After 18 months apart, delegates were eager to meet up again and talk business in ways that cannot be done on Zoom or Teams, and the 22nd Annual GHI Conference at the Bella Center in Copenhagen gave them the perfect opportunity to do so.
Covid restrictions in Denmark have been lifted, with masks now only being required at airports and test centres, and it was good to see people’s faces again (and to see the interesting variations of Covid-friendly handshakes, resulting in some awkward exchanges as people did not know how to greet people). Nevertheless, delegates and exhibitors were able to network and showcase their products, with over 300 people through the door by the time the conference sessions started.
While this was going on, Conference Chairman Max Gosney was leading discussions with industry experts in the conference room, trying to make sense of the past events and looking at what next for aviation. There was much to discuss, such as turning the challenges of the pandemic into opportunities, how to attract and retain talent, and how cargo has saved the world and kept the industry going. Deputy Editor, James Muir, was busy taking notes throughout the sessions to bring the following highlights from the discussions.Welcome back
Welcoming everyone back, Gosney said: “The critics said it couldn’t be done, that it was too soon and that we should stay virtual. We have shown the doubters to never underestimate those who make an artform out of performing the perfect turnaround. This has been a collective success, the first step on the comeback, we’re not there yet but it is a key milestone. Thank you so much for making it happen.”
Comparing the aviation industry to the infamous Apollo 13 mission, he said that 2020 started normally with passenger volumes growing but by March, we also had a problem. The virus was spreading rapidly around the world, countries were shutting their borders and airspace, and soon, international travel was impossible.
For Apollo 13, survival was the priority and soon they were making modifications and using equipment in inventive new ways. Likewise after the initial shock at how the world could change so rapidly, the industry swung into action and pretty soon got things moving again. Demand for air cargo went through the roof as PPE and other medical supplies needed moving, with passenger aircraft being used for cargo only flights. Cargo was placed in boxes on seats and in some cases, airlines removed the seats to make an improvised freighter to highlight just a couple of changes that were implemented. Praising the industry’s response, he called their achievements every bit as impressive as Apollo 13.Crisis?! You mean opportunity!
The first industry expert on stage was Chris Brown, Director – Head of Strategy at KPMG Ireland, who warned that the industry must not look back to 2019 but to the future, and how the pandemic presents opportunities to grow and evolve. KPMG wants to focus, he says, at the coming decades, which is why it created the Aviation 2030 series to understand future challenges.
He said: “The common theme across the Aviation 2030 series is that R&D timelines can often take over a decade, therefore, logically, commercial models in the 2030s are already being set by decisions today.”
A history graduate, Brown shared his favourite quote, “The only thing we learn from history is that we learn nothing from history”, calling it “depressingly true” for business, saying the same mistakes get repeated as people do not think long-term.
Brown asked: “Is there a better time than now than to step back and think how we do things in terms of process, talent and technology? I can guarantee that when things are back at full steam, those longer-term things will get put to the back of the to-do list.”
Once Brown finished his presentation, it was time for “The Big Debate: ‘Out of the Ashes’”, looking at how the aviation industry will adapt and recover from the pandemic. Turning to the cargo experts on the panel, Gosney described cargo as having been the lifeblood of aviation ever since the pandemic struck.
Henrik Ambak, Senior Vice President – Cargo Operations Worldwide at Emirates SkyCargo said that cargo has played a vital role for many airlines, but it will return to its secondary role once passenger traffic returns to normal.
He added: “What I hope is taken out of this, is the willingness and ability to change very quickly. The way seats were taken out of passenger aircraft and floor loading was introduced, however irritating this may have been for the ground handlers, this should have been seen as a business opportunity.”
The attitudes of ground handlers to the new reality surprised him, saying: “We were slightly flabbergasted when they said ‘don’t do this, this is difficult for us’. Instead of seeing this as an opportunity and coming back to us and saying this is going to cost you money, to which we would probably say yep, we know and we’re happy to pay.”
Praising regulators for responding quickly and approving changes, the reluctance from ground handlers was less impressive to Ambak.Attracting staff
Due to Covid, there were mass redundancies across aviation but now the industry needs skilled staff again, but how to attract the right people or to have enough people is an issue.
This issue pre-dated Covid, said David Barker, Divisional Senior Vice President – Airport Operations for dnata who commented, “For me, aviation has been a wonderful career. It is my profession but unfortunately it has been commoditised to the point where it is a job. We need to make it a profession, we need people who love aviation when they smell jet fuel, they want to come to work.”
Aviation was a secure sector before the pandemic but now it is not, in Barker’s view. It is a low-paid job in a rough environment and to make it more attractive, it must not be the lowest paid in the market.
