Pilots are the backbone of your Navy, or sometimes, the backbone of your economy. They fly your ships, receive your commands, and execute your orders with high accuracy and efficiency. Of course, you can't blame the Pilots if you lost a battle with another player.
Pilots are recruited on any planet with the Military Academy available. The Pilots are actually recruited by first requiring a number of free Population on the planet, then, upon completion of the Academy upgrade, added to the "Total Pilots".
Currently in the game, there is a game mechanics that allows you to have a large Navy.
Pilots can be recruited when Shipyards are not found on the same planet, and vice versa. Since Pilots are counted Empire-wide, it means that you can have a whole planet specialized with "Military Training" while the other with ship-building industries. Observations so-far (in-system) have supported this hypothesis.
Also, Pilots, like Population, are counted as a Capacity. When Pilots are KIA, they don't just die. Instead, they magically show up literally at the nearest recruit station and appear healthy for the next ship to fly. For example, when your 50 fighters die, your 50 Pilots are free to be re-allocated. They can be sent to fly 8 Frigates and 2 Engineering Spaceships, for example.