GDFCA/2013 Civil aviation and its changing world of work Sectoral Activities Department
Introduction This Global Dialogue Forum is to discuss The effects of the economic crisis in the civil aviation industry, in order to reach a common understanding of the difficulties the industry has undergone due to structural change, and a better understanding of the effects of the low-cost carrier model on the industry as a whole, as well as consensus on a common approach that could contribute to a more sustainable industry. February 20, 2013 GDF Civil Aviation 2
February 20, 2013 GDF Civil Aviation 3
A Short Glance at Civil Aviation February 20, 2013 GDF Civil Aviation 4
Civil Aviation is a Major Industry US$425 billion in value added (2007) 8.3 million people employed worldwide The industry supports 15.1 million jobs February 20, 2013 GDF Civil Aviation 5
Distinct Features of the Industry Transnational industry but rooted to countries Highly regulated Highly segmented job profiles Constant fluctuations Perishability of the service February 20, 2013 GDF Civil Aviation 6
From Crisis to Crisis 2001 2002 2008 2010 February 20, 2013 GDF Civil Aviation 7
Millions Millions Recent Trends and Outlooks in Civil Aviation Air Transport, registered carrier departures worldwide and passengers carried, 1970-2010 3000 30 2500 25 2000 20 1500 15 1000 10 500 5 0 0 Air Transport, passengers carried (left axis) Air transport, registered carrier departures worldwide (right axis) February 20, 2013 GDF Civil Aviation 8
Air transport, freight (million tonne-km), 1974-2010 250 000 200 000 150 000 100 000 50 000 0 February 20, 2013 GDF Civil Aviation 9
Airlines Airlines are a wonderful generator of profit for everyone except themselves The Economist (2012) Percentage of total passengers Full-Service Airline Low Cost Carrier Regional Airline Charter Airline February 20, 2013 GDF Civil Aviation 10
350 000 World s largest airlines in 2011, measured by number of revenue passenger kilometres (RPK) and number of passengers 180000 300 000 160000 140000 250 000 120000 200 000 100000 150 000 80000 100 000 60000 40000 50 000 20000 0 0 RPK's (millions) (left axis) Passengers (000) (right axis) February 20, 2013 GDF Civil Aviation 11
Airlines in the Middle East Middle Eastern Airlines have grown in importance February 20, 2013 GDF Civil Aviation 12
2003 Low Cost Carrier Seat Capacity 11% February 20, 2013 GDF Civil Aviation 13
2004 Low Cost Carrier Seat Capacity 14% February 20, 2013 GDF Civil Aviation 14
2005 Low Cost Carrier Seat Capacity 15% February 20, 2013 GDF Civil Aviation 15
2006 Low Cost Carrier Seat Capacity 17% February 20, 2013 GDF Civil Aviation 16
2007 Low Cost Carrier Seat Capacity 20% February 20, 2013 GDF Civil Aviation 17
2008 Low Cost Carrier Seat Capacity 21% February 20, 2013 GDF Civil Aviation 18
2009 Low Cost Carrier Seat Capacity 22% February 20, 2013 GDF Civil Aviation 19
2010 Low Cost Carrier Seat Capacity 24% February 20, 2013 GDF Civil Aviation 20
2011 Low Cost Carrier Seat Capacity 25% February 20, 2013 GDF Civil Aviation 21
2012 Low Cost Carrier Seat Capacity 26% February 20, 2013 GDF Civil Aviation 22
Total airlines net profits and profit margins 2003-11 20 15 10 5 0-5 -10-15 -20-25 -30 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total airlines net profits (in USD billion) Profit margin (per cent) February 20, 2013 GDF Civil Aviation 23
Airports Top 10 largest airports in 2011 by passenger numbers Frankfurt Los Angeles Chicago London Atlanta Paris Dallas/Fort Worth Beijing Tokyo Hong Kong February 20, 2013 GDF Civil Aviation 24
Significant source of employment Ownership private vs. public Regulation traditionally a natural monopoly February 20, 2013 GDF Civil Aviation 25
Land-Side Operations Ground Handling and Catering Maintenance Air Traffic Management February 20, 2013 GDF Civil Aviation 26
Employment Employment in air transport in 2010 2500000 2000000 1500000 1000000 500000 0 Airlines and handling agents Airport operators Others working on-site at airports Civil Aerospace Industry Africa Middle East Latin America and Caribbean Europe Asia-Pacific North America February 20, 2013 GDF Civil Aviation 27
Civil Aviation in the Decade Following 9/11 The United States annual airlines employment and revenue passenger miles 1990-2010 900 000 850 000 800 000 750 000 700 000 650 000 600 000 550 000 500 000 450 000 If the Wright brothers were alive today, Wilbur would have to fire Orville to reduce costs Herb Kelleher, 1994 400 000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Revenue passenger miles (millions) Employees (average full time equivalent) February 20, 2013 GDF Civil Aviation 28
Alliances 28 member airlines 12 member airlines 19 member airlines Percentage of Seat Capacity Star Alliance oneworld Sky Team Non Alliance February 20, 2013 GDF Civil Aviation 29
Mergers 2004 2008 2010 2011 2013? February 20, 2013 GDF Civil Aviation 30
Deregulation Open Skies Regulatory System Flags of Convenience February 20, 2013 GDF Civil Aviation 31
Pressure on Labour Costs Oh, it is excellent to have a giant s strength; but it is tyrannous to use it like a giant Shakespeare - Measure for Measure, II:2 Outsourcing Temporary Contracts Agency Labour February 20, 2013 GDF Civil Aviation 32
Gender in Civil Aviation Employment in air transport in EU27, 2000-07 600 000,0 500 000,0 400 000,0 300 000,0 200 000,0 100 000,0 0,0 2000 2001 2002 2003 2004 2005 2006 2007 male female Women are Underrepresented in Civil Aviation Lack of Women Pilots 4% worldwide Cabin Crew seen as woman's work February 20, 2013 GDF Civil Aviation 33
Which picture is more representative? February 20, 2013 GDF Civil Aviation 34
Challenges for a Sustainable Industry Infrastructure Constraints Shortage of Skills Economic Viability with Sustainable Enterprises Environmental Issues February 20, 2013 GDF Civil Aviation 35
Challenges for Decent Work Rights at Work Occupational Safety and Health Migrant Workers Social Dialogue February 20, 2013 GDF Civil Aviation 36
Improving Workplaces Employment Relations in Airlines Loyal employees in any company create loyal customers, who in turn create happy shareholders. Sir Richard Branson, 2001 Work Coordination at Airports February 20, 2013 GDF Civil Aviation 37
The Role of the ILO Make Decent Work a Reality in Civil Aviation Creating jobs Guaranteeing rights at work Extending social protection Promoting social dialogue Collaborate with the constituents and partners, including ICAO February 20, 2013 GDF Civil Aviation 38
Discussion Points 1. What have been the effects of the economic crisis and other crises since 2000 on civil aviation, what difficulties did the industry undergo due to the structural change, and how have low-cost carriers affected the industry as a whole? 2. What are the most important occupational safety and health issues and how could they best be addressed? 3. What should be done to promote social dialogue in the civil aviation industry, in order to ensure that civil aviation can attract and retain the workforce it needs and provide decent work, and to contribute to a more sustainable industry? 4. Recommendations for future action by the International Labour Organization constituents and the International Labour Office. February 20, 2013 GDF Civil Aviation 39