FACTORS IMPACTING TRAINING, Ziva Narendra Arifin, President - Director Of Aviatory Indonesia

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Asia has been recognized as a region of vibrant and diverse growth in the past twenty years. It sits at the pinnacle of world’s future economic leadership, thanks to the rise of lower and middle-class population through workforce absorption and better opportunities for SMEs to be successful.

In the Asia-Pacific air transport sector alone we have seen significant increases in a number of new AOCs (air carriers/ operators) being established, the highest volume of aircraftpurchases in the region's history, new airports being built and more people flying within the first decade of the new millennium compared to the three previous decades combined. The business and charter aviation community is no exception; it has also enjoyed its share of increased utilization thanks to increasing

confidence and expanding work primarily in the sector of mining and natural resources. With China leading the region's economy sharing a huge chunk of global production, Asia Pacific's aviation sector has been on the upscale - thriving, gaining momentum and rapidly expanding. It is indeed a delightful and very much promising fact, yet one that still leaves one remaining question: “Does it come with a certain price?” The answer is an underlined 'yes' with strong emphasis on sustainable human capital regeneration.

Today we have quite a number of aviation training providers in the region - from institutions that offer certified short courses all the way to degree-level programs. However, it has not always been the case. Up until the early 2000s there were only a handful of aviation schools operating in Asia Pacific with certain extent of accreditation, which was what the capacity had demanded during that period. But what about today? What has changed in the training environment? How do we keep up with the rising demand? Can we insist on qualitative approach as first and foremost in fundamentals of generating future aviators? What are the implications of economy, efficiency, security, and even safety in all this?

To gain broader understanding of the region's current state of aviation manpower, we need to look back at the preceding phases that further shaped the industry as we know today.

THE ASIA FINANCIAL CRISIS OF LATE- 1990s

While most Asian countries, particularly developing nations, were summing up debts, the air transport sector was relatively well at the midpoint of its growth up until the mid-1990s. The industry's

capacity was well within balance and market expansion was seemingly at a steady incline. Manpower availability was slightly close to surplus and while there were only a number of aviation

training institutions available in the region, aviation, at the time, remained a highly desired career path. Jobs were scarce but still at a predictive rate by taking account the turnover between retirement and recruitment rate, which was a much simpler exercise back in the day. In a nutshell, Asia Pacific has quite a promising portfolio under its belt. That was until the 1997 economic crisis hit the better part of the entire region. 

Currencies dropped, demand flow toppled, prices increased - virtually no country within the territory was spared from steep market decline. Southeast Asian countries such as Thailand and Indonesia took more direct hits, while others like Japan, India, Hong Kong, and China suffered mild to less significant impact from the crisis. In the midst of financial turmoil and most economic sectors being decimated, air transport as well as aviation in general were among those that suffered the most due to drastically declining sales and traffic, in addition to operational costs that were becoming less and less affordable.

While flagship carriers and state-owned enterprises were able to sustain the aftershocks, they too suffered significant losses, which resulted in major furloughs, downsizing of fleet, and cutting

back on routes. Second-tier players such as regional carriers, cargo operations, and business aviation suffered heavily due to their size and nature of operations, while corporate and contract based charter operators experienced less harmful impact. Asian aircraft and parts productions took an abrupt stop; housing tens of thousands of employees facing uncertainty of their future. Survival

was the name of the game. 

Pushed to a screeching halt, the industry was left with no alternative but to opt for downsizing and implementing cost efficiency as their strategy. Manpower, among the biggest portions of operating expenditures, was cut down to a much smaller fraction. In what seemed like a slow and steady demise,aviation reached the state of becoming less and less of a desirable career choice.

RISE OF THE LCC

By the dawn of the new millennium most of the countries hit by the crisis were starting to show signs of recovery. Malaysia was able to maneuver their way out of debt, while Indonesia deregulated their airline industry in the year 1999; giving way for new investments on LCCs and regional operations. As many as eight new Part 121 operators emerged within a five-year span in Indonesia alone, while in

places like Singapore, Malaysia, Vietnam, and China similar trends had taken place.

Companies, such as AirAsia, Tiger Airways, Lion Air, and (the late) Viva Macau, came to make harvest during this period with average market share increase of 3% per annum (source: Frost & Sullivan), despite a rough start in post-9/11 environment and still overshadowed by market shares of the U.S. and the EU. From the unscheduled air operations aspect, more jobs were also becoming available thanks to the strong foundation and recovery from real sectors such as mining (both production and exploration), agriculture, and logistics/cargo.

It seemed at the time that air transport in Asia was back on its feet once again, but one vital factor that (still) remained overlooked even at that time was regeneration of skilled resources. Over time

there had been clear evidence where more investments were placed in favor for aircraft but not air crew or technical roles, while management in aviation becoming less of a desirable formula in lieu of professionals coming from non-aviation fields such as retail/ FMCG, telecommunication, banks, and others. This paradigm shift also both directly and indirectly resulted in disparity of aviation human capital growth; something that many of us failed to realize until a decade later.

