The last two years have been tremendous, and the industry got through it with the three key words of people, purpose and passion, Sean Fernandes, Senior Manager – Airport Services, Training and Compliance, Postholder Ground Operations at flydubai told the audience at the opening ceremony.
He congratulated the industry for their dedication during the pandemic, calling it an amazing two years, urging the audience to give themselves a round of applause.
Following the round of applause, Fernandes welcomed Monika Mejstrikova, Director of Ground Operations at IATA, to the stage, who talked about how the recovery was faster than expected.
International connectivity is over 80% of pre-pandemic levels though not all regions have recovered, highlighting Asia, which is about 20% and not likely to change while China remains closed to international travel. She called on states to make bold decisions to remove travel restrictions.
Mejstrikova continued, “The summer season is here, and our passengers are ready to travel, they want to travel and we cannot disappoint them. We need successful and sustainable ground operations but we have challenges with staff shortages and many experienced staff have left during the pandemic and we know that they are not coming back.”
The industry needs stronger talent acquisition strategies to make hiring much faster. More compelling retention strategies are essential to keep staff, suggesting career path mapping is one way to go, demonstrating how easy and fast it can be to grow in the industry.
The time it takes for staff to receive security clearance is an issue, and the industry needs to work with authorities to resolve this.
CEOs talk
CEOs took to the stage next, with Valentin Lago representing Air Europa, Steve Allen of dnata, and Richard Prince of Aviapartner joining IATA Director General, Willie Walsh and session moderator Nick Careen, Senior Vice President Operations, Safety and Security at IATA to share their views on sustainable aviation.
Careen started the session saying that the previous night he had woken up at 3 o’clock and could not get back to sleep so he was speaking to his father on the phone in his native Newfoundland.
His father asked what he was going to do at the conference and Careen told him he was moderating a CEO panel.
Careen was asked to ask the CEO if they sleep like babies, a comment that confused him until his father explained: “they wake up every two hours crying!”.
The pandemic was the deepest and most prolonged crisis the industry had ever seen, said Walsh. Highlighting how severe the impact was, Walsh said that revenue fell by 6% in 2001 post-9/11, a massive crisis at the time.
In 2009, following the global financial crisis, revenue was down over 16% but that was nothing compared to 2020 when it was down 56% compared to 2019. He praised the industry for learning from previous crises and its determination to keep going.
“We are faced with what I think are business as usual challenges, rebuilding our networks and schedules, getting people back into the business. While this is incredibly challenging, it is a nice challenge to have relative to where we have been over the last two years. A terrible two year period for the industry but we’re still in business, we’re rebuilding and I’m optimistic about the demand scenario for the summer and rest of the year. It’s going to be a good year for everybody in this industry and we need it,” said Walsh.
Allen added that everyone had learnt a new definition of the word turbulence, and everyone had to look at the way they work with each other, planning and replanning much more frequently, and seasonality requires a major rethink.
“The resilience of the people is obvious, we should never talk about Covid without mentioning it. It has been incredible how the industry has ridden that turbulence and I think we’ve learnt that automation has to be the future. Standardisation is essential for automation and we need to progress with that,” said Allen.
The pandemic gave people the chance to rethink what they do, saying that dnata reduced its cost base, new people work for the company, and it has a new perspective on digitisation. Pre-Covid, most had never used Teams or Zoom but now everyone has.
Customer relationships need a rethink, how contracts are created and how more resilience can be built into the contracts as the world looks forward and creates a better industry.
Prince agreed that the challenges today are business as usual but going back to what was done before is not the solution; there are problems to resolve today but knowing what the future will look like is essential.
He said: “We have to not get too lost in trying to fix the past and focus on how do we become a different type of organisation providing a different type of service. At Aviapartner, we are talking about what is the future product we are selling to airlines.”
What they sell to airlines and the type of person is changing, saying: “Generations and people are changing, we are not going to be able to recruit thousands of people who want to lift bags all day the way we have done before so that recruitment process is fixed today but focus on the future because it is a different set of talents and skills that we currently employ.”
In the present, staffing is an issue; Allen admitted that it is a challenge in the US, UK, Europe, and Australia in particular, because of migrant workers going home or finding other roles, saying the migrants have been relied upon for lower skilled roles.
Higher up, people like data scientists have gone to tech companies who have boomed and thrived during the pandemic.
“We really need to add what I call the magic dust back into our industry. Prior to Covid, we always talked about how everybody loves working in the industry, it’s so interesting, aviation fuel, all of that stuff. We need to get that feeling back again,” said Allen.
In those locations, the industry “has a mountain to climb” but Allen added that recently he was in Brazil, and in a location like that, if he wanted to recruit another 500 people, he could do it tomorrow.
When the pandemic struck, Aviapartner believed that the ability to bring back resources quickly would be fundamental. Prince said the company deliberately did not run a downsizing programme, which has been critical in markets like France, Italy, and Spain where Aviapartner does not see any resourcing issues.
