Sample Paper on Effects of the 1500-Hour Rule on the Aviation Industry

Table of Figures

Figure 1: Labor costs in the aviation industry since 2013                                                      8

  • Original figure created from IATA information regarding the expenses in the aviation industry since 2013

Figure 2: Rate of return of investments in the aviation industry since 2010                         9

  • Original figure created from IATA information regarding aviation industry profits

Figure 3: Number of airline incidents and accidents from 2009 – 2015                                11

  • Original Figure created from online data on accidents

Figure 4: Global airline passenger and cargo yield growth                                                   12

  • Figure adapted from Tailwinds (2014)

Figure 5: Global commercial airline revenue in $ bill                                                           13

  • Figure adapted from Tailwinds (2014)

Figure 6: The air transport system factors                                                                              15

  • Figure adapted from Hansman (20

Abstract

This paper has the objective of explaining the impact of the 1500 rule on the aviation industry in general. Following its enactment into law by the congress, it pacifies this discussion of whether or not these rules remain called. It expounds on the results and chaos that regional carriers often subjected civilians. Therefore, this paper inundates a discussion with comparable resources of previous works done by earlier writers in the aviation industry. In addition, a conventional number of methods are applied to make it a detailed, explosive, and highly interactive discussion. In a way, this paper combines both the theoretical and practical aspects. It also brings forth the contentious issues that parties pursuant to this rule have in common.

Introduction:

Aviation is a critical mode of national transport and it is thus necessary to make this safe transportation mode even safer. The airline industry provides essential support to tourism and the global businesses by providing the safest and fastest means of transport. It is estimated that the aviation industry transported over 2.8 billion travelers and about 47.6 million tons of cargo in 2011 and connected cities around the world with over 36,000 airline routes. However, the industry has also witnessed some of the most devastating accidents in the history and stakeholders have always searched for the best strategies that would ensure safer airlines and carriers. The 1500 effect was a new rule passed by the Federal Aviation Administration requiring all the commercial line pilots hired by U.S carriers to have at least 1500 hours of flight time. The new rule was warmly welcomed by the Air Line Pilots Association and was a reaction to the Colgan air crash near Buffalo-Niagara International Airport on February 12, 2009. The rule was effected starting 1st August, 2013. In the words of Michael Huerta, an administrator at the federal aviation Administration, the rule gave first officers a stronger foundation for aeronautical knowledge and experience before flying an air carrier. The rule also sought to address the issue of pilot fatigue (Maxon, 2013)

After the crash that saw all the 45 passengers and the whole flight crew along with one person on the ground dead, the bereaved families championed for this rule to make the system safer. In response the Congress passed an Act that saw the FAA draft new rules in regards to safety, out of that the ‘1500 hour rule’ was born (Hoffman, 2014).

The Colgan Air Flight 3407 en route to Buffalo-Niagara airport crashed on February 12, 2009. Forty-five passengers were on board and they all perished. Another person on the ground was also a casualty of this air crash. In light of the crash, the FAA issued a new set of guidelines to help stem the threat of other aviation disasters. Consequently, a year later, after the air crash, the NTSB rolled up its sleeves and issued an investigative report. The report concluded that the cause of the crash was the lack of appropriate control on the side of the pilot. As a result, the plane failed to accelerate and tumbled down. A horde of other subordinating reasons was also given by the NTSB as failure of the captain to adhere to and manage cockpit protocols. Colgan was also guilty of lacking adequate procedures.

Notably, the captain, at the time of his untimely demise, possessed an ATP (air line transport pilot) certificate and cumulatively, had been involved in 3379 hours of flight. On the other hand, the first officer had been involved in 2244 hours and boasted of commercial rating.

The Colgan flight crash was a recipe for rigorous lobbying from survivors. They agitated for legislative action and more control as pertains the aviation industry. As lobbying intensified, the congress in response to the survivors’ nightmare, responded by passing into law the Airline Safety and Federal Administration Extension Act of 2010.As a requirement, the FAA was poised to come up with new rules, probably a revision of the ones that existed at the time of the crash. The new rule is subsumed into various aspects of aviation practice as experience of the pilots and training. The FAA later drew the new laws and the ‘1500 rule’ was conceived. The highlight of the 1500 rule was that a pilot’s and a co-pilot’s minimum flight time was effectively placed on a minimum of 1500 hours. The FAA also issued new flight crew requirements, qualifications, as well as the standards of certification, which became operational on August 1, 2013.

