IATA Global Aviation Human Capital Summit, Singapore, November 2011

2. Human Capital opportunitiesHuman Capital opportunities
and challenges in aviationand challenges in aviation
Guido Gianasso
VP, Human Capital, IATA

3. 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

4. Global Aviation Human Capital Summit 2011
IATA – who we are
HC team
Providing 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

5. 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

6. Global Aviation Human Capital Summit 2011
Who is here – some statistics

7. Global Aviation Human Capital Summit 2011
Who is here – some statistics

8. Global Aviation Human Capital Summit 2011
Our sponsors

9. Global Aviation Human Capital Summit 2011
Our partners
Supported by Held in

10. To represent, lead and serve the airline industry
Updated outlook for theUpdated outlook for the
global airline industryglobal airline industry

11. Cash flows are being squeezed
-5%
0%
5%
10%
15%
20%
2005 2006 2007 2008 2009 2010 2011
%revenues
EBITDA as % revenues
seasonally adjusted
US
airlines
Asia-Pacific
airlines
European
airlines

12. 550
600
650
700
750
800
850
900
40
60
80
100
120
140
160
180
2007 2008 2009 2010 2011
A
ve
rage
in
tern
atio
n
alretu
rn
fare
,U
S$
Jet
ke
ro
se
n
p
rice
s,U
S$
p
er
b
arrel
Fuel prices and average fares
Jet kerosene price
(left scale)
Average return fare
(right scale)
Mainly by the rise in fuel costs

13. 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
%changeinairlineseats
Changeinoperatingfleet(a/cpermonth)
Airline fleet development
Source: Ascend
Deliveries Other factors Storage activity % change in seats m-o-m

14. 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
%changeoveryear
Indexofbusinessconfidence
Worldwide growth in air travel and business confidence
Growth in RPKs
(right scale)
Business
confidence
(left scale)

15. Freight markets have stopped growing
11
12
13
14
15
16
17
115
125
135
145
155
165
175
2007 2008 2009 2010 2011
AirfreightFTKs,billionspermonth
Worldtradevolume,2000=100
Air freight volumes and world trade
World trade
(left scale)
Air freight volumes
(right scale)

16. 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
WorldGDPgrowth
Netpost-taxprofitsas%revenues
World economic growth and airline profit margins
Net post-
tax profit
margin
World
economic
growth

17. 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
Spain
Italy
France
UK
Germany

18. Will reinforce medium-term geographical
shifts – driven by growth of middle incomes
Global middle class in 2009 and prediction for 2030

19. And the potential to better connect large
cities, particularly in ASPAC and LATAM
Source: UN, SRS Analyser
5-10 mln
10-15 mln
15-20 mln
> 20 mln
Urban Popn. 2015

20. 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

21. 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
Bloomberg
forecast
Lowest
Bloomberg
forecast
Fuel costs expected to stay relatively high

22. 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
2011F
2012F
US$billion
%revenues
Global commercial airline profitability
Net post-tax losses
(right scale)
EBIT margin
(left scale)

23. 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

24. 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

25. 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

26. Global Aviation Human Capital Summit 2011
We look forward to…
 Network
 Learn from each other
 Have some fun together

27. Global Aviation Human Capital Summit 2011
Thank you!Thank you!