1NCThere is currently high demand for pilots.Trejos ’13 (Nancy, “Airlines face a pilot shortage, Boeing report says”, USA Today, http://www.usatoday.com/story/todayinthesky/2013/08/29/airlines-face-a-pilot-shortage-boeing-report-says/2725815/, Accessed on 6/26/14, ER)

MIAMI — Airlines will need nearly half a million new commercial pilots worldwide by 2032 as they expand their fleets, an industry forecast released today

predicts.¶ Boeing, the Chicago-based airline manufacturer, said today that airlines will have to hire 498,000 pilots — about 25,000 each year — to support all the new aircraft they are expected to add to their fleets over the next two decades. They also will need 556,000 new maintenance technicians, or about 28,000 a year.¶ Boeing's outlook, released today during the launch of the 787 flight training center at its campus here, predicts

demand for pilots will grow in all regions except for Europe. The projected increase in pilot demand is greater than what Boeing had indicated in previous forecasts. It is particularly driven by airlines' interest in single-aisle aircraft, the company said.¶ REMEMBER THIS?: Scenes from the 2013 Paris Air Show¶ But other factors are coming into play, analysts say. Thousands of pilots are retiring this year just as the Federal Aviation Administration is introducing new rules requiring new training and more rest in between flights.¶ The FAA announced a new rule last month requiring co-pilots, or first officers, to get 1,500 hours of flight time for their certification, up from 250 hours.¶ Starting next year, the minimum rest period before a pilot's flight duty will increase from eight hours to 10 and must include the ability to get eight hours of sleep in a row.¶ RELATED: Pilot

shortage looms for airlines¶ ALSO RELATED: FAA requires more pilot training after Colgan crash¶ "The urgent demand for competent aviation personnel is a global issue that is here now and is very real," said Sherry Carbary, vice president of Boeing Flight Services. "The key to closing the pilot and technician gap in our industry is enhancing our training with the latest, cutting-edge technologies to attract and retain young people interested in careers in aviation."¶ The most pronounced shortage will be in the Asia Pacific region, where 192,300 pilots and 215,300 technicians will be needed, according to Boeing's forecast.¶ Even though demand has declined slightly in Europe, the region still will need another 99,700 pilots and 108,200 technicians.¶ North America follows with a projected demand for 85,700 pilots and 97,900 technicians. Latin America will be in need of 48,600 pilots and 47,600 technicians.¶ TWITTER: Follow USA TODAY's Nancy Trejos¶ Analysts say the brunt of the shortage will be felt by regional carriers that operate half of the USA's scheduled flights. They simply won't be able to compete with the larg er airlines.¶ "The major U.S. airlines are just beginning the longest and largest pilot hiring binge in history, and the 'wake turbulence' will be very disruptive to smaller flight operations who feed them pilots," says Louis Smith, president of FAPA.aero, a company that provides career and financial advice to professional pilots.¶ The pool of qualified candidates is drying up for everyone, says Robert Mann, president of airline consulting company R.W. Mann & Co. in Port Washington, N.Y.¶ The industry has historically hired former military pilots, he says.¶ "These days the military is short of pilots, not mustering them out, like in the post-Vietnam years through the 1980s," he says.¶ Meanwhile, the number of people willing to deal with the liability insurance and fuel and maintenance costs for a plane has declined.¶ All that, he says, has made getting a pilot's license "a huge expense, and the number of flight schools has likewise declined."¶ Poor wages also have not helped to attract qualified candidates, he says.¶ A first officer for a regional carrier, still on probation, typically makes $18,000 to $20,000 a year before taxes at first, Mann says. Flight school loans can reach $100,000, he says.Katie Connell, a spokeswoman for Airlines for America, which represents the industry, disputes that there is a lack of qualified candidates. "Long-term projections about pilot hiring are inherently subjective as they are

based on assumptions about airline growth that have often proved to be faulty," she says. "We expect the major commercial airlines will be appropriately staffed, and are not expecting any shortage within the next few years."

An aff discovery of the plane’s fate would increase aviation insurance ratesGabriel 4/14 (Anita Gabriel, “MH370 may raise aviation sector insurance rates”, The Business Times(Singapore),http://proxy.library.georgetown.edu/login?url=http://search.proquest.com/docview/1511564677?accountid=11091, Accessed on 6/26/14, ER)

[SINGAPORE] With the disappearance of the Malaysia Airlines jet, the aviation-insurance industry could face one of the biggest "war-loss" payouts since the terrorist attack on New York's World Trade Centre in 2001.¶ If it is indeed the case that the loss of flight MH370 was triggered by what is termed "war loss" - such as pilot suicide or a hijacking - rates for aviation-sector policies could spike in the coming months, said international agency Standard & Poor's Ratings Services.¶ "War loss" is a separate insurance product that indemnifies the value of an airplane's hull in the event the jet is destroyed or damaged beyond economic repair, such as through a terrorist act, a hijacking or pilot suicide.¶ The insurance market, which covers risks such as these has "limited players" and an annual premium pool of under US$100 million globally.¶ A leading player in this realm is Lloyd's of London unit, Atrium. Lloyd's of London said last week that it was ready to pay out claims for the

loss of the missing Boeing 777 jetliner.¶ Standard & Poor's estimates the losses for the aviation-insurance market at between US$250 million and US$450 million, depending on potential court settlements.¶ The bulk of the sum will comprise liability-loss payouts to families of the passengers; US$100 million will cover the value of the airplane hull.¶ Connie Wong, Standard & Poor's head of insurance ratings for Asia, told The Business Times that the sum could be higher, depending on the outcome of the potential law suits by families of the victims.¶ Last week, US law firm Ribbeck Law Chartered International said it had initiated the first civil legal proceedings related to MH370 and planned to pursue lawsuits seeking "millions of dollars" for the aggrieved families.¶ It is noteworthy that the amount paid for each passenger - there were 239 people of 14 nationalities on board - could vary widely as payouts are based on the jurisdiction in which the claim is filed and the nationality of the passenger, among other things.¶ Standard & Poor's does not, however, expect the liability payouts to rattle the global insurance and re-insurance companies or their Asian peers. Its credit analyst

Dennis Sugrue said in a statement yesterday: "The losses will be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual re/insurers."¶ The losses for Asia's rated life insurance companies should be manageable, said Standard & Poor's.¶ Ms Wong said: "Asian insurers are smaller, so even a small loss can impact them. But no one player is expected to be significantly affected."¶ The payouts on aviation insurance policies after the Sept 11, 2001 attacks - when aircraft used as weapons crashed into the World Trade Center, leading to huge loss of life - has been estimated at US$4 billion.¶ MH370 has yielded no clues to how or exactly where it disappeared on March 8. Since it has been established that the plane had flown for a significant period of time after its last contact with ground control, the possibility of "human intervention" has been widely speculated as a possible reason the jet left its charted course.¶ Despite the efforts of one of the largest international searches mounted by commercial and military planes and ships, there has not been a single

confirmed sign of aircraft wreckage. The search is continuing, hampered only by bad weather.¶ Three types of policies are available in the aviation insurance space - "all-risk" policies, which cover multiple-risk elements for commercial airlines; war and political risk policies, and product-liability policies to cover mechanical failure.¶ If product liability caused the loss of MH370, it could trigger claims against third parties such as the airplane or engine makers or airports associated with the flight.¶ Standard & Poor's said: "The uncertainty around the final loss and settlement amounts will remain for some time, but insurance protection for this event is well syndicated in the global aviation market."¶ Australian Prime Minister Tony Abbott yesterday echoed his Malaysian counterpart Najib Razak in saying that there was no hope of finding survivors from MH370, and that the plane was lost in the remote, freezing Indian Ocean.¶ Referring to the wave of criticism levelled at Mr Najib for saying last week that MH370 was irrevocably lost on the basis of satellite data, Mr Abbott said that, amid the "absolutely overwhelming wave of evidence", Mr Najib was "perfectly entitled to come to that conclusion, and I think once that conclusion had been arrived at, it was his duty to make that conclusion public".¶ Mr Najib will travel to Perth tomorrow to visit Pearce air force base and to see the search operations off Australia first-hand.¶

High insurance rates kills flight schools, leaving pilot demand unfulfilled-9/11 proves.Balona ’02 (Denise-Marie, “Pilot School Stalls after Flight Insurance Rates Soar”, Knight Ridder Tribune Business News, http://proxy.library.georgetown.edu/login?url=http://search.proquest.com/docview/464487436?accountid=11091, Accessed on 6/26/14, ER)

DBCC isn't the only institution grappling with insurance rates. Sky-high premiums are becoming a serious threat to flight schools throughout the United States, said Carolyn Williamson, executive director of the University Aviation Association, an organization representing degree-granting, collegiate aviation programs nationwide. She has seen rates jump as

much as 200 percent since Sept. 11, 2001.¶ "Insurance is a big thing," Williamson said. "Flight schools are struggling with the impact, some to the point of closure."¶ Richard Keltner, a regional manager for NationAir Insurance Agencies Inc., one of the country's largest aviation insurance specialists, said underwriters have raised flight-school premiums mostly because of the higher cost of settling claims and because poor investment market conditions are not providing them with the same level of profit. Also, premiums are higher because underwriters aren't as willing to spend their money insuring an industry that, right now, is considered a high risk.