Methods

Commercial air transportation in the USA is a complex web of system components. However, there are few analytical methods for assessing these interactions, which include airline safety. Flight safety management requires comprehensive data collection on safety related events and the assessment of the same. The role of analytical tools or methods is to help in reporting and investigation of safety related events (Luxhoj, 2003). Information for this report was collected from secondary library sources and from primary data from interviews.

60%-80% of airline accidents are due to human error this including the infamous Colgan air crash near Buffalo-Niagara International Airport on February 12, 2009. The underlying research methods comprise analytical approaches like the human factors analysis and classification systems, Bayesian belief networks and case studies. Some of the methods will be used on a day-to-day basis while some others will be used less often.

The human factor analysis and classification system relies on the system safety theory. Bayesian Belief Networks (Beaubien & Baker, 2002), on the other hand is used as a methodology for numerous tasks that revolve around reasoning under uncertainty. It uses probability theory, which provides solutions to the reasoning problem in cases of uncertainty. The ASRM (Aviation System Risk Model) uses the Bayesian Belief Networks (BBNs) has been used to expand the human causal factors and determine the safety strategies.

The type of tool to be used depends on the case study and the time and financial resources. Some common tools that fall under the ‘1500 hour rule’ safety classification include the safety event data systems, human factor analysis, and other general analytical tools.

Safety Audits and Assessments

These audits are used to uncover organizational problems or systemic practices that could affect safety. They include audits by personnel from different airlines, safety audits by the regulatory agencies to ensure that the pilots and co-pilots meet the new requirements or the internal evaluations to ensure the policies and procedures are followed (McDonald et al., 2000)

In addition, structured observations in which specially trained assessment personnel ride on regular flights can be used.

 

Trend Analysis Tools

These tools enable the analysis of safety data. They are the general-purpose analysis tool and are not restricted to airlines analytical reporting. They work hand in hand with special purpose safety report management systems and present information in tables and charts for reports and presentations.

Human Factor Analysis Method

A structured Human Factor Reporting (HFR) program is essential in order to conduct a human factor analysis of event reports. Human factors observations are qualitative and not quantitative making the issue of interpretation complex (Netjasov & Janic, 2008). Due to subjectivity, one may fail to address an issue, but this does not mean it is irrelevant. The problem of incomplete recording of human factors is eliminated by the use of a human factors specialist to conduct interviews.

The human factor tools are more investigative and are used to answer the question why a particular event happened rather than what happened. This is relevant to the incident that led to the rule and other related case studies. Other analytical methods like text mining and data visualization are exploratory while others like risk analysis and cost benefit analysis are decision support tools.

Costs Benefit Analysis Tools

This method provides an analytical framework to help in the decision making of whether to conduct safety enhancements and the cost effectiveness of various alternatives. Solutions to various safety problems impose operational costs on airlines; therefore, it is necessary to prioritize the potential hazards to address based on their costs and benefits.

Primary Research

During the data collection stage for this study, two methods were used. Secondary sources and primary sources were used for data collection so as to obtain sufficient information on the topic of study. The primary information was obtained through an interview with Professor Cass Howell, the Associate Dean of the college of Aviation (Prof Cass Howell, personal interview, March 27 2015). The interview method was chosen because it enables the acquisition of both verbal and non verbal information relayed. Also, the professor was selected as the most suitable person to be the respondent since he is renowned and knowledgeable on the topic of study. This was based on the awareness that as he has received numerous ratings as the best teacher by students and is also recognized as being smart in aeronautics. Moreover, he is always willing to assist students with any information that may be requested from him. The interview report is included herein as appendix 1.

Secondary research

The secondary sources i.e. pieces of literature, formed the foundation of the study by offering guidance on the information that should be obtained through a primary study. The choice of relevant materials for the study was based on the contents of the materials. A systematic review based on the material content was then carried out. To present the secondary information, repetitive summary was used to extract only the relevant information for the study.

