Addressing Pilot Shortage: An Opportunity Area within fast growing Middle East Aviation Market

Addressing Pilot Shortage

  • The Middle East is outpacing the world in terms of international traffic growth, witnessing growth in demand and expansion of capacity at rates never seen in any other market.
  • Rising population with high disposable income; favourable geographic location; growing tourism sector; strong presence of expatriates who travel frequently to their native nations and an underdeveloped railway network are driving this aviation boom.
  • However, despite the strong growth in the air traffic as well as the fleet size, the lack of skilled aviation professionals is acting as roadblock in Middle East’s thriving aviation industry.
  • Though it seems to a big problem, it is a BIG opportunity for the players who can leverage it by pursuing aviation training centers/academies as a profitable business proposition.

The Middle East is the fastest growing aviation market across the world in terms of international traffic growth. According to IATA, in 2013, the growth in passenger traffic for airlines in the Middle East was 12.1% – more than double the global average and in both business and leisure travel. Between 2012 and 2032, air passenger traffic in the Middle East is expected to expand at a CAGR of 6.7% in terms of Revenue Passenger Kilometers (RPK), while air cargo traffic is expected to grow at a 7.2% CAGR in terms of Freight Tonne Kilometers (FTK). To add to this, air passenger traffic on outbound routes from the Middle East is expected to outpace the traffic on traditional routes such as Europe – North America, Europe – Europe, and North America – North America over the coming two decades.

Expanding population base (especially of foreign nationals), urbanization, higher income levels, underdeveloped railway network and burgeoning numbers of tourists are driving the Middle East aviation sector. With a growing young population base, increasing propensity to travel and ongoing regional liberalization, regional traffic growth is acting as an important contributor to the Middle East’s expansion as long-haul routes are. Regional governments are prioritizing aviation, recognizing the industry as a catalyst for local development, diversification, delivering trade, tourism, and economic growth.

Aviation Traffic Growth – Middle East vs. World

Addressing Pilot Shortage2

Middle East Aviation Market Value = USD 550 Billion

Addressing Pilot Shortage1Source: Boeing.com

Long-term expansion is clearly visible as Middle East airlines are expected to receive delivery of 2,610 new passenger and cargo aircraft (worth $550 billion) over the span of next 20 years. Nearly 960 aircraft are on order, including more than 600 widebodies, accounting for 25% of the global backlog, or twice as many as on order in North America. Increasingly, the traditional hubs (London, Paris, Singapore) and their carriers (Lufthansa, British Airways, Cathay Pacific and Singapore Airlines) and their hubs are being superseded by Dubai, Doha and Abu Dhabi and their home carriers (Emirates, Qatar Airways and Etihad Airways). If one looks at the rapidity of the shift, it has been breathtaking. In the past five years, London Heathrow, Paris, Frankfurt and Amsterdam added a total of 11.7 million new passengers, growth of just 5%. In contrast, the three upstart Middle East hubs have added 35 million passengers, an increase of a whopping 60%.

However, despite the strong growth in the air traffic as well as the fleet size, the lack of skilled aviation professionals has been acting as a deterrent in the path of Middle East’s thriving aviation industry. According to industry experts, quality pilots will become an increasingly limited commodity over the coming years, driven by the rapid fleet growth of Gulf airlines. The region is facing an unusual situation where the jobs created by the aviation boom will not be able to fill up soon due to lack of skilled professionals. This is further aggravated by the fact that U.S. pilots staffed in the Middle East are heading back home to fill the positions left vacant by the retiring U.S. aircraft pilots. According to a recent report by Boeing, there will be a need of more than 37,000 pilots in the Middle East to fly the aircrafts due for delivery there over the next 20 years. But there is a serious lack of adequate training facilities.

Though it sounds as a big problem, it is a BIG opportunity for the small players who can leverage it and evaluate aviation training centers/academies as a profitable business proposition. Dedicated aviation academies are going to play an important role in solving the pilot shortage in the Middle East, and ensuring that people receive the training they need for being certified as skilled airline professionals. The existing training centers are struggling to keep up with the demand and point towards a market ready to welcome new entrants. Two training centers in the UAE have 1,300 full time and 500 part time student pilots and engineers. Another Jordan-based air school churns out 130 pilots a year and wants to increase the number to nearly 200 while expanding to a second training centre in Iran.

