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Pilot's Guide to Handling Economic Cycles

The Puns of  Ups & Downs

If you have been in aviation for more than 5 years, you know the cyclic nature of our industry. Any hiccup in the economic world results in a ripple effect echoing through military, commercial and business aviation resulting in both upswings and downswings. Being involved in a financially sensitive business like ours, with relatively poor returns on invested capital, begs for preparation with all who are involved. Over the past few years, we aviators have enjoyed continuing growth of world economies, good performance of airlines and the financial and emotional gain of this “super-cycle”. Unforeseen fluctuations in the market put pilots, flight attendants, air traffic controllers and the likes under severe economic pressure, and most of them lack strategies for cycle oriented behavior. To put it plainly: “when its good eats, you eat like kings and queens, when the going gets tough, the Mac-and-cheese years of being broke during flight training flash before your overly-satiated eyes”. So two questions need to be answered:

  • What do you do when the bottom falls out resulting in an economic decline?

  • What are you doing to prepare for the next cycle during an economic peak? 

What do you do when the bottom falls out resulting in an economic decline?


First things first, clearly identify your situation. Are you furloughed, laid off, fired, demoted, pay-reduction? Bust out that contract and start reading. Look for things like non-compete, or see what the verbiage is regarding pay outs etc. Get resourceful if something is unclear to you. For example, if you are a member of AOPA, did you know you get a free half-hour consultation by a professional aviation lawyer? Get resourceful and fully understand your situation. 


Time to update that gloriously annoying budget that clearly identifies the fact you shop way too much on Amazon and eat out far too often then you should. If you don’t already have one, you better dust off that calculator and get to work. Keep it basic and get a good idea of three different breakdowns: 

    - Living Expenses, 

    - Credit Card / student loan debt  

    - Discretionary spending. 

Compare and contrast the essential bills that must be paid first and see how much you have in your savings to cover these bills. 

There are plenty of free online resources that have simplified budgets you can use. I personally use google sheets budget template and tailor it to my needs. Heres a free download.


 Now that you are familiar with whats coming in and whats going out, it’s time to answer some pertinent questions.​

  • What do you have available? In the bank. In savings. In Assets. What can you sell?

  • What memberships can you cancel or freeze?

  • Who do you owe money to? What’s the minimum payment required? Put away the credit cards NOW.

  • Who is part of your support network? Reach out. Let them know what’s happening. They may have an alternative solution.

  • Do you have any unemployment insurance policies? What about payment protection on the mortgage? Are you eligible for unemployment?

These all don't have to be answered at once, and there may be other questions that arise as you start down this basic list above. This will set you up to intimately understand your financial situation. 

Cycle-Proof Your Finances

1. Make Sure You’re Credit Card Debt-Free ASAP

Getting rid of credit card debt while you’re able to will be a lifesaver during a recession. If you have credit card debt you should consider consolidating it. Debt consolidation isn’t as complex as it sounds. All you’re doing is borrowing money at a low-interest rate and using it to pay off high-interest debt. That means your monthly interest repayments go down and there’s only one bill to pay each month. Simple but effective! is a handy and free tool to visualize your debt and start making these necessary changes.

2. Whip Your Credit Into Shape, and keep monitoring it!

A lot of things that happen to you in your adulthood and specifically in your aviation career are riding on your credit score. Considering how many things in life are credit dependent, when an economic hardship hits the aviation industry, you will be ready with a strong credit score and it will make your life so much easier to refinance, consolidate debt or request payment extensions.   Credit Karma is free and updates you as soon as changes occur in your credit. 

3. Cut Back On Your Unnecessary Expenses 

Subscriptions to things like streaming services, the gym, or Amazon Prime can be budget killers, especially if you aren’t even using them. Apps like Truebill and Bobby can track and/or cancel your subscriptions for you.

4. Protect your Assets 

We tend to think of insurance as an unnecessary expense that gets in the way and provides little long-term value. However, the reality is that insurance can be a solid way to protect your assets. As you arrange your finances, make sure you pay attention to insurance and get the protection you need.The items that we insure are often expensive and difficult to replace. These are assets that, if damaged or destroyed, would be prohibitively expensive to buy again without devastating your finances. Educate yourself on:

    1. Home insurance

    2. Auto insurance 

    3. Renter insurance

    4. Liability insurance

    5. Life insurance

There’s other various types of insurance that can help you protect you as well, from disability insurance to valuable contents insurance. The key is to identify your own needs and what assets would break you if they were lost. 

5. Aim to build up 6 months of expenses and don’t touch it. 

So next time this scare happens, (and it will), you will have breathing room to figure it out! I know this seems impossible and most are preferential to investing said funds, but it's a really solid goal to aim for and whether you successfully get there or not, you’re probably still going to be better off either way with a strong savings. 

6. Don’t use up all of your resources. 

In other words, don’t be “house-poor”. You know, buy the biggest house you can afford in the best neighborhood and not be able to afford furniture to put in it. Its very appealing and easy to do when you’re in a financially good spot; push for that extra acre of land, opt in for all of those extra gadgets on that vehicle,  upgrade your vacation destination. All of those decisions add up in the long run. If those upgrades require you to put anything on a credit card, DON’T DO IT. They will cost you so much more in the end and chances are, you don’t need it. Live within your means!

Final thoughts, be open and honest with those that are trying to help you with whats going on. Have your banker and your CPA in your corner. They eat it up and love problem solving with numbers. As long as you are transparent, they will help protect you from yourself AND try to get you your hearts desires at the same time. Banking and tax-prep technology has gotten so far away from personal interaction with these kinds of relationships, you would be surprised how much farther you can go with a face-to-face meeting. 

Whether you're reading this during a peak or a trough in the economy, don't give up on your dreams in aviation, the financials always comes back around and that fire you feel when you fly will never go out. 

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