Transcripts

The Airline Industry Has Pilot Training Taking Off In China

JEFF YASTINE: The airline industry is booming in China, with the country expected to order an estimated $280 billion in new planes over the next two decades. While that's good news for Boeing and Airbus, the boom is driving a new industry: pilot training. As Nick Mackie reports, the business of training pilots is taking off faster than China can currently license pilots. While it's good news for Boeing and Airbus, the boom is driving a new industry

NICK MACKIE, NIGHTLY BUSINESS REPORT CORRESPONDENT: China's airlines carried 138 million passengers in 2005, a number that's expected to double within five years. Over $17 billion is earmarked to build 42 airports nationwide. And a carrier like Sichuan Airlines, based here in Chengdu, southwest China, wants to increase its fleet by 80 percent to serve the rapidly expanding market. For each plane, Sichuan Airlines rotates five two-man crews, each person earning between $3,000 and $4,000 per month. This small regional carrier must recruit hundreds of new fully fledged pilots to meet its target.

TRANSLATION OF: LAN XINGUO, PRESIDENT, SICHUAN AIRLINES: Ten pilots and 30 planes means we have 300 pilots now. To reach our goal, there's still some way to go. We want 55 planes, so we need 550 pilots.

MACKIE: China's civil aviation flight university (INAUDIBLE) may be the world's biggest pilot training institution with four campuses, five airfields and over 100 aircraft. But it too, is under pressure to expand. This academic year, it should graduate some 800 pilots. But an estimated 10 percent of China's pilots are close to the mandatory retirement age of 60. China has around 11,000 pilots to fly more than 800 aircraft currently operated by the country's major commercial airlines. But with the passenger and cargo market growing at an annual rate of 9 percent, the demand for pilots outstrips the capacity of the aviation colleges to supply. These student pilots -- here strengthening their sense of balance -- are sponsored by China's carriers. The fees here are $100,000 per pilot. As a stop-gap measure, some airlines are known to flout government policy and recruit qualified foreigners, while others hire ex-Chinese military. To help close the supply gap, this college intends to increase its capacity of trained flyers by 50 percent, and that means buying more land, technology and hardware. It also wants to send students to an overseas partner college, possibly in Australia.

TRANSLATION OF: ZHENG XIAOYONG, PRESIDENT, CIVIL AVIATION FLIGHT UNIVERSITY OF CHINA: For 1,200 students, we need more training facilities and a further one or two airfields. And we also need a cooperation with a university abroad, which has an airfield so it can train 200 of these students per year.

MACKIE: In the longer term, this will not be enough if Boeing's estimates prove correct and China buys 2,900 new planes over the next 20 years. As well as further expansion of this college, smaller privately run facilities are expected to be licensed, plus more deals signed on overseas joint ventures. These are promising times for those in the broad-based business of flight training. Nick Mackie, NIGHTLY BUSINESS REPORT, Chengdu, southwest China.