Aviation is back; after a challenging two years, the industry is well on its way to recovery and the GHI Annual Conference, held at the RAI in Amsterdam, welcomed over 800 delegates through the doors. Mirroring the aviation industry, the 2021 event in Copenhagen had put in a strong performance considering the circumstances, but anyone attending the Amsterdam show could tell that life was returning to normal.
Welcoming guests with his opening remarks, Conference Chairman Max Gosney told the audience that aviation is a force to be reckoned with and long may the recovery continue.
“It has been a year of resurgence and comeback for aviation after the pandemic, latest figures show we are at about 75% globally of our pre-pandemic levels with some markets performing better than others,” he said.
He admitted that it is not all rosy, there are some major challenges such as China not opening its borders, high inflation, recessions in many markets, high fuel prices and a skills crisis. Despite this, Gosney said that we can look back on the year as being good for aviation.
Collaboration was a huge buzzword during the pandemic, said Gosney, explaining that, during the Covid-era webinars, people talked about a new age where all parties would have to work together for the common good to survive during the pandemic. Many heralding this as a new beginning but as volumes returned in Europe and the Americas, Gosney noted a return to old-fashioned methods as the industry struggled to cope over the summer.
There were delays, cancellations and bad publicity for the industry, and soon people were pointing the finger at others, blaming them for the chaos.
“We had, in the UK certainly, airports criticising airlines for not paying their handlers enough, we had the handlers in the firing line for not having the skills in place to meet the challenges of the recovery. We even had Heathrow Airport saying the passengers are bringing too much stuff so the fingers were out and we saw that spirit of collaboration disappear very, very quickly,” said Gosney.
Surging traffic
Panellists taking part in the Big Debate: Chaos at the airport, went on to discuss the challenges of skills and collaboration as well as capacity constraints as passenger traffic resumed. Bastiaan de Bruijne, General Counsel of Airports Council International (ACI) Europe said passenger traffic was still 20% below pre-pandemic levels and was unlikely to be back to normal until 2024. If this summer is anything to go by, it raises questions about how the industry will cope when numbers are back at 2019 levels. Staffing was a reason but not the only reason why the summer was so bad.
The recovery was steep and concentrated with higher numbers during peak periods, meaning no amount of staff or capacity was going to be enough.
He said, “It’s a bit like here in Amsterdam, if you look at a Tuesday morning, traffic jams are worse. There are fewer people overall in the offices but everyone comes in on Tuesday.”
For next year, Stewart Angus, Senior Vice President International Airport Operations at dnata does not predict such an extraordinary ramp up again, saying that this year, sometimes the airlines did not know more than two weeks ahead about a new service. Staffing has increased but it is not just a numbers game, experience is vital; this has been lost and takes time to build up again.
“While we have the numbers, because the whole infrastructure at airports has been so challenging, the way one of my managers described it was you know what it’s like the week before Christmas or the first week of the school holidays, it has been like that for four months now. We resource to a level that we need while recognising that, once in a while, things go a bit wrong. It’s almost been like that every day,” said Angus.
Skills shortages
“How can we make aviation a profession again?” This is a resounding question David Barker, CEO of Global Airport Operations, makes to stakeholders during GHI debates and again reiterated at the Annual on a panel focusing on tackling skills shortages. Interestingly, he said what came out of the pandemic in regards to global operations in the developing and developed world was a ‘tale of two cities’.
He gave examples of countries such as Pakistan, the Philippines and Brazil having fantastic operations which never struggled with head count. But when you compared the situation in the US or UK or even in parts of Europe, operations struggled immensely. “Why?” he asked.
“Well, if we look at the developing countries, aviation is still a profession. We put a posting out we get job [applications] from thousands of people to come to work there but if we go to the US, we are competing with McDonald’s, so the question for the aviation community is we need to raise the bar and make aviation a profession again,” adding that: “It was not just dnata’s or Swissport’s, or Menzies’ role, it’s all of our jobs to make aviation a profession again.”
Barker went on to say that as a community: “We need to make sure that we invest in our people so that we create the next generation of ground handling so it’s not just a job and it goes back to being a profession.”
He told delegates: “I’m really proud of dnata that we are going to invest $100 million in eGSE from now to the end of 2024. It matters to the next generation. Ground handlers are no longer just moving bags; we have autonomous vehicle trials in LA and drones in the warehouse in Dallas, using remote pushback solutions with Mototok and other units, meaning next generation electronics are operating on the ramp itself.”
Desiree Perez, Leadership Coach and Aviation Consultant, SAYGE Coaching, gave a thoughtful interpretation of the skills crisis facing the industry, explaining that people are looking for meaningful work to connect to nowadays, that they want to be part of a “bigger picture” and want to be making an impact and supported to grow a career in the long term.