Literature Review

The history of aviation dates back to 1903 flew on a first powered flight, which a-heavier than air machine. Earlier people had flown on balloons and gliders. The first air passenger was Leon Delagrange, while the first American passenger in an Orville Wright’s airplane was Charles Furnas. Tremendous developments have been made in the air transport to ensure more safety and comfort for the passengers. Legislations for safety have been enacted prior to the ‘1500 hour rule.’ This can be traced to the Air Commerce Act of 1926 that authorized the secretary of commerce to designate air routes, license pilots, and aircraft, develop navigation systems and to investigate accidents (Goldstrom, 1930).

The Boeing 247 was the first modern airplane unveiled in 1933. It incorporated amenities like comfortable seats and hot water systems to ensure coziness for the passengers. The planes however could not fly higher than 10000 feet since the levels of oxygen, reduced and passengers became dizzy and fainted. Technological breakthroughs in the aviation industry have made air transport to be the safest mode of transport, legislations on the minimum requirements are thus meant to reduce human errors (Cross, 1988).

According to Brannon Ike, the requirement to have pilots to have more flight hours is a safety measure by the government to protect its citizens but it unfortunately destroys jobs and increases the cost flying. He argues that the congress’ legislation will not only hurt the producers, but will also have a negative effect on the consumers and decrease safety. The incident that triggered this legislation had the pilot and the co-pilot having more than 1500 hours of flight time. In More recent air crashes, the pilot and the first officers had more than 1500 hours of flight time.  The benefits of this restriction therefore have negligible benefits. It only affects the cost of training and effectively boosts the pilot pay. As a result of the new rule people will opt to use cars, this will increase the car accident rates (Brannon, 2014).

Previously a first officer (co-pilot) only required a commercial pilot license and 250 hours of flying at minimum, however the new rule changed this, and the latter requires an Airline Transport License (ATP) with 1500 minimum flight hours. In addition, an ATP license is offered to persons over 23 years of age. On the other hand, a pilot is supposed to have 1000 flight hours at minimum as a first officer before flying as a captain. Co pilots will be required to have an aircraft type rating that comprises additional training and testing specific to the airlines they fly. There are such as for military pilots with 750 flight hours, college graduates with an associate’s degree in aviation and 21-year-old pilots with 1500 flight hours. This rule unfortunately does not apply to carriers of foreign origin.

The implications of the rule have resulted in a shortage of pilots since the airlines have been forced to recruit higher qualified pilots when there are diminishing numbers of pilots. A large  number of pilots are of advanced age and approach the retirement age of 65, trained military pilots are also becoming less as the days go by, these coupled with the high cost of private pilot training have made the shortage even worse. The profession is also becoming less attractive due to pay freezes, pay cuts, contract concession among many other factors. The high costs of obtaining a college degree and obtaining an ATP license make the minimum requirements very high to meet, the beginning salary for the same job is however ridiculous. This incremental salary was projected to result in increased labour costs in the aviation industry as shown in the table below.

Figure 1: Labor costs in the aviation industry since 2013 (Original figure)

Given the versatile nature of dynamics relating to the aviation practice over the years, it is imperative to note that the industry has generated a lot of literature. Information obtained from the FAA and the NTSB will be instrumental in espousing this discourse. Journals on aviation as well as other scientific articles will be used to explain the evolution of the new sets of laws governing the aviation industry.

In 1981, a survey, the national general aviation activity survey was conducted. The conclusions were such that the mean annual flight time per hour stood at 188.1 hours. Effectively, an estimated 40.7 million hours were recorded by US aviation aircraft (Schwenk & Carter, 1982). The enactment of the 1500 rule into law by the congress remains consequential to regional airlines or carriers. These carriers had the aim of cutting on costs, which accrued because of the deregulation policies of the aviation authority. Regional carriers had the tendency to employ cockpit crew who lacked some substantial experience. Two hundred and fifty hours or thereabout was how little the number of co-pilots was required to possess. These regional carriers were always on course to employ the less experienced co-pilots to fly their turboprop jets.

The number of flight hours was the impetus the FAA and other regulatory authorities required to stem this discrepancy. The new laws which came into operation in the year 2013 transcends beyond the ‘1500 rule’. Obviously, the FAA new guidelines were crafted in good faith. However, the new set of laws did not augur well with regional carriers. Recently, Roger Cohen, the Regional Airline Association president admitted that the members of the organization have had troubles in finding pilots with the 1500-hour rating.

