Last weekend saw significant schedule disruptions for Indigo— India's largest and most successful airline. With on-time performance at 45.2 percent as reported by the Directorate General of Civil Aviation (DGCA), there was much dismay amongst travellers who would have booked on the 1600 flights that the airline operates daily. This reason: insufficient number of cabin crew who showed up. This came just two months after pilots had attempted a mass sickout. Today news is pouring in of a further 8 percent salary correction for pilots at Indigo and the restoration of some allowances. Other airlines will likely have to follow. These incidents are not peculiar to one airline. Rather, these speak to a broader theme in the Indian aviation landscape. Namely: the war for talent. And this is bound to have an impact on costs, cash flow and competitiveness.
An intensely competitive landscape is emerging
June saw approximately 10.5 million domestic travellers take to the Indian skies. Another million odd travellers took to the international skies during the same period. Airline capacity was hovering at approximately 85 percent — 90 percent of pre-Covid levels and by the end of the year capacity is likely to cross pre-Covid levels. Other proxies that speak to demand including hotel bookings, VISA wait times and fares are all trending upwards.
In the backdrop, there is the changed aviation landscape. In the domestic market, with two large and well-capitalised players namely Indigo and the Tata group along with two airlines in startup mode namely Akasa and Jet airways. Everyone is competing intensely. To capture a portion of the demand and to soak up infrastructure which in times to come can be a competitive advantage. In the international market, the Middle East airlines are again on a hiring spree and the compensation and benefits packages have become better. With the Indian rupee performing as it is and inflation creeping up, the packages are perceived to be even more lucrative. Altogether, this has led to a situation where airline talent that only 18 months ago was desperately searching for options now has several that can be considered. And this fact is not lost on many.
Engaged and vocal workforces are now the norm
Events over the past 18 months have highlighted that workforces are now more vocal and engaged than ever before. This problem is exacerbated in certain geographies. With the advent of mobile phones and communication channels, it is easier than ever for various workgroups across locations to share information, views and frustrations. With nearly 500 million smartphone users as of this year and the cheapest data rates in the world, the workers’ ability to connect has increased exponentially. And this has stark effects. Indeed, a single post, a 30-second video clip or a single tweet can ignite a firestorm and lead to significant impacts on a firm — both internally and externally.
In the case of India, Whatsapp chat groups for operational personnel are now the norm and even a casual remark made has the potential to amplify and in many cases create a media firestorm. And there have been cases where employees have taken directly to social media channels to air grievances. Airlines that earlier were faced with the choice of what to make public, now have to invert the question and ask what not to make public because information flow and access have become ubiquitous.
Two-way engagement is now a must and airlines can no longer use a “spray and pray” method of communicating the message. The message tone too requires some change with a focus on conversation as opposed to the traditional one-way “broadcasts” of information. And not all are comfortable with this. Most executive suites are staffed with leaders who grew up without a mobile phone or digital nomads as it is popularly referred to. For them to move to a “digital-native” mindset requires a fair bit of effort. And management is finding out that they have to be out and visible and being confined to executive offices is no longer an option for cases where talent is to be retained.
The war is for skilled and “semi-skilled” talent alike
There is an ongoing debate on “skilled” and “semi-skilled” talent. Skilled talent in the aviation context has usually referred to operational talents such as engineers, pilots, trainers and aviation finance professionals. Semi-skilled talent has often meant workgroups that can be hired from other industries and where the learning curve is not as steep or as technical. In what could be a first, airlines are finding it hard to attract and retain both workgroups.
With the talent that is increasingly taking to portfolio careers or a basket of jobs over the working lifetime, airline personnel departments are on overdrive. To source, to attract and to retain talent. Replacing talent with technology is only a partial solution and even less so in labour-intensive industries like airlines. To put this in perspective, even when check-in processes are replaced by Kiosks airlines often find themselves deploying staff to guide passengers with the process.
As it stands, for airlines, success in the future for expansion and sustainability alike depends on talent. And the ability to hire and retain talent. And this will have to be balanced with costs, cash flow and competitiveness. Throwing money at the problem is just not an option, not to mention the fact that the soaring demand has not quite meant soaring profitability for most airlines due to the disproportionate rise in input costs.
The battle for the skies will be won on the ground. And hiring, training and retaining talent will be key to this endeavour.
—Satyendra Pandey is the Managing Partner for the aviation advisory firm AT-TV. Views expressed are personal
(Edited by : Ajay Vaishnav)
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