Aviation key to the global economyIATA ’13 (“Aviation Economic Benefits”, International Air Transport Association, http://www.iata.org/publications/economics/Documents/890700-aviation-economic-benefits-summary-report.pdf, Accessed on 6/26/14, ER)

Global economic growth is a key driver of growth in air traffic demand. However, while air traffic demand has

increased ¶ as economies have grown, air transportation itself can be a key cause and facilitator of economic growth. Not only is the ¶ aviation industry a major industry in its own right, employing large numbers of highly skilled workers, but more importantly ¶ it is an essential input into the rapidly growing global economy. Greater connections to the global air transport network can ¶ boost the productivity and growth of economies by providing better access to markets, enhancing links within and between ¶

businesses and providing greater access to resources and to international capital markets.

Demand for Pilots (Lauryn)World demand for pilots increasing.

Glennie 2014 [Charlotte, for CNN] [http://www.cnn.com/2014/02/23/travel/asia-pilot-shortage/] February 23, 2014

(CNN) -- A 35% increase in demand for air travel. A tripling of the region's airplane fleet. Up to nearly 13,000 new planes needed. Predictions for growth in the Asia Pacific aviation industry over the next two decades are impressive. But one question keeps recurring in the region and, indeed, around the globe. Will there be enough pilots to fly the new planes and enough technicians to maintain them? "The airlines say, 'OK, we've just bought a bunch of airplanes and we've put in all our funding into the airplane,'" says Bony Sharma, vice president of Mil-Com Aerospace Group, a Singapore-based aviation training company. "Now where does the funding come in to train the pilots, to train the engineers, to train even the management people, to keep these airplanes operational and safe and flying? That's the biggest challenge that we're facing." 100 flight schools 'still not enough' Mil-Com runs training for a number of Asia-based airlines, including the privately owned Vietnamese carrier VietJet Air. Earlier in February, the low-cost carrier signed a $6.4 billion contract with Airbus for 63 new single-aisle A320 planes, the lease of seven and the option to buy a further 30 aircraft. Like so many of Asia Pacific's low cost carriers, however, VietJet Air is struggling to recruit enough personnel to fulfill its lofty ambitions, due to what Sharma describes as an "extremely serious" shortage of pilots. "All the airlines in Vietnam are heavily dependent on international pilots," says Sharma. "They're competing from the same pool of pilots as the Middle East, with the growth of Singapore, the growth of AirAsia. It's that same pool that all these airlines are competing for, so it's a big challenge in Vietnam." Mil-Com has been working with VietJet Air since it was founded in 2011, training engineers, technicians and cabin crew. At February's Singapore Airshow, Mil-Com and Eagle Flight Training of New Zealand signed a Memorandum of Understanding with Vietnam's Aerospace Engineering Services JSC (AESC), to open a flight school in Vietnam, focused on training pilots. "Even if we set up 100 airplane flying schools tomorrow, it still wouldn't be enough," says Sharma. "The

shortage is that extreme." Half a million pilots needed globally Released in August 2013, the Boeing Pilot and Technical Market Outlook for 2013-2032 forecasts nearly half a million new commercial airline pilots will be needed to fly all the new airplanes entering the world fleet over the next 20 years. The problem is acute in Asia Pacific. There the Boeing report says the explosion in demand for air travel will mean 192,300 new pilots will be required by 2032, including 77,400, or 40% of them, in China. It's an issue the industry is working to address. "What we can do is partner with governments, partner with training agencies, partner with airlines and focus a training curriculum that allows the training of those pilots," says Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes. "We're trying to get out in front of it." Together with partner airlines, Boeing runs pilot training schools in Singapore, South Korea, Australia, Japan and China.

Half a million more pilots will be needed in the 20 years.

Davies 2013[Alex, Business Insider reporter] Aug. 29, 2013 [http://www.businessinsider.com/boeing-projects-major-need-for-pilots-2013-8] Accessed: 6/28/14 LGF

The global aviation industry will need half a million more pilots in the next 20 years to keep up with demand, according to a new forecast report from Boeing. The 2013

Pilot and Technician Outlook says that by 2032, the world will require 498,000 more pilots and 556,000 more technicians. That's about 25,000 new pilots every year. The bulk of that demand (192,300 pilots) will come from the Asia Pacific region, where the airline industry is booming. In its Current Market Outlook, published earlier this year, Boeing predicted the area will require 12,820 new airplanes, worth $1.89 trillion. The key to meeting the demand for pilots and technicians "is enhancing our training with the latest, cutting-edge

technologies to attract and retain young people interested in careers in aviation," Sherry Carbary, vice president of Boeing Flight Services, said in a press release.

Plan Can Find the Plane (Lauryn)

MH370’s black box will tell us what happened with the plane.Faulkner 4/14 (John Faulkner, “Flight MH370 black box: What can it tell us”, The New Zealand Herald, http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11235876, Accessed on 6/26/14, ER)

As the search continues for wreckage from the missing Malaysia Airlines plane it's probable that answers surrounding the mystery of flight MH370 will not be available until the recorders are recovered.¶ There are two main recorders and the main flight data recorder is vital as it has a virtually complete record of all aircraft parameters until a crash, when it loses aircraft power.¶ It should record the last 25 hours of flight operation with a minimum requirement to measure data across five areas:¶ • Pressure altitude ¶ • Indicated airspeed¶ • Magnetic heading ¶ • Mormal acceleration ¶ • Microphone keying (to link it to the second, cockpit recorder).¶ It's an extremely sturdy piece of equipment and will survive almost any kind of crash. It's placed at the back of the aircraft as generally aircraft crash nose-first.¶ Why is it called a black box?¶ The name "black box" survives from the second world war when all advanced electronic devices in aircraft were secret and were either painted black or made from black materials. They're usually called "crash recorders" in the industry and since the 1960s they've been painted bright orange to make them easier to find.¶ If the recorders end up in the sea, the salt water releases a device - the underwater location beacon (ULB) - that is then capable of sending a sonar signal for up to one month. The frequency of the beacon is 37.5kHz which is identical to that heard by rescue authorities this week.¶ This sonar signal can be heard underwater and picked up by systems on all warships and specially fitted ships:¶ • The time taken for a sonar signal to hit a target and return gives its distance¶ • Change in pitch on return of the signal gives a measure of movement.¶ The challenge, though, is the beacon's battery power. It must last a minimum of 30 days and although it can last longer, it still means a race against time for authorities before the pinger goes flat. With more modern battery systems, it may be time to revisit and extend the life of this device.¶ Flight recorder images courtesy of Australian Transport Safety Bureau.¶

Conversations in the cockpit¶ The other part of the black box is a cockpit voice recorder. This device records all conversation on the flight deck but it overrides the recording every

two hours, so only the final two hours can be obtained. Again, following this case this could be extended by updating the equipment.¶ But there have been industrial problems. Pilots, like most people, guard their privacy and do not readily agree to have all their conversations recorded. Would you like your conversations - in their entirety - recorded on a long flight?¶ A number of airline systems can erase recordings after aircraft shutdown.