Airlines too are not behind and are starting pilot training centers to ensure an adequate supply of workforce for the aircrafts they have in their ordered delivery pipeline. Emirates Flight Academy is expected to address the need for 40,000 pilots in the Middle East over the coming two decades. Emirates Airlines operates a Pilot and National Cadet Pilot Program, and is planning to open a flight academy for pilots in 2015. The academy will be able to take up to 600 pilots and will be situated in Dubai. Air Arabia has already established a flight academy, which is up and running in Sharjah. A few weeks back, Etihad Airways announced that it is establishing the Etihad Flight College, a world-class flight training facility in the UAE for Emirati and international cadet pilots. Such steps by the players, in addition to solving the pilot crunch, will create more job opportunities for the local talent available in the region.

Among the aviation training institutes operating in the region, Emirates-CAE Flight Training is an outstanding example of a successful aviation joint-venture, as highlighted in the case study below.  

Case Study: Emirates-CAE Flight Training ­– 12 Successful Years of Imparting Aviation Training

Emirates-CAE Flight Training                                                  

Founded: 2002| Joint Venture: Emirates and CAE

Emirates-CAE Flight Training (ECFT) is jointly operated by Emirates and CAE, a global leader in modeling, simulation and training for civil aviation and defence. Located in the Emirates Aviation College campus, ECFT provides aviation-related courses for commercial and business carriers in the Middle East, Europe, Africa, Asia and Oceania, and South America, aimed primarily at flight-deck crew and maintenance personnel.

Over the past 12 years, Emirates and CAE have consistently invested in the management and expansion of their joint venture. This has helped in growing the business substantially as well as earning ECFT its strong reputation as a centre of training excellence.

It was the first training facility of its kind in the Middle East that was approved by aviation authorities in Europe, the U.S. and the UAE. According to Camille Mariamo, Managing Director, commercial training and simulation, Middle East & India Region, “ECFT works in close collaboration with more than 20 different national aviation authorities to ensure that their specific requirements are fulfilled”.

Locations/Facilities: ECFT operates 2 training facilities in Dubai:

  • The original facility in Al Garhoud, Dubai has 14 training bays and is one of the largest pilot training facilities in the world. It caters to 200 aviation clients and trains more than 10,000 pilots and technicians a year on a range of Airbus, Bell Helicopter, Boeing, Bombardier, Dassault, Gulfstream and Hawker Beechcraft aircraft types.
  • With the first center almost reaching full capacity, the Dubai Silicon Oasis (DSO) facility was opened in 2013. ECFT’s new 55,000 square foot facility already boasts of industry-leading Airbus and Boeing flight training simulators with breakthrough visual realism, cockpit replication and high-fidelity avionics simulation.

Achievements

  • The original facility in Al Garhoud, Dubai, was the first training centre of its kind in the Middle East to be approved by the European Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and UAE General Civil Aviation Authority (GCAA).

CAE was unable to provide figures for its market share in the Middle East. “I can say we are the dominant player with a very strong leadership position,” according to Mariamo. As per CAT magazine’s 2011 civil full flight simulator census, CAE supplied all of the simulators in the UAE, including seven units for Emirates and three for Etihad.

Source: The Emirates Group

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

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MH370 and lessons for the Aviation Industry, Governments, & the Media

MH370

 

  • The MH370 strategy has created learnings for all involved – mostly for the aviation industry including airlines, manufacturers, and regulatory authorities, and also for governments and the covering media. 
  • The key ones for the aviation industry include improving tracking mechanism by developing transponder and communication equipment that can’t be disabled, globalizing air traffic control and monitoring, improving black box design and strengthening passport control. 
  • Governments worldwide need to ensure more cooperation among themselves, and also treat the affected families with care and empathy, largely through effective communication. 
  • Finally, the media needs to act more responsibly and gather enough evidence before advocating any conspiracy or terrorism theories.

 

The tragic MH370 flight and the ongoing search for its whereabouts involving more than 25 nations has resulted in a lot of emotional and political outbursts, speculations, conspiracy theories, cost, verbal wars, and above all, grave news for the families of 239 passengers and crew on-board. A tragedy of this magnitude has created learnings for all involved – mostly for the aviation industry including airlines, manufacturers, and regulatory authorities, and also for governments and the covering media. 