People are critical to all businesses, and Brown believes that one area of inspiration was retail, and how they approach talent. Citing the supermarkets, he said that the likes of Aldi and Lidl want innovative people who stick around, potentially to rise up and make positive improvements to the brand.
“Consistently, across countries they spend about 10-20% more on their staff than the competition. That’s not the brand perception but they’ve done the maths, they know it’s cheaper overall because there’s hidden costs when you’re just trying to benchmark to the lowest,” he said.
When looking at costs, Ambak says that as an airline, if paying more gets a better service, of course they would pay the premium.
He said: “At Emirates SkyCargo, we focus on pharmaceutical transport and some ground handlers said they were willing to build the necessary infrastructure. They said this comes with a price and we need to give them a longer commitment. We may have to pay more and make a longer commitment but on the other hand, we get to enter a market that you cannot enter with the alternative. Trust me, that’s how it works but many ground handlers still believe it is a race to the bottom, which is sad.”
The panellists were not convinced that there would be significant changes, though some changes would be brought forward few years.
Steven Polmans, Chairman of The International Air Cargo Association (TIACA), said: “I think we will gain time, I think we will do in 2025 what we would otherwise have done in 2028 or 2030. I think it will speed up change. I’m not expecting many things to be implemented that we never spoke about before.”
Markus Becker, Strategic Delivery Executive of Global Load Control added that like post-9/11, aspects of the industry changed, and he would like to see positive changes otherwise the industry will be blindsided again during the next crisis.
Ambak though, described Covid as a “bump in the road”, saying: “I don’t think we’re going to learn a lot, as usual.”Time to experiment
With reduced airport operations due to the pandemic, Iberia Airport Services was able to test new ideas for turnarounds, which Head of Commercial and Business Transformation Nuria Escorihuela Altaba discussed in the innovation session, “Turnaround 3.0”.
With diesel engines, GSE is a major source of pollution with CO2 and NOx emissions, so going electric has environmental benefits and makes life more pleasant for staff. In partnership with British Airways and Mototok, an autonomous pushback tractor has been developed with each vehicle saving 23 tonnes of CO2 emissions per year. They are in use in Madrid and Barcelona, and can handle Airbus A320s and Boeing 737s. Several dispatchers are now trained to use the remote controlled pushbacks.
Escorihuela Altaba said: “The pandemic has helped us to deploy them because we have the time to train our flight dispatchers and test it with low levels of activity. There have already been more than 3,000 manoeuvres in Madrid and Barcelona without any major incidents.”
She believes the pandemic created the right environment to test new technologies because people had the time to adopt new ideas and more time to understand any problems.
People are the main problem, she added, and that we need to sit down with them and show them the benefits of new technologies and ways of working.Cargo boom expected to continue
The passenger sector continues to struggle as travel remains difficult but the cargo industry remains very strong, so to start the second day, it was in the spotlight.
Air cargo has had a good pandemic and combining continued high demand with a lack of capacity both in air and sea freight, the panel were in agreement that the next 12 to 18 months were looking very good. Some are looking even further ahead with Diana Schoeneich, Senior Director Europe Region for AirBridgeCargo Airlines saying that, having spoken to customers, next year is already looking good and strong growth is projected until 2024. She also pointed out that most passenger traffic is for narrow-body aircraft, and that around 1,900 wide-body aircraft are still in storage.
Alan Glen, Vice President Cargo Development at Menzies Aviation added: “Logistics is broken at the moment; with the supply constraints in the market, it has helped cargo come to the fore. It has always been important but I don’t think it’s been newsworthy, now it’s newsworthy because the spotlight is on it. It’s been a very challenging period for everybody and I think the challenges will continue for a while. We’re very bullish.”
Pictures of cargo being loaded into passenger cabins has been a defining image of the pandemic, Gosney observed, and speaking from the airline’s point of view, Ambak is expecting these services to continue for some time to come.
He said: “As long as our passenger colleagues are happy we will continue to use them, I promise as soon as they [passenger aircraft] are needed they will be put back to their primary purpose but a good guess would be around eight to ten months.”
Niche cargo such as pharma and e-commerce have been particularly strong, and all parties need to discuss expectations so they all know what is expected and can resolve any issues.
Glen went as far as saying e-commerce is not really a product, saying: “It is difficult to handle because it’s difficult to screen, difficult to build but it’s not a product. There’s nothing to differentiate it, it’s not a profitable product, it’s not dense so you don’t get paid very much for handling it so it’s a challenge to do more for it. I’m not even sure what more is.”
Speaking as a handler, Glen says pharma needs investment and urges customers to specify requirements.
