INTRO: It’s no secret that pilots at the major
airlines earn fat salaries.
At Delta, even new first officers earn $92 per hour.
This number goes all the way up to $354 per hour for the most experienced captains.
A very similar payscale can be found at American and United as well who also pay anywhere between
$90 per hour and roughly $350 per hour.
Now, it should be noted that pilots don’t work 2000 payable hours per year like most
other jobs.
The average pilot flies 75 hours per month or about 900 hours per year.
This translates to about $81,000 for new first officers and $318,000 for the top captains
and that’s just cash compensation.
All of these companies have extremely generous retirement plans that are idiot proof.
Usually, most companies will match your retirement contributions up to a certain amount, but
if you don’t contribute, they won’t contribute either.
All three of these airlines, however, have a defined direct contribution of 16% into
either a 401K plan or a B fund.
This means that on top of your salary, they’ll contribute 16% worth of your salary into one
of these retirement funds.
Additionally, they also offer 401K matching as well usually up to 5-6%.
This means that even as new first officer, you’ll automatically be contributing about
$13,000 per year into a 401K plan thanks to the defined contribution.
If you maximize your own contribution to the limit of $20,500, with the 401K match, you’d
be contributing about $35,000 on just your first year.
For perspective, if you contribute $35,000 into your 401k for 40 years at an 8% return,
you’re left with $9 million.
And that’s literally the lower bound.
For the most experienced captains, they enjoy a defined contribution itself of roughly $50,000.
At this point, they only need to contribute $11,000 from their own paycheck to meet the
total contribution limit of $61,000.
At this rate, you’d be looking at reaching $15 million by retirement.
On top of all this, pilots at major airlines also enjoy generous profit sharing.
Before the pandemic started, Delta shared a record $1.6 billion which works out to about
$17,500 per employee.
When you add all of this up, you’ll see that these pilots start off in the low $100s
and are able to work up all the way to nearly $400,000 in total compensation.
And the best part is that, progression within the airline industry is extremely straight
forward.
You don’t have to suck up to your boss or come up with a new product idea to get a promotion.
Promotions within the aviation industry are generally automated and solely dependent on
your total flight hours and experience.
So, if you stick with it for long enough, you will eventually reach the top.
And if you thought the base salaries were a lot, don’t even get me started on overtime.
But, this brings up the question: why in the world are pilots paid so much?
BARRIER TO ENTRY: One of the main reasons that pilots are paid
so much is because the barrier to entry is simply so high.
Not only do you need to spend years building up flight hours, but you also need a four
year degree to fly for any of the major airlines.
The airlines have been getting more lenient with the degree requirement recently, but
they still very much lean in favor of candidates who have one.
Starting with the degree requirement, this doesn’t need any explanation because I’m
sure all of ya’ll are familiar with how this works.
You go to an institution for 4 or maybe 3 years and reluctantly grind out annoying homeworks
and tests and eventually, you’ll walk out with a piece of paper.
But, if you want to become a commercial pilot, you’re only about half way through.
First, you’ll have to get your private pilot’s license which costs between $10 to $20,000
and usually takes about 9 months.
After this, you can start grinding out your commercial pilot’s license which usually
consists of three parts.
First, you have your instrument ratings which cost between $10 to $15,000.
Second, you have the commercial license itself which costs $25 to $35,000.
And finally, you have multi engine add-ons which cost between $5 and $10 grand.
At this point, you’re 2 years in and have already invested between $50 to $90,000 into
training, not to mention the cost of college.
But, atleast you have your commercial license right?
Well, yes and no.
With this license, you can start flying for commercial purposes, but that doesn’t mean
that you can actually fly for commercial airlines.
To do that, you have to get your ATPL or airline transport pilot license.
To get this, you don’t need very much additional training if any, but what you do need is an
eye watering 1,500 hours.
As a new commercial pilot, you’ll probably only have somewhere between 250 to 300 hours.
So, you’ll have to find out a way to grind out another 1,200 hours on your own.
Fortunately, if you got a bachelor’s degree in an aviation related field, you can bring
down the requirement from 1500 hours to 1000 hours.
This is where good planning comes into play, but you’d still have to figure out how to
get another 700 hours.
You could opt for a unique solution like crop dusting or flying skydivers, but more times
than not, the most efficient way to build up these hours are to become a flight instructor
yourself.
The bad part though is that this will cost you another $20 to $35,000 and it’ll take
you atleast another year if not two to actually build the hours themselves.
On the brightside, you will get paid as a flight instructor, but it won’t be that
much considering how much time and money you’ve put towards it.
After all this, you’ll finally get your hands on an airline transport pilot license.
On average, the entire process costs about a $100,000 and takes four years, so most people
are usually in their mid 20s by the time they get their college degree and ATPL.
But now, you can finally become a commercial airline pilot.
PAYING YOUR DUES: While you can finally get a job as an airline
pilot, you still wont be making the big bucks.
Given that the aviation industry is 100% driven by experience, you’re gonna have to start
off at regional airlines that no one likes.
The good thing though is that most of these regional airlines flow directly into the major
airlines.
This means that as spots open up at Delta and American Airlines, they’ll automatically
transfer the most experienced pilots from the regionals to them.
Usually, this happens once you build somewhere between 5000 and 6000 hours of flight time.