The last two hours of flight MH370 may well be useful in giving some indication of what has happened, even if there is silence.¶ Inside a flight recorder and the memory chip now used for recording information (left) replacing the tape that was once used (right).¶

New search location may lead to finding the plane.

Ahlers 2014 [Mike, CNN- director of U.S. Immigration and Customs Enforcement] June 18, 2014 [http://www.cnn.com/2014/06/18/world/asia/malaysia-missing-plane/]

Washington (CNN) -- The doubters have spoken. A group of independent experts -- who prodded authorities to release satellite data on Malaysia Airlines Flight 370 -- says it

thinks it knows the approximate location of the missing aircraft. "While there remain a number of uncertainties and some disagreements as to the interpretation of aspects of the data, our best estimates of a location of the aircraft (is) near 36.02 South 88.57 East," according to the statement, which was approved by 10 named experts. The group opted to release its statement late Tuesday in advance of a BBC documentary on the missing plane, and ahead of the Australian government's announcement on the focus of the search, so that there would be no question about the independence of the group's findings, said one member of the group, American Mobile Satellite Corp. co-founder Mike Exner. "We wanted to get our best estimate out," Exner said. The group believes that after the Boeing 777 circumnavigated Indonesia, for reasons that are still unknown, the plane traveled south at an average speed of 470 knots, probably at a consistent altitude and constant heading, Exner said. All five computer models developed by the experts place the aircraft in a "pretty tight cluster...plus or minus 50 miles of each other," he said. The plane and its 239 occupants vanished March 8 while flying from Kuala Lumpur to Beijing. In a blog post, group member Tim Farrar called the recommended search site "our best estimate -- but not the only possible -- location for a potential search."

Cost of Accident (Supreme Overlord)The insurance for the plane itself will cost over $100 millionThe Malaysian Insider ’14 (The Malaysian Insider, “Insurers to pay up to RM1.5 billion for MH370 loss, says expert”, http://www.themalaysianinsider.com/malaysia/article/insurers-to-pay-up-to-rm1.5-billion-for-mh370-loss-says-expert2, Accessed on 6/28/14, ER)

Standard & Poor's (S&P), an American¶ financial services company, said the final total¶ would depend on whether

faulty mechanics¶ were to blame, reported South China¶ Morning Post (SCMP).¶ S&P credit analyst Dennis Sugrue estimated¶ the losses associated with the value of the ¶

plane itself to be about US$100 million, with¶ most payouts going to relatives of those on¶ board. ¶ "The amount paid for each passenger could¶ vary widely based on the jurisdiction in which¶ the claim is filed and the nationality of the¶ passenger, among other factors," S&P told the¶ daily. Wall Street Journal (WSJ) had reported¶ that the insurers of Malaysia Airlines flight¶ MH370 have agreed to

share the US$100¶ million cost of the lost plane as it is unclear¶ how the plane went down.¶ The agreement, the paper had said, was only¶ for the cost of the plane and does not cover¶ passengers' individual life insurance policies ¶ or compensation from the airline.¶ It had reported that the reinsurance is¶ divided between insurers covering hull and¶ liability – an all risk comprehensive policy¶ which covers loss of passengers and plane,¶ and another policy that covers the plane against a malicious act, known as Hull War and Allied Perils.¶ "When the cause of loss is unknown, we both put up 50% of the value of the aircraft," a person familiar¶ with the issue had

been quoted as saying by WSJ.¶ The agreement, however, does not mean that the reinsurers have accepted full liability, and the¶ division of the payment will be negotiated among themselves as the airline is paid in full.¶ German insurer Allianz Global Corporate & Specialty was reported as saying that it was the lead¶ insurer for the MAS plane for the

hull and liability policy.¶ Lloyd of London's unit, Atrium, is the lead insurer against malicious acts, such as terrorism and¶ suicide. It had offered to pay half of the value of the plane.¶ While Allianz had declined to comment, Lloyd had said it has "a record of paying all valid claims and¶ has

already begun to pay claims arising from this tragedy".¶ Personal insurers, it was reported, had already started making payments to the victims of MH370¶ following the declaration by Malaysian authorities that the plane, with 239 people on board, had¶ crashed in the southern Indian Ocean with no possibility of survivors.¶ "We have taken the necessary steps to make initial contact with the families of our policyholders¶ aboard the plane," said AIA Bhd, one of the insurers. ¶ Insurers for the Chinese passengers on board the plane had also started making payments to the¶ families.¶ A total of 1,110 personnel from seven nations are scouring the Indian Ocean to try to uncover evidence¶ of what happened to the Boeing 777, which vanished enroute from Kuala Lumpur to Beijing on March¶ 8, reported the SCMP.¶ Among the vessels due to join the search is Australia's Ocean Shield, which has been fitted with a¶ sophisticated US black box locator and an underwater drone.¶ However, the locator would only be used if "conclusive visual evidence" of debris was found, US Navy¶ spokesman Commander William Marks told CBS's Face the Nation program yesterday. – April 1,¶ 2014.

Insurance cost for the plane can be over 500M, cause high impact on the insurance companiesAbbott, 3-21-2014(MH370: Echoes of 9/11 haunt insurance industry as Australia joins search for plane,http://www.insurancebusinessonline.com.au/news/mh370-echoes-of-911-haunt-insurance-industry-as-australia-joins-search-for-plane-185662.aspx. ST)

An Australian aviation law and insurance expert believes the mere suggestion of terrorism as the cause of Malaysian Air Flight 370’s disappearance 12 days ago reinvigorates memories of the post-9/11 fallout in the aviation insurance industry. A statement issued by the AMSA at 11pm AEDT yesterday said that four aircrafts from Australia, the US and New Zealand were used yesterday to search the ocean for the plane.  A merchant ship arrived on Thursday and a second one is

said to be on route. The search came to an end when night fell. The search will resume today. The total insurance loss of Malaysia Airlines flight is between US$500m and $600m.

Allianz is the lead insurer. Shannon O’Hara, senior associate at Brisbane-based law firm Carter Newell, has claimed

that the repercussions of a potentially catastrophic loss in the case of MH370 will be felt throughout the aviation industry, particularly by insurers of airlines. “The aviation insurance market differs from most other markets because the potential exposure of airlines in the event of a catastrophic loss is significant,” O’Hara told Australasian Lawyer when approached for comment on the unfolding crisis. Though the risks associated with catastrophic events are typically spread widely,

keeping the exposures of any given insurer within acceptable limits, impacts are felt broadly by insurers. While conventional aircraft losses can typically be gauged via the effects on insurance premiums, more significant accidents - and particularly the terrorist attacks on

September 11, 2001 - can invoke wider impacts on insurer policies and their airline clients “The September 11 terrorist attacks took the issue of insurance for catastrophic aviation events to the next level,” O’Hara said.

At the time, premiums for airline companies increased significantly, and a blanket global approach was taken by insurers to exclude risks associated with terrorist attacks that include hijacking. O'Hara is not expecting the MH370 incident to result in such

measures. "Other than by reference to increased premium and resultant profit impact issues among airlines and insurers, the disappearance of MH370 is unlikely to affect aviation insurance policies, and the endorsements attaching thereto, in the same way as the events of September 11," O'Hara explained. “Of course, until some certainty around MH370 is achieved, it is impossible to fully ascertain the flow on effect to the industry, particularly given MH370 may itself throw a new unexpected challenge." The MH370 rescue efforts, which have been plagued by allegations of ineptitude on the part of Malaysia's Department of Civil Aviation, which is coordinating the operation, may also raise questions internationally as the disaster unfolds. “In the longer term and within a global context, the international community may turn to consider matters such as the adequacy of the MH370 emergency response together with the parties compliance with the guidelines set by ICAO [International Civil Aviation Authority], Annex 13 to the Convention on International Air Transportation,” O’Hara said. ICAO's Annex 13 deals with issues relevant to the disappearance, including incident reporting, data systems and information exchange. Airline customers may also be affected by the fallout as emergency security measures are put in place. "We anticipate heightened security processes - both in an airport and airline context - will have already been put in place at least in the short term," O'Hara said. "In this regard, it is worth noting the security screening processes in place post-September 11, 2001 are of course, rigorous, so the degree to which the travelling public might readily observe any heightened security processes is somewhat questionable," she added.