The skills shortage remains an issue, with Glen saying retaining people is hard with a lot of money being spent on training but with the turnover, companies are frequently chasing their tail. In some markets it is easy to keep people, but in the US, apart from a core group, length of service feels like six weeks.
Ambak believes the industry can take cues from other sectors, pointing out that the likes of Walmart and McDonald’s calculated the cost of attrition among staff, and that increasing wages did not increase costs because staff stayed longer. In the US, Amazon is offering to pay college fees for employees, maybe perks like this will make people feel valued and they might stay, he added.
Interesting though cargo is, it is not sexy and speaking as Chairman of TIACA, Polmans says the association has banned the word, commenting: “People need to see cargo as a very interesting and refreshing industry where they can make a career. If you want to work in a sexy industry, there are other places.”
E-commerce delivers for air cargo
Moving onto the topic of the e-commerce boom, Ambak was then joined by Celine Hourcade, Managing Director of Change Horizon, Franck Mathout, Country Manager France and Regional E-Commerce Manager Europe for AirBridgeCargo Airlines.
Mathout shared some impressive numbers, including that e-commerce is expected to represent 20% of global air cargo in 2022, up from 10% in 2017, and Amazon’s aircraft fleet will keep growing, from 80 by the end of this year to 200 by around 2027. Integrators are also investing heavily, so air cargo will have to do something if it is not to get left behind.
Ambak had a question; who, when we say aviation, are we talking about? The growth is here to stay as consumers expect, demand quick (and free) delivery of pretty much any item, something shops cannot do.
He also had a second question, asking the audience: “We like to move it, but is e-commerce just mail or courier, or is it a whole new business? We move a lot of e-commerce for postal authorities and integrators but is it something that the airlines should take on?”
Airlines faced similar pressures in the 90s with the rise of integrators, when the press was predicting that if airlines and forwarders did not become integrators within ten years, they would die. “But I’m still standing here,” Ambak commented.
The market share for integrators increased substantially and then stabilised. In some cases, they are clients of the airlines because it does not always make sense to have their own networks.
Hourcade believes that if ground handlers want to capture opportunities, they need to have a dialogue with airlines and e-commerce shippers to understand their needs. They can also gain speed through automation, provide innovative practices to help shippers comply with regulations and look into last mile deliveries such as drones, calling them an “incredible opportunity” for the whole e-commerce sector.
For any company wishing to develop their business, they must listen to the market to understand the requirements, said Hourcade because a one-size-fits-all approach does not work.
“Ultimately, it’s about having that conversation and having all the players at the table, defining the common objectives and positioning the new product or service that will add value. There is not one magic answer, it depends on the market,” she commented.Attracting new talent
The pandemic has destroyed job security and added to environmental concerns, why would young people want to get involved in aviation? That was the topic for “The Big Debate: How do we attract future talent into aviation after the crisis?”.
Speaking from a cargo perspective, Hourcade said it had been a good pandemic as it had provided visibility and the potential to position itself as an essential service, having transported PPE, vaccines and generally kept world trade moving.
She said: “We can say that aviation and logistics saved lives and it’s very important to feel that pride and to use that as a message to attract back workers.”
Understanding modern mindsets is important; young people, as much as anything, want an experience and to feel they are doing something worthwhile. Earning a salary is not enough. Convincing young people that aviation is worthwhile is vital, but how to do that is a challenge.
Becker said: “We have so many challenges that need to be solved, we need to develop the right future professionals that want to address problems so that we can move forward and remain an industry that people want to work for.”
Hourcade added that the new generation live through social media, saying “they are driven by likes”, and the employers must recognise that they want recognition and acceptance that they have a cool job.
“We need to offer them a story where they say they are part of the aviation community and if it generates likes, we win them and keep them,” she said.
Desiree Perez, Leadership Coach and Aviation Consultant at Level Up Your Potential added: “Something people have learnt through the pandemic is to say I’m not just going to do a job, it’s how we position ourselves as employer of choice. It’s not anymore about working eight hours then going home. What can we do on a corporate perspective to be attractive and be a choice?”
Aviation and logistics have an image issue; they are perceived as old fashioned and polluting, so perhaps this is why we need young talent, as they are eager to produce a better world.
Hourcade said: “We need you, it’s a world of opportunities for the new generation to really have an impact. It can’t be boring in aviation and logistics because we have so many challenges. I would build on our weaknesses to make it an attractive message for them to join us.”Goodbye, see you soon
After all the build-up and excitement, it was amazing how quickly time flew and soon, the conference was over. Hopefully, now the worst of the pandemic is over, we won’t be waiting another 18 months or longer to see you all again.