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Human Capital opportunities Human Capital opportunities and challenges in aviationand challenges in aviation
Guido GianassoVP, Human Capital, IATA
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Global Aviation Human Capital Summit 2011
Why are we here
To review and discuss challenges and opportunities for the
HR leaders in the air transport industry
To share best practices and learn from each other
To identify areas of future cooperation
To identify how IATA can better support the air transport
industry in the human capital area
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Global Aviation Human Capital Summit 2011
IATA – who we are
HC teamProviding HC support to 1500 IATA employees in 65 countries around the world
ITDI Providing combined training solutions for the commercial air transport industry:30.000 students and participants every year
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Global Aviation Human Capital Summit 2011
Who is here
500 HR leaders in the air transport industry were invited: IATA member airlines / Non-IATA member airlines
Airports
Air Navigation Service Providers
Civil Aviation Authorities
International organizations and regional air transport trade
associations
170 participants in Singapore
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Global Aviation Human Capital Summit 2011
Who is here – some statistics
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Global Aviation Human Capital Summit 2011
Who is here – some statistics
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Global Aviation Human Capital Summit 2011
Our sponsors
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Global Aviation Human Capital Summit 2011
Our partners
Supported by Held in
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To represent, lead and serve the airline industry
Updated outlook for the Updated outlook for the global airline industryglobal airline industry
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Cash flows are being squeezed
-5%
0%
5%
10%
15%
20%
2005 2006 2007 2008 2009 2010 2011
% r
even
ues
EBITDA as % revenuesseasonally adjusted
US airlines
Asia-Pacific airlines
European airlines
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550
600
650
700
750
800
850
900
40
60
80
100
120
140
160
180
2007 2008 2009 2010 2011
Aver
age
inte
rnati
onal
retu
rn fa
re, U
S$
Jet k
eros
en p
rices
, US$
per
bar
rel
Fuel prices and average fares
Jet kerosene price(left scale)
Average return fare(right scale)
Mainly by the rise in fuel costs
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Fleet changes adding seats at 8% annualized rate
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
-200
-150
-100
-50
0
50
100
150
% c
hang
e in
airl
ine
seat
s
Cha
nge
in o
pera
ting
fleet
(a/
c pe
r m
onth
)
Airline fleet developmentSource: Ascend
Deliveries Other factors Storage activity % change in seats m-o-m
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Travel has held up but outlook is weaker
-15%
-10%
-5%
0%
5%
10%
15%
30
35
40
45
50
55
60
65
2006 2007 2008 2009 2010 2011
% c
hang
e ov
er y
ear
Inde
x of
bus
ines
s co
nfid
ence
Worldwide growth in air travel and business confidence
Growth in RPKs(right scale)
Business confidence(left scale)
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Freight markets have stopped growing
11
12
13
14
15
16
17
115
125
135
145
155
165
175
2007 2008 2009 2010 2011
Air f
reig
ht F
TKs,
bill
ions
per
mon
th
Wor
ld tr
ade
volu
me,
200
0=10
0
Air freight volumes and world trade
World trade(left scale)
Air freight volumes(right scale)
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Global growth slowing towards critical level
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
-6%
-5%
-4%
-3%
-2%
-1%
1%
2%
3%
4%
5%
6%
1970 1975 1980 1985 1990 1995 2000 2005 2010
Wor
ld G
DP
gro
wth
Net
pos
t-ta
x pr
ofits
as
% r
even
ues
World economic growth and airline profit margins
Net post-tax profit margin
World economic growth
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Financial markets expect defaults in Europe
0
2
4
6
8
10
12
14
16
18
Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011
Government bond yields in Europe
Greece
Ireland
Portugal
SpainItaly
FranceUKGermany
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Will reinforce medium-term geographical shifts – driven by growth of middle incomes
Global middle class in 2009 and prediction for 2030
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And the potential to better connect large cities, particularly in ASPAC and LATAM
Source: UN, SRS Analyser
5-10 mln10-15 mln15-20 mln> 20 mln
Urban Popn. 2015
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Short-term will add to growth disparities
-1
0
1
2
3
4
5
6
7
8
9
Euro area US Japan Latin America MENA Asia ex Japan
EIU's forecasts for GDP growth
2010
2011
2012
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20
40
60
80
100
120
140
2007 2008 2009 2010 2011 2012
Brent crude oil price and forecasts, US$/b
Futures 19 Sep
Highest Bloombergforecast
Lowest Bloomberg forecast
Fuel costs expected to stay relatively high
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In this environment we expect profits to be positive but not strong
-30
-25
-20
-15
-10
-5
0
5
10
15
20
-9.0
-6.0
-3.0
0.0
3.0
6.0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
F
2012
F
US
$ bi
llion
% r
even
ues
Global commercial airline profitability
Net post-tax losses(right scale)
EBIT margin(left scale)
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Global Aviation Human Capital Summit 2011
HC: challenges and opportunities
How to drive change and innovation in our organizations
How to significantly cut costs while improving the
customer experience
How to attract talent in an industry where employee
branding has lost its strength and the ability to compete in
terms of compensation is low
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Global Aviation Human Capital Summit 2011
HC: challenges and opportunities
How to develop a strong and diverse pipeline of global
leaders to replace the current generation
How to efficiently develop and retain talent at all levels of
the organization
How to manage difficult trade unions in complex labour law
environments
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Global Aviation Human Capital Summit 2011
HC: challenges and opportunities
In order to better understand your view, we have
conducted a survey with Egon Zehnder International
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Global Aviation Human Capital Summit 2011
We look forward to…
Network
Learn from each other
Have some fun together
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Global Aviation Human Capital Summit 2011
Thank you!Thank you!
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