War Risk(Daisy)Finding MH370 would cost insurance millions. Business News, March 31, 2014 (Business News, S&P: Potential losses from MH370 at US$250m to US$450m (Update), http://www.thestar.com.my/Business/Business-News/2014/03/31/SP-says-Potential-losses-from-MH370-crash-at-US$250m-to-US$450m/, Accessed June 28, 2014, DES)

Standard & Poor's estimates losses from the Malaysia Airlines MH370 to be between US$250mil and US$450mil, depending on potential court settlements.¶ The

international ratings agency said on Monday the losses would be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual reinsurers.¶ S&P credit analyst Dennis Sugrue said: "The impact on smaller rated Asian insurers and reinsurers that have a share of the potential losses should be manageable because their reinsurance

or retrocession protection is likely to keep their net loss relatively low."¶ The ratings agency pointed out if the Malaysian event was classified as a war loss, then it would be one of the largest losses in this class of business since the terrorist attacks on the World Trade Center in 2001. The loss would most likely lead to rate increases in aviation war policies in coming months.

Malaysia 370 could have been hijacked. Mendick, Telegraph’s chief reporter, 3/15/14 (Robert, He has spent almost two decades in newspapers; previously, he has been news editor of the Independent on Sunday and chief reporter of the London Evening Standard, Malaysia Airline MH370: 9/11-style terror allegations resurface in case of lost plane, Accessed June 28, 2014, DES)

Evidence of a plot by Malaysian Islamists to hijack a passenger jet in a 9/11-style attack is being investigated in connection with the disappearance of Flight MH370¶ An al-Qaeda supergrass told a court last week that four to five Malaysian men had been planning to take control of a plane, using a bomb hidden in a shoe to blow open the cockpit door.¶ Security experts said the evidence from a convicted British terrorist was “credible”. The supergrass said that he had met the Malaysian jihadists – one of whom was a pilot – in Afghanistan and given them a shoe bomb to use to take control of an

aircraft.¶ A British security source said: “These spectaculars take a long time in the planning.”¶ The possibility of such a plot, hatched by the mastermind of the 9/11 attacks on the Twin Towers in New York, was bolstered by an admission by Najib Razak, Malaysia’s prime minister, that the Boeing 777’s communications systems had been deliberately switched off “by someone on the plane”.

Airline economy is key to us and global economy (can add aviation is key to other things too)Airlines for America 14 (Airlines for America creates measures that improve safety, security, and well being of the aviation industry and has been recognized by several government departments, such as Congress, for its work, “Economic Impact”, 6/28/14, http://www.airlines.org/Pages/Economic-Impact.aspx, 6/28/14, MJL)

In the summer of 2005, Pulitzer Prize winner Daniel Yergin opined, "Every day, the airline

industry propels the economic takeoff of our nation. It is the great enabler, knitting together all

corners of the country, facilitating the movement of people and goods that is the backbone of economic growth. It also firmly embeds us in that awesome process

of globalization that is defining the 21st century." Indeed, the World Bank recognizes that "Air transport has become an essential economic and social conduit throughout the world. Beyond the benefits of fast and inexpensive transcontinental travel, air transport also has become a vital form of shipping for high-valued items that need to come to market quickly, such as agricultural products subject to spoilage." Further, it notes that air cargo has become the essential mode of transportation for high value and perishable goods, wherein 40 percent of all goods by value worldwide are transported by air: "Many developing countries depend heavily on air cargo for their exports as other modes are unreliable or non-existent." University of North Carolina Professor John D. Kasarda (Director of the Kenan Institute of Private Enterprise at UNC's Kenan-Flagler Business School) has observed that major airports are essential to U.S. competitiveness and are powerful engines for local economic growth. "Business is a contact sport," Kasarda observes, "and aviation is the physical Internet — it lets people and products physically connect over long distances quickly... It enables the real connectivity. We're talking about what enables the world to be flat." He noted in an October 2008 article that the combined importance of speed, agility and connectivity in today's increasingly fast-paced, globally networked economy are creating a new economic geography "with aviation networks driving and shaping business location and economic development in the 21st century as much as highways did [in] the 20th century, railroads in the 19th, and rivers and seaports in the 18th... The upshot is that route development, business development, and regional economic development go hand-in-hand around the globe." On May 22, 2008, in a speech to the Aero Club of Washington,former

U.S. Air Force Secretary Michael Wynne declared that "Our country's vastness and its economy depend upon commercial aviation as the backbone of national and international commerce… Global trade undergirds America’s strength and allows the United States to project its economic power. In my opinion,

the commercial aviation industry [is] a crucial component of America’s economic strength. This has been true for decades, and will remain true into the foreseeable future." In August 2008, Moody's Economy.com chief economist Mark Zandi remarked that "Aviation is the glue that keeps the global economy together. Without widely accessible and well-priced air travel, the global economy will quickly become less global." In June 2014, the Federal Aviation Administration (FAA) Air Traffic Organization (ATO) published "The

Economic Impact of Civil Aviation on the U.S. Economy," finding that incommercial aviation was ultimately responsible for 5.2 percent of U.S. gross domestic product (GDP) in 2012,

helping generate $1.455 trillion in economic activity, $437 billion in personal earnings

and 11.3 million jobs. Economic Impact of Commercial Aviation on the U.S. Economy (2012) Economic Activity/Output (annual) $1.455 trillion Personal Earnings (annual) $437 billion Share of GDP 5.1 percent Job Impact 11.3 million Source: FAA Air Traffic Organization, The Economic

Impact of Civil Aviation on the U.S. Economy, June 2014 In the FAA report, ATO Chief Operating Officer Teri Bristol observes, "The nation's economic success depends on having a vibrant civil aviation industry."

Unidentified passengers, hijacking proofThe Economist, March 10, 2014 (RB, The Economist, In the dark, http://www.economist.com/blogs/gulliver/2014/03/malaysia-airlines-flight-mh370, Accessed June 30, 2014, DES)

NOTHING quite makes sense about the disappearance of Malaysia Airlines Flight MH370, a Boeing 777 that dropped out of contact with air-traffic controllers while flying on an even course in good weather on Saturday morning. But it seems certain that something terrible happened to the plane, which was bound from Kuala Lumpur to Beijing.¶ Vietnamese officials said on Sunday that they believed they had spotted a door from the aircraft floating in the sea. But Azharuddin Abdul Rahman, the head of Malaysia's Civil Aviation Authority, later said that it had not found "anything that appears to be an object from the aircraft, let alone the aircraft." Oil from a long slick, which was spotted in the area, is being tested to determine whether it originated from the plane or from shipping.¶

Search crews from ten countries will expand the area they are combing from Tuesday, after suggestions that the plane tried to turn back at some stage into its flight. But it may be months or even years before anyone knows exactly what happened to the jet. The black boxes onboard Air France Flight 447, which crashed over the Atlantic in 2009, were not recovered until 2011.¶ Most aeroplane accidents happen during takeoff and landing, and most are survivable. That is what makes incidents like this one—when a plane seems to disappear without so much as a distress signal—so mysterious. The mystery deepened on Saturday, when officials in Austria and Italy confirmed that two of the passengers on the flight had used European passports that were reported stolen in

Thailand in 2012.¶ The Malaysian government confirmed on Sunday that it had footage of the two men who boarded the plane. One of them has since been identified, although further details have not been released. Reuters quoted a senior Malaysian police official as saying that officers had previously foiled several plots to blow up planes leaving Malaysia. "We have stopped men with false or stolen passports and carrying explosives, who have tried to get past KLIA (airport) security and get on to a plane," he is quoted as saying. "There have been two or three incidents, but I will not divulge the details."¶ There are many possible explanations besides terrorism. Many commentators

have pointed out that it is common for travellers to attempt to travel with stolen passports in Asia. Interpol keeps a database of 40m stolen passport numbers, but very few countries take advantage of it or make any effort to block owners of stolen passports from boarding planes. Maybe it's time for that to change.