Given that you built 1000 hours to get your ATPL, you’ll have to build another 4 to
5000 hours before you make it to the majors.
To make things worse, this wont be particularly enjoyable either.
All of the desired routes and schedules are reserved for the most experienced pilots at
the major airlines.
So, as a rookie regional pilot, you’ll be doing the routes that no one else wants to.
This usually consists of multiple 1-2 hour flights on a daily basis.
Not only will you be taking on the most undesirable routes, but you’ll also be paid regional
airlines wages.
Take endeavor airlines for example which flows through to Delta.
As a first year first officer, you’ll only be making $52 per hour or about $47,000 per
year.
On the brightside, you’ll probably be able to move up to being a captain within 2 or
3 years because the churn at these airlines are super high as everyone is moving up to
the majors.
As a captain at Endeavor, you can earn a much more respectable $89 per hour or about $80,000
per year.
Once you’re a captain, you probably wont have to wait much longer until the major airlines
call you in, but the entire process at the regionals usually takes 4 to 5 years in total.
So, by the time most people finally get to the majors, they’re in their late 20s if
not over 30.
Once you put in a couple of years here though, you’ll finally become a captain at a major
airline and earn over $200,000 per year which will slowly rise to $400,000 per year.
So, becoming a pilot is definitely a lucrative career, but the upfront time and capital investments
are insane.
Not to mention the daily sacrifices that pilots have to make like always being on the road
and constantly eating out.
They’re also taking a massive risk with their health as well.
Pilots have to pass a first class medical examination every year, and if they fail,
they can no longer be airline pilots.
Fortunately, these guys wont have any trouble picking up a nice job as an air traffic controller
or something.
But, given that most pilots become pilots out of passion, this is definitely not an
optimal outcome.
Airlines have been trying to simplify the process as much as possible.
For example, they’ve been requesting that the government reduce the 1500 hour flight
rule, but the FAA just rejected this notion a few days ago, so that’s not exactly progressing
well.
Airlines have also been launching their own flight academies that are supposed to streamline
and subsidize the process, but these are brand new, so we’ll have to wait a few years before
we see any results.
In the meantime, becoming a commercial pilot remains a long and grueling process.
And to get people to go through this process, airlines are having to offer late career salaries
well into the multi six figures.
But, given the massive pilot shortage, it appears that even these salaries are not enough
to attract new talent.
PILOT SHORTAGE: It’s 2022 and we have the most advanced
technology ever, yet for some reason, we also have shortages all over the place.
There’s a car shortage, a chip shortage, an oil shortage, a minimum wage worker shortage,
a software engineer shortage, and of course, a pilot shortage.
Most of these shortages were a result of the pandemic though.
The pilot shortage, however, has been ongoing since 1997.
Right now, there’s a shortage of 8,000 pilots which is about 11% of the workforce.
To make things worse, this number is expected to grow to 30,000 by 2025 and 80,000 by 2032.
This insane shortage is giving existing pilots an extraordinary overtime opportunity.
You see, airlines try to avoid cancelling flights as much as possible because it makes
them look really bad.
People will share their negative experiences with friends and family and on social media,
and it’s just not a good look.
So, what airlines do to avoid this is ask existing pilots to take on additional trips
where they’re paid 100 to 300% more.
And when you’re base salary itself is already over $250 per hour, this quickly jumps up
to several hundred dollars per hour if not over a $1000 per hour.
Also, pilots are usually extremely picky with which overtime trips they take because they
can only fly a limited amount of hours per month.
The FAA restricts pilots from flying more than 100 hours per month.
So, after their base 75 hours, they only have 25 hours left to work overtime on a monthly
basis.
Because of this, they usually don’t take the opportunities that are “only” 100%
above their base salary.
More times than not, they strategically wait for the ones that are 200-300% above their
base salary.
If they max out their overtime to 25 hours at $1000 per hour, that’s an extra $25 grand
a month or $300 grand per year.
And this is exactly what many of the top pilots do.
Using this strategy, the top pilots at Southwest are able to make $549,000 per year.
The top pilots at Delta are able to make $526,000 per year.
And the top pilots at American airlines are able to cross $700,000 per year.
And all of that is only with an 11% pilot shortage.
Imagine how high these salaires will be in 10 years.
7 FIGURE INCOMES: In the end, the reason that pilot’s earn
a lot isn’t rocket science.
Like any job, they’re paid in accordance to their demand.
Demand for aviation has been skyrocketing for decades, but the supply of pilots hasn’t
quite kept up.
The main reason for this is all of the insane requirements to become a pilot.
You literally need over a thousand hours worth of experience before you can get your first
airline job.
This issue has only been accelerated by the tech industry which has been able to offer
higher salaries with less education time.
So, the majority have chosen the tech industry over the aviation industry, and it’s really
only the passionate ones that end up as pilots.
But, man, if you’re already on the other side, it’s never been a better time to be
a pilot.
The median salary itself currently stands at $202,000.
But, the top pilots earn well above half a million per year, and honestly it's just a
matter of time until this becomes 7 figures.
Now, personally, I do think all shortages will eventually be dealt with, but that doesn’t
mean that the process will be fast.
This shortage can easily take another decade if not more to sort out, and by then, pilots
will be one of the most appealing careers out there in terms of compensation.
And that’s why pilots are paid so much.
Would you become a pilot for a 7 figure salary?
Comment that down below.
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