who also secured large orders for such aircraft whose airworthiness is question face financial hardship due to the millions, if not billions of dollars spent in buying or leasing these aircraft.
Even though aircraft accidents do not occur often, one rotten apple certainly spoils the whole bag, painting a bad picture for the rest of the industry. This leads to lower passenger traffic and an overall retarded growth in the industry, affecting millions.
When handling crisis, use the PIOSEE strategy;
The first step in solving any crisis wherever it maybe is by recognizing it! Prioritize each problem according to its urgency. Always focus on one problem at a time. Acceptance is key.
From the problem, acquire and learn all available information in the situation and note the cause and effects in the situation.
From the information acquired, gather all options for a possible solution.
Choose the best and most efficient option that will lead to a suitable outcome.
Once an option has been selected, apply it! It is crucial not to skip this stage. Do not have second thoughts when executing the option. Be conscious and assertive in your choice.
Once the option has been executed, look back and evaluate the outcome and make a judgement. If the outcome is good, continue to the next problem. If the result was unsuccessful, restart the process again.
– It is important to ensure that all steps are followed to ensure a positive result when tackling a problem.
– If the result is unsuccessful, do not give up! Try until you come out successful!
Jobs are much more than just the way we make a living. They influence how we see ourselves, as well as the way others see us. They give us structure, purpose, and meaning. That’s why job loss and unemployment can be so stressful.
Job loss and unemployment involves a lot of change all at once. Beyond the loss of income, losing a job also comes with other major losses, some of which may be even more difficult to face:
• Professional identity
• Self-esteem and self-confidence
• A daily routine
• Purposeful activity
• A work-based social network
• Sense of security
It’s normal to feel angry, hurt, or depressed, grieve for all that you’ve lost, or feel anxious about what the future holds. But no matter how devastating your losses seem, there is hope. With time and the right coping techniques, you can come to terms with these setbacks, ease your stress and anxiety, and move on with your career.
During this dark time, it is important to be at your strongest!
Some of the tips to handle this situation may be to:
1. Apply for employment insurance as you look for your next job.
2. Contact previously acquired contacts from your former job (network for new employment).
3. Think of your job loss as a temporary setback.
4. Accept the reality and look for a silver lining.
5. Avoid alcohol and drugs.
6. Focus on what you can control. Do not focus on items that are out of your control.
7. Take care of yourself: eat well, sleep sufficiently, exercise and practice hobbies or get new ones!
* It is important to use the POISEE technique when dealing with a crisis such as this!
* Keep a sound mind and do not give up as it is only a temporary setback.
Even though a rare phenomenon, employees may be laid off due to a number of reasons.
These reasons may include: the company went bankrupt, the company is downscaling due to a crisis, or there is simply no demand. Being unemployed will certainly cause financial hardship that no-one wants to endure. Despite this, there is still hope!
Being in an industry that is subject to constant change, one should always be especially keen to secure employment insurance in case of the worst case scenario, as it is always better safe than sorry!
With employment insurance, one is able to receive partial income replacement if a job is lost for whatever reasons. It is to be noted that these payments are treated as taxable income and therefore, applicable federal and provincial taxes will be deducted.
As with all benefits, specific qualifications depending on state, province or country, need to be met to qualify. The rules vary by state, but typically employees have to have lost their jobs through no fault of their own, have a minimum level of prior earnings from recent employment, be ready to take new positions immediately, and be actively seeking work. More information on this is publicly available on the internet as well as through local government offices close to you.
It is an understatement to say that employment insurance is a life saver and should not be taken for granted!
As a member of an industry coveted for its good pay, financial knowledge is king!
While earning a considerable sum of money is good, knowing when and how to spend it is even better.
Having seen the various crises that have affected the aviation industry in the past, one must always be prepared financially in case of unemployment or even bankruptcy. Again, always better safe than sorry!
Financial literacy is not something that human beings are born with, but it is certainly a huge advantage for the people who have it. The best part about acquiring financial literacy skills is that anyone can learn them. You don’t need to be mathematically gifted to learn how to manage your money, or learn how to read and interpret a financial statement, or how to file your own taxes. Below are some tips that you should consider when handling your finances:
1. Learn to Budget
Learning how to spend can save you lots of money and time! The basic principle of budgeting involves allocating money to different activities or things before spending it. Some people prefer using Excel spreadsheets or
apps like Mint to manage their expenses. Others grab a pen and paper and do it the old-fashioned way.