Black boxes will tell us what happened to the plane.Wong and Semple, The New York Times, April 1, 2014(Edward and Kirk, With Plane Still Missing, Legal Moves for Payouts Start, http://www.nytimes.com/2014/04/02/world/asia/malaysia-airlines-flight-370-compensation.html?_r=0, Accessed June 30, 2014, DES)

The most a Chinese court has awarded plaintiffs in a fatal plane crash case is about $140,000 per passenger, for an accident involving Henan Airlines in 2010. Zhang Qihuan, a lawyer who has been talking to relatives of those on Flight 370, said a court probably would

not award more than that in any accident, to avoid setting a precedent. But he said families could settle for a much higher amount out of court if they agreed to keep quiet.¶ Some lawyers say it

is too early to begin discussing lawsuits because there is insufficient evidence to establish why the plane disappeared. Forensic analysis of the flight data recorder and cockpit voice recorder — the black

boxes — or debris from the plane might help sustain a case. Malaysian officials have not accused anyone of wrongdoing.¶ Robert A. Clifford, an aviation accident lawyer based in Chicago, said he had been contacted by a lawyer in Texas claiming to speak for a Flight 370 family. But he emphasized that no one should rush into litigation. “You don’t have to knee-jerk it, go out, file something,” he said. “This is a process, not an event, and this race is not always won by the swift.”¶

Malaysian officials and Malaysia Airlines are girding themselves for legal and financial fallout from the plane’s disappearance.

HIJACKING VERY LIKELY, WAR RISK INSURANCE WILL APPLY

O’Conner, Daily News, March 14, 2014 (Tim, Official says there's 'conclusive' evidence missing Malaysia Airlines Flight 370 was hijacked by someone 'with flying experience' as hunt zeroes in on two possible 'routes', http://www.nydailynews.com/news/world/malaysia-airlines-flight-370-divert-andaman-islands-article-1.1721523, Accessed June 28, 2014, DES)

¶ Malaysia's leader said Saturday the disappearance of Malaysia Airlines Flight 370 was the result of "deliberate action."¶ Earlier, a Malaysian official said it was "conclusive" the plane was hijacked. But Prime Minister Najib Razak

said investigators are still looking at all possibilities.¶ Najib said authorities now know the missing Malaysia airliner's transponder was intentionally disabled, and it turned back from its flight to Beijing and flew across Malaysia. He said investigators concluded one of the pilots or someone else with flying experience

hijacked the jet.¶ Later Friday, Malaysian acting Transport Minister Hishammuddin Tun Hussein was less definite, acknowledging at a press conference only that authorities are not discounting the possibility of a hijacking.

HIJACKING PLOT DISCOVERED FOR MH370, WAR RISK INSURANCE WILL APPLY

Mendick, Telegraph’s chief reporter, 3/15/14 (Robert, He has spent almost two decades in newspapers; previously, he has been news editor of the Independent on Sunday and chief reporter of the London Evening Standard, Malaysia Airline MH370: 9/11-style terror allegations resurface in case of lost plane, Accessed June 28, 2014, DES)

Evidence of a plot by Malaysian Islamists to hijack a passenger jet in a 9/11-style attack is being investigated in connection with the disappearance of Flight MH370¶ An al-Qaeda supergrass told a court last week that four to five Malaysian men had been planning to take control of a plane, using a bomb hidden in a shoe to blow open the cockpit door.¶ Security experts said the evidence from a convicted British terrorist was “credible”. The supergrass said that he had met the Malaysian jihadists – one of whom was a pilot – in Afghanistan and given them a shoe bomb to use to take control of an aircraft.¶ A British security source said: “These

spectaculars take a long time in the planning.Ӧ The possibility of such a plot, hatched by the

mastermind of the 9/11 attacks on the Twin Towers in New York, was bolstered by an admission by Najib Razak, Malaysia’s prime minister, that the Boeing 777’s communications systems had been deliberately switched off “by someone on the plane”.

WAR RISK CAUSES HUGE ECONOMIC TOLLS

Business News, March 31, 2014

(Business News, S&P: Potential losses from MH370 at US$250m to US$450m (Update), http://www.thestar.com.my/Business/Business-News/2014/03/31/SP-says-Potential-losses-from-MH370-crash-at-US$250m-to-US$450m/, Accessed June 28, 2014, DES)

Standard & Poor's estimates losses from the Malaysia Airlines MH370 to be between US$250mil and US$450million, depending on potential court settlements.¶ The

international ratings agency said on Monday the losses would be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual reinsurers.¶ S&P credit analyst Dennis Sugrue said: "The impact on smaller rated Asian insurers and reinsurers that have a share of the potential losses should be manageable because their reinsurance or retrocession protection is likely to keep their net

loss relatively low."¶ The ratings agency pointed out if the Malaysian event was classified as a war loss, then it would be one of the largest losses in this class of business since the terrorist attacks on the World Trade Center in 2001. The loss would most likely lead to rate increases in aviation war policies in coming months.

Hijackings caused by personal hardship

Koerner, March 14, 2014(Brendan, Wired, How the Missing Malaysia Airlines Jet Could Have Been Hijacked, http://www.wired.com/2014/03/malaysian-airlines-flight-370-possibly-hijacked/, Accessed June 28, 2014, DES)

Though data points may be accumulating in favor of the hijacking theory, it remains difficult to believe that MH370 is now in the possession of a global terror network that plans to use it in a future attack; landing and hiding a Boeing 777-200ER–a 209-foot-long aircraft with a 200-foot wingspan–in a lawless corner of the world would require immense resources, not to mention luck. In fact,

there’s a good chance that any hijacker of the flight was not motivated by any

sort of radical ideology, but rather by personal woes. In the history of air piracy, the vast majority of hijackers have been men or women who, though they may have claimed political affiliations, were most interested in fleeing from desperate circumstances: economic hardships, legal entanglements, love affairs gone wrong. In the era before everyone had to pass through metal detectors and have their carry-on luggage screened,

hijacking a plane was an easy and spectacular way to try and alter one’s fortunes. One young American hijacker, who tried to flee to Cuba with her boyfriend in the late 1960s, neatly summed up that mindset when later asked why she had opted for such a risky crime: “Something had to be done–and I did something, for better or worse. It [was] better than eighteen years of therapy, or whatever. It just seemed like the answer.”

Pilot hijacked plane, Pilot experiencing hardships

Moral, Daily News, March, 26, 2014

(Lee, Malaysia Airlines Flight 370 pilot' in ‘no state of mind to be flying,’ says friend, as search for missing plane explores possible debris southwest of Australia, http://www.nydailynews.com/news/world/flight-370-pilot-friend-shouldn-flying-article-1.1734998, Accessed June 28, 2014, DES)

Captain Zaharie Ahmad Shah was “terribly upset” that his marriage with wife Faizah Khan was falling apart, a longtime friend told the New Zealand Herald newspaper Wednesday.¶ “He’s one of the finest pilots around and I’m no medical expert,” said the friend, who is also a pilot and insisted on not

being identified. “But with all that was happening in his life, Zaharie was probably in no state of mind to be flying.”

