The economy is getting better, which means some things may be getting worse. That’s how it appears as the business aviation industry slowly and haltingly starts to emerge from a long and deep recession and a search begins for skilled labor to fill the growing number of openings.
As Yogi Berra famously said, “This is like déjà vu all over again.” And so it is, though not as dramatic. Following the recession that began in 2001, thousands of skilled workers hired during the boom time of the late 1990s through early 2001 were laid off and furloughed as struggling companies “right-sized” to meet the drop in demand. In mid-2006, the economy was righting itself and business aviation followed suit, and many of those skilled workers let go during tough times didn’t come back when things got better. Some had found other work in areas where the same skills were in demand, others retrained for new careers in different fields, and still others left for more stable, if not greener, pastures.
And so the competition for skilled labor became intense, with one company going so far as to paper the automobiles in a competitor’s employee parking lot with help-wanted flyers.
Now, on the heels of this most recent recession, assuming a recovery is indeed under way, the business aviation industry is already starting to see a new shortage of skilled workers.
Layoffs at Gulfstream Aerospace, from March 2008 through the end of 2009, totaled 1,200. Duncan Aviation, a family-owned and -operated MRO that had long taken pride in the fact that it had never laid off an employee in its 55-year history, implemented a reduction in force that affected 306 positions. Wichita alone, long the self-described air capital of the world, saw a combined total of nearly 13,000 workers laid off by Cessna, Learjet and Hawker Beechcraft and their vendors.
As business aviation begins this recovery, it faces the same problem it did in 2006: many of those who were laid off, as well as those lost to natural attrition, are not coming back.
“A lot of people got out of the industry, and a lot of them aren’t coming back, at least not here,” said George Kythreotis, general manager of Jet Professionals, a global aviation staffing specialist based in Teterboro, N.J.“Some of them went overseas, to the Middle East, China and India.”
These are growth areas for business aviation, he explained, and skilled, experienced A&Ps who would command salaries of $80,000 to $90,000 at Bombardier or Gulfstream are making as much as $120,000 a year in an overseas assignment, said Kythreotis. He added that there can be considerable tax advantages, depending on the host country’s tax treaty terms with the United States. A U.S. citizen working in Shanghai, for example, will pay taxes on earnings only in China, “but it’s significantly less than the U.S. tax rate.”
“The fact is,” concluded Kythreotis, “human capital is evolving on a multinational and international stage, and skilled workers willing to go abroad may find some real advantages.” This, he added, is one reason that Jet Professionals International now has recruiting offices in Basel, Switzerland and Abu Dhabi in the United Arab Emirates.
As for wages in the U.S., Kythreotis said the structure has remained rather flat, “maybe 3 or 4 percent higher than in 2008.” This means a starting salary of about $50,000 a year, or roughly $24 or $25 an hour.
To be sure, even though the industry as a whole appears to be slowly recovering in the U.S., it is halting and spotty and not everyone is hiring. Some pockets of the aerospace industry are recruiting. Atlanta and St. Louis, for example, are cities where aviation businesses are hiring. In fact, “St. Louis [home to Jet Aviation] is hiring both full-time employees and contractors,” said Kythreotis. Other areas, notably Wichita, where Hawker Beechcraft continues to lay off workers and where Boeing is in the process of closing the plant at which it employed more than 2,160 workers, are generally not hiring–although Bombardier Learjet recently announced plans to boost its payroll in Wichita by 300 jobs related to the Learjet 85 program.
Public-Private Training Partnerships
The Aviation Institute of Maintenance (AIM) in Virginia Beach, Va., reports that enrollment starts were up 7 percent last year, and enrollment continued to show positive growth early this year. At its 10 schools around the U.S., a new 80-week program for A&Ps starts every five weeks, and corporate aviation education director David Jones said, “In the Atlanta area, virtually everybody graduating could find an aviation job.”
Gulfstream Aerospace hired 1,300 at its U.S. facilities nationwide last year and is currently shopping for mechanics, avionics technicians and engineers in some specialized areas. The hiring process emphasizes the individual merit of the candidate and previous work history, including previous Gulfstream experience, said a spokesman.
Looking ahead to a continued recovery, Gulfstream has a number of partnerships with government programs and with local institutions to ensure a continuing pool of entry-level workers.
It is working with Georgia Quick Start, which delivers training in classrooms, mobile labs or on plant floors, to provide leadership training. The company has also made arrangements with Embry-Riddle Aeronautical University to offer master’s degree programs for engineers who qualify for extra tuition reimbursement, and with local Savannah Technical College to offer skill-building classes “with the intent of potentially hiring the program graduates.”
When Duncan Aviation, headquartered in Lincoln, Neb., was forced to adopt layoffs, it offered severance packages, assistance with counseling services, grief management, training, résumé writing, networking and job hunting. Today, with the market improving, Duncan has begun hiring and saw its workforce grow approximately 6.7 percent last year.
Further, Duncan is seeking to hire the best skilled people with an attitude that fits its corporate culture. “All things being equal, the candidate with prior experience at Duncan Aviation will be given preferential consideration.” Duncan has rehired about 13 percent of those who were laid off or furloughed.
Looking at such key growth indicators as customer feedback, requests for information and quotations, as well as a growing backlog, Duncan has established alliances with colleges in Nebraska and Michigan, and Duncan employees serve on the board of advisors at the schools.
Greenpoint Technologies, an independent completion and refurbishment center in Kirkland, Wash., is hiring, but carefully, “to match our staffing to our workload,” said head of sales and marketing Christine Hadley. She said the center is not finding it difficult to find technical talent, but she emphasized that it is also important that those hired understand and embrace the corporate culture at Greenpoint of “a highly productive, customer-centric team.”
(Partnerships to boost the base of trained mechanics exist elsewhere as well. AAR has teamed with the city of Chicago to create ab initio maintenance training programs.)
Indications are that while an industry recovery is slow, and may be somewhat lengthy, it is happening and it is evident in the gradual growth in hiring. What is less clear is to what degree and how quickly demand for skilled and experienced employees will surpass the available worker pool.
Jones at AIM said the institution expects approximately 1,750 people to graduate this year, with about 65 to 70 percent going into aviation. He added that those who want jobs in aviation will be able to get jobs, “If they’re willing to go where there are jobs.”
Will that change? Dale Forton, president of the Professional Aviation Maintenance Association in Ionia, Mich., notes that about 80 percent of the A&P community is between the ages of 40 and 65 and over the next 20 years “those people are going away.” But that’s the long term.
Another long-term look, said Forton, came from Boeing, which last year estimated a need through 2030 for 650,000 A&Ps worldwide, approximately 32,000 of them in corporate aviation.
In the short term, there is yet another factor to be considered, and that is an end to the war in Iraq and the numbers of highly skilled aviation mechanics who will be leaving the military as their enlistments expire and looking to enter the civilian job market. “It may not be a dramatic number, but it is there,” said Kythreotis.
In the meantime, said Forton, the industry can be thankful that the slow recovery is–for the moment–keeping demand from rising too sharply.