In markets like Germany where economic migration was key, Aviapartner is in the same position as other companies because the migrants chose to work elsewhere.
Singling out the Netherlands, Prince said: “They had the best furlough programme in the world, paying 100% of people’s salaries, 250 people just walked out of the door because they wanted to work, they had other opportunities. It’s a challenge market by market and I think it depends where you are.”
Walsh believes that these are temporary problems that can be overcome, saying that the industry faced these problems every year going into the peak season.
The major impediment is security clearance times, which have extended well beyond what people are used to, rising from three weeks to three months, something people had not factored in.
“These are real challenges but a much nicer challenge than ramping your activities down from 100% to 5%, which is what we were doing in April 2020,” said Walsh.
It reflects different labour retention schemes, he said, calling the Spanish government very smart, but the UK less so.
This also reflects the speed of recovery; last year, international travel was at 24% of 2019 levels, Q1 this year it was 42% but demand has exploded. Walsh advises not to get too carried away, saying the industry will get through the peak season, but it will be challenging.
Root cause of problems
The pandemic has been a time to build back better, we have regularly been told, but in the session “Exploring root causes of ground handling staff shortages”, Thomas Romig, Vice President Safety, Security and Compliance at Airports Council International questioned whether things are being done differently, and his honest answer is no, the industry has not done things differently.
“I think we have talked about doing things differently but we haven’t actually taken that much action and that’s the reality. We need to move into a different way of doing things and thinking about doing things, then actually action it and not just talk about it,” Romig told the audience.
Sustainability was a word that was discussed in Paris, and Romig said while going green is a major discussion point, the economics are key. Staff are generally low paid, and the whole system is facing economic challenges due to profit margins.
The economics of the system will require a rethink if the industry wants to sustain itself, Romig believes, because the current system will not support projected long-term growth, especially if passenger volumes double by 2040 as is predicted.
According to David Barker, Divisional Senior Vice President of Airport Operations at dnata, short-term, wages and recruitment are the biggest issues and innovation is the long-term challenge.
About 50% of the potential workforce are missing because women are not working on the ramp, and this is a major reason why dnata joined 25by25.
“We have a mission to make the job palatable for that part of our population. Longer-term, we need to look at innovation so rather than hiring a baggage agent, we are hiring a technology person to do automation of the baggage system,” said Barker.
Barker disagrees with those who say that it is still like the 1970s on the ramp, as there is technology like autonomous vehicles, that should make aviation exciting to new generations. Rather than being a solution for sustainability, they can help resolve labour shortages. Making aviation a technology job would be much more exciting and easier to recruit for than manually throwing baggage around.
“I have been in aviation since 1987, I have never seen wages go backwards. I keep hearing the comment, let’s do something temporarily then come September we’ll look at it again. That’s not a solution, the reality is we need to put the wages up short-term to make it sustainable but we need to change our market to make it more attractive to the next generation,”, citing diversity, virtual reality, and sustainability as these are the future, said Barker.
David Anderson, Global Head of QHSE at Swissport, agreed. Using Heathrow Airport as an example, it employs 100,000 people, if the third runway happens, logic suggests it would need another 50,000, things have to change because those people do not exist.
“Our labour shortages have the ability to constrain our ability to grow. We have got to get into technology and find solutions that allows us to do more work with the same people then we can move to a role where people are not manually handling bags,” he said.
The point of competition was raised, and if the industry is a race to the bottom, it is our fault, said Anderson, adding that nobody is forced to sign a loss-making contract.
We need to be smart in the way we do business, he said, saying that short contracts do not help for investment, calling long-term partnerships a much more sustainable model and much more likely to get necessary investment.
Competition is good but too much is not, and Barker believes there is too much competition. “We have 20 ground handlers in Chicago, it’s too many. One airline was so unhappy with the pricing, they brought in a new ground handler into the market, the 21st, then they asked why wages are so low. For me, I’m all for competition but let’s compete on terminals; let us and Swissport compete for Chicago’s Terminal 5, let that be the competition to raise the bar.”
Healthy competition to raise standards is what the industry needs, he said, not 20 providers with equipment all over the place with low-paid staff. Rethink competition, he urged the audience, telling them to think bigger and look at synergies saying that everyone is at fault for the race to the bottom.
Romig agreed, saying airports want to see competition but 20 providers is not good as that is too complex. He likes the idea of pooling standardised equipment, and competing on quality is good.
There is competition with other industries, citing Cincinnati airport where Amazon has built a large warehouse, which is attracting airport staff with better pay and perks.
Barker ended the session by saying that his main concern is not staff shortages but the immense pressure on those who worked throughout the pandemic.
In major markets such as the UK, staff who could be called aviation professionals have had enough, and Barker urges airlines to stop adding to the peak because these staff have reached the peak of their tolerance.
“Take a moment and thank an aviation worker when they’re out there because they’re sticking it out, doing their best every single day,” he urged.