HIJACKING CONFIRMED BY MALAYSIAN PRIME MINISTERC, The Economist, March 16, 2014(R, The Economist, The plot thickens, http://www.economist.com/blogs/banyan/2014/03/malaysia-airlines-flight-mh370?page=2&spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709, Accessed June 29 2014, DES)

IT WAS always going to be significant that the Malaysian prime minister himself, Najib Razak, took the daily press conference on March 15th that is usually given by his underlings. Sure enough, Mr

Najib had momentous news, that the authorities now blame “deliberate” action for whatever happened to Malaysia Airlines Flight MH370, now missing for more than a

week. He stopped short of calling this a hijacking, but experts now agree that this is what must have happened; so

catastrophic mechanical failure, or pilot error, are now ruled out. But whether this deliberate action was that of a deranged pilot, other members of the crew, some of the passengers, or even someone else, is unknown. Furthermore, the search for MH370 just got a lot harder. Authorities from 25 countries are now being obliged to scour a much larger area than before, over land as well as sea. ¶ Mr Najib announced two vital new bits of information. The plane’s communication systems were systematically disabled after take-off, and after its last contact with air-traffic control over the South China Sea it was probably flying for about another seven hours. The plane was diverted back across peninsular Malaysia and flew off in a north-westerly direction. It certainly had enough fuel on board to do this.¶ Given the fact that the plane continued flying for so long, the search area has now been widened spectacularly, along two corridors. The first is northwards, across China towards Kazakhstan, Turkmenistan and beyond, and the second southwards, towards Indonesia and the Indian Ocean. Given the vast distances and areas involved, it might well take a lot longer to find the plane, or at least some debris if it did indeed crash. But the

hijacking hypothesis, and long flying time, also raises the slim hope that the plane might have landed somewhere, and that the

passengers therefore might just be alive. Some family members therefore welcomed the news.¶ ¶ The fact that a hijacking of some type has now been confirmed as the most likely cause of MH370’s disappearance also means that the police are renewing their investigations into the 227 passengers and 12 crew members on board. The police are looking into four possibilities: hijack, sabotage and personal and psychological problems. And as the “deliberate” actions involved in disabling the plane’s communications, and then diverting it onto a new course, clearly required detailed knowledge of the Boeing 777 and no little skill, interest has inevitably focused on the pilot and co-pilot.

Losses from war risk will be spread throughout global aviation marketNyman, Insurance insider at the post magazine, March 31, 2014(Francesca, The post magazine, Where am I? Flight MH370 loss could impact war risk rates, http://www.postonline.co.uk/post/news/2337128/flight-mh370-could-impact-war-risks-rates, Accessed June 29, 2014, DES)

In the past few years, prices have significantly declined in the market for "all risk" aviation policies, due to strong growth in capacity in this historically profitable line of business. At the same time, the number of claims and severity of losses have been declining since 2001, S&P said.¶ But while losses related to the Malaysian jet are unlikely to halt recent rate declines in the global aviation market,

there may be implications for the war risk market, which is smaller and has a limited pool of premiums- market estimates are less than $100m annually globally.¶ For the war risks policy to kick in, there would need to be evidence of circumstances including terrorist activity, hijacking, or pilot suicide. Lloyd's insurer Atrium Underwriting is the lead insurer for Malaysia Airlines' war risks policy.¶ The loss of the plane is likely to have limited impact on the credit profiles of the rated reinsurers and insurers exposed to the event as is well syndicated in

the global aviation market, S&P added.¶ Based on information from public and market sources, the loss is expected to be between $250m-$450m "depending on potential court settlements" the ratings agency said.¶ "The losses will be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual re/insurers," said Standard & Poor's credit analyst Dennis Sugrue.¶ "The impact on smaller rated Asian insurers and reinsurers that have a share of the potential losses should be manageable because their reinsurance or retrocession protection is likely to keep their net loss relatively low," he added.¶

S&P does not expect the net retained losses (after the reinsurance payment) to have a notable impact on the overall financial profile of affected global re/insurance companies.

AFF A2

1. Non-Unique: Spending Will Happen AnywaysRidley, CEO Intelligent Travel, 14 (Tony, “The Sinister, Scary Impact of Malaysia Airlines Flight MH370”, http://intelligenttravel.com.au/travel-risk-management/sinister-scary-impact-malaysia-airlines-flight-mh370, Date Accessed 6/28/14, JAL)

Direct Impact and Likely Outcomes of Malaysia Airlines Flight MH370 Aviation technology will face renewed pressure for modernisation and upgrades. This will put economic burden on an already pressured industry and will likely drive some providers or services out of select markets as a result.

Governments will also be pressured to regulate and spend in this area too but inconsistent international results will not close the gap or solve the problem in the next decade. This gap will remain a key vulnerability for competent and persistent threat groups.

2. No Internal Link: Aviation Industry Won’t CollapseNorris, Journalist for CommercialRiskEurope.org, April 3, 2014 (Ben, “$450m losses from flight MH370 will not arrest soft aviation market–S&P”, http://www.commercialriskeurope.com/cre/3142/56/450m-losses-from-flight-MH370-will-not-arrest-soft-aviation-market-S-P/, Date Accessed 6/29/14, JAL)

S&P estimates that insured losses from missing Malaysia Airlines flight 370 will total between $250m and $450m and not arrest declining premium rates in the global aviation market.  However, depending on how things unfold, there may be a rise in pricing for aviation war risk insurance that indemnifies airplane hull in the event of terrorist activity, hijacking or pilot suicide, added S&P.

The total losses will not notably impact the overall financial and credit profiles of global re/insurance companies exposed to the event, said the rating

agency.  "The losses will be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual re/insurers," said its credit analyst Dennis Sugrue.  S&P was keen to point out that losses are subject to several variables including potential court settlements. But added that the tragedy is unlikely to trigger material changes in the soft pricing environment for global aviation insurance.  In the past few years prices have significantly declined for 'all risk' aviation policies as a result of strong capacity growth in this historically profitable line of business. At the same time, the number of claims and severity of losses have been in decline since 2001.  However, S&P said that claims emanating from the loss could trigger three different policy types: 'all risk' aviation; war and political risks; and product liability.  If the Malaysian Airlines disaster is classified as a war loss it would be one of the largest losses in this class of business since the terrorist attacks on the World Trade Center in 2001 and would most likely lead to rate increases for aviation war policies in coming months, it said.  "This market is relatively small with limited players and pool of premiums (market estimates are less than $100m annually globally)," explained S&P. It estimates the losses associated with the value of the flight hull at about $100m.  The bulk of the total insured loss will be driven by liability loss payouts to family members of the passengers. The amount paid for each passenger could vary widely based on the jurisdiction in which the claim is filed and the nationality of the passenger, among other factors, said S&P.  The final shape and size of the loss will depend on whether a mechanical fault caused the incident, which would then lead to product liability losses.  The

event could also trigger additional claims filed against third parties, such as airplane or engine manufacturers or

the airports associated with the flight.  "The uncertainty around the final loss and settlement amounts will remain for some time, but insurance protection for this event is well syndicated in the global aviation market. The credit impact on rated re/insurers should therefore be limited," said Mr Sugrue.

3. Non-Unique: Aviation Industry was Already Bad Before 9/11Makinen, Coordinator Specialist in Economic Policy Government and Finance Division, September 27, 2002 (Gail, Report for Congress: “The Economic Effects of 9/11:  A Retrospective Assessment”, http://fas.org/irp/crs/RL31617.pdf, Date Accessed 6/29/14, JAL)

The use of commercial airplanes as assault vehicles to wreak havoc on the United States has no precedent in

aviation history. At the time of 9/11, the industry was already in financial trouble due to the recession. 9/11 severely compounded the industry’s financial problem. Even though the federal government quickly responded with an aid package that gave the airlines access to up to $15 billion (consisting of $5 billion in short-term assistance and $10 billion in loan guarantees), it is by no means certain that the industry will not have to undergo a major reorganization typified by U.S. Airways filing for Chapter 11 bankruptcy and United suggesting that it may take a similar course of action.