She said despite labour losses and the impact of continued attrition on the ground handling industry, there were ways the industry could still grow. “The truth is that there is no overnight solution, there are many components that play into this and it’s an investment. We’ve got to be clear there is an investment of time, money and resources that has got to happen here.”
She said wage increases played a part in retention and reducing attrition but it is not the only reason, comparing today’s workers to those of the past who were more loyal to the industry. In the social revolution following the financial recession of 2008, she said it is all about people wanting a quality of life and touched on topics people are now asking such as development opportunities and whether it will be a rewarding job.
She was realistic that there was going to be continued attrition that will keep impacting revenue earnings, and continued investment would be needed on the ground handling side “for retraining and rebadging and other related hiring costs”.
Financial outlook
On day two, Forsyth Black, CEO of Edinburgh Midwest Aviation Partners spoke on the Financial Outlook: Out of the frying pan and into the fire session as we come out of the pandemic and straight into a global recession. He mentioned how Covid decimated passenger volumes to almost 100% and while the recovery strengthened for a period secondary lockdowns for countries in different regions flatlined the recovery. But Latin America and US managed considerably well during the pandemic, while the Asian markets performed badly due to China’s strict zero-Covid policy.
“We are now back to some sort of normality with some parts of the world doing as well as they did in 2019. North America to Latin America, they are already ahead of 2019 with the holiday market rebounding quite strongly but Asia is still lagging behind again,” he continued.
“We see air freight rates come back to where they were and sea freight rates coming back to where they were. But we see a different economy as we come out of Covid, a post-Covid economy that has been hit by recession.”
Strange trends have been noted, said Black, such as softening demand and inflation starting to get out of control at the same time, so workers are demanding large pay increases to cope with the cost of living.
Covid has changed the labour market. He said: “Covid has forced some people out of the market forever and some people have chosen to leave the labour market forever, so against the traditional supply and demand side economics there’s a shrinking labour shortage and that is something which many people in our industry and the wider economy have not come across before.”
In light of the recession, Black said companies will have to “revise their playbooks” while also race to adapt their strategies to deal with persisting inflation. Among the moves that will help companies emerge stronger will include managing liquidity and the balance sheet but also aggressively pursuing M&A opportunities.
In addition to this, he said that the era of cheap money was coming to an end, that will have a massive impact on deals carried out. He warned companies to take time to be “sale-ready” which was money well-spent as was targeting the right buyer pool.
Sustainability
Following on, there was an open panel discussion on Sustainability: From talking the talk to walking the walk. Chris Brown, who heads the Aviation Strategy hub at KPMG, said one of his major bugbears was accusations that the sector is greenwashing.
Almost every day, an airline is announcing a sustainable aviation fuel (SAF) partnership, but Brown said that, when you break down the numbers and time period, it is a tiny proportion of the total fuel consumed.
Airlines are also looking at hydrogen propulsion but when you look past the headline, often they are sponsoring an academic study, but, realistically, it will not be using hydrogen for decades, if ever. These are open goals for those who want to accuse the aviation industry of greenwashing, said Brown, who said there was a lot of low-hanging fruit, which could take months or years to implement, and not decades.
The biggest contributor to greenhouse gases are contrails, and they receive nowhere near the attention that they should, said Brown, who explained that they have a higher warming impact than tailpipe CO2 emissions. This is a data science issue, identifying weather conditions to significantly reduce the impact of contrails, and it is open to anyone with the right know-how to solve.
On the ground, taxiing is inefficient, even with one engine as they are not designed to run on the ground. For airlines, taxiing consumes fuel and for airports, it is often their largest source of emissions. Biofuel and robotic tugs can reduce emissions, and companies are working on motorised nosewheels, which Brown said had the benefits of decarbonising operations and offers customers operational efficiencies.
“That is where decarbonisation really resonates because decarbonisation is not going to pay for itself and there is a lot of talk in the sector about who pays for it. If a decarbonisation initiative is expensive for the amount of CO2 it is going to abate, why do it?” said Brown.
Christian Bergfelder, Managing Director and Owner of Bergfelder Consulting & Training said passengers want to feel good when travelling. In the cargo sector, freight forwarders increasingly look for providers who are actively working on reducing emissions.
Silo thinking needs to be removed, said Bergfelder, recalling a recent meeting he attended at a major European airport who talked about their electrification goals but had not thought about required infrastructure such as charging points.
At DHL, Bergfelder’s previous employer, its goal was more than 50% electric GSE on the ramp by 2026. Rather than wait for the airport operator in Leipzig to act, DHL decided to make the investment itself, which Bergfelder said is not necessarily the most efficient way as it is not working together.
“We are always talking in forums like this about we need to cooperate more, work together and share experiences, but when are we actually doing that?” he said.