Proponents of tougher standards and regulations include Clark Nicola who in her view supports the introduction on tough standards to improve the chances of recovering flight recorders of airlines that crash into water masses. These measures are in response to the disappearance of the Malaysian airliner. This represents one of the global trending issues concerning safety in the aviation industry, which in addition to the U.S rules is making it tougher and expensive for the producers (Clark, 2014)

The 1500-hour rule is susceptible to criticisms and plaudits from the airline associations and survivors respectively. Survivors find logic in the 1500-hour rule in that it ensures that highly qualified pilots and co-pilots are charged with flying the regional carriers and turboprop jets. Does not safety of the customers of the aviation service count the most? Regional carriers on the other hand, find the FAA 1500 rule as an infringement. Through their association, they have aired their discontent in recent times. They even had the effrontery to contest the FAA assertion that their pilots were ‘inexperienced’.  This claim can be supported by data on accidents in the airline industry from 2013 to 2014, which indicated that some of the accidents occurred despite the pilots having greater flight hours. Also, even with the projection that the 1500 hour rule would result in decreased passengers and subsequently decreases in profits in the Aviation industry, the chart below shows that increase in profitability has been experienced instead.

Figure 2: Rate of return of investments in the aviation industry since 2010 (original)

Is the FAA 1500 rule as impeccable as survivors and other stakeholders assert? Or rather, is the rule too stringent to accommodate small and medium carriers? Considering the Colgan 3407 flight for instance, the wealth of experience possessed by the pilot was not enough to steer the aircraft to some safe haven. A mix of factors contributes to flight failure and subsequently, aircraft crashes. Scholars have been drawn into the literature that concerns the aviation practice. Daniel Rust, a professor at the University of Missouri, for instance, questions the veracity of the 1500 rule. He holds the opinion that the time logged at the cockpit by a pilot need not necessarily translate into a wide berth of skills and experience. He notes that the grave issue actually, is not the number of flight hours, rather, it is the over reliance on controls that are automated. He propounds a gesture that the 1500 rule is only wired to reduce the impact of regional carriers at the face of flight accidents. The new rules have the effect of hiking fare prices and creating unnecessary consternation on the side of the consumers of the airline services.

Educational institutions are also expected to meet the requirements of the FAA rule. The K-State Salina perchance brags of an impeccable training facility that will equip students with the experience required by the FAA. The college offers a four-year degree course effectively implying that its students will complete a mandatory 1000 hours worth of flight time. After completing the four-year degree program, they will automatically qualify for an Airline Transport Certificate. On attaining a university degree, the graduates can then earn certification at the age of 21 instead of the 23 that was operational earlier.

The Federal Aviation administration considered revising the tougher piloting rules imposed implemented in 2013 due to the detrimental effects on the aviation industry. A committee set out on April 2014 was bound to observe, and recommend the guidance materials, notices and other training and qualification materials. The new rule had received much criticism from the airline industry and thus prompted the development of the committee. The families that lobbied for the enactment however raised concerns and asserted that the training committee would interfere with the fight for flight safety (Zremski, 2014). None could be more belated than Anthony Foxx, the secretary of transportation during the announcement of the new guidelines. He noted that the government and all stakeholders in the aviation industry owe it to the public to provide safe aviation services. The new rules are in line with the NTSB provisions as well

The object of the new provisions is to tame errant aviation practices that in the recent past have raised quite a number of civilian casualties. The FAA, notably, found the moral authority to construct new laws and regulations concerning the aviation practice. The new laws did not seclude the ‘1500 rule’ that stipulated the minimum flight hours, as a pilot and his co-pilot are required to possess.

Analysis

The findings from the study indicate that since the enactment of the 1500-hour rule, the number of accidents in the aviation industry has not reduced significantly. The following chart gives the trend of airline accidents and incidents that have taken place since 2009. The purpose of the presentation is to give a comparison between the accident trends before the enactment of the rule and after.