4. No Internal Link: Their own evidence by Anita Gabriel says, “The losses will be well spread throughout the global aviation insurance and reinsurance markets, resulting in a limited credit impact on individual re/insurers5. Case > on Probability, their evidence assumes war loss payouts which only happens in specific circumstances, MH 370 might not meet meaning no insurance payouts on the scale of war loss6. Alt Causes to Flight School Closes: Their own Balona evidence says, “Also, premiums are higher because underwriters aren't as willing to spend their money insuring an industry that, right now, is considered a high risk.” Plan doesn’t Solve this

7. Non-Unique: Pilot Decline NOWFlight International Magazine, June 10, 2014 (“ANALYSIS: The truth about the US pilots shortage”, http://www.flightglobal.com/news/articles/analysis-the-truth-about-the-us-pilots-shortage-400009/, Date Accessed 6/30/14, JAL)The US General Accounting Office says it does not know if there is an airline pilot shortage in the country. The Air Line Pilots Association says there is no shortage. The US Federal Aviation Administration says it is not the cause of the problem. The Regional Airline Association says: come to Cleveland, Ohio or Tupelo, Mississippi or Devils Lake, North Dakota and we will show you there definitely is a shortage and it could become everyoneâE[TM]s problem. Republic Airways, for example, has grounded 27 Embraer EMB-140 aircraft it flew on behalf of American Airlines and United Airlines, telling its investors the decision was based on âEoethe significant reduction in qualified pilots who meet the

congressionally mandated 1,500h pilot experience rule and the companyâE[TM]s rigorous qualification standardsâE. Republic chairman and chief executive Bryan Bedford recently testified to the US House Committee on Transportation and Infrastructure Subcommittee on Aviation: âEoeHad we been able to keep those aircraft flying, we would need nearly 800 more employees.âE  Great Lakes Airlines is taking the drastic step of converting its 19-seat Beech 1900s into nine-seaters, enabling them to fly with a single pilot as a Part 135 carrier and thus cutting its pilot requirement in half. The Cheyenne, Wyoming-based carrier had trimmed service to 17 cities, some of which is being restored with the modified turboprops, but plans to park 11 of its 28 aircraft. Florida-based Silver Airways ended scheduled service to five cities in New York, Pennsylvania, and West Virginia in February and another five in Alabama and Mississippi in April. President and chief executive Dave Pflieger blames âEoeincreased requirements related to new hire pilot certificationâE, which has had âEoethe unintended effect of creating a nationwide shortage of regional airline pilotsâE. United Airlines spokesman Rahsaan Johnson also cites regional-carrier pilot shortages when the carrier dropped Cleveland Hopkins International airport as a hub, eliminated non-stop service to over 40 cities, reduced peak-time departures from 199 to 72, and left the city of Cleveland with a potentially vacant concourse initiated at the behest of Continental Airlines, which United merged with in 2010. The effect on travellers is typically two-fold: higher ticket prices and longer times to get to their destination, either via flight connections through other cities or car, bus or train rides to a major airport. âEoeIt is not just regional airlines and the smallest markets they serve that face a pilot shortage crisis,âE Bedford told the Congressional committee. âEoeThe pilot shortage is a threat to air carriers large and small and to our nationâE[TM]s economy overall.âE He noted that regional airlines provide the exclusive source of scheduled air service at 70% of US airports and the majority of air service at 86% of the countryâE[TM]s airports, adding: âEoeSome may be surprised to learn that many larger hubs are also served mostly by regional airlines. For example, 66% of Chicago OâE[TM]HareâE[TM]s flights are operated by

regional airlines.âE In other words, there is likely to be a domino effect on air service. If regional airlines cannot hire pilots to fly their aircraft, that reduces the feeder traffic to their major air carrier partner hubs. A GAO report issued in April found that small airports have lost 20.5% of flights since 2007, medium-sized airports have lost 23.9%, and large hubs are down by 9.1%. And larger-capacity aircraft are not the reason: these lost flights represent about 80,000 fewer total seats. Consultants Matt Barton and Dan Akins at Flightpath Economics warn in a white paper entitled Grounded: The Devastating Impact of the Pilot Supply Crisis that 239 airports across the country are at risk of losing air service. âEoeThe stability of the airline industry, and the large economic benefits that it generates, are currently threatened by a growing shortage of available, qualified, and interested pilots.âE They estimated over the next 10 years a potential shortfall of up to 10,000 pilots resulting in lost revenue to the aviation industry of as much as $26 billion, eliminating as much as $50-130 billion in total annual economic activity, a scale they compared with âEoethe economic impact of 9/11âE. Big Foot syndrome RAA president Roger Cohen says there is a demand for air service âE" âEoethereâE[TM]s just not the pilots that can fill itâE. He points out that the FAA 1,500h rule, part of the agencyâE[TM]s August 2013 implementation of the Airline Safety and Federal Aviation Administration Extension Act of 2010 (Public Law 111-216), which mandated that all first officers carry an Air Transport Pilot certificate, caused a âEoesevered pipelineâE, with âEoea huge demand as pilots leave the workforce but a shrinking number of people come inâE. Cohen tells Flightglobal in an exclusive interview that there has been talk of a pilot shortage half a dozen times over the 40 years he has been in the aviation industry. âEoeTo a lot of people, it almost became like the Loch Ness monster or Big Foot; people had heard about it but no-one had really seen it.âE A GAO report issued in February concluded that indicators of a pilot shortage are mixed; it could not definitively say whether there was a shortage or not. Senior Policy Analyst Vashun Cole admits the study âEoeran into a number of data limitations trying to do the econometric modelâE. At the recent RAA Convention in St. Louis, the GAO report was blasted for apparently failing to factor the impact

of 9/11 on pilot salaries and other labour market indicators. Cohen is emphatic that there is a pilot shortage. âEoeThis time it is different. It is here. It is very real. And it has happened faster and more significantly than anyone had ever expected.âE All of the previous âEoesightingsâE of a pilot shortage at the commercial level, he explains, âEoewere mitigated by what could be termed exogenous eventsâE, in other words produced by something outside the system, for example: recession, fuel prices, 9/11, or SARS. Cohen says a regional airline pilot shortage was just starting to manifest in 2007. âEoeA number of carriers had actually begun to cut service, but

then the industry was overtaken in 2008 by the global recession.âE In effect, the recession, together with the FAA raising the mandatory pilot retirement age to 65, postponed

the pilot shortage. âEoeNow those people who are 65 are starting to leave the profession, there is a little bit of growth in the commercial sector, and yet we have the confluence of long-term demographics âE" people getting out of the

profession, the pay is not what it needs to be, the industry has lost its glamour, kids arenâE[TM]t interested in science and technical kinds of activities âE" and, coming out of the recession, thereâE[TM]s a global need for airline pilots. But hereâE[TM]s the capper: a whole set of new regulations layered onto all of this.âE The FAA 1,500h rule âEoehas moved the goalposts and cut off the pipeline for people who were currently training to start their

careerâE, says Cohen. Bedford laments: âEoeJust as the industry was beginning to hire new, much-needed pilots, the FAA placed an additional obstacle between future aviators and their professional airline career.âE He notes that aspiring pilots who have graduated from well-regarded training programs âEoemust now spend an additional 12-18 months building extra flight hours in predominantly unstructured environments before airlines are permitted to hire and place them into their own structured training programs.âE This gives new meaning to the phrase âEoegap yearâE after graduation, including more cost, which discourages many candidates from pursuing pilot careers altogether. A study last year by half a dozen universities with aviation training programs revealed that more than 40% of student pilots may drop out of the pipeline: 9% are no longer considering an airline pilot career because of the new requirements, and one-third are âEoereconsideringâE their career choice. There is concern, too, that lack of continuity and structure during the âEoehours-buildingâE gap of a year or two between formal training and reaching the magical 1,500h hour level may cause new pilots to lose their sharp edge. âEoeUnfortunately, these aviators often find themselves needing to put the start of their airline career on hold while they literally fly in circles accumulating hours in aircraft and operating conditions that are in no way similar to those they would gain as a first officer flying under the authority of an experienced airline captain,âE said Pedro Fábregas, president and chief executive of Envoy Air, an American Airlines subsidiary. Show us the money ALPA, a union representing about 50,000 commercial pilots in the US and Canada, claims there is no shortage of capable candidates, only âEoea shortage

of pay and benefits for pilots in the regional airline industryâE, according to president Lee Moak. Stephen Farrow, president and chief executive of Piedmont Airlines, disputes this. He says the regional carrier sought 50 new pilots in the first quarter but could only hire 28. âEoeThis is not due to a lack of motivation or compensation. Piedmont pays one of the highest first-year salaries