Despite the method used, it is crucial that the practice is continued in order to make it an eventual habit.
When making a budget consider:
a. Doing a monthly review of your income, expenses and investments.
To create a personal budget, it’s a good idea to know the following: how much money you take home after paying taxes; how much your expenses cost; and how much money you contribute to savings and investments. When you keep a monthly tally of your income, expenses and investments, you can have a clearer snapshot of your financial picture.
b. Set (realistic) financial goals.
The way you’d build a budget to save for a vacation might be different than if you’re saving for a house. If you know what you’re saving for, you can create a budget tailored towards that goal which can also help reduce the urge for impulse purchases. Having a financial finish line to aim for can also help you maintain your spending routine and encourage you to investigate more affordable spending options when necessary.
c. Understanding your spending and saving habits.
There is likely going to be a percentage of your money you will have to dedicate to necessary expenses (like a mortgage or student loans), another percentage for wants (like shopping or dining out) and a third portion solely for saving. Consider what percentage of your income you can put aside for savings each month and try to stick to it as best you can.
d. Set up expense guardrails to avoid you from overspending.
If your goal is to save, it’s a good idea to consider setting caps on how much you spend on non-essential items (like entertainment or dining out) so you don’t accidentally spend more than you want to. You can also monitor any automated payment statements you may have so you’re aware of any extra charges (like phone data overages) you may have incurred.
e. Tracking, monitoring and adjusting your budget as needed.
Think of budgeting as a marathon and not a sprint. To help you get the most out of your budget, you must play an active monitoring role and make adjustments as needed. For example, if you have a sudden unexpected expense, you’ll likely have to readjust your budget or, if you have one, use your rainy-day fund to handle those costs. Whether your financial goals are big or small, making a budget can help you track your progress towards reaching them.
2. Having an Emergency Fund
The importance of an emergency fund is critical to say the least. As previously seen, having an emergency fund can save during time of crisis or even unemployment.
A continuous habit of setting aside money for an emergency fund and treating it as a non-negotiable monthly ‘expense’ will not only get you saved up and armored for a crisis, but also help you save up for additional goals such as vacations, cars or even money for a down payment when buying a home.
An advisable way of saving your money is by placing it in a high-interest online savings account, a certificate of deposit, or a money market account as inflation may erode the value of your savings.
3. Saving for Retirement
Typically, pilots retire at 65 years old, thus saving for your eventual retirement is always a wise choice.
Due to the way compound interest works, the sooner you start saving, the less principal you’ll have to invest to end up with the amount you need to retire and the sooner you’ll be able to call working an “option” rather than a “necessity.”
Compound interest occurs when interest gets added to the principal amount invested or borrowed, and then the interest rate applies to the new (larger) principal. It’s essentially interest on interest, which over time leads to exponential growth. Compounding can work to your advantage as your savings and investments grow over time—or against you if you are paying off debt.
Whereas not all airline companies offer retirement plans, company sponsored retirement plans are a particularly great choice because you get to put in pre-tax dollars. Some companies will often match part of your contribution, which is like free money, and the contribution limits tend to be high.
4. Get a Grip on Taxes
It’s important to understand how income taxes work even before you get your first pay check. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations.
Fortunately, there are plenty of online calculators that have taken the dirty work out of determining your own payroll taxes, such as PaycheckCity.com. These calculators will show you your gross pay, how much goes to taxes and how much you’ll be left with, which is also known as net, or take-home pay.
For example, USD $35,000 a year in New York will leave you with around USD $27,455 after taxes without exemptions in 2019, or about USD $2,290 a month.
By the same token, if you’re considering leaving one job for another in search of a salary increase, you’ll need to understand how your marginal tax rate will affect your raise and that a salary increase from $35,000 a year to $41,000 a year won’t give you an extra $6,000, or $500 per month—it will only give you an extra $4,195, or around $350 per month (again, the amount will vary depending on your state or province of residence).