Figure 3: Number of airline incidents and accidents from 2009 – 2015 (Original Figure)

The 1500-hour rule was initiated in 2013. In 2014, a committee set out to appeal amendment to the rule due to its impacts on the aviation industry. The chart above gives a representation of airline incidences and accidents that have occurred since 2009. In the chart data, occurrences that resulted in death and serious injuries are classified as accidents while those, which resulted in no deaths, are classified as mere incidents. The representation was created from industry data and is therefore an original creation. The data involves incidents, some o f which resulted in no deaths, for instance, on March 5th 2015, the Delta Airlines Flight 1086 crashed into a fence resulting in more than one dozen injuries and no deaths. This has been included in the generated chart. Following the observed trend in airline incidents and accidents, the change experienced from the time before the 1500-hour rule to now is not significant. This is because in 2015, there have already been four incidents; half of them resulted in deaths.

In the year 2010, 23 of the recorded incidences were accidents resulting in deaths and injuries. This shows while there has been a reduction in the number of accidents and incidents, the reduction is minimal, and therefore the costs of hiring pilots with the required qualifications can be said to be higher than the costs saved in terms of accident reduction. The rule can be said to have resulted in incremental costs rather than saving of finances. The number of accidents incidents and accidents reduced from 2012 to 2013 by a large margin and reduced even further in 2014. It is however difficult to conclude that the trend of reduction in the number of incidents and accidents is sustainable given that already 4 incidences have occurred in 2015 although only one quarter of the year has passed. This clearly indicates that is it can be predicted from the data, 2015 would have experienced a total of approximately 16 incidences. This is even higher than the record in 2013 and thus cannot be said to be an indication of a potential reduction in the number of incidences and accidents.

Furthermore, the reduction in the number of incidents and accidents had already began reducing prior to the 1500 hour rule since from 2009, the accidents reduced from 27 to 24 in  2010 and thereafter to 13 in 2012. In addition, since the reports are usually given for the previous years, the report or 2013 showed that between 2012 and 2013, the number of accidents also reduced further, from 13 to 12. This cannot be said to have been a result of the 1500 flight hour rule. The rule has no serious implications on the level of accidents in the aviation industry and cannot be effective towards accident reduction.

The trend in the growth of passenger and cargo yield in the past 10 years is shown in the chart below. These results indicate a fluctuation in the yield growth as compared to the consumer prices.

Figure 4: Global airline passenger and cargo yield growth (Tailwinds, 2014)

From the chart, it can be observed that the trend in consumer price growth was within 5 percent in the last 10 years. The cargo yield growth and the passenger yield growth fluctuated much in the same number of years. The greatest fluctuation was in 2009 where the two dropped to values of -15 and approximately -14 percent for cargo yield and passenger yield respectively. The fluctuations have increased over the years. From 2011, even wider departures from the consumer price were recorded. In 2013, the least yield growths in 5 years were recorded.

From 2012, the growth in cargo and passenger yield have decline, showing a negative value. With a positive yield growth below the growth of consumer prices, the implication is that the airline industry is operating at inflation rates far below the overall inflation rates in consumer goods. In addition, from the results, it is seen that the yield growth rates dropped even further after 2013, i.e. after the inception of the 1500-hour rule. This means that while the 1500-hour rule was meant to increase the safety of the airlines by reducing the number of incidents and accidents, it may also have contributed to reduction in the income from the sector. This is because as expected, the 1500-hour rule led to the increase in flight and cargo transportation costs. This means that with the increase in the airline operation costs without a significant increase in the charges for services, the overall income per passenger or cargo is bound to reduce hence reducing the yield growth rate. The industry therefore reports a negative yield growth rate.

Another conclusion that may be drawn from the yield growth rate records is that due to the increase in the airline operation costs as a result of higher pilot competencies, fewer passengers and cargo owners opt to use airlines. As reported from the literature, an increase in flight charges may result in more people opting to use road transport. This implies that with a reduction in the number of people using airlines due to a shift in transport choice, the overall growth in the passenger levels is supposed to reduce. This can be explained to be especially due to a shift in the flight usage. For example, when the charges for flights are high, it is expected that those who fly with major airlines would shift to regional airlines, while those who use the regional airlines shift to road transport. Despite this decline in passenger growth yield, the industry has continued to expand the passenger capacity. This can be related to the expectation that the 1500 hour rule is likely to result in higher passenger levels. From this point of view, the airline industry has engaged in the expansion of carrier activities and even numbers, contrary to the trend observed in the cargo and passenger growth yields (IATA, 2014).