($30,000) in the regional industry and offers a $5,000 signing bonus for new hires. This is due simply to an acute shortage of qualified, appropriate pilots on the market, and the unprecedented demand for their services.âE Like many regionals, Silver Airways is offering a signing bonus to entice qualified first officers. Silver recently doubled the ante to $12,000, which it claims is the highest in the

regional airline industry. The major US air carriers have all exhausted their pools of previously furloughed pilots. Delta Air Lines recently called back all of its pilots, United recalled the remainder of its laid-off pilots last autumn, and American Airlines used up its available furlough roster a year ago. Victoria Day, spokesperson for the trade group Airlines for America (A4A), says: âEoeWe expect the major commercial airlines will remain appropriately staffed and are not expecting any shortage. In fact, commercial airlines continue to attract quality

candidates for our openings âE" including pilots âE" because we offer well-paying jobs with good benefits.âE As the major carriers turn to the next most-qualified group of candidates âE" pilots flying for regionals, there simply are not enough of them to go around. Cohen says most estimates show a need in the US for about 18,000 new pilots by the end of the decade. âEoeRight now, thatâE[TM]s more pilots than all the regionals have combined.âE Alternative pathways? Challenged at the RAA convention, FAA Administrator Michael Huerta defended the clearly unpopular ATP certificate and 1,500h requirement. âEoeCongressâE[TM]s intent was clear. They wanted to increase the qualification and experience requirements for pilots.âE

He claimed, âEoeWe broadened the flexibility as much as we could in an effort to address industry concerns.âE But Huerta also left the door slightly ajar, saying: âEoeWeâE[TM]re open to discussing ideas on strengthening the pilot pipeline.âE The FAAâE[TM]s AFS-280 department, the Air Carrier Training Systems and Voluntary Safety Programs Branch, has established an Aviation Rulemaking Committee to explore âEoealternative pathwaysâE to enable more young pilots to attain their ATP. The ARC is chaired by AFS-280 manager Rob Burke and Don Dillman, managing director of Flight Operations for A4A. The 15-member group, whose meetings are not open to the public, also includes representatives from airlines, academia, and training vendors such as FlightSafety International and CAE. Currently the FAA regulations permit exceptions to the 1,500h threshold only for authorised two-year college programmes (1,250h), four-year college programmes (1,000h), and military (750h). The RAA and others would like to see credit for other âEoestructuredâE or âEoeproficiency-basedâE training, such as airline-sponsored programs through flight training academies. They would also like to reconsider substituting some flight hours with simulator-based time, as many as half of the 1,500, a concept originally proposed to the FAA but which is capped at 100h under the current rules. The ARC is expected to make recommendations within a year. Might the FAA also adopt an ICAO Multi-crew Pilot License (MPL) programme, as have about 50 national aviation authorities around the world? âEoeWe donâE[TM]t like to use that word [MPL],âE says Cohen, a sentiment echoed by many who see the FAA as overly resistant to the MPL concept, which requires only 250h of flight time for new pilots âE" the same number of hours FAA regulations had considered acceptable for decades until the US Congress dictated otherwise. Proponents of MPL (including a consensus at last DecemberâE[TM]s ICAO MPL symposium) argue that the highly structured, competency-based programs, which have produced about 1,000 new pilots to date worldwide, âEoeshowed an equivalent level of performance out of the MPL graduatesâE compared with a traditional commercial pilot licence approach, according to Mitch Fox, chief, ICAO flight operations section.

8. No insurance price rise--Most recent evidence suggests that auto pilot flew the plane into the ocean after the crew and passengers died from suffocation—not war-lossSmith, journalist for international business times, 6/27/14 (Lydia, “MH370 passengers likely suffocated in ‘ghost flight’: What is Hypoxia and Which Planes Has it Brought Down? http://www.ibtimes.co.uk/mh370-passengers-likely-suffocated-ghost-flight-what-hypoxia-which-planes-has-it-brought-1454406 accessed 6/30/14, keg)

The passengers and crew of the missing Malaysia Airlines Flight MH370 most likely died from suffocation after coasting into the southern Indian Ocean on autopilot , according to a report released by Australian officials. The Australian Transport Safety Bureau outlined how investigators had arrived at this conclusion after comparing the conditions on the flight with previous disasters, although the report contained no new evidence from within the aircraft. The report narrowed down the possible final resting place of the Boeing 777 from thousands of possible routes, highlighting the lack of communisations, the straight flight path and various other key abnormalities of the flight, according to Reuters. "Given these observations, the final stages of the unresponsive crew/hypoxia event type appeared to best fit the available evidence for the final period of MH370's flight when it was heading in a generally southerly direction," the report said. The report stated it was likely the plane was on autopilot when it came down. " It is highly, highly likely that the aircraft was on autopilot otherwise it could not have followed the orderly path that has been identified through the satellite sightings," Australian Deputy Prime Minister Warren Truss told reporters in Canberra. Investigators have said the little evidence they have suggests the plane was deliberately diverted thousands of kilometres away from its scheduled route, before crashing into the ocean. The document also revealed the search will move further south to an area 1,800km (1,100 miles) off the western coast of Australia.

9. Even if the demand for pilots is high, new pilots have stopped entering the field—low salariesZillman, journalist for fortune,3/3/14

(claire, “why airlines are running out off pilots” http://fortune.com/2014/03/03/why-airlines-are-running-out-of-pilots/ accessed 6/30/14, keg)

Regional airlines can’t fill their cockpits because their pilots earn miserably low pay . But the smaller firms are subject to the cost-cutting whims of major carriers. FORTUNE — Apparently, a good pilot is hard to find. On Friday, the U.S. Government Accountability Office released a report on the current and future availability of airline pilots. In its typically cagey language, the GAO said that it found “mixed evidence regarding the extent of a shortage of airline pilots.” The real takeaway: Regional airlines can’t fill their cockpits, and it’s because their pilots earn miserably low pay. According to data for 14 regional airlines , the average new pilot’s hourly wage is about $24 per hour , the report says. But the Air Line Pilots Association estimates that the average starting salary is even lower than that — $22,500 per year , which for a 40-hour work week equals an hourly rate of $10.75 . Unsurprisingly, 11 of the 12 regional airlines the GAO interviewed reported difficulties filling entry-level first-officer vacancies . “ You just can’t find people to work for those wages ,” says Helane Becker, a managing director at Cowen and Company who covers airlines It’s not simply a matter of regional airlines being stingy. Rather, it’s a

result of the uneven marriage between regional airlines and their bigger, brand-name counterparts. Regional jet services — such as SkyWest or Republic Airlines — fly to cities that lack the demand to merit service from larger carriers like United UAL -1.01% or Delta DAL -1.55% . A regional airline typically doesn’t sell tickets directly to passengers but instead signs contracts to operate under the brand names of bigger carriers — an arrangement that subjects regionals’ revenue to the whims of their overseers. That position became especially precarious in the early- and mid-aughts, when larger airlines landed in bankruptcy and required regional airlines to rebid for contracts at lower rates. For instance, a few days before Delta filed for bankruptcy in 2005, it entered into an agreement with SkyWest that put a cap on the amount of money the regional carrier could make from the deal. If SkyWest SKYW 0.33% earned “excess margins over certain percentages,” they had to be returned or shared with Delta, according to a SkyWest Securities and Exchange filing. As a result, regional airlines cut costs — including employee wages — as they battled each other for contracts with major carriers. “The regional guys think, ‘If I raise costs, the industry will simply go to the lowest common denominator,’” says Robert Mann, an airline industry consultant. Pilot wages received another blow in late 2007, when Congress passed legislation extending the mandatory retirement age from 60 to 65. The law put the United States on par with international standards, which let pilots fly an additional five years. The discrepancy between the ages had created an odd situation where American pilots retired at 60 only to be hired by international carriers. They were still subject to the 60-year retirement law when in American airspace though, so when flying in or out of the U.S., they had to surrender the controls to a younger copilot, says Mann. Prolonging the retirement of pilots was a logical step for Congress, but it depressed pilot wages even further in an industry in which pilots ascend the ranks of regional airlines with the goal of eventually landing in the cockpit of a more prestigious — and better paying — mainline carrier. But in 2007 , older pilots suddenly received another five years of eligibility and stayed put, so the supply chain of pilots stalled, and so did pilots’ pay raises. “In that five-year window, if you were a first officer, you went through five more years of stagnation,” Mann says. “You would have moved up, but captains chose to fly for five more years. It was a one-time free pass to continue to operate the industry under economics as they were.”

10.