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Coming Through the Clouds: The Airline Industry’s New Better
The aviation industry was one of the hardest hit by the COVID-19 pandemic. Now it is essential that airlines seize new opportunities.
The health of the aviation industry directly affects the global economy.
An aging employee base means the aviation industry needs significant new hires.
Rapid advances in technology present a bright future for the aviation industry.
The COVID-19 pandemic has had a profound impact on all kinds of businesses. But the airline industry has surely been one of the hardest hit.
Countries locking down, businesses putting travel on hold, conventions canceled and travelers giving up vacations had a major effect on aviation. In some regions, 97 percent of aviation activity ceased entirely during the pandemic.
Industrywide, airline travel, measured by revenue passenger miles, was down 70.6 percent in October 2020 from its level a year earlier, according to the International Air Transport Association. As bad as that was, it was an improvement from the 90 percent year-over-year decline in April.
Facing these challenges, many airlines moved to contain costs and redistribute resources, and then adapted operating models to stabilize their businesses. Now, as the COVID-19 vaccination campaign takes off around the world, there are signs of hope for the future. As airlines come through the pandemic, they’ll still face risks, but there will also be new opportunities, and it’s essential that the aviation industry seizes them.
“Aviation is not just a business. It’s part of the fabric and network that holds our world together,” says Michael Burke, chief executive officer, Human Capital Solutions at Aon. “It’s an engine for job creation. It’s an engine for social cohesion and a place of innovation.”
The aviation industry’s links to many other aspects of the economy make it a kind of global bellwether, and its lessons can help leaders in other sectors make better decisions for their own companies.
Even before the pandemic, the airline industry was not without its risks. Taking advantage of the opportunities that will exist post-pandemic will require addressing each of them successfully.
In Aon’s 2019 Global Risk Management Survey, aviation businesses identified five significant future risks. They were:
- Failure to attract or retain top talent
- Business interruption
- Cyber attacks and data breaches
- Increasing competition
- Aging workforce and related health issues
Here’s a look at how the industry is addressing a few of those risks through the pandemic and beyond.
Finding Top Talent
As was the case across numerous industries, many aviation industry companies’ initial response to the pandemic involved furloughs, layoffs and hiring freezes to conserve cash. This means that airlines’ talent problems will remain post-pandemic: There’s a global pilot shortage and skilled information technology and engineering workers are hard to find and retain.
“The sector will need about 645,000 pilots over the next two decades,” says Suzanne Courtney, strategic growth director for Europe, Middle East and Africa for Aon’s Assessment Solutions. “Potential pilots are making this career decision during their school years, so early career conversations will be key to building the pipeline.”
In the U.S., 94 percent of aircraft pilots are white and more than 92 percent male, according to the Bureau of Labor Statistics. The industry is looking to ensure the pipeline it builds is a more diverse one. Those early career conversations will be a key component of raising awareness. “Diversifying the pilot pipeline will also mean getting creative in addressing traditional barriers, like high costs of pilot training and the profession’s mobile lifestyle,” Courtney says.
The aviation industry will also need to attract workers with engineering and technical training. Aviation companies will therefore need to increase engagement with science, technology, engineering and math in the classroom.
For the industry’s current information technology, engineering and other technical workers, the pandemic has produced a silver lining of sorts: It has forced employers to think differently about remote working and employee engagement. Airlines are using that experience to offer employees flexibility to help workers achieve a better work-life balance and, as a result, are becoming more attractive to IT and engineering talent.
“When hiring technology talent, we market ourselves not by saying we are an airline, but we’re a technology company that happens to have 455 aircraft,” says Mark Duffy, deputy director HR, head of talent at Ryanair. “We have that much emphasis now on our technology.”
Tackling Cyber Crime
Like other industries, the increase in remote working in response to the pandemic has meant greater cyber security risks for aviation companies. “More end points mean more potential points of exposure to cyber risks, putting the entire network at risk,” says Stephanie Snyder, commercial strategy leader for Aon Cyber Solutions.
But airlines’ cyber exposure extends further because they rely on operational technology to control and move equipment.
Kerry Peirse, general manager of IT infrastructure, operations and security, Cathay Pacific Airways, says her airline’s cyber security approach has three stages. “The first step: Try and stop people getting in. It’s about protecting your perimeter, the perimeter of your network and your environment. Second: Slow people down should they have managed to get through. Third: If you haven’t been successful in the first two, make sure what an intruder finds isn’t particularly useful.”
Aviation companies need to take steps to understand their cyber exposures, protect critical assets, and develop and maintain robust cyber risk management strategies. Snyder says the process isn’t linear — it’s circular.
“We call it the ‘Cyber Loop.’ There are four stages: risk assessment, risk quantification, cyber insurance and incident-response readiness,” Snyder says.
From an opportunity standpoint, technology has potential to help airlines navigate evolving health and safety requirements in the post-pandemic world.
Tracking will allow airlines to identify touch points throughout a passenger’s journey and modify operations as needed to reduce the risk of exposures. Contactless processing of passengers and cargo will also help reduce exposure to the pandemic.
Aviation is not just a business. It’s part of the fabric and network that holds our world together. It’s an engine for job creation. It’s an engine for social cohesion and a place of innovation.
Reshaping the Aviation Workforce
An aging employee base and a wave of pending retirements present the industry with workforce and health challenges, paralleling many other sectors.
“As the workforce ages, mentorship will be essential as airlines rely on older pilots to coach and guide younger pilots joining the ranks,” Courtney says.
As companies look to increasingly embrace digitization, there are opportunities to expand digital talent. New hires are one way to bring in these skills. But Burke says Aon’s human capital research shows age is not a determining factor for future-ready behaviors and competencies — so there’s just as much opportunity to retrain older workers and offer mobility in new roles.
“Aviation companies that invest in training and development will benefit from loyal and engaged workforces, particularly in an environment where career paths are increasingly nonlinear,” says Burke. “And companies stand to benefit in the long run from more diverse workforces that see multigenerational teams working in collaborative environments.”
For the Aviation Industry, Brighter Skies Ahead
The combination of new talent and technology will ultimately allow the aviation industry to move beyond the pandemic and take advantage of opportunities that will drive future growth.
Changing sociocultural behaviors, political pressures, regulatory guidelines and commercial ambitions have all driven rapid advances in technology. And emerging technologies — like electric engines or vertical takeoff and landing — will drive demand to redesign infrastructure and rethink training programs to provide new necessary skills.
“In a changing world, aviation will continue to play a critical role in global trade and travel — now and into the future,” Burke says. “With robust risk management and people strategies, aviation businesses can look to the horizon and pursue opportunities with confidence.”
The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.
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