Plain English Meaning
What a pilot is actually able to handle right now, based on training, experience, fitness, and current state of mind — not what the aircraft can do, but what the person flying it can do.
Full Definition
The total set of skills, knowledge, experience, physical condition, and judgment a pilot brings to a flight, which together determine what that pilot can safely accomplish at a given moment.
Context Anchor
Seen in instructor discussions about judging whether a student or pilot is ready for a task, a lesson, a solo flight, or a more demanding flight condition.
Derivation
Pilot comes from older words meaning a person who guides or steers. Capability comes from Latin roots meaning able to take in or handle something. Together, the phrase points to what a pilot is truly able to handle in flight.