Lesson #1: Tracking mechanisms need to be improved, and planes should not be allowed to disable their transponder and communication equipment. The transponder and communication equipment in Malaysia Airlines MH370 flight was disabled. Disabling these equipment means that a plane can’t send and receive information to the world outside the flight, thus making it untraceable (like MH370!). According to a CBS News article carrying views of Mary Kirby, aviation expert and the founder of aviation news company Runway Girl Network, it is important for manufacturers to develop communication systems that simply can’t be switched off from within a plane. Even when forced to shut-down, such systems should move into a back-up mode and should continue to transmit data thereby enhancing tracking. The aviation industry needs to move beyond cost considerations and develop and install such systems. And given the stakes involved, aviation authorities worldwide should make the installation of such a system a necessary safety perquisite. 

Lesson #2: Air traffic control and monitoring needs to be global and satellite-based. A report by The Sydney Morning Herald (SMH) mentions that “the backbone of the global commercial aircraft monitoring system is land-based radar, augmented by a secondary radar on the plane that emits a signal pinpointing its location with a particular signature that identifies the aircraft.” However, such radars only cover 10% of the planet, creating a large void with respect to tracking planes over deserts, oceans and other remote areas. The need of the hour is to develop satellite-based air-traffic control service that covers the entire world. Bear in mind that such a system would need considerable time and money, so a phased roll-out of such a technology seems more likely. 

Lesson #3: Black-box design and technology needs to improve considerably. The black box is critical to any aircraft investigation, but the current technology leaves a lot to be desired. For one, current black box technology does not support live streaming of data from flights and as per the SMH report, these boxes can currently record only two hours of cockpit conversation (smartphones these days have more capacity!). Further, a black box has a range of as little as 10 nautical miles and runs out in 30 days. Finally, a black box doesn’t float so it is not surprising that it took two years to find the black box of Air France 447, which crashed into the Atlantic Ocean in 2009. The Air France incident had highlighted the glaring gaps in black box design, and the latest MH370 episode has created a feeling of nothing but déjà vu. Therefore, it is important for manufacturers to step up their efforts towards designing a black box that addresses most of the above concerns. 

Lesson #4: Don’t forget that pilot errors are still the biggest cause for airline accidents, so spreading conspiracy- and terrorism- theories without evidence can only worsen the situation. According to a database compiled by PlaneCrashInfo.com, there were 100 large commercial airline accidents worldwide between 2000 and 2009, and 54% of these accidents were caused by pilot errors and 24% by mechanical failures. Only 9% accidents were caused by acts of sabotage like explosive devices/shoot downs/hijackings, etc. (poor weather conditions accounted for 8% accidents and another 5% were caused by air traffic control/improper maintenance/etc.). Therefore, given the historical data, media channels and publications need to act more responsibly and gather sufficient evidence before advocating any conspiracy or terrorism or alien abduction theory through “experts”. Please note that we are we are by no means saying that the MH370 incident took place due to pilot incompetence, but only that a proper investigation into all possible causes should be carried out before airing views on media outlets, especially given the high emotional quotient among affected families and the gullible nature of general public in such situations. 

Lesson #5: Information sharing and cooperation among nations leaves a lot be desired. Managing a search and rescue involving 26 countries and their respective authorities is never going to be easy, but the current cooperation levels leave a lot to be desired. The SMH report cites that the Malaysian military was slow in sharing satellite information with other countries and China took three days to release its grainy footage of debris in the South China Sea. Similarly, Australia took four days to share images of debris in the southern Indian Ocean, while Thailand did not share its knowledge it picked up MH370 on its radar for 10 days, saying it was never asked. In crisis situation like the current one, where speed is the key to locating the aircraft and finding and saving the people on-board, nations need to step-up and enhance cooperation.

Lesson #6: Affected families must be treated care and empathy, and communication should be transparent, timely and well-managed. Be it withholding information for longer than necessary or communicating visa sms the final unfortunate finding that all aboard were lost, the MH370 incident is a case study for governments and authorities on ‘How not to manage communication during such a crisis’. Governments should ensure that communication is fact driven, routed through a single channel, and is done in timely fashion so as to avoid the spread of any rumors. Also, it is important to communicate the steps being taken for the affected families so as to convey a sense of empathy and support. Additionally, the affected families should be kept aware from media glare (ideally in a different hotel) so that they are spared the continuous hounding by media personnel looking for ‘bites’.

Lesson #7: Passport control needs to be strengthened. Two Iranian nationals boarded MH370 with stolen passports. While these people do not have terrorist background, the alarming thing is the ease with which they got on-board. The SMH report highlights that Interpol has an estimated 40 million lost or stolen passports in its database, and passengers boarded planes 1 billion times last year without their passports being checked against that database. So, it is important to design a system which checks against this database at all airports worldwide, thereby reducing safety related risk.

 

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review