Date of Award

3-19-2007

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

Department

Department of Systems Engineering and Management

First Advisor

Jeffrey S. Smith, PhD

Abstract

The purpose of this research was to create a model that could potentially predict demand for military trained pilots in the airline industry. Specifically, this thesis sought to answer the research question addressing whether or not military trained pilots are currently more in demand or less in demand. The research questions were answered through a comprehensive literature review, collection of data relevant to airline industry growth, and regression analysis. The Aviation Continuation Pay Bonus, offered to all eligible Air Force aviators, has risen from $12,000/year to its current value of $25,000/year. With shrinking budgets, and ever increasing costs of war, it remains important to implement cost savings measures wherever possible. Airline hiring is one of the most significant factors in an Air Force pilot's decision to leave the service. By monitoring airline industry, pilot growth and military pilot retention rates, it is possible to determine the amount of military trained pilots needed in civilian industry. Armed with this information, Air Force official could potentially revise bonus offerings and pilot production rates, ultimately saving the service money. Results of this research show that variables such as the unemployment rate and September 11, 2001 terrorist attacks are significant in predicting airline industry growth. Also, despite current high pilot retention rates in the Air Force, the research model shows a slight increase in demand for military trained pilots from the years 2005 to 2006.

AFIT Designator

AFIT-GCA-ENV-07-M4

DTIC Accession Number

ADA467529

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