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World’s largest pilot school ups investment in Philippines

The year 2011 is winding down and the economy is expanding at a slower-than-expected rate, but a multinational provider of commercial aviation training services is gearing up for what it sees as increased demand for airline pilots both within the Philippines and throughout Asia. That demand is being driven by fierce competition among Philippine budget airlines, and demand for professional Filipino pilots by their regional competitors.

According to Andrew McIntosh, who is operations director for Alpha Aviation Group (AAG), Philippine airlines are under pressure to generate a continual stream of new professional pilots. Part of the reason is because their businesses are expanding as Filipinos increasingly embrace low-cost air travel primarily within the Philippines, but also to nearby regional destinations, especially Hong Kong and Singapore.

Philippine airlines underwrite the training of most of the pilots they hire, and in return pilots must agree to remain with the airlines for a specified period, generally around three years. Once that obligation is fulfilled, however, despite domestic demand for their services many Filipino pilots accept positions with regional airlines because of dramatically higher pay, even when that means they must live apart from their families.

Becoming a fully certified professional pilot requires about three years of training and experience. And about $100,000. That dollar investment may seem high, but the real impediment to becoming a pilot is the investment in time. With regional airlines expanding rapidly, the time required to train and certify pilots and the alarmingly thin talent pool—experts predict airlines will need almost 200,000 new pilots over the next 20 years—present huge challenges for airline executives.

AAG has worked to address that challenge since it began operations in the Clark Special Economic Zone in 2006. It has become the world’s largest provider of Multi-crew Pilot License (MPL) pilots. Late last week, the company announced that it is further expanding its operations in Clark, adding a state-of-the-art Airbus A320 Level D Full Flight simulator, according to chief operating officer Kunal Sharma.

The company already maintains and operates an A320 simulator in its four-bay simulator facility. It also maintains a fleet of basic pilot training aircraft. As an independent training services provider, AAG counts most airlines in the Philippines among its clients, according to Mr. Sharma, and about 80 percent of the training it provides is for Filipinos employed by local airlines.

AirPhil Express, Cebu Pacific, Zest Air, and SEAir are all clients. International clients include Air Arabia and Jet Airways. “The secrets to our success in the Philippines are the abundance of local talent and the competence, ambition, and growth of players in the industry,” Mr. Sharma told reporters in Makati last week. “Those are the principal reasons for our decision to expand here.”

The executive said the company’s investment in the new simulator alone is in excess of $10 million. It will be installed in the company’s existing facility, and operated and maintained by an experienced crew of professional airline pilot trainers. Funding for the investment is being provided by Maybank, which “shares our vision for the Philippines as an emerging center of Asian aviation,” Mr. Sharma explained, “especially in the training of the region’s pilots.

Mr. Sharma—who was a licensed commercial airline pilot himself earlier in his career and more recently was regional sales manager for Boeing Training and Flight Services—and Mr. McIntosh emphasized that, “AAG graduates have established successful careers in the aviation industry. The training we provide is based on international standards, and prepares cadets to work anywhere in the world.”

The company has produced 100 MPL graduates and 160 pilots overall. The new simulator can provide approximately 6,000 training hours annually. In theory, this means that the company can produce up to 300 MPL pilots a year. However, the simulator is used by licensed pilots as well, who regularly undergo recertification as a regulatory requirement, but also because of upgrades in software and systems installed on aircraft.

According to Mr. Sharma, that means that the simulators themselves must also be regularly updated and upgraded over their 20-year lifecycle. The initial investment, the continuing investment in upgrading, maintaining, and operating the simulator, and that 20-year timeframe suggest that AAG has put down firm roots in the Philippines. That’s a good thing for several reasons.

Having the world’s largest MPL provider in the world on your doorstep is an enormous advantage for Philippine airlines. But it’s an even bigger advantage for Filipinos aspiring to become highly paid pilots. Mr. Sharma said that because of the excellent reputation of Filipino pilots internationally, they will be in high demand for decades. And many will owe their training and their careers, to AAG.

(Disclosure: AAG is a client of my firm.)

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn. Copyright © 2011 Michael Alan Hamlin. All Rights Reserved.)