Despite the reduced growth levels in the passenger and cargo yields, the total revenue from cargo and passenger flights has been recorded to have risen at a slow rate in the past 5 years. The growth experienced in revenue in the past five years has been significant. The chart below shows the trends in cargo and passenger revenue as well as revenue generated from other flight types.

Figure 5: Global commercial airline revenue in $ bil (Tailwinds, 2014)

From these results, the passenger related revenue is seen to rise within the last five years from 445 billion to 596 billion dollars. As compared to the passenger revenue, the cargo revenue has increased slightly from 68 billion to 87 billion dollars. This shows that the passenger revenue is increasing at a faster rate than the cargo revenue; this means that this could be due to the rise in the number of passenger flights across the airlines. On the other hand, the number of cargo flights has reduced, particularly with the 1500-hour rule in place.

The increase in passenger revenue has been said to be due to the rise in passenger traffic across time. The increase in the robustness of the passenger flight business has seen a rise in the number of passengers accessing the flights even in the light of increasing charges as a result of the 1500 hour rule. This implies that the growth in the passenger revenue is independent of the flight factors such as pilot hiring and retention strategies. Moreover, it may be concluded that this incremental revenue indicates the presence of a luxury market in the airline industry where demand is always high regardless of the pricing strategy. It can also be concluded that the revenue due to passenger flights rises because of the increased shift from road transport to air transport as a result of perceived safety. This is drawn from the belief that the 1500-hour rule can result in better performance in terms of safety among airlines.

On the cargo revenue, there has been slow growth due to various reasons. First, most of the potential cargo transport consumers have shifted to alternative means of transport due to increasing flight costs. Other transport modes such as shipping, and road transport have become alternatives to air cargo freight. This implies that even with the 1500 hour rule, the revenue obtained from cargo transport still has the potential of reducing since there is a projection that the delivery of wide body aircrafts will continue in future. Moreover, the consideration of the aircraft belly capacities as part of the overall passenger fleet also reduces the capacity of airlines in dealing with large cargo volumes.

From these results on revenue fluctuations, either it can be confirmed that changes in cargo freight or passenger freight revenues are not dependent on the 1500-hour rule. However, the rule affects pricing in the airline industry. The relationship between the revenue obtained from both cargo and passenger freight can however be said to be correlated to the yield growth. It is expected that with increased passenger yield growth, there should also be a rise in the related passenger revenues. This is however not the case in the current aviation industry, particularly in the last five years. This implies that there are several factors at play within the aviation industry, such as the status of the financial markets and the airline capabilities. The figure below shows the operation of the airline industry as a function of various factors.

From the figure below, the economy and the airlines are dependent through the demand and supply of services. From the diagram, it can be inferred that the airlines’ operation depend on the vehicle capabilities and the NAS capabilities. These two factors work together for the airlines profitability. After the confirmation of the presence of these two factors, the airlines are tasked with the pricing of other services and scheduling of their flights. With the increase in the passenger freight traffic, the schedules are much busier and the prices can be determined by several factors. One of the factors that influences the flight schedules is the supply of aircraft to carry out those scheduled flights. A higher number of aircrafts within an airline means that the airline will have a busy schedule.

With a sufficient number of flights and the right pricing, the success of the airline is still dependent on its ability to access the market. This includes access to potential passengers, capital, and the industry as a whole. Effective marketing is used by the airlines to access the market. Apart from the access to markets, airlines also access the society through provision of employment as well as expansion of employment opportunities. In these two ways, the airlines contribute to national economy. On the other hand, the demand for flights by passengers is dependent on various factors. One of these factors is the need for travel or freight for passengers and cargo respectively.

Another factor that plays an important role in the airline industry is the debt market in the economy. The demand for airline services determines the revenue obtained from the industry. The higher the demand of the services, the higher the profitability of the industry. The air transportation system depends on these factors and many others such as the environmental impacts, and the national economy as a whole. The analysis of these factors is important to this study since it contributes to the growth of the airline industry.

Figure 6: The air transport system factors (Hansman, 2010)

The impacts of these factors on the airline industry show that the 1500-hour rule has minimal influence on the airline industry if any. The influence may not be direct, but rather through an influence of the other factors at play. For instance, since the 1500-hour rule influences the costs of operating airlines, it subsequently influences the pricing of flights, scheduling of the flights and the access to market. All these factors are instrumental on the supply side of the air transport system. However, since the demand side of the system does not depend on the pricing of the supply side but on the need for freight or travel, the 1500 rule may have a limited impact on the demand. This therefore explains the previously observed results where the airlines experienced growth in revenue despite the enactment of the 1500 hour rule. In addition, the reported increase in yield growth can also be explained using this information.