When you purchase something with your credit card, you are borrowing money from the bank. If you don’t give that money back in time, the bank is going to start charging interest on your balance.
This debt can build up and become a monster if you don’t pay off your balance every month.
However, if you use a credit card responsibly and pay off the balance every month, it is a good way to start building credit. Most credit cards also have other benefits such as rewards points, cash back, or travel points.
If you are capable of paying off the balance in full every month, then you should have no problem managing a credit card and staying out of debt.
You should monitor your credit score & credit report regularly to have an idea of your credit status.
As an alternative to credit cards, one may opt to use a prepaid reloadable card instead of a credit card. These cards work just like debit cards, but they have the perks of credit cards. Note that prepaid reloadable cards won’t help you build credit.
As a visual explanation on credit, click the following link; Youtube- Basics Of Credit
Having completed flight training, your time will come to choose your career path.
Without any doubt, with 200-250 hrs upon the completion of your training any opportunity should be taken without hesitation, as getting an offer with little experience is often rare.
Once you gain experience, you will be able to choose your aviation career path to your liking. Be it long haul, medium haul, short haul, instructing, aerial photography, search and rescue and many other career paths, making an informed decision is always wise.
As often thought, a pilot’s job is as a luxurious one, with glamorous uniforms, big jets, tropical destinations and fat cheques. Whereas these jobs certainly do exist, there are things to consider when choosing a career path in aviation.
Depending on your career path, you may be a short, medium or long haul pilot. As a long haul pilot you will probably find yourself reporting to work on average around once a week, however be away from home for a couple of days compared to a short haul pilot who reports to work 4 to 5 days a week but gets home every night, except for certain exceptions.
Long haul pilots will generally get more days off per month simply due to restrictions on days off after a duty that has a considerable time change.
Long haul pilots also burn up their maximum hours in a shorter period and all pilots have maximum monthly and yearly hour limitations. For example, a pilot reporting for a 3 day trip to Vancouver from London will have flown in excess of 19 hours in those 3 days. It would be unusual for a short haul pilot to accrue that amount of hours in 3 days.
Short haul pilots, however, conduct more take-offs and landings compared to a long haul pilot and become familiar with destination airports very quickly as they may end up flying to some of them weekly. Typically, a short haul pilot could potentially fly up to 6 sectors a day with at least 3 of those being their sectors thus perform the take off and landings. A long haul pilot could, on average, perform less than 5 take-offs or landings in a month that may lead to some pilots running out of IFR currency, causing them to go to the simulator to regain currency.
Typically, you will be paid more as a long haul pilot as you require more experience and operate larger aircraft with a responsibility for more passengers. You will also fly for the bigger, national flag carriers such as Emirates, Air Canada, British Airways and others.
Some people may struggle with jet lag on long haul operations and the nights out of bed flying. If your body struggles to cope with this you are less likely to be able to take advantage of the extra time off long haul gives you.
Long haul flying can have an impact on families as every time you go to work you are typically away for at least 2 nights, although it could be up to 4 or 5 nights. Some families, or should I say partners, may benefit from this in their relationship and others may struggle with this.
Normally destinations are more varied in long haul. When flying short haul you may be lucky enough to night stop in some terrific cities and destinations, but most pilots usually only get 30 mins to an hour at the destination airport before operating back to their home base. On long haul, one trip you could be in South Africa wine tasting in the summer and the next trip you could be lying on the beach in Rio de Janeiro. It is difficult to get those experiences on short haul, however while you are indulging yourself in these experiences you are many miles away from your loved ones.
Despite long haul flights’ considerably longer rest times, both short haul and long haul pilots have lots of time off due to mandatory rest restrictions. This gives them a chance to engage in extra activities that act as a secondary source of income, leading to overall better financial health.
Having seen the advantages and disadvantages of long haul and short haul flights, everyone has different preferences and situations that may factor them into following one path or the other.
Despite the aviation industry being in its darkest hour, the light at the end of the tunnel is there and will eventually be reached.
Due to its heavy connections in the global economy, aviation has proved to be essential in day to day life and therefore will eventually improve and soar higher than ever!