THE COMFORT ZONE

For a period of time between the years 2000 - 2005, surplus of the industry's unemployment leftover from the previous decade has taken benefit from expansion of the job market. Demand was high, and so was quantity of supply. Absorption rate escalated with an average of 92% across the region, most notably on specific roles such as pilots, engineers, flight attendants, and flight operations officer. The industry was leading towards an exuberant and promising, but unfortunately not long-lasting growth.

The second half of the 2000s saw early signs of the aviation workforce toppling off once again. Many did not take into account the inevitable factor of retirement. Much of the experienced workers at the time were approaching their late 50s/60s and while recruitment was still ongoing volume-wise it began to fall short due to declining supply of qualified individuals - which simply was not fast enough to fulfill the soon-to-be vacant seats, especially in the cockpit. Furthermore, there were few aviation schools being established while existing providers were only able to produce a small batch of new generation aviators per year. It was a state of delusive comfort that blindsided the industry, after realizing it was already too late.

The International Civil Aviation Organization, an agency recognized under the United Nations, declared a state of emergency across the globe on the shortage for pilots and engineers. As many as 52,000 pilots and 18,000 maintenance personnel were said to beneeded every year for air operators across the Asia-Pacific region — from small Part 91 operators to Part 121 air carriers, as well as Part 135 charter flyers and Part 145 MRO businesses. To make matters worse, demand continued to rise in all corners of the globe; from Eastern Europe, Africa, Middle East, South America, and much of Asia - companies were competing to put the best offer on the table in order to attract experienced air crew to work for them. Although the 2008 global financial crisis placed a huge bump in the road and many companies worldwide did not survive the commotion, it did not stop the demand from rising. 

What happened next perhaps can be qualified as the state of haphazardness, if not panic. As a response (or rather, reaction) to the ominous threat, a number of new aviation schools and training facilities were established to serve as a 'damper' to the huge gap in the manpower market. Several companies, however, have taken the initiative to accelerate their regeneration program and minimize the lead-time between retiring versus new talents through collaborations with training providers or schools overseas (mostly U.S. or Australian-based).

On a much more well-thought, well-planned platform, however - especially at degree/university level, establishment or expansion of higher education programs such as Embry-Riddle Aeronautical University's (ERAU's) Asia initiative by building a campus in Singapore, or Ecole Nationale de l'Aviation Civile's (ENAC) collaboration with universities across Asia were built under the philosophy of sustainability of the future in human capital and evolving global market, rather than mild to moderate efforts to satisfy short-term needs.

HARNESSING THE FUTURE

With the need for new generation talents in aviation continuing to escalate at a speedy rate and countless business potentials on the horizon, a collectively-agreed and well-devised solution needs to be put in place. With Asia projected to play a huge role in the world's economy in the near future, which is initiated by the Association of Southeast Asian Nations’ Single Aviation Market (ASEAN-SAM) this year and expected to be progressively implemented in coming years, it is inevitable that Asia Pacific's aviation community and stakeholders, including governments, need to seriously look into investing into qualitative methods in aviation training programs as opposed to fixating on the shortage of quantity. 

It would not be overrated to also implement common standards between Asia-Pacific nations, in terms of personnel qualifications, and build consistency as well as enforcement of regulations to ensure that the market pool is not only fulfilled, but also healthy and provides equal standings within the region. As cliché as it may sound, the key to achieve a healthy and sustainable cycle in aviation human capital, is quite simple yet also complicated.

Firstly, we need to continuously invest in quality-driven training and education programs. It may hurt you in the beginning, but time and history have proven it to be true. Secondly, we need to invest

in seeding, identifying, and nurturing savvy leaders of the future.

Many of us still have not taken aviation degrees seriously and overlook them as exchangeable. That may work in some cases, but may not work for the best in the long run.

With the need for new generation talents in aviation continuing... a collectively-agreed and well-devised solution needs to be put in place.

SO, LET’S RECAP THE KEY ASPECTS:

  1. Invest in quality over quantity

  2. Never 'cut corners' when it comes to training

  3. Think long-term

  4. Identify and nurture future leaders in aviation

  5. Start optimizing the workforce by honing their skills, but never push the boundaries

Again, I reiterate, these are quite simple tasks that are not beyond logic. However, they're easy to overlook especially when we start to take account factors of cost and effort. It's true, none of the above results will speed up our cost recovery or profit but we need to have faith in greater long-term returns. Southwest Airlines and AirAsia are two perfect examples where solid human capital

development programs have proven to strengthen not only the companies' portfolio, but also their desirability factor for places to work. Sure, there are many other components (of equal or greater

importance) that make a great company, but we need to remind ourselves of the fact that the greatest asset in the aviation sector, as with any industry in general, is human. Acknowledge and embrace this, and you shall be awesomely rewarded.

www.aviatoryindonesia.com

Training Report, 2018Robert Li