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End-of-year review: Aviation

Venari Partners’ Director, James Parker, reflects on the year in aviation and what’s on the horizon in 2024

 

This time last year, I noted that 2022 had been the busiest year yet for our aviation practice. I’m pleased to report that it’s been more of the same in 2023. While we’ve perhaps had to work slightly harder to achieve these results this year, the industry’s remarkable return to profit made the chaos of COVID seem further away than ever. Indeed, with pent-up travel demand continuing after the pandemic, it was a bumper year for many airlines.

 

As is customary by now, we’ve put together a breakdown of the main executive talent trends we saw in aviation this year, as well as some predictions for 2024.

 

The view across the globe

Demand for recruitment was pretty consistent throughout 2023. Volume from Europe remained steady, while elsewhere it seemed that activity in one region would tail off only for another to pick up. For example, the US was buoyant for the first half of the year, then wound down comparatively as Asia Pacific (APAC) and the Middle East gathered steam. Some US airlines have even begun making cuts, making us wonder whether they might have over-recruited.

 

Most airlines made additions to their leadership teams, though there was not as much turnover at C-level as we might have expected. I imagine one reason for this was compensation. With airlines having a good year, many executives will be due handsome bonuses, thus diminishing the incentive to look for a new challenge along with remaining COVID retention plans. Still, it only takes a few senior figures to go before there’s a ripple effect. Without mentioning any names, we’ve heard speculation from here and there about a few prominent aviation CEOs who are rumoured to leave within the next three to six months; it’ll be interesting to see if there is any substance to this hearsay.

 

The geopolitical picture naturally has an impact on business and on companies’ hiring strategies. It’s worth noting that where executive teams recruited, it was typically due to attrition rather than growth. There are a number of M&A developments that we are watching with interest, such as JetBlue’s $3.8 billion offer to buy Spirit, the merits of which are currently being debated in a trial chaired by the US Department of Justice. Elsewhere, SAS have added numerous resources to their executive team and we can expect more as they exit their Chapter 11 bankruptcy filing stateside with financing from Castlelake and AirFrance-KLM. We can also expect changes at TAP – if and when they are bought out – while we’re curious to see what happens with Alaska Airlinesproposed deal to merge with Hawaiian Airlines.

 

Diversity continues to grow in importance

In recent years, diversity, equity, and inclusion (DEI) has emerged as an increasingly important topic in aviation. There’s a clear appetite for more diverse talent across large swathes of the industry, whether it be diversity of ethnicity, nationality, gender, or even thought. (In January 2023, we released a whitepaper on gender diversity within airline boards and will make a point of updating the scenario each year. Stay tuned for our next report in January – though unfortunately we do not anticipate a significant change to our previous findings.) For many airlines, there is a desire to reflect the global nature of their business model in their management teams, rather than merely recruiting from local markets. Plenty of carriers now have diverse management teams – which, as a champion of diverse and pluralistic values, we at Venari Partners are delighted to see. Still, DEI is less of a strategic concern in some markets than others, and it’s also worth noting that in certain areas of an airline, such as maintenance and engineering, it is still particularly challenging to hire female leaders. US salaries are on the rise – but what about elsewhere?

 

Salaries under focus

Another area of interest for the industry is compensation. In recent years, there’s been a significant rise in salaries – for both fixed-rate and total figures – in the US market. 2022 saw the largest salary budget increase in 20 years in North America, though this was the industry playing catch-up in large part and we’ve probably seen the last big changes in pay for a while to come. In Europe, salaries increased slightly though not at US levels, while in the Middle East, meanwhile, pay has been relatively static. Carriers in the region might need to revisit this, as the financial packages on offer are no longer as strong comparatively.

 

Less overseas recruitment for APAC carriers

In APAC, meanwhile, we’ve seen very little international recruitment. Airlines in the region have been happy to let expats leave of late – but this is nothing we haven’t seen before. Usually, when the economic picture looks positive, APAC carriers recruit internationally. When the market is more challenging, often these airlines are happy to let foreign talent leave. Given that this region was the slowest to open up after the pandemic, we expect that the trend will reverse before long as demand picks up again.

 


So, what’s on the cards in 2024?

 

Sustained demand will mean more recruitment

Next year, we’re expecting hiring activity to increase in some areas, and to remain static or even decrease in others (for example, the US). Still, consistent demand will mean some airlines will look to increase their capacity; more seats in the sky mean a more competitive and therefore challenging marketplace. Carriers that haven’t brought in talent lately will look to do so – not least in digital and tech, which continues to be a hot topic in the sector. Airlines are trying to improve their offerings in this space, though they are also losing talent to other industries. Engineering and Maintenance will also be key areas of concern, especially given the ageing workforce in these areas.

 

Will bonuses affect candidates’ willingness to move?

As I mentioned above, there’ll be plenty of bonuses paid out due to the industry’s strong showing this year. Will this be a catalyst for airlines to hang on to talent? Or will candidates cash in on their windfalls and try something else, whether that means moving within aviation, to another industry altogether – or even choosing to retire? Probably all of these things will occur; it will certainly be interesting to observe.

 

Difficulties for air cargo

We’re anticipating that air cargo will continue to struggle in 2024. The sector has had a tricky time of it post-COVID; the margins aren’t there at present and revenue opportunities are challenging. There probably won’t be a big change in recruitment volumes. Meanwhile, increasingly we’re seeing candidates leave air freight for aligned sectors like urban air mobility (UAM) and vertical take-off. UAM and drone companies, in turn, will likely look to identify talent from airlines going forward; when some of these startups get off the ground in earnest, they will likely need flight operations talent.

 

Candidates have more options post-COVID

A final note as we head into the new year: the window for finding strong talent affordably or easily after COVID has most definitely closed. Now, good candidates usually have multiple options. Talent will likely continue to leave for other sectors, so perhaps airlines need to get better at attracting candidates from other fields as opposed to from each other. When carriers do bring in outside candidates, they need to ensure the new blood has plenty of time to learn and embed themselves in the new environment. 

 

Candidates have greater choice than ever because we’re seeing more turning down offers. Strong contenders are likely to receive a counteroffer from their current employer and should assume so prior to entering into an interview process – we would advise talent to think carefully about whether or not they are genuinely open to a move first. Last year, we put together an article about handling counteroffers to help candidates make the best decision – just click the link to refresh your memory.

 

Next year in aviation at Venari Partners

From our side, you can expect 2024 to see us travelling to see clients more often; we’ve always placed great stock on the value of meeting face-to-face. We’re looking forward to attending more events, too, with IATA’s AGM in Dubai next June, October’s World Aviation Festival in Amsterdam, and the CAPA Airline Leader Summit in Belgrade next November just three industry gatherings we’ve already pencilled in our calendar. We will also seek to build new partnerships, as well as further charity initiatives following on from our efforts this year. 

 



I’d like to wish our entire network a very happy and peaceful holiday season, and all the best for 2024!

 

If you’re looking for executive talent solutions in aviation, look no further – please get in touch.

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