The effects of the 1500 hour rule on the aviation industry are limited to pricing as opposed to the intended objective of reducing accidents. From reports of accidents in the recent years, it was reported that in most of the accidents that occurred in airlines both before and after the enactment of the rule happened under pilots with sufficient flight experience. For instance, the Asiana Airlines flight 214 had a pilot with over 12000 flight hours and a co-pilot with an experience of over 9,000 hours (Ng & Castellano, 2013). This indicates that the cause of airline accidents is not attributable to low flight hours covered by the pilots in charge.

 

Recommendations

From the observed study results, various recommendations are made for the improvement of the aviation industry and to deal with the impacts that the 1500 rule has had on the industry. The following recommendations have been placed for application in the airline industry.

Confinement of the 1500 hour rule to major airlines and to particular positions within the airlines: There is no denial that the 1500 hour rule may have some benefits to the aviation industry. However, with the observed related costs, it may be more beneficial to major airlines, which receive higher revenues than to regional airlines. In case the rule is applied to major airlines only, it will be possible for the airlines to sustain its application due to their ability to afford the associated operation costs. In addition to this, it will also enable the regional airlines to grow by ensuring that they also have a sufficient number of pilots with the requisite certification even though the pilots may not have the required number of flight hours. This is because the 1500 hour rule restricts their ability to access qualified pilots due to their limiting pay structures (Prof. Cass Howell, Personal Interview, March 27 2015).

Secondly, it may also help the aviation industry to set schools for flight training in which the sole objective would be to ensure that the pilots leaving have the requisite number of flight hours. This may however be essential only if the rule is imposed on all airlines regardless of their sizes. The aim of the schools would be to give pilots and opportunity to gain as much flight hours as they can before they are recruited as pilots for commercial airlines.

Control of travel and freight pricing: This will help since airlines will have price boundaries within which they have to operate despite the costs involved in the implementation of the 1500 hour rule. The implication of this is that the number of passengers who travel by air will continue to grow even after the implementation of the 1500 hour rule. Similarly, the cargo freight volumes will also increase constantly as long as the airlines have the requisite capacity for both cargo and passenger freight and travel respectively. The results of this would be retention of passengers even with the 1500 hour rule.

Another alternative would be to abolish the 1500 hour rule. The rationale for doing this is that the rule has not and may not be effective in accomplishing the objectives for which it was planned (Prof. Cass Howell, personal interview, March 27 2015). For instance, accidents happened before the rule was imposed and involved even flights where the pilots had immense numbers of flight hours. In cases such as the Asiana Airline Flight 214 and the LAM Mozambique airlines Flight 470 (Hradecky, 2014), the pilots had over 12000 and over 9000 flight hours respectively while the co-pilots had approximately 9000 and 1400 flight hours respectively. Even in the post 1500 hour rule, accidents have happened where the pilots had large flight hours in record. This implies that regardless of the number of flight hours that the pilots have, accidents may still happen.

Airlines complying with the 1500 hour rule may also need to be more conversant with other regulations guiding the air transport system. For instance, it may be necessary to find ways of optimizing the costs of hiring new pilots. This is due to the reason that with high costs of hiring pilots, the airlines have to contend with higher operation costs than normal (Prof. Cass Howell, Personal interview, March 27 2015). The implication of this is that with the higher operation costs, it may be necessary for the airlines to charge their customers more. The recommendation is that if other regulations can be cited which can help reduce the costs of operation, a balance in costs may be achieved hence the airlines would not have to increase the charges for their customers.

Another recommendation would be for the airlines to engage flexibility in their operations. The role of flexibility is to enable adaptation to the existent market conditions. Through flexible operational structures, it will be possible for the airlines to adapt to market changes with our without the 1500 hour rule. This will help the airlines to achieve incremental profitability even with the fluctuations in the market and the industry as a whole. Moreover, it may also assist airlines to identify potential challenges in flights and thus address them before they escalate to difficulties. With a flexible operation strategy, it is possible for the airlines to attain sustainable competitive advantage which will translate to growth and profitability. Moreover, flexibility will also enable the airlines to acquire a strong customer attraction capability.