Asia recovery
Javid Malik, Chairman of the Advisory Board of Ink Innovation, who used to work for Air Asia, said China remains the biggest challenge for the Asia region because it has between 60-80% of countries’ markets which has forced countries like Malaysia, Thailand, Vietnam and Hong Kong to turn their attention to their domestic markets.
He was talking as part of a panel asking: Where is Asia on the Covid recovery path? Malik was joined by Vivien Lau, Chief Executive of Jardine Aviation Services Group and Wilson Kwong, Chief Executive, Hong Kong Air Cargo Terminals Ltd (Hactl).
Malik told delegates that a trend started to appear during the pandemic: “What you started to see while conventionally it was [normally] places like Phuket, Penang and Macao that served the global international markets they had to start engaging with their domestic/regional markets. The MAHB (Malaysia airport authority) and Air Asia came together, which was unprecedented, given the history, but collaboration needed to take place and I remember saying cash is king but collaboration is queen and that has never been so true for the region.”
On putting aircraft back into service, he said, the MRO providers only have so much capacity. “It would take the next 22-26 months for just Air Asia to get its fleet back in serviceable standard order. So it’s a mathematical impossibility to say we will be flying 100% of the fleet of 2019 numbers in 2023 when the MRO capacity is not ready.”
Malik said the other challenge was the supply chain for all of the spares globally, explaining: “While it has got better there is still significant lead times as well as the production lag times. Then there is the issue whether or not you have the cash to buy them.”
Lau said it was a difficult time to recruit people at this time when aviation is still regarded as a high risk industry. “It’s difficult to recruit young people to join the industry. We used to rely heavily on a group of people who were really passionate about the industry. With this group now gone, it is difficult to get them back and difficult to groom another group of passionate staff.”
Looking ahead, she said: “Overseas carriers remain very hesitant so that they have to plan really well in advance. But we do hope by next year there will be further relaxation to travelling restrictions to Hong Kong and China.”
Staying safe
How to continue operating safely was discussed during the final day of the conference. Mark Gower, Managing Director of Gatwick Ground Services said the key concerns were staff doing unfamiliar tasks, high pressure, a hero mentality, lower experience levels and less oversight as there were fewer people to manage the situation.
Nicholas Pelham, Ground Operations Quality and Safety Manager at easyJet said the airline’s readiness journey started years ago, focusing on winter operations but questions were asked internally why was there little focus on summer, as that is the airline’s busiest period. Processes and procedures have been enhanced with preparations for this summer being started around Christmas. This put easyJet in a position to put out communications to its airport operations managers so they could prepare themselves.
“By the end of March, we knew what our challenges were. Our first litmus test came with the Easter season, which we used as a barometer for the way summer would play out,” said Pelham.
This became ingrained into everything easyJet did and does, and the teams are already looking at what this will look like for next summer. Serious air miles were put in to spread the word about safety, talking to management teams at airports and getting front-line staff engaged. No formal audits were carried out but checks were done to ensure compliance.
Another purpose was to thank the staff for their work. “We wanted to say thank you to people. The power of a thank you is so important because we recognise that we had a really tough summer and there were lots of things that came together to cause that and we know people have been working incredibly hard,” said Pelham.
Engaged leaders
Staff shortages meant senior managers had to go on to the frontline to help their staff, which was discussed in the session: Back to the shopfloor – what did senior management learn? Francisco Lopez, Operations Director at Iberia Airport Services said the way leaders approached people changed as they had to stay on the frontline with the staff, which has helped them as they can see the job for themselves.
A new rule has been put into place saying that each manager has to spend at least 5% of their time on the frontline, with flexibility about when they work. In Madrid, managers have to spend one morning a week working as a ramp agent and in Barcelona, they spend 1.5 hours a week with an employee or group of employees, shadowing them and gaining a better understanding of their job.
Jelmer Melissen, Chief Technology Officer of Viggo, the largest independent handler in the Netherlands advised anyone helping out on the ramp not to pick the easiest shifts, as staff will dismiss you as someone from management out for a jolly. Do not tell people your position, when Melissen is doing a shift, he is part of the team, not a senior manager. After helping out, do not just rush back to the office, spend time with the staff as you will learn more in half an hour over a coffee than reading your very important emails and management reports. One more point, don’t boast about it on LinkedIn.
Returning to the stage, Gower commented he would have to delete lots of LinkedIn posts. Gower was regularly on the frontline this year along with other managers and he was having to control them, making sure they were deployed where they were needed.
Returning to the frontline was eye-opening, learning that the staff wanted different things to what he expected. Gower gave the example of food; retail outlets were closed and the canteen was a long walk away, which used up their breaks, so arranging food deliveries was an easy fix that staff appreciated.
Bring on 2023
Time flies when you’re having fun, and soon it was all over. In 2023, GHI’s regional events will return, and the Annual will be in Lisbon. See you next year!