It will also help for airlines to achieve sustainable growth with the application of steady or moderate growth strategies. This implies that even with the incorporation of the 1500 hour rule, it will be difficult for the aviation industry to be sustainably in operation if the right strategies are not applied. It is therefore important that the need for faster growth should not override the need for customer satisfaction in the aviation industry.

Conclusion

From the findings of this study, it has been confirmed that the effects of the 1500 hour rule are minimal on the aviation industry. From the interview carried out with the Associate Dean, it was established that the impacts of the 1500 hour rule on the aviation industry include a limitation in the number of qualified pilots available, and increased hiring costs. It has also been confirmed that while major airlines may find it slightly easier to gain the required number of pilots by hiring from the regional airlines, the latter may not be lucky enough to gain in terms of pilot qualifications. The 1500 rule has also been confirmed to have limited impacts in terms of both passenger and cargo yield growths. Similarly, the revenue growth in the airline industry has been confirmed to be independent of the rule. The 1500 hour rule has also been confirmed to be ineffective in accident prevention since accidents happened at the same rate both before and after the implementation of the 1500 hour rule. Moreover, the success of the air transport system has been confirmed to be tied to various factors such as the market access and the pricing strategy.

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Clark, N. (2014). ’Europe seeks tougher rules on aircraft recorders’. The New York Times. Retrieved from http://www.nytimes.com/2014/05/07/business/international/europe-seeks-tougher-rules-on-aircraft-recorders.html?_r=0

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Appendix: Interview Report

This is the record of the interview that was carried out with Professor Cass Howell (Professor of Aeronautical Science and Associate Dean, College of Aviation). The interview was carried out in the Professor’s office on 15th March 2015. The report includes the questions asked and the responses given by the Professor.

What do you suppose the 1500 hour rule has contributed to the aviation industry since its enactment?

I believe that the main objective of enacting the 1500 hour rule was ill informed because its contribution to the industry has been negligible if any. Instead of the intended objective, the rule has resulted in worries across the industry. Trained pilots are worried about the ability to attain the requisite number of flight hours and the airlines are also worried about getting pilots with the required flight hours. Accidents have continued to happen in the industry despite having qualified pilots.

What are the major concerns surrounding the aviation industry in the wake of the 1500 hour rule?

The major concerns in the industry as relates to the 1500 hour rule are from pilots and airlines. It is the concern of every regional airline that they may not be able to access a sufficient number of pilots with the expected flight hours. The pilots are also concerned that they may not be able to be exposed to the right experience that will give them the required number of flight hours.

Do you believe the 1500 hour rule has the potential to reduce the number of airline incidents and accidents in the aviation industry?

I do not think the trend in airline accidents will change significantly due to the 1500 hour rule because accidents used to happen even with pilots with over 2000 flight hours on record. This has continued even after the enactment of the 1500 flight hour rule. The rule therefore has little potential if any in the reduction of accidents in the aviation industry.

How do you think the 1500 hour rule will change the hiring landscape for pilots in airlines?

As airlines have already reported, gaining competent pilots with the required number of flight hours will be difficult. Both major airlines and the smaller airlines are finding it difficult to get competent pilots. The result of this has been that the major airlines recruit pilots from the regional airlines. This means that the regional airlines will lack sufficient numbers of pilots to recruit. The costs of hiring will also be higher.

What will be the impact of the 1500 hour rule on the industry in the long term?

The impacts of the 1500 hour rule are not confined to the aviation industry. They will extend to the economy and the entire logistics industry as well. Initially, the regional airlines hired pilots with 250 – 750 flight hours whom they paid less. This has changed and the passengers and cargo owners will be expected to pay more for the airline services due to the higher pilot payment rates. The implication of this is that the airlines will experience a reduction in the passenger demand.

Will the regional airlines comply with this rule?

It is expected that it will be difficult for regional airlines to comply fully with this rule because the pilots with this level of competency require higher pay structures. The regional airlines will have to change their pay structures and benefits or promise the pilots high recognition and status in the airlines. The regional airlines will even find it more difficult to comply with the rule due to the demand for qualified pilots who